Posted on 06/27/2005 9:07:38 AM PDT by WayneLusvardi
The Coming Revenge of the "New Londoners"
Could a little known telecom class action case point the way to justice for homeowners caught up in confiscatory redevelopment projects?
"A man's home is...somebody else's piggybank." -- Glenn Reynolds
Perhaps it is appropriate that the name of the City in the recent U.S. Supreme Court eminent domain case is New London, Connecticut. Over 200 years ago in "Old London" and in the Old World of Europe all land was owned by the "sovereign." The sovereign ruler leased his land only to land barons. There was no such thing as private property.
However, by 1215 England's King John was forced to sign the Magna Carta which restricted his ability to reclaim land. By the American Revolution in 1776 citizens in the "New London" of America decided "the people" were sovereign. In 1789 the U.S. Constitution provided for just compensation for governmental takings of land for public uses. On June 23, 2005, in the case of Kelo vs. New London, the U.S. Supreme Court found no reason to limit the existing definition of public use which included seizing property by eminent domain to turn it over to private developers for profit making redevelopment projects (http://www.ij.org/private_property/connecticut/).
The Supreme Court decision underscores the mostly accurate perception in the mind of the public that the courts are on the side of big government and big corporations, and only secondarily the small homeowner or landowner (http://www.spectator.org/dsp_article.asp?art_id=8357). Based on this writers experience in working on the governmental side of eminent domain for 20-years, my guess is that this case will be indelible in the memory of the public who will seek political retribution at the first visible opportunity that arises.
But could homeowners ultimately find justice despite this adverse high court ruling? Perhaps a little known class action court case could point the way for property owners to form land syndicates that would preempt condemnation actions by local governments for redevelopment projects and make them unnecessary.
In 2001, a class action settlement was finalized with more than 50,000 landowners in 16 states and Thorougbred Technology and Communications ("T-Cubed"), the telecom subsidiary of Norfolk Southern Corporation, owner of one of the four largest railroads in the nation (see: http://www.law.com/jsp/article.jsp?id=1022862310259).
The Thoroughbred Telecom case involved the purchase of easements from landowners holding ownership rights underlying Norfolk Southern's railroad corridors to allow installation of fiber optic wire conduits. The presiding federal court approved the formation of an aggrieved class because it was ruled that Thoroughbred Communications was not a communications company but a real estate land assembler. The court further ruled that the railroad only held easements restricted to railroad purposes. As such, it did not have the powers of eminent domain to condemn easements for fiber optic cables within its own railroad corridors.
Members of the class action received upfront compensation of $6,000 to $30,000 per linear mile plus 7.5% per year or more of the revenue obtained by T-Cubed from selling additional conduits. This allowed a large class of landowners for the first time to participate in the profits of a semi-public project. (see: http://news.com.com/2100-1033-258333.html?legacy=cnet)
Homeowners may now see the handwriting on the wall so to speak that they will be unable to successfully challenge a public resolution for necessity to take their properties for the public purpose of private redevelopment. As a result they may now be more willing to voluntarily form a land syndicate to pre-assemble the land, sell their homes to an intermediary land assembler and syndicator, and in return receive a percentage of the rent from a long-term lease of the land for a new commercial development.
Unlike the T-Cubed case, the formation of a land syndicate would not even require approval of a court. However, such syndicates may need to go to court to enter a legal challenge to the resolution of public necessity sought by local redevelopment agencies. Now that the U.S. Supreme Court has made it fruitless to fight city hall in property takings for redevelopment projects, the typical "holdout problem" to land assemblage may be less of an impediment.
Should land syndicates emerge, it wouldn't be too long before other public takings would also gravitate away from the coercive eminent domain model and toward a more voluntary syndicate and annuity compensation model. This is precisely what happened during the national build-out of the fiber optic network across the U.S. during the telecom bubble of 1999-2002. The telecom industry devised a compensation system based on a flat unit price per linear mile or linear foot to purchase easement rights from landowners. Because they were able to commodify the compensation the typical "hold-out" problem found in eminent domain was surmounted (see Wayne Lusvardi and Charles B. Warren, "What Price an Easement? Setting Market Value in Fiber Optic Corridors," Public Utilities Fortnightly, July 1, 2001).
In 1513 the Italian political adviser Niccolo Machiavelli cautioned princes that:
"Still, a prince should make himself feared in such a way that, even if he gets no love, he gets no hate either; .and this will be the result if only the prince will keep his hands off the property of his subjects or citizens.but above all, he should not confiscate people's property, because men are quicker to forget the death of a father than the loss of a patrimony."
The formation of land syndicates would be politically irresistible by local politicians desiring to stay in office. It is probably too late for the homeowners in New London to form a syndicate and get justice in their situation. But it may be that entrepreneurial New Londoners, like the "New Londoners" of the past American Revolution, will emerge across the country in reaction to the recent Supreme Court ruling.
bump
A similar tactic could have implications for redistricting problems, such as those in California, as well.
bump
But if the following is the proposed direction, I’m not sure it’s going to fly:
From Wikipedia:
Syndicalism is a political and economic ideology which advocates giving control of both industry and government to labor union federations. Syndicalisme is a French word meaning "trade unionism". This milder version of syndicalism was overshadowed by revolutionary anarcho-syndicalism in the early 20th century, which was most powerful in Spain, but appeared in other parts of the world as well.
A model syndicalist community is as follows. The local unit, the syndicat, would communicate with other syndicats through the bourse de travail (labour exchange). The bourse would handle management and the transfer of commodities.
Syndicalism forms one of the three most common theories of a pre-managed economic and labor structure. It believes, on an ethical basis, that all participants in each organized trade internally share equal ownership of its output and therefore deserve equal earnings and benefits within that particular trade, regardless of position or duty. This contrasts socialism's emphasis on the distribution of output from all different trades to one another as required by each trade, not necessarily considering how those trades organize themselves internally. Both these systems of pre-organized economic structure can theoretically include variations on privatism, unlike the third such pre-arranged egalitarian strand, namely communism. Communism supports the abolition of government-sanctioned private ownership and private earnings in favor of making all property legally public, and therefore solely the responsibility of the state and/or the community.
Instances of syndicalism in power, during the Spanish Revolution or the 1956 Hungarian Revolution rapidly approach the economic organisation of communism, often within weeks of syndicalists seizing control of social production.
Syndicalists often form alliances with other workers' movements, including socialism, communism, and anarchism.
"All your property are belong to us"
anyone know who ruled what way in this case?
For clarification a real estate syndicate has nothing to do with syndicalism. It's merely a joint business venture in which landowners become part owners.
read later
State legislatures will take this head on.
Conservatives, (plus O'connor, minus Kennedy) ruled in the minority.
Does it have any connection with the theories of economist Henry George who advocated the theory of the Single Tax which is really rent levied against jointly owned land?
Thank you for the info!
No connection with land valuation theory of Henry George. A syndicate is more like stock ownership.
I thing a better A.K.A would be RingWorms.
The Supremes just said reporters could be jailed for not revealing sources, and the news reporters, shocked, said of course, Congress will pass a law protecting reporters' right to stay mum. Well, Congress can jolly well pass a law protecting private homeowners' rights, too!
Machiavelli was one smart dude.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.