Eminent domain abuse hurts America: Column

Ten years ago this week, Justice Sandra Day O'Connor engaged in an exchange in the now infamous case of Kelo v. City of New London that would not only surprise her — you could tell by the expression on her face — but the rest of the listeners in the Court, as well:

Justice O'Connor: "For example, Motel 6 and the city thinks, well, if we had a Ritz-Carlton, we would have higher taxes. Now, is that okay?"

Attorney for City of New London: "Yes, Your Honor. That would be okay."

Four months later, five members of the Court endorsed the city's position in its landmark ruling. The nation was shocked. The Court held that the city could take the homes of Susette Kelo and her neighbors to hand over to a private developer in the mere hope that new development project could raise tax revenue and improve the economy.

Writing in her dissenting opinion, Justice O'Connor recalled her exchange with the city's attorney: "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."

The outrage that swept the country after the Court's decision quickly transformed into nationwide reform efforts, and the results in the past decade have been striking. In response to Kelo, 44 states changed their laws. Of those 44, eleven states changed their state constitutions. High courts in three of the six non-reform states increased protections against takings for a private use. Thus, a grand total of 47 states increased protections for property owners in some way since Kelo was handed down.

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Despite this progress, however, there is still no meaningful federal constitutional protection against eminent domain abuse. Accordingly, people in some states have strong property rights, some weak, and some none at all. For instance, the use of eminent domain in New York before and after Kelo sounds like a parody of eminent domain horror stories. Yet, the New York state legislature and its Court of Appeals refuse to do anything to rein in the power.

For example, since Kelo, New York courts have upheld the taking of private property for the expansion of private universities, for the Brooklyn Nets arena, and even allowed a developer's extortive demand for $800,000 in exchange for not condemning someone's property and when that owner refused, condemnation papers were filed the following day.

Like the First Amendment's protection for free speech and the Fourth Amendment's prohibition of unreasonable searches and seizures, the public use provision — requiring that land taken through eminent domain be put to a public use — is an explicit part of the Bill of Rights. The Supreme Court would not stand for First and Fourth Amendment rights not having meaningful levels of protection for all Americans regardless of the state where they happen to reside. The same should apply to property owners under the Fifth Amendment when they face abuse of the eminent domain power.

Although the justices have had several opportunities to reconsider questions of public use since the Kelo decision, the U.S. Supreme Court has rejected each in turn. Hopefully, at some point in the near future, the Court will take the opportunity to correct its monumental constitutional error.

There is one other important albeit sad lesson from the Kelo case. Ten years after the Court's decision, 15 years after the approval of the city's development plan, and over 17 years since it was first proposed, there has been no new construction in the Fort Trumbull neighborhood of New London where the condemnations occurred. The homes and businesses have long since been bulldozed. The once tight-knit, blue-collar neighborhood that was home to dozens of families and businesses is now a barren, overgrown field home only to feral cats and migratory birds. New London is the latest and most prominent of the string of government-directed urban renewal debacles stretching back more than 60 years.

That is the legacy of eminent domain abuse. When cities propose projects, they have a built-in incentive to make extravagant claims about the benefits that will result. Promises are easy to make, and if the promises were overblown or even outright lies, there are no penalties for the people who made the failed promises. There are consequences, however, for the people whose businesses are ruined and whose neighborhoods are torn apart.

In the wake of Kelo, Americans got a brief respite from this cycle of abuse. Politicians were afraid to use eminent domain, and, in the wake of the financial downturn, developers were not engaged in much development. Now, as the commercial real estate market picks up and politicians and business interests are once again tempted to abuse eminent domain, hopefully they and their constituents will remember the failure of the New London project and so many others like it. But that is a thin reed upon which to rest private property rights. Until the U.S. Supreme Court takes up this issue again, the reforms passed in the wake of Kelo must be preserved and strengthened. And, in places like New York, they must be implemented for the first time. The homes and small businesses of modest Americans hang in the balance.

Scott Bullock and Dana Berliner are attorneys with the Institute for Justice. Mr. Bullock argued the Kelo case before the U.S. Supreme Court and Ms. Berliner argued the case before the Connecticut Supreme Court.

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