Posted on 07/06/2005 10:13:33 AM PDT by Torie
Second Thoughts on Kelo
A proper understanding of property rights suggests that the Kelo decision wasn't so bad after all.
by John Hinderaker
07/05/2005 12:00:00 AM
THE SUPREME COURT'S DECISION in Kelo v. City of New London has sparked a great deal of comment, most of it critical. Conservatives, in particular, have denounced Kelo's holding that economic development projects are a "public use" that municipalities and other government units can use eminent domain to carry out. George Will's analysis was representative:
The question answered yesterday was: Can government profit by seizing the property of people of modest means and giving it to wealthy people who can pay more taxes than can be extracted from the original owners? The court answered yes.
Many conservatives seemed to enjoy waxing populist over the decision; Pfizer, Inc. was a popular target. Pfizer-bashing started at the top. Justice Thomas, writing in dissent, said that the majority held, "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.'" Justice O'Connor, also dissenting, echoed the theme: ". . . any boon for Pfizer or the plan's developer is difficult to disaggregate from the promised public gains in taxes and jobs." And the Washington Times editorialized:
City officials sought to lure Pfizer there to build a $300 million research facility with the understanding that the surrounding parcels of land could be developed into an upscale complex of residences along with a marina, hotel and conference center. . . .The city argues that because Pfizer can pay more taxes, and because it can provide more jobs, it will make better use of the Ft. Trumbull properties than the ordinary people who currently own them.
In fact, however, Pfizer has little or nothing to do with the New London project. In February 1998, Pfizer announced that it would build a global research and development headquarters on a site in New London that was then used as a garbage dump. It was after Pfizer's announcement that the city decided to embark on a redevelopment project that would include land near Pfizer's. Pfizer completed construction of its research and development headquarters four years ago; its project was in no way contingent on the city's separate redevelopment efforts. Pfizer--whose spokesman noted that the company's role in the New London condemnation case has become an "urban legend"--has no involvement in the Kelo case, no interest in the property at issue, and has never supported either side in the controversy.
In reality, the New London economic development project is similar to efforts that hundreds of towns and cities have made to revitalize aging or depressed neighborhoods. Focused on a 90-acre area called Fort Trumbull that is comprised of both publicly and privately owned land, the project includes a typical mix of public and private uses: a pedestrian "riverwalk," a waterfront hotel and conference center, marinas for recreational and commercial uses, a new Coast Guard Museum, new residences, and an industrial park to which the city hopes small biotechnology companies will be lured by Pfizer's nearby research facility. The city created the New London Development Corporation ("NLDC") to carry out the Fort Trumbull project, and, as is usual in such cases, gave the NLDC powers of eminent domain to acquire the necessary parcels of land. The NLDC was able to negotiate purchase agreements with most landowners, but a few refused to sell and ultimately commenced the litigation that reached the Supreme Court.
Fort Trumbull is such a typical mixed-use municipal development project that it is a little hard to understand the significance that commentators have given to the Court's decision. The issue before the Court was phrased very broadly by the majority: "We granted certiorari to determine whether a city's decision to take property for the purpose of economic development satisfies the 'public use' requirement of the Fifth Amendment." Thus, if the minority had prevailed, no municipality in America could condemn any property in order to carry out an "economic development" project. This would have the practical effect of making such projects virtually impossible.
It is noteworthy, however, that the Supreme Court held long ago that a governmental unit can use its eminent domain power to relieve "urban blight" (see Berman v. Parker, 348 U.S. 26, 1954). That principle was not challenged by any party in the Kelo case or by the Kelo dissenters (with the possible exception of Justice Thomas). So, had the dissenters been in the majority, a city would be powerless to carry out a redevelopment project in a neighborhood that is only depressed--like Fort Trumbull--but if it waited until the neighborhood is actually blighted, a redevelopment project would be permissible. Permissible, but probably too late. It is not obvious how this result would represent an advance for either individual rights or public policy.
