Development:

Property Rights Alliance's LaGanga looks at state reaction to eminent domain decision

When the Supreme Court upheld a Connecticut city's decision to take private property for use in an economic redevelopment project last summer, the ruling sparked a prompt backlash among lawmakers at the state and federal level. Scott LaGanga, executive director of the Property Rights Alliance, explains his group's work with state legislatures to limit expansion of eminent domain powers. He also weighs in on the various bills proposed by members of Congress in response to Kelo v. the City of New London.

Transcript

Brian Stempeck: Hello and welcome to OnPoint. I'm Brian Stempeck. Joining us today is Scott LaGanga, executive director of the Property Rights Alliance. Scott thanks a lot for being here today.

Scott LaGanga: Glad to be here.

Brian Stempeck: We're going to talk about a major decision that happened this summer from the Supreme Court, the Kelo decision. And it was basically a big decision on property rights where the court said that city and state planners, when they're trying to do something like economic development, can basically take private property and basically use it for another private developer to take that over. Can you give us examples, so far, in the past few months how states and cities have started using this decision? And whether things are already happening that are problematic in your opinion?

Scott LaGanga: Yeah, we've seen this up rise in terms of the use of eminent domain by the justification of economic development. That that's the trend that seems to be that municipalities and localities are now using because the door has now been opened by the Supreme Court decision. Prior to the case, this is not say the first time a decision has come down in this manner and we've seen the Poletown decision come down before that. And over the course of time takings have occurred time and time again on a local level. This was just so notorious in scope that now it's opened the door for municipalities across the country. And I know that the Institute for Justice, which has done even the litigating on that case before the court, has tracked tens of thousands of cases around the country where a city has determined that they can make better revenue into the local government on the grounds that if they change a small house and determine it as blighted or some determination that they believe that economic development is on their side. And they can reap more cash revenue for their locality, for public services where they choose.

Brian Stempeck: Now people who support this decision basically say that this doesn't really make any new law. It just reaffirms what was already in place. And they say the property rights groups, like yourself, maybe are overreacting in this case. How do you respond to that?

Scott LaGanga: Well their determination is that it doesn't change anything on the current path. That this has always been going on. And what we've said is there's a determination. Eminent domain and the takings is in place in the Constitution on the grounds there are certain times it's necessitated for transportation projects, for construction of schools that have no other place but in that one area. And what we've said is that's in place so that public can use for public benefit. And now what the court has decided is that a government can now make the decision and the distinction, that they can transfer a private property to another private property owner. And that the benefits from that other private property owner can reap benefits for the local government. What we've said is there's a clear distinction between transfers of private to private by a public organization, by local government, as opposed to the public government making a determination that infrastructure or transportation or something of that nature is necessary for the public benefit. Not for new tax revenue and new public services and determination of that nature.

Brian Stempeck: Now we've seen a major legislative reaction to this both on Capitol Hill and a lot of the states. Talk a little bit about what's happening at the state level. I know your group is working to try to get this as a priority for a lot of the legislatures around the country.

Scott LaGanga: Yeah, we've been working with state legislators around the country on the grounds that day one for the legislative sessions, most of them have gone into recess or are on hold until January of next year. So the plan is to have good solid legislation with teeth, not just short of a makeup cover just to get through the Legislature. But something with teeth so it's in place January 1 so that legislators across the country can be debating the fact that eminent domain has to be protected in the sense that public can use it for a public project, but not the transfer of private to private. And so we've been working and we've already started to see some of the benefits in certain states. Alabama was the first state to pass legislation, signed by Governor Riley at the time. Which had some, and this has been some of the discussion, making sure that it's tight and strong. And it has some openings to it and again, talking about blighted property. A locality, a state government, could make a determination and find the reasoning to find something blighted, which would easily give them the case before a court or any other judiciary function that they can take that property, that they have the grounds. We'd like to see tighter language taking a more, instead of the substantive discussion of economic development or blight, we want to make sure that there's tight language that distinguishes and defines those terms, so that it doesn't give as many loopholes and movement in the language. There's a number of other states, Texas has recently passed and Governor Perry has signed legislation there. And then if you look at even last year, Measure 37 in Oregon was a piece of legislation passed by the voters stating that because of environmental rules and regulations they've been pressured in many ways by these things and lose property value. That they either want to be compensated fairly or make sure that they fall out of those development rules that have, over the course of time, restricted them.

Brian Stempeck: Now isn't there a way to implement this ruling in a way that wouldn't be objectionable to you? I know that some states already had their sort of procedures for dealing with these kinds of things.

Scott LaGanga: Sure.

