Arlington, Va.—If the government destroys your business through eminent domain, must it pay you for what you lost?
That is the question raised by a cert petition filed by the Institute for Justice (IJ) with the U.S. Supreme Court today (July 31, 2017) on behalf of a small Louisiana entrepreneur who is fighting a battle of national importance about one of government’s most controversial powers.
Chad Jarreau is a dirt farmer; dirt farming is literally the manufacture of dirt. For more than 10 years, Jarreau would dig and drain pits of dirt on land he owns in Cutoff, Louisiana, then churn the dirt to create fine-grained sandy dirt useful in construction projects. But in 2011, the South Lafourche Levee District, the government entity responsible for local levee construction and maintenance, appropriated a broad swath of Jarreau’s land for levee construction, making further dirt farming impossible and preventing him from fulfilling sales he had already agreed to. To be clear: The Levee District is not constructing a levee on Jarreau’s land; it is taking the land from him so it—rather than Jarreau—can farm the dirt without paying him.
After a trial, a judge found that Jarreau’s land was not particularly valuable and awarded him just $11,869 for the land the government took. But the judge also found that Jarreau’s dirt-farming business was extremely valuable and awarded him $164,705.40 for the harm to his dirt-farming operation. On appeal, though, the Louisiana Supreme Court held that Jarreau was not entitled to be compensated for damages to his business, only for the price of the land, reducing the total award back down to $11,869.
“This case is about whether the government must pay for the harm it causes when it takes people’s land, such as destroying a person’s business,” explained IJ Senior Attorney Robert McNamara. “The Constitution says that the government must pay ‘just compensation’ when it takes your property. Many courts across the country have ruled that justice means the government should pay you for the losses it causes, including the loss of your business. Other courts, as in this case, have said it does not—or, at least, it does not have to pay a business owner.”
“This case is especially egregious because everyone agrees that Chad’s dirt is valuable,” said IJ Attorney Jeffrey Redfern. “The Levee District took the land because it wanted to use that very same dirt for its construction projects. Nobody at the Levee District questions that Chad lost something valuable; they just say they should not have to pay him for it.”
“Eminent domain is one of the government’s most terrible—and easily abused—powers,” said IJ President and General Counsel Scott Bullock. “Allowing government to take property without paying for the damage it causes will just lead to more use and abuse of eminent domain, with the costs borne by innocent business owners. It is past time the Supreme Court put a stop to these abuses and forced local and state governments to make their victims whole.”
“This case spotlights why ordinary Americans rightfully hate eminent domain,” McNamara said. “In Kelo, the U.S. Supreme Court ruled you could lose your home for the mere promise that someone else might pay more taxes with your land. And in this case, the government wants the power to not only take your land, but destroy your livelihood without having to consider the disastrous consequences such government actions would have on millions of ordinary American nationwide. Common sense, common decency and the Constitution demand the government make whole these property owners who have lost so much at the hands of the government.”
# # #
[NOTE: To arrange interviews on this subject, journalists may call John Kramer, IJ’s vice president for communications, at (703) 682-9320 ext. 205.]