Monday, July 12, 2010

Eminent domain and the Kelo backlash

When, five years ago, the Kelo v. City of New London decision was handed down by the U.S. Supreme Court, I thought, Well, that's the end of things for sure. When any government can systematically employ a ruse to legally confiscate citizens' homes, that's a sign that the Republic's days are numbered. I figured the Supreme Court had given a green light to every developer who salivated over some landowner's piece of property. I had followed the case closely since I couldn't think of many rulings that could be more significant than this one.

When a Supreme Court Justice himself claims that a ruling by his very Court is "unconstitutional," where do you go from there? What is one to think when the mighty "interpreters" of the Constitution admit to error by the Court? In Kelo Justice Clarence Thomas vehemently disagreed with the majority decision, as written by Justice John Paul Stevens. In his Dissent, Thomas wrote:

The Constitution’s text, in short, suggests that the Takings Clause authorizes the taking of property only if the public has a right to employ it, not if the public realizes any conceivable benefit from the taking. ... The Takings Clause is a prohibition, not a grant of power: The Constitution does not expressly grant the Federal Government the power to take property for any public purpose whatsoever. Instead, the Government may take property only when necessary and proper to the exercise of an expressly enumerated power. ... Something has gone seriously awry with this Court’s interpretation of the Constitution. Though citizens are safe from the government in their homes, the homes themselves are not. ... 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.

Justice Sandra Day O'Connor, another emphatic dissenter, expressed it this way:

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. ... 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. ... 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.

Here are excerpts from a view on the case offered by The Economist magazine, The worst decision of Justice Stevens:

[Justice Stevens'] opinion in Kelo v. New London (2005) was simply terrible. The case was about a private developer in New London, Connecticut, who wanted to raze some waterfront homes to build an office block and some posh apartments. The owners didn't want to sell. The city decided to force them to, calculating that the new development would create jobs and yield more taxes.

The city decided to use the power of "eminent domain." Under the Fifth amendment, the government may seize private property only in exceptional circumstances. The land seized must be put to “public use,” and “just compensation” must be paid. “Public use” has traditionally been taken to mean something like a public highway. Roads would obviously be much harder to build if a single homeowner could hold out forever or for excessive compensation. The government's powers of “eminent domain” have also been used to clean up blighted slums.

In this case, however, the area was not blighted, and the land was not going to be put to a public use, so the seizure was plainly unlawful. Amazingly, Justice Stevens – and a slim majority of the court – said it was fine. Rejecting “any literal requirement that condemned property be put into use for the ...public,” he said it was enough that the seizure should serve some vaguely defined “public purpose” — such as those new taxes. This massively expanded the government's power of eminent domain. ...

The ruling had two effects. First, it told local governments and their developer chums that working-class neighbourhoods were up for grabs. In the year after Kelo, the Institute for Justice, a group that defends property rights, counted 5,783 homes, businesses, churches and other properties condemned or threatened with eminent domain to the benefit of a private party. ...

But second, Kelo provoked a backlash. Most Americans are repelled by the idea that the state might take your house and give it to Donald Trump. (This is not rhetoric: New Jersey once tried, unsuccessfully, to seize someone's home because The Donald needed somewhere to park limousines outside one of his casinos.) Since the Kelo ruling, no fewer than 34 states have passed laws or constitutional amendments aimed at curbing the abuse of eminent domain. At the mid-term elections, voters in ten states approved measures curbing politicians' power to seize private property, all by wide margins.

Public revulsion against such seizures is visceral and nearly uniform: polls find between 85% and 95% of Americans are opposed to them. Political affiliation makes no difference. Republicans hate to see property rights violated and individuals bullied by the state. Democrats hate to see the state's coercive power hired out to big corporations, and worry, correctly, that the chief victims of eminent domain abuse will be the working class and ethnic minorities.

And the discerning writer William Norman Grigg offers his inimitable reflections on the notorious Kelo case:

Prior to the closing of the frontier in 1890, "Manifest Destiny" was the incantation used by the government when it gave itself permission to steal property it coveted. Today, the preferred conjuration is "eminent domain." The phrase "eminent domain" reflects an assumption Karl Marx would find congenial: government is the default owner of everything, and that private ownership, however extensive, is merely a contingent arrangement. ...

In his recent book, Government Pirates, former real estate developer Don Corace offers a concise description of how eminent domain operated prior to the onset of the current depression: "Arrogant and corrupt city and county officials – with near limitless legal budgets ... align themselves with well-heeled developers, political cronies, and major corporations to prey on the politically less powerful and disenfranchised, particularly minority communities." ...