MANY CRITICS of the Kelo decision have said that it authorizes seizing the property of one person merely to give it to another. Apart from any misunderstanding of Pfizer's role, this can only be because, once the NLDC acquires title to the Fort Trumbull property, it will be conveyed to a developer, Boston's Corcoran Jennison, to carry out the project. Some hostility to the Kelo decision seems to be based on the belief that Corcoran Jennison may profit from its work--an odd concern, one might have thought, to be expressed by conservatives. But New London's use of a private developer highlights an important point: there is no doubt that the city (or the NLDC) could use its eminent domain power in support of the Fort Trumbull project if it planned to retain ownership of the land and administer the project itself. If the project were publicly owned, no one could question that the associated condemnation proceedings would be in support of a "public use." But are the rights of Americans any less imperiled by condemnation in support of publicly-owned projects? And, as a matter of policy, if a city wants, for example, to create more housing, does it make any sense to force it to pursue the long-discredited practice of building public housing projects, rather than facilitating the use of private capital and private management to achieve the same end?
There have, in fact, been development projects in recent years that have strained the Fifth Amendment's "public use" requirement to near, and perhaps beyond, the breaking point. In a number of instances, cities have condemned thriving businesses to clear space for a company to erect its corporate headquarters. Such transactions--very different from anything at issue in Kelo--can perhaps be characterized as seizing property from one individual or business to give it to another.
Even here, though, it is possible to sympathize with the affected municipalities. Suppose a large company whose headquarters are located in an urban area needs more space--say, a whole city block. Lacking powers of eminent domain, it has only two choices. It can negotiate with each landowner on the block and try to buy all of the individual parcels. This, however, is often difficult or impossible; once it becomes known that the company is buying land for its corporate headquarters, any individual landowner can block the project by refusing to sell. Occasionally such "holdouts" are motivated by sentimental attachments, but usually they simply want to extort an unreasonable sum from the corporate buyer. (It is interesting that in her Kelo dissent, Justice O'Connor stressed that: "Petitioners are not hold-outs; they do not seek increased compensation. . . ." Yet the majority opinion notes that "[t]en of the parcels [at issue] are occupied by the owner or a family member; the other five are held as investment properties." If petitioners had won their case, the value of those investment properties would have skyrocketed.)
Faced with the difficulty of assembling an adequate real estate package at a reasonable cost, our hypothetical company has one obvious alternative: buy a cornfield remote from any city, and erect a "campus" rather than a high-rise building. Rather than accept the loss of a major employer and taxpayer under these circumstances, it is not surprising that some cities have chosen to cooperate in development projects that put the city's eminent domain power at the disposal of a private company.
Today most significant development projects involve multiple uses and cooperation between public and private entities. While such projects can no doubt be subject to various abuses, they can also be enormously successful and of great public benefit--to take just one example, consider the spectacular renovation of Baltimore's inner harbor. Moreover, two factors minimize the danger that economic development projects pose to individual rights. First, they are carried out in the glare of publicity. Nothing in local government attracts more scrutiny or more criticism than such projects. Second, the Fifth Amendment requires that anyone whose property is taken for a public use be fairly compensated, and in practice, most takings are compensated generously. Thus, while condemnation can undoubtedly impose hardship on individuals, it is unlikely to result in gross injustice.
The principal threats to property rights lie elsewhere. In particular, regulatory actions often severely limit what an owner can do with his property. Unlike urban development projects, such regulations are often adopted in forums that are remote from, and unresponsive to, the political process. And what an owner generally hopes for in such situations is to be covered by the Fifth Amendment's guarantee of compensation for the loss of use of his property, which is automatic in the case of a condemnation.
So it is a good thing that the Kelo decision has focused attention on the erosion of property rights; but, despite the critical consensus that has formed among conservatives, it is far from clear that the case was wrongly decided.
John Hinderaker is a contributor to the blog Power Line and a contributing writer to The Daily Standard.
How so?
Thus, if the minority had prevailed, no municipality in America could condemn any property in order to carry out an "economic development" project. This would have the practical effect of making such projects virtually impossible.
I don't see a problem with this. The notion that an "economic development" project a good thing on its face has no place in Constitutional law.
