How would Virginia's proposed eminent domain amendment change just compensation, lost access, and lost profits rules?

Plain-English summary

In January 2012, Delegate Jackson Miller asked the AG how a proposed amendment to Article I, § 11 of the Virginia Constitution (which would later be ratified by voters in November 2012) would change eminent domain rules. The amendment was initiated through House Joint Resolution 693, agreed to at the 2011 session, and was a response to the U.S. Supreme Court's 2005 Kelo v. New London decision. It built on Va. Code § 1-219.1, enacted in 2007. Miller posed three sets of questions; the AG answered each in turn.

1. Would the amendment expand "damages" to let owners near unpopular public projects collect even when no land is taken? No. "Damaged" in Article I, § 11 has always been a constitutional term of art, not the ordinary English word. As explained in PEPCO v. Highway Commissioner and Tidewater Railway v. Shartzer, "damaged" means damaged in the legal sense, requiring a loss of a recognized property right, not just inconvenience or diminished desirability. The 1902 Constitution added "damaged" to the eminent domain provisions, but even then the courts held that merely making property less desirable (a nearby county jail, in Shartzer) was not constitutional damage absent some "diminution in substance." The amendment did not change that threshold. Owners near unpopular facilities still could not recover when none of their land was taken or no property right was invaded.

2. Did the amendment make various traffic and street-closure scenarios compensable? The answers tracked existing doctrine, with one twist for lost profits and lost access.

• (a) Converting a major cross-town highway to limited access only, eliminating direct access for abutters. Already compensable; the AG found the facts nearly identical to State Highway & Transportation Commissioner v. Linsly. An abutter's easement of access to a public road is a property interest; extinguishing it is constitutional damage. The amendment would not change this, and just compensation might come to include "lost profits" and "lost access" as defined by future legislation.
• (b) Adding medians that limit access to right-in/right-out. Generally not compensable. Under Highway Commissioner v. Easley, the police-power regulation of traffic flow is not compensable when reasonable access remains. Whether such limits become compensable under the amendment would depend on how the General Assembly defines "lost access" and "lost profits."
• (c) Temporary weekend street closure for a festival. Not compensable. Same police-power principle; brief duration, no "damages" in the constitutional sense.
• (d) Temporary closure for a parade. Same answer.

3. Would the amendment block locality condemnations of land for infrastructure upgrades to support a redevelopment plan? No, provided the locality could prove the use was public. The amendment would not bar localities from acquiring land for roads, utility expansion, or related infrastructure, even when those projects support broader redevelopment plans. But it would shift the burden of proof to the condemnor, eliminating the statutory presumption in § 15.2-1903(C) that an adopted resolution constitutes "sufficient evidence" of public use and necessity. The amendment would also expressly forbid taking property where the "primary use" is private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development. The AG read "primary" carefully: infrastructure improvements that incidentally benefit private development can still satisfy public use if the primary use is transportation or utility service, not economic development itself.

The AG flagged that the amendment directed the General Assembly to define "lost profits" and "lost access." The amendment's compensation rules would depend heavily on how those definitions were drawn.

The amendment was approved by Virginia voters in November 2012 and is now part of the Virginia Constitution.

Currency note

This opinion was issued in 2012, before the amendment was ratified. The amendment passed in November 2012, and the General Assembly subsequently defined "lost profits" and "lost access" by statute. Subsequent statutory amendments, court decisions, or later AG opinions may have further changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

The proposed amendment grew out of two events. First, Kelo v. New London held that the federal Constitution did not bar takings primarily for economic development. The Court explicitly noted "that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power," and many states did. Virginia's first response was § 1-219.1, enacted in 2007, which incorporated the principle that the right to private property is a fundamental right and limited locality takings.

The proposed constitutional amendment locked § 1-219.1's substance into the Constitution and added: (a) recognition that the right to private property is a fundamental right; (b) shifted the burden to the condemnor, eliminating the presumption in § 15.2-1903(C); (c) added "lost profits" and "lost access" to "just compensation" (subject to legislative definition); (d) prohibited excessive takings beyond what was necessary for the stated public use; and (e) expressly excluded private gain, private benefit, increasing jobs, increasing tax revenue, and economic development as primary public uses.

The opinion also touched on the relationship between constitutional change and existing law. Citing Swift & Co. v. Newport News, a decision following the 1902 Constitution, the AG noted that statutes inconsistent with a newly adopted constitutional provision are nullified, and that common law remains in force except where changed by statute or the Constitution. But the General Assembly retains authority on subjects not forbidden by the Constitution per FFW Enterprises v. Fairfax County and art. IV, § 14, so existing eminent domain statutes and case law would continue to apply except where in conflict with the amendment.

