Texas law states the right to own private property trumps government’s attempts to bargain hunt public projects, but property owners lack any realistic opportunity to pursue their rights in court when a condemning entity, such as a public entity exercising eminent domain powers, denies them adequate compensation for their land.
After the U.S. Supreme Court’s decision in Kelo v. City of New London in 2005, which expanded the definition of a “government interest” that justifies the taking of property, Texas joined other states in reining in government’s eminent domain authority.
Eminent Domain Run Amok
Supreme Court Justice John Paul Stevens said an expanded tax base supersedes the right to own property, a blunt dismissal of property rights that convinced Texas lawmakers the Supreme Court had deviated significantly from the Constitution.
The reaction was as swift as it was overdue. The same flawed philosophy paving the way for Kelo had also pulled apart the legal protections standing between Texans and the unbridled power of the state. After six years of passing small but significant changes, the Texas Legislature pushed through a large reform bill that attempted to defend what lawmakers believed was already sacrosanct under the state’s constitution.
That push was not without its weaknesses. Lawmakers spent so much energy weaving in additional procedural safeguards that they overlooked the most crucial thread: enforcement.
According to the Texas comptroller, more than 9,000 entities currently claim the power of eminent domain and the ability to execute condemnations. The legislature has neither the expertise nor the time to parse through which eminent domain offers are fair assessments of the property’s value and which are exploitations of state power, so the property rights of many Texans are routinely violated despite the state’s legal protections.
Redress for Unfair Assessments
Enforcement would ordinarily fall to Texas’ courts. Legal action often proves so expensive though that many owners resign themselves to accepting less compensation than they believe they deserve rather than trying to challenge the condemner’s assessment.
Valuation disputes run, on average, between three to five years, and they can cost hundreds of thousands of dollars. Condemners have both the experience and the financing to navigate that process, but the average property owner does not. Currently, the state’s law denies Texans any credible chance of having those expenses reimbursed. Mandatory attorney fees are triggered only when the condemner fails to tender a “bona fide offer,” a high mark the Texas State Senate’s researchers concede “rarely provides relief to property owners even when it is determined that the condemner has made an unfair offer.”
The property owner pays the legal fees out of pocket or on a contingency fee basis, which is available only if the expected eventual award is grand enough to attract a lawyer to take the case. In either case, the final award does not include compensation for the plaintiff’s court costs, meaning not only do Texans exit the courtroom responsible for covering at least some portion of the legal fees, they have to spend their own money to assert their property rights.
Uneven Playing Field
The current nature of eminent domain laws tilts the scales against property owners. Texas’ lack of eminent domain law enforcement measures ensures condemners will press and prod until their intrusions extend far beyond what public necessity demands.
The Texas Legislature is currently considering Senate Bill 474, a new fee-shifting arrangement in compensation hearings. Specifically, a condemning entity would become liable for the owner’s reasonable attorney fees whenever a case results in a determination that the owner’s land was undervalued by at least 20 percent.
Respect for private property has resurged over the past decade, but the strength of these rights depends on the victims of eminent domain abuse being able to obtain sufficient redress through the courts. As presently structured, the law only pays lip service to property owners.
Kathleen Hunker ([email protected]) is a policy analyst with the Center for Economic Freedom at the Texas Public Policy Foundation.