Testing Eminent Domain's Limits: The (New London CT) Day, 2/20/05

By Kate Moran

When the Kelo v. New London case heads to the U.S. Supreme Court on Tuesday, it will test whether the government can act as an all-powerful real estate broker that can seize property from one owner and give it to another to promote economic growth.

The Kelo case, which arose out of the city's efforts to redevelop the Fort Trumbull area, is an important milestone in determining the limits of government power under the Fifth Amendment to take property for “public use” as long as it provides “just compensation” to the original owner.

Governments have always been allowed to condemn property for public works projects such as the building of highways, railroads and schools, and in 1954 the high court allowed that the clearing of slums and blight also qualifies as a public purpose.

This year, the court will referee whether governments can take property not to clear blight but simply to incubate the kind of development that will promote a general public good by producing a greater share of tax revenue. A decision is expected by June.

The Institute for Justice, the firm representing the seven Fort Trumbull property owners who are challenging the use of eminent domain, will argue that the court should strike down economic development as a valid public purpose because it produces nebulous benefits for the public at large while giving a huge advantage to private developers.

The institute, a public interest law firm that has waged a nationwide battle to curtail the use of eminent domain, asserts that the court will bleed all meaning out of the Fifth Amendment's public use clause if it equates private enterprise, no matter how good for a community's economic health, with such pure public uses as the building of roads.

The institute argues that the Connecticut Supreme Court, which upheld the city's use of eminent domain in a March ruling, transformed private development into a public use “simply because of the ‘secondary' or ‘trickle-down' benefits a business may produce.”

Three members of that court dissented from the majority ruling, noting that the benefits promised by the Fort Trumbull project were too speculative to warrant the seizure of homes where some residents had lived for generations. Those justices urged the adoption of a “heightened scrutiny” test that would require cities to provide courts with proof that a proposed development had reasonable certainty of success.

The Institute for Justice hopes the Supreme Court will quash economic development as a valid public purpose, but as a second best option its attorneys are asking the court to require the sort of test recommended by the dissent in Connecticut.

Legal experts are skeptical that the high court, which has traditionally shown deference to the way legislative bodies define public use, will disallow economic development condemnations entirely. Yet they are waiting to see where the court might place some checks on the power of governments.

“It's very hard for the courts to start telling the legislative branches what is and is not in the public interest,” said Vicki Been, the director of the Furman Center for Real Estate and Urban Policy at New York University. “The Constitution, of course, says you can't take property except for public use. Well, is public use slum clearance, but not redevelopment of the slums that are cleared? How do you start drawing those lines?”

Attorneys for the New London Development Corp. will argue that decades of federal precedent support the sort of taking the agency is attempting at Fort Trumbull. The quasi-public agency asserts in its brief that courts have historically respected the way legislatures use eminent domain because judges do not have the professional capacity to evaluate economic development projects.

As they tell it, judicial checks on the use of eminent domain would handicap cities, with their dense neighborhoods and paucity of undeveloped land, in attracting the corporate campuses and industrial parks that now flock to the suburbs. In a friend-of-the-court brief filed on behalf of the NLDC, the Connecticut Conference of Municipalities argues that eminent domain helps to keep new development focused in the urban centers and prevents sprawl into the suburbs and the countryside.

Attorneys for the NLDC are urging the court to reject the “reasonable certainty” test advocated by the Institute for Justice that would require cities to have evidence of a project's viability, such as a contract with a developer, before they condemn private property. They say such a test would trap cities between impossible alternatives.

“On the one hand, the (institute) notes the constitutional bar against takings designed solely to benefit a private party,” they say in their brief. “On the other hand, (it) wants this Court to bar any plan unless it states who will develop the condemned land and for what specific uses.”

The Institute for Justice is pushing for a federal limitation on the ability of governments to use eminent domain because of what its attorneys call chaos and inconsistency in the state courts on the issue. Shortly after the Connecticut court upheld the use of eminent domain last spring, the institutes notes, Michigan's court overturned a 1981 decision that was among the first anywhere to allow the condemnation of private property for economic development.

The NLDC attorneys counter that the Michigan case was based solely on that state's constitution. To impose a federal limitation on condemnations would, they say, impinge on the federalist system that allows states to act with some degree of independence.

“It would be incongruous, to say the least, to have the federal courts micromanage state and local development projects,” their brief says. “Not only are judges professionally ill-suited to such a role, but that sort of heavy-handed intrusion into state and local affairs does not comport with our federalist system of government.”

David Barron, a professor at Harvard Law School, declined to guess where the Supreme Court might come down on the issue. He noted, however, that the Fort Trumbull redevelopment plan is not a simple case of a government seizing private property to hand it to a Wal-Mart or other big-box developer that do would little more for the public good other than increase the tax base. Instead, the plan was “a vision for an entire part of the city being used in a different way,” a re-imagining of old land-use patterns that would help open the waterfront to the general public.

“It's a very good plan, but it is also a long-range plan, and it is also speculative. There are so many features to the kind of taking that New London engaged in that there's a fair amount of room for the court to craft some limitations on the public use requirement,” Barron said. “If the court is interested in trying to develop some limitations to constrain the government's ability to take property and involve private developers in building it out, the rich factual setting of the New London land use plan provides them with a lot of different routes for establishing those limits. What I bet against is the court coming down with a bright-line rule one way or the other.”

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