Almost 20 years ago, an unpopular U.S. Supreme Court ruling forced property owners throughout Georgia to worry they could lose their property rights to eminent domain.
That is until a 2006 state law restricted the government’s eminent domain powers. That law put property owners’ minds at ease.
But there were a few things in that Georgia law that those property owners didn’t know about. Consequently, they may, yet again, have reason to brood.
Georgia law, as it turns out, doesn’t shield landowners from eminent domain, at least not to the extent they thought it did.
Eighteen years ago, Georgia legislators passed a law that forbade a private entity from using eminent domain to take another person’s land…unless it serves a public purpose.
But, in these matters, there’s apparently some gray area over what Georgia law does and does not require. There’s even a debate over what constitutes and what does not constitute a public purpose.
Suppose a railroad company — which is private — wants to apply eminent domain to use your land?
And what if Georgia law says that it can?
Legal experts have already said the U.S. Supreme Court might have to resolve these questions.
For now, at least, this has to work its way up through the Georgia courts.
On Tuesday, attorneys on opposing sides appeared before the Georgia Public Service Commission (PSC). They argued over the 2006 Georgia law and what it does and does not say. Depending upon whom you ask, either this law is settled…or there are a lot of loose ends that need tying up.
THE RAILROAD SPUR
Leadership at the Sandersville Railroad Company intends to construct a 4.5-mile long rail spur across land that Sparta residents Blaine and Diane Smith have had in their family for more than a century….over the Smiths’ objections.
Across the Smiths’ land, a train will haul as much as 500,000 tons of granite from the nearby Hanson Quarry. Sandersville Railroad spokeswoman Vivian Lee-Boulton said last year that the spur and the proposed eminent domain would not force anyone out of their home.
Smith and his attorneys at the non-profit public interest law firm Institute for Justice (IJ) argued that this Hanson Spur would not constitute a public use…but instead constitute a private taking.
This spring, PSC officer Thomas Bond recommended that the Sandersville Railroad’s potential use of eminent domain would serve a legitimate public purpose.
This week the PSC gathered to hear arguments to challenge Bonds’ recommendation.
METHODS OF TRADE
IJ Senior Attorney Bill Maurer represents the Smiths, as well as affected property owners Don and Sally Garrett in addition to Marvin and Pat Smith.
“The [Sandersville] railroad has manifestly failed to provide basic information about this project,” Maurer told PSC members Tuesday.
Sandersville officials, Maurer said, were supposed to provide, among many other things, an independent financial analysis that proves the proposed spur is needed.
“The railroad has also not demonstrated that it will receive sufficient revenues to make this project economically viable,” Maurer said.
“It has not demonstrated any of the actual costs of this project. The railroad also has not shown that it has or will obtain necessary approvals from the Federal Service Transportation Board, nor has it explained sufficiently why it does not need them.”
Maurer told the PSC that Sandersville has only produced “vague, unsupported and conclusory testimony from self-interested individuals.”
“Much of this testimony was simply some version of ‘Trust us,’” Maurer said.
“What the railroad has produced here is more like a sales pamphlet than an effort to provide a sufficient legal justification to use eminent domain to destroy the property, the peace of mind, and the legacy of my clients.”
Attorney Robert Highsmith represents Sandersville Railroad.
“There are a lot of things that the respondents and the interveners wish were in the law,” Highsmith told the PSC, adding that, in these circumstances, Georgia law does not require a feasibility or economic study or even a noise analysis.
THE KELO DECISION
Eminent domain gives the government the power to take your property, even if you don’t want to sell. The Fifth Amendment restricts eminent domain in two ways. First, the entity that takes the land must have a public use for it, such as construction of roads or bridges. Second, property owners must receive just compensation.
In 2005, the U.S. Supreme Court’s decision in the Kelo v. New London case expanded the definition of “public use” to include private economic development. The following year, Georgia state legislators passed a new law that countered the Supreme Court’s decision. In the Peach State, economic development is not considered a public use that justifies eminent domain.
Smith and the other parties have thus far refused Sandersville’s offers of money to use his family land.
Per Georgia law, economic development or increasing the tax base is also not a justifiable reason to take someone’s private property.
IJ argues that a government may legally use eminent domain to build something that benefits the public, such as a highway, but not for something that benefits only a private company.
A LEGITIMATE PUBLIC PURPOSE?
In 2006, Georgia legislators said railroads were essentially the same as public utilities, Highsmith said.
“The law says that one has to demonstrate that it [eminent domain] is for a public purpose, which is expressly defined by the General Assembly to include railroads and to include channels of trade,” Highsmith said.
Mauer, citing what little information he said Sandersville Railroad provided, told the PSC that it is impossible to determine whether the proposed railroad spur serves a legitimate public purpose.
“The commission should not give them [Sandersville] a pass simply because they are a railroad,” Maurer said.
“This project is not about meeting a public need nor is it about providing a necessary service to the public. It arises for one reason and one reason only. The private want of private companies for more money. It is a naked transfer of wealth from my clients to Sandersville and its small network of clients so that those companies can get richer.”
Highsmith, in his rebuttal, said the project will open a channel of trade for multiple customers. Five business owners who attended Tuesday’s hearing said they will contract with Sandersville if the line gets built.
Those businesses included one cement manufacturer and one construction company, as well as a wood and procurement fiber company.
“The service is available to any customer willing to contract with the Sandersville Railroad to ship,” Highsmith said.
“It is not for the use of a single customer. It is not for the use of an individual private enterprise.”
WHAT’S NEXT?
The PSC will now consider whether to adopt or reject Bond’s recommendation.
PSC spokesman Tom Krause said Wednesday that the PSC has not yet voted.
“As far as timing, it is hard to say. Typically, cases get a vote within 30 days after the final hearing, but it is difficult to apply that general rule to specific cases,” Krause said via email.
“As far as procedure, the case will appear on the agenda for a Committee Meeting (which meets every other Thursday), where it will be discussed. The final decision/vote will be held at the subsequent Administrative Session (the Tuesday following the Committee Meeting).”
Krause said other unspecified factors could cause a delay.