Common questions

Q: Did the proposed amendment let landowners near an unpopular public project recover damages without losing any land?
A: Per this opinion, no. "Damaged" in Article I, § 11 retained its constitutional meaning: a legal invasion of a recognized property right. Mere proximity to or inconvenience from a public project did not qualify before the amendment, and the amendment did not change that.

Q: If a road project eliminates direct access to a business's frontage, can the business recover?
A: According to Linsly and this opinion, yes. An abutter's easement of access to a public road is a property right, and its extinguishment constitutes constitutional damage. The amendment preserves that result and may expand the calculation of compensation to include "lost access" and "lost profits" per future legislation.

Q: What about medians or right-in/right-out limits?
A: Generally non-compensable under Easley if reasonable access remains. The amendment did not change the police-power exemption for traffic regulation. Compensation under the new "lost access" framework would only kick in when the loss of access happened alongside an actual taking.

Q: Did the amendment kill economic-development takings entirely?
A: Effectively, yes, for takings where economic development was the "primary use." The amendment expressly listed "private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development" as not constituting public use. But infrastructure improvements (roads, utility upgrades) tied to a redevelopment plan could still be public use as long as the primary use was transportation or utility service.

Q: What was the biggest procedural change?
A: The shift in burden of proof. Under § 15.2-1903(C), a locality's adopted condemnation resolution had constituted "sufficient evidence of such public use and necessity." The amendment expressly abolished that presumption and required the condemnor to prove public use, giving property owners a meaningful opportunity to contest.

Q: How would 'lost profits' and 'lost access' be defined?
A: That was for the General Assembly to decide. The amendment directed the legislature to define both terms, and the AG declined to predict how broadly compensation would be expanded.

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2012/11-135_Miller.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

January 26, 2012

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

The Honorable Jackson H. Miller
Member, House of Delegates
P. O. Box 10072
Manassas, Virginia 20108

Dear Delegate Miller:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You ask several questions regarding a proposed amendment to Article I, § 11 of the Constitution of Virginia ("the Amendment") relating to the taking or damaging of private property by the power of eminent domain.

1. You ask whether the Amendment, if adopted, would expand the meaning of "damages" to such an extent that it would enable the owners of property located in the vicinity of, or affected by, an unpopular public facility to recover damages, even when none of their land has been taken for the facility;

2. You ask whether the Amendment, if adopted, would require local governments to compensate property owners for "lost access" and "lost profits" in the following examples: (a) the conversion of a major cross-town highway featuring at-grade intersections and lined with businesses to a limited-access-only highway with grade-separated interchanges that would eliminate the direct access of abutting landowners and require access through a back road or other separate access road; (b) the reconstruction of major arterial streets within a city or town to four-lane divided roads with medians, resulting in vehicular access being limited by the medians to right-in and right-out for abutting commercial property owners, eliminating left-in and left-out turns for vehicles; (c) the closure of a street, which happens to be lined with commercial businesses, during a period that extends for approximately 54 hours, from 4:00 p.m. on Friday through 10:00 p.m. Sunday to host a festival; and (d) other similar temporary road closures for parades; and

3. You ask whether the Amendment, if adopted, would prevent the use of eminent domain by a locality to acquire land for the upgrading of public infrastructure (i.e., roads and utility facilities) to support a redevelopment plan adopted by the locality to promote and encourage high density, multi-use, urban-style development in the place of aging low-density suburban-style development.

Response

It is my opinion that:

1. The Amendment, if adopted, would not expand the meaning of "damages" to such an extent that it would enable the owners of property located in the vicinity of, or affected by, an unpopular public facility to recover damages when none of their land has been taken for the facility;

2. Bearing in mind that determinations in condemnation cases always depend on the precise facts of a particular case, the following general conclusions may be made with respect to your examples:

(a) Damages sustained when a major cross-town highway is converted to a limited access only highway which eliminates all direct access to the major highway by abutting landowners are compensable under our current Constitution and will remain compensable under the Amendment;

(b) The design and construction of highways and roads, including the installation of medians and other traffic management and safety features, represent the exercise of the Commonwealth's police power, the exercise of which generally is not compensable under our current Constitution, provided that a reasonable means of ingress and egress for an abutting property remains; whether limitations on vehicular access will be compensable under the Amendment will depend on how the General Assembly defines by statute "lost access" and "lost profits," but a property owner likely will have an opportunity to present to the body determining just compensation evidence of the damages alleged to have been sustained;

