Stepping in front of the government bulldozer

Printed from:

A review of “The Grasping Hand: Kelo v. New London and the Limits of Eminent Domain” by Ilya Somin

In 2005, the United States Supreme Court, in a narrow 5-4 decision, ruled that the city of New London, Connecticut could use the power of eminent domain to transfer private property from one group of residents to another group of private individuals, all in the name of economic development.

In its majority opinion, the justices broadened the definition of public use outlined in the Fifth Amendment beyond the traditional view into a radical one that favored the city government’s efforts to attract a major corporation, attract young urban professionals and expand the tax base. The private property guardianship enshrined in the Constitution’s “takings clause” by James Madison was discarded by a court majority eager to recast the “public use” ideal in order to support public-private partnerships. In Kelo v. City of New London, the Court strongly implied that city planners, with the help of condemnation letters and eminent domain law, need only to promise that the economic benefits will outweigh the personal costs to sincere, dissenting holdouts. Public use intersected with private gain in a novel way.

Susette Kelo, an EMT and owner of the famed pink house at the center of the case, thought it wrong for the city to level a neighborhood for Pfizer, the drug giant. Pfizer had little interest in co-existing with longtime neighbors. A representative for Pfizer said the firm “wanted a nice place to operate and we don’t want to be surrounded by tenements.” Such is the force of big business working hand in glove with government.

The Constitution allowed government to use the power of eminent domain if it paid “just compensation” for public goods. But the traditional view of this power enabled governments with just cause to take private property for public purpose — to create roads, canals, parks, and rights of way. In Kelo, this view was found inferior to the need for marquee facilities, including a marina, a private park, a hotel, office space, and upscale housing to benefit private parties. To quote Justice Sandra Day O’Connor’s memorable dissenting opinion: “the specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carleton, any home with a shopping mall, or any farm with a factory.”

Few cases have sparked the outrage in the form of constraints by state legislatures against a federal judicial edict. The Kelo backlash fostered the early seedlings of 21st century libertarian and conservative revolt against judicial activism.  It would not be wrong to draw a straight line from the grassroots reaction to Kelo to the outcry against TARP corporate bailouts in 2009.  In the minds of conservatives, the decision was the unleashing of big government everyone feared.

The Court’s rebuke of settled public use doctrine riled Red State conservatives who wrote new laws to curb Kelo’s blunt instrument against private property rights. The decision also upset principled liberals, inviting the critique of the NAACP and the late Jane Jacobs, the famous critic of urban renewal.

“The seemingly local conflict that began in Fort Trumbull would ultimately trouble the conscience of an entire nation,” notes Ilya Somin in “The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain.” Somin, a legal scholar and a founder of the high-traffic Volokh Conspiracy blog, has written the ultimate legal handbook for our post-Kelo world.  He plants his flag firmly in the ground of the Madison’s narrow view of the takings clause. And he is well aware of the creeping definition of public use that arrived in earlier cases such as Poletown and Berman. But those cases still respected Madison’s intent. Kelo undermined that consensus.

As a plaintiff’s friend of the court, Somin’s heart is clearly on the side of Kelo and others such as the Cristafaro family, New Londoners who were pushed around by an earlier eminent domain case and owner Richard Beyer who wasn’t about to be pushed around for a first time. The New London Development Corporation was successful in forcing most homeowners to sell, primarily by means of  intimidation. In a quick sketch of the drama that is Kelo, the antagonists are easy to identify, and Somin’s narrative draws sympathy for the plaintiffs who had to endure rough tactics. The late night phone calls, the assorted harassment to sell and the moving of dirt piles to prevent one resident from moving his handicapped grand-daughter in her wheelchair were all part of the developers’ modus operandi.

But Somin is able to appreciate the other side of the argument as well, and this integrity makes his own position more secure and compelling. Rather than vilify, Somin, through his own interviews and research, elevates his opponents — believing that they were acting in good faith to improve New London’s economy, rather than serving as handmaidens for Pfizer’s ambitions. Wesley W. Horton, counsel for the city of New London who faced off against the homeowners attorneys from Institute for Justice before the Supreme Court, endorsed the book for its exhaustive treatment of the case. It is easy to see why.

