Missouri has a peculiar statute that we wish were more widespread. In 2006, state legislators adopted the “heritage value” statute requiring courts award an additional 50% over fair market value as just compensation when property owned by a family for more than 50 years is taken by eminent domain. Thus, when heritage property is taken, the owner is entitled to 150% of fair market value.
We like.
Congratulations to our Owners’ Counsel colleague Robert Denlow for defending the heritage value statue in the Missouri Supreme Court in St. Louis Cnty v River Bend Estates Homeowners’ Ass’n, No. SC92470 (Sep. 10, 2013), a decision which, among other things, resulted in the court upholding the statute against a constitutional challenge. The two main claims of illegality were that (1) the legislature went outside of its authority and defined just compensation to mean “too much,” and (2) the payment of the heritage premium “conferred an unconstitutional private benefit.”
Who raised these challenges, you ask? Property owners who owned for less than 50 years who felt that others should not get a bonus just because they’d owned their property for a long time? A property owner stiffed by a taking not for public use?
No, the condemnor made the arguments. First, just compensation as defined by Missouri court decisions, its argument went, means “fair market value” and not a penny more. Second, “any compensation it must pay beyond the constitutional minimum to make that acquisition serves no public purpose and is, therefore, unconstitutional.” Take Kelo, turn it on its head. You wish condemnors wouldn’t make such arguments, and it just seems odd to us when the government itself challenges the constitutionality of one of its own laws. We know it can, but it just seems weird when it does.
The court rejected both arguments and held that the heritage value statute was just fine, and that it is consistent with the court’s own definition of “just compensation” —
Sections 523.039 and 523.061 do not alter this Court’s definition of “just compensation,” which serves as a constitutional floor below which the legislature cannot descend; the statutes instead promote the legislature’s intended policy of providing additional benefits to certain property owners whose real property is taken for public use.
Slip op. at 33-43 (footnote omitted). So yes, the legislature can adopt a law that provides more, and “the constitutionally required ‘just compensation’ is a minimum measure that must be paid, not a maximum one.” Slip op. at 35.
The court also held that the statute was not a conferral of a private benefit on the heritage property owners because the “primary effect” of the statute served a public good even if it has some incidental private benefit.
Kelo turnaround, postively Shakespearian!
The court also rejected the County’s other complaints about an incomplete transcript and certain of the trial court’s evidentiary rulings, but you can read those yourself if you are interested (although the opinion is a good primer for those who want to find out how an eminent domain trial goes down). For a summary of the court’s rulings, see here.
Once again, congratulations to Bob Denlow and his partner Paul Henry for a good win. Their take on the decision here. Here’s their brief.
St Louis Cnty v River Bend Estates Homeowners’ Ass’n, No. SC92470 (Mo. Sep. 10, 2013)