Generally, just compensation has been defined as the propertys fair market value during the appropriation of the property. While only the state has eminent domain powers, it may, at times, entrust these powers to several private and public organizations, including public utilities providers, so that these organizations can employ eminent domain powers to operate electric, water, gas or telephone lines over private property. A condemnation proceeding is the process using eminent domain powers of acquiring land for public use.
There is another way that the government can influence the property use”when it enacts laws that erode or limit the value of private property. When government regulates real property to remove its economic value, this regulatory actions comprise a regulatory taking, giving the property owner entitlement to just compensation. Kelo v. City of New London was a case decided by the United States Supreme Court that involved the use of eminent domain to allocate land from one private owner to another to allow economic development (Cohen 29).
The Kelo case came from the condemnation by New London, Connecticut, of privately owned real property in order for it to be used as part of a comprehensive redevelopment plan (Delogu 58). The Court arrived in a 5-4 decision that the general benefits a community enjoyed from economic growth qualified such redevelopment plans as a allowable public use as stipulated under the Takings Clause of the Fifth Amendment. The American politicians and the general public have widely criticized the decision.
Many members of the general public considered the outcome as a misinterpretation of the Fifth Amendment and as a gross violation of property rights, the outcome of which would be to benefit large corporations at the expense of individual homeowners and local communities. Some legal experts interpret the publics outrage as being directed not at the interpretation of legal principles involved in the case, but at the far-reaching moral principles of the general outcome (Cohen 29). The U. S. Supreme Courts 5-4 decision sparked more controversy than any issue decided during its 20042005 term (Lopez and Totah 397).
Benson (45) explained that although the holdout problem cited as the primary economic justification for eminent-domain powers may be a significant problem for government purchase of contiguous parcels of land, it is much less significant for private purchases for development, such as those involved in the Kelo situation, and government takings powers, including eminent domain, actually result in substantial government failure. Therefore, even if market failure arising from the holdout problem does prevent some potentially desirable property transfers, it does not follow that eminent domain is justified.
Likewise, such can be considered as a futile regulatory exercise that grossly favor a single private multinational corporation”the picture would have dramatically changed if the New London government, through its private development firm, has invited a handful of investors to come in. The legal positivists maintain that eminent domain is a peculiarly American branch of law because of the takings clause of the Fifth Amendment, but the roots of this law go back, as does much of American law, to England (Stoebuck 4, 7-9). The U. S. Constitution does not openly bestow condemnation powers to the federal government.
Such power is generally inferred today from clauses of Article 1, Section 8, that provide Congress power to establish post offices and post roads as well as authority over property obtained for forts, arsenals, and other similar facilities, and from the takings clause of the Fifth Amendment (Delogu 58). This inference was not made, on the other hand, for almost a century. Indeed, one of Alexander Hamiltons arguments against including the Bill of Rights was that it would contain various exceptions to powers which are not granted (513).
Furthermore, the clauses in Article 1 appear to limit federal takings by requiring the Consent of the Legislature of the State, so Hamiltons point appears to apply at least to federal eminent-domain powers. Some of the Founding Fathers of the United States actually debated for an explicit recognition of private-property rights that the government could not take (Floyd 23). Thomas Jefferson contended that all remnants of feudalism in regard to property should be removed.
He pushed vigorously for allodial ownership, wherein landowners would hold complete dominion over their property with no feudal obligations to the state (Galperin 663). In other words, Jefferson argued that landholders should not be considered as stewards, with property ultimately controlled by the prerogative of the state (Paul 9). Jefferson believed that when the state was seen as the ultimate land owner, freedom will not be safe since the state would be in a position to reduce men to poverty or even to serfdom (McDougall 45).
Others obviously had a differing opinion, perhaps since the former colonies had already been actively sequestering property to benefit powerful business interests, and their leaders did not want to renounce these actions. During the revolution, loyalists properties were confiscated, debts owed to British subjects by the tobacco-producing territories were cancelled, and a number of other takings were done (Paul 74), so if the new government did not have similar powers, claims by the dispossessed owners of these assets might have legal standing.