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Can a Private Company Use Eminent Domain?


Although local, state, and the federal government have the power to use eminent domain, some private companies can be granted this power as well. This power can be used to condemn private property in order to complete certain projects that are intended to benefit the public. Private companies like redevelopment authorities, oil and gas companies, railroads, or other privately-owned utility companies can use eminent domain in certain situations.

The government’s right to take or condemn private land for “public use,” has been a highly contentious topic at times, primarily because such actions can displace people from their homes. With more and more private companies using eminent domain laws as a tool to seize private land and increase their profits, property owners are rightfully becoming worried.

In the past, the “public use” provision of eminent domain law has been used for things like roads, schools, parks, and other public facilities that could be accessed by all in the community. In recent years, the meaning of “public use” has been interpreted more loosely. In the controversial case of Kelo v. City of New London, the Supreme Court ruled in favor of New London and decided that the city could take private property and give it to another private entity for “economic development.” However, despite spending millions of taxpayer dollars on the project’s proposal, nothing was ever constructed.

Now, oil and gas companies have this card to play when justifying land grabs. As suggested by a University of Minnesota Law professor, “in many natural resource–rich areas of the country… the knock on the door is less likely to come from a government official and much more likely to come from a mining, oil, or gas company representative.”

Is your property facing eminent domain from a private company? We can help. Contact our San Diego team of eminent domain attorneys to schedule a consultation today.