(c) The temporary closure of a street for a weekend festival represents the reasonable exercise of the police power by a locality, is not a taking or damaging of property and, thus, would not be compensable if the Amendment is adopted; and

(d) The temporary closure of a road to accommodate a parade represents the reasonable exercise of the police power by a locality, is not a taking or damaging of property and, thus, would not be compensable if the Amendment is adopted; and

3. The Amendment, if adopted, will not prevent the use of eminent domain by a locality to acquire land for the upgrading of public infrastructure, such as roads and utility facilities, to support a locality's redevelopment plan to promote and encourage high density, multi-use, urban-style development, so long as the condemnor can meet its burden of proving that the use of the property taken is a public use.

Background

The General Assembly has proposed amending specific provisions pertaining to eminent domain in Article I, Section 11, of Virginia's Constitution and has initiated the amendment process pursuant to Article XII, § 1 (entitled "Amendments"). The initial step in that process was House Joint Resolution 693, agreed to at the 2011 session of the General Assembly.

The present efforts to amend Virginia's Constitution have been strongly influenced by the decision of the United States Supreme Court in the case of Kelo v. New London. In Kelo, the City of New London, Connecticut condemned non-blighted residential property belonging to Susette Kelo for the primary purpose of promoting economic development. Her land was condemned so it could be used for the benefit of private business. The decision prompted an outpouring of criticism that began with the rather pointed dissent of Justice O'Connor, who was joined by Chief Justice Rehnquist and Justices Scalia and Thomas. As stated in Justice O'Connor's dissent: "Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded . . . ." The Court's decision, based on the Fifth Amendment to the United States Constitution, was the final blow in Susette Kelo's efforts to save her property, as the Constitution and other laws of Connecticut afforded her no relief. Significantly, the majority in Kelo emphasized "that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power" and that "many States already impose 'public use' requirements that are stricter than the federal baseline."

In an effort to address concerns raised by the Kelo decision, as well as the concerns of Virginians, the General Assembly enacted § 1-219.1 of the Code of Virginia, entitled "Limitations on eminent domain." The proposed Amendment to the Virginia Constitution incorporates a number of the central concepts contained in § 1-219.1, including the right to private property being a fundamental right.

The proposed Amendment is designed to establish, as an integral part of Virginia's Constitution, that the right to own and possess private property is a fundamental right and to embody that principle in the laws and jurisprudence of the Commonwealth of Virginia. The authors of the proposed Amendment decided to remove all doubt, at least in Virginia's jurisprudence, by explicitly stating that the right to own property will be deemed a fundamental right in Virginia.

In furtherance of that objective, the Amendment will impose specific limitations on the exercise of eminent domain powers and help ensure that "no private property shall be damaged or taken for public use without just compensation to the owner thereof." The Amendment will reinforce the requirement for a "public use" and provide clarification by specifying what is not considered to be a "public use." In the event private property is "damaged" by a public project or use, the proposed Amendment will retain the existing requirement that just compensation is due to the owner thereof, even in the absence of a direct taking of an owner's property. Regarding compensation, however, the Amendment provides that "just compensation shall be no less than the value of the property taken, lost profits and lost access, and damages to the residue caused by the taking." The General Assembly is directed to define the added terms of "lost profits" and "lost access," which may expand the scope of just compensation for damages, depending upon the wording of the definitions in the legislation to be enacted.

Applicable Law and Discussion

If the Amendment ultimately is adopted and incorporated into our Constitution, an important issue will be how and to what extent the Amendment will affect existing statutes and case law pertaining to eminent domain, including statutes such as § 1-219.1. As noted in the case of Swift & Co. v. Newport News, a decision that followed soon after the adoption of Virginia's Constitution of 1902: "And all statutes existing when such a Constitution is adopted, or which might thereafter be passed, inconsistent with its provisions, are nullified by such constitutional prohibition." Of particular interest is the fact that the 1902 Constitution amended the eminent domain provisions from Virginia's prior Constitution by requiring just compensation when property has been "damaged" for public uses. Significantly, the decision in Swift & Co. also states that "[i]t is also well settled that the common law remains in force in this State, except when changed by statute or the Constitution, which operate prospectively only[.]"

