Hawaii Housing Authority v. Midkiff

Brief Fact Summary. Remnants of the feudal system in Hawaii left a great deal of land concentrated in the hands of a few landowners. The Hawaii legislature adopted a plan to condemn various residential lands to break up the large estates. Then, Hawaii Housing Authority (Petitioner) sold the land back to the tenants or lessees who requested the condemnation and wanted to buy the land.

Synopsis of Rule of Law. Exercise of the eminent domain power for “public use” will be constitutional so long as it is rationally related to a conceivable public purpose. The Government itself does not have to use the property. Only the purpose, not the mechanics will be relevant to the takings’ constitutionality.

Facts. The condemnation process reduced the tax burden on the landowners who would face significant federal taxes if the title was conveyed by a normal sale of real estate. Tenants or lessees would file applications for condemnation and if an appropriate number of lessees requested a condemnation the state would condemn the tract. After that, the Hawaii housing authorities would sell the condemned land to the tenants or lessees who had applied for fee simple ownership. Thus, the owners would receive compensation from the sale but with a lesser tax burden.

Issue. Whether the act was a constitutional taking “for public use” or did the act violate the United States Constitution (Constitution) because it was not for public use?

Held. The Hawaii Act is constitutional because it was rationally related to a conceivable public purpose and was a compensated taking. The Supreme Court of the United States (Supreme Court) would give deference to the state’s determination of what was a public use. Hawaii had a comprehensive and rational approach to correcting a market failure, which resulted in an evil land oligopoly (concentrated property ownership) traceable to past monarchs. Where there is a rational, legitimate purpose the Supreme Court would not examine its overall effectiveness.

Discussion. Public use in this case is a benefit rather than actual literal use. It focuses on the ends rather than the means. The court was deferential to the state’s legislative determination. Mere fact that the land was transferred in the first instance to private citizen (the lessees) did not render it a private use. Court did not think that the entire community had to benefit from a particular legislative act.