Hawaii Housing Authority v. Midkiff

Brief Fact Summary. This case involved a constitutional challenge to a Hawaii law under which property held in fee simple by just a few people was condemned and sold to lessees of the property in order to re-distribute the fee simples on the island. The Fifth Amendment of the United States Constitution provides that “private property shall not be taken for public use without just compensation.”

Synopsis of Rule of Law. The mere fact that property taken outright by eminent domain is transferred in the first instance to private beneficiaries does not condemn that taking as having only a private purpose.

Facts. Historically, Hawaii was settled by Polynesian immigrants who developed an economy around a feudal land tenure system, the result of which was to concentrate land ownership in the hands of a few. In 1967, the Hawaii legislature enacted the Land Reform Act of 1967 (Act), which created a mechanism for condemning residential tracts and for transferring ownership of the condemned fee simples to the existing lessees. If 25 eligible tenants of at least half the tenants on a five acre or more residential tract request that their homes be condemned, then the Hawaii Housing Authority (HHA) is authorized to hold a public hearing to determine if the proposed condemnation will effectuate the public purposes of the Act, and if the HHA find the public purposes will be served, then HHA is authorized to designate some of the tracts for acquisition. The prices are set by condemnation trial or by negotiation between lessors and lessees. HHA then acquires the land of the former fee owners’ full
right, title and interest in the land. Then the land is sold to the lessees by HHA. In 1977, HHA held a public hearing to begin condemnation proceedings of some of Appellees’ lands. In 1978, HHA ordered Appellees to negotiate with certain lessees to determine a price for the land. HHA then ordered Appellees to submit to compulsory arbitration. Instead of submiting, the Appellees filed suit in the district court, asking that the Act be declared unconstitutional and that its enforcement be restrained. The district court held the compulsory arbitration portion of the Act unconstitutional, but ultimately upheld the rest of the Act. The district court found that the Act was within the state’s police power and that the means the legislature chose to serve those goals were not arbitrary, capricious or selected in bad faith. The United States Court of Appeals for the Ninth Circuit reversed the district court and held that the transfers under the Act were not like those previously held to be p
ublic uses within the meaning of the Fifth Amendment. On an application of HHA and other private appellants the case was submitted to be reviewed by the Supreme Court of the United States.

Issue. Is the Act constitutional?

Held. Yes. The court of appeals decision is reversed.
The Court began by defining the permissible scope of the use of eminent domain power by legislative bodies to redevelop slum areas as defined in the case of Berman v. Parker, 348 U.S. 26 (1954), in which the Court upheld the use of the power based on the legislature’s determination of the best means to accomplish the goal of the public interest. “Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear. For the power of eminent domain is merely the means to an end.” Berman v. Parker, supra. The “public use” requirement is thus coterminous with the scope of a sovereign’s police powers.
The Court noted that its prior decisions require the Court to abstain from substituting its judgment for that of legislative bodies as to what constitutes a public use unless the use is without reasonable foundation.
The Court held that the Act of the Hawaii legislature may not actually achieve the goals it has set out to achieve, but that the wisdom of takings is not relevant for the Court to decide so long as the legislature’s purpose is legitimate and the means for achieving the goals are not irrational.
The mere fact that property taken outright by eminent domain is transferred in the first instance to private beneficiaries does not condemn that taking as having only a private purpose.

Discussion. Note the broad authority of the legislative body. So long as the purpose of any act, which includes eminent domain is legitimate and the means to achieve the purpose are not irrational, the act will withstand constitutional scru