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. (NLDC) 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. 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 came to a
split decision. Both sides appealed.
The Trial Court found that
NLDC couldn't take property for a park, but could take property for
office space.
The Connecticut Supreme Court
found 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 found
that a sovereign may not take someone's property for the sole purpose of
transferring it to another private party, even if they pay compensation.
However, a 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 Court found that New
London was not forced to remove "blight" from the area, but as
long as they determined that the area was "sufficiently
distressed" to justify the taking they deserved 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, it was argued that
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.
In 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 and 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.
Ironically, a few years after
this decision, the main company that requested the land be taken so they
could have an office building abandoned the property, and the area is now
desolate and unoccupied.
