The Big Question:
Can the government constitutionally claim homes and other private property for "public use," even if the government itself will not be using the property?
The Fifth Amendment and the "Public Use" Standard:
The Fifth Amendment concludes with the words: "...nor shall private property be taken for public use, without just compensation." This phrase is referred to as the "takings clause."
Background of the Case:
In 1998, the drug company Pfizer built a new plant in New London, Connecticut. To take advantage of additional business the plant might bring in, the City of New London attempted to purchase 115 houses in a nearby area in order to sell it to commercial developers. 15 residents resisted, so the city cited eminent domain and claimed the land.
The Supreme Court's Verdict:
In a 5-4 decision, the Supreme Court ruled in favor of the City of New London.
The Majority Ruling:
The Court's opinion, written by Justice John Paul Stevens and joined by justices Stephen Breyer, Ruth Bader Ginsburg, Anthony Kennedy, and David Souter, holds 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.
Justice Anthony Kennedy joined with Justice Stevens' majority ruling, but also wrote a separate concurrence emphasizing 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..." He then cited specific facts of the case that highlighted that the development plan was not written to benefit a specific party.
In a scathing dissent, Justice Sandra Day O'Connor (joined by Chief Justice Rehnquist and justices Antonin Scalia and Clarence Thomas) condemned the ruling as a fundamental attack on property rights. "To reason," she wrote, "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."
Justice Clarence Thomas joined Justice O'Connor's dissent, but argued even further. While Justice O'Connor's definition of "public use" could technically include private ownership (such as claiming land for the creation of a privately-owned hospital, for example), 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.
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. As Justice O'Connor wrote in her dissent:
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. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result.Although initial reaction to the decision was fierce, and even included an unjustifiable attempt to directly punish a Supreme Court justice for his ruling, legislative responses (outside of largely symbolic federal legislation) have been fairly weak. As Cato Institute scholar Tim Sandefur remarked 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."The long-term impact of the Kelo decision remains to be seen, but early indications are not promising. Eminent domain, already an easily-abused concept, has become even easier to abuse.