In recent history, there has been no greater example of eminent domain abuse–where the taking of private property was transferred from one private entity to that of another for the purpose of economic development–than the court case of Kelo vs. New London. This case is cited regularly in journals, newspapers, magazines and niche publications that are talking about private property rights and eminent domain issues.
Since the unprecedented U.S. Supreme Court ruling in 2005, the name Kelo is so common (in some circles) that the name itself has become the go-to word to define eminent domain abuse; much like paper kerchiefs are called Kleenex® and a Machiavelli describes an unscrupulous and unethical person.
Knowing about the Kelo vs. New London case, understanding the implications the U.S. Supreme Court’s ruling on the case, and studying the aftermath of the Kelo decision is essential when discussing property rights and eminent domain.
Kelo vs. New London
In 1997, Susette Kelo purchased a pink cottage that overlooked the Thames River. Her closest neighbors included the Dery family who had lived in Fort Trumbull since 1895. Matt Dery’s mother, who was born in her house in 1918 and had never resided anywhere else, lived next door. The Institute for Justice that defended Ms. Kelo, described the neighborhood and its value to the residents.
“The richness and vibrancy of this neighborhood reflected the American ideal of community and the dream of homeownership.”
The following is the condensed tale of what happened to this small American community that had settled in the outskirts of New London, Connecticut.
In 1998, Pfizer, a mega drug company, built a plant in New London. Wanting to take advantage of a potential economic windfall, the City of New London targeted a nearby 90 acre residential development and offered to purchase 115 homes. Susette Kelo and nine of her neighbors refused to sell so the city claimed eminent domain rights and took the land. According to the Institute for Justice,
“The City handed over its power of eminent domain—the ability to take private property for public use—to the New London Development Corporation (NLDC), a private body, to take the entire neighborhood for private development.”
It appeared as though the City had abdicated its 5th Amendment duty of protecting its citizens’ property rights. The elected officials seized Ms. Kelo’s et al. property by citing its power of eminent domain and without any apparent constitutional authority transferred the property over to another private entity for the unprecedented purpose of “economic development.” In that moment, the definition of “public use” came under severe scrutiny.
Charles Cohen, an author for the Harvard Journal of Law and Public Policy summarized the NLDC development plans.
“Plans called for developers to construct a mixed-use complex containing homes, a hotel, a marina, restaurants, shops, office space, and other amenities.”
U.S. Supreme Court Ruling
In 2005, the case reached the U.S. Supreme Court. The Supreme Court Justices in this case were: Justices John Paul Stevens, Stephen Breyer, Ruth Bader Ginsburg, Anthony Kennedy, David Souter, Sandra Day O’Connor, Antonin Scalia, Clarence Thomas and Chief Justice Rehnquist. In a 5-4 decision, the Supreme Court ruled in favor of the City of New London. The Institute for Justice, who defended Susette Kelo stated
“…in one of the most controversial rulings in its history, [the court] held that economic development was a “public use” under the Fifth Amendment to the U.S. Constitution.”
The Majority Ruling came from Justices John Paul Stevens, Stephen Breyer, Ruth Bader Ginsburg, Anthony Kennedy, and David Souter. In the Court’s opinion, the Majority held that
…”a city may claim private property under the Fifth Amendment so long as it does so as part of a clear economic development plan intended to benefit the community as a whole.”
In addition, Justice Kennedy along with Justice Stevens wrote a separate concurrence that stated that a
“…court confronted with the plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit…”
Those Justices in dissent were Sandra Day O’Connor, Antonin Scalia, Clarence Thomas and Chief Justice Rehnquist. A now poignant statement by Justice O’Connor sums up the implications of the decision.
“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.
Justice O’Connor along with Chief Justice Rehnquist and Justices Scalia and Thomas judged the decision as a fundamental attack on property rights. In her dissent she wrote
“To reason, that … incidental public benefits … 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 Fifth Amendment.”1
Additionally, Justice Thomas “argued that any plan to forcibly transfer property from one private owner to another under eminent domain violates the Fifth Amendment’s “public use” standard.”2
The Aftermath of the Kelo Decision
The U.S. Supreme Court ruling made national news. Soon after the court’s decision, almost every State in America was prompted to pass amendments to their State Constitution that would legislatively protect against eminent domain abuses. Several State Supreme Courts either rejected the Kelo decision outright or clarified the definition of eminent domain and blight.
“The Supreme Court’s 5-4 decision against Kelo and her neighbors sparked a nation-wide backlash against eminent domain abuse, leading eight state supreme courts and 43 state legislatures to strengthen protections for property rights.”3
Watch video Kelo–Five Years Later
Despite the attempts made by States to run significant interference with eminent domain abuse, Tom Head, civil liberties author, points out that the effects to protect property were minimal. In a summary of the Kelo case, Head shares his opinion on the impact of the ruling.
“The Kelo ruling was one of the most unpopular in U.S. history. Both liberals and conservatives were shocked at a ruling that essentially grants wealthy corporations indirect eminent domain powers, and threatens the property rights of every American citizen–especially American citizens who lack the resources to shape local policy.”
“Although initial reaction to the decision was fierce, …, legislative responses (outside of largely symbolic federal legislation) have been fairly weak.”4
Head goes on to quote Tim Sandefur, a Cato Institute scholar, who stated in a June 2006 editorial:
“Of the 16 states that have acted since Kelo was decided, only six — South Dakota, Georgia, Indiana, Pennsylvania, Minnesota and Florida — have imposed meaningful restraints on government power. Other states have either done nothing or have enacted laws so riddled with loopholes that they allow government to seize whatever property they consider “blighted.”
All across the United States the “taking” of private land by big government, big business and callous developers is not just happening under the auspices of “economic development.” Elected officials, Federal and State regulators, influential environmental groups, and social activists are directly and indirectly using the power of eminent domain to “take” land or modify its use under the auspices of ecological biodiversity, social injustice, and public health. Eminent domain abuse is nothing new but when it happens, the public must put pressure on their elected officials to act swiftly to curtail any further erosion of the 5th amendment.
The Fort Trumbull project was never realized.
“After spending close to 80 million in taxpayer money, there has been no new construction whatsoever and the neighborhood is now a barren field. In 2009, Pfizer, the linchpin of the disastrous economic development plan, announced that it was leaving New London for good, just as its tax breaks are set to expire.”
Kelo was a great watershed moment that led to some much needed corrections. There are legitimate reasons for eminent domain, but for profit should not be one except under sever circumstances.
Frederic Bastiat in his 1848 treatise, The Law, deemed anyone or entity who takes anyone’s property without due process is considered a plunderer. Granted the Kelo case was due process, but not for the greater good of the community served.