Brian Stempeck: In California I know that people have said that's a very open process. You're talking about different ways you can go about this, say paying landowners more than the property is worth.

Scott LaGanga: Sure.

Brian Stempeck: And having a very open process. Is that the kind of thing you're looking for or is it more extreme than that? I mean I know there's some bills that are being floated at the federal level right now that would cut off funding entirely for these processes or go a step further than that. What are you looking for?

Scott LaGanga: Well on the federal level, as you bring that up, the only thing even in the court's decision, and they had a note in the decision, in the Kelo decision, stating that the true, if there is to be any movement and strength in this it has to be done on a state and local level. The only thing the federal government can do is restrict the funding or economic development dollars that come from the federal government down to the state level. So it gives some sort of disincentive for a government to think twice about making that choice of using the takings and using economic development. What we want to see, and some individuals have said to me, well, we should just wipe out economic development and takings, eminent domain in all capacities, even for a public use. This is property. It's protected under the Constitution and it must be protected in that way. And I've said we need to reinforce the Constitution, not go above it, not exceed it anyway, but have a good presence that we are protecting people's property. But still allow room and justification when necessary for eminent domain to be used for a public purpose, include a public purpose and define that on the local level. And that's really, each state government has their own constitution and framework to work in. California has made that distinction because under their rules and regulations in the state and their state constitution it has fitted them the best. And even in their legislature they've already discussed further legislation to reinforce that or maybe even change it.

Brian Stempeck: Now I'm seeing a number of bills on the federal level as well. Even today, before we taped this interview, the House resources committee had a hearing on one of the bills from Chairman Pombo.

Scott LaGanga: Sure.

Brian Stempeck: And these are a couple of different approaches, cutting off federal funding, having kind of an ombudsman who would oversee the whole process. At the federal level what process do you support? What legislation would you like to see go forward?

Scott LaGanga: You know I believe there's a lot of validity to this idea of holding off on economic development funds. If the choice is made and you justify it as economic development and you use federal funding to either reinforcement that determination in the state government or the local government with those dollars, I believe there's rules to be had. There needs to be a line drawn that says if you've made this choice you are now making the choice that you're going to use state and local dollars that you have accumulated, instead of the federal funding to make that determination. And so when it comes to, even when we discuss the ombudsman, Senator Hatch's bill, there's a lot of strength to that idea. Again though, I would take it to the states. I would have states create, as Utah did and where Senator Hatch has now modeled this for the federal level, states should have an ombudsman. They should have their own to work on arbitration and litigation between a landowner, who is involved in a takings by the government, who knows their legal rights and how far the government can work in that way. So things of that nature, we agree with them, but again, the true teeth of this will occur on the state and local level. And that's where we want to see these types of things move forward.

Brian Stempeck: So do you think that Congress should pretty much stay out of this?

Scott LaGanga: I believe they have a role. And I believe the funding is the role, as we've discussed. Having some limitations so that, immediately following I know that Scott Garrett had an amendment to the transportation on bill, which said that any funding from that appropriations bill could not enforce the Kelo decision. That I believe is good sound policy. Why? Because it's not going to allow the federal government to fund then the decisions of state and local governments around the country. They can make their own determination. And if they choose to do so one way or the other that's the choice they've made. But they shouldn't be subsidizing it with federal grants and economic development loans and grants that inevitably embolden this discussion.

Brian Stempeck: Now you're talking about basically working with a lot of legislatures next year in 2006. As you work next year how much do you see this as an election issue? It's gotten a lot of attention at the local and state level.

Scott LaGanga: Well as a political issue it's been very interesting because I mean, as we talk about this partisanship that exists in Washington, D.C., we also see this sort of kumbaya moment where everyone's holding hands and discussing from both parties about how important this is to their constituency, from those on the left to those on the right, working as one on legislation. So it's almost a difficult issue for some to utilize say against an opponent, but we'll certainly campaign on it. I mean I certainly believe that some of the best applause I've had as I've been around the country and having a discussion about this has been that this is critically important. This is a foundation of government to protect. I mean the Supreme Court is there in place to protect the people from government, from extreme government action and instead almost encouraged it by that decision. And so this now gives the opportunity so people can go around and discuss I've worked on this legislation. I've made a stance that people's property must be protected as much as you believe in all your other amendments and rights under the Constitution.

Brian Stempeck: All right Scott. We'll look forward to seeing what happens next year. Thanks a lot for coming on the show.

Scott LaGanga: Thanks a lot.

Brian Stempeck: I'd like to thank our guest today. That was Scott LaGanga of the Property Rights Alliance. I'm Brian Stempeck. This is OnPoint. Thanks for watching.

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