Legal News

Maryland?s Run for the Preakness: Would it Be Constitutional?

By Ashby Jones

We can hear it already from our Baltimore-born friends: Baltimore’s an odd place; it’s fiercely loyal to its homegrown institutions (Cal Ripken, Burger Cookies, Natty Boh); and it doesn’t want to have another Robert Irsay-gate on its hands. Fine. But the recent news about the Preakness Stakes — the second leg of horse racing’s triple crown — strikes us as a bit odd, even given such Balmer-specific qualifications.

The news: Maryland’s governor, Martin O’Malley, has said that he and the state’s legislative leaders plan to exercise eminent domain powers over the Pimlico Race Course, where the Preakness is held every May, to keep the Preakness alive and well in Baltimore. Everyone in Baltimore, it seems (including Michael Phelps), is riled up over this. Click here, here and here for recent coverage in the Baltimore Sun.

The future location of the Preakness has been thrown into question because of federal bankruptcy filings by the race’s current owner, Magna Entertainment Corp., of Canada. Magna recently announced its intention to sell its horse-racing holdings in Maryland.

But eminent domain?

“This is a very bold step,” said Maryland Senate president Thomas V. Mike Miller. “The state is stepping in almost heavy-handed and saying, ‘Look, we don’t care how much money you’ve got or where you want to go with these properties. The state of Maryland has an interest.’ ”

Bold, certainly. What about legal? We checked in with University of Baltimore School of Law professor James Kelly, who teaches a community development clinic and has written about eminent domain.

Kelly explained that any eminent domain analysis needs to be looked at on two levels — whether the state itself has placed any limits on it’s own inherent power to seize land, and, beyond that, whether the specific “condemnation” runs afoul of either of two clauses of the Fifth Amendment — the due process clause and the “for public use” clause.

Under this analysis, said Kelly, the seizing of Pimlico would likely be legal. Maryland is fairly permissive when it comes to its own eminent domain powers. Furthermore, “due process” in regard to eminent domain is typically satisfied absent a showing of bad faith — “that the seizure was a land grab for a private party,” said Kelly. And the seizing of a race track predominantly to keep a historic race — that also serves as an economic boon to the state and city — would qualify as a public use, especially under the recently reduced threshold established by the Supreme Court’s Kelo ruling in 2005.

The harder question, said Kelly, is whether the Preakness itself is something that could be seized. He didn’t have an answer to that on the tip of his tongue, but said the analysis would likely turn on what, exactly, the Preakness is, i.e., what sorts of intangible assets make up “the Preakness,” and where they reside. Kelly said that if they “reside” largely outside of Maryland, it might be a harder case.

Further complicating matters is the fact that Magna is currently in Chapter 11. So, Kelly says, any move by the legislature to seize the Preakness might have to wait until the properties emerge from bankruptcy.

One final thought: Wouldn’t “Eminent Domain” make a great name for a horse? A helluvua lot better than The Pampelmousse, in our opinion.

Full post as published by Law Blog - WSJ.com on April 09, 2009 (boomark / email).