Somin’s study is a perfect legalistic complement to the more journalistic retelling by Jeff Benedict in “Little Pink House.” As an intellectual forager, Somin introduces us to the variety of legal doctrines underlying Kelo v. New London. In assessing the majority argument, he finds the easy flaws in Justice John Paul Stevens’s deference to precedent and his face-value faith in the New London’s plan. He finds the concurring opinion of swing voter Justice Anthony Kennedy vague and an opening to a future challenge.

Yet his near-absolutist opposition to the broad view of public use leads Somin to both praise and raise questions about the eloquent and valuable dissents of Justices Sandra Day O’Connor and Clarence Thomas. Somin is in general agreement with O’Connor’s conclusion that “under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, as long as it might be upgraded – i.e. given to an owner who will use it in a way that the legislature deems more beneficial to the public – in the process.” However, Somin believes O’Connor should have placed more emphasis on an originalist reading and less emphasis on rationalizing two previous cases, Berman and Midikiff. (O’Connor was a key player in the 1984 Midikiff case.)

Turning to the vast literature on eminent domain, Somin praises the legal scholar and takings expert Richard Epstein for carefully circumscribing when private-to-private takings are justified. However, Somin parts company with Epstein, arguing that neither Epstein’s arguments on behalf of economic efficiency nor judicial discretion to address the holdout problem can prove superior to outright bans that protect individual liberty.

Somin is happy to find any port in a storm and thinks his ideological opponents, versed in the theory of the “Living Constitution,” could help revisit Kelo in the future. Since blight declarations inflict harm on vulnerable segments of society, living Constitutionalists should easily interpret the expansive public use doctrine in Kelo as counterproductive to equalitarian aims. But this outreach is not always reliable. Notably, the most ardent defender of the living Constitution theory on the court, Justice Stephen Breyer sided with the majority.

Until the turn of the 20th century, a narrow interpretation of public use held sway. But the current of the Progressive movement infused wayward thinking on a conservative, liberty-protective Constitution.  On their way to remaking society, Progressives frowned upon the economic rights of individuals. “The Progressives,” writes Somin with great care to distinguish one set of liberals from another, “were hostile to judicial protection for property rights because they believed it impeded effective economic planning and was a tool that the wealthy wielded to protect their economic interests at the expense of the poor.” This veil of standing up for the poor, however, has been pierced.

Expanding public use to include collective schemes today has the opposite effect as the public choice school of economics teaches us. Rather than help the poor, progressive planners, right up through New London, have established policies that have allowed the rich the game the system in partnership with government. Rent-seeking Pfizer, it was later found out, was pushing the process from day one. The New London newspaper, The Day, reported that the condemnations “were a condition of Pfizer’s move” to the city.

Ironically, defeat at the U.S. Supreme Court helped the plaintiff-losers, while the winners and their supporters, among them the smart-set urban planners, remain disappointed at state reform. Today, the contested land remains fallow as Pfizer (through its incompetence) barely maintains presence in New London. Susette Kelo and her neighbors were better compensated for their properties. Several justices (including Justice Stevens) have expressed regret at their decisions, and states across the fruited plain have enacted some half-measures to assure their mostly conservative constituents that Kelo “cannot happen here.”

But today, eminent domain remains an option for urban renewal. Governments’ thirst for revenue goes hand in hand with “public use” loosely defined. And the conceit that government can pick winners in economic development persists and enables the threat of eminent domain.

In October 2011, Justice Antonin Scalia, who had been one of the Kelo dissenters, called the decision one of the Court’s biggest “mistakes of political judgment, of estimating how far … it could stretch beyond the text of the Constitution without provoking overwhelming public criticism and resistance. “ The late justice declared as recently as 2014, “Kelo will not survive.” The current controversy over his replacement casts doubt on that prediction.

For now, Somin and the plaintiffs have the last word, “The grasping hand of eminent domain is far from shackled. But its iron fist has seen its legitimacy challenged … Kelo was far from the end of the struggle to confine the grasping hand to its proper, strictly limited, place. But by shattering the dominance of a misguided orthodoxy, it achieved a breakthrough that may in time be remembered as the end of the beginning.”

Frank Conte

Frank Conte

Frank Conte is director of communications at the Beacon Hill Institute at Suffolk University where he also serves as project manager for the annual State Competitiveness Report and Index. Read his past columns here.