Not sure I understand the quotation. Who is the one driving a cart and horses through the law, is it Wells Fargo or Richmond?
And it's an old American tradition to consider bankers as "the Devil" or strongly in that direction. This has even provided what's very possibly our best bit of political rhetoric, "You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." (http://en.wikipedia.org/wiki/Cross_of_Gold_speech)
Not too far from where I live is a house that Deutsche Bank took possession of a year and a half back. They haven't made any moves to sell since. The lot is overgrown, the roof will start leaking soon, it's an eyesore that's getting worse every month.
A few years back I had the misfortune to rent from an absentee landlady from one of the poorest ZIP codes in Brooklyn who had bought that property at the height of the boom. The high point of the tenancy was the heating failing in early October. When the code inspector showed up I could show him the garbage that hadn't been collected for three weeks and send him down to the basement where the lady, her husband and her useless cousin had torn the boiler apart, attempting to fix it, and couldn't put it back together again. She had arranged for the plumber to come, cancelled it a day later, and then went out from Brooklyn to do this cock-up of a cowboy job.
The backstory was that her bank had asserted rights the day the plumber was cancelled. The garbage was there because the garbage hauler had gone unpaid for that month. I moved out soon after, and the move was a pain.
That was in 2008. The state of the house is uncertain. Lis pendens was filed in 2008, as I said, and there has been no court date until now.
What I'm saying here is that unmaintained housing stock and housing stock without a clean title has real effects on the people that live in them and nearby, the public that is. You can make a good case that eminent domain is justified here. No one has done it yet, this is uncharted territory as far as the law is concerned, but it's heartening to see Richmond take a shot at it.
Kelo notwithstanding, "benefit of the public" is not "public use"; the former can be stretched infinitely, to the ending of the rule of law.
You're also ignoring that they admit they're seizing the property for less than it's value:
"Richmond, working with San Francisco-based Mortgage Resolution Partners, offers $150,000 to buy a $300,000 bank loan on a house that is now worth $200,000 and is in danger of foreclosure.
If the bank agrees, the city and the company then obtain the loan at $150,000. Richmond and the company then offer the homeowner a new loan of $190,000, which, if accepted....
If the bank refuses to sell the loan to Richmond, then the city invokes its power of imminent domain and seizes the mortgage. It would then offer the bank a fair market value for the home."
See the Naked Capitalism posting that cynicalkane brought to our attention for more details and a view from a very different angle: http://www.nakedcapitalism.com/2013/08/beware-of-private-equ...
Also mentions that California has a property owner friendly way of establishing "just compensation".
What is always troubling is the interaction between municipal authorities and venture capital; their interests do not intersect, and there is little experience in municipalities with complex financial deals. The showcase piece is the Birmingham, AL sewer disaster.
The idea of eminent domain is appealing, and the real-world implementation is another problem.
That's the fifth amendment.
It was the 7th as passed by the Congress, just not as ratified by the states: https://news.ycombinator.com/item?id=6274204 ....
The Supreme Court has ruled that the government can take property from one private party and give it to another private party for "economic development" [1]. So it's already been stretched pretty far.
No. The Constitution provides that property taken for the public good must be fairly paid for. Property can be taken for private use without compensation. For example, the adverse possession laws in many jurisdiction.
I didn't see that mentioned in the article. Are you sure you are not thinking of that article someone linked to in a comment here on HN rather than the submitted article?
That's consonant with the plain language of the 5th Amendment, Kelo notwithstanding: "nor shall private property be taken for public use, without just compensation."
I take the article's language as the author knowing this is scamming the Constitution's provision for eminent domain, even if it's pretty clear he doesn't care. Hence the quote starting this thread.
Not so sure about that... the Supreme Court has given wide leeway to municipalities in their interpretation of eminent domain. This is just one of the slippery slope side effects of their earlier decisions.
But your point about this slippery slope is well taken.
Thomas Jefferson had this to say about it, per Wikipedia:
"You seem to consider the judges as the ultimate arbiters of all constitutional questions; a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy. Our judges are as honest as other men, and not more so. They have, with others, the same passions for party, for power, and the privilege of their corps.... Their power [is] the more dangerous as they are in office for life, and not responsible, as the other functionaries are, to the elective control. The Constitution has erected no such single tribunal, knowing that to whatever hands confided, with the corruptions of time and party, its members would become despots. It has more wisely made all the departments co-equal and co-sovereign within themselves."
The subsequent history has shown he was spot on. Given that the Switch In Time That Saved Nine waved through FDR's New Deal, and most subsequent gross violations of the Constitution, shows in practice they're really bad at what they arrogated to themselves, and they've far too often given the other branches of government cover. E.g. "sure, this might be unconstitutional, the Supreme Court will decide!" Fairly often the "might" is really "is", and later politicians who depending on a saving throw from the Supremes got disappointed. E.g. McCain-Feingold.
Can you point out where the article mentions that it's "flatly unconstitutional?" The only reference I could find to constitutionality (mentioned also in the photo caption) is:
"first-in-the-nation plan to use the government's constitutional power of eminent domain to ..."
The article does mention that "The banks have filed two lawsuits alleging that the plan is an illegal abuse of eminent domain", but every legal opposition to eminent domain seizure makes that claim.
I won't get into the much more complicated usury argument, since that's now settled in (post)Christendom, else we wouldn't be having this argument.
For "flatly unconstitutional", see https://news.ycombinator.com/item?id=6273984
I read the link you pointed to. It affirms that the plantiff's claim is "consonant with the plain language of the 7th Amendment."
There must be a typo there, as the 7th is right to a trial by jury, while the given quote about "nor shall private property ..." is from the 5th.
