Eminent domain — the power to force people to sell their property — can significantly disrupt a society. People at risk of losing their land at any time will be reluctant to invest in improvements, which in turn will limit the nation’s productivity. For this reason, the Fifth Amendment says that eminent domain can only be exercised for “public use” and only with “just compensation.” Even then, people debate what is a “public use” and many who have been forced to sell their property don’t believe the amounts they are paid are “just” if they are significantly less than the unwilling sellers would have asked for in a free exchange.
Most states — no one is sure how many — have decided that railroads are a “public use” and have granted railroads the power of eminent domain. This raises questions like:
- What is the definition of a “railroad”?
- Can anyone call themselves a railroad and begin taking other peoples’ property?
- Does a railroad have to be operating to exercise this power?
- Does a railroad have to have rails to be a railroad?
- Can a railroad take peoples’ property even if they don’t have money to pay for it or to finish building the rail line?
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These and similar questions are addressed in Maryland and Texas courts where private companies that have proposed to build high-speed rail lines have demanded the right of eminent domain even though they don’t actually operate any trains and don’t even have enough money to build the proposed lines. The issue is slightly more straightforward in Texas than it is in Maryland. Continue reading
