Kelo v. City of New London, 545 U.S. 469, 125 S. Ct. 2655; 162 L. Ed. 2d 439 (2005)
Facts—The City of New London, Connecticut, approved a development plan to revitalize its downtown and waterfront areas. It created a private nonprofit entity, the New London Development Corporation (NLDC), which subsequently sought to use the power of eminent domain to take private houses, including those of Susetto Kelo, who had lived in her house since 1997, and Wilhelmina Dery and her husband Charles, who had lived in their house for more than 60 years. These and other homes and properties were well-kept. A Connecticut Superior Court allowed some of the takings and disallowed others, but the Connecticut Supreme Court upheld them all.
Question—Consistent with the takings clause of the Fifth Amendment (applied to the states by the Fourteenth), can a city allow a private entity to use the power of eminent domain to condemn well-kept private houses to further economic development?
Decision—Yes, a takings meets the “public use” requirement if it serves a “public purpose.”
Reasons—J. Stevens (5–4). “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 . . . [but] a State may transfer property from one private party to another if future ‘use by the public’ is the purpose of the taking.” A public purpose needs to be genuine, but the Court has long “rejected any literal requirement that condemned property be put into use for the general public.” Instead, it has “embraced the broader and more natural interpretation of public use as ‘public purpose.’” Berman v. Parker (1954) allowed the condemnation of an unblighted store as part of a larger redevelopment plan; similarly, Hawaii Housing Authority v. Midkiff (1984), allowed the compensated transfer of property from one set of individuals to another in order to combat a land oligopoly. Ruckelshaus v. Monsanto Co. (1984), applied similar principles to the use of dates for pesticide applications. New London had carefully formulated a comprehensive plan designed to increase jobs and tax revenues. Moreover, “Promoting economic development is a traditional and long-accepted function of government.” This differs from a “one-to-one transfer of property” designed to benefit one party over another. Nor is it the Court’s business to decide whether there is a “reasonable certainty” that the plan’s benefits will actually materialize. States are, however, free to establish stricter standards than those required by the federal constitution.
J. Kennedy, concurring. The Court should apply rational-basis review, which does not mean that it should defer to obvious cases where the takings clause is used to benefit one party over another.
J. O’Connor, dissenting. The NLDC “is not elected by popular vote, and its directors and employees are privately appointed.” The Fifth Amendment requires both “public use” and “just compensation.” Cases transferring “private property to public ownership” (as for roads, hospitals, and military bases), and “private property to private parties,” like railroads serving as “common carriers” are relatively unproblematic, but this case is different. O’Connor would hold that “economic development takings” are unconstitutional. Although agreeing with Berman and Midkiff, this case goes much further and is not the result of direct legislative action. Although the majority opinion suggests that courts can oversee such takings, it provides no details as to how they should do so. Moreover, requiring that such takings only be used for upgrades is inadequate. “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” Instead “nearly all real property is susceptible to condemnation on the Court’s theory.”
J. Thomas, dissenting. The Court should return to the “original meaning” of the takings clause, which requires “public use” rather than simple “public purpose.” Public use was meant to give narrower scope than was the “general Welfare” clause. The common law provided nuisance laws to take care of cases involving uses of land that “adversely impacted the public welfare.” The public use clause “embodied the Framers’ understanding that property is a natural, fundamental right.” This case differs from Mill Acts, allowing for compensated flooding of upstream lands by grist mills, which were common carriers or “quasi-public entities.” The majority’s understanding of “public use” is “boundlessly broad and deferential” and “not susceptible of principled application.” This understanding largely emerged from dictum in early cases that was inconsistent with the language of the Fifth Amendment, to which the Court should return. In the meantime, “Though citizens are safe from the government in their homes, the homes themselves are not.” Moreover, “The question whether the State can take property using the power of eminent domain is . . . distinct from the question whether it can regulate property pursuant to the police power.” Berman resulted in the displacement of many minority communities. “When faced with a clash of constitutional principle and a line of unreasoned cases wholly divorced from the text, history, and structure of our founding document, we should not hesitate to resolve the tension in favor of the Constitution’s original meaning.”
Note: As of 2010, a sour economy had stymied the projected building boom in New London (Kelo’s home site was in a vacant lot), and numerous states had adopted provisions to provide greater protections for private property than those that the Supreme Court had found in this case.
