Sunday, Aug. 20, 2006 | 7:42 a.m.
In the mid-1990s, when Las Vegas wanted to build a parking garage for the Fremont Street Experience, it covetously eyed property at Las Vegas Boulevard and Carson Avenue that had been owned by the Pappas family for more than four decades.
The family balked, arguing that it was unfair for the city to use eminent domain to take its property to benefit casinos lining Fremont Street. The Pappas property had been home to a number of small businesses before the use of eminent domain, which permits governments to acquire private land for public purposes.
Then-District Judge Don Chairez agreed with the Pappas family, with a 1996 decision: "Nevadans do not believe in trampling on one party's rights to help another party, no matter how worthy the cause."
The Nevada Supreme Court, however, reversed that decision, and after the U.S. Supreme Court refused to hear the case in 2004, the Pappas family, out of legal options, finally accepted a $4.5 million settlement from the city.
Although the family was well compensated - the settlement was 13 times more than the city's initial offer - that did not change the seminal element of the case: A private landowner was forced against his will to sell his land to the government.
Since that episode, eminent domain has mushroomed into a contentious national debate, triggered by a controversial Supreme Court decision stating that an economically depressed Connecticut town had the public's interest in mind when it took homes from unwilling sellers for a redevelopment project.
But the high court left the door open for states to interpret their own eminent domain laws. This summer, the Ohio Supreme Court did just that when it ruled in favor of homeowners battling a Cincinnati suburb's attempt to force them out of their houses to make way for a condominium, office and retail development.
Now, Nevada could become the next major battleground in the fight over how broadly, or narrowly, eminent domain should be defined and used. If the state Supreme Court decides after a hearing this week to leave a proposed constitutional amendment on the November ballot, Nevada voters will add their voices to the often strident debate over an issue that strikes at the core of the American pysche: the right to possess your own little green acre, without fear that the government might snatch it from you.
A long history
Long a source of controversy, eminent domain has spawned increasingly acrimonious disputes in recent years as municipalities have sought to find creative new - and, critics argue, legally suspect - ways of using one of government's most potent powers.
While the notion of having one's home or other property forcibly taken away by the government seems inherently un-American, many grudgingly accept that, on rare occasions, individuals may have to make a sacrifice in the name of a greater public good such as the building of a road or school.
But some cities' recent attempts to force people out of their homes to then turn the land over to private developers - albeit ones whose projects promise some public reward - has many arguing that government has gone too far on eminent domain.
That is the volatile political environment Nevada could confront this fall.
Led by Chairez, a Republican candidate for Nevada attorney general, and Las Vegas lawyer Kermitt Waters, a group calling itself the People's Initiative
to Stop the Taking of Our Land - PISTOL - has qualified a Property Owner's Bill of Rights initiative for the November ballot.
"It's going to stop government from financing public projects on the backs of landowners," Waters said of the initiative. "It is intended to protect the people, the politically and economically weak people who can't fight back. This will keep the rich from robbing the poor. It's a reverse Robin Hood."
But a number of government agencies, businesses and labor unions have challenged the ballot initiative's legality. Led by Clark County Commissioner Bruce Woodbury, who heads Nevadans for the Protection of Property Rights Inc., opponents argue that the initiative would do far more than prohibit government from taking private property for redevelopment.
Opponents warn that the initiative could prove costly to taxpayers because it would require landowners to be compensated for "substantial economic loss" caused by government actions such as zoning decisions that affect property values.
Woodbury insists he has no qualms about prohibiting the government from taking private land and giving it to another private party for redevelopment.
"It's all the other stuff that's added on that no one is saying much about that leaves me greatly concerned," he said.
Waters and Chairez, though, won Round One on Aug. 8 when District Judge Mark Denton upheld the legality of the measure, which qualified for the ballot after PISTOL backers submitted 137,698 signatures.
Now it's up to the Nevada Supreme Court, which is scheduled to hear oral arguments Wednesday on an appeal filed by the initiative's opponents. Eminent domain aside, the legal dispute is noteworthy because it also will test a new state law intended to limit ballot initiatives to a single subject.
Single subject?
Woodbury and his cohorts contend the initiative covers more than simply eminent domain and therefore violates the single-subject law. Waters and Chairez strongly disagree.
The single-subject law was passed by the Nevada Legislature after voters in 2004 expressed frustration with convoluted ballot measures, including a failed initiative on medical malpractice damage awards that also sought to reduce auto insurance rates.
