Legal Environment of Business
17 April 2012
Eminent domain refers to the government and state having power over all property within a state, usually the power to take property for public uses, such as a park or library. In the United States, under the Fifth Amendment to the Constitution, the owner of any property is entitled to reasonable compensation, this meaning the fair market value of the property. The fair market value is the highest value of the property if there was a willing buyer. Eminent domain has four different types of taking from the government. These four “takings” include, complete taking, partial taking, temporary taking, and easements and rights of way. Complete taking is when the government seizes all the property which is at issue. Partial taking is if the government seizes a strip of land, to make a railroad for instance, that is on an owner’s property, then the government should compensate the owner for the strip of land and whatever remaining property that they own. Temporary taking is when a piece of property is appropriated for a limited amount of time. For example, it could be necessary to temporarily obtain a piece of land in order to do highway construction. And lastly, easements and rights of way can occur, for example, if a utility company needs to install power lines on private property, they can do so and the owner can still be able to use their property as long as it does not interfere with the easements.
There have been multiple cases in which eminent domain has been considered very controversial. These cases dip into public use vs. public purpose and blighted areas. Public use, as mentioned earlier, is the government taking land that would be beneficial for the community, such as building highways or railroads. This is generally accepted by the community as long as the community would benefit from the public use. What tends to be controversial is if the government takes the land for a private use. Private use frequently refers to the promotion of economic development which people would disagree that it is intended for a public use. The other area of controversy in eminent domain arises when a piece of land or property is considered blighted. When property is blighted, it means that it is beyond repair or an area that happens to be deteriorating. The government has the right to seize property if they believe it is blighted, which then in turn can increase arguments. With this being said, the Berman vs. Parker case in 1954 will show how the government was able to abuse this “blighted” notion and therefore being noted as a precedent for future cases. In 1954, the case involving Berman vs. Parker was decided by the United States Supreme Court. In 1945, Congress passed the District of Columbia Redevelopment Act, which created the District of Columbia Redevelopment Land Agency, and their purpose was to discover and redevelop blighted areas of Washington, D.C. In this case, an area in the District of Columbia was said to be injurious of health and that most of the homes were “completely beyond repair and abandoned.”1 Hence, this area was considered blighted and under eminent domain, it could be seized by the government. However, in this area, there was a department store that was owned by a man named Berman and was said to not be blighted. He then sued the city from taking his property via eminent domain. Berman refused to have his property taken because he argued that, “this transfer of their property to a private entity for development violated the Fifth Amendment, as the taking would be for private use.”2 The Supreme Court ruled, "It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well balanced as well as carefully patrolled...If those who govern the District of Columbia decide that the nation’s capital