Page 1117, Eminent domain: Kelo v. New London: the Supreme Court upholds condemnations for a harbor city's economic development. Television and newspaper coverage in Spring 2005 often featured Ms. Susette Kelo of New London, Connecticut standing in front of her family home in that city's waterfront neighborhood, soon to be taken away by eminent domain for an economic redevelopment project. She and several neighbors who have likewise refused to sell are anguished by the imminent loss of their homes in which they have raised their kids and invested their savings and sweat over the years. And on the other side appears the image of a jowly bureaucrat, explaining somberly that to bring cash, commerce, and people with money to spend into the area, the city needed to redevelop the waterfront by attracting private companies like the headquarters of mega- corporation Pfizer, of Viagra fame, and the condemness will recive just compensation. Which image touches us in the heart? Susette Kelo, every time. Since the Supreme Court decision there has been a cacaphony of criticism against the big hand of government usurping private property rights. Legislation "correcting" eminent domain is being proposed in state capitols and Congress. In terms of social governance, law, and human common sense, does this story line accurately reflect the controversy at bar? Susette Kelo, et al. v. City of New London, Connecticut
STEVENS, J., delivered the opinion of the Court, in which KENNEDY, SOUTER, GINSBURG, and BREYER, JJ., joined.
Stevens, J. In 2000, the city of New London approved a development plan that, in the words of the Supreme Court of Connecticut, was "projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city, including its downtown and waterfront areas." In assembling the land needed for this project, the city's development agent has purchased property from willing sellers and proposes to use the power of eminent domain to acquire the remainder of the property from unwilling owners in exchange for just compensation. The question presented is whether the city's proposed disposition of this property qualifies as a "public use" within the meaning of the Takings Clause of the Fifth Amendment to the Constitution. Decades of economic decline led a state agency in 1990 to designate the City a "distressed municipality." In 1996, the Federal Government closed the Naval Undersea Warfare Center, which had been located in the Fort Trumbull area of the City and had employed over 1,500 people. In 1998, the City's unemployment rate was nearly double that of the State, and its population of just under 24,000 residents was at its lowest since 1920. These conditions prompted state and local officials to target New London, and particularly its Fort Trumbull area, for economic revitalization. To this end, respondent New London Development Corporation (NLDC), a private nonprofit entity established some years earlier to assist the City in planning economic development, was reactivated. In January 1998, the State authorized a $5.35 million bond issue to support the NLDC's planning activities and a $10 million bond issue toward the creation of a Fort Trumbull State Park. In February, the pharmaceutical company Pfizer Inc. announced that it would build a $300 million research facility on a site immediately adjacent to Fort Trumbull; local planners hoped that Pfizer would draw new business to the area, thereby serving as a catalyst to the area's rejuvenation. After receiving initial approval from the city council, the NLDC continued its planning activities and held a series of neighborhood meetings to educate the public about the process. In May, the city council authorized the NLDC to formally submit its plans to the relevant state agencies for review. Upon obtaining state-level approval, the NLDC finalized an integrated development plan focused on 90 acres of the Fort Trumbull area. The development plan encompasses seven parcels. Parcel 1 is designated for a waterfront conference hotel at the center of a "small urban village" that will include restaurants and shopping. This parcel will
also have marinas for both recreational and commercial uses. A pedestrian "riverwalk" will originate here and continue down the coast, connecting the waterfront areas of the development. Parcel 2 will be the site of approximately 80 new residences organized into an urban neighborhood and linked by public walkway to the remainder of the development, including the state park. This parcel also includes space reserved for a new U. S. Coast Guard Museum. Parcel 3, which is located immediately north of the Pfizer facility, will contain at least 90,000 square feet of research and development office space. Parcel 4A is a 2.4-acre site that will be used either to support the adjacent state park, by providing parking or retail services for visitors, or to support the nearby marina. Parcel 4B will include a renovated marina, as well as the final stretch of the riverwalk. Parcels 5, 6, and 7 will provide land for office and retail space, parking, and water-dependent commercial uses. The plan was.designed to make the City more attractive and to create leisure and recreational opportunities on the waterfront and in the park. Petitioner Susette Kelo has lived in the Fort Trumbull area since 1997. She has made extensive improvements to her house, which she prizes for its water view. Petitioner Wilhelmina Dery was born in her Fort Trumbull house in 1918 and has lived there her entire life. Her husband Charles (also a petitioner) has lived in the house since they married some 60 years ago. In all, the nine petitioners own 15 properties in Fort Trumbull - 4 in parcel 3 of the development plan and 11 in parcel 4A. There is no allegation that any of these properties is blighted or otherwise in poor condition; rather, they were condemned only because they happen to be located in the development area. The Supreme Court of Connecticut.held.that all of the City's proposed takings