The Fifth Amendment in the United States Constitution prohibits the government from taking private property for public use “without just compensation.” This clause, known as the “Takings Clause,” is generally referred to as the government’s power of “eminent domain.”
Eminent domain, or the “condemnation” of private property, is a power given to the federal, state and local government as well as certain government agencies. Many government agencies have the power of eminent domain. This can, and does, include government agencies that can range from the local sewer and public works department to the U.S. Forest Service.
There are two different types of condemnation cases: eminent domain cases and inverse condemnation cases. In today’s post, we will give a brief explanation of the differences between the two.
In a true “condemnation” action, the government is taking private property for a public use. For example, the government could be expanding a road, building a school, or building a highway. In this type of case it is the government that starts the legal action because it needs the private property for its public project. As a result, the government must pay the property owner “just compensation” for the taking.
Eminent domain cases are by far the most common type of condemnation proceeding. In an eminent domain case, the focus is not on whether the government has a good or bad reason for taking private property but whether or not what the government is doing amounts to a “taking.” If it does, then the government must pay the property owner “just compensation.” If not, then there is no taking, so no compensation is required.
Inverse condemnation, on the other hand, is when the property owner brings an action against the government claiming that what the government is doing constitutes a “taking” of private property without just compensation.
Inverse condemnation cases can arise in any number of ways, but among the most difficult (and interesting) are those that arise out of government regulation. A California case illustrates this concept quite well. In 2002-2003, a federal program ordered all raisin growers in the U.S. to set aside 47% of their crops, and in 2003-2004, 30% of their crops.
The raisins that were to be set aside were to be given to the federal government—free of charge for it to sell, donate or dispose of as it saw fit. Speaking of fit, California raisin growers Marvin and Laura Horne refused to set aside raisins for the federal government and ultimately filed an inverse condemnation proceeding. The Hornes argued that the marketing order constituted a taking of their property without just compensation. The case went all the way to the Supreme Court before it was finally held that a regulatory limit on production has the same economic impact on a grower as a physical taking. So if the federal government wanted those raisins, it had to pay for them.
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