6 months ago

State legislatures do not define what constitutes “just compensation”

By Jeffrey W. McCoy Attorney

The Fifth Amendment to the U.S. Constitution provides that private property shall not be taken “for public use, without just compensation.” The just compensation requirement safeguards private property rights by ensuring that the government cannot take property on a whim.

But who defines what constitutes “just compensation?” That is the question Bay Point Properties, a Mississippi company, recently asked the U.S. Supreme Court to answer. The case involves a 14.5 acre parcel that was previously encumbered by a highway easement. After hurricane Katrina, the highway was destroyed and the Mississippi Transportation Commission decided to relocate the highway to another property.

Despite moving the highway, the Transportation Commission still wanted to use Bay Point’s land for a public park. The Commission originally planned to purchase the land from Bay Point, but after the land was appraised at over $8,000,000, the Commission decided to just build the park anyway. Bay Point filed a suit seeking just compensation for the Commission’s taking.

A Mississippi statute, however, limited the amount of compensation Bay Point was able to receive for the loss of its property. The statute provided that any highway easement remains in place, even if there is no highway, unless the Commission formally abandons the easement at one of its meetings. Based on this statute, the trial court judge instructed the jury to award no more than $500 to Bay Point.

Yesterday, Pacific Legal Foundation filed a friend of the court brief urging the Supreme Court to review the case. In the brief, PLF argues that allowing the legislature to determine just compensation would render the Just Compensation Clause meaningless. If a legislature is allowed to set the price of the property it takes, then it could avoid compensating property owners by setting the price at a minuscule amount – like $500.

The Just Compensation Clause protects against this type of abuse, but courts must make sure not to defer to legislature’s calculations of just compensation. Hopefully the Supreme Court will review Bay Point’s case in order to reaffirm that the power of eminent domain is not unlimited, and to ensure the proper constitutional protections for all property owners.

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