Another State Supreme Court rejects eminent domain for economic development. The Iowa Supreme Court recently allowed the use of eminent domain for an oil pipeline. But in so doing, writes Nick Sibilla, it rejected the infamous Supreme Court decision in Kelo v. New London:
Under both the Iowa and U.S. Constitutions, the government may only take private property with eminent domain for “public use,” which has long been limited to infrastructure projects. But in Kelo, a bitterly divided U.S. Supreme Court expanded “public use” into “public benefit,” and declared that the mere promise of new jobs and increased tax revenue could justify using eminent domain. The court even rejected a request by the affected homeowners in New London (who were represented by the Institute for Justice) that would have required a “‘reasonable certainty,’ that the expected public benefits will actually accrue.”
Yet when a similar argument was made for Dakota Access, the Iowa Supreme Court was “unmoved” about “the alleged economic development benefits of building and operating the pipeline.” Instead, the court explicitly rebuked the Kelo decision and even mocked its reasoning:
“If economic development alone were a valid public use, then instead of building a pipeline, Dakota Access could constitutionally condemn Iowa farmland to build a palatial mansion, which could be defended as a valid public use so long as 3100 workers were needed to build it, it employed twelve servants, and it accounted for $27 million in property taxes.”
“In sum, because we do not follow the Kelo majority under the Iowa Constitution,” Justice Edward Mansfield wrote for the court, “we find that trickle-down benefits of economic development are not enough to constitute a public use.”
But Mansfield, along with three other justices, did rule that Dakota Access was a “common carrier,” which in Iowa, counts “as a valid public use, even when the operator is a private entity and the primary benefit is a reduction in operational costs.” Like railroads and public utilities, authorizing eminent domain for a common-carrier pipeline would be constitutional.
[Nick Sibilla, “Iowa Supreme Court Rejects Kelo v. New London, Upholds Eminent Domain for Dakota Access Pipeline,” Forbes, June 7]
The oil must flow.
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