Conner Harris
Harris Expropriation Litigation and Planning
Expropriation and injurious affection have provided the world with many gifts. They facilitate the development and construction of critical infrastructure. Well-developed infrastructure, in turn, provides economic and societal benefits. Legislative, common law, and/or common law principals protect private property rights through requirements for payment of fair compensation where land must be taken or injuriously affected. And as one eminent author has noted, the costs protections included in Ontario’s expropriation legislation (copied through much of Canada) are “a golden goose, laying eggs, but eggs made of gold”.[1]
But it may be that a lack of comprehensive protections for injurious affection where no land is taken in a certain jurisdiction south of the border is responsible for the greatest societal benefit of all – Kentucky Fried Chicken.
A long-time fixture of the fast-food scene, Kentucky Fried Chicken and its secret (and delicious) blend of 11 herbs and spices is well known. Most people would also recognize its founder, Colonel Harlan Sanders. A multi-faceted man, Colonel Sanders worked as an insurance salesman; ferryboat operator; manufacturer of coal lamps; tire salesman; gas station operator; and lawyer (among other things).[2] This is in addition to his distinction as a “Kentucky Colonel”, which is an honorary title not to be confused with the military rank. But he is inarguably most famous for being the founder and mascot of the Kentucky Fried Chicken behemoth.
Colonel Sanders’ Kentucky Fried Chicken has humble origins in Corbin, Kentucky, in 1930. That year Sanders opened “Sanders’ Servistation and Café” along a highway known as US Route 25. The business was originally a gas station, and Sanders supplemented fuel sales by selling home-cooked meals that he prepared himself.[3] He did not sell fried chicken at the time because it took too long to prepare. The fast-cooking method for which Kentucky Fried Chicken would become famous was not invented yet.[4]
Sanders gradually expanded the restaurant at his service station and, in 1940, bought out a competitor across the highway. He renamed that property as “Sanders Court and Café” and developed it into a restaurant-motel complex. At this new location, for the first time he put fried chicken on the menu.[5] Sanders developed his own special seasonings – the famous 11 herbs and spices – and his chicken sold well.[6] The recipe has allegedly never changed.
In 1956 a new highway (Interstate 75) was built parallel to US Route 25 where Sanders Court and Café was located.[7] The new Interstate bypassed the town of Corbin entirely and the highway junction was moved several miles away. This cut down on vehicle traffic to Sanders’ two locations and business dropped by more than 50%.[8] Colonel Sanders was forced to sell his restaurant and motel complex in March 1956 for less than half its market value.
The loss of his businesses left Colonel Sanders with only a meagre monthly social security cheque for his income. But he was always an industrious man. He took his chicken recipe “on the road” and began selling it to restaurant operators for additional income. The first taker was a restaurant in Salt Lake City operated by Pete Harman.[9] Sanders’ chicken was placed on the menu and advertised as “Kentucky Fried Chicken”. Business at the restaurant increased by 20-fold after it added Sanders’ chicken to the menu. He knew that he had a recipe for success.
Sanders would later supplement his recipe with a method of pressure-cooking that allowed for faster preparation of the chicken. He travelled the country selling licenses for the chicken, and this was the start of a franchising business that would grow over time. Eventually that business became the Kentucky Fried Chicken that we all know and love today.
Keen-eyed readers will probably already have recognized where this article is going. The fact pattern will be familiar to anyone who has practiced in the area of expropriations. Colonel Sanders had a business on the highway. When the highway was bypassed, business dried up and he was forced to sell it at a loss.
All of this occurred in the United States – in Kentucky specifically. Property owners there are not without protections from government interference or acquisition of their property. Compensation for compulsory acquisition (called “eminent domain”) is a protected right in the 5th Amendment to the United States Constitution. But they don’t have as comprehensive a right to compensation for interference with their properties and businesses due to public works like that which exists in Ontario.
American property owners are protected from interference with their property by virtue of the doctrine of “inverse condemnation”. The doctrine allows them to obtain compensation for government action that damages or decreases the value of their property. It is, however, a relatively narrow right. Compensation is payable where: a government takes physical possession of a property without acquiring title to it;[10]there is a [MG1] regulatory takings where a regulation goes far enough to be characterized as an acquisition;[11] a governmental authority uses its own property in a way that interferes with the ability of other owners to use and enjoy their own property;[12] and a government enacts “unconstitutional exactions”, being conditions imposed on the development of land.[13] These heads of compensation generally do not include loss of traffic due to a re-routed highway.[14]
The contrast between these rights and the law in Ontario is significant. Landowners in this Province are afforded a statutory right to obtain compensation for injurious affection caused to them where no land is taken by a governmental authority. This is roughly analogous to the American concept of inverse condemnation (overlapping somewhat as well with the concept of “constructive takings”).
