Introduction

In June 2008, Nashville’s redevelopment agency filed a condemnation action against a small country music recording and publishing business located on storied Music Row.  Along with trying to take the building, the city also took a little bit of its soul in the process.  Nashville’s Metropolitan Housing and Development Agency (MDHA) wants to give the property that houses Country International Records to a Houston-based private developer to put up yet another generic office building that will house an architectural and real estate firm.

Traditionally, eminent domain has been understood as the power of government to take private property for a public use—projects the public would own and use, such as a road or a courthouse.  In recent years, however, local governments, like Nashville’s, have used eminent domain to take property from private parties to give it to other private parties like, in this case, the Lionstone Group.

But the owner of Country International, Joy Ford, is fighting back.  On July 21, 2008, she joined with the Institute for Justice to challenge MHDA’s abuse of eminent domain.  At stake are both a unique piece of Music City’s heritage and the property rights of all Tennessee citizens. Sherman and Joy Ford’s Contributions to Nashville and Country Music

Joy Ford and her late husband, Sherman Ford, founded Country International Records in 1974 and, in the early 1980s, bought the building that houses the business—the building that is now threatened with eminent domain abuse.  In her youth, Joy was a country singer and performed with Loretta Lynn in small country festivals throughout the South.  In addition to forming Country International, Joy and Sherman built the Bell Cove Club in Hendersonville, Tenn., just outside of Nashville.  Many country music legends performed at the club, including bluegrass founder Bill Monroe, who had a regular gig there before he passed away and whom Joy and Sherman befriended.  John Carter Cash celebrated his 21st birthday at the club, with the Carter and Cash families in attendance.

While never a big player on the country music scene, Country International has had a steady and nurturing influence on many country singers and songwriters.  The label has recorded and published songs that have made the Billboard Country Top 100 and several country songwriters such as David Allan Coe and Otis Blackwell, the author of such legendary hits as Great Balls of Fire, All Shook Up and Return to Sender, have worked with Country International and have written songs at its headquarters.  Pictures of these stars, along with several others, line the walls of the small but proud building.

Sherman Ford died in 1999, but Joy has carried on the business and is still actively involved in working with and nurturing younger artists in addition to keeping the legacy of the business alive.  The company’s headquarters is located right on Music Row so it is often used as a place to hold meetings and to write songs.  The building even has a room dedicated to songwriters working on new material. As Ladd Smith, a young guitarist and songwriter working with Country International, said recently, “You have to be on Music Row in order to network properly.  We can’t afford an office on Music Row, but we can call Joy.”[1]

MDHA’s New Plans for Music Row

Nashville’s MDHA is the redevelopment agency for the City of Nashville and surrounding Davidson County.  In 1998, MDHA put together, and the city council approved, the Arts Center Redevelopment Plan.  That plan was amended in 1999 and the area was expanded to include Joy Ford’s property and much of Music Row.  MDHA has now entered into a development agreement with the Lionstone Group, a Houston-based developer.  The development agreement calls on MDHA to obtain Ford’s property that is bordered on three sides by Lionstone-owned land and resell it to the firm at cost. MDHA is essentially renting out its eminent domain authority.  Lionstone will pay for all costs of the condemnation, even paying MDHA’s attorney’s fees.  On Ford’s land, Lionstone plans to build a 12-story office tower.  Lionstone claims that an architectural firm and a real estate brokerage firm have already signed on as tenants.

Joy Ford is not seeking money.  She has no interest in selling a business and building that is so important to her and Nashville’s heritage.  Joy remains adamant that she does not want to sell her property.

Incredibly, by its own admission, the developer does not need the headquarters of Country International in order to build the office tower.  In 2006, the developer approached Joy about selling her property, she refused, and the developer admitted it did not need the property: “[i]t would have been easier to plan the site with [that location].  But when she [Joy Ford] was firmly opposed to selling, we just took a different approach and are going to build around her.”[2]  Now, the developer and MDHA want her out, claiming that the office building will be less “marketable” if she remains.[3]

This year, MDHA asked to meet with Joy, which she did in May 2008.  During the meeting, Joy asked MDHA to provide documents about the redevelopment plan and the so-called blight study of the area.  After some delay, MDHA eventually did turn over the documents.  After she received them, she asked in a May 27 letter that the agency give her 30 days to review the documents before she would meet with them again.  However, on June 20, 2008, MDHA, perhaps feeling pressure from the developer, filed a condemnation action against Joy.

