The Right to Full and Fair Compensation: Making Sure Small Business Gets a Fair-Shake

Since the Supreme Court’s infamous decision, in Kelo v. New London, there have been some big eminent domain reforms across the country. That was the decision that allowed government to take private property from ordinary homeowners, and small businesses, for the benefit of large corporate developers. But if there was a silver-lining, Kelo brought a lot of attention to the problem of eminent domain abuse in America. The result is that citizens in some states have succeeded in limiting the government’s power of eminent domain through legislation and the initiative process. For example, last fall Virginians voted to amend their State Constitution to prohibit municipalities from taking private property for the benefit of private corporations.

NFIB Legal Center has been vocal about eminent domain abuse in both the court of law and the court of public opinion. To be sure, we led a coalition of 12 different groups in urging the Supreme Court to reconsider Kelo last year. And we continue to fight eminent domain abuse in other ways—including challenging the authority of state and local government to proceed with eminent domain takings where the authorities have failed to comply with procedural rules that are designed to protect private property owners. But, one of our biggest concerns—in the fight to end eminent domain abuse—is the problem of undervaluation. Accordingly, NFIB Legal Center has launched a special initiative to advocate for rules that ensure small business owners are fully and fairly compensated for their losses when they suffer a taking in eminent domain.

As part of our Just Compensation Project, NFIB Legal Center recently filed in an Ohio case to defend the rights of a small business owner. In that case, the City of Westerville decided to use eminent domain to take a landscaping easement—taking the owner’s right to control landscaping on his property. This was all part of a municipal beautification project. But, in taking this right for itself, the City’s actions caused the remainder of the owner’s property to depreciate in value. This is because the City was taking away the owner’s right to ensure unobstructed views to and from public roads—an especially valuable right for commercial property owners because there is a strong correlation between public visibility and consumer traffic.

But, the City is refusing to compensate the owner for the resulting depreciation, and the City is appealing a lower court’s decision in favor of the landowner. Accordingly, NFIB Legal Center filed an amicus brief arguing that the Constitution requires compensation for depreciation in value to private property when government takes away valuable property rights through eminent domain. We also defended the owner’s right—under the Ohio Constitution—to receive compensation for the taking of his legal right to continue using an existing access point. As we argued, loss of an access point can result in further depreciation to commercial property, even when there are other ways to access the property.

This is just the latest in NFIB Legal Center’s ongoing effort to ensure full and fair valuation in eminent domain cases. You would be amazed at the ingenious—sometimes Orewellian—arguments that governmental lawyers come-up with to justify low-ball compensation awards. But that is all the more reason for us to fight harder. We may have a long-way to go in the fight to end eminent domain abuse in America, but we are not going to give-up. We’re rolling-up our sleeves and ready to defend small business rights from coast-to-coast.

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About Luke Wake

Luke A. Wake is a senior staff attorney at the NFIB Small Business Legal Center. Wake has particular expertise on environmental and land use issues, and has worked on numerous other constitutional issues and matters of importance to small business owners. He is an ardent defender of private property rights, which he believes are essential to the free enterprise system and the foundation of American liberty. As a strong advocate of individual rights and economic liberties, he has built his career defending small business interests. Since joining the NFIB Legal Center, Wake has focused on a whole host of issues, from employment law matters to regulatory compliance. In addition to serving as a resource for small business owners, Wake remains committed to the Legal Center’s pledge to ensure that the voice of small business is heard in the nation’s courts. He is also working to advance small business interests in law review articles, including publications in the Berkeley Journal of Law & Ecology, the Texas Journal of Law and Politics, and Competition Magazine. See R.S. Radford & Luke A. Wake, Deciphering and Extrapolating: Searching for Sense in Penn Central, 38 Ecology L.Q. 731, 746-747 (2011); Damien M. Schiff, Luke A. Wake, Leveling the Playing Field in David v. Goliath: Remedies to Agency Overreach, 17 Tex. L. Rev. & Pol. 97 (2012); Jarod M. Bona and Luke A. Wake, The Market-Participant Exception to State-Action Immunity From Antitrust Liability, J. of Antitrust and Unfair Competition of the State Bar of Ca., Vol. 23, No. 1, 156 (Spring 2014); James S. Burling and Luke A. Wake, Takings and Torts: The Role of Intention and Foreseeability in Assessing Takings Damages, in Condemnation 101: Making the Complex Simple in Eminent Domain 449-51 (ALI-ABA Committee on Continuing Professional Education eds. 2011). Before joining the Legal Center’s team, Wake completed a prestigious two-year fellowship as an attorney in the Pacific Legal Foundation’s (PLF) College of Public Interest Law. Wake is a graduate of Case Western Reserve University School of Law in Cleveland Ohio. He is a member of the California Bar, the District of Columbia Bar, and the U.S. Supreme Court Bar. He completed his undergraduate studies at Elon University in North Carolina in 2006 where he focused on political theory and corporate communications.
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