The single-subject laws implemented by Nevada and other states have caught the attention of University of Southern California law and business professor John Matsusaka, president of the university's Initiative & Referendum Institute. The problem, he said, is that what constitutes a single subject is not always clear-cut.
"Courts are getting more aggressive at enforcing them," Matsusaka said of single-subject laws. "But because it's subjective, the danger is that the judge's own personal biases will creep in. It's like asking, 'Is pink one color or is it two, red and white?' I would just let the voters decide whether it's one subject."
The Nevada ballot measure, which would have to be approved by voters in November and again in 2008 to take effect, initially was funded by $65,000 from Waters' Liberty Oil and Refining Association Inc. and $5,000 from Chairez. Waters and Chairez have since contributed an additional $45,000 and $3,300, respectively.
Their donations have been surpassed by the $168,778 from Americans for Limited Government, a Chicago organization that has financed similar measures in other states.
"Governments will think twice before saying they want to take someone's property," Chairez said of the initiative. "Right now, if government makes a decision to take property through eminent domain, you don't have a right to challenge their decision."
Initiative's provisions
In addition to prohibiting the taking of private land for private redevelopment, the initiative would require:
Chairez said landowners would not be taken seriously in court if they challenged undeniably public projects such as schools and roads.
"Ninety-nine percent of the time, it's the government that's being frivolous, and it's the government that's being abusive," Chairez said.
Another provision specifies that only elected judges - not unelected senior judges - could issue eminent domain rulings.
Perhaps the most controversial provision would entitle landowners to receive compensation whenever a government decision results in "substantial economic loss" to their property through actions such as zoning changes, the elimination of access to private property and limiting the use of private air space.
The Nevada Supreme Court delivered a victory to property-rights advocates last month when it determined that university system Regent Steve Sisolak of Las Vegas was entitled to $6.5 million from McCarran International Airport. Sisolak had argued that land he owned near McCarran was devalued when Clark County, which owns the airport, placed airspace restrictions on nearby developments.
All of the initiative's provisions, Chairez argues, deal with eminent domain. But even if that were not the case, he contends the single-subject law cited by the lawsuit's plaintiffs is unconstitutional because the Nevada Legislature failed to amend the Nevada Constitution on that point.
As for those who argue that the initiative is vague, Waters said interpretation should be left up to judges and juries.
"The judges are the brakes on this thing," he said. "If a landowner's complaint gets by a judge, it has some merit, doesn't it?"
Plaintiffs increase
The legal effort to block the initiative has seen a long list of co-plaintiffs join Woodbury and Nevadans for the Protection of Property Rights in the bid to keep the issue from reaching voters. They include Clark County, Las Vegas and Henderson chambers of commerce, Nevada Contractors Association, Associated General Contractors, Southern Nevada Home Builders Association, Clark County Regional Flood Control District, Southern Nevada Water Authority, Las Vegas Valley Water District and the Regional Transportation Commission.
The plaintiffs also include Nevadans for Nevada, an organization supported by labor unions and by Nevada Tomorrow, funded in part by gaming companies, other businesses and the Greenspun family, which owns the Las Vegas Sun.
"Our primary concern is that we believe it will cost the taxpayers a lot of money," said Christina Dugan, vice president of public affairs for the Las Vegas Chamber of Commerce. "It will give trial lawyers the ability to hold up legitimate land seizures."
The chamber dislikes the provision that would force government to sell back land to private property owners at its original price if it is not used for a public purpose within five years. Sometimes, as in the case of the Sierra Club lawsuit that delayed expansion of U.S. 95, challenges to road projects can take years to resolve, Dugan said.
Opponents also predict that land costs could dramatically rise, hitting taxpayers in the pocketbook, if the government must try to repurchase property after a five-year delay derailed the first deal. And they argue that requiring government to pay the highest possible price for land also could substantially increase the cost of public projects.
But the provision that troubles Woodbury the most is the one requiring landowners to be compensated for government actions that substantially devalue their property.
"That would constitute a radical change, a complete overturning of established law in the United States," he said. "It has nothing to do with eminent domain. It creates an unlimited realm of liability for all state and local entities. State and local government in Nevada will be paralyzed and will probably be bankrupted."
He and fellow opponents say examples of liability could include public construction projects, police actions that lead to seizure of property, civil forfeiture actions, public transportation decisions and public service decisions such as the location of a park or school or the allocation of police resources.
The ballot measure also comes under fire for attempting to create rules for the judiciary, such as limiting its authority to appoint senior judges.
