J.P. Burleigh, Associate Member, University of Cincinnati Law Review
I. Protection and Appropriation
In 1689, John Locke argued that ownership of private property is a natural right of man. The Constitution of the State of Ohio affirms that all men have an “inalienable” right “to acquire, possess, and protect private property.” However, explicit in that same Constitution is a provision for the government to seize the very property it protects. This is known as eminent domain: the inherent power of the government, through its “transcendent authority” (dominum eminems) as sovereign, to appropriate private property to promote the general welfare. This power is subject to two limitations: the government must take the property for some public use and also compensate the person deprived of his or her property. In the United States, eminent domain power has been used to acquire land for some of the country’s most significant public projects—the Great Smoky Mountains National Park, the Eisenhower Interstate Highway System, and the Cape Canaveral Air Force Station, just to name a few. Often, however, property owners do not want to give up their property, even when they are compensated; thus eminent domain has been contested by property owners for well over a century.
Cincinnati is tied up in that history. The first U.S. Supreme Court case to affirm the federal power of eminent domain was Kohl v. United States, which in 1876 allowed the United States to appropriate land for a custom house and post office in downtown Cincinnati; today that site is home to the Potter Stewart U.S. Courthouse. 130 years later in another Cincinnati case, City of Norwood v. Horney, the Ohio Supreme Court interpreted the Ohio Constitution’s public use requirement to impose a stricter test than that under the United States Constitution. Fortunately for Cincinnatians and all Ohioans interested in maintaining their home against a government’s eminent domain action, Norwood case made clear that Ohio’s constitution affords more protection against eminent domain than the U.S. Constitution does.
II. Federal Interpretation of Public Use
Although the Fifth Amendment of the United Constitution constrains eminent domain power by requiring public use and just compensation, for decades the trend in federal courts has been to defer to legislatures in determining what constitutes public use. For instance, in 1945 Congress passed the District of Columbia Redevelopment Act, which created an agency tasked with acquiring, “by eminent domain or otherwise, real property for the redevelopment of blighted territory in the District of Columbia.” An owner of a department store challenged the condemnation of his property by arguing that his property was not blighted; that the project would be managed by a private agency; and that his property would be redeveloped for private use. The Supreme Court held that because “public welfare is broad and inclusive,” the decision to eliminate blight fell within Congress’s police powers, and that once such public use is established, “the means of executing the project are for Congress and Congress alone to determine.” Notably, those permissible means included considering the neighborhood as a whole for blight, as opposed to just one building, and allowing a private party to administer the redevelopment once the government had acquired the property.
The Supreme Court continued this deferential approach in Hawaii Housing Authority v. Midkiff. There, the Hawaii legislature had determined that its land was concentrated in so few hands—72 private landowners, to be exact—that the real estate market was effectively controlled by an oligopoly. In response, the legislature enacted the Land Reform Act of 1967 authorizing the condemnation of land from those few landowners to redistribute it amongst its citizens. In affirming this scheme as reasonable means to a valid exercise of police power, the Supreme Court emphasized that “where the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensated taking to be proscribed by the Public Use Clause.”
This trend came to a head in Kelo v. City of New London, which allowed New London, Connecticut to seize the homes of several families in order to build, among other things, a massive commercial facility for Pfizer, Inc. Unlike in Berman, the city made no argument that the homes in question were blighted or even near a blighted neighborhood. Instead, taking was purely for economic development to combat a “serious city wide depression.” The Supreme Court relied on Midkiff and Berman to hold that the seizures were rationally related to the legitimate goal of economic development.
III. Ohio Supreme Court Parts Ways With Kelo
Up until the Norwood case, Ohio courts analyzed eminent domain takings in the same way that federal courts did. Although the analyses stemmed from two different laws—Article 1, Section 19 of the Ohio Constitution and the Fifth Amendment of the U.S. Constitution—the process and results were nearly identical. That changed after Kelo, which sparked a national reaction. Property rights advocates believed the Supreme Court’s decision would leave any and all private property vulnerable to eminent domain takings if the government merely shows that another use of the property would be more profitable. President Bush issued an executive order stating the policy of the federal government that takings should be “merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.” The Ohio General Assembly even enacted a temporary ban on eminent domain takings across the state. The Ohio Supreme Court had already accepted review of Norwood, which posed similar facts to Kelo, and took the opportunity to depart from federal precedent and interpret Ohio’s public use requirement more strictly.
The City of Norwood is a small municipality on the east side of greater Cincinnati. A residential community that was also home to several manufacturing plants, Norwood fell on hard times following the 1960s construction of Interstate 71. Much of the neighborhood was torn down and paved over by the highway, and what was left felt markedly different. Home values dropped as many residents moved away; commercial tenants, seizing the opportunity of low property prices, moved in to fill the void. Gradually, what was predominantly a residential area became populated with businesses, including high end shopping centers called Rookwood Commons and Rookwood Pavilion. Some welcomed this change; others did not. In 2002, the development group which had spearheaded these first two efforts entered an agreement with Norwood to build a third project called the Rookwood Exchange.
