|Kelo v. New London|
Supreme Court of the United States
|Argued February 22, 2005
Decided June 23, 2005
|Full case name||Susette Kelo, et al. v. City of New London, Connecticut, et al.|
|Citations||545 U.S. 469 (more)
125 S. Ct. 2655; 162 L. Ed. 2d 439; 2005 U.S. LEXIS 5011; 60 ERC (BNA) 1769; 18 Fla. L. Weekly Fed. S 437
|Prior history||Judgment defendants as regarding certain plaintiffs, judgment for remaining plaintiffs, Kelo v. City of New London, 2002 Conn. Super. LEXIS 789 (Conn. Super. Ct. Mar. 13, 2002); affirmed and reversed in part, remanded, 843 A.2d 500 (Conn. 2004); cert. granted, 542 U.S. 965 (2004)|
|Procedural history||Writ of Certiorari to the Supreme Court of Connecticut|
|Subsequent history||Rehearing denied, 126 S. Ct. 24 (2005)|
|The governmental taking of property from one private owner to give to another in furtherance of economic development constitutes a permissible "public use" under the Fifth Amendment. Supreme Court of Connecticut affirmed.|
|Majority||Stevens, joined by Kennedy, Souter, Ginsburg, Breyer|
|Dissent||O'Connor, joined by Rehnquist, Scalia, Thomas|
|U.S. Const. amend. V|
Kelo v. City of New London, 545 U.S. 469 (2005) was a case decided by the Supreme Court of the United States involving the use of eminent domain to transfer land from one private owner to another to further economic development. The case arose from the condemnation by New London, Connecticut, of privately owned real property so that it could be used as part of a comprehensive redevelopment plan. The Court held in a 5–4 decision that the general benefits a community enjoyed from economic growth qualified such redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment.
The case was appealed from a decision by the Supreme Court of Connecticut in favor of the City of New London. The state supreme court held that the use of eminent domain for economic development did not violate the public use clauses of the state and federal constitutions. The court held that if an economic project creates new jobs, increases tax and other city revenues, and revitalizes a depressed urban area (even if not blighted), then the project qualifies as a public use. The court also ruled constitutional the government delegation of its eminent domain power to a private entity.
The United States Supreme Court granted certiorari to consider questions raised in Berman v. Parker, and later in Hawaii Housing Authority v. Midkiff, . Namely, whether a "public purpose" constitutes a "public use" for purposes of the Fifth Amendment's Taking Clause: "nor shall private property be taken for public use, without just compensation". Specifically, does the Fifth Amendment, applicable to the states through the Due Process Clause of the Fourteenth Amendment (see main article: Incorporation of the Bill of Rights), protect landowners from takings for economic development, rather than, as in Berman, for the elimination of slums and blight?
The decision was widely criticized. Many of the public viewed the outcome as a gross violation of property rights and as a misinterpretation of the Fifth Amendment, the consequence of which would be to benefit large corporations at the expense of individual homeowners and local communities. Some in the legal profession construe the public's outrage as being directed not at the interpretation of legal principles involved in the case, but at the broad moral principles of the general outcome. "Federal appeals court judge Richard Posner wrote that the political response to Kelo is "evidence of [the decision's] pragmatic soundness." Judicial action would be unnecessary, Posner suggested, because the political process could take care of the problem."
The owners sued the city in Connecticut courts, arguing that the city had misused its eminent domain power. The power of eminent domain is limited by the Fifth and Fourteenth Amendments to the United States Constitution. The Fifth Amendment, which restricts the actions of the federal government, says in part that "private property [shall not] be taken for public use, without just compensation"; under Section 1 of the Fourteenth Amendment, this limitation is also imposed on the actions of U.S. state and local governments. Kelo and the other appellants argued that economic development, the stated purpose of the taking and subsequent transfer of the land to the New London Development Corporation, did not qualify as public use. The Connecticut Supreme Court heard arguments on Dec. 2, 2002. The state court issued its decision (268 Conn. 1, SC16742) on March 9, 2004, siding with the city in a 4-3 decision, with the majority opinion authored by Justice Flemming L. Norcott, Jr., joined by Justices David M. Borden, Richard N. Palmer and Christine Vertefeuille. Justice Peter T. Zarella wrote the dissent, joined by Chief Justice William J. Sullivan and Justice Joette Katz.
This case was the first major eminent domain case heard at the Supreme Court since 1984. In that time, states and municipalities had slowly extended their use of eminent domain, frequently to include economic development purposes where applicable. In the Kelo case, there was an additional twist in that the development corporation was ostensibly a private entity; thus the plaintiffs argued that it was not constitutional for the government to take private property from one individual or corporation and give it to another, if the government was simply doing so because the repossession would put the property to a use that would generate higher tax revenue.
