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And relax with iHeartRadio and Southwest Airlines. This is our American stories, and now it's time for our Rule of Law series. Where we tell stories about what happens when the rule of law is present or absent in our lives, our own Alex Cortez brings us this next story. This is the story of three residents of Winston-Salem, North Carolina. My name's Craig Richardson. I'm an economics professor at Winston-Salem State University. I'm Matthew Bryant, and I've practiced law in Winston-Salem, North Carolina. My name is Paula Smith. I sell flexible benefit plans, so FSAs, HSAs, HRAs.
I have a wealth of knowledge of HSAs and FSAs, so if anyone needs to ask me questions, I can answer those questions. I was driving on my way to work, and I heard a story on my local NPR station about a couple named James and Phyllis Nelson. They bought this little dream home outside of Winston-Salem.
Surrounded by hardwoods, looking out their bedroom window, they could see Pilot Mountain. And what they started to relay was something which was shocking to me, which was the fact that one day when they woke up in 1996, this was about 17 years earlier, they woke up to see the government workers driving stakes in their lawn. And they came out to ask what was going on, and they said, well, this is where a road's coming through, a highway, a future highway. And it's the center line of the road, and it's going to go 200 feet on each side of these stakes. It turns out that that road goes right through its kitchen, right through the middle of its home.
This whopping surprise arrived for Paula Smith, too. We bought the house that we lived in for 29 years in Winston-Salem, so at that time we didn't know anything about a highway coming through our neighborhood. There was a lot of years there that we were living not knowing what was about to happen to us, that's for sure. Now when we hear a story like that, you know, I think we know that sometimes this happens, we have eminent domain, which means the government has the right to have public projects and they buy out homes. But what gave the twist to the story was that the Department of Transportation was using a law passed by our General Assembly in the late 80s that allowed the department to make road plans that would restrict the development and use of property indefinitely until the department got around to acquiring and getting ready to construct the roadways. It turns out that there's something called the Transportation Corridor Map Act. What gave this a very unusual twist was that in North Carolina, unlike any other state, which also there are other states that have map acts, but unlike any other state in the United States, there was no time limit on when these roads could be built. In other words, the DOT, the Department of Transportation, could plan a road, could say it would happen sometime in the future, and essentially have carte blanche to decide whenever that road would be built.
And these were called road corridors. Now why would the DOT do something like this? Well, the original intent was that this idea would save taxpayers money. The idea behind that was that if we designate your house in a road corridor and we're going to eventually buy your house out, we don't want you to put in a new kitchen. We don't want you to add a garage or add value in any way because that's going to cost taxpayers more money.
So we're going to put you in this road corridor and we're going to say that basically any idea you have about improving your value of your property is frozen. Now for the vast majority of states, they have about less than a year they have to act or the corridor goes away. But again in North Carolina, there was no time limit whatsoever. This gave the power to the state a tremendous amount of power and it locked people like James Nelson in for years, if not decades.
I had never really heard of this law. However, they used it in Winston-Salem back in 1997 and restricted hundreds and hundreds of properties and didn't pay for it. And the owners were all sort of stuck waiting for the department and the department never really got around to funding that road and building it.
So that had festered since the 90s through the 2000s until 2009. We put the house on the market in November of 2006. So we've redone all this stuff, it's now better than it was, let's sell this house and let's go find something else we want to build. And Realtor comes out, puts a sign in the yard, she does her due diligence, she comes back and she says, literally about two weeks after the house had been on the market, she comes back and she says, I think you've got a problem. And she said, your house is going to be taken by the DOT. I said, no it's not, it's going to be like three or four houses down away from us, it's not coming through our yard, they're not taking our house. She said, oh yes they are, they're taking your house, they're coming all the way to the corner now.
And I was like, oh no, now what? She said, well I have to take the house off the market. There's no other buyer for your house other than the DOT. She said, no one's going to buy your house knowing that eventually a road's coming through and your only buyer is the DOT. I went, oh okay, well this is interesting, now what do we do?
And she said, you sit and wait. And I thought, this is not right, this is just not right, you can't just tell me, I can't sell, tell us we can't sell our house. And she said, well I in good faith as a realtor cannot sell your house to anyone else. So we took the house off the market and we sat there and went, okay, now what?
