Eminent domain is the seizure of private land by government authorities. Under the Fifth Amendment of the United States Constitution and Section 21 of the Tennessee state constitution, any “taking” by the government must be fairly compensated to the property owner.

An article from April 2023 in the Tennessee Lookout called attention to eminent domain proceedings in West Tennessee related to the Blue Oval City facility currently underway outside Jackson.¹ The development, which will primarily manufacture batteries for electric vehicles, marks the largest public investment in Tennessee history.² The project has wide community and legislative support and has been touted by the governor as an opportunity to create jobs and bring investment to Tennessee.³ Blue Oval City requires the construction of new highways to serve the campus, and acquisition of private land is necessary to create the needed roadways.⁴

Despite broad enthusiasm for the project, some landowners and community groups are questioning the method of acquisition being used by the Tennessee Department of Transportation.⁵ There are 31 tracts needed to complete the highway needed for Blue Oval City. As of the most recent news reports on the subject, 14 of the tracts have been settled. The remaining 17 are in the condemnation process, with eight under review by the attorney general’s office.⁶

West Tennessee property owner Marvin Sanderlin, a Black farmer whose family has worked the land for generations, is among those whose land is in the condemnation process.⁷ Although a supporter of Blue Oval City, Sanderlin has raised concerns about the low offer he received from the state in press reports in the Commercial Appeal,⁸ The Tennessean⁹ and the Tennessee Lookout.¹⁰ Sanderlin has retained counsel and is contesting the petition for condemnation.

Landowners and advocacy groups, including the NAACP’s Legal Defense Fund, have noted that the specter of land loss looms especially large for Black farmers, who have seen their acreage decline precipitously since the turn of the previous century.¹¹ One study indicated that Black land ownership declined by 90 percent from 1910 to 1997, constituting $326 billion in lost wealth.¹² According to press reports, much of the land up for seizure to support the Blue Oval campus has been held by Black farmers for generations and holds special meaning for the owners.¹³

While the affected landowners may look to the United States and Tennessee constitutions protections against “takings” for relief, there is further recent jurisprudence to consider.

Gov. Bill Lee addresses the crowd at the Blue Oval City groundbreaking in March 2023.   Photo: Tennessee Department of Economic and Community Development

Eminent Domain for the Benefit of Private Entities

The limits of the government’s power of eminent domain were tested in Kelo v. City of New London,¹⁴ a case from Connecticut that went all the way to the Supreme Court. Susette Kelo owned a home with a waterfront view in a historic New London, Connecticut neighborhood. The town, which was experiencing an economic depression and had an unemployment rate double that of the state, had created a plan to revitalize its waterfront with a mixed-use development. They hoped their plan to make an attractive area for commercial and recreational activities would appeal to big-name employers looking for job sites, including Pfizer.

Kelo’s neighborhood was located in the area slated for development. While most other property owners sold, Kelo and several of her neighbors refused. The area was not blighted; some of the hold-outs had completed extensive renovations to their homes.

The Supreme Court considered whether the use of eminent domain to seize land for economic development could be considered “public use.” In a five to four decision, the court explored the meaning of “public use,” and ultimately held that taking land for the development was a valid “public purpose.” Writing for the majority, Justice John Paul Stevens opined that legislatures should be granted “broad latitude” in government takings for public needs.¹⁵ The court’s ruling deferred to legislatures, which would have the best knowledge of the needs of the locality.

The ruling also addressed whether the government can take from one private individual for the benefit of another private entity for a public purpose. In Kelo, the taking was pursuant to a comprehensive plan by a legislature that had found the area to be sufficiently distressed. The proposed plan would bring jobs and tax revenue to the area. “There is…no principled way of distinguishing economic development from the other public purposes that we have recognized,” Stevens wrote.¹⁶ 

Kelo argued that economic development was not a legitimate public purpose, but narrowly lost the case. She and her neighbors lost their homes. Interestingly, the land cleared of homes was left undeveloped. Pfizer moved out of New London in 2009.¹⁷

The Kelo ruling was widely unpopular. However, the opinion itself explicitly invited states to craft their own rules around eminent domain, stating “we emphasize that nothing in our opinion precludes any state from placing further restrictions on its exercise of the takings power.”¹⁸ Many states, including Tennessee, created statutes limiting governmental power with regard to eminent domain. Tennessee’s statute (Tenn. Code Ann. § 29-17-101) now states that eminent domain should be used “sparingly” and that laws allowing seizure of land should be “narrowly construed.”

Further, the statute limits “public use” by explicitly stating that it does “not include either private use or benefit or the indirect public benefits resulting from private economic development…including increased tax revenue and increased employment opportunity.”

The Public Transportation Exception

The statute grants a handful of exceptions. The first allows “the acquisition of any interest in land necessary for a road, highway, bridge or other structure…used for public transportation.”  The land slated for seizure in Fayette, Tipton and Haywood counties will be used for public roads and highways. Here, a private entity will receive the benefit of these roads, which are being created for the purpose of serving the new campus. Blue Oval City is estimated to bring thousands of new jobs to the area, which will boost the local economy, including the tax base. But the statute explicitly states that eminent domain cannot be justified by increased employment or tax revenue.