The first eminent domain case since Midkiff to reach the Supreme Court, Kelo became the focus of vigorous discussion and attracted numerous supporters on both sides. Some 40 amicus curiae briefs were filed in the case, 25 on behalf of the petitioners. Suzette Kelo's supporters ranged from the libertarian Institute for Justice (the lead lawyers) to the NAACP, AARP, the late Martin Luther King's Southern Christian Leadership Conference and South Jersey Legal Services. The latter groups signed an amicus brief arguing that eminent domain has often been used against politically weak communities with high concentrations of minorities and elderly.
The case was argued on February 22, 2005. The case was heard by only seven members of the court with Associate Justice Sandra Day O'Connor presiding, as Chief Justice William Rehnquist was recuperating from medical treatment at home and Associate Justice John Paul Stevens was delayed on his return to Washington from Florida; both absent Justices read the briefs and oral argument transcripts and participated in the case decision.
During oral arguments, several of the Justices asked questions that forecast their ultimate positions on the case. Justice Antonin Scalia, for example, suggested that a ruling in favor of the city would destroy "the distinction between private use and public use," asserting that a private use which provided merely incidental benefits to the state was "not enough to justify use of the condemnation power."
On June 23, 2005, the Supreme Court, in a 5–4 decision, ruled in favor of the City of New London. Justice John Paul Stevens wrote the majority opinion, joined by Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer. Justice Kennedy wrote a concurring opinion setting out a more detailed standard for judicial review of economic development takings than that found in Stevens's majority opinion. In so doing, Justice Kennedy contributed to the Court's trend of turning minimum scrutiny—the idea that government policy need only bear a rational relation to a legitimate government purpose—into a fact-based test.
In Hawaii Housing Authority v. Midkiff, 467 US 229 (1984), the Court had said that the government purpose under minimum scrutiny need only be "conceivable." In two 1996 cases the Court clarified that concept. In Romer v. Evans, 517 US 620, the Court said that the government purpose must be "independent and legitimate." And in U.S. v. Virginia, 518 U.S. 515, the Court said the government purpose "must be genuine, not hypothesized or invented post hoc in response to litigation." Thus, the Court made it clear that, in the scrutiny regime established in West Coast Hotel v. Parrish, 300 US 379 (1937), government purpose is a question of fact for the trier of fact.
Kennedy fleshed out this doctrine in his Kelo concurring opinion; he sets out a program of civil discovery in the context of a challenge to an assertion of government purpose. However, he does not explicitly limit these criteria to eminent domain, nor to minimum scrutiny, suggesting that they may be generalized to all health and welfare regulation in the scrutiny regime. Because Kennedy signed on to the Court's majority opinion, his concurrence is not binding on lower courts. He wrote:
A court confronted with a plausible accusation of impermissible favoritism to private parties should [conduct]….a careful and extensive inquiry into ‘whether, in fact, the development plan [chronology] [1.] is of primary benefit to . . . the developer…, and private businesses which may eventually locate in the plan area…, [2.] and in that regard, only of incidental benefit to the city…[.]’" Kennedy is also interested in facts of the chronology which show, with respect to government, [3.] awareness of…depressed economic condition and evidence corroborating the validity of this concern…, [4.] the substantial commitment of public funds…before most of the private beneficiaries were known…, [5.] evidence that [government] reviewed a variety of development plans…[,] [6.] [government] chose a private developer from a group of applicants rather than picking out a particular transferee beforehand and… [7.] other private beneficiaries of the project [were]…unknown [to government] because the…space proposed to be built [had] not yet been rented….
Kelo v. City of New London did not establish entirely new law concerning eminent domain. Although the decision was controversial, it was not the first time “public use” had been interpreted by the Supreme Court as “public purpose.” In the majority opinion, Justice Stevens wrote the "Court long ago rejected any literal requirement that condemned property be put into use for the general public" (545 U.S. 469). Thus precedent played an important role in the 5-4 decision of the Supreme Court. The Fifth Amendment was interpreted the same way as in Midkiff (467 U.S. 229) and other earlier eminent domain cases.
