The pain of eminent domain: 3/2/05

By Richard A. Epstein

Few Supreme Court cases in recent years have attracted more attention than Susette Kelo's battle against New London, Conn. New London, which claims it is a depressed city, wants to boot Kelo and her neighbors off their property to promote economic development.

Before they can do so, the Supreme Court has to answer a deceptively difficult question: What, if anything, does the Constitution require of a government when it takes property for a public use?

Most people think their homes are their castles - and hence, they are somewhat stunned to hear that their castles can be taken. But their feelings are somewhat assuaged if they think that the property will go to build a road or a military base - from which they would quickly conclude that the taking is for a public use, even if the road leads to nowhere and the military base is nonessential.

But for more than 150 years, such guidelines have been regarded as too narrow for government. Early cases have allowed the state to take or condemn property for focused public uses. Let's say, for example, that a mine is separated from a railroad spur by a tract of scrub land. The only way to move ore from mine to railroad is by aerial tramway over the scrub land. Without condemnation, the owner of the useless scrub can hold out to extract a small fortune from the mine owner. Hence the willingness of courts to come to the mine owner's aid.

Kelo's case is on the opposite side of the spectrum. She places a high subjective value on ownership of her home. Meanwhile, her house does not block the creation of any public project. Nor is any in the offing for years.

Kelo has become a cause celebre because in 1954, the Supreme Court cut local governments more slack than they deserve by holding that any slum clearance project was for a public use even if it meant removing some sound structures.

The Supreme Court's attitude was, and may still be, that state legislatures should determine what is a good plan and what is a bad plan. That is why Justice Sandra Day O'Connor has asked what standard should be used to "second guess" the legislature. The implicit subtext is that urban renewal projects are tough to understand and it is too bad if small people get unceremoniously dumped in the name of urban improvement. After all, if courts don't ask about the benefit from the public road, why ask about the benefit for urban renewal?

Fair question, for which there is, I think, a fair answer. We know roads are needed, and that individual landowners (like the owner of scrub land) could hold out for fortunes if condemnation were not allowed. But why do we "need" this particular urban renewal plan? It can't be because the lawyer for New London, Wesley Horton, trots out his master plan in oral argument and urges the court to assume that once Ms. Kelo and her neighbors are removed, this plan will materialize and tax revenues will increase. Truth is that the only pretty thing about this plan is his diagram. Otherwise, everything is in complete disarray for reasons that have nothing to do with Kelo's last stand. New London has spent $73 million in state money for environmental cleanup, infrastructure improvement, and the like, but at this time the city can't name a single project that will go on the nearly 90 acres it already owns, and can't imagine a single public use for the private homes it is so eager to condemn. And no sane lender would ever advance a dime to the city on the strength of optimistic tax projections that don't have a chance of being realized, given the downward spiral of this program since its inception.

Will at least five members of the Supreme Court be willing to open the doors to this Potemkin village? If they will just turn the doorknob, they might articulate a test that says, minimally, that before the city can adopt an urban renewal program, it has to present an integrated plan that requires inclusion of private homes. Just wanting to build fancy single-family homes doesn't cut it: Lots of developers do creative in-fill work all the time in Philadelphia and elsewhere, without condemnation powers. What is needed is evidence for a large plant or facility that cannot be located elsewhere. New London's lust for the Kelo home doesn't come within a country mile of meeting that overgenerous standard.

Richard A. Epstein is a professor of law at the University of Chicago, the Bedford Senior Fellow at Hoover Institution, and a commentator on the National Constitution Center's "Constitutional Minute."
e-mail: repstein@uchicago.edu.