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Politics and Economy:
Eminent Domain
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Kelo v. New London

In a close ruling announced on June 23, 2005 the Supreme Court ruled 5 to 4 that state and local governments could use eminent domain to take private property against the owners' will for use in private development. The decision is expected to have major ramifications for redevelopment and property rights cases around the country. (Learn more about the history of eminent domain and what legal measures have been undertaken in the wake of the ruling._ The question facing the Court was the following:

What protection does the Fifth Amendment's public use requirement provide for individuals whose property is being condemned, not to eliminate slums or blight, but for the sole purpose of "economic development" that will perhaps increase tax revenues and improve the local economy?

At issue was the city of New London, Connecticut's efforts to exercise eminent domain against a group of homeowners in the area known as Fort Trumbull. The impetus, said the plaintiffs, was the city's wish augment the pharmaceutical company Pfizer, Inc.'s recently built multi-million dollar research facility which is located next to the Fort Trumball area of the city. In 2000, the New London City Council presented a redevelopment plan for the Fort Trumball area including a conference center, hotel complex, offices and condominiums. The execution of the plan would require the razing of the neighborhood's homes and small businesses. Eminent domain power was transferred to the New London Development Corporation, a private, nonprofit group of citizens, business owners and community leaders.

The controversy gained national legal status when some Fort Trumbull residents began to question the use of eminent domain not for a traditionally defined public project — a roadway or a school, for example, — but under the rationale that the private developments outlined in the plan would increase the tax base of the area and the economic vitality of the city.

The homeowners argued that their neighborhood, unlike previous neighborhoods cleared by use of eminent domain, was not "blighted" and redevelopment was not necessarily for the public good. And, they argued, that eminent domain should not be used to build projects where the primary recipient of income would be private developers, not the city or its citizens. City Attorney Thomas Londregan countered that "New London has been and is classified by the state of Connecticut as a distressed municipality," and the project would bring jobs along with tax revenues.

The Kelo v. New London case created some unexpected allies — from the National Association of Homebuilders to the Cato Institute, The NAACP to THE ECONOMIST. Allied for the homeowners were those who feared for the rights of lower-income citizens and inner city neighborhoods. Joining them were a number of private property advocates. Editorials against the New London use of eminent domain appeared in papers across the nation. Conservative pundit George F. Will wrote about "Despotism in New London" for THE WASHINGTON POST and THE CHRISTIAN SCIENCE MONITOR, calling the project "The Eminent Domain Game."

The Courts difference of opinion on the case was stark. Writing for the majority, Justice John Paul Stevens stated: "The city has carefully formulated an economic development that it believes will provide appreciable benefits to the community, including -- but by no means limited to -- new jobs and increased tax revenue." On the dissenting side, Justice Sandra Day O'Connor countered: "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."

Read the Court's opinion and the dissent. (PDF)

Read more about the debate over the case below and discuss your thoughts on the topic.

Pro-Kelo et. al.Pro-New London
"Should this Court affirm the Connecticut Supreme Court's holding that pure 'economic development' constitutes a public use for eminent domain purposes, legislative majorities will be able to infringe on the property rights of minorities and allocate the burdens of economic development to less politically and economically powerful groups — those least able to bear this burden."

- Amicus brief on behalf of the NAACP, AARP, et. al. (PDF)

"I am convinced that cities need to retain the power to take private property, upon payment of compensation, to spur economic and social revitalization...Why do cities need this power? Our cities house the majority of our poor citizens but a declining minority of economic activity. Modern transportation, communication, and power transmission allow most businesses to locate nearly anywhere. Cities find it hard to compete with rural, green field sites for large private investments that provide employment and a local tax base. One reason for this is that land in older towns is divided into many small plots containing aging buildings. Cities can overcome this disadvantage through using eminent domain to assemble large tracts at strategic locations where new economic development can occur."

--J. Peter Byrne, "Can Your Town Take Your Home?"

"That [the government] may view the proposed development in this case as beneficial—in the form of increased tax revenue and a strengthened local economy—cannot alter the private nature of the use. This is simply an attempted transfer of property from one set of private owners to another. Declaring this use to be public would deprive the 'public use' language in the Takings Clause of any constraining force."

- Amicus brief filed by the Reason Institute, (PDF)

- "It's hard to know what to make of grand claims about the importance of the right to property necessarily conflicting with the government's power to take it -- given that the right to property grew up along with the government's authority to exercise the power of eminent domain. The very same Constitution that precludes the government from depriving people of their property without due process of law makes it perfectly clear that the government can take that property for a public use so long as it pays just compensation."

-David Barron, "Debate Pits Private Property Against Powers of the State, WALL STREET JOURNAL, May 19, 2005

"The question is: Does the Constitution empower governments to seize a person's most precious property -- a home, a business -- and give it to more wealthy interests so that the government can reap, in taxes, ancillary benefits of that wealth? Connecticut's court says 'yes,' which turns the Fifth Amendment from a protection of the individual against overbearing government into a license for government to coerce individuals on behalf of society's strongest interests. Henceforth, what home or business will be safe from grasping governments pursuing their own convenience?"

- George F. Will "Despotism in New London," THE WASHINGTON POST, September 19, 2004

"What makes this case salient is not the parsing of this Court’s Public Use doctrine or its application to the facts of this case. As shown, both are straightforward, and both support the decision reached by the Connecticut Supreme Court. Rather, it is the fact that the exercise of eminent domain will result in taking some of the petitioners’ homes, even though for just compensation. This is undeniably a genuine cost of realizing the City’s goal of improving the economic well-being of its citizens, but it is one that the State of Connecticut authorized and that both the State and the City decided to incur after careful deliberation conducted in an open, democratic process."

- Amicus brief filed by Connecticut Conference of Municipalities, et al., (PDF)

Additional sources: CNN; THE ECONOMIST; Medill On The Docket; The Supreme Court; Kirstin Downey, "Revitalization Projects Hinge On Eminent-Domain Lawsuit," WASHINGTON POST, May 21, 2005

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