On June 25, 2005, Justice Sandra Day O'Connor wrote the principal dissent, joined by Chief Justice William Rehnquist, Justice Antonin Scalia and Justice Clarence Thomas. The dissenting opinion suggested that the use of this taking power in a reverse Robin Hood fashion— take from the poor, give to the rich— would become the norm, not the exception:
|“||Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.||”|
She argued that the decision eliminates "any distinction between private and public use of property — and thereby effectively delete[s] the words 'for public use' from the Takings Clause of the Fifth Amendment." 125 S.Ct. 2655, 2671
Clarence Thomas also penned a separate originalist dissent, in which he argued that the precedents the court's decision relied upon were flawed and that "something has gone seriously awry with this Court's interpretation of the Constitution." He accuses the majority of replacing the Fifth Amendment's "Public Use" clause with a very different "public purpose" test:
|“||This deferential shift in phraseology enables the Court to hold, against all common sense, that a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation, is for a 'public use.'||”|
|“||Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities. Those communities are not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful.||”|
Following the decision, many of the plaintiffs expressed an intent to find other means by which they could continue contesting the seizure of their homes. Soon after the decision, city officials announced plans to charge the residents of the homes for back rent for the five years since condemnation procedures began. The city contended that the residents have been on city property for those five years and owe tens of thousands of dollars of rent. The case was finally resolved when the City agreed to move Kelo's house to a new location. The controversy was eventually settled when the city paid substantial additional compensation to the homeowners. Three years after the Supreme Court case was decided, the Kelo house was dedicated after being relocated to a site close to downtown New London. The city's redevelopment plans that were heavily relied on in the Supreme Court opinion in justification of the taking, proved to be chimerical. In spite of repeated efforts, the redeveloper (who stood to get a 91-acre waterfront tract of land for $1 per year) was unable to obtain financing, and the redevelopment project was abandoned. As of the beginning of 2010, the original Kelo property was a vacant lot, generating no tax revenue for the city. A group of New London residents formed a local political party, One New London, to combat the takings. While unsuccessful in gaining control of the New London City Council, they gained two seats and continue to try to gain a majority in the New London City Council to rectify the Ft. Trumbull takings.
In June 2006 Governor M. Jodi Rell intervened with New London city officials, proposing the homeowners involved in the suit be deeded property in the Fort Trumbull neighborhood so they may retain their homes.
Three years later, however, the land where Susette Kelo's home had once stood was an empty lot, and the promised 3,169 new jobs and $1.2 million a year in tax revenues had not materialized. The land was never deeded back to the original homeowners, most of whom have left New London for nearby communities. In addition, in September 2009, Pfizer, whose upscale employees were supposed to be the clientele of the Fort Trumbull redevelopment project, completed its merger with Wyeth, resulting in a consolidation of research facilities of the two companies. Shortly after the merger closed, Pfizer decided to close its New London facility in favor of one across the Thames River in nearby Groton by 2011; this move coincides with the expiration of tax breaks on the New London campus that also expire by 2011, when Pfizer's tax bill on the property would have increased almost five-fold.
After the Pfizer announcement, the San Francisco Chronicle in its lead editorial called the Kelo decision infamous:
The well-laid plans of redevelopers, however, did not pan out. The land where Suzette Kelo's little pink house once stood remains undeveloped. The proposed hotel-retail-condo "urban village" has not been built. And earlier this month, Pfizer Inc. announced that it is closing the $350 million research center in New London that was the anchor for the New London redevelopment plan, and will be relocating some 1,500 jobs.
The Chronicle editorial quoted from the New York Times:
"They stole our home for economic development," ousted homeowner Michael Cristofaro told the New York Times. "It was all for Pfizer, and now they get up and walk away."
Public reaction to the decision was highly unfavorable and, as a result, many states changed their eminent domain laws. Prior to the Kelo decision, only eight states specifically prohibited the use of eminent domain for economic development except to eliminate blight. Since the decision, forty-three states have amended their eminent domain laws, although some of these changes are cosmetic.
Opposition to the ruling was stated by popular groups such as AARP, the NAACP, the Libertarian Party and the Institute for Justice. Many owners of family farms also disapproved of the ruling, as they saw it as an avenue by which cities could seize their land for private developments. The grassroots lobbying group American Conservative Union and The New Media Journal described the decision as judicial activism, as did numerous blogs.
The New York Times editorial board agreed with the ruling, calling it "a welcome vindication of cities' ability to act in the public interest." The Washington Post's editorial board also agreed with the ruling, writing, "... the court's decision was correct... New London's plan, whatever its flaws, is intended to help develop a city that has been in economic decline for many years."
|“||...for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.||”|
However, since eminent domain is often exercised by local and state governments, the presidential order may thus have little overall effect.
On June 27, 2005, Senator John Cornyn (R-TX) introduced legislation, the "Protection of Homes, Small Businesses and Private Property Act of 2005" (S.B. 1313), to limit the use of eminent domain for economic development. The operative language
Similar bills have subsequently been put forth in the House of Representatives by Congressman Dennis Rehberg (R-MT), Tom DeLay (R-TX) and John Conyers (D-MI) with James Sensenbrenner (R-WI). As some small-scale eminent domain condemnations (including notably those in the Kelo case) can be local in both decision and funding, it is unclear how much of an effect the bill would have if it passed into law.
