Eminently Important Rights

Ohio Supreme Court can protect private property owners

Carl and Joy Gamble owned their home in the Cincinnati suburb of Norwood for 35 years. They raised their two children in the house and expected to enjoy retirement there with all their fond memories. By all accounts, the house was well-kept and the neighborhood was in good condition.

Last year, the city of Norwood exercised its power of eminent domain to force the sale of the Gambles’ home and several other nearby homes and businesses, for transfer to a private developer to build a complex of offices, rental apartments and chain retail stores.

Next month, the Ohio Supreme Court is scheduled to hear oral arguments in the Gambles’ appeal of their lawsuit challenging Norwood’s actions.

Earlier this year, the U.S. Supreme Court upheld the taking of private property by the city of New London, Conn., for transfer to private developers for an “economic development” project.

The property owners challenged New London’s exercise of eminent domain arguing the city violated their rights under the Fifth Amendment to the U.S. Constitution, which permits the taking of private property with just compensation only “for public use.”

Traditionally, the government’s exercise of eminent domain authority has been restricted to actual public uses, such as building roads or public schools.

The U.S. Supreme Court’s decision upholding New London’s actions effectively did away with traditional “public use” limitations on eminent domain authority. Under the court’s new doctrine, if a private developer can convince a locality that the developer can put property to “better” use than the current owners, including generating more tax revenue, the local government entity has a green light to condemn the property.

The court’s decision caused a passionate response from property rights advocates and others. Retiring Justice Sandra Day O’Connor crystallized those concerns in her dissenting opinion, pointing out that “under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner.”

O’Connor concluded the beneficiaries of the court’s decision are “those citizens with disproportionate influence and power in the political process, including large corporations and development firms,” at the expense of individual property owners.

The court’s majority opinion, however, acknowledged that states have the authority to place their own restrictions on eminent domain. In fact, Gov. Bob Taft recently signed legislation that creates a moratorium on Ohio municipalities using eminent domain for private economic development in Ohio for a year while the issue is studied by a newly created task force.

Such interim measures are not a long-term solution. Once outrage over the court’s decision dissipates, the General Assembly will come under immense pressure from local governments and private developers to permit municipalities to exercise eminent domain authority broadly.

The U.S. Supreme Court, however, also recognized that “many states already impose public use requirements that are stricter than the federal baseline” as a “matter of state constitutional law.” Ohio has done just that.

Like the Fifth Amendment to the U.S. Constitution, the Ohio Constitution provides that private property may only be taken for a public use, and the Ohio Supreme Court has always required an actual public use for a taking to be valid.

For example, Ohio’s highest court has permitted the taking of private property for “urban renewal” purposes only where the property is located in a slum or blighted area, because a taking for the “primary purpose of eliminating slums” is a public use.

Norwood’s actions, however, go beyond Ohio’s existing rules on eminent domain by taking private property merely because local government officials believe that the proposed use of the property would be more beneficial than the current use.

The area at issue is not a slum or blighted area. In finding the area is “deteriorating” enough to justify a public taking, the city of Norwood relied on such factors as “high diversity of ownership” of property and an “increase in traffic congestion” in the area. Such factors exist in thousands of areas across Ohio. In the future, will private property in all of these neighborhoods be subject to government taking?

By ruling in favor of the Gambles, the Ohio Supreme Court would protect the private property rights of all Ohioans by limiting the use of eminent domain authority to true public uses, and not private gain.

David J. Owsiany is a legal policy analyst at Reason Foundation.