The Supreme Court’s ruling in Kelo v. City of New London is undoubtedly one of its worst decisions in the past 20 years. The Court gave state and local governments the option to transfer private property from its rightful owner to another private owner, justifying this as a “public use” since it will supposedly promote “economic development.” Kelo is a classic example of activist judges rationalizing a predetermined result—in this case, overturning the Constitution’s protection of private property rights.
The Court’s decision stripped Susette Kelo and her neighbors in the historic Fort Trumbull neighborhood of their property in order to build an “urban village”—a fact Justice John Paul Stevens breezily dismisses in his opinion, which is a thoroughly unimpressive piece of legal legerdemain. Stevens failed to note that the neighborhood would be bulldozed even though he acknowledged that not only had Kelo lived in her house since 1997, and had made substantial improvements to her property, but that “Wilhelmina Dery was born in her Fort Trumbull house in 1918 and has lived there her entire life.” The continued existence of what was apparently a very stable residential area, however, could not be allowed to stand in the way of “progress.” Stevens held that the residents and their homes must be sacrificed in the interest of a supposed greater good.
The thousands of new jobs and millions of dollars in new tax revenue that were promised, however, never materialized. Instead, an extremely expensive vacant lot now sits where the neighborhood once stood. The City of New London even tried to charge the former residents for five years of back rent as punishment for having contested what was essentially nothing but municipal extortion for the benefit of Pfizer.
Unjust Taking
There are three standards of review when assessing the constitutionality of a governmental action: “rational basis,” “intermediate scrutiny,” and “strict scrutiny.” In Kelo, the justices used the “rational basis” test, the lowest level of scrutiny, which only requires that the proposed action serves a “legitimate state interest.” However, such an approach fails to address the question of whether even a worthy goal can justify an action that not only threatens a fundamental right—property ownership in this case—but also directly contradicts the clear language of the Constitution’s Takings Clause, which limits the taking of property by eminent domain to “public use.”
In her dissent, Justice Sandra Day O’Connor noted that “the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings ‘for public use’ is to wash out any distinction between private and public use of property—and thereby effectively to delete the words ‘for public use’ from the Takings Clause of the Fifth Amendment.” She also quoted Alexander Hamilton’s statement that protecting property was one of the “great objects of government.” The dissent draws a clear distinction between taking property “for the public’s use, but not for the benefit of another private person.” “The specter of condemnation hangs over all property,” O’Connor continues. “Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”
In his separate dissent, Justice Clarence Thomas quoted William Blackstone distinguishing the difference between “public necessity” and “public use,” and noted that the Takings Clause specifically refers to “public use.”
The 5th Amendment’s Takings Clause contains the following language: “No person shall…be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation [emphasis added].” The critical issue in Kelo was the meaning of the phrase “public use.” From a textual analysis, it should be clear that it means the property in question will be used for a purely governmental function such as a road or a public building. Or it could be used by an entity such as the Tennessee Valley Authority, which utilized eminent domain to create lakes and dams for a government-owned electrical power system.
At one time, there was virtually no limitation on the power of government to take property for whatever purpose it believed to be necessary. Property ownership was viewed as being essentially nothing more than a form of temporary stewardship that could be terminated if the ruling powers deemed it necessary. It’s no surprise that this type of power was frequently used in an abusive manner. One of the earliest legal limitations on this power was inserted into Article 29 of Magna Carta, which provided that “No Freeman shall be taken, or imprisoned, or be disseized of his Freehold…but by lawful Judgment of his Peers, or by the Law of the Land [emphasis added].” However, it did not specify any limitations on the permissible purposes of such takings.
The Founding Fathers drafted the Constitution with the clear intent of limiting the power of government to engage in arbitrary and abusive exercises of power, even if done with the stated intention of pursuing a higher good. The right to be secure from arbitrary seizure of private property is one of the most important limitations on government power, hence the inclusion of the term “public use” in the Takings Clause. It would no longer be enough to ensure that a property owner be afforded procedural due process—the Takings Clause also established a substantive right to “just compensation.” While the Constitution does not define that term, it was clearly intended to mean more than token payment; it should be construed to mean fair market value.
The Kelo decision was extremely unpopular with the public, resulting in 47 states passing legislation to restrict the use of eminent domain. These laws and their effectiveness in limiting this type of governmental overreach vary widely among states. The Institute for Justice, a non-profit legal organization which represented the plaintiffs in the Kelo case, has created a map which shows a letter grade for every state’s eminent domain laws. New York, Massachusetts, and Arkansas have an F rating.
Overruled?
A new case has the potential to overturn the Kelo decision and promote an interpretation of the Takings Clause that could significantly increase the protection of property rights.
The Institute for Justice is representing Brian Bowers, who is attempting to prevent his property from being transferred to another private owner. According to the government, this taking will purportedly promote “economic development,” which has become a euphemism for corporate welfare and crony capitalism. After losing in the New York court system, Bowers has decided to take the case to the Supreme Court; a petition for certiorari was filed in December.
Bowers was in the process of buying property in Utica, New York, for the purpose of building a medical office in the vicinity of a hospital. However, a local government entity, the Oneida County Industrial Development Agency, condemned that land for the express purpose of giving it to another private company that intended to use it as a parking lot for another privately owned medical office building. This was clearly a case of taking property from one owner for the express purpose of transferring it to another private owner—an owner who was not only engaged in the same type of business, but was actually a direct competitor. There was not even the slightest pretext that this action could possibly be considered to be a public use. It is difficult to imagine a more egregious abuse of eminent domain.
Kelo has helped reduce property rights to Third World levels. State and local governments now essentially have the authority to take land from anyone and give it to whoever they choose on the pretext that doing so will confer some economic benefit to the public at large. Unfortunately, this power can easily be abused for purposes of either political patronage or outright bribery. This was standard practice for Saddam Hussein and Robert Mugabe—but it has no place in the United States.
Additionally, eminent domain, under the guise of “public necessity,” might be used to implement the utopian plans of the Left. Many politicians would like nothing better than to take property for leftist causes such as climate change, affordable housing, social justice, sustainability, redistributing wealth, and environmental justice.
While it is still too soon to know if the Supreme Court will take the Bowers case, the certiorari petition noted that while there had been denial of certiorari in appeals of two prior 2nd Circuit decisions (in 2008 and 2024) arising out of New York eminent domain cases, it contains a footnote indicating that four of the current members of the U.S. Supreme Court had previously voted to do so (one in 2008 and three in 2024). Therefore, it appears quite likely that they will do so in this instance.
This case presents an ideal opportunity to prevent the abusive use of eminent domain on the basis of vague pretexts such as economic development and public necessity. “Public use” should be clearly defined as transferring ownership of property to the government for use in carrying out a governmental function. Eminent domain should never be used to transfer ownership from one private owner to another. Additionally, if the property is no longer needed for government use, the previous owner should have the right of first refusal when the property is sold. Using eminent domain should be subject to a much higher level of scrutiny. The Supreme Court should take this case and render a decision that will finally set clear limits on the use of eminent domain.