In 2008, land use Professor Daniel R. Mandelker argued that the public backlash against Kelo is rooted in the historical deficiencies of urban renewal legislation. In particular, the article cited the failure to incorporate land use planning and a precise definition of blight in urban renewal legislation as problematic. In 2009, Professor Edward J. Lopez of San Jose State University studied passed laws and found that states with more economic freedom, greater value of new housing construction, and less racial and income inequality were more likely to have enacted stronger restrictions sooner.
Prior to Kelo only eight states specifically prohibited the use of eminent domain for economic development except to eliminate blight: Arkansas, Florida, Illinois, Kentucky, Maine, Montana, South Carolina and Washington. By July 2007, 42 states had enacted some type of reform legislation in response to the Kelo decision. Of those 42 states, 21 enacted laws that severely inhibited the takings allowed by the Kelo decision, while the rest enacted laws that place some limits on the power of municipalities to invoke eminent domain for economic development. The remaining eight states have not passed laws to limit the power of eminent domain for economic development.
Proposition 207, the Private Property Rights Protection Act, passed in 2006.
Subsequent to this decision, there was widespread outrage across the country. California developer and libertarian Logan Darrow Clements scooped a similar proposal by New Hampshire libertarians to seize Justice Souter's 'blighted' home in Weare, New Hampshire, via eminent domain in order to build a "Lost Liberty Hotel" which he said would feature a "Just Desserts Cafe". Officials of the Libertarian Party of New Hampshire (LPNH) and the Coalition of New Hampshire Taxpayers had been eyeing the Justice's property to build a Constitution Park. A few weeks later, LPNH Vice-Chair Mike Lorrey discovered that Justice Breyer owned an extensive vacation estate in Plainfield, NH, and announced on the New Hampshire Public Radio show The Exchange focusing on eminent domain that LPNH would be pursuing their Constitution Park concept with Breyer's property in mind. Lorrey and Clements both advocated an amendment to New Hampshire's Constitution limiting eminent domain, which passed New Hampshire's legislature on March 24, 2006. The text of the amendment is as follows: "No part of a person's property shall be taken by eminent domain and transferred, directly or indirectly, to another person if the taking is for the purpose of private development or other private use of the property." It passed by an overwhelming margin in the 2006 general election.
Proposition 90 failed in the November 2006 election. The initiative also included language requiring that government pay financial compensation to any property owners who could successfully argue that regulation caused them significant economic loss. Subsequently, Proposition 99 passed in the June 2008 election. It amends the state constitution to prohibit (subject to some exceptions):
|“||state and local governments from using eminent domain to acquire an owner-occupied residence [if the owner has occupied the residence for at least one year], as defined, for conveyance to a private person or business entity.||”|
However, under preexisting California law such takings (for conveyance to a private party, as opposed to a public use that may incidentally benefit private parties) were already illegal.
|“||Private property taken by eminent domain [...] may not be conveyed to a natural person or private entity except as provided by general law passed by a three-fifths vote of the membership of each house of the Legislature.||”|
The Iowa Legislature passed a 2006 bill restricting the use of eminent domain for economic development. Gov. Tom Vilsack (D) vetoed the bill, prompting the first special session of the Iowa Legislature in more than 40 years. The veto was overridden by votes of 90-8 in the Iowa House and 41-8 in the Iowa Senate.
A proposed constitutional amendment to prohibit government from taking private property by eminent domain for certain private purposes
The proposed constitutional amendment would:
- Prohibit government from taking private property for transfer to another private individual or business for purposes of economic development or increasing tax revenue.
- Provide that if an individual's principal residence is taken by government for public use, the individual must be paid at least 125% of property’s fair market value.
- Require government that takes a private property to demonstrate that the taking is for a public use; if taken to eliminate blight, require a higher standard of proof to demonstrate that the taking of that property is for a public use.
- Preserve existing rights of property owners.
March 29, 2006 the governor signed into law 2005 Wisconsin Act 233, which prohibits condemnation of nonblighted property for transfer to a private entity. Nonblighted property is defined by a list of conditions that may make the property a detriment to the "public health, safety, or welfare." Two days earlier the governor signed into law 2005 Wisconsin Act 208, which creates procedures designed to protect property owners including public notice and public hearing requirements.
The Wisconsin law has been criticized as one having little or no real protection for property owners because it provides protection against property condemnation for economic development but does allow property condemnation under a broadly defined description of blighted.