Eminent Domain Abuse: An Overview

Eminent domain is the power of government to take away a person’s home, farm or business.  It has been called the “despotic” power,[4] and in colonial times when English law prevailed, there were no limits on the monarch’s power to seize property.

Recognizing its potential for abuse, James Madison wrote an important constraint on eminent domain into the Fifth Amendment to the U.S. Constitution, which provides that private property shall not be “taken for public use without just compensation.”[5]  This language constrains eminent domain in two ways.  First, the government can only take property for a genuine public use.  Second, if the government takes property for a public use, it must pay just compensation.  Most state constitutions, including Tennessee’s, contain the same or similar language to that of Madison.[6]

The “public use” limitation on eminent domain is particularly important.  It prevents the government from taking someone’s home or business simply to give it to someone else with more political influence for his or her own private use.  Thus, traditionally, the power of eminent domain was invoked only when the government needed land to build a public necessity, like a drainage system or a road.  Gradually, however, the traditional and principled constraints on eminent domain have been dismantled with tragic results.

The demise of the U.S. Constitution’s “public use” clause began with the U.S. Supreme Court’s 1954 decision in Berman v. Parker in which Washington, D.C., used eminent domain to renew what were in those days called “slums.”[7]  Rather than rule narrowly that the city could condemn decrepit tenements that presented a genuine threat to public health, the Supreme Court instead decided that the constitutional term “public use,” which had a specific historical definition, actually means “public purpose.”  Worse yet, the Supreme Court also decided that rather than allowing independent courts of law to decide what constitutes a public purpose, those decisions would now be left to local governments—the very entities that employ eminent domain.  Thus, a vital constitutional check on government power was lost.

The erosion of the “public use” clause in the U.S. Constitution culminated in the 2005 ruling in Kelo v. City of New London, justly one of the most reviled decisions in U.S. Supreme Court history.[8]  In Kelo, the City of New London, Conn. decided to seize non-blighted homes and turn them over to another private party in the hope that the new owners would use the land in a way that would create jobs and pay higher taxes.  The U.S. Supreme Court, by a narrow 5-4 vote, approved, ruling that even a remote hope of “public benefits,” whether those benefits are proved to be likely or not, justifies taking someone’s home or business and turning it over to another private party for that party’s private profit.  Under Kelo, a city can measure its citizens’ worth in how much they pay in taxes, meaning that a family can be uprooted, cast aside, and its home destroyed if someone richer comes along who can be taxed more heavily.  And so, just as “public use” was blurred to mean “public purpose” in Berman, in Kelo, “public purpose” was further blurred into “public benefit.”  And with each of these steps, the fundamental right to own property, which was so important to the Founders and has been essential to our liberty and prosperity, was undermined.

In her pointed dissent, Justice O’Connor explained the grave implications of what the majority had done:  “Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”  In an apt description of Nashville’s use of eminent domain against Joy Ford, Justice O’Connor also warned:

Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more.

The backlash against Kelo was swift and nearly unanimous.  Public opinion polls consistently show that more than 80 percent of Americans disapprove of using eminent domain to transfer property from one private party to another for so-called “economic development.”[9]  As of this writing, 43 states, including Tennessee, have reformed their statutes to some degree to afford property owners greater protection against the wrongful seizure of their property.[10]  Finally, two state supreme courts to have squarely considered the Kelo question unequivocally rejected the use of eminent domain for economic development, while four others have said they are likely do so in a future case.[11]

The Supreme Court of Tennessee, for its part, has not taken a case in over five decades addressing statutory and constitutional limitations on redevelopment and eminent domain.[12]  With eminent domain abuse occurring to citizens in Tennessee, the time is ripe for the Tennessee courts to consider these important issues.

