Court Opinion

ID: 8247100
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:37:36.736304+00
Date Added: 2024-06-11T16:42:47.874624
License: Public Domain

ANDERSON, Justice
(concurring in part, dissenting in part).
I join in the result reached by the court in this condemnation dispute, but dissent from the specific definition of “community” that we announce today.
Some eminent domain background is appropriate here. In Kelo v. City of New London, the United States Supreme Court held that the Public Use Clause of the Fifth Amendment of the United States Constitution permits the government to take private property from one owner and transfer that property to other private parties for the purpose of economic development. 545 U.S. 469, 125 S.Ct. 2655, 162 L.Ed.2d 439 (2005). The Kelo decision prompted many states, including Minnesota, to enact legislation aimed at curbing the use of eminent domain. See Ilya So-min, The Limits of Backlash: Assessing *713the Political Response to Kelo, 93 Minn. L.Rev. 2100, 2102 (2009) (noting that “a strong case can be made that Kelo has drawn a more extensive legislative reaction than any other single court decision in American history”).
Minnesota Statutes § 117.187 (2012)— known as the minimum-compensation statute — was enacted as part of a broader set of eminent domain reforms that followed in the wake of the Kelo decision. See Act of May 19, 2006, ch. 214, §§ 1-22, 2006 Minn. Laws 195, 195-206 (codified at Minn.Stat. §§ 117.012-52 (2012)). The goal of the minimum-compensation statute is straightforward: it aims to more fully compensate property owners who must relocate when the government takes their property. But if the Legislature intended to increase compensation to displaced property owners, then I fear that Minn.Stat. § 117.187 fails to provide courts with sufficient guidance to achieve that aim.1
I begin my analysis by touching on the basic constitutional principles that govern takings compensation. The United States and Minnesota Constitutions require the government to pay “just compensation” when it takes private property for public use. U.S. Const. amend. V; Minn. Const, art. I, § 13. The purpose of paying “just compensation” is to make the property owner whole, which generally is accomplished by paying the property owner the fair market value of the property. See United States v. 564-54 Acres of Land, 441 U.S. 506, 511, 99 S.Ct. 1854, 60 L.Ed.2d 435 (1979). Under the fair market value standard, “just compensation” is measured by “what a willing buyer would pay in cash to a willing seller.” Almota Farmers Elevator & Warehouse Co. v. United States, 409 U.S. 470, 474, 93 S.Ct. 791, 35 L.Ed.2d 1 (1973) (citation omitted) (internal quotation marks omitted); accord City of St. Paul v. Rein Recreation, Inc., 298 N.W.2d 46, 49 (Minn.1980). See also Appraisal Institute, The Appraisal of Real Estate 25-37 (13th ed.2008).
But the fair market value standard does not capture all of the losses that a property owner incurs when the government exercises the power of eminent domain. See 564.54 Acres of Land, 441 U.S. at 511, 99 S.Ct. 1854. As the Supreme Court has explained, although “the market value standard is a useful and generally sufficient tool for ascertaining the compensation required to make the owner whole, ... such an award does not necessarily compensate for all values an owner may derive from his property.” Id. For example, the fair market value standard does not compensate property owners for any subjective losses — such as the sentimental value of a longtime family home— or any gains that the government realizes from the taking of their property. See Katrina M. Wyman, The Measure of Just Compensation, 41 U.C. Davis L.Rev. 239, 254-55 (2007). Nor does the fair market value standard typically capture out-of-pocket expenses that property owners incur, including “attorney[ ] fees, relocation costs, and the cost of replacing the [taken] property if that cost exceeds its fair market value.” Id. at 254-55. I suggest that the latter problem is increasingly a serious consequence for property owners in this age of complex — and even contradictory and incoherent — zoning and land use restrictions. Consider, for instance, a property owner who owns property that is currently put to a nonconforming use (perhaps even an unpopular nonconforming use) that has limited fair market val*714ue. Replacing that property may involve costs for the property owner that far exceed the “fair market value” of the taken property.
The minimum-compensation statute mandates that property owners who “must relocate” are entitled to a measure of compensation that “at a minimum ... [is] sufficient for an owner to purchase a comparable property in the community.” Minn. Stat. § 117.187. But even though the objective of the minimum-compensation statute appears to be clear on its face, the statute provides little to no guidance to courts on how that objective should be achieved.
In fact, the Legislature did not define any of the key terms in the minimum-compensation statute. Indeed, as the majority aptly notes, “[t]he minimum-compensation statute requires a ‘comparable property’ to be located within the same ‘community’ as the condemned property.” Supra at 7. But the minimum-compensation statute does not define the word “community” or “comparable property,” nor does it define the term “relocate.” Perhaps the lack of guidance on the key terms in the minimum-compensation statute would be less troubling if it only applied to a specific class of property — for example, residential property. But the minimum-compensation statute defines “owner” broadly to include “the person or entity that holds fee title to the property.” Minn.Stat. § 117.187. In other words, the minimum-compensation statute applies to all displaced property owners. See Mark D. Savin, The Biggest House in Town: Extending the Limit of Just Compensation, SN041 ALI-ABA 213, 225 (2008) (explaining that the minimum-compensation statute “applies to property ‘owners’ of all types”).
