Maryland’s Governor signed emergency eminent domain legislation

On Monday, Maryland’s House voted 93-43 to pass emergency eminent domain legislation allowing the State to condemn the horse racing assets of Magna Entertainment. Yesterday, O’Malley signed SB 1072 (Chapter 3 of the 2009 Legislative Session) into law, effective April 14, 2009. SB 1072 authorizes “the State to acquire by purchase or condemnation the private property rights relating to the Pimlico Race Course, the track known as Laurel Park, the Bowie Race Course Training Center, the name, copyrights, service marks, trademarks, trade names, contract rights, business entities, stocks and horse racing events that are associated with the Preakness Stakes and its trophy, the Woodlawn Vase, and certain other private property.”

The legislation “declares that the retention of the operation of the Pimlico Race Course and Laurel Park tracks, the operation of the Bowie Race Course Training Center, and the running of the Preakness Stakes in Maryland, are for valid public purposes, including continuing the economic benefits to the State and its citizens…”

However, OCA Maryland member and eminent domain attorney, James Thompson explains that the public purpose of this legislation may be constitutionally flawed. “The key constitutional challenge to this legislation is that it is not a taking for a public use or purpose as is required in both the U.S. and Maryland constitutions,” says Thompson. “Ultimately, the State is not going to own or manage the race tracks but will re-sell them to private owners who will presumably keep them in Maryland which will, in turn, be an economic benefit to the State. Is that enough? This will clearly test the limits of eminent domain use for ‘economic development’ in Maryland.”

Prior to the 2007 appellate decision in Mayor and City Council of Baltimore City v. Valsamaki, 397 Md. 222, 916 A2d. 324 (2007), Maryland law in the area of public purpose was not particularly favorable to property owners. The Court of Appeals decided in Prince Georges County v. Collington Crossroads, 275 Md. 171, 339 A2d. 278 (1975) that a large taking in Prince Georges County “for a type of industrial development believed by the County’s officials to be needed in the County” (Id. at 190, 288) for economic development was a public use or purpose allowable by the State’s constitution. However, Thompson explains, “our Valsamaki case plus the adverse reaction to the Kelo case (545 US 469 (2005)) have reawakened a judicial interest in protecting private property rights in Maryland and nationally.”

In Valsamaki, in which Mr. Thompson and John C. Murphy represented the property owner, the court struck down the improper use of the “quick take” power by the City of Baltimore and, although it did not rule on the public use issue, it found “scant” evidence of public use or purpose in the City’s economic development argument.

Thompson also pointed to the interesting constitutional issue raised by Professor Gideon Kanner in his post “And They’re Off” (Gideon’s Trumpet, 4/10/09) – does the ultimate condemnation of these private property rights interfere with the constitutionally protected freedom of Americans to travel from state to state and carry their property with them? If the owners of these property rights agreed to stay or leave these assets in Maryland, would condemnation be filed?

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James L. Thompson, Esq. and Joseph P. Suntum, Esq. are members of Miller, Miller & Canby in Rockville, Maryland. Messrs. Thompson and Suntum have represented numerous property owners throughout the State of Maryland in defending their property against governmental seizure by eminent domain. Additionally, both have lectured extensively on the topics of eminent domain, just compensation, and property valuation. Mr. Thompson is also the only attorney from Maryland who holds membership with the Owners’ Counsel of America.

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