And one of Matthew's business clients was also a victim. The B. Roth Oil Company was sitting on a very valuable piece of property that was underutilized. It was basically they had to park used cars on it because for 20 years the department had not let it, or at that time about 15 years, had not let it get a building permit to do anything because it was trying to keep property prices down for its ultimate acquisition of the properties. And my immediate reaction on that day in late summer of 2009 was, that cannot possibly be the law. It struck me immediately as violative of your right to freely use your property, as long as it conforms with zoning, they can't stop me from doing something legally permissible on my property. I said, they can't stop us doing things legally. So I said, okay, well let me figure this out. And in the span of a day or two, I figured that this kind of legal gimmick had been used, because it's not too novel, you know, if you want to pay less for something, just don't let anybody freely use it.
And the price will go down. They had done this thing 25 or six times throughout the state. Well, they had tried that in Florida in the early 90s and it had been almost immediately challenged and struck down as unconstitutional. And we said, well, they can't do this. The department will tell them to just give us the building permit or buy us and we'll tell them this is why.
And lo and behold, we went back and forth with the Department of Transportation and they had no interest in considering what we were doing or really undoing their practice of restricting these properties. And so they told us to just, you know, jump off a, you know, the cliff. And I said, we got to do something about this. And the client, B. Roth, and my partners all said, yeah, this is unconstitutional, let's go figure out what to do.
And we're listening to our Rule of Law series. North Carolina legislators and the DOT are clearly violating the rule of law by completely disregarding their own citizens' constitutional rights to own property and not have it taken without just compensation. That's the eminent domain clause, eminent domain clause these people were referring to in the story, all to make their own jobs easier. And by the way, to bring down the price for the so-called good of the taxpayers.
Because, again, if you can't negotiate with anybody but the Department of Transportation, how do you find out the real value of your home? What happens next in this story? Will the rule of law ultimately reign in North Carolina? We'll find out next after this break.
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But hurry, these deals won't last long, so get yourself to Walmart today! We talked to the DOT and they said, oh, probably within two years, three years, we'll be out there and we'll be buying your house and you'll be on your way. So in 2008, we got a new governor in North Carolina, and Ms. Perdue had her own agenda, as most governors do. She had her own areas of the state that she favored, I should say, and the beltway around Winston-Salem went from being, I think we were like priority number four or five in the state, to being priority number 25. There was another group of environmentalists called the Friends of Forsyth, and the Friends of Forsyth then filed a lawsuit against the highway being built because of some environmental issues. There was some creek that had some kind of creature in the creek that was going to be displaced and the creek was going to be altered, and so the environmentalists got involved. So that basically, from 2008 to 2010, the DOT was going, we can't do anything in the midst of this mess with the Friends of Forsyth. I think I even commented one time, the Friends of Forsyth were no friends of ours because they were fighting against the highway being built.
I'm sitting here with a house we can't sell because the DOT has a map on us that says you're going to take our house, but we don't know when. It was just a mess. It was just a total mess.
Thankfully, the lawsuit was dismissed in 2010. And around this time, Paula met Beverly Reynolds, whose family business had a property that couldn't be expanded or sold because of this MAP Act. And she said, well, let's have a meeting. Well, she got Steve Trogdon, who was the head of the DOT, happened to be in Winston-Salem that day. So somehow or other, she got him to come to our meeting. I went out and put flyers in mailboxes and said, we're having a meeting at 7 o'clock on this date. Please be present. You'll find out what's going to happen.
So we had a good 65, 70 people at that meeting. Of course, that's when Steve Trogdon stood there in front of all of us in 2010 and said, I don't know when you were ever going to build your highway. I don't know when we're ever going to take your houses. But you're, you know, you're in the map and we're going to buy your houses. But we can't tell you when. It could be 25 years from now before we buy your house. I think we all just come.
Our mouths just dropped open. You can't stand here and say that. I mean, you just cannot stand here and say something to these people that this is their lives.
This is their, you know, their land, their jobs. You know, you can't just stand here and say that. He just, he just didn't care. I mean, I guess he was trying to be honest with us, but he just, he just seemed very cold about the whole thing. The B. Roth Oil Company said, go find us some other plaintiffs and turn this into a class action, which we met with owners. They had a big group meeting.
They, as you will hear, are as conversant as anybody on the face of the earth about the wrongs that the government can do when it thinks it's doing good for the public. And Paula Smith, who I think I may have heard her name before we showed up, within seconds when I said, does anybody want to do it? Boom, she's up at the front. We didn't hesitate. You know, again, I think I, after hearing the Mr. Trogdon guy, the head of the DOT, say it could be another 25 years, my husband and I looked at each other and said, this is not right. We have to do something. And Matthew, he wanted somebody to join the lawsuit, and I believed in him. I'm not that kind of person that's going to sit around and do nothing. I sometimes get myself in trouble.