While the Tennessee Code Annotated does not define “public transportation,” for these purposes, Black’s Law Dictionary states that public transportation is “the government-owned system of buses, trains, etc. that are available for everyone to use.”¹⁹ On initial reading, a highway would seem quite different than a bus or a train, and might be a stretch to qualify as public transportation. However, the roads are government-owned and would be “available for everyone to use,” granted, with their own private vehicle. As a Tennessee Bar Journal explainer article opined post-Kelo, “Even the most stalwart strict constitutional constructionists would have a difficult time arguing that building a road was not ‘for public use.’”²⁰

The Industrial Park Exception

The other possible exception exempts “the acquisition of industrial parks” from the statute. Tenn. Code Ann. § 13-16-102 defines “industrial park” as “land and rights, easements and franchises relating thereto, and may include adequate roads and streets, water and sewer facilities, utilities, and docks and terminals, as required for the use of industry, and such appurtenant land for necessary incidental use. ‘Industrial park’ may also include a site for the establishment or location of a single industry.” Blue Oval City fits squarely within this definition.

This is in contrast to other states, which may require a single owner of the “park” and multiple entities on site. For instance, a Pennsylvania statute defines an industrial park as “a tract of land, the development of which is vested in a single body, that has been platted to provide for three (3) or more industrial sites with special emphasis given to aesthetics and compatibility of uses within the tract.”²¹

The broad definition of this industrial park carve-out gives industry a significant loophole, and would seem to be in tension with the protections of Tennessee’s post-Kelo eminent domain limitations. If a single, private factory owner can qualify as an industrial park, what would prevent another Pfizer from promising development, jobs and tax revenue as a justification for the taking of private land, only to renege or move their location a few years later?

The Tennessee Department of Transportation (TDOT) describes its acquisition procedures as similar to a private sale between landowners.²² When an agreement cannot be reached, the process aims to balance the need of the private property owner to get a fair price with the responsibility to be good stewards of taxpayer funds. When land is needed for a TDOT project, appraisers investigate and evaluate the land and other area properties to determine fair market value, defined as “what a willing buyer would pay to a willing seller.” Property owners are then contacted with a fair market offer for their land.

When a landowner rejects offers by the state, Tennessee can initiate eminent domain proceedings. In this case, a jury of qualified citizens determines the amount to be provided to the landowner.

Currently, the proposed condemnations are under review by the attorney general’s office, announced after reporting in the Tennessee Lookout, Commercial Appeal and Tennesseean. As the landowners seek relief, they will have to look outside of Tenn. Code Ann. § 29-17-101 and 102 due to their exceptions. |||

EMILY CRAWFORD is a 3L at Nashville School of Law. She is a senior accountant at Vanderbilt University Medical Center and has a background in human resources. Crawford is also a constant reader, slow running apologist and one carry-on travel authority.

NOTES

1. Anita Wadhwani, “Black Farming Community Fights to Get Fair Deal as State Takes Land for Ford Plant Roadways,” Tennessee Lookout (Apr. 3, 2023), https://tennesseelookout.com/2023/04/03/black-farming-community-fights-to-get-fair-deal-as-state-takes-land-for-ford-plant-roadways/.
2. Sam Stockard, “Legislature Approves Ford’s Blue Oval City, Largest Investment in State History,” Tennessee Lookout (Oct. 20, 2021), https://tennesseelookout.com/2021/10/20/legislature-approves-fords-blue-oval-city-largest-investment-in-state-history/.
3. “Ford to Invest $5.6 Billion in Memphis-Area Megasite to Build Electric Vehicles and Batteries,” Fox 13 Memphis (Sept. 28, 2021), https://bit.ly/3uJBoDU.
4. Wadhwani, supra note 1.
5. Omer Yusuf, “Landowners and TDOT Face Off Over Blue Oval City Road,” Commercial Appeal (Jun. 8, 2023), www.commercialappeal.com/story/money/business/2023/06/08/ford-in-tennessee-blueoval-city-new-road-tdot-eminent-domain/70220182007/.
6. Id.
7. Wadhwani, supra note 1.
8. Kelly Puente, “Black Farming Communities Face Uncertain Future as Ford Moves In,” Commercial Appeal (Jul. 9, 2023).
9. Kelly Puente, “Black farmers have lived here for generations. Now, a Ford plant is changing the landscape,”  Tennessean (Jul. 9, 2023), www.tennessean.com/story/news/2023/07/09/new-ford-battery-plant-changes-landscape-for-tennessee-black-farmers/70249454007/.
10. Wadhwani, supra note 1.
11. Anita Wadhwani, “Legal Defense Fund urges state to fairly compensate Black farmers in path of BlueOval road,” Tennessee Lookout (May 15, 2023), https://tennesseelookout.com/2023/05/15/legal-defense-fund-urges-state-to-fairly-compensate-black-farmers-in-path-of-blueoval-road/.
12. Leah Douglas, “U.S. Black Farmers Lost $326 Billion Worth of Land in 20th Century Study,” Reuters (May 2, 2022), www.reuters.com/world/us/us-black-farmers-lost-326-bln-worth-land-20th-century-study-2022-05-02/.
13. Puente, supra note 8.
14. Kelo v. City of New London, 545 U.S. 469 (2005).
15. Id. at 483.
16. Id. at 484.|
17. Patrick McGeehan, “Pfizer to Leave City That Won Land-Use Case,” The New York Times (Nov. 12, 2009), www.nytimes.com/2009/11/13/nyregion/13pfizer.html.
18. Kelo v. City of New London, 545 U.S. 469 (2005).
19. Public Transportation Definition, Black’s Law Dictionary (11th ed. 2019), available at Westlaw.
20. Scott Griswold, “Property Rights v. Public Use Analyzing Tennessee’s Response to Kelo Eminent Domain Ruling,” Tennessee Bar Journal, February 2007, Vol. 43, No. 2, at 14.
21. S. Whitford Assocs. v. Zoning Hearing Bd., 157 Pa. Commw. 387, 404-405.
22. Acquisition Procedures, Tennessee Department of Transportation, www.tn.gov/tdot/right-of-way-division/acquisition-office/acquisition-procedures.html.