Sponsored and written by Darrell Hanson, Former Commissioner for the Iowa Utilities Board
In upcoming years the energy and water utility sectors will be investing heavily in electric transmission lines, water mains, and gas pipelines and storage facilities. One likely consequence of this looming infrastructure investment is an increase in the number of eminent domain disputes.
As both a former utility commissioner and a former city council member, I have participated in eminent domain controversies ranging from large-scale utility projects to local water main extensions, street upgrades, and bike paths. It is never easy to vote to interfere with another person’s property rights, even when projects are clearly in the public interest. But it is probably a good thing that such decisions are hard, because property rights are one of the foundations of American democratic theory.
One factor that has made eminent domain issues more controversial in the past few decades is the conviction among some groups that eminent domain represents an intolerable violation of fundamental rights by an oppressive government.[i] However, there’s nothing new or particularly un-American about the principle that the public good may take precedence over private property rights.[ii] In fact today’s property owners may actually have stronger legal protections than their predecessors did during the early history of the U.S.
Early Americans built a wide variety of public works projects across private property throughout the country. In an interesting parallel to today’s regulated public utilities, some of this new infrastructure was constructed not by government itself, but by specially chartered private corporations that were granted eminent domain powers and legal monopolies within designated territories.
In those years property owners were far less likely to receive compensation for such projects. For one thing, the concept of eminent domain “takings” had a narrower meaning, applying primarily to the actual loss of legal title. In cases of public necessity, damages such as the loss of buildings, diminished income potential, or loss of full enjoyment of property were often regarded as damnum absque injuria (loss without injury), requiring no redress. Most importantly, early public works projects were frequently able to entirely ignore eminent domain protections because they were considered an exercise of government’s common law police powers rather than a taking.
For example, if property owners had tolerated traffic over their land for a length of time, the courts could infer that the owners intended to dedicate the route for public use and declare the property to be a public roadway without compensation. Then local police powers could be used to improve the road by removing anything, including buildings, considered to be an impediment or a nuisance-again, without compensation. Police powers and common law were used in similar ways to build canals, river levees, ports and docks, and river navigation improvements. In some cases owners were even required to demolish and remove their structures at their own expense. According to legal historian William J. Novak, “If some private individuals were injured as a consequence of public-spirited improvements, early American judges were comfortable leaving them without a remedy…Private rights were relative; public rights were absolute.”[iii]
Imagine the firestorm that would be created today if someone tried to define an infrastructure project as an exercise of police powers to avoid compensating the affected property owners. We don’t normally think of the eminent domain process as a benefit for landowners, but unlike the earlier use of the police power, eminent domain provides constitutional guarantees of just compensation and due process. Simply put, today’s eminent domain approach represents a strengthening of individual property rights as they were traditionally understood.
Of course, modern landowners in the path of a utility project won’t feel any better to learn they probably would have had fewer rights 200 years ago. And regardless of how property rights were defined in the early decades of U.S. history, modern public officials are still obligated to objectively weigh the interests of the public against the rights of property owners under the precedents and laws in force today. But as they make those difficult decisions, public officials should be reassured that even when property owners are angered or dismayed by the outcome, their rights to due process and just compensation have been protected by the eminent domain process.
[i] See for example WeTexans, “Jobs at the Expense of Liberty?” at http://wetexans.com/jobs-at-the-expense-of-liberty/; Young Americans for Liberty, “Eminent Domain-Lasting Tyranny” at http://www.yaliberty.org/posts/eminent-domain-lasting-tyranny; and “Eminent Domain is Theft” by Kevin Craig, Libertarian candidate for U.S. Congress in Missouri’s 7th district at http://kevincraig.us/eminent-domain.htm.
[ii] For example, in the Declaration of Rights in Vermont’s 1777 Constitution, it was declared “That private property ought to be subservient to public uses, when necessity requires it; nevertheless, whenever any particular man’s property is taken for the use of the public, the owner ought to receive an equivalent in money.”
[iii] Novak, William J., The People’s Welfare: Law & Regulation in Nineteenth-Century America, The University of North Carolina Press (Chapel Hill, 1996), p. 131