Sometimes I say things I shouldn't say sometimes because I just, you know, believe that you've got to stand up for yourself. Paula and Kenny were always the face of the litigation through the class action. So we said to everyone, the more people we get, the more weight it has. And I said, you know, you don't charge up a hill at the opponent with five people.
You send 500 people up the hill. By the time we started showing up at the appellate courts, we had 50 or 60 cases. Then the next time we visited, we had 70, 80 or we had maybe 90 cases. Every time we showed up, we had more cases. And the Supreme Court and the judges and justices knew this.
So, yes, the fact that this was statewide and on such a large scale and not just a little one off in some little town someplace absolutely gave it gravity. I know I took my daughter. This might have been the court of appeals hearing that we went to in Raleigh. She said, I want to go to and see what this is about. And she was just amazed. I mean, she's like, this is really OK. This is really bad because, of course, she's a 20 something at that time. And she's like, this is really bad.
Yes, this is. I mean, it's kind of fun to watch the courtrooms are packed. I mean, Matthew did a good job of getting people to go to the courtrooms and being in the courtrooms and letting the judge and the court of appeals and the Supreme Court see that, you know, these are real people that are being affected here. These people is sitting here in this room are the ones being affected. It always bother me. I go to these meetings at the churches or I go to the meetings at the court hearings and you look around the room and the majority of people I get a little teary eyed talking about this.
You get in these rooms and these people that are in these rooms are all in probably mid 60s to late 60s to 70s to 80s. These are people that have lived in their homes their whole lives or their family farms and things like that, that the D.O.T. had no they didn't care. They just had no compassion for these people whatsoever. And you hear that somebody passed away and then now their family, they couldn't finalize the estate because the D.O.T. is holding on to their land and won't pay them out. And, you know, it's like this is so sad what they were doing to people's lives.
And it was just wrong. I'm glad that we fought it. I was really happy to see that this case was ultimately brought up to the North Carolina Supreme Court and the MAP Act was overturned in 2019 after more than 30 years of people enduring the MAP Act. I know a person who had wanted to retire in Florida was unable to sell their home and died in that home because they were stuck. The irony of the MAP Act is it was supposed to save taxpayers money by giving the state power to hold on to land until it needed to be developed and pay a lower price. But in fact, it is incredible in terms of how much this has backfired because homeowners have fought for their property rights. The property rights that are constitutionally guaranteed have sued the state and now are owed money that is many times multiple of their original home. And the lawsuits, according to one estimate, could cost the state over $1 billion. So this is an unfortunate road, so to speak, that the state took. Whatever they have saved, they are now having to pay for it.
You know, it has increased their anticipated acquisition costs in today's dollars two or threefold. The judge says these people are entitled to interest back to the date of the taking. So the date of the taking, I think, for us was 2008. I think it was 8 percent interest, which was a nice sum of money. And because they kept dragging this out in court, we got a lot more money for our house in 2019 than we would have gotten for our house in 2010.
But it's because they just kept dragging it out and dragging it out and dragging it out. In my own backyard, there are 3,000 people who have property rights that is very similar to a country I've been studying for 15 years, Zimbabwe. In fact, they have the worst property rights in the entire country.
And what I did was I said, well, let's pretend that this area outside of my city is a little country. Let's stack it up against a well-known property rights index put out by the Heritage Foundation, a think tank based in Washington, D.C., which has a very well-regarded property rights index. And what I did when I sort of put in here's what the power you have to sell your property, here's the power to upgrade your property, here's the power to go to the bank, I found out that, in fact, the people had property rights that were equal to living in some of the worst countries in the world. That would be places like Zimbabwe or Cuba.
That's why I named the title of one of my articles, Is This North Carolina or Zimbabwe? How Property Rights in North Carolina Deteriorated to the Level of a Third World Country. What we had learned is that your average Joe does not like lawyers, does not like the government, loves their property, and would rather be left alone.
At least as a road going through their living room. So we had to overcome their distrust of lawyers, and their distrust of the government, and their distrust of the court system. And they have all been rewarded with putting their faith in us, and that is a reward beyond the money we've made people. It's a professional reward that I gather most people don't get to have in their career, and it's been very gratifying. It's just been an ordeal from the beginning, and I guess that's why I got a little teary-eyed, because it's finally almost over. And it's like I can kind of let my emotions get the best of me now, because it's over. It is indeed over, and what voices we heard there, what a story about property rights. Great storytelling by Alex Cortez, as always.
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Whisper: medium.en / 2023-06-02 04:45:21 / 2023-06-02 04:54:46 / 9