In recent weeks, the Illinois state government has begun the legal process of seizing a huge amount of private property in and around Peotone, a small town in Will County, about forty miles south of Chicago. The land is being taken for the supposed purpose of building a third Chicago-area airport to complement O'Hare and Midway – a project that has been discussed, studied, and debated since 1968.

The proposed "South Suburban Airport" – which would be three times the size of O'Hare International – is impractical, unwanted, and unnecessary. It doesn't enjoy the support of any major airline or the approval of the FAA. ...

Expanding the small international airport in depressed Rockford would provide additional runway space at a fraction of what would be spent on a third Chicago-area airport. But this would deprive the state's patronage pimps of an opportunity to lavish plundered wealth on their favored constituents. ...

Four Peotone-area condemnation cases are already working their way through the court system. Unless the land owners are successful in getting the cases dismissed outright, they will face a lengthy, protracted legal struggle in which their opponent – the criminal junta dominating Springfield and Chicago – will use money extorted from them as taxes to underwrite the effort to drive them from their land. ...

There's every reason to believe that the Peotone Landgrab – if it's successful – would be a template for similar acts of official larceny wherever fertile tracts can be seized by the political class at depressed "fair market value."

Following are conclusions about the Kelo case offered by the Institute for Justice, the public interest law firm that represented the New London residents:

The U.S. Supreme Court should have ruled in favor of the Kelo homeowners and established a federal baseline that would protect home and business owners throughout the nation. Instead, it threw the issue to the states, completely abdicating its role as guardian of Americans’ rights under the U.S. Constitution.

Less than one week after the decision was handed down, the Institute for Justice launched a national campaign called “Hands Off My Home.” IJ was determined to focus the outrage over Kelo and turn it into meaningful reform. In the five years since the decision, there has been an unprecedented backlash against the Kelo ruling in terms of public opinion, citizen activism, legislative changes, state court decisions, and lessons learned from the New London case:

• Citizen activists defeated at least 44 projects that sought to abuse eminent domain for private gain in the five-year period since Kelo.
• Forty-three states improved their laws in response to Kelo, more than half of those providing strong protection against eminent domain abuse.
• Nine state high courts restricted the use of eminent domain for private development since Kelo while only one (New York) has so far refused to do so. ...

Across the country, property owners and activists have testified before crowded public hearings and state legislatures. They have formed groups and started websites. They stood tall on the steps of City Hall and held press conferences demanding officials keep their hands off their property. They have held neighborhood meetings, which have turned into citywide meetings. ...

Following the public outcry about Kelo, constitutional amendments and legislation at the federal, state and local levels were introduced in legislative bodies nationwide. In the five years since the decision, 43 states have passed either constitutional amendments or statutes that have reformed eminent domain law to better protect private property rights. ...

When the U.S. Supreme Court decided not to correctly interpret the U.S. Constitution, the state high courts began to fill that void. Three state supreme courts — Ohio, Oklahoma and South Dakota — explicitly rejected the Kelo decision. Ohio cities had frequently abused eminent domain and Oklahoma cities had occasionally abused the power, but we have heard of no new abuses in either state since their respective court decisions. Moreover, the New Jersey Supreme Court implicitly rejected Kelo while also curtailing the use of redevelopment and blight as an excuse for private development.

The Institute for Justice describes the dismal facts of what ultimately happened to the land in New London that was sought by the developer Pfizer, Inc.:

Part of the package of incentives offered to Pfizer to come to New London was the redevelopment of the neighboring Fort Trumbull area. Fort Trumbull was a working-class neighborhood. It housed approximately 75 homes, as well as a few smaller businesses and an abandoned Navy base.

The plan called for this area to be replaced by an upscale hotel, office buildings and new housing. Now, five years after the Kelo ruling, there has been no new construction on any of the land that was acquired in Fort Trumbull. After the decision, the remaining residents who had fought to save their homes, including Susette Kelo, were forced out. The Fort Trumbull site was completely razed. And it has remained empty ever since — brown, barren fields no longer home to people but rather to feral cats and migratory birds. After much controversy and many extensions of time given to the chosen developer, the city terminated the development agreement.

Now, ten years after its initial plan was approved, the city has commissioned another study to see what might work in the area. Ironically, given that a majority of the area used to be filled with owner-occupied and residential rental property, the city is considering a proposal to build some rental property on a portion of the project area. Ten years lost and more than $80 million in taxpayer money spent to perhaps one day build a lesser version of what used to exist on the peninsula.


Judicial vandalism

Eminent domain: Taking from Peter to give to Paul

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