Power asymmetries and limits to eminent domain: The case of Missoula water’s municipalisation

Abstract

In 2017, the City of Missoula, Montana, in the western United States, successfully used its powers of eminent domain to take ownership of its water system from The Carlyle Group, a large international private equity firm. The Missoula case provides a lens to investigate the promises and pitfalls of eminent domain as a tool for (re)municipalisation. The case study focuses on the challenges of the eminent domain (or condemnation) process, including the assessment of fair market value. Information and power asymmetries make it difficult for public actors – the mayor, judge, and Public Services Commission (PSC) – to negotiate with private owners. Rising legal costs and increasing asset value make timing of essence, but the condemnation process is often protracted. The findings suggest that while municipalities may be able to use eminent domain to retake their water supply, it is no guarantee. Success depends on the nature of the stateʼs eminent domain law, the ability to provide evidence of public value, the technical decisions of the PSC and the courts, and the political and financial support within the municipality for remunicipalisation and the eminent domain process. Increasing power asymmetries between municipalities and international private equity firms raise questions about the future of water regulation and, as costs escalate, about the ability of municipal governments to pursue eminent domain as part of a remunicipalisation strategy.