The Public Use Requirement in Eminent Domain Law: A Rationale Based on Secret Purchases and Private Influence

Abstract

This Article provides a rationale for understanding and interpreting the "public use" requirement within eminent domain law. The rationale is based on two factors. First, while the government often needs the power of eminent domain to avoid the problem of strategic holdout, private parties are generally able to purchase property through secret buying agents. The availability of these undisclosed agents makes the use of eminent domain for private parties unnecessary and indeed undesirable. The government, however, is ordinarily unable to make secret purchases because its plans are subject to democratic deliberation and thus publicly known in advance. Second, while the use of eminent domain for traditional public objectives does not create a danger of corruption, the use of such power to benefit private parties invites the potential for inordinate influence. Private parties that directly benefit from takings can obtain a concentrated benefit and often pay little for acquiring properties. These parties thus have a strong incentive to influence the eminent domain process for their own advantage. In light of this analysis, the Article finds that the Supreme Court's recent decision in Kelo v. City of New London and decisions in several other important cases are problematic. The Article concludes that the theory of public use based on secret purchases and private influence provides a socially desirable, judicially administrable, and constitutionally legitimate mechanism for distinguishing between public and private uses and promoting economic development.

Keywords: Public use, property, eminent domain, takings, Kelo, Hathcock, Berman, Midkiff, holdout, externalities, secret purchases, secret agents, buying agents, undisclosed agents, private influence, Fifth Amendment

JEL Classification: K11