The
City of New London, Connecticut was not doing well. Unemployment was high and the area
was "blighted."
When
the military base closed, a lot of jobs and economic activity went away.
The
non-profit, private, New London Development Corp. (NDLC) proposed
revitalizing the area by redeveloping the former base and surrounding
area.
Grandiose
plans were proposed to add fancy housing, office space, high-end retail,
recreational parks, and a museum.
The
plan required the use of 115 privately owned lots.
New
London authorized NLDC to buy out the 115 homeowners who would be
displaced by the new development.Nine didn't want to sell.New London authorized the homes be taken by NLDC via eminent
domain.
Kelo,
a homeowner, sued to prevent NLDC from taking her home.
There
was no evidence that Kelo's home (or any of the others) was
"blighted" or otherwise in poor condition.They were condemned solely
because they were located in the development area.
Kelo
argued that the taking was a
violation of the 5th Amendment, which authorizes taking of
property for public use.
This
was not public use, this was for
private companies to develop private offices/retail/residential space.
The
Trial Court granted a restraining order preventing NLDC from taking some
of the property for a park, but allowed them to take some of the property
for office space.Both sides
appealed.
The
Connecticut Supreme Court held that all of the takings were valid.Kelo appealed.
The
Connecticut Supreme Court found that the takings were authorized by the State's municipal
development statute, which stated that the taking of land as part of an
economic development project is public use and in the public interest.
The
US Supreme Court affirmed.
The
US Supreme Court agreed that the sovereign may not take someone's
property for the sole purpose of transferring it to another private
party, even if they pay compensation.
However,
the sovereign may transfer property from one private party to another if
future "use by the public" is the purpose of the taking.
For
example, giving land to railroads with common carrier duties.
"Common
carrier" means that the general public uses the service.Everybody can ride a railroad,
not everybody gets to enter a private office building.
The
US Supreme Court found that New London was not forced to remove
"blight" from the area, but their determination that the area
was "sufficiently distressed" to justify a program of economic
rejuvenation is entitled to the Court's deference.
Basically,
the Court was saying that the definition of "public use" is a
legislative decision, and the courts should defer to local governments
in setting limits.
Some
States have regulations specifically preventing this sort of taking.The Court felt that if Kelo didn't like the law, the place to
take it up was with the State government, not the courthouse.
The
Court suggested looking at the public benefits of the "entire
plan," not just on the impact on specific homeowners.
See
Hawaii Housing Authority v. Midkiff
(467 U.S. 229 (1984)).
Kelo
unsuccessfully argued that economic development does not qualify as a
"public use," but the Court found that promoting economic
development is a traditional and long accepted function of government.
Does
that mean it's ok to take a poor person's land and give it to a rich
person since rich people build larger houses and pay higher taxes?
In
a dissent, Justice O'Connor noted three categories of takings that have been held to satisfy the public use
requirement:
Transfers
of private property to public ownership, as for a road.
Transfers
to private parties such as common carriers, like railroads, who make the
property available for public use.
Transfers
to private parties as part of a program to serve a public purpose.
O'Connor
mentions that in Hawaii Housing Authority v. Midkiff and Berman v. Parker (348 U.S. 26 (1954)), the purpose was to
cure public harms, but this decision goes further because now nearly any
lawful use of private property could be said to generate some incidental
public benefit.In
addition, the beneficiaries of this decision are likely to be rich
developers with disproportionate influence, and the victims are likely
to be the disenfranchised lower class.
This
decision caused a huge public outcry.
Most
of the public thought this was completely unfair, even the Governor
intervened.
After
this decision, a group of private citizens attempted to get Justice
Souter's personal home condemned to make way for a private museum about
the Bill of Rights.
Based
on the decisions in Berman v. Parker,
and Hawaii Housing Authority v. Midkiff, this decision was no big surprise to the
property law community.
In
a way, despite the final result of Kelo, this was a bit of a reversal
from those previous decisions, since they were both unanimous, and Kelo
was a 5-4.