It is noteworthy, however, that the Supreme Court held long ago that a governmental unit can use its eminent domain power to relieve "urban blight" (see Berman v. Parker, 348 U.S. 26, 1954). That principle was not challenged by any party in the Kelo case or by the Kelo dissenters (with the possible exception of Justice Thomas).
Good for Justice Thomas -- it appears that he's the only one who understands the law in a consistent, rational manner. Supreme Court precedents notwithstanding, there is no legal basis in this country for a government to seize private property simply to eliminate "urban blight." There has to be a public health/safety issue at stake for this to occur. Simply "fixing the neighborhood" isn't a sufficient reason to seize private property.
Some hostility to the Kelo decision seems to be based on the belief that Corcoran Jennison may profit from its work--an odd concern, one might have thought, to be expressed by conservatives.
Absolute bullsh!t. The author deliberately hides behind the profit motive of the developer and falsely implies that "profit motive" is a conservative characteristic. It may be -- in a general sense -- but certainly not at the expense of an individual's property rights. If the author drove his car 10,000 miles every year and I decided that I could generate a lot of revenue with it by driving it 12,000 miles per year delivering pizza or Chinese food, would he acknowledge my right to have the government take it away from him and give it to me?
If the project were publicly owned, no one could question that the associated condemnation proceedings would be in support of a "public use." But are the rights of Americans any less imperiled by condemnation in support of publicly-owned projects? And, as a matter of policy, if a city wants, for example, to create more housing, does it make any sense to force it to pursue the long-discredited practice of building public housing projects, rather than facilitating the use of private capital and private management to achieve the same end?
Another bit of nonsense. The fact that the government is inherently incapable of putting the property to good use itself has nothing to do with whether or not it should be permitted to seize it on behalf of someone else. In this case, the author is suggesting that pneumonia is a good thing because it is preferable to tuberculosis -- as if a person only hase two options. The notion that getting neither disease is the best option of all seems to have been completely lost on him.
In a number of instances, cities have condemned thriving businesses to clear space for a company to erect its corporate headquarters. Such transactions--very different from anything at issue in Kelo--can perhaps be characterized as seizing property from one individual or business to give it to another.
Why is the case in question "very different" from the Kelo case? I see it as an illegitimate application of the same eminent domain powers.
Suppose a large company whose headquarters are located in an urban area needs more space--say, a whole city block. Lacking powers of eminent domain, it has only two choices. It can negotiate with each landowner on the block and try to buy all of the individual parcels. This, however, is often difficult or impossible . . .
Tough sh!t. That's the way it works. If I own a home and decide that I need to build an addition to my house, I have no right to design an addition that extends into my neighbor's yard -- and then demand that the municipal government condemn that property just so I can have a larger kitchen, additional bedroom, etc.
Faced with the difficulty of assembling an adequate real estate package at a reasonable cost, our hypothetical company has one obvious alternative: buy a cornfield remote from any city, and erect a "campus" rather than a high-rise building. Rather than accept the loss of a major employer and taxpayer under these circumstances, it is not surprising that some cities have chosen to cooperate in development projects that put the city's eminent domain power at the disposal of a private company.
Contrary to what this article suggest (and contrary to what many so-called "conservatives" may believe), there is absolutely nothing conservative about allowing employment figures and tax revenue considerations to trump established rights.
Moreover, two factors minimize the danger that economic development projects pose to individual rights. First, they are carried out in the glare of publicity.
That's no protection at all against an illegitimate abrogation of someone's individual rights. If anything, this could exacerbate the situation if "the public" is fully supportive of such a project. The basic premise of "individual rights" is that they are not subject to the whims of government, the public, etc.
Second, the Fifth Amendment requires that anyone whose property is taken for a public use be fairly compensated . . .
Thank you. I rest my case.
You mean that because there were middlemen, the property wasn't stolen to be given to a private business, and that makes it perfectly OK?