Legal Challenge to MDHA’s Condemnation Petition

It is a foundation of Tennessee law that eminent domain statutes are to be strictly construed in favor of the property owner.  In 2006, in response to the U.S. Supreme Court’s infamous Kelo decision, the Tennessee legislature reformed the eminent domain laws of the state, including the laws relied upon by MDHA in this case.[13]  In Section 1 of these changes, the legislature clearly set forth its intent: “It is the intent of the general assembly that the power of eminent domain shall be used sparingly, and that laws permitting the use of eminent domain shall be narrowly construed as not to enlarge by inference or inadvertently the power of eminent domain.”[14]  Under these changes, MDHA is only authorized to use eminent domain in a “blighted area.”  The legislature then went on to make a number of other changes, including substantively better defining blight by eliminating broad blight categories, specifically tying blight to factors that are “detrimental to the safety health, morals, welfare of the community,” and prohibiting takings to enhance tax revenues.[15]  Finally, the legislature made it clear that these amendments apply to all condemnation proceedings initiated on or after July 1, 2006.

As noted, in 1999, MDHA amended the Arts Center Redevelopment Plan to include approximately 111 buildings as well as parcels of vacant land and parking lots in the historic Music Row area of Nashville.  MDHA conducted a property survey of the area and presented the plan to the Metropolitan Government of Nashville and Davidson County.  On July 21, 1999, the Metropolitan Government approved the amendments to the Plan specifically finding that the “additional area to be incorporated in the ‘Plan’ . . . is a blighted area as defined in accordance with Tennessee Code Annotated Sections 13-20-201 through 13-20-216.”  As noted, however, the statutory standard for acquiring property and for determining whether an area is blighted changed in 2006.  And, unquestionably, MDHA must comply with these new standards established by the legislature and applying to all condemnations filed after July 1, 2006, including the action against Joy Ford, which it did not file until June 2008.  Because MDHA is trying to rely on a law that is no longer in effect and because eminent domain statutes must be strictly construed in favor of the property owner and must not be enlarged “by inference or inadvertently,” MDHA is without statutory authorization for this condemnation.

In addition to lacking statutory authority, the blight study itself does not hold up under Tennessee law.  In making its determination that the area encompassing Joy Ford’s property was blighted, MDHA relied in part on what is called the External Appearance Survey of Structural Conditions.  The survey consists of vague, confusing, and arbitrarily assigned categorical distinctions and an unclear methodology.  To give one example, “no apparent foundation defects” was the only box marked on the survey forms for 16 structures, yet of these, 7 were given a “Sound” classification and 9 were given a “Minor Deterioration” classification without any identifiable reason.  Furthermore, Tennessee law requires that “dilapidation” mean “extreme deterioration and decay due to lack of repairs and care of the area.”  The surveys reveal that not one of the properties was rated as dilapidated and it appears that only a small number of buildings could meet the statutory standard of “extreme deterioration and decay.”

MDHA’s actions also violate Art. I, § 21 of Tennessee’s Constitution and Tenn. Code Ann. § 29-17-102.   Under Tennessee law, eminent domain cannot be used for a private use or benefit, nor can eminent domain be used for private economic development purposes, such as increased tax revenue and increased employment.  It appears that MDHA’s purpose in this condemnation is not to remove blighted conditions.  Indeed, Joy Ford’s property is clearly not blighted.  Rather, MDHA is using the blight designation in the area as a pretext so it can transfer the property to a private developer for a private use and to further private economic development, both of which are prohibited under the Tennessee Constitution and statute.  The condemnation here is a developer-driven project.  The developer proposed the project and will now pay all the condemnation costs, including attorney’s fees, required to implement it.

MDHA’s actions violate the Fifth Amendment to the U.S. Constitution as well.  While the Supreme Court in Kelo recognized that private economic development is a public use under the Fifth Amendment, Justice Kennedy in his Kelo concurrence, which provided the decisive fifth vote in the case, wrote that the “rational-basis standard of review [does not] alter the fact that transfers intended to confer benefits on particular, favored private entities, and with only incidental or pretextual public benefits, are forbidden by the Public Use Clause.”[16]  He went on to state that “a court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit . . . .”[17]    Here, it is not MDHA’s purpose in this condemnation to remove blighted conditions.  Rather, MDHA is using the blight designation in the area as a pretext so it can transfer the property to a “particular, favored private entit[y]” for a private use, with only incidental or pretextual public benefits.