were valid. Relying on cases such as Hawaii Housing Authority v. Midkiff, 467 U. S. 229 (1984), and Berman v. Parker, 348 U. S. 26 (1954), the court held that such economic development qualified as a valid public use under both the Federal and State Constitutions. The three dissenting justices would have imposed a "heightened" standard of judicial review for takings justified by economic development. Although they agreed that the plan was intended to serve a valid public use, they would have found all the takings unconstitutional because the City had failed to adduce "clear and convincing evidence" that the economic benefits of the plan would in fact come to pass. It has long been accepted that the sovereign may not take the property of A for the sole purpose of transferring it to another private party B, even though A is paid just compensation. On the other hand, it is equally clear that a State may transfer property from one private party to another if future "use by the public" is the purpose of the taking; the condemnation of land for a railroad with common-carrier duties is a familiar example. The City [would not] be allowed to take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit. The takings before us, however, would be executed pursuant to a "carefully considered" development plan. The City's development plan was not adopted "to benefit a particular class of identifiable individuals." This "Court long ago rejected any literal requirement that condemned property be put into use for the general public.". Not only was the "use by the public" test difficult to administer (e.g., what proportion of the public need have access to the property? at what price?), but it proved to be impractical given the diverse and always evolving needs of society. Accordingly, when this Court began applying the Fifth Amendment to the States at the close of the 19th century, it embraced the broader and more natural interpretation of public use as "public purpose.". We have repeatedly and consistently rejected that narrow test ever since. The disposition of this case therefore turns on the question whether the City's development plan serves a "public purpose." Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field. In Berman v. Parker, 348 U. S. 26 (1954), this Court upheld a redevelopment plan targeting a blighted area of Washington, D. C., in which most of the housing for the area's 5,000 inhabitants was beyond repair. Under the plan, the area would be condemned and part of it utilized for the construction of streets, schools, and other public facilities. The remainder of the land would be leased or sold to private parties for the purpose of redevelopment, including the construction of low-cost housing.
The owner of a department store located in the area challenged the condemnation, pointing out that his store was not itself blighted and arguing that the creation of a "better balanced, more attractive community" was not a valid public use. Writing for a unanimous Court, Justice Douglas refused to evaluate this claim in isolation, deferring instead to the legislative and agency judgment that the area "must be planned as a whole" for the plan to be successful. The Court explained that "community redevelopment programs need not, by force of the Constitution, be on a piecemeal basis-lot by lot, building by building." The public use underlying the taking was unequivocally affirmed: "We do not sit to determine whether a particular housing project is or is not desirable. The concept of the public welfare is broad and inclusive. The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled. In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is not for us to reappraise them. If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.". Viewed as a whole, our jurisprudence has recognized that the needs of society have varied between different parts of the Nation, just as they have evolved over time in response to changed circumstances. 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. The City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment. To avoid this result, petitioners urge us to adopt a new bright-line rule that economic development does not qualify as a public use. Putting aside the unpersuasive suggestion that the City's plan will provide only purely economic benefits, neither precedent nor logic supports petitioners' proposal. Promoting economic development is a traditional and long accepted function of government. There is, moreover, no principled way of distinguishing economic development from the other public purposes that we have recognized. In our cases upholding takings that facilitated agriculture and mining, for example, we emphasized the importance of those industries to the welfare of the States in question. It would be incongruous to hold that the City's interest in the economic benefits to be derived from the development of the Fort Trumbull area has less of a public character than any of those other interests. Clearly, there is no basis for exempting economic development from our traditionally broad understanding of public purpose. Petitioners contend that using eminent domain for economic development impermissibly blurs the boundary between public and private takings. Again, our cases foreclose this objection. Quite simply, the government's pursuit of a public purpose will often benefit individual private parties. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects. It is further argued that without a bright-line rule nothing would stop a city from transferring citizen A's property to citizen B for the sole reason that citizen B will put the property to a more productive use and thus pay more taxes. Such a one-to-one transfer of property, executed outside the confines of an integrated development plan, is not presented in this case. While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, the hypothetical cases posited by petitioners can be confronted if and when they arise.
