How a legal system regulates land use is of critical importance. In some systems, governments

legally own the land thus reserving all developmental decisions for governmental control. In the U.S., even

though the government is a major landowner (especially in the western parts of the U.S.), we have a strong

tradition of active private ownership of land. Many of our property rules reward landowners who develop

and make active use of their land. If your use of your land harms others, however, it could be determined to

be a "nuisance" and the bad use stopped (or damages paid). Over time, concerns with environmental quality

as well as other values (like historical preservation) have led us to find many more ways to limit and control

how private parties use the land they own.

If it is clear that the government wants land for a public use, such as building a road or a school, it

can "take" the land through the power of eminent domain. Under the Constitution, the government must

then pay just compensation for the property. But what happens if the government chooses not to take the

land, but rather, imposes strict land-use regulations that limitperhaps severelyhow the land can be used

by its owner? Very often, the landowner will suffer a significant economic loss. When should the

government have to pay compensation for limiting an owner's potential use of his or her property?

This is the main issue raised in Lucas, (p. 16 in this week's readings), which will be one of the main

topics of discussion in the seminars. What was the nature of David Lucas' claim? Why did the Court find

that he deserved to be compensated? What would be the impact of the Court's decision on efforts by South

Carolina and other coastal states to control problems associated with coastal development?

DISCUSSION PROBLEM

One of the most successful professional basketball teams in the United States is the Cameron

Crazies, located in Cameron in the State of Duke. The Crazies for years have played in a relatively small

arena near downtown Cameron. It is an old facility, especially in comparison to the many new basketball

arenas built recently in other cities. The Cameron Crazies are owned by a company called Raymond

Enterprises. The President of Raymond Enterprises is Andrew Raymond, a multi-billionaire who made his

money in a computer software company and now owns various businesses, including the Crazies.

In early 2020 (before Covid), Raymond shocked the leaders in Cameron when he said that

Cameron needed to build a new arena or he would move the team to North Carolina. He indicated that they

needed a "state of the art" facility located near downtown. He was willing to contribute to the project by

financing a hotel and office tower that could be built as part of the project.

The Mayor of Cameron, who is a personal friend of Raymond, immediately asked the City Council

to authorize $1.0 million to conduct a study of locations and hire an architect to conduct a "concept study"

of alternatives and options. The project was coordinated by the Cameron Redevelopment Agency. The

Agency created a special committee to oversee the planning and, at the advice of the Mayor, asked Andrew

Raymond to serve on the Committee.2 | P a g e

In late 2020, while many businesses in the area were essentially shut down, the Committee issued its

Study Report. The twenty-page document identified a 50-acre location near downtown. It described a plan

to have office and retail space as well as a hotel along with the basketball arena (which was the centerpiece of

the plan). The plan also included a large parking deck and a public park in a triangular area next to the

stadium. The arena itself would be owned by the city but leased to Raymond Enterprises in a long-term lease.

The land adjacent to the arena would be acquired by the city and sold to Raymond Enterprises for $1.

Raymond Enterprises would be responsible for developing the land to include a hotel and offices. It could

either develop the property itself or have another developer build it. If a total of $250 million were not

invested in new construction on the property within 5 years, ownership of the land would revert to the city.

About one-third of the area is vacant lots, some of which are owned by the city. In addition, there

are about 30 buildings including some small apartment buildings and retail spaces. About 15% of the

buildings were in need of significant repairs and a few were currently unoccupied, but many of them were

operating as small businesses. Several of the businesses had been essentially shut down since March, 2020

because of the Covid-19 pandemic.

The Study Report indicated that, overall, the area was "at least somewhat blighted" or rundown.

The State of Duke does not have a statute that specifically defines what constitutes a blighted area. Local

neighborhood groups objected to the description of the area as blighted. They noted that several of the

buildings in the area had recently been renovated.

Based on the report, the City of Cameron authorized the use of its eminent domain power to take all

the parcels in the 50-acre zone. It found that this project offered significant economic development

potential for the City. It also found that this part of the city "had significant characteristics of a blighted

area" that further justified the taking.

A group of local landowners have filed a lawsuit in state court challenging the proposed taking of

their property. The trial court found that the taking was acceptable but noted that it was a close question

under Kelo. The court also raised an issue as to whether the Supreme Court of Cameron would establish a

more difficult standard to justify a takings under the State Constitution. While the language of the Cameron

Constitution is similar to the Fifth Amendment, other Statessuch as Ohiohad held that economic

development by itself was not a sufficient "public use" to justify a taking. (Note: State Court Justices in

Cameron are elected)

The case is now pending in the Cameron Supreme Court. Under Kelo, what is the strongest

argument the landowners can make to support their challenge? What do you believe is the likely result of

their challenge under Kelo? If you were a Supreme Court Justice in Cameron, would you vote to interpret

the Cameron Constitution to forbid takings justified primarily by economic development?