Alerts and Updates
Georgia Enacts Restrictions to Eminent Domain, Part of a National Trend
May 15, 2006
In the Supreme Court's decision in Kelo v. City of New London, 125 S. Ct. 2655 (2005), the majority opinion clarified that "nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power." Since Kelo, state governments have rushed to change their condemnation laws to eliminate or severely restrict takings for "public benefit." In Georgia, the General Assembly enacted the Landowner's Bill of Rights and Private Property Protection Act (the "Act"). Governor Sonny Perdue signed the Act on April 4, 2006.
Condemning Authority
The Act clarifies that only housing authorities and public utilities are authorized to exercise eminent domain power. Further, a state constitutional amendment (once approved) will specifically require any condemnation to be approved by a vote of the local county commission or city council. Therefore, each condemnation action in Georgia will ultimately require the affirmative vote of an elected official. This should give condemning authorities pause in that their deeds must ultimately bear the stamp of approval of local government politicians. However, the difficulty of clearing this hurdle will largely depend upon the complacency, or vigilance, of the voters.
Public Benefits
Previously, courts have made determinations of public purpose on either the concept of "public use" or "public benefit." "Public use" generally means that the general public or public agencies must have a right to use the property in some way. "Public benefit," however, as in Kelo, satisfies the requirement of public purpose when the condemnation promotes some public interest, even though the general public may not have access to the property in question. The concept provides the rationale for the type of "economic development" takings that are permissible under the Supreme Court's Kelo holding.
The Act specifically defines "public use" as (1) literal possession by the general public or government entities; (2) use for public utilities; (3) use for roads and channels; (4) acquisitions in instance of clouded title; (5) friendly condemnations; and (6) takings of "blighted" property. The legislation specifically excludes economic development from the definition of public use. As has been the case in many states, the restrictions on public use have a loophole in the "blight" exception. Blight is to be determined on a property-by-property basis. The only specific direction in the Act is that the subject property must be "urban" and must also meet certain conditions, such as abandonment, environmental contamination or illegal activity on the property.
Experts on condemnation law anticipate a challenge to the Act under the concept of violation of separation of powers. The Judicial Branch of Georgia, having ruled that the judiciary is to decide the question of what constitutes a public purpose, may construe the Act as a restriction on a court's power to determine public purpose and just compensation. As Justice Stevens noted in Kelo, "Some [public use] requirements have been established as a matter of state constitutional law, while others are expressed in state eminent domain statutes that carefully limit the grounds upon which takings may be exercised." Kelo, at 273. One day Stevens and his colleagues may be asked by Georgia to decide whether Georgia's constitutional law or its eminent domain statutes control the issues of proper public purpose and just compensation.
Compensation
The Act establishes new obligations on the condemnor and opportunities for the condemnee to recover additional damages as "just and adequate compensation." The appraisal process has been significantly changed. Most important, the required appraisal effectively governs the issue of just and adequate compensation even in cases where a formal condemnation proceeding is initiated. Other provisions also provide better opportunities for condemnees to recover relocation expenses and attorneys fees.
As with the issue of public purpose, Georgia courts have explicitly held that the issue of just and adequate compensation is to be decided by the courts. However, the Georgia Constitution is not nearly as clear about the role of the legislature in determining the measure of compensation as it is about the role of the legislature in determining public purposes.
Procedural Changes
While the restrictions on public purpose most likely will draw the most attention and receive the most analysis, the procedural rules contain many significant changes (and additional protections for condemnees) and make up the bulk of the actual legislation.
In Georgia, virtually all condemnation cases are heard before a special master appointed by the Superior Court. The complicated new procedures place additional procedural hurdles before the parties prior to the formal initiation of an action, apparently to encourage settlements. Railroads and utilities are relieved of many of these requirements. And like many similar provisions in legislation addressing Kelo in other states, the Act provides that the condemnee has a right to reacquire the property if the property has not been put to a public use within five years after condemnation.
In addition, the special master procedures in condemnation actions have been significantly revamped. The most important of these changes permits the condemnee to challenge at any time the issues of "authorized public use" and the legal authority of the condemnor directly before the court, rather than litigate such issues first before the special master. Previously the issues were barred from judicial review unless they had first been litigated before the special master.
Conclusion
Georgia's Act provides more stringent requirements and procedures for condemnors than the law previously allowed. The comprehensive procedural revisions, designed for the protection of condemnees, will require considerably more time, effort and expense on the part of both the condemnor and the condemnee to ensure compliance with the new processes. The revised definitions of "public use" are the key to the legislation, however. As in many other states, the concept of "public benefit" has been eliminated from the statutory framework for condemnations as a reaction to Kelo.
For Further Information
If you have any questions about this Alert or would like more information, please contact George J. Kroculick or any of the attorneys in Duane Morris' Atlanta office.
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