South-Western Legal Studies in Business

Use of Eminent Domain Power to Take Private Property for Private Use Unconstitutional
Description Illinois supreme court held that the use of eminent domain by a state economic development agency, by which it would force the sale of property to the agency by an unwilling seller, so that the agency could then sell the property to another private party that wanted the property was an unconstitutional abuse of the notion of taking for public purpose.
Topic Constitutional Law
Key Words Eminent Domain; Public Purpose; Taking
C A S E   S U M M A R Y
Facts Gateway International Raceway in Madison, Illinois, asked the Southwestern Illinois Development Authority (SWIDA) to condemn 149 acres owned by National City Environmental (NCE), which ran a recycling plant and landfill. SWIDA is a political entity and municipal corporation created by the Illinois legislature to promote economic development. Gateway wanted NCE’s land so it could expand its raceway operations. SWIDA offered NCE $1 million for its land, which would be covered by Gateway. NCE refused, so SWIDA moved in court to condemn the property to obtain title by eminent domain. The trial court approved the taking. The public purpose was to improve the flow of traffic in the area and to reduce blight. The court of appeals reversed in favor of NCE. SWIDA appealed to the high court of Illinois.
Decision

Affirmed. The taking would not achieve a legitimate public purpose and was unconstitutional. Using the power of eminent domain for private purposes, to allow the racetrack to expand its facilities in a cost-efficient manner by avoiding the open real estate market was a misuse of the power entrusted by the public. The flexibility of “public purpose” does not mean an unfettered ability to exercise takings beyond constitutional boundaries.

Citation SWIDA v. National City Environmental, 768 N.E.2d 1 (Sup. Ct., Ill., 2002)

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