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N.C. House bill would restrict eminent domain

Legislation notebookWEBThe first legislative bill filed in the N.C. General Assembly’s 2015 session seeks to amend the state Constitution to clarify language on when private property can be taken by governmental bodies through eminent domain and to require just compensation and the right to a jury trial in condemnation cases.

House Bill 3 was introduced by Rep. Chuck McGrady of Hendersonville, who said the bill is in “direct response” to a U.S. Supreme Court decision in 2005 that allowed New London, Conn., to take property from landowners for a private redevelopment project deemed to be for public benefit.

In that case, many landowners in an economically distressed waterfront neighborhood had willingly sold their land to the city for a planned redevelopment project the city hoped would rejuvenate the area. Others, however, refused to sell, and the city began the process of acquiring the property through condemnation. A landowner sued, and ultimately the U.S. Supreme Court ruled 5-4 that the city had the authority to condemn the land.

The project, however, went bust, and the land today has not been redeveloped.

McGrady said he couldn’t recall any situations in North Carolina in which land was taken for private development, but wants to ensure that it doesn’t happen in the future.

Charles Szypszak, professor of public law and government at UNC Chapel Hill’s School of Government, said North Carolina statutes currently don’t authorize governmental bodies to take land in the same way that New London did.

“This would prevent the legislature from enacting that right,” he said. An amendment to the Constitution would make it more difficult for legislators to enact broader condemnation powers. In order to do so, lawmakers would have to remove that Constitutional language by amending it yet again before passing any laws that would provide broader powers.

The bill would also delete from a state statute the authority of governmental bodies to condemn property for public benefit, leaving only the power to condemn only for public use.

“There’s been a lot of loose language in various state court opinions interchanging the language of public use and benefit,” McGrady said. The U.S. Supreme Court, he said, “invited state legislation if (states) wanted a stricter standard.”

Szypszak said that should the proposed legislation pass, the courts then will have to wrestle with defining “public use.”

“The courts have said it’s not just public use” that justifies eminent domain, he said. “In the case of environmental protection, for example, the public doesn’t actually use it.”

Using the public benefit standard, said attorney Tommy Odom of Charlotte, gives the government “much broader bases to file the condemnation action. Public use is much narrower.”

“Taking out the public benefit – that’s the most important thing in the whole bill, in my opinion,” said Odom, of The Odom Firm. “It makes it a little more difficult for the government to take somebody’s property.”

Odom said between 60 and 70 percent of the cases his firm handles are in defense of property owners facing condemnation proceedings.

The original 2009 site plan for the mixed-use Bryton development just north of Interstate 485 that required improvements to N.C. Highway 115, bottom, for which the town of Huntersville condemned the property of the one owner who wouldn’t sell to American Asset Corp.

The original 2009 site plan for the mixed-use Bryton development just north of Interstate 485 that required improvements to N.C. Highway 115, bottom, for which the town of Huntersville condemned the property of the one owner who wouldn’t sell to American Asset Corp.

In 2010, the town of Huntersville voted to condemn private property belonging to the Dellinger family along N.C. Highway 115 near Alexanderana Road to make road improvements necessary for the Bryton multi-use development. The Odom Firm represented the Dellingers, who were the only property owners who didn’t agree to sell to American Asset Corp. the land it said it needed for drainage easements and other road improvements.

Bryton is a still-developing, 450-acre project that includes a town center that welcomed a Walmart in 2013 and, at buildout, is expected to include up to 1 million square feet of retail space, 1 million square feet of commercial space and 4,000 apartment units and single-family homes.

The town decided that the estimated $1 billion investment in the project and subsequent economic activity was for the public benefit. The Dellingers lost a legal challenge to the condemnation in Mecklenburg County court, and settled with American Asset before an appeal was heard.

“It’s difficult to challenge the government’s right to condemn,” Odom said. “You have a hard time challenging anything dealing with roads and airports.”

Nationally, courts have also allowed eminent domain to be used to flood land and to remove people from unsafe living conditions.

The proposed legislation also explicitly requires “just compensation” for the property, language that McGrady said had been specifically lacking but an accepted practice under common law, and would explicitly provide the right to a jury trial to determine just compensation for those facing condemnation.

McGrady introduced a similar bill in 2013, House Bill 8, which passed that body by a 110-8 vote and was sent to a Senate Judiciary Committee, where it stalled in April 2013. Similar language was then added to Senate Bill 636 by the House, but the bill was also sent to the Judiciary Committee, in July 2013, and failed to make it to a floor vote in the Senate. That bill dealt with state Wildlife Resources Commission penalty changes to boating safety regulations.

McGrady believes that the full Senate would support his most recent bill should the House pass it and the Senate take a vote. Calls to several senators on the Judiciary Committee were not returned by deadline.

“There is broad bipartisan support for the idea of really clarifying what condemnation and the use of eminent domain is in North Carolina,” he said.

“I think there has been a senator or two who would like to see condemnation allowed for economic development issues,” he said, declining to identify who those senators might be.

The bill calls for a statewide referendum, required of all Constitutional amendments, on May 3, 2016. Voters would be asked to decide whether they are for or against a “constitutional amendment to prohibit condemnation of private property except for a public use and to provide for the payment of just compensation with right of trial by jury in all condemnation cases.”

The language would amend Section 1 of Article 1 of the Constitution, which provides equal protection for all residents against unjust deprivation of life, liberty and property. The bill would also amend Chapter 40A of the state’s General Statutes, which provides the authority for and restrictions on eminent domain.

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