Finally, there is no necessity for the condemnation.  Real property, including land, homes and small businesses, can be condemned in Tennessee only if it is necessary for the accomplishment of a public use.[18]  Courts will strike down arbitrary and capricious uses of eminent domain as unnecessary.  MDHA’s acquisition of Joy Ford’s property is not necessary for the purported public use.  As noted, the developer has already admitted that it does not need Joy’s land to build the office tower.  MDHA should drop its eminent domain action and go back to its original plan of simply building around the headquarters of Country International.

The Institute for Justice Steps On to the Stage

The Institute for Justice has stepped up to vindicate not only Joy Ford’s rights, but also the similar rights of everyone in Tennessee who is threatened by eminent domain abuse or who may be threatened in the future.

The Institute for Justice has litigated eminent domain cases nationwide in court and in the court of public opinion, successfully preserving the rights and properties of the politically and financially disenfranchised. Among IJ’s victories are:

Wells v. City of Riviera Beach—In May 2007, the Institute for Justice successfully defeated an attempt in Riviera Beach, Fla., to displace more than 5,000 residents for a massive private development project that included a yacht marina, luxury condominiums and upscale hotels.

City of Norwood v. Horney—In a resounding repudiation of the U.S. Supreme Court’s decision in Kelo v. City of New London, the Ohio Supreme Court unanimously ruled in July 2006 that the city of Norwood acted unconstitutionally by taking the homes of the Institute for Justice’s clients.

Brody v. Village of Port Chester—In December 2005, the 2nd U.S. Circuit Court of Appeals ruled that the Village of Port Chester violated IJ client Bill Brody’s constitutional rights by condemning his property for private development without giving him notice of his one opportunity to challenge the condemnation.

City of Tempe v. McGregor—In October 2005, as a result of the Institute for Justice Arizona Chapter’s legal defense, Arizona courts rejected the city of Tempe’s attempt to condemn private property for the benefit of a wealthy private developer.

Kelo v. City of New London—Just two years after the landmark U.S. Supreme Court ruling in Kelo v. City of New London that allowed private property to be taken for economic development, 41 states have tightened their restrictions on eminent domain. In 2007, IJ client Susette Kelo’s little pink cottage—the home that became a national symbol of the fight against eminent domain abuse—was moved rather than allowing it to fall to the government’s wrecking ball.

Saleet v. City of Lakewood—In 2004, as a result of an IJ lawsuit representing 17 home and business owners, citizens from the city of Lakewood voted down an eminent domain abuse project that would have demolished an entire neighborhood for high-priced condominiums and an upscale mall. Shortly afterwards, Lakewood voters rejected the bogus blight designation, which applied to 93 percent of the city.

City of Mesa v. Bailey—In September 2003, the Arizona Court of Appeals unanimously struck down the City of Mesa’s use of eminent domain for private gain. The city attempted to seize a small car repair shop so a privately owned hardware store could relocate.

Mississippi Major Economic Impact Authority v. Lonzo Archie—IJ represented the Archie family in their successful fight to save 24 acres of property and several homes they owned since 1941. The state tried to seize the Archie family’s private property in 2001 for the benefit of Nissan Motor Corporation, to which it had already given more than $290 million in subsidies and tax breaks and approximately 1,300 acres of land.

Pittsburgh Fifth and Forbes—IJ helped saved more than 120 small businesses in downtown Pittsburgh in 2000 from the mayor’s plan to abuse eminent domain.

Casino Reinvestment Development Authority v. Banin—In a classic David versus Goliath battle, the Institute for Justice scored a major victory for property rights in July 1998 when the New Jersey Superior Court ruled a state agency cannot condemn widow Vera Coking’s home of 37 years and give it to Donald Trump for his private development.