Consider, in this case, the dispute over the term “community.” Cameron contends that “community” refers to the trade area in which his displaced business is located. The County, for its part, argues that “community” refers to the city or town in which the condemned property is located. The district court concluded that the statutory reference to “community” means “a location where a business can survive and be profitable,” and in this case, that definition translated, ultimately, to the city limits of Inver Grove Heights. The majority’s formulation is what it describes as the plain and ordinary meaning of “community” described as “an identifiable locality that has a socially or governmen-tally recognized identity, or a group of such localities.” Supra at 9. None of these propositions are facially unreasonable.
But while the majority has made a valiant effort to do what the Legislature did not do in defining “commúnity,” and while the majority’s definition of community might be serviceable in many contexts, I see several problems, not the least of which is that Cameron’s definition is arguably better suited for commercial property given that the sine qua non for all commercial enterprises is profitability. If the district court’s definition did not adequately capture the “community” that applies to residential property, an equally forceful argument can be made that the majority’s definition, focusing on individuals and localities, fails to precisely identify “community” for commercial property purposes.2 An additional concern is that the majority *715appears to have traded one definitional problem for another; “socially or govern-mentally recognized identity” as a phrase is no better defined than “community.” Finally, it is not hard to posit circumstances that do not fit the majority’s definition — a very small city, with no comparable properties, or the reverse, a large metropolitan area composed of many different “communities” with vigorous disagreement about what “community” means. In the end, I fear that the majority is on an unnecessary and problematic errand, at least at this juncture and thus I dissent from the definitional analysis adopted today.
All of that said, regardless of what terms are used, the majority properly affirms the district court’s use of municipal boundaries and it is difficult on this record to conclude that it was error for the district court to determine that “community” included the city of “Inver Grove Heights.” Put another way, it is sufficient for the purposes of the dispute before us today to affirm the use of municipal boundaries as a way of defining community in this case and leave for some other day, or better yet, legislative action, to further define what “community” means under the statute.
As noted earlier, problems with definitions under the statute are not limited to “community.” The minimum-compensation statute says almost nothing about how to calculate the “damages payable” to the displaced property owner once a “comparable property” is located. MinmStat. § 117.187. To be sure, the minimum-compensation statute sets the floor: compensation must at a minimum “be sufficient for an owner to purchase a comparable property.” But parties, and courts, are clearly struggling with how to calculate damages in the new universe created by the minimum-compensation statute. Cameron, for example, objects to the partial hypothetical property created by the district court to assume additional square footage for his business and thus to award damages to him in excess of the traditional fair market value approach; at the same time, Cameron endorses his expert’s claim of damages equal to the cost of construction of a completely hypothetical property. It is enough here to say that his arguments approving of one hypothetical approach while urging rejection of the other hypothetical approach are not persuasive.3 Given that the Legislature has provided no guidance on the issue, I conclude that the district court’s approach is reasonable under the circumstances presented.
Finally, the minimum-compensation statute says nothing about what happens when no comparable property is available for a displaced property owner to purchase and here I worry that the majority’s emphasis on monetary compensation, while not inappropriate, may not accurately reflect what the Legislature intended.
The Legislature’s use of the verbs “relocate” and “purchase,” instead of a noun such as “value,” suggests that the purpose of the minimum-compensation statute is to do more than simply compensate a displaced owner monetarily. Rather, these word choices suggest that the purpose of the minimum-compensation statute is to permit a displaced owner to actually purchase a comparable property and relocate to that property. But actual relocation cannot occur if no comparable property exists or is available for purchase. Indeed, the terms “relocate” and “purchase” *716might, in a different case and with different facts than we face today, lead to very different results (e.g., a demand by the property owner for condemning authority to purchase a specific property currently on the market and to relocate the owner to that property). See Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn. 1999) (providing that no word in a statute “should be deemed superfluous, void, or insignificant”). Here, the district court, faced with unique circumstances, fashioned a remedy that I conclude, on this record, was not erroneous. For the reasons discussed earlier, I would affirm the district court but I dissent from the court’s adoption of a specific definition of “community.”

. Indeed, as the Minnesota Eminent Domain Institute recognized in its amicus brief to our court, "[d] espite the significant implications of Minnesota Statute § 117.187, there is little record as to legislative intent.”

. This discussion highlights the problems associated with rejecting Cameron's argument on the basis that his definition made "little sense in the context of a forced residential relocation.” Supra at 10. The majority’s definition appears to be more closely aligned with residential rather than commercial property and the issue in this case is, of course, the valuation of commercial property.

. It is important to note, however, that the decision of the district court to reject completely new construction here is not the same as concluding that new construction is never appropriate as the measure of damages. Damages in the eminent domain context are fact-dependent.