Alternatively, petitioners maintain that for takings of this kind we should require a "reasonable certainty" that the expected public benefits will actually accrue. Such a rule, however, would represent an even greater departure from our precedent. "When the legislature's purpose is legitimate and its means are not irrational, our cases make clear that empirical debates over the wisdom of takings-no less than debates over the wisdom of other kinds of socioeconomic legislation-are not to be carried out in the federal courts." Midkiff, 467 U. S., at 242. Indeed, earlier this Term we explained why similar practical concerns (among others) undermined the use of the "substantially advances" formula in our regulatory takings doctrine. See Lingle v. Chevron U. S. A. Inc., 544 U. S. ___, ___ (2005) (slip op., at 14- 15) (noting that this formula "would empower - and might often require - courts to substitute their predictive judgments for those of elected legislatures and expert agencies"). In affirming the City's authority to take petitioners' properties, we do not minimize the hardship that condemnations may entail, notwithstanding the payment of just compensation. This Court's authority, however, extends only to determining whether the City's proposed condemnations are for a "public use" within the meaning of the Fifth Amendment to the Federal Constitution. Because over a century of our case law interpreting that provision dictates an affirmative answer to that question, we may not grant petitioners the relief that they seek. Affirmed. Kennedy, J., concurring. I join the opinion for the Court and add these further observations. This Court has declared that a taking should be upheld as consistent with the Public Use Clause, U. S. Const., Amdt. 5., as long as it is "rationally related to a conceivable public purpose." Hawaii Housing Authority v. Midkiff, 467 U. S. 229, 241 (1984); see also Berman v. Parker, 348 U. S. 26 (1954). This deferential standard of review echoes the rational-basis test used to review economic regulation under the Due Process and Equal Protection Clauses, see, e.g., FCC v. Beach Communications, Inc., 508 U. S. 307, 313-314 (1993); Williamson v. Lee Optical of Okla., Inc., 348 U. S. 483 (1955). The determination that a rational-basis standard of review is appropriate does not, however, alter the fact that transfers intended to confer benefits on particular, favored private entities, and with only incidental or pretextual public benefits, are forbidden by the Public Use Clause. A court applying rational-basis review under the Public Use Clause should strike down a taking that, by a clear showing, is intended to favor a particular private party, with only incidental or pretextual public benefits, just as a court applying rational-basis review under the Equal Protection Clause must strike down a government classification that is clearly intended to injure a particular class of private parties, with only incidental or pretextual public justifications. As the trial court in this case was correct to observe, "Where the purpose [of a taking] is economic development and that development is to be carried out by private parties or private parties will be benefited, the court must decide if the stated public purpose - economic advantage to a city sorely in need of it - is only incidental to the benefits that will be confined on private parties of a development plan." A court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government's actions were reasonable and intended to serve a public purpose. Here, the trial court conducted a careful and extensive inquiry into "whether, in fact, the development plan is of primary benefit to. the developer, and private businesses which may eventually locate in the plan area, and in that regard, only of incidental benefit to the city." The trial court considered testimony from government officials and corporate officers; documentary evidence of communications between these parties; respondents' awareness of New London's depressed economic condition and evidence corroborating the validity of this concern; the substantial commitment of public funds by the State to the development project before most of the private beneficiaries were known; evidence that respondents reviewed a variety of development plans and chose a private developer from a group of applicants rather than picking out a particular transferee beforehand; and the fact that the other private beneficiaries of the project are still unknown because the office space proposed to be built has not yet been rented. The trial court concluded, based on these findings, that benefiting Pfizer was not "the primary motivation or effect of this development plan"; instead, "the primary motivation for [respondents] was to take
advantage of Pfizer's presence." Likewise, the trial court concluded that "There is nothing in the record to indicate that. [respondents] were motivated by a desire to aid [other] particular private entities." Even the dissenting justices on the Connecticut Supreme Court agreed that respondents' development plan was intended to revitalize the local economy, not to serve the interests of Pfizer, [the deeloper] Corcoran Jennison, or any other private party. This case, then, survives the meaningful rational basis review that in my view is required under the Public Use Clause. Petitioners and their amici argue that any taking justified by the promotion of economic development must be treated by the courts as per se invalid, or at least presumptively invalid. Petitioners overstate the need for such a rule, however, by making the incorrect assumption that review under Berman and Midkiff imposes no meaningful judicial limits on the government's power to condemn any property it likes. A broad per se rule or a strong presumption