Property Rights Foundation of America®

Presented at the
Tenth Annual National Conference on Private Property Rights
Property Rights Foundation of America, Inc.
Albany, N.Y. - October 14, 2006

 

THE EMINENT DOMAIN CRISIS

JAMES E. MORGAN
Principal, Galvin & Morgan, Counselors at Law, Delmar, N.Y
.

Thank you, Carol. I see many familiar faces out there. Over the years I've gotten to know many of the audience as clients and friends. I am going to have to rewrite my bio here, though, because my career has now encompassed about fifteen years of private practice, which should eclipse my list of achievements working for the State of New York. I certainly believe it has, because the work I have done since I left the State has been much more important.

I spoke to this group last year concerning eminent domain. At that time I had a volume of McKinney's (1) with me and read a passage from the Enabling Act, which is the act that states the purpose for eminent domain. I am sure that, after you listen to the speakers, you'll begin to realize that the original purpose has not been followed. The act has been used and abused over the years. One of our speakers will display what leaders in the legislature are attempting to do to correct that. But there are several aspects that I wish, very briefly, to point out to you.

The Kelo case, of course, is the major case in the recent past from the U.S. Supreme Court. (2) This case, of course, is directly on point with eminent domain, and it concerns the issue of what was the right, what the government can include in the purpose for taking your property. Of course, historically that has generally been defined under the term of "public taking." It's for a public purpose. And of course, as you know, the Kelo case went substantially beyond what was expected and allowed the take for something beyond economic blight, and it's now down to an ambiguous term whereby many government agencies are now trying to fit almost anything into eminent domain, those at the government agencies who do use eminent domain.

I want to point out to you the original purpose of eminent domain, because it is an important aspect which we have talked about much more in previous conferences. Eminent domain is, also, something the government fears, and it fears eminent domain for a reason. There are precedents under eminent domain for the attorneys who practice in that area. If you look at it carefully, the original drafters of the statute did intend to provide the private citizen the ability to challenge the taking of their property. They tried to give it so you would also be compensated. The amendment which provides for eminent domain reads that the government does not have the right to take your property without just and fair compensation. The eminent domain statute was originally designed to give you just and fair compensation.
What has occurred in this state, and, from my familiarity with other states at this point, I'm sure is true elsewhere, is that eminent domain on its face looks about as fair as anything else. But what you've heard this morning from our friends from the West, we have been talking about different types of taking. We've listened to several very good speakers pointing out how the government has been abusing its authority, because it is taking property through administrative means, through enforcement of purported authority of regulation. It is something that does, in fact, happen in the East, in New York State. I can name several cases over the years. There will be more.

For example, we have handled the Pine Barrens cases on Long Island for a number of years. That act, again, provided for the use of eminent domain as a last resort by the government. But the Pine Barrens Commission itself has succeeded in taking the bulk of 50,000 acres of private property without just and fair compensation. The commission did that through what I call legislative sleight of hand. They provided something called a TDR, which is transferable development right, which unfortunately the U.S. Supreme Court recognized in the Penn Central case a number of years ago. (3) Very simply, and I don't want to go over my time, very simply that gives the government the right to take your property, but they can partially compensate you by something called transferable development rights, or something that you can market.

On Long Island, those rights were defined as a per acre value of approximately $7,000 to $9,000, which anyone who knows anything about Long Island realizes is untenable. Tell our friends here from the West that Long Island property right now is going for between $85,000 and $150,000 per acre in the Pine Barrens area on Long Island. That is what the market has forced it to, because they have taken so much property there through this use of the government authority that it has driven property to the point that for residential development there isn't any. The only people who can afford to build out there are the people who call the Hamptons home. And for those of you who don't know what the Hamptons are, it is sort of the American version of the French Riviera. And we are talking about millions of dollars an acre.

But I also want to point out another aspect. This type of taking by administrative fiat is going on in the forms of zoning, the master plans. Carol made a good point in answer to a question before that you should get control of your master plan, because God help those of you in your local communities if you get something called "smart zoning." Smart zoning is an acronym for total control of your property. It can and does include in certain jurisdictions the ability to control your ability to cut a tree on your property that exceeds six inches in diameter. Smart zoning is also sponsored by the New York State Department of State. It's done under the guise of allowing you to preserve your property values. That's not the full effect of what it becomes. It becomes almost a taking, because at that point the government, the local government controls almost every aspect of your property, in this state. So yes, you should control this, but you have to be active.

Eminent domain itself, the right to compensation for the taking of property and the regulation of property, has been around a long time. Back in the 1970s, around 1976, there was tour sponsored, I forget which organization, but I had the privilege of going into a trailer and looking at a document. The document had been signed in 1215 by King John of England. It's called the Magna Carta, and everybody assumes, when they hear about it in school, that it is irrelevant. It is not irrelevant, because it is the first written protection of property rights in the world. So this battle has been being fought for a long time.

We are suffering from the Kelo case, but there are other cases out there. You heard of a number of them, which will hopefully put limits on what's happening.

***
Notes:

(1) McKinney's Consolidated Laws of New York Annotated (the standard reference for New York law).

(2) Susette Kelo, et al., v. City of New London, Connecticut, et al., U.S. Supreme Court (2005).

(3) Penn Central Transportation Company v. City of New York, U.S. Supreme Court (1978).

"The Supreme Court…decided that so long as the use of the existing structures was not impaired, the city could wholly prohibit the occupation and use of the airspace above Pennsylvania Station without payment of compensation."

"One peculiarity of Penn Central is that the air rights to be granted Penn Central were over eight properties, including the Biltmore Hotel, the Waldorf-Astoria, and the Yale Club, that Penn Central already owned. How, it must be asked, is the city in a position to grant these rights to Penn Central as compensation for its landmark preservation statute? To do this, the city must first own the rights, which it acquired not by purchase from Penn Central, but by zoning.. The city's compensation for the loss of air rights thus came from its prior uncompensated takings. It is as though A uses money stolen from B to pay B for property purchased from him thereafter."

(Richard Epstein, Takings, Harvard University Press, 1985. pp. 64, 189)


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