We're "Activists!" Who Knew?

According to the Daily Reporter (Wisconsin), that is. If it's on the internet, it must be true, right?

Activists want U.S. Supreme Court to rule on eminent domain case summarizes the background in City of Milwaukee Post No. 2874 Veterans of Foreign Wars of the United States v. Redevelopment Agency of the City of Milwaukee, No. 09-1204 (cert. petition filed Apr. 2, 2010):

National organizations that focus on eminent domain law are urging the U.S. Supreme Court to rule on a lawsuit over the vacant property at 27th Street and Wisconsin Avenue in Milwaukee.

The Redevelopment Authority of the City of Milwaukee acquired the property in 2001 from Maharishi Vedic University Inc. by declaring the land blighted. The authority paid $140,000 to the university and $300,000 to the City of Milwaukee Veterans of Foreign Wars Post No. 2874, which held a long-term lease for space in a vacant hotel on the site.

We we filed an amicus brief on behalf of the National Association of Home Builders and the Wisconsin Building Association in support of the VFW's cert petition. The Institute for Justice (the people that represented Mrs. Kelo) also filed an amicus brief, available here.

The issue in the case is the constitutionality of the "undivided fee" rule. The Wisconsin Supreme Court applied the rule to prohibit the jury from hearing evidence regarding the value of the VFW's long-term low rent lease. The court concluded that the VFW's lease could not be valued separately because the fee simple interest was condemned, and that the VFW was not entitled to any compensation for its leasehold interest. 

The case is getting nationwide attention because it is an example of a legal dispute that has come up in other U.S. lawsuits, said Dana Berliner, senior attorney for the Institute for Justice, an Arlington, Va.-based law firm that takes on cases that affect eminent domain law. In the Milwaukee case, the VFW stands to get no compensation for its lease, based on a 2009 Wisconsin Supreme Court ruling.

"This situation showed so clearly the results of the rule that the Wisconsin Supreme Court applied," Berliner said. "The result was so extreme."

The origin of the case dates to 1961, when the VFW, which owned the site, agreed to sell it to Towne Metropolitan Inc., Milwaukee, to develop a hotel. In exchange for the land, the VFW received a 99-year lease to use space in the building as a VFW hall. In 2003, the VFW had 67 years left on its lease with the option to extend the lease another 99 years.

"It is completely impossible that just compensation for a 50-year or 60-year lease is zero," Berliner said.

The core question is whether governments, when using eminent domain, base their payments to the owner on the value of the land acquired or the value of the assets lost, such as the VFW’s long-term lease.

More about the case and the issue here. Thanks to the folks at California Eminent Domain Report for the heads up.