Yes wrong, and yes, not Pfizer's doing. When a company enters a region, or a new facility is built on vacant land, the nearby land is suddenly of much higher value. Local municipalities and local real estate interests try to capture these values for theselves. (See the real estate dealings in "Texas" by Michner; the agent was dealing blocks of land for his partners, but kept the cornor piece for himself. ) The solution must come down in favor of property rights, conservatives rightly value this more highly than any aligence to "corporations" which is really a democratic construct. Every citizen benefits by the right to own property. Communities governing bodies that misuse eminent domain will be voted out.
That's a very uniqe substitute for the old "cold dead hand"!!!! :)
There are some really lovely properties in the most valuable centers of many cities and towns which produce no tax revenues to speak of.
And their pews are half-empty on Sunday anyway.
I can think of quite a few properties I would love to get in on developing if we could just get the moribund old half-empty church out of the way.
Now we can.
And we will.
I would like to see right of center lawyers apply Kelo vs New London to property taken for public use (under 5th amendment protection) by Congress from the property stock county governments depend on for tax revenue. Payments in lieu of taxes to counties by Congress equate to just compensation for property taken from tax rolls by Congressional action for public use. Every taking protected by the 5th amendment should be treated equally as far as serving the public purpose and the crucial Constitutional role of local planning in promoting the general welfare are concerned.
Serving the public purpose and local planning are just as important to solving rural blight as urban blight. Kelo vs New London should require public use plans originate at the local level and serve the public purpose. Iconsistent revenue from an unreliable private sector economy is having a devastating impact on rural areas where Congress has taken large tracts of property from the county's property tax base under 5th amendment protection.
As long as local public use plans are administered by federal employees, serve the public purpose, protect the environment, and permit a wide variety of recreation opportunities for the public, Congress and the federal courts have little choice but to defer to local planning in the interest of serving the public purpose and promoting the general welfare.
I once read a tagline to the effect of "What's this 'take my guns out of my cold, dead hands' crap? I'm not planning on dying...I'll be taking their guns from their warm, dead hands." That was someone else's tagline, not mine (though I must say that I like it).
And ...
"Second, the Fifth Amendment requires that anyone whose property is taken for a public use be fairly compensated, and in practice, most takings are compensated generously. Thus, while condemnation can undoubtedly impose hardship on individuals, it is unlikely to result in gross injustice."
To force owners of private property to sell when they do not want to sell is something that should only be done under very rare circumstances as allowed by the Constitution. The only provision for forced taking of private property is in the fifth amendment and it has two very specific requirements: (1) public use, and (2) just compensation.
Public use means just that: public use. It does not mean private use that also benefits the public. When the property is turned over to a private enterprise to operate as private property, it is not public use.
Just compensation should be based on what a willing buyer and seller would agree to. However, if you take my private property that happens to be a residence worth $150K, but turn it into a commercial property with a "market" value of several million (just the portion that was my property mind you), then offering me $100K for the "condemned" property is hardly just compensation.
This was an egregious error by the SCOTUS regardless of whatever kind of logical gymnastics the author might contort himself to determine otherwise.
"This was an egregious error by the SCOTUS regardless of whatever kind of logical gymnastics the author might contort himself to determine otherwise."
Perhaps it was.
But there isn't really any effective mechanism for fixing it, is there?
This is just a terrible flaw in the US Constitutional structure as it now exists.
The "smart" posters on this thread are right. It is difficult once you cross the Rubicon of conflating public use with public benefit (as was done with the blight and Hawaii land oligopoly decisions), to then make a silk purse out of a pig's ear out of allowing some condemnations of a public benefit, but not others. It becomes something of a house of mirrors, with seeming apparent differences were none of substance actually exist.
Although we are now in the area of YOUR expertise (unlike the Catholic Church,) I will disagree with you.
I happen to like the majority's nod toward States' rights--and that's about all I could find here.
As is pointed out in other posts, the word "use" is now redefined by SCOTUS to mean "benefit." Well, usage may provide benefits--but benefits cannot exist without use.
IOW, they have mangled the language in their effort to affirm Statism. Scalia's concurrence is not surprising--he's rapidly becoming the "O'Connor Conservative" replacement--that is, when he personally doesn't like something, it's un-Constitutional. OTOH, when he DOES like something, it's wonnerful. (See his continuing abuse of the 14th in the pharma-maryjane case.)
