Eminent Domain & Taking Issues

Proposed State Constitutional Amendment Regarding Eminent Domain Powers Supported By House, Readies for Senate Vote

We blogged in the past here about House Bill 3 pending in the North Carolina General Assembly, which is entitled: “AN ACT TO AMEND THE NORTH CAROLINA CONSTITUTION TO PROHIBIT CONDEMNATION OF PRIVATE PROPERTY EXCEPT FOR A PUBLIC USE, TO PROVIDE FOR THE PAYMENT OF JUST COMPENSATION WITH RIGHT OF TRIAL BY JURY IN ALL CONDEMNATION CASES, AND TO MAKE SIMILAR STATUTORY CHANGES.”

The Bill’s title should give you a sense of its contents.  If you’d like to know more, you can view the Bill in its current form or you can revisit our prior piece from January of this year.  The legislative staff provides its own summary here.

What makes things a little more interesting is the N.C. Court of Appeals recent decision in Town of Matthews v. Wright, which we blogged about here.  In Wright, the Court of Appeals reiterated that a taking by a local government must be for both a public use and a public benefit; the Town could not show a public benefit, and thus improperly exercised its eminent domain powers.  If the test is conjunctive rather than disjunctive as between “public use” and “public benefit”, as the Wright case reminds is true in a local government context, does the amendment proposed by HB 3 removing “public benefit” from the private condemnor calculus actually remove one prong of/obstacle to condemnation?  In other words, in the wake of HB 3 should it become law and as the courts read the laws, will a private condemnor need show ONLY “public use” rather than BOTH “public use” and “public benefit”?  We’re not so sure that is the intended outcome by the drafters of and supporters of HB 3, who likely believe the test to be “disjunctive” or, at least, do not want the taking power to be made “easier” for the potential condemnors.

Since we blogged at the time of its introduction, House Bill 3 passed the House in February by a 113-5 count.  It currently sits in the Senate Rules Committee.  The Bill — which would allow a ballot measure to amend the State constitution — must make it out of the Senate.  We’ll see if it does.  If so, the measure would appear on the May 2016 ballot.

Stay tuned.

Mike Thelen practices in Womble Carlyle’s Real Estate Practice Group out of the Firm’s Raleigh office. He regularly represents a wide variety of clients, from local governments to businesses, in land use and real estate development litigations and transactions in state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw here and on Instagram at NCLandUseLaw here.

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