Although Norwood encouraged the Rookwood group to buy the land necessary to complete Rookwood Exchange, some property owners refused to sell, including the Horney, Gooch, and Gamble families. The city found that their properties were “deteriorating,” which qualified them for condemnation under Norwood’s eminent domain statute, and then commenced appropriation actions to seize the properties and turn them over to Rookwood. At trial in the Hamilton County Court of Common Pleas, the court found that the properties were indeed “deteriorating” but “not blighted,” and allowed Norwood to proceed. After the necessary hearings on valuation of the properties, Norwood deposited compensation with the court, took title to the properties, and transferred them to Rookwood, which promptly began demolishing the houses. The homeowners appealed this decision and asked the trial court to enjoin Rookwood from damaging their homes in the meantime, but the trial court denied this request. The appellate court refused to issue a stay on this judgment, per a provision in the Ohio Revised Code that prohibited courts from imposing stays following eminent domain approvals. On May 20th, 2005, The First District Court of Appeals affirmed the judgment, emphasizing the deference owed to Norwood’s legislative decision to appropriate the property. The next month, Kelo was decided. So when Horney and the other property owners argued their case to the Ohio Supreme Court, the entire country was watching to see what would happen.
On September 28th, 2005, the Ohio Supreme Court came out decisively protective of private property rights, expressly rejecting Kelo’s broad interpretation of the public use requirement. As a preliminary matter Justice Maureen O’Connor’s opinion, the court held that eminent domain statutes in Ohio shall be held to a heightened standard of scrutiny. Upon taking a closer look at Norwood’s statute, the court held that Norwood’s standard of condemning “deteriorating” properties was void for vagueness. “Deteriorating,” the court reasoned, is so subjective a term that it could mean anything, and therefore nothing. Under the standards Norwood had used to qualify an as deteriorating—dead end streets, increased traffic, small front yards, and more—nearly any suburban neighborhood in America might qualify. A law that meaningless is no law at all, the court reasoned, and thus cannot form the basis of an eminent domain taking. The court held that eminent domain decisions must be based on the current status of property and not on speculation. Norwood had based its condemnation on finding that the properties were in the process of deteriorating. That is to say, Norwood found that the properties might be deteriorated someday, as opposed to being blighted or deteriorated in the current moment. Thus “deteriorating” was an unconstitutional standard also because it inherently looked to the future and was not rooted in the actual condition of the property.
Next, the court held that economic benefit to a community cannot be the sole reason for an eminent domain action; taking from Peter to give to Paul is not permissible merely because Paul’s taxes will be higher. This was a clear repudiation of Kelo’s key holding, namely that economic development alone was a legitimate public use. The court noted that prior to Kelo, neither the United States Supreme Court nor the Ohio Supreme Court had ever held economic benefit to be a sufficient public use on its own. Consistent with that understanding, the court held that an “an economic or financial benefit alone is insufficient to satisfy the public-use requirement of Section 19, Article 1 . . . Any taking based solely on financial gain is void as a matter of law, and the courts owe no deference to a legislative finding that the proposed taking will provide financial benefit to a community.”
Lastly, the court struck down a statute which had prevented the court of appeals from issuing a stay on Norwood using the property while litigation was ongoing. Issuing stays is a power inherent in judicial review of legal disputes, the court held, and no statute could limit that power. As has been noted in other literature, the opinion can be read to address separation of powers as it does eminent domain. Courts in Ohio will not merely rubber stamp legislative condemnations of private property; courts can and will take a hard look at those statutes, intervening with stays when appropriate to protect property owners from potentially unlawful seizures.
IV. Lasting Protections for Future Ohio Eminent Domain Cases
Although this decision came too late to save the homes in question, Norwood is a much needed reinvigoration of Ohio’s public use requirement. Future property owners faced eminent domain proceedings can thank Horney and the Ohio Supreme Court for clarified constitutional protection beyond that present in the Fifth Amendment. Courts in Ohio will now take a more critical look at attempts local governments make to appropriate private property for public use. Eminent domain statutes must base condemnations on the present condition of properties and cannot use rely on vague or speculative criteria. The decision to appropriate must be based on something more than mere economic benefit. Finally, if a homeowner appeals an eminent domain condemnation, courts retain the power to administer a stay during the appeal. While eminent domain is still alive and well, Norwood was a landmark case ensuring Ohioans that their property is not completely up for grabs.
John Locke, Two Treatises of Government, Ch. 5 § 25 (Thomas Hollis ed., 1764).
Ohio Const. art I, § 1 (“All men are, by nature, free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring, possessing, and protecting property, and seeking and obtaining happiness and safety.”).