The lawsuit also alleges that the ballot measure violates the federal equal protection clause of the U.S. Constitution because landowners fighting eminent domain would gain certain rights not afforded plaintiffs in other cases.
By failing to hold property owners liable for court costs related to eminent domain actions, "they have no incentive to settle because they will get a free ride," Woodbury said.
The Nevada ballot measure and others nationwide were sparked by the U.S. Supreme Court's June 2005 ruling in Susette Kelo v. the City of New London, Conn.
The high court's 5-4 ruling upheld the city's decision to take away residential property held by nine homeowners for a redevelopment project that officials in the economically depressed city claimed would be for the public good.
Fighting City Hall
Although property rights advocates decried the decision, Kelo was considered a major victory for struggling inner cities looking to rejuvenate their economies.
That was the hope of Norwood, Ohio, a Cincinnati suburb that lost major factories and saw its population shrink over the past 20 years. Norwood wanted to replace 71 homes with a development that would have provided 300,000 square feet of office space and 220 condominium and apartment units, a $125 million project estimated to produce $2 million in tax revenue annually.
Most homeowners, sizing up the situation as a classic case of not being able to fight City Hall, sold. Three homeowners, however, resisted. And last month, the Ohio Supreme Court sided with the holdouts.
In its decision, the Ohio court said potential economic benefits to a government or community cannot be the sole justification for seizure of private property.
"For the individual property owner, the appropriation is not simply the seizure of a house," the court's 58-page opinion concluded. "It is the taking of a home, the place where ancestors toiled, where families were raised, where memories were made."
The defeat - in the first property rights case of its kind to reach a state's highest court since the Kelo decision - cost Norwood one of the few remaining economic development tools it had at its disposal. Cincinnati attorney Timothy Burke, who represented Norwood in its legal battle, said he fears that if other state courts make the same rulings, "it will harm the ability of older central cities to deal with the problems they face."
"I have a real concern because we have taken away an important tool cities can use to revitalize their communities," Burke said. "This ruling will discourage developers from taking on the tough projects where they have to put a lot of smaller parcels together. So maybe they'll just go down the interstate and look for the nearest cornfield."
Since the Kelo ruling, about two dozen states have approved eminent domain legislation to ban the taking of private land for private development. In addition to Nevada, several states also have November ballot initiatives related to eminent domain.
Two sides
Americans for Limited Government, the group backing Nevada's measure, is a nonpartisan group headed by Howard Rich, a New York City real estate entrepreneur who founded U.S. Term Limits, an organization that took credit for a grass-roots movement that led 15 states, including Nevada, to adopt term limits . Rich also is affiliated with other libertarian organizations.
Heather Wilhelm, a spokeswoman for Americans for Limited Government, sharply disagreed with the plaintiffs' assertion that compensating property owners for adverse land-use decisions is a separate issue from eminent domain. Both topics, she said, involve "government takings."
On the other side of the debate is the American Planning Association, a nonprofit research organization with offices in Chicago and Washington. The association is troubled by Nevada's ballot initiative, as well as similar November measures in California, Idaho and Montana - a list that also could include Arizona and Washington by Election Day.
The association objects to the provisions allowing landowners to be compensated for land-use decisions while retaining their property, otherwise known as "regulatory takings."
Regulatory-takings initiatives, the association says, "threaten a wide array of planning, environmental, historic preservation and land conservation measures," and could bankrupt governments forced to compensate unhappy landowners.
Regulatory-takings provisions, association consultant Jason Jordan says, also could lead to "sprawl on steroids."
"It would threaten air and water quality, and there certainly will be legal uncertainties," Jordan said. "The burden of proof will shift to the government. Instead of someone having to prove diminution of land value, the government would have to prove their decision has no harmful effect."
Oregon's voters approved the nation's first regulatory-takings initiative, Measure 37, in 2004. Through early last month, landowners - mostly in rural and forest areas - had filed 1,994 claims for compensation from the state, demanding more than $4.2 billion. Several hundred other claims have been filed with county governments.
The Oregon Supreme Court, reversing a lower court, upheld the legality of Measure 37 in February. But opponents continue to assail the measure, saying it will dismantle decades of planning to limit sprawl.
To date, no compensation has been paid as government agencies continue to wade through interpretation of the law. The responsibility for sorting through claims filed with the state has fallen on Michael Morrissey of the Oregon Land Conservation and Development Department.
"Measure 37 is a lot more complex than people thought it would be," Morrissey said. "There are a lot of details that people didn't realize. It's still a big unknown."
For now, the same can be said of Nevada's potential ballot measure.
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