Background
NFIB continues to fight abusive eminent domain practices. The NFIB Legal Foundation has supported small-business owners who have challenged eminent domain takings in several states. Under the Fifth Amendment to the Constitution, the government may use eminent domain to take private property for "public use." Over the last century, the definition of "public use" has been expanded to allow government to take property from small businesses and hard-working homeowners in the name of "economic development."
In 2005, the U.S. Supreme Court ruled that the city of New London, Conn., was justified in taking a private home against the owner's wishes in order to give that property to a private developer because it increased tax revenue. Since this decision, NFIB scored major victories for small business by enacting tough eminent domain reform legislation. In some states, however, small business continues to struggle against abusive eminent domain takings.
As governmental seizures of private property continue in states like Missouri, California and New Jersey, it has become more apparent that takings for economic development can cause greater harm than good, threatening business owners and families in the process.
NFIB State Action
Missouri
- The NFIB Legal Foundation is supporting an NFIB member in his Missouri Supreme Court fight against an abusive taking by the City of Arnold.
- In this case, the City of Arnold seeks to take the business property of Dr. Homer Tourkakis, a local dentist and NFIB member, who has owned the property for over twenty years. The City plans to transfer Dr. Troukakis’ property to a private developer who will build a big-box retail store.
- Dr. Tourkakis won in trial court, but the city appealed to the Missouri Supreme Court where the Legal Foundation filed a brief.
- With help from Missouri Citizens for Property Rights, NFIB is working to amend the Missouri Constitution to prohibit eminent domain for private use.
- NFIB would strongly support similar action in all states.
California
- NFIB-California has endorsed a ballot measure, the California Property Owners and Farmland Protection Act, that will appear on the June 2008 ballot, and includes the following provisions:
- Prohibits government from using eminent domain for private purposes, while allowing eminent domain to be used for legitimate public uses like building roads, schools, other government buildings and water projects.
- Prohibits public agencies from seizing family farms, ranches and other property in order to acquire water rights or acquire farmland to further enable urban sprawl.
- Prohibits government from setting the price at which property owners sell or lease their property.
- Provides procedural reforms and full compensation when property is seized for public purposes.
New Jersey
- In New Jersey, the NFIB Legal Foundation is involved in BMIA, LLC v. Belmar, N.J., an eminent domain dispute involving a redevelopment project that would affect 20 mom and pop businesses.
- This eminent domain dispute involves a commercial property owned by BMIA, LLC in Belmar, N.J. BMIA has been fighting to keep its property (the Belmar Mall) from being condemned for a redevelopment project.
- To ensure that condemnation of the property would be possible, Belmar conducted a study, which determined that the downtown property was "an area in need of redevelopment" based on the fact that just 2 percent of the property was blighted.
- This case all-too-well highlights the injustices that property owners, including many small-business owners, face when it comes to battling a local government's liberal interpretation of blight.
Eminent domain and small business
- Seventy-seven percent of NFIB members have said that the government's power of eminent domain should be restricted to public uses.
- Small businesses are disproportionately affected by eminent domain.
- While large corporations stand to benefit from economic development projects, the small property owner is almost always harmed.
- Unlike big corporations, small businesses lose not just their location, but their customer base and goodwill, also.
- To have to worry about large businesses using the power of eminent domain to force them off of their property is simply outrageous.
- No one should have to spend a small fortune in legal fees to defend his own property from his own government.
