John Locke Update / Research Brief

Preventing eminent domain abuse in North Carolina

posted on in City & County Government, Land Use Planning, Law & Regulation, Legal Update, Local Government, Property Rights
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The John Locke Foundation and the North Carolina Advocates for Justice recently filed a joint amicus or “friend of the court” brief in support of a Wake County property owner named Beverly Rubin. Ms. Rubin has spent the last five years in a legal battle with the Town of Apex over a sewer line that the town installed across her property in 2015.

Despite the fact that a Wake County Superior Court judge found that Apex violated the NC Constitution when it installed the line, and despite the fact that that the Superior Court’s decision survived appeals to the NC Court of Appeals and the NC Supreme Court, the town has continued to assert the legitimacy of its sewer easement across Ms. Rubin’s property. What’s more, in January of this year, it succeeded in persuading a different Wake County Superior Court judge to issue a declaratory judgment upholding the town’s right to the easement. As I will explain, if that judgment is allowed to stand, it will eviscerate the “public use or benefit” requirement that currently protects North Carolina property owners from eminent domain abuse. The case is Apex v. Rubin, and you can read our brief here.

For readers who are unfamiliar with the phrase, “eminent domain” refers to the government’s power to take land from property owners who are unwilling to sell it voluntarily. State and local governments throughout the country have a long history of abusing that power to benefit well-connected industrialists and property developers rather than the public. (See here, here, here, and here.) Compared to other states, North Carolina does a poor job of protecting property owners from that kind of abuse, and, for many years, the John Locke Foundation has advocated statutory and constitutional changes that would improve matters. (See here, here, and here.)

Even as things currently stand, however, North Carolina property owners are not entirely without protection. Chapter 40A of the North Carolina General Statutes, which lays out the basic law of eminent domain in the state, explicitly limits the power to takings that are for “public use or benefit.” In addition, the North Carolina Supreme Court has held that the same limitation is implicit in the Law of the Land Clause that appears in Section 19 of Article I of the North Carolina Constitution. The Superior Court judge who originally reviewed the facts pertaining to the taking of the sewer easement found that it did not satisfy the public use or benefit requirement. Given that this requirement is enshrined in the state constitution, how is it possible for the town to nevertheless claim that it has a right to the easement? The answer has to do with something called the “quick-take” process.

Chapter 136 of the North Carolina General Statutes lays out the law pertaining to transportation in general and the Department of Transportation (DOT) in particular. Article 9 of Chapter 136 describes the procedure whereby the DOT can take private property for its own use. Unlike the normal procedure for taking private property, which is spelled out in Chapter 40A and requires condemnation proceedings to be completed before the condemning agency can take possession, under Article 9, the DOT may take possession of property and begin construction while condemnation proceedings are pending. This is what is referred to as the “quick-take” process. As exercised by the DOT, the use of the quick-take power seldom causes problems because DOT takings are almost always for public roads, and public roads almost always satisfy the public use or benefit requirement. Unfortunately, the General Assembly has extended the quick-take power granted to the DOT under Chapter 136 to a handful of municipalities as well. Apex is one of those municipalities. The fact that it took Ms. Rubin’s property using its quick-take power under Chapter 136 power is the source of all the trouble in this case.

The town filed a Chapter 136 condemnation action seeking a sewer easement across Mr. Rubin’s property on April 30, 2015. When it did so, the town estimated the compensation due to Ms. Rubin at $10,771. On July 7, 2015, Ms. Rubin filed an answer in which she argued that, far from being for public use or benefit, the taking was actually for the financial benefit of a private developer named Bradley F. Zadell. She also warned the town that, under precedent established by the North Carolina Supreme Court, if the town used its power under Chapter 136 to began construction of the sewer while the condemnation action was pending, it would have to bear the risk if its taking were ultimately found to be unconstitutional. The town ignored this warning and installed the sewer without waiting for a judicial decision in the case.

On August 1, 2016, Wake County Superior Court Judge Elaine M. O’Neal conducted an evidentiary hearing at which Ms. Rubin presented evidence which she claimed showed the following:

  • Mr. Zadell had bought up land surrounding her property in the expectation that he would be able to sell it at a profit after obtaining a sewer easement from her.
  • When Ms. Rubin steadfastly refused to sell him the easement he wanted and eventually asked him to stop pestering her, Mr. Zadell entered into closed-door negotiations with the Town of Apex and successfully “pressured” the town into signing an agreement under which the town would use its condemnation power to obtain the sewer easement, and Zadell would reimburse the town for all of its costs and expenses.
  • By the time of the hearing, Mr. Zadell had already sold the property he’d acquired adjacent to Mr. Rubin’s for a $2.5 million profit.

Evidently, Judge O’Neal found Ms. Rubin’s evidence persuasive. On October 18, 2016, she entered a final judgment. Judge O’Neal found that the town’s use of eminent domain violated both the North Carolina and United States constitutions because “The paramount reason for the taking [was] for a private interest and the public’s interest was merely incidental.” She also held that the town’s claim to Ms. Rubin’s property was “null and void.”

As noted above, Apex appealed Judge O’Neal’s decision, first to the NC Court of Appeals and then to the NC Supreme Court, but it failed in both venues. Significantly, while the Court of Appeals rejected the town’s appeal because it had failed to file it in a timely manner, the court also made a point of noting that it had reviewed the case on the merits and found “no error” in the superior court’s judgment.

That ought to have been the end of the matter, but, as also noted above, rather than accept the judgment of the courts, Apex filed a new lawsuit asking for a declaratory judgment against Ms. Rubin. The town claimed that, because it had installed the sewer line while its condemnation action was pending, its title to the easement vested on the date it installed the sewer, and, as a result, Ms. Rubin’s sole remedy is just compensation. It’s a convoluted argument and not a very good one. Nevertheless, when Superior Court Judge Bryan Collins heard Apex’s complaint (Judge O’Neal having retired), he took the unusual step of effectively reversing his own court’s prior decision and rendered judgment in favor of the town.

Clearly, if this result is allowed to stand, it will mean that any municipality that has been granted the option of using the quick-take process under Chapter 136 will be able to circumvent the public use or benefit requirement at will. That can’t be what the General Assembly intended when it extended Chapter 136 to certain municipalities, and it would do well to reconsider that decision. More importantly, that can’t be what the North Carolina Constitution permits. In our amicus brief, we explain in detail why, in fact, Judge Collins’ order is inconsistent with our state’s constitution, statutes, and case law. In case you want to see that explanation in detail, here, again, is a link to the brief.

Jon Guze is Director of Legal Studies at the John Locke Foundation. Before joining the John Locke Foundation, Jon practiced law in Durham, North Carolina for over 20 years. He received a J.D., with honors, from Duke Law School in… ...

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