Ah, well. I've bought more ammo.
How so? Becaseu the precedenets equate public use with public benefit. This essentially writes the words "public use" out of the 5th amendment. ANY taking of propery can arguably have some incidental public benefit. As Justice O'Conner pointed out, who of us can say that we are using our real property to its fullest public benefit? Thus, all public takings can be considered 'public use". But, if all takings are public use then the words "public use" in the fifth amendment has no meaning because the clause means the same thing whether the words "public use" are there or not. ONe of the first rules of Constitutional interpetation is that every word has meaning or it would not be there. Therefore, equating public use with public benefit is not sound constitutional practice.
That's what comes of relying on precedent instead of the clear wording of the Constitution. At some point, the Justices should have checked the map and seen how far off course precedent had drifted them.
Meanwhile, the gist of this article is, "Kelo wasn't so bad; it merely extends the taking of 'blighted' property to 'depressed' property. It merely extends taking power to autonomous government-created holding companies, who can in turn sell to private developers. Isn't that better than govt. housing projects?"
Well, the answer is no. Taking private property for govt. redistribution via housing projects was wrong. Extending these redistribution schemes to private corporations for profit is even more wrong. The precedents were a rotten foundation, but the SCOTUS chose to pile on more to the toppling edifice.
A Perforation Party, perhaps?
There are mechanisms for fixing it:
1. Statutory language by congress defining "public use" and "just compensation" to make forced transfer of property from one private owner to another private owner virtually impossible.
2. Replacement of at least 2 "living constitution" justices with strict constructionist justices and a suitable case to revisit this case.
3. Constitutional amendment to clarify the meaning of this seemingly plainly written provision within the 5th amendment.
"It is difficult once you cross the Rubicon of conflating public use with public benefit (as was done with the blight and Hawaii land oligopoly decisions), to then make a silk purse out of a pig's ear out of allowing some condemnations of a public benefit, but not others."
I agree.
I see the issue as more general and institutional.
It is difficult, once you have established the precedent that the Supreme Court is the final arbiter of outcomes of anything having to do with law in the United States, to find any way to stop the court from eventually issuing decisions that remove every fundamental issue - from the distinction between what is life and what isn't and who may kill and when, to the definition of private property and who can take it and what "taking" means - from the realm of democracy.
In fact, absent the Lincoln Civil War precedent of presidential nullification, I think that the Supreme Court has a perfect record of being obeyed.
My approach, therefore, is to make a silk purse out of this sow's ear of a decision by exploiting it to make money.
I hear what you are saying.
But wouldn't point 1 violate federalism concerns, by having Congress establish a national definition of what states and localities traditionally have decided? The Supreme Court might strike down the law as exceeding Congress' constitutional power, on federalist grounds.
Also, has there been any indication at all that the majority Republicans in Congress care about this issue?
Point 2 is certainly a possibility, but it requires a long, long wait during which a lot of people will be hurt. Beyond that, there's no guarantee what a justice will do once s/he gets up there.
The viability of this second strategy depends on who President Bush nominates to the court. It will be a "true colors" moment.
Point 3 requires the approval of 2/3rds of the House and Senate, and 3/4ths of the states. Neither party has expressed any interest in challenging this decision. Where shall the 2/3rds be found in either house of Congress to propose a Constitutional amendment and actually pass it?
This decision looks likely to stand.
I appreciate the reasoning. It will have to go deeper to get to the level the SCOTUS looks at. One question is where private property comes from in the first place and how the present owner got title. Another question is the nature of 'public'. Are we not, as private citizens, already part of the public, and would not our private uses then already have a public aspect? As to the sacred word of the Constitution, there were many unfortunate wordings in the product of the 1787 convention and there were many unresolved issues, one of which, the nature of which persons had the right of sufferage, is still not resolved. The two legs of the State are persons and property, acknowleged during the convention but not stated in the product, which has little to do with 'private'.
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