of invalidity, furthermore, would prohibit a large number of government takings that have the purpose and expected effect of conferring substantial benefits on the public at large and so do not offend the Public Use Clause. My agreement with the Court that a presumption of invalidity is not warranted for economic development takings in general, or for the particular takings at issue in this case, does not foreclose the possibility that a more stringent standard of review than that announced in Berman and Midkiff might be appropriate for a more narrowly drawn category of takings. There may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption (rebuttable or otherwise) of invalidity is warranted under the Public Use Clause. Cf. Eastern Enterprises v. Apfel, 524 U. S. 498, 549-550 (1998) (Kennedy, J., concurring in judgment and dissenting in part) (heightened scrutiny for retroactive legislation under the Due Process Clause). This demanding level of scrutiny, however, is not required simply because the purpose of the taking is economic development. This taking occurred in the context of a comprehensive development plan meant to address a serious city- wide depression, and the projected economic benefits of the project cannot be characterized as de minimus [sic]. In sum, while there may be categories of cases in which the transfers are so suspicious, or the procedures employed so prone to abuse, or the purported benefits are so trivial or implausible, that courts should presume an impermissible private purpose, no such circumstances are present in this case. O'Connor, J., with whom The Chief Justice, Justice Scalia, and Justice Thomas join, dissenting. Over two centuries ago, just after the Bill of Rights was ratified, Justice Chase wrote:
An ACT of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority. A few instances will suffice to explain what I mean. [A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with SUCH powers; and, therefore, it cannot be presumed that they have done it." Calder v. Bull, 3 Dall. 386, 388 (1798) (emphasis deleted).
Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded - i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public - in the process. To reason, as the Court does, 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. Accordingly I respectfully dissent. Thomas, J., dissenting..The Court [holds], 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." I cannot agree. If such "economic development" takings are for a "public use," any taking is, and the Court has erased the Public Use Clause from our Constitution, as Justice O'Connor powerfully argues in dissent. I do not believe that this Court can eliminate liberties expressly enumerated in the Constitution and therefore join her dissenting opinion. Regrettably, however, the Court's error runs deeper than this. Today's decision is simply the
latest in a string of our cases construing the Public Use Clause to be a virtual nullity, without the slightest nod to its original meaning. In my view, the Public Use Clause, originally understood, is a meaningful limit on the government's eminent domain power. Our cases [he cites and rejects Berman and Midkiff] have strayed from the Clause's original meaning, and I would reconsider them. The most natural reading of the Clause is that it allows the government to take property only if the government owns, or the public has a legal right to use, the property, as opposed to taking it for any public purpose or necessity whatsoever.
COMMENTARY & QUESTIONS 1.The "public use" defense reawakens from the dead? In challenges to eminent domain actions where private development entities are slated to receive condemned parcels, defendant propertyowners typically raise the "public use" defense, as noted in the coursebook: "lands transferred to a private entity are not serving a public use as the Constitution requires." Since the 1954 case of Berman v. Parker, text at page 1118, this argument has generally been dead-on-arrival. Recently, however, fueled in part by the privateering movement led by the funders of the Pacific Legal Foundation and its cohort, there have been incursions upon what had appeared to be settled law. In 2004 Michigan's Supreme Court expressly overturned its 1981 Poletown decision and rejected a transfer or condemned lands to private development companies, saying that such transfers required much stricter proof of necessity than if a government agency retained the land. County of Wayne v. Hathcock, 471 Mich. 445 (2004). 2. Is "economic development" a suspect justification for eminent domain? Justice O'Connor's adamant dissent in Kelo was her swan song, and for a justice who had written key opinions in Midkiff and Palazzolo, it is a bit enigmatic. Focusing on the prior cases' element of "harm," she seems to prove too much:
"Are economic development takings constitutional? I would hold that they are not. The Court's holdings in Berman and Midkiff [eds.-she authored the Midkiff majority] were true to the principle underlying the Public Use Clause. In both those cases, the extraordinary, precondemnation use of the targeted property inflicted affirmative harm [emphasis added-eds.] on society - in Berman through blight resulting from extreme poverty and in Midkiff through oligopoly resulting from extreme wealth. And in both cases, the relevant legislative body had found that eliminating the existing property use was necessary to remedy the harm. Thus a public purpose [sic] was realized when the harmful use was eliminated. Because each taking directly achieved a public benefit [sic], it did not matter that the property was turned over to private use. Here, in contrast, New London does not claim that Susette Kelo's and Wilhelmina Dery's well-maintained homes are the source of any social harm."
