Editorial: Eminent Domain: An Insidious Development

Eminent domain has been around for a long time and for many years it was used sensibly. In recent years it has taken an insidious turn that clearly indicates that many who govern care little about the rights of those they govern. Thanks to a U.S. Supreme Court decision in the relatively recent past, property can be designated “blighted” and confiscated by government at almost any level and be given to whomever is willing to put up the most money. It is happening all over the nation.

In the old West, men were hung for stealing a man’s horse or his cattle. Today governments virtually steal private property and hand over the booty to someone else—often to the competition. Abraham Lincoln is probably restless in his grave over such goings on.

Early last week, Keystone Industries LLC, a Fort Myers, Fla.-based coal company, was in court trying to defend itself against an eminent domain case brought by the Jacksonville (Fla.) Port Authority. The authority wants to condemn 65 acres owned by Keystone and lease it to other private companies for port development. Attorneys for Keystone say the port’s primary prospect for the land “is actually one of Keystone’s competitors, The Drummond Company, a Birmingham, Ala.-based company that claims to have shipped more than 29 million tons of coal in 2005.” The Florida Union-Times says, according to court testimony, “Drummond has signed a letter of intent and drafted a lease with the port authority to rent land for at least $12 million a year.”

Florida legislators recently passed a law to prevent the taking of property that is “blighted” to give it to another private developer, but the condemnation proceedings were filed previous to that passage, so the case must be tried under the old rules. Carol Saviak, executive director of the Coalition for Property Rights, a nonprofit group based in Orlando, said the case is a perfect example of why the new legislation is needed.

Port officials say Drummond is only one of a number of options for the land. And we ask, “Does it make any difference?”

About Keystone’s ownership of the land, a Keystone representative appearing on the Hannity & Colmes telecast last week said that though the port had submitted a bid when the property was put up for sale, Keystone had outbid the port.

Unless there is some redeeming explanation for the port’s action, we think port officials are merely fishing for more dollars. Keystone is already in the process of developing the land. Keystone’s lawyers argue that the company’s use of the land would be more beneficial to the region than if Drummond got it.

Keystone lawyers have asked the judge to throw out the proceedings because the port has not made clear its intended use for the land. They especially don’t like the possibility that it could be turned over to a competitor.

The entire procedure is a bit muddy. Several potential prospects for the land have been mentioned, including Hanjin Shipping Company (a South Korean steamship line) or other similar companies. The authority had once intended to use the land for consolidation of Mercedes-Benz’s Jacksonville shipping operations before that project was put on hold.

Could ownership be disputed? The previous owner, Jax Maritime Partners, agreed to sell the 65 acres to Keystone before the port authority filed for condemnation. But the sale apparently closed after the port’s filing. It is also reported that the port authority is close to reaching an agreement to buy other riverfront property that could serve Drummond’s needs.

So why doesn’t the port just buy the other property, let Drummond move in, and let Keystone go about its business? Well…there may be another glitch.

The Florida Times-Union reported that Simon Bloom, lead counsel for Keystone, spent part of an afternoon implying that there might be bad blood between the Port Authority and Keystone President Tom Scholl.

Several years before the condemnation proceedings began, the port was trying to buy property for use by Mercedes-Benz. At the same time, Keystone was looking to buy nearby land. According to the testimony, Scholl visited Mercedes-Benz to tell them that a coal operation would be next door and that it could create dust problems for the car company. So Mercedes never bought the land.

There are lots of ups and downs and ins and outs to this case, but we think the only fact that matters is whether or not Keystone legally owns the land. If it does, Jacksonville should keep hands off. If the port is really just on a fishing expedition, the court should cancel their trip.

Does that mean there are never legitimate reasons to acquire land through eminent domain? Certainly not. The procedure was once used only to acquire land for a truly public purpose; property was never confiscated and given to other private parties.

The Keystone/Jacksonville Port Authority case appears on the surface to be symbolic of the erosion of property rights in the U.S., and it should not be tolerated by the courts. Businessmen no doubt are beginning to wonder whether government is enemy or friend.

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