More importantly, however, the Amendment will be interpreted, in part, in conformance with Article IV, § 14, of the current Constitution of Virginia, which provides that "[t]he authority of the General Assembly shall extend to all subjects of legislation not herein forbidden or restricted." As noted in FFW Enterprises v. Fairfax County, "the legislature has the power to legislate on any subject unless the Constitution says otherwise." Except to the extent of conflicts with the Amendment, the vast majority of our existing eminent domain statutes and related body of case law should remain applicable.

The current eminent domain provisions in the Constitution of Virginia state, in part, as follows: "[t]hat the General Assembly shall not pass any law . . . whereby private property shall be taken or damaged for public uses, without just compensation." This basic limitation is carried forward in the proposed Amendment. Substantive policy changes in the Amendment will (1) operate to impose certain express limitations on the ability of the General Assembly to define what constitutes a public use, (2) expand the scope of just compensation to include "lost access" and "lost profits," as defined by the General Assembly, (3) prohibit excessive takings beyond what is necessary to achieve the stated public use, and (4) impose upon the condemnor the burden of proving that the use is public and eliminate any presumption that it is.

I will now address your specific questions and issues seriatim.

I.

Before responding to your first inquiry, the concept of "damage" to, or "damaging" of, private property must be distinguished from the requirement for "just compensation" to a landowner whose property has been taken or damaged in conjunction with a public use. Under the proposed Amendment, the terms "lost access" and "lost profits" will be components of "just compensation." If property is "damaged" for public uses under Virginia's Constitution, just compensation will include, depending on the facts of the particular case, compensation for "lost access" and "lost profits" to the extent authorized by the General Assembly.

Regarding damage, and as explained in PEPCO v. Highway Commissioner, the contention that a landowner who has suffered damage to his private property is entitled to compensation under the eminent domain provisions of the Virginia Constitution turns on the meaning of "damage" or "damages." Under Article I, § 11 of our Constitution, the term is not accorded its ordinary meaning. Instead, the term "means damaged in the legal sense." In PEPCO, two electric utilities that maintained pole lines on highway department right-of-way were forced to relocate their lines, but the utilities did not hold any easements or other interest in the subject land. The claim of entitlement to just compensation failed because the pole lines were installed and maintained under mere licenses or permits issued by the State Highway Commissioner that were revocable at will.

In 1902, Virginia adopted a new constitution, which amended prior eminent domain provisions in the 1869 version to include for the first time the term "damaged." As noted in Tidewater Railway Co. v. Shartzer, prior to such amendment "[i]t was uniformly held . . . that there could be no recovery for an injury or damage to property, no part of which was actually taken." Nonetheless, even this early case recognized that merely rendering a property less desirable, such as the erection of a nearby county jail, does not constitute the damage contemplated by the Constitution, absent some "diminution in substance" caused by the public use. The proposed Amendment will not alter this threshold requirement that there be damages in the constitutional sense. Owners of property will be no more entitled under the Amendment to compensation for the inconvenience of having an unpopular public facility located nearby than they are under current law.

II.

Example (a) involves the conversion of a major cross-town highway into a limited-access-only highway that eliminates all direct highway access by abutting landowners, leaving access only by local or back roads. The facts presented are nearly identical to those in State Highway & Transportation Commissioner v. Linsly, except that in Linsly the State Highway Commissioner planned to construct a service road providing indirect access. An easement of access to a public road (generally, an easement by implication) is a property interest, and its extinguishment by the Commonwealth or a locality under powers of eminent domain would be a form of "damage" in a legal sense. In your example, as in Linsly, the landowner has lost his abutter's easement of access to a major public highway, a substantive property right, resulting in damage in the legal sense. The damage suffered entitles the landowner to just compensation. The proposed Amendment will not affect this result; however, the determination of just compensation may include a recovery for "lost profits" and "lost access" as defined by future legislation.

The facts in Example (b) involve the construction of medians affecting vehicular access. Such construction could limit ingress and egress for certain properties to right-in and right-out only. In cases such as this, where reasonable access remains, even though it is not as extensive, the current rule, stated in Highway Commissioner v. Easley, is that "[a]n abutting landowner's right of access to a public road is subordinate to the police power of the state reasonably to control the use of streets so as to promote the public health, safety, and welfare," and that no compensation is due to the owner of property abutting a public road "when the state, in the exercise of its police powers, reasonably regulates the flow of traffic on the highway." The proposed Amendment will not change the rule in Easley for cases where a median or other regulation of traffic leads to diminished access and there is no taking or damaging of property.

