A 2018 Federal Circuit Court ruling rejected compensation to the plaintiff in a case in which the government took through eminent domain a privately owned airline terminal and physically demolished it. The plaintiffs, now seeking cert before the U.S. Supreme Court, spent $17 million building that terminal at Dallas Love Field Airport. The US Court of Claims ruled that the taking of the terminal was worth more than $133 million, but the Federal Circuit Court of Appeals reversed, declaring the terminal's value to be zero, as the investment property had yet to earn a positive cash flow.
Our panel of experts will discuss the impact of Love Terminal Partners v. US on takings law. George Will will offer opening remarks followed by the panel discussion.
America’s founders enshrined property rights in our Constitution, not just because they thought it would provide a strong blueprint for a free market but because they saw ownership as an essential human right.
Thus, the final draft of James Madison’s Fifth Amendment has no wiggle words or loopholes. It states unequivocally that private property shall not “be taken for public use, without just compensation.” And yet despite this clear guidance, courts are expanding what can be considered public use, steadily eroding protections in takings law. In 2005, the Supreme Court ruled that property can be taken from one private owner and given to another private owner. In 2018, the Court of Appeals for the Federal Circuit took an even bolder step, ruling that private property can be taken and destroyed without compensation.
Business management guru Peter Drucker once likened trying to predict the future to driving down a country road at night with no lights. Investing in a business can feel like such a journey as the successful investor tries to maneuver around unseen obstacles. One thing that cannot be foreseen or steered around, however, is a court’s unprincipled ruling.
This is what happened to the Love Terminal Partners investors who operated the Lemmon Avenue Terminal at the Dallas Love Field Airport. These investors poured $17 million into constructing a six-gate facility, separate from the main airport terminal. They never realized an annual net profit, but remained optimistic. They continued to put money into their property and to make regular lease payments to the City of Dallas because they were confident of the eventual value of their investment.