Q: The state appropriated my neighbors’ properties to build a highway, invoking “eminent domain.” My Jewish neighbor vehemently objected and declared that he does not forgo his halachic right. Is it permissible to use the highway, or is it considered theft?
A: The concept of eminent domain appears in Halachah as a classic example of dina d’malchusa. The Gemara (B.K. 113b) brings proof to Shmuel’s opinion that dina d’malchusa is valid from the fact that the king cuts down people’s trees to make bridges, and we commonly traverse them. Similarly, the Mishnah (Sanhedrin 20b) teaches that a king can breach a fence or destroy a house to make a road. Furthermore, the Gemara (B.B. 54b) teaches that the king can revoke possession of land from people who do not pay taxes (Hil. Gezeilah 5:17; Melachim 5:3; C.M. 369:2,10).
The implication is that the government does not even have to compensate the owner.
Thus, halachah recognizes the validity of eminent domain, and certainly if the government compensates with fair market value as required by law.