Kelo v. City of New London, U.S. Supreme Court (2005)

Facts: In 1998, the city of New London, an economically depressed city on the Thames River in Connecticut, had an unemployment rate nearly double that of the state and was shrinking in population. As a result, state and local officials decided to redevelop the Fort Trumbull waterfront area in order to revitalize the city, reactivating the private nonprofit New London Development Corporation (NLDC) to assist in planning. With over $15M in state bonds in support of planning and creating a state park, and with a promise from Pfizer to create a $300M research facility adjacent to the park, the NLDC finalized an integrated development plan focused on 90 acres of the Fort Trumball area.

The development plan encompassed seven parcels, including a the state park, a waterfront conference hotel, a residential neighborhood, research, office and retail space, a pedestrian riverwalk, a renovated marina, and parking to support these activities. The goals of the plan were capitalize on the Pfizer facility, create jobs, generate tax revenue, make the city more attractive, and to create leisure and recreational opportunities on the waterfront and in the park. 32 of the 90 acres were the site of a disused government facility, and the remainder comprised of 115 privately owned properties. After the city approved the plan in January or 2000, the development agent, NLDC successfully negotiated the purchase of most of project area, but failed to negotiate with Susette Kelo, Charles and Wilhelmina Dery, and 6 other petitioners owning 15 properties in Fort Trumbull. In November 2000, the NLDC initiated condemnation proceedings against the petitioners without allegations of blight. The petitioners brought the case to court on the grounds that this taking violated the public use clause of the Fifth Amendment.

Procedure: The Superior Court found in favor of the petitioners with property in parcel 4A, designated for park or marina support. It found against petitioners located in parcel 3, designated for office space. Both sides appealed to the Supreme Court of Connecticut who ruled that all the City's takings were valid.

Issue: Does the decision to take property for the purpose of economic development satisfy the "public use" requirement of the Fifth Amendment?

Holding: In a 5-4 decision, the court found in favor of the City of New London.

Rationale:
  1. The "use by the public" is a difficult test to administer (what proportion of the public need have access to the property? at what price?) so the interpretation of public use has evolved into the broader understanding of "public purpose" since 1906. The court cited several precedents to show that they deferred to legislative judgements on what constitutes a valid public purpose: "For more than a century, our public use jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of the takings power."
  2. Promoting economic development is a traditional and long accepted function of government. There is no basis for exempting economic development from the court's traditionally broad understanding of public purpose. Even though some private parties may receive more benefits than others here, "We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects."
  3. What about the likelihood the public purpose won't be achieved? "A constitutional rule that required postponement of the judicial approval of every condemnation until the likelihood of success of the plan had been assured would unquestionably impose a significant impediment to the successful consummation of many such plans." (Ouch though, since the land is still undeveloped it appears...)
  4. On the potential for abuse or a veiled giveaway to a private party: "The identity of most of the private beneficiaries were unknown at the time the city formulated its plans. The city complied with elaborate procedure requirements that facilitate review of the record and inquiry into the city's purposes."

Notes:
Precedents cited:
  • In Berman v. Parker (1954), the U.S. Supreme Court ruled in favor of eminent domain of a department store (that wasn't blighted) because the area "must be planned as a whole" in order to be successful; "It is within the power of the leglature to determine that the community should be beautiful as well as healthy," spacious, clean, well-balanced, etc.
  • In Hawaii Housing Authority v. Midkiff (1984), the U.S. Supreme Court reaffirmed Berman's deferential approach to legislative judgements in this field, and affirmed a Hawaii statute which transferred titles from lessors to lessees (for just compensation) in order to eliminate the "social and economic evils of a land oligopoly."
  • In Ruckelshaus v. Montasanto, Co. (1984), the U.S. Supreme Court found that the EPA could consider data & trade secrets of prior pesticide applicants when evaluating subsequent applications as long as the new applicant paid just compensation for the data. Here the public purpose is to enhance competition and spare applicants the time-consuming research. (!)

Dissent suggests that Berman and Midkiff differed because each taking directly achieved a public benefit so it didn't matter that the property was turned over to private use; eliminating the property was necessary to remedy the harms (blight resulting from extreme poverty and oligopoly resulting from extreme wealth, respectively). Here, the petitioners well-maintained properties are not the source of any social harm.

Also, second to last paragraph of the Dissent ("Any property may now be taken...") is well put.

Also, for kicks, here's a dramatic video! http://www.youtube.com/watch?v=4N1svadJQ40