In Example (c), a street is closed for an entire weekend for a festival. Under the given facts, there is no taking of land, and the same principles apply as set forth in Easley. Even assuming the street closure resulted in a substantial decrease in the business of abutting merchants during the course of the festival, no damages would be payable. In this situation, the relatively short duration of the closure represents the exercise of the police power and does not involve or cause any substantial "damages" in the legal sense of that term. This answer similarly applies to Example (d), where the road closure is to accommodate a parade and any impact lasts only for a very limited period of time.

III.

In the example presented by your Question 3, you describe a major project by a locality to facilitate a redevelopment plan. The construction phase of the infrastructure improvements often will require the acquisition of title to land and easements. For purposes of completing required acquisitions, the General Assembly has granted localities condemnation authority pursuant to Title 15.2, Chapter 19. Article I, Section 11 of the Constitution of Virginia, however, both now and with the proposed Amendment, limits the exercise of such authority by providing that private property may not be taken (i.e., condemned) except for "public uses" or "public use."

Hoffman explains that the stated "necessity" for resorting to condemnation is a legislative function that the courts will not review unless the decision by the locality is arbitrary or capricious or in the event there is evidence of manifest fraud. Subsection C of § 15.2-1903 concludes with the provision that a duly adopted resolution or ordinance that satisfies the criteria of § 15.2-1903(B) and is filed with the condemnation petition "constitutes sufficient evidence of such public use and necessity." This statutory presumption is inconsistent with the provision in the proposed Amendment that states "[t]he condemnor bears the burden of proving that the use is public, without a presumption that it is." If the Amendment is adopted, the statutory presumption in § 15.2-1903(C) will become void, localities will be required to prove that the use is public, and citizens whose property is subject to condemnation will have the opportunity to fully challenge any such assertion by the locality.

Under the Amendment, there is one particular provision that may impact development projects such as described in your example, depending on the precise facts. The referenced provision states that, except as otherwise provided in the Amendment, "a taking or damaging of private property is not for public use if the primary use is for private gain, private benefit, private enterprise, increasing jobs, increasing tax revenue, or economic development . . . ." In the absence of a statutory definition, the plain and ordinary meaning of a term is controlling. The word "primary" means "first in order of time or development" and the word "use" means "the act or practice of employing something." Thus, a court would focus on the use for which the condemning authority employs the property taken. Applying the proposed Amendment to the scenario presented in Question 3, the "primary use" of such infrastructure construction is not economic development but, instead, to provide improved transportation to the public and enhanced utility service that will facilitate and support future economic development, a secondary benefit.

Notwithstanding the provisions in the Amendment, localities will retain ample condemnation authority to improve and upgrade transportation and utility infrastructure in conjunction with development projects, including those planned by the locality or as may be planned by private developers and approved by the locality. The elimination of the statutory presumption in § 15.2-1903(C), however, will afford citizens a fair and open process in the determination of what constitutes a "public use" in their individual cases.

Conclusion

Accordingly, it is my opinion that:

1. The Amendment, if adopted, would not expand the meaning of "damages" to such an extent that it would enable the owners of property located in the vicinity of, or affected by, an unpopular public facility to recover damages when none of their land has been taken for the facility;

2. Bearing in mind that determinations in condemnation cases always depend on the precise facts of a particular case, the following general conclusions may be made with respect to your examples:

(a) Damages sustained when a major cross-town highway is converted to a limited access only highway which eliminates all direct access to the major highway by abutting landowners are compensable under our current Constitution and will remain compensable under the Amendment;

(b) The design and construction of highways and roads, including the installation of medians and other traffic management and safety features, represent the exercise of the Commonwealth's police power, the exercise of which generally is not compensable under our current Constitution, provided that a reasonable means of ingress and egress for an abutting property remains; whether limitations on vehicular access will be compensable under the Amendment will depend on how the General Assembly defines by statute "lost access" and "lost profits," but a property owner likely will have an opportunity to present to the body determining just compensation evidence of the damages alleged to have been sustained;

(c) The temporary closure of a street for a weekend festival represents the reasonable exercise of the police power by a locality, is not a taking or damaging of property and, thus, would not be compensable if the Amendment is adopted; and

(d) The temporary closure of a road to accommodate a parade represents the reasonable exercise of the police power by a locality, is not a taking or damaging of property and, thus, would not be compensable if the Amendment is adopted; and

3. The Amendment, if adopted, will not prevent the use of eminent domain by a locality to acquire land for the upgrading of public infrastructure, such as roads and utility facilities, to support a locality's redevelopment plan to promote and encourage high density, multi-use, urban-style development, so long as the condemnor can meet its burden of proving that the use of the property taken is a public use.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General