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Woodcrest Homes, Inc. v. Carousel Farms Metro. Dis

Institute for Justice Asks U.S. Supreme Court to End Colorado Law Permitting Neighbors to Engage in Eminent Domain Abuse

Imagine if two of your neighbors got together, claimed they established a new town, and then “voted” to take your property from you using eminent domain. Crazy, right? Not in Colorado, where the owners of Woodcrest Homes battled a competing developer’s attempt to use eminent domain to take their property.

After battling in the courts for four years, the Institute for Justice partnered with Woodcrest to formally petition the U.S. Supreme Court to resolve whether the Constitution allows private developers to grant themselves the right to use eminent domain to seize someone else’s private property for their own gain.

In upholding the land grab, the Colorado Supreme Court wrote: “Permitting some private benefit by public taking may strike some as unusual. But Colorado is no stranger to this method of encouraging development.”

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. When it comes to property rights, Colorado’s law is more akin to the Wild West than a constitutional republic.

In 2006, Woodcrest Homes began planning to build a housing development outside the town of Parker, Colo., and purchased a small piece of land sandwiched between two larger parcels to begin the project. When the housing market went bust in 2008, the project stalled. But years later, Century Communities, a competing developer, picked up where Woodcrest left off. Using Woodcrest’s own plans, Century purchased the two pieces of land surrounding Woodcrest’s parcel and created a so-called “municipal district”—a pseudo-governmental body permitted in Colorado—comprising all three pieces of land and staffed by Century’s own employees. The district then “voted” on whether to use eminent domain to take away Woodcrest’s land and—unsurprisingly—Century “won.”

Woodcrest challenged the taking, arguing that it violated the Fifth Amendment of U.S. Constitution, which only allows property to be taken for “public use.” But the Colorado Supreme Court disagreed, holding that the only thing that mattered was what Woodcrest wanted to put on the land (roads and utilities), not whether the process had been captured by a private developer serving its own ends.

On March 23, 2020, the Supreme Court decided not to hear this case, which means that the Colorado Supreme Court’s decision upholding this land grab remains the law of the land in that state. But the fight is not over. IJ will continue fighting eminent domain abuse in courts around the country, and eventually we will win.

Woodcrest Homes, Inc. v. Carousel Farms Metro. Dis

Date Filed

November 7, 2019

Original Court

United States Supreme Court

Case Status

Closed

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