Court ruling on property is our own darn fault
June 27, 2005
Forgive me, but I’m still puzzling over the U.S. Supreme Court’s decision in the Connecticut case that allowed city government to use eminent domain to take away people’s houses so they could be sold to a private developer.
It just seemed so unconstitutional – more than that, anti-constitutional – in taking away a basic right, held dear in the independent reaches of the West. How could this be? What tortured logic led to such a decision?
As it turns out, unfortunately, it’s our own darn fault.
I mean you and me. And the state of Nevada. Well, the state’s Supreme Court, anyway.
Yup, it’s right there in Justice John Paul Stevens’ opinion. He cites a Nevada case to justify taking away private property and turning it over to somebody else who’s going to turn a profit and, incidentally, make life better for all of us.
You see, we have short memories. We not only have forgotten the lessons of our own history in the West, we can’t even remember the old movies about that history.
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For what model exists for the kind of blatant thievery the Supreme Court just sanctioned? Is it socialism? Is it communism? Liberals? Conservatives?
Actually, the only economic model I can think of in which the government was quite so complicit in taking land away from one poor soul in order that it may be used by some robber baron to make more money would be our own: Western expansionism.
We could start with American Indians. They didn’t really believe in private ownership of the land and, therefore, failed to keep detailed records of deed transactions. So they were paid “just compensation” of a couple of horses and some blankets.
Shortly thereafter, the railroad ran straight through a whole lot of places settlers only thought they owned. Silly them. The railroad was progress. It was going to be for the betterment of everybody.
It wasn’t exactly a “public use,” as protected by the Constitution, but it was for a “public purpose,” which is how the Constitution came to be interpreted by courts and state legislatures.
As Justice Stevens wrote, it’s kind of impractical to try to draw a line between whether the public is going to actually use something or whether it’s simply for a bigger purpose- like a dam that’ll flood your town so Las Vegas can have water, power and bigger casinos.
That’s how the judge got to the Nevada example, which happens to involve mining. In fact, it involves the Dayton Gold & Silver Mining Co. and a Nevada Supreme Court opinion from 1876.
The Nevada court, Stevens noted, stressed that “(m)ining is the greatest of the industrial pursuits in this state. All other interests are subservient to it. Our mountains are almost barren of timber, and our valleys could never be made profitable for agricultural purposes except for the fact of a home market having been created by the mining developments in different sections of the state. The mining and milling interests give employment to many men, and the benefits derived from this business are distributed as much, and sometimes more, among the laboring classes than with the owners of the mines and mills …. The present prosperity of the state is entirely due to the mining developments already made, and the entire people of the state are directly interested in having the future developments unobstructed by the obstinate action of any individual or individuals.”
There you have it.
Those obstinate individuals were standing in the way of mining interests, and everybody knows Nevada wouldn’t be what it is today without mining. So it was a good thing the court allowed the mining company to use the government to shake off those pesky individuals so that mining could go on its way, the state could prosper and we could all move here over the next 100 years or so.
In other words, had the courts upheld property rights a century ago, you and I might not be here.
Maybe. Maybe not.
And that’s exactly the problem with Justice Stevens’ logic and the steady erosion of this property right through the courts and state legislatures ever since. It presumes that government knows best – that government must step in and force someone to sell their property because, otherwise, good things won’t happen.
The entire situation in Connecticut is based on speculation – as is any development. The city of New London has a plan for the property which involves bringing in jobs, businesses, parks and other sorts of “economic development.” That’s all a great idea, but there’s no guarantee it’s going to succeed.
More to the point, there’s no guarantee it wouldn’t succeed if government just got out of the way.
When eminent domain is introduced into private ownership, it simply gives the buyer a huge advantage over the seller – in large part because most appraisals for “just compensation” aren’t allowed to take into consideration the future development potential of the property.
Which is exactly the justification given for taking it away. See how absurd this becomes?
Do you think the homeowners in New London wouldn’t sell for $1 million each? For $1 billion each? For $10 billion each?
Once the potential buyer gets the upper hand, because it can get city government to set a price and a court to back it up, what incentive is there for the buyer to pay what the property’s really worth?
We’ve seen something of this in our own back yard, with the Carson City freeway and, more recently, the Interstate 580 project through Pleasant Valley. We all think the highway is a good idea, right? If it went through my house, though, I’d want the state to pay through the nose.
That’s not really fair to my fellow taxpayers, though, so I would get a fair market value for my property. But what if it were going to be a privately owned railroad, or a mining company, or (like in Connecticut) a pharmaceutical company? I would want my fair market value and, say, 10 percent of the gross.
But if your railroad or pharmaceutical company fails, don’t come looking to me.
Don’t go looking to the Supreme Court, either. It just went along for the ride.
n Barry Smith is editor of the Nevada Appeal. Contact him at email@example.com or 881-1221.