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States, cities struggle over eminent domain

Of all the decisions by the Supreme Court this past term, nothing has stirred up emotions more than a ruling on private property rights.  NBC's Pete Williams reports.

WASHINGTON — Of all the decisions by the Supreme Court this past term — on issues from the Ten Commandments to medical marijuana — nothing has stirred up emotions more than a ruling on private property rights.

The court said homeowners can be forced to move and sell — even to another private owner — if the land would be used to benefit the local economy. Cities are pushing to take advantage of the ruling, while states rush to try to undo it.

Just the suggestion of using eminent domain to redevelop one block in Maplewood, Mo., a St. Louis suburb, touched such a nerve that residents jammed into last week's City Council meeting to denounce it.

"I would encourage this council to adopt a resolution declaring Maplewood an eminent domain-free zone," said resident Ed Gottlieb.

Meanwhile, Long Branch, N.J., is preparing to use the power to expand a coastal development project, hoping to revitalize its economy.

Nationwide, the Supreme Court's ruling has encouraged cities to push ahead with plans to use the power.

"They need to be able to respond,” says the American Planning Association’s Paul Farmer, adding, "and not just sit with empty warehouses or empty factory buildings, and watch their housing markets decline."

But the areas marked for change aren't always empty. Developers in Washington, D.C., have gone to court to force out the owners of smaller shops to make way for a big chain discount store and restaurants.

"I don't believe that it is correct for a local government to say to a business, 'We're going to replace your business with another one we feel we like better,'" says Mindy Tolchinsky, who has been a D.C. merchant for more than 26 years.

But the Supreme Court's ruling has also touched off a different rush: Nearly 20 states (Alaska, Connecticut, Delaware, Florida, Indiana, Illinois, Massachusetts, Minnesota, Missouri, New Jersey, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Virginia and Wisconsin)arenow preparing bills to scale back use of eminent domain for economic development.

The Texas House passed its first version unanimously, 136-0. Legislators like Rep. Frank Corte Jr., say private property needs more protection.

"When it's given to another person to increase the hiring use, or the tax base, or someone else's own gain," says Corte, "I just think that really rubs across the basic core of our values."

Supreme Court Justice Sandra Day O'Connor, who dissented from the Supreme Court's eminent domain ruling, said this week she's not surprised by the response. 

"I would expect," said O’Connor, "to see a little more state action in this area."

Congress is working on a bill of its own and senators say they intend to press Supreme Court nominee Judge John Roberts to see what he thinks of the power of eminent domain.