If this test were literally applied, a host of obviously appropriate takings, including takings for public use, would be void - airport construction, highways, Central Park. In this Kelo context Justice O'Connor undoubtedly meant that proof of harmfulness is required where private entities receive title. She also does not make a clean division between public use, purpose, and benefit, as this excerpt shows. In the modern age the needs of society and the role of government have indeed evolved so that physical public use would clearly be too limiting a standard. 3. Justice Thomas grasps the radically limited public use standard. In his dissent, Justice Thomas is willing to go to the extreme: eminent domain, he apparently believes, should be restricted to cases of actual physical public use, interpreting the word "use" far more strictly than Justice O'Connor. He does not adopt her "harm" requirement, however, instead noting that many kinds of eminent domain are justified by the "necessary and proper" clause, but he does insist that the power can be used "only if the government owns, or the public has a legal right to use" the lands so obtained. This is either an extreme stance or an invitation to definitional equivocation. (What would he say, for
instance of cities and states assembling parcels for the construction of hometown teams' sports stadiums? Do I as a member of the public have "a legal right to use" the resulting private stadium if the only way I can use it -a mere two square feet of it, at that - is to pay $500+ for a season ticket?) 4. A revisionist view - The Kelo case makes basic common sense (even to people like certain of the authors who in the past have bitterly opposed eminent domain cases - like the Poletown or Tellico cases in the coursebook at pages 1117-1122 and 778-779.) When stupidly applied to private property, eminent domain is an abomination. But if it is carefully and thoughtfully applied, eminent domain is a necessary and rational attribute of governance. It seems to us that eminent domain for economic development is often a sensible use of governmental power, without which many of our blighted urban areas could never be resurrected and economic projects would have to go out to the urban fringe, feeding sprawl. There will almost always be a few holdouts (who will, by the way, often put themselves in lucratively extortionate positions by defeating forced purchases of key parcels). Moreover, notably in the regulatory setting, the argument is regularly made by corporate players that private entities are societally more efficient and innovative than government agencies in getting things done. The Right is insistently critical of governmental bureaucracy and micromanagement, and often advocates public-private "partnerships" of government initiatives with corporate private enterprise. See Chapter 14. Isn't this inconsistent with the current criticism of Kelo? In many modern settings where governments at federal, state, or local level use eminent domain to facilitate land development projects, private entities likewise pulled in to play a significant role, sometimes receiving title or control of part or all of the project area. Why? The theory is that public bodies in many cases lack the funds and expertise to do a businesslike job of development design and implementation, and desperately need private partners. In the eminent domain setting, however, this logic is politically far less appreciated than when it is used to mitigate regulation. For a particular parcel of private property to be taken from A and transferred to a private entity B seems far more of an affront, even if just compensation is paid. The compromise toward which the courts (and Congress, if the newpapers are to be believed) may be moving is a straightforward acknowledgement that where eminent domain is used to tranfer property to private entities, courts may scrutinize the condemnation's rational basis more stringently. Justice O'Connor briefly cited the recent Michigan case, County of Wayne v. Hathcock, 471 Mich. 445, 684 N. W. 2d 765 (2004), which required three somewhat jumbled tests to be satisfied in such case. In Hathcock an airport buffer zone was not allowed to transfer private lands to private commercial uses. The Michigan Supreme Court said for such takings to be valid "public uses"- First, [must involve] "public necessity of the extreme sort otherwise impracticable [for]…enterprises generating public benefits whose very existence depends on the use of land that can be assembled only by the coordination central government alone is capable of achieving…. Second,.when the private entity remains accountable to the public in its use of that property…. Finally, condemned land may be transferred to a private entity when the selection of the land to be condemned is itself based on public concern.on the basis of "facts of independent public significance," meaning that the underlying purposes for resorting to condemnation, rather than the subsequent use of condemned land, must satisfy the Constitution's public use requirement….
Is the meaning of these three standards clear enough? If appled explicitly to Kelo (Justice Kennedy implies that such considerations might be relevant in such cases), would the city's need to build a revitalizing core area around the harbor satisfy the Hathcock tests?
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