Watchdog Asks Supreme Court to Decide Whether Companies Can Use Eminent Domain

Employees of Century Communities operate the municipal district…

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(Joshua Paladino, Liberty Headlines) The Institute for Justice petitioned the Supreme Court on Thursday to review whether Colorado can let private developers use eminent domain for business purposes. 

“When it comes to property rights, Colorado’s law is more akin to the Wild West than a constitutional republic,” said Jeff Redfern, an attorney at the Institute for Justice, which represents the petitioner. “This is nothing other than an old-fashioned landgrab. Unlike most eminent domain laws, which require governments to engage in the taking, Colorado’s law cuts out the middleman and just lets private developers use eminent domain to hand land over to themselves.”

The Colorado Supreme Court ruled this summer that municipalities can use eminent domain to take property from a private person even if the property will be used for another person’s private gain, IJ reported.

“Permitting some private benefit by public taking may strike some as unusual,” The Colorado Supreme Court wrote in its decision. “But Colorado is no stranger to this method of encouraging development.”

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The case involves two property development companies, Woodcrest Homes and Century Communities.

Before the 2008 recession, Woodcrest Homes purchased a small parcel of land outside Parker, Colorado, situated between two larger parcels of land.

The company planned to begin a housing development, but the project was never completed because of the recession.

Century Communities bought the two larger parcels of land years later and used the plans that Woodcrest Homes had established to continue building the housing development.

After buying the land, Century Communities established a “municipal district,” which is a “pseudo-governmental body permitted in Colorado.”

Employees of Century Communities operate the municipal district called Carousel Farms Metropolitan District.

Despite Century Communities owning only the two larger pieces of land, the Carousel Farms Metropolitan District comprises all three parcels of land.

Since Century Communities essentially owns the Carousel Farms Metropolitan District, the district “voted” to take the third piece of land from Woodcrest Homes through eminent domain, IJ reported.

Woodcrest Homes challenged the district’s use of eminent domain, arguing that the taking benefited Century Communities, which violates the Fifth Amendment’s protection that eminent domain be available only for “public use.”

The Carousel Farms Metropolitan District argued that it would build roads and utilities on the land taken from Woodcrest Homes “so that the public can eventually gain access” to the housing development.

A Colorado district court initially sided with the Carousel Farms Metropolitan District.

Then a court of appeals sided with Woodcrest Homes.

Then the Colorado Supreme Court sided with the district again.

Now IJ asks that the Supreme Court hear the case and side with Woodcrest Homes.

“Eminent domain is supposed to be used by the government for the benefit of the public, not by developers for themselves,” said IJ Attorney Patrick Jaicomo. “Colorado law gives public power to private businesses to use for private gain. That’s plainly unconstitutional and we’re confident that U.S. Supreme Court will end this corrupt abuse of power.”