The Arkansas and U.S. Constitutions permit the process of eminent domain, which is the taking of private property for public purposes as long as there is just compensation paid to the owner, legal authorization for the taking, and an observance of procedural due process. Eminent domain can be used to obtain property for public purposes such as improvement districts, electric power lines, natural-gas pipelines, irrigation and drainage companies, cemeteries, roadways, bridges, dams, and state colleges and universities. Interpretation of the term “public purpose” has produced much of the case law on eminent domain, including Pfeifer v. City of Little Rock, a 2001 Arkansas case, and Kelo v. City of New London, Connecticut, a 2005 U.S. Supreme Court case; these cases provided significant clarification in the law of eminent domain.
The 2005 Kelo case involved a condemnation of properties, some blighted and some not. The Kelo federal court found that all of the condemned properties were part of a comprehensive redevelopment plan. Hence, all were condemned for a “public purpose.” In the earlier Pfeifer case in Arkansas, some of the individual properties to be taken were not to be used for the public purpose of the William J. Clinton Presidential Center and Park, but the overall plan was to create a comprehensive design for a park, including the presidential library. This plan evidenced a public purpose.
The power of eminent domain can be delegated by the Arkansas General Assembly to private entities that have a public interest, such as public utilities, subject to these same requirements. Besides public utilities, the power can be delegated to local governments, such as cities and school districts. In the Pfeifer case, the city used eminent domain to acquire land used for the Clinton Presidential Library, although it was described as a “park” by the condemning authority, as the statutory authority was clearer for acquisitions for parks. Those entities may also be delegated the power to levy taxes, such as for improvement district assessments.
Private property may not be taken for private purposes—that is, for purposes of benefiting specific persons as opposed to benefiting the public generally. For example, blighted properties may be condemned and redeveloped, disposed of or demolished, but not with a specific purchaser in mind. The Supreme Court has declared that providing access to a single private ownership is not a “public purpose.” Furthermore, it is not necessary that the property taken be used by the public. Arkansas law is consistent with the Kelo decision, although the relevant cases are highly fact-specific and should be read accordingly.
In 2015, the Arkansas General Assembly restated and revised the requirements for the “procedural due process” part of the eminent domain process by adding a property owner’s “bill of rights.” Among other requirements, the bill of rights requires a condemning authority to notify a property owner when property is being considered for condemnation to estimate the compensation likely to be due for the property. The authority is required to make a good faith offer to an owner before filing suit. The owner can hire an appraiser to assist in negotiations or trial, or the owner may hire a real estate agent, planner, or investor instead. Such experts’ fees may be included in the owner’s cost recovery if it is determined that the owner’s just compensation is in an amount that exceeds by twenty percent the condemning authority’s initial offer. Appraisals are a vital part of the condemnation process, forming the basis for determinations as to whether compensation being paid is “just.” Filing an eminent domain legal action may immediately vest title and possession of property in the condemning authority, generally if it deposits in the court an amount that reflects the fair value of the property taken, based on an appraisal.
The practical results of the 2015 revisions to the statutes will likely be to pressure condemning authorities to negotiate earlier and more specifically in the eminent domain process, making offers they are willing to stand behind early in the process. There is no corresponding duty imposed on owners to make a good faith counter-offer. Further, allowing estimates by non-appraisers may reduce the costs incurred by an owner in countering an offer. The revisions will also expand the pool of potential value witnesses available to an owner, although without addressing the weight of their testimony. The ultimate result, intended or not, of the revisions may be a situation that favors property owners.
For additional information:
Ashley, Dot Cox Coston. “The Personal Price Paid by Property Owners for the Good of the County during WWII.” Ouachita County Historical Quarterly 37 (Winter 2005): 24–33.
Crouch, Ilisa. “Justices Let LR Take Land for Clinton Library.” Arkansas Democrat-Gazette, November 2, 2001, pp. 1A, 6A.
House Bill 1870 of 2015. Arkansas General Assembly. http://www.arkleg.state.ar.us/assembly/2015/2015R/Bills/HB1870.pdf (accessed September 17, 2015).
Musa, Aziza. “Utility’s Land Seizure Goes to Appeals Court.” Arkansas Democrat-Gazette, February 26, 2015, pp. 1B, 8B.
Pfeiffer III v. City of Little Rock. FindLaw.com. http://caselaw.findlaw.com/ar-supreme-court/1125992.html (accessed September 17, 2015).
W. Christopher Barrier
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.