Ohio Const. art. I § 19 (“Private property shall ever be held inviolate, but subservient to the public welfare. . . [W]here private property shall be taken for public use, a compensation therefor [sic] shall first be made in money, or first secured by a deposit of money; and such compensation shall be assessed by a jury, without deduction for benefits to any property of the owner.”).
Cooper v. Williams, 4 OHIO 253, 286 (1831).
Morton Butler Timber Co. v. United States, 91 F.2d 884, 886 (6th Cir. 1937).
Josh Stephens, Reclaiming the Interstates from Ike, California Planning and Development Report(Dec. 8, 2011), http://www.cp-dr.com/articles/node-3072 (“All told, the government committed 750,000 eminent domain takings in the construction of the interstates.”).
Gwathmey v. United States, 215 F.2d 148 (5th Cir. 1954); Cape Canaveral Air Force Station, National Park Service(Aug. 29, 2017) https://www.nps.gov/articles/cape-canaveral-air-force-station.htm.
See Williams, 4 OHIO at 253, decided in 1831.
Kohl v. United States, 91 U.S. 367, 377-78 (1876).
Potter Stewart U.S. Courthouse, Cincinnati OH, U.S. General Services Administration, https://www.gsa.gov/historic-buildings/potter-stewart-us-courthouse-cincinnati-oh#significance.
City of Norwood v. Horney, 110 Ohio St. 3d 353, 372 (Ohio 2006).
U.S. Const. amend. V (“[N]or shall private property be taken for public use, without just compensation.”).
Id. at 368-71.
Berman v. Parker, 348 U.S. 26, 29 (1954).
Id. at 31.
Id. at 33.
Id. at 34.
Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 233 (1984)
Id. at 241.
Kelo v. City of New London, 545 U.S. 469, 473 (2005).
Id. at 475.
Id. at 493.
Id. at 483.
See Norwood, 161 Ohio App. 3d 316, 330 (2005) (“The United States and Ohio Supreme Courts have interpreted the phrase “taken for public use” as being equivalent to the phrase “taken for the public welfare.””).
Five Years After Kelo, Institute for Justice(June 2010) https://ij.org/report/five-years-after-kelo/.
Charles E. Cohen, Eminent Domain After Kelo v. City of New London: An Argument for Banning Economic Development Takings, 29 Harv. J.L. & Pub. Policy 491(2006).
Exec. Order No. 13406, 71 FR 36973.
Norwood, 110 Ohio St. 3d at 355.
Kathleen M. Trafford, City of Norwood v. Horney – Much More Than Eminent Domain: A Forceful Affirmation of the Independent Authority of the Ohio Constitution and the Court’s Power to Enforce It, 48 Akron L. Rev. 35, 43(2015).
Norwood, 161 Ohio App. 3d at 320.
Id. at 321.
Greg Paeth, Despite development that would be the envy of many cities, Norwood still struggles with its books, WCPO Cincinnati(August 22, 2016, 6:00 AM), https://www.wcpo.com/news/insider/despite-development-that-would-be-the-envy-of-many-cities-norwood-still-struggles-with-its-books.
Norwood, 110 Ohio St. 3d at 357.
City of Norwood v. Horney, 161 Ohio App. 3d 316, 321-22 (Ohio Ct. App. 2005).
Id. at 319,.
Id. at 323.
Norwood, 110 Ohio St. 3d at 353, 360-61.
Id. at 361.
Norwood, 161 Ohio App. 3d at 334.
545 U.S. 469 (2005).
Kathleen M. Trafford, City of Norwood v. Horney – Much More Than Eminent Domain: A Forceful Affirmation of the Independent Authority of the Ohio Constitution and the Court’s Power to Enforce It, 48 Akron L. Rev. 35, 43. (2015)
Norwood, 110 Ohio St. 3d. at 391.
See Id. at 356 (“Courts shall apply heightened scrutiny when reviewing statutes that regulate the use of eminent-domain powers.”).
Norwood, 110 Ohio St. 3d at 379.
Id. at 382.
Id. at 381.
Id. at 382.
Id. at 382.
Id. at 378.
See Kelo v. City of New London, 545 U.S. 469, 485 (2005). (“Clearly, there is no basis for exempting economic development from our traditionally broad understanding of public purpose.”).
Id. at 377.
Id. at 378.
Id. at 384-91.
Kathleen M. Trafford, City of Norwood v. Horney – Much More Than Eminent Domain: A Forceful Affirmation of the Independent Authority of the Ohio Constitution and the Court’s Power to Enforce It, 48 Akron L. Rev. 35, 56. (2015)
Norwood, 110 Ohio St. 3d at 376.
Id. at 388.
In Re Columbus S. Power Co., 983 N.E2d 276, 281 (Ohio 2012).
Id. at 381-83.