Defending Joy Ford is part of the Institute for Justice’s commitment to strategic litigation that will help restore judicial protection for private property rights.  The U.S. and every state constitution include property rights because they are the foundation of our independence as responsible citizens.  Indeed, for most Americans, ownership of a home or small business is the cornerstone of their efforts to provide for their families and realize their dreams.  Thus the wrongful use of eminent domain to transfer property from one private owner to another does not simply destroy a home or business.  It very often destroys a life, one patiently built through years of hard work.

Litigation Team

The lead attorney will be IJ Senior Attorney Scott Bullock.  Although he has litigated in all of the Institute’s areas, his current litigation primarily focuses on property rights, economic liberty and free speech cases in federal and state courts.  In property rights, Bullock has been involved in a number of cases challenging the use of eminent domain for private development.  He was co-counsel in and argued the landmark Kelo case, one of the most controversial and widely discussed U.S. Supreme Court decisions in decades.  He was also co-counsel in Horney v. City of Norwood in which the Ohio Supreme Court unanimously ruled in July 2006 to stop the use of eminent domain for private development.  Bullock has worked with property owners in scores of other cities, including spearheading the litigation that saved the land and homes of the Archie family in Canton, Miss.  For that accomplishment, he was awarded in 2002 the top civil rights prize by the state chapter of the Southern Christian Leadership Conference.  His articles and views on constitutional issues have appeared in The New York Times, The Wall Street Journal, 60 Minutes, ABC World News Tonight, National Public Radio and many other publications and broadcasts.

Noted Tennessee eminent domain attorney James W. Fisher of the Nashville-based law firm Lassiter, Tidwell, Davis, Keller & Hogan, PLLC, will serve as local counsel for Mrs. Ford. Conclusion

Across the nation, local governments abuse so-called blight laws in order to conveniently transfer property to private developers.  If Joy Ford’s non-blighted business can be condemned and transferred to a private developer, then the same thing can happen to homes and small businesses throughout Tennessee.   This case is about ensuring that overreaching governments and their backers in the development industry are made to respect the clear limitations on eminent domain found in the Tennessee and U.S. constitutions and Tennessee law.

For more information, please contact:

John Kramer

Vice President for Communications Institute for Justice 901 North Glebe Road, Suite 900 Arlington, VA  22203

(703) 682-9320 ext. 205 jkramer@ijstaging.wpengine.com

[1] Chas Sisk, “Turf war may test eminent domain,” The Tennessean, March 23, 2008.

[2] Josh Fory, “Building snag: Not everyone is gung-ho for development,” Nashville Business Journal, September 15, 2006.

[3] Chas Sisk, “Turf war may test eminent domain,” The Tennessean, March 23, 2008.

[4] Van Horne’s Lessee v. Dorrance, 2 U.S. 304, 311 (1795).

[5] U.S. Const. Amend. V (“nor shall private property be taken for public use, without just compensation”).

[6] Tenn. Const. art. I, sec. 21 (“That no man’s particular services shall be demanded, or property taken, or applied to public use, without the consent of his representatives, or without just compensation being made therefore.”)

[7] 348 U.S. 26 (1954).

[8] 545 U.S. 469 (2005).

[9] See http://www.castlecoalition.org/resources/kelo_polls.html for links to various opinion polls.  National polls conducted by MSNBC and CNN demonstrate that 97 percent and 99 percent of those surveyed respectively opposed Kelo-styled eminent domain for private gain.  See http://www.castlecoalition.org for continuously updated information on eminent domain reform.

[10] http://www.castlecoalition.org/pdf/publications/report_card/ states/california.pdf

[11] City of Norwood v. Horney, 853 N.E.2d 1115 (Ohio 2006); Bd. of County Comm’rs v. Lowery, 136 P.3d 639 (Okla. 2006).

[12] Nashville Housing Authority v. City of Nashville, 237 S.W.2d 946 (Tenn. 1951).

[13] 2006 Tenn. Pub. Acts Chapter No. 863 (available at http://tennessee.gov/sos/acts/104/pub/pc0863.pdf).

[14] Id.

[15] Id.

[16] Id. at 2669 (2005).

[17] Id.

[18] See Duck River Elec. Membership Corp. v. City of Manchester, 529 S.W.2d 202, 205 (Tenn. 1975).