The test for determining whether compensation for injurious affection where no land is taken is owed is well known. The damages suffered by a landowner must result from statutory authority; they must be due to actions that would give rise to liability but for the defence of statutory authority; and they must result from the construction, but not the use, of the works by the governing authority.[15] Where these elements are proved the affected landowner will be entitled to compensation as set out in the Expropriations Act. Their rights to the comprehensive cost protections set out in the Act will also be engaged.
Compensation for injurious affection where no land is taken, importantly, can arise from construction that re-routes highways or other access. The similarities between Colonel Sanders’ loss of his business and Canada’s seminal case on injurious affection where no land is taken are easily recognizable. The landowner in that case – Antrim Truck Centre Ltd. – operated a truck stop on Highway 17 near Antrim, Ontario. The property was improved with a restaurant, bakery, gift shop, gas and diesel bar, and leasing and service centre.[16] It is unknown whether a Kentucky Fried Chicken was located on the property.
In 2004, changes were made to Highway 17 and Highway 417 that affected the ability of travellers to access the truck stop. There was no longer any direct access from Highway 417. Motorists were required to take a circuitous route to access the property and the services on it. This change, effectively, put the truck stop out of business.[17] No land was expropriated from the owner for the project and it brought a claim for injurious affection where no land was taken as a result of the highway improvement works.
After a lengthy legal battle that reached the Supreme Court of Canada, the owner was awarded $58,000 for business loss and $335,000 for loss in market value of the land.[18] By all accounts the landowner was quite satisfied with this result. They were not required to franchise their business in order to survive.
In light of the result achieved in Antrim, consider what may have happened if Sanders Court and Café had been located in Ontario instead of Kentucky. When the highway was re-routed, Colonel Sanders could have obtained compensation for the loss of his business like the owner did in Antrim. He could have relied on that compensation to supplement his social security cheques. It seems unlikely that, at the age of 66 and with approximately $400,000 in compensation in his pocket, he would have been forced to take his chicken recipe on the road to make a living. The franchise business that became KFC likely would never have developed.
It is no coincidence that we have no widely-franchised and beloved “Antrim Truck Centre” business on every corner. Had the Expropriations Act protected his Corbin, Kentucky business, Colonel Sander’s full and fair compensation probably would have deprived the rest of the world of his finger lickin’ recipe. That would truly be a substantial and unreasonable interference with the culinary options available to the rest of us.
- Conner Harris is the Founder and Principal of Harris Expropriation Litigation and Planning. In his former life he was a long-time employee of the Colonel. He also proudly represented the family of one of the earliest Kentucky Fried Chicken franchisees in – what else – a claim for compensation arising from an expropriation.
[1] Report on the Expropriations Act, prepared by R.B. Robinson, Q.C., October 1974, page 16. https://archive.org/details/mag_00002880/page/15/mode/2up
[2] Colonel Harland Sanders: The Autobiography of the Original Celebrity Chef, page 26-28. https://web.archive.org/web/20130921055011/https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf
[3]Ibid, https://web.archive.org/web/20130921055011/https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf pg. 37 and 38.
[4]Ibid, https://web.archive.org/web/20130921055011/https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf pg. 39.
[5]Ibid, https://web.archive.org/web/20130921055011/https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf pg. 40.
[6]Ibid, https://web.archive.org/web/20130921055011/https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf pg. 42-43.
[7]https://www.roadarch.com/eateries/kfc.html
[8]Supra, https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf pg. 63.
[9]Ibid, https://s3.amazonaws.com/colcookbook/us/pdf/English_FullBook.pdf pg. 66.
[10]Cedar Point Nursery v Hassid, 594 US ___ (2021), slip op.
[11] Abigail Flanigan, Rent Regulations After Cedar Point (February 23, 2022). Columbia Law Review.
[12] Carlos A. Ball, The Curious Intersection of Nuisance and Takings Law, 86 B.U. L. Rev. 819 (2006).
[13] Casner, A.J. et al. Cases and Text on Property, Fifth Edition. Aspen Publishers, New York: 2004, p. 1221.
[14] https://digitalrepository.unm.edu/cgi/viewcontent.cgi?article=3845&context=nrj , Board of County Commissioners v Slaughter, 49 NM 141, 158 P.2d 859 (1945).
[15]Antrim Truck Centre Ltd v Ontario (Transportation), 2013 SCC 13 at para 5.
[16]Antrim, para 11.
[17]Antrim, para 12.
[18]Antrim, para 13.
[MG1]For the grammar of the sentence to work.