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August 14th, 2015 — By — In Articles

It’s Been 10 Years Since Kelo v. City of New London. Where are We Now?

On June 23, 2005, the U.S. Supreme Court handed down one of the most controversial property rights decisions in recent history. The Court’s 5-4 decision holding that New London, CT could condemn 15 homes and transfer ownership to a private entity for the purpose of encouraging “economic development” sent a shockwave through the property rights landscape and ignited a decade’s worth of debates, court battles and legislative efforts in response to the ruling. With June 2015 marking the 10-year anniversary of Kelo v. City of New London, let’s take a look back at how we got to where we are today.

Looking Back: The Supreme Court’s Landmark Decision in Kelo v. City of New London
The case of Kelo v. City New London arose out of a redevelopment plan proposed by the city which centered around the local government’s power to use eminent domain to acquire private property for a public purpose. The City of New London, CT condemned and seized private residential property in a working-class neighborhood near the waterfront in order to convey the property to Pfizer for the construction of a $300 million research facility.

Dana Berliner, Litigation Director at the Institute for Justice and one of the attorneys who represented Ms. Kelo and her neighbors before the Supreme Court noted that the abuse of eminent domain power by governments for the benefit of “essentially private projects” had become rather routine and one which many felt there was “little point in fighting.”

However, Ms. Berliner, along with fellow IJ attorney Scott Bullock, Ms. Kelo and her neighbors mounted a spirited challenge that caught the attention of the media and the public. The case catapulted the debate to the forefront of the media and our daily discussions. Did the government really have the right to seize private property from its citizens for the benefit of and use by major corporations?

While the Fifth Amendment of the U.S. Constitution — “nor shall private property be taken for public use, without just compensation” — requires the payment of just compensation for the taking of private property using the power of eminent domain, the prospect that corporations in cooperation with local government could take private property for their private use was too much for many people to swallow.

Despite IJ’s valiant efforts, the Supreme Court ruled in favor of the City of New London. Citing the public’s interest in economic growth and the public benefits (such as job creation and increased tax revenue) that could flow from private development projects such as Pfizer’s proposed research facility, the Court held that the municipality did not violate the public use component of the Fifth Amendment in seeking to promote “economic development.”

Major Developments (or the Lack Thereof) Since Kelo v. City of New London
In the 10 years since Kelo, there have been several developments in the law of eminent domain as it relates to “economic development.” However, broadly speaking, Kelo remains the law of the land.

A Patchwork Quilt is No Way to Protect Constitutional Rights – As Ms. Berliner wrote recently, “states have filled the vacuum of federal constitutional protection” that remained following the Kelo decision. A total of 47 states have increased protections for private property owners against the abuse of eminent domain for private development. However, in three states (Arkansas, Massachusetts, and New York), as well as the District of Columbia and U.S. territories (such as Puerto Rico, Guam and the U.S. Virgin Islands), owners are left with little protections since Kelo. Despite the steps that 47 states have taken to increase protections, the fact remains that each state responded differently and what we have currently is a patchwork quilt of varied protections or lack thereof across the country. This adds to the complexity of the eminent domain law and landowners’ need for qualified and experienced counsel when threatened by the government’s use of eminent domain.

Supreme Court Refuses to Consider Kelo Challenges – While the Supreme Court has weighed in on a number of property rights cases that have sought review since Kelo, it has specifically refused to consider Kelo-like challenges to the public use component of the Fifth Amendment’s Takings Clause. In the 2013 case of Ilagan v. Ungacta, Owners’ Counsel of America (OCA) and other property rights advocates and legal scholars petitioned the Court to clarify a key aspect of its decision in Kelo — the general distinction between authorized “economic development” condemnations and unconstitutional “pretextual takings.” However, the Supreme Court declined to hear the case, leaving this important question unanswered. Read more about OCA’s involvement in Ilagan v. Ungacta and our efforts in other landmark property rights cases here and here.

Proposed Federal Legislation – In 2015, Congressman Jim Sensenbrenner (R-Wis.) re-introduced the Private Property Rights Protection Act (PPRPA) on the floor of the House of Representatives. Several iterations of PPRPA – which, in its current form, would impose economic sanctions and provide a private right of action against governments that exercise eminent domain for economic development – have received consideration in years past. Additionally, Congressman Tom Reed (R-NY) introduced the Defense of Property Rights Act this year in response to recent actions taken by government relating to Marcellus Shale exploration and drilling. Reed’s bill seeks to provide an option for compensation for property owners unfairly harmed by government action and to change the judicial process owners must take in seeking to remedy government regulation of their property. At this time, no federal bills seeking to protect private property rights since Kelo have become law. OCA continues to monitor and will weigh in on any Federal legislation seeking to protect the right of private property ownership.

Economic Development Qualifies as a Public Purpose Even if the Government Can Not Prove the Benefit Will Materialize – Despite the City’s Supreme Court Victory, the Project Never Came to Fruition. No buildings have been constructed on the site of the condemned homes, nor in the larger project area. In fact, the planned beneficiary of the proposed redevelopment project, Pfizer, not only pulled out of the project, the company pulled out of the city altogether. The Fort Trumbull neighborhood where Susette Kelo and her neighbors lived is now a vacant field home to weeds and feral cats. As law professor Ilya Somin wrote on the 10th anniversary of the Kelo decision, the Court held that virtually any potential public benefit qualifies as a public use, even if the government cannot prove that the anticipated benefit will ever materialize.

As these and other developments have demonstrated, despite widespread support for clarification or outright reversal of the Supreme Court’s decision, 10 years later, Kelo v. City of New London remains firmly entrenched in U.S. law of eminent domain.

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