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Frequently Asked Questions About Eminent Domain

What is "Eminent Domain?"

"Eminent domain" is the power of the government to take private property for its own use without the owner's consent. This power is restrained by the Fifth Amendment of the U.S. Constitution, which provides that private property must be taken for public use, and that the owner of the property must be paid just compensation for the property. The power of eminent domain may be exercised directly by the legislature by the adoption of a statute identifying the particular property to be acquired for a public use, or it may be delegated to agents who may exercise the power in the manner prescribed in the enabling statute.

Why have I been hearing so much about eminent domain in the news?

In a highly controversial decision announced on June 23, 2005, the U.S. Supreme Court ruled 5-4 in the case of Kelo v. City of New London that the City's condemnation of several private residences pursuant to a comprehensive economic development plan did not violate the 5th Amendment of the U.S. Constitution. This is the first time the Court has considered the specific issue of the taking of non-blighted private land for the purpose of economic development.

Who has the power of eminent domain in Tennessee?

The power of eminent domain has been delegated to counties (T.C.A. § 29-17-101; 29-17-801) and municipalities (T.C.A. § 29-17-201; 29-17-801). The power of eminent domain has been generally delegated to any person or corporation authorized by law to construct railroads, turnpikes, canals, toll bridges, roads, causeways, or other work of internal improvement (T.C.A. § 29-16-101). The General Assembly has also delegated the power of eminent domain to a wide variety of governmental agencies and public service corporations.

How does the power of eminent domain work?

Each condemner must satisfy a three-part test in order to have the right to take private property under the power of eminent domain. The first part of the test is the authority of the condemner to use the power of eminent domain. The second part of the test is whether the private property being taken will be put to a public use by the condemner. The third part is whether the private property is necessary for the accomplishment of the public use.

What constitutes a public use?

The term "public use" does not have a precise and universally acceptable definition. The legislative body makes the initial determination of whether a proposed use constitutes a public use. If challenged by the property owner, the courts have the right and the duty to determine whether the proposed use is a public use. The courts have historically given a strong presumption of correctness to the determination by the legislative body.

The various decisions by the courts on whether a proposed use is a public use fall into two categories: A narrow view and a broad view of the scope of public uses. Courts using the narrow view require that the public must be entitled as of right to directly use or enjoy the property taken. Under the broad view, the condemnation of the property need be only for the public benefit or common good. Under either view, it is not essential that the entire community directly enjoys or participates in the proposed use for the court to find a public use (e.g., the condemnation of easements for a utility line to serve a single customer who has the right to service from the utility).

In determining whether a proposed use constitutes a public use, the courts also consider whether the condemner is a public or private entity. For the purpose of this analysis, courts have recognized that there are at least three categories of condemners: governmental entities; public service corporations regulated by the state; and private individuals or corporations. The standards for public use differ for each category.

If the condemner is a governmental entity, the courts determine whether the public would be entitled to receive and enjoy the benefits of the proposed use. The general public need not have access to the property to satisfy this requirement. According to a 1980 appellate court decision, acquiring property as a part of a redevelopment plan under which the property will subsequently be resold to a private developer does not result in the property being acquired for a private purpose when the public receives a benefit from the complete implementation of the redevelopment plan.

Where the condemner is a public service corporation regulated by the state, the court must determine whether the public will be given an opportunity to make use of the service provided by the public service corporation at reasonable rates and without discrimination. The proposed use must satisfy a public demand for facilities for travel or transportation of intelligence or commodities, and the general public, under reasonable regulations, must have a definite and fixed use of the services of the condemner independent of the will of the condemner.

If the condemner is a private corporation or individual, the courts will rarely find that the proposed use is a public use. If the proposed use is absolutely necessary to permit the private individual or corporation to discharge duties owed to the public, a public use may be found. Otherwise, the court will require the condemner to establish that the general public will be entitled to make a fixed and definite use of the property being condemned, independent of the will of the condemner.

Courts have found the following to constitute public uses when the condemner was a governmental entity:

• Municipal streets
• Street lights
• County roads
• Bridges
• Sewers
• Utility facilities and office buildings
• Waterworks
• Cemeteries
• Golf courses
• Parks
• Greenbelts
• Slum clearance projects
• Redevelopment projects
• Easements across railroad right of ways

Courts have found the following to constitute public uses when the condemner was not a governmental entity:

• Railroad tracks and terminal facilities
• Telephone lines and underground fiber optic cables
• Grist mills
• Iron works
• Electric power facilities
• Privately owned turnpikes
• Flumes
• Telegraph lines and poles
• Private water lines
• Microwave relay towers

What is NAR's position and policy on eminent domain?

NAR's eminent domain policy urges that government entities be required to justify condemnation actions in order to ensure, as much as possible, that under the circumstances they are both necessary and likely to achieve real and substantial community benefits. The government should provide persuasive, objective evidence that the project, and the resulting public purpose or benefit, will in fact be realized. Furthermore, considerations of fairness and reasonableness require that payment of "just" compensation, as directed by the 5th Amendment, must cover the additional costs incurred by property owners affected by condemnation actions above and beyond the loss of the subject property.

Since eminent domain impacts the Constitutional rights of property owners, it should be exercised carefully and only in special circumstances. This is especially true in situations where a condemnation action transfers a property interest from one private party to another.

In an amicus (friend of the court) brief filed jointly with the National Association of Home Builders in the Kelo case, NAR argued that the Supreme Court should provide a framework for an intermediate level of judicial scrutiny that would allow courts in future cases to determine whether eminent domain is appropriate in situations where a private party will maintain primary ownership, control, or jurisdiction over the condemned property. Legislative deference generally is not a proper standard of review for condemnations involving significant private interests, especially those with economic development as the sole justification. A higher level of scrutiny would allow for a more careful review of the use to which the property will be put to determine whether the public use or purpose is primary or incidental. Unfortunately, the Court rejected this argument, determining that it was inappropriate to second-guess the city's comprehensive economic development plan.