I don't see though how this is an effective argument. Every single lawsuit filed in opposition to an eminent domain seizure must claim that the seizure is violation of the 5th amendment. So of course this lawsuit is "consonant with the plain language of the 5th Amendment" as otherwise it would be thrown out as being unjustified.
A more effective argument would point to existing legal cases, to show how the courts have previously ruled. But the comment you linked to dismissed Kelo - a case which gives some idea of how much the Supreme Court may defer to local governments - without giving any reference to other more relevant cases.
I addressed your other points here: https://news.ycombinator.com/item?id=6274067, in brief the Constitution != Supreme Court.
Specifically, you said: What they're doing is flatly unconstitutional, as the article mentions.
The article, as far as I can tell, says that the plaintiffs claim that it's unconstitutional, but as I've pointed out, every such plaintiff must make the same point.
As you write, this is your interpretation. It's not the same as "flatly." Another, and in my opinion better, interpretation is that the author is reminding the reader what eminent domain means. Let's see if I can provide evidence for my view.
For reference, the original quote is "The banks have filed two lawsuits alleging that the plan is an illegal abuse of eminent domain, which allows governments to seize private property for public use — like a house in the path of a new highway or a piece of land needed for a new park."
What do other newspapers say when they describe eminent domain?
1) "Another option would be for the county to acquire the property under eminent domain, the process by which a municipality can take over private property for a public good, for a price." http://www.miamiherald.com/2013/03/01/3262043_p2/um-county-c... (The private University of Miami wants to build a pedestrian bridge across a major road, where 8 students have died since 1989. The city doesn't have the budget for an eminent domain claim.)
2) "There's a new partner in the mix as Aberdeen officials work to buy the now-closed federal courthouse under eminent domain, which allows government entities to take possession of private property if it is in the public interest." http://articles.aberdeennews.com/2013-08-06/news/41141473_1_...
3) "As with the Trans-Texas Corridor, the pipeline dispute seems certain to reopen a legislative debate over eminent domain powers, which governmental entities and so-called common carriers such as utilities and pipelines use to acquire land for public projects after compensating the owner." Fort Worth Star Telegram, reprinted in http://www.mcclatchydc.com/2012/02/22/v-print/139579/texas-b... . (On the question of if an oil pipeline counts as a common carrier under Texas law.)
Do note how this points out that the Supreme Court isn't the only court to judge the constitutionality of an eminent domain seizure. State courts are also involved, and the Supreme Court usually defers to them, rather than making an overarching statement.
4) The Chicago Tribune articles I looked at never explain 'eminent domain.' I guess they expect their readers to know that already. But quoting from http://articles.chicagotribune.com/2006-01-03/news/060103024... , "Overwhelmingly, the eminent domain cases filed in Cook, Kane, DuPage, Lake, McHenry and Will Counties are for traditional public purposes, such as highways, schools, libraries, police stations--projects that will be owned by the government for the public use. / But a review of court cases filed since 2001 shows local governments have used eminent domain powers in many redevelopment projects where private companies end up in control of the land. / Municipal officials say this is nothing new and the current system should not be changed. Chicago area communities have used eminent domain in this way for decades to dream up new plans, they say."
That suggests that despite your rejection of Kelo, it is not completely out of line with the use of eminent domain over decades. Of course, it isn't, since you're really objecting to the court's decision in Berman v. Parker, and not the more proximate Kelo.
5) In any case, "public use" is a very wide language, and the details are often left to the states. In Nevada, 2011, "A bill by Sen. Sheila Leslie, D-Reno, would strip from state law special provisions that give mining and beet sugar producers the right to eminent domain similar to that of governments." http://www.reviewjournal.com/columns-blogs/political-eye/bil... . Mining justifies the law saying "The eminent domain law has long recognized mining is a public interest use of the lands and is of paramount interest in Nevada," (http://www.reviewjournal.com/news/government/comstock-reside... )
The is the whole issue, isn't it? "Public use" doesn't seem to have a "plain meaning", or at least not the one you think it has.
6) Elsewhere in the Las Vegas R-J, in an interview with a eminent domain lawyer who defends property owners:
"""Question: What is eminent domain?
Answer: It's the power of the government to take land for public purpose.
Question: Does it ever go through uncontested?
Answer: If the government gets to the point of eminent domain, it's contested. They can't come to an agreement on the price of the property. Otherwise, it's a willing buyer and a willing seller. """
With #1, #2, and #3 I've shown that it's not unusual for newspapers to give an explanation of what 'eminent domain' means. The description is often something very much like "allows governments to seize private property for public use". Thus, the original author's elaboration is just that, and not seemingly a subtext supporting opposition to the seizure.
With #4 and #5 I point out that 'public use' is not well defined, and while the land in most cases will be owned by the government, this is not universally true, with examples from two different stated. Thus, the original author elaboration of "like a house in the path of a new highway ..." is true, though incomplete. (The use of 'like' implies that it's incomplete.)
With #6 I strengthen my thesis, which is that any time there is an eminent domain challenge, it must be premised on how it's a violation of the 5th Amendment, or more often the equivalent definition in the state law. Thus, the original author's statement 'an illegal abuse of eminent domain' describes what has to happen for any eminent domain seizure.
I truly fail to see how the author "flatly" expresses an opinion that "this is scamming the Constitution's provision for eminent domain." What I read is consistent with how eminent domain seizures are usually covered, including those where the land is taken for fully constitutional reasons (as in #2).
So, do elaborate how you get a very different interpretation from the same text. How are you sure that you aren't reading your own beliefs into the article?