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The frontier of eminent domain: why aren't Kelo activists also incensed over natural resource development takings?

Article Excerpt
In 2005, the law of eminent domain captured the attention of the public at large. Suddenly, everyone cared about public use, takings, and the Fifth Amendment. As a result of the Supreme Court's decision in Kelo v. City of New London, the issue of what constitutes a public use for purposes of eminent domain authority dominated the media, dinner conversations, state and federal legislative sessions, and highway billboards. The public was shocked and outraged to learn that city officials could take a private home to facilitate a new corporate headquarters and that a state could replace "any Motel Six with a Ritz Carlton." Although the Supreme Court had upheld similar takings long prior to its decision in Kelo, the public had now taken notice, was not happy, and wanted to make sure government officials could not knock on the doors of the nation's citizens with the same authority.

In many natural resource--rich areas of the country, however, the knock on the door is less likely to come from a government official and much more likely to come from a mining, oil, or gas company representative. Once again, this is nothing new. Since the early 20th century, state constitutions and legislative enactments in the Interior West have given broad authority to natural resource developers to exercise the power of eminent domain directly to promote development of coal, oil, gas, and other state natural resources. These "natural resource development takings" have much in common with the Kelo-type "economic development takings." Both types of takings grant the condemning authority the right to displace private property interests in the name of economic development that will ultimately benefit the public at large by facilitating the operations of private firms.

This article explores two aspects of natural resource development takings. First, it considers how courts have used natural resource development takings as a benchmark for comparing and contrasting Kelo-type economic development takings. Despite the similarities between the two, there has been virtually no discussion of whether natural resource development takings should be subject to the same limits states are now placing on Kelo-type takings.

Second, this article considers the extent to which the public and legislative reaction to Kelo has affected natural resource development takings in the Interior West. A review of judicial decisions and legislative developments in resource-rich states shows that Kelo has had a subtle but important effect. A review of those developments provides not only new insights on property allocation concerns unique to the Interior West, but serves as a case study of how eminent domain law is merely one method of reallocating property in order to promote social and economic goals. When those goals change, a jurisdiction's approach to eminent domain law can and should change as well.

NATURAL RESOURCE DEVELOPMENT

It is black-letter law that a sovereign may not take the property of A for the sole purpose of transferring it to another private party B even though A is paid just compensation. However, in many states B may bring its own action for eminent domain to take A's property if B's activity is the development of natural resources. A closer look at the historic constitutional and statutory authority for natural resource development takings illustrates the important role eminent domain played in allocating property rights in the early 20th century to reflect state values and needs.

In the early 19th century, legislatures in many Eastern and Midwestern states delegated eminent domain authority to private transportation and manufacturing companies in order to promote economic expansion in a country with little surplus capital. State courts generally upheld this delegation on grounds that the needs and wants of the community at that time were served by economic expansion. Thus, the companies' use of eminent domain was for a public rather than a private purpose.

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During the latter half of the 19th century, however, some courts in the same states applied (albeit for a short time) a narrower concept of public use in order to preserve the rights of property owners. Under this approach, a taking that would benefit a private party could be upheld only if the project would actually be open to use by the public.

By the early 20th century, the courts overwhelmingly returned to a broad construction of public use, defining it not as "use by the public" but as any "public purpose," at least when it came to government-initiated eminent domain actions. The courts, however, retained the narrow view of public use when it came to reviewing state laws allowing private entities to exercise the power of eminent domain for economic development. For instance, in 1913 the Pennsylvania Supreme Court declared...

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