Term Paper on "Kelo Eminent Domain: Was the Kelo Decision"

Term Paper 10 pages (2707 words) Sources: 4

[EXCERPT] . . . .

Kelo

Eminent Domain: Was the Kelo Decision Fair?

In 1954 the Supreme Court ruled in Berman v. Parker that government's power of eminent domain could be used to seize property to tear down "blighted" areas. Unfortunately, according to Fund (2005), this effort was widely perceived as "Negro removal," as many cities tore down stable neighborhoods to make room for more lucrative developments.

In 2005, the Supreme Court added salt to the wounds of those who felt slighted by the Berman decision when it decided 5-4 to allow the government to take private property that isn't "blighted" if it can be justified in the name of economic development. This decision, made in the Kelo v. New London case, caused a great deal of controversy in the United States.

Is the Kelo decision a fair one? Many have vehemently opposed it, saying that it enables cities to take private property from one party and transfer it to another even if the property or neighborhood is not blighted. However, others believe that this decision is similar to prior decisions made over the years. This paper aims to determine what the impact of the decision is and whom it impacts most.

The Kelo Decision

According to the Fifth Amendment to the United States Constitution, just compensation must be paid when the power of eminent domain is used, and requires that the property be taken for "public use (Fund, 2005)." To be exact, the Fifth Amendment to the United States Constitution states that "private property [shall not] be taken for public use, without just compensation."

These requirements are often referred to as the takings clause. The U.S. Supreme Court has giventhe public use requirement an expansive interpretation and has allowed takings of private property for reconveyance to other private parties, or in some cases by private parties directly, on the theory that the new owners will use the land to generate greater tax revenues.

Throughout U.S. history, the definition of public use has expanded to include economic redevelopment projects that use eminent domain seizures to enable new commercial development or redevelopment that will benefit the community as a whole (Fund, 2005). The Supreme Court's decision in Kelo v. City of New London, 125 S. Ct. 2655 (2005) is one example of this. This case was highly controversial and widely publicized, making eminent domain a hot topic for American citizens.

In the case, private homeowners had refused to sell their properties to the city of New London, Connecticut, for destruction to allow a hotel, shopping and housing complex to be built by a private developer (Urbigkit, 2006). The U.S. Supreme Court ruled 5-4 that the city had the right to seize the property against the homeowner's will, even though the area was not "blighted."

The homeowners contended that this taking would violate the "public use" restriction in the Fifth Amendment's Takings Clause, but the Court ruled that the taking of the property was an allowable "public use" because "promoting economic development is a traditional and long accepted governmental function (Urbigkit, 2006)."

Reactions to the Decision

The Kelo case, a case questioning whether the government's eminent domain power could be used to help private parties take private homes, land, and businesses for private commercial development (McEowen, 2005) is a controversial one. The court approved the exercise of the power on behalf of a private party -- a decision largely criticized by individuals, politicians and organizations across the country.

While critics have every right to push Congress to enact legislation that will "protect" the property rights that they believe the Kelo decision took away, it is important to understand what exactly the Kelo decision did and did not do.

As a result of this case, the public largely criticized political leaders, saying that the Kelo case favors the rich at the expense of the poor (Fund, 2005). In addition, many argue that the developments often offer little benefit to the communities they promise to improve. Since the case, numerous states have implemented state legislation that restricts the state's own power of eminent domain. The Supreme Courts of Illinois, Michigan, Ohio and Georgia do not allow such takings under their state constitutions.

The majority of courts have held the fair market value of the condemned property to satisfy the "just compensation" requirement put forth by the Constitution (Fund, 2005). However, this determination is a judicial question, and it is usually determined in a trial by jury, on the basis of the parties' appraisal testimony. Some states (Connecticut, New York and Rhode Island) do not use juries. There, judges make condemnation awards. Many people argue that this violates personal property rights.

The Kelo decision is not the first to authorize the use of eminent domain solely for economic development (McEowen, 2005). For many years, the Court has allowed the use of eminent domain to facilitate agriculture and mining because of their importance to the states in question. In addition, the Court has supported the condemnation of trade secrets in order to promote economic competition in pesticide markets. However, eminent domain was not exercised in these cases because of some "precondemnation use" that inflicted "affirmative harm."

According to Justice Stevens, the author of the Kelo majority opinion:"[p]romoting economic development is a traditional and long accepted function of government" - surely an irrefutable proposition - and that there was "no principled way" of distinguishing what the petitioners characterized as economic development "from the other public purposes that we have recognized (McEowen, 2005)." Thus, Kelo does not expand the government's power to take property when some "harm" to society does not exist. The Court has authorized these types of takings for many years.

Many critics argue that Kelo authorizes condemnations where the only justification is a change in the way the property is used. For example, a stable neighborhood might be destroyed if a profitable development will generate higher tax revenues. This is actually an incorrect reading of the case. According to McEowen (2005): "While that possibility was raised at oral argument, the Court did not have to decide whether an isolated taking to produce a marginal increase in jobs or tax revenues satisfies the Constitution's "public use" requirement. The New London Redevelopment Project at issue in the case was designed to do more than simply achieve an "upgrade" in the use of one tract of land. Indeed, the project was also designed to generate a number of traditional "public uses," including a renovated marina, a pedestrian riverwalk, the site for a new U.S. Coast Guard museum (including public parking for the museum), an adjacent state park, as well as retail facilities."

Many critics also claim that the Kelo decision weakens the standard of review for determining whether a specific taking is for a public use (McEowen, 2005). The Court's 1984 decision in Hawaii Housing Authority v. Midkiff holds that the applicable standard of review is the same minimum rationality test the Court uses in reviewing substantive due process and equal protection challenges to economic regulation.

That standard did not change with the Kelo decision (McEowen, 2005). The Court recognized that condemnations must be carefully reviewed when they result in a private retransfer of property, or are not part of a major redevelopment plan. This protects property from being taken under the pretext of a public purpose, when the actual purpose is to benefit a private party. The Court suggested that, in the future, it would implement a higher standard of review in public use cases. Before the Kelo decision, the courts were simply required to ask whether the use of eminent domain was "rationally related to a conceivable purpose." After the Kelo decision, courts are required to examine whether the assumed public purpose is a "mere pretext" to justify a transfer driven by "impermissible favoritism to private parties." Thus, Kelo can be seen as somewhat of a victory for property rights advocates.

According to Fund (2005), Rep. John Conyers, the ranking Democrat on the House Judiciary Committee, said he felt "shocked" to be joining with conservatives in backing a bill to prevent federal funds from being used to make improvements on any lands seized for private development. He stated that NAACP, Operation PUSH and the Leadership Conference on Civil Rights all feel that "this court opinion makes it too easy for private property to be taken and [this is a practice] that has been used historically to target the poor, people of color and the elderly." The measure blocking federal funds passed the House. A companion resolution condemning the Kelo decision was also approved.

Many Democrats who previously dismissed conservative fears about activist judges are now taking their side when it comes to eminent domain. "In a way this ruling is about civil rights because it interferes with your right to own and keep your property," says Wilhelmina Leigh, a research analyst with the Joint Center for Political and Economic Studies in Washington (Fund, 2005). "It means you have to hope and trust in the goodness of other human beings that if… READ MORE

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