It’s the Same Old Song, This Time in North Carolina

“Now it’s the same old song, But with a different meaning since you been gone”

Those lyrics have stood the test of time, as has the use of eminent domain power for purposes that probably were not contemplated by our founding fathers when they created the Bill of Rights to the United States Constitution and set limits on the awesome power of eminent domain by government.  The first limit, that the taking of private property must be for public use, has been the subject of debate for generations. That debate probably reached its crescendo in or just after 2005, when the United States Supreme Court decided the controversial case of Kelo v. New London, and upheld the right of a Connecticut city to use eminent domain to take private properties, including occupied homes, for the “economic benefit” that the takings were supposed to accomplish by bulldozing those homes and allowing the City to transfer the property to other private property owners so that they could put the properties to “better” uses and make a profit off of them.

Wait, does this mean that a government agency can take your home if someone wants to build an apartment building or hotel upon it?   The answer, at least according to the Kelo court, is maybe.  If the State or local agency in question is in a jurisdiction where “economic benefit” is a permissible form of public use that justifies the government in seizing property from private citizens, then the answer is yes, your home can be taken by the government so someone else can profit from it.

Most people would sense that the taking of private property may be at least questionable if it results in another private party realizing an economic benefit from that taking.  But can that concept get any worse than an instance where the government can take your home so that a foreign company can make a profit or bigger profits?

After Kelo, many states tightened up their laws and some actually changed them to prohibit “economic benefit” takings altogether.  But recently, the concept of stretching the power of eminent domain towards its dangerous intersection with private gain, instead of public use, has reared its ugly head in the State of North Carolina.  There, the State was excited to announce last year that Vietnamese electric car manufacturer VinFast would be building a factory there, to kickstart its entry into the electric vehicle market in the United States.  Yet the feel-good story of a big company bringing jobs and the promise of economic growth didn’t end there.  In exchange for its promise to bring thousands of jobs to the State in what its Governor labeled as a “transformative” project that warranted having the State provide more than a billion dollars of financial incentives, after VinFast more recently indicated that there would be a slight delay in the completion of its project so that it could begin to provide all of those economic benefits to the region, the North Carolina Department of Transportation recently unveiled plans which indicated that the project would require highway improvements to accommodate all of the traffic that the new factory would generate.   And, as you might have already guessed, those road improvements will require that the NCDOT use its eminent domain power to seize dozens of private properties, including more than 25 homes, several local businesses, and a church that had been in existence since the 1800s. More information on this project is available in this article by Reason.com.

This is a classic chicken or egg story.  Are the road improvements a public use because the public will use the roads?  Or are the roads (and the public use) the result of private enterprise which are needed so that a private (foreign) company can bring its business to North Carolina and make a profit?  Sure, this project will bring jobs to the area and provide other benefits to the region.  But does the “economic benefit” that the project will bring justify the use of eminent domain in a state which is not ordinarily supposed to permit takings of private property for economic benefit?

In New Jersey, the Local Redevelopment and Housing Law permits the taking of private properties for “local redevelopment” purposes, where private gain can result from a project, but the law is supposed to be applied only in situations where redevelopment is required to eliminate blight.  Thus, economic benefit can be a result of takings by eminent domain in New Jersey, but not the purpose of or reason for the takings.  Has the VinFast project in North Carolina caused that State to use a back door approach to recognize, and permit, takings for economic benefit, instead of takings where economic benefit is merely a consequence of the takings?

There is no mention in the current media coverage of the VinFast-related condemnations but, if any of the owners do challenge NCDOT’s right to take their properties, it will certainly be worthy news to follow.

We’ll have the popcorn ready.  And we’ll also be sure to spoil the ending.