Kelo v. City of New London , 545 U.S. 469 (2005) was a case decided by the Supreme Court of the United States involving the use of eminent domain to transfer land from one private owner to another to further economic development. The case arose from the condemnation by New London, Connecticut, of privately owned real property so that it could be used as part of a comprehensive redevelopment plan. The Court held in a 5–4 decision that the general benefits a community enjoyed from economic growth qualified such redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment.
History
The case was appealed from a decision by the Supreme Court of Connecticut in favor of the City of New London. The state supreme court held that the use of eminent domain for economic development did not violate the public use clauses of the state and federal constitutions. The court held that if an economic project creates new jobs, increases tax and other city revenues, and revitalizes a depressed urban area (even if not blighted), then the project qualifies as a public use. The court also ruled constitutional the government delegation of its eminent domain power to a private entity.
The United States Supreme Court granted certiorari to consider questions raised in Berman v. Parker, 348 U.S. 26 (1954) and later in Hawaii Housing Authority v. Midkiff , 467 U.S. 229 (1984) . Namely, whether a "public purpose" constitutes a "public use" for purposes of the Fifth Amendment's Taking Clause: "nor shall private property be taken for public use, without just compensation". Specifically, does the Fifth Amendment, applicable to the states through the Due Process Clause of the Fourteenth Amendment (see main article: Incorporation of the Bill of Rights), protect landowners from takings for economic development, rather than, as in Berman, for the elimination of slums and blight?
The decision was widely criticized. Many of the public viewed the outcome as a gross violation of property rights and as a misinterpretation of the Fifth Amendment, the consequence of which would be to benefit large corporations at the expense of individual homeowners and local communities. Some in the legal profession construe the public's outrage as being directed not at the interpretation of legal principles involved in the case, but at the broad moral principles of the general outcome. "Federal appeals court judge Richard Posner wrote that the political response to Kelo is "evidence of pragmatic soundness." Judicial action would be unnecessary, Posner suggested, because the political process could take care of the problem."
In November 2009, Pfizer, the beneficiary of the eminent domain action, announced that it would leave New London.
The case
The case in the Connecticut courts
The owners sued the city in Connecticut courts, arguing that the city had misused its eminent domain power. The power of eminent domain is limited by the Fifth and Fourteenth Amendments to the United States Constitution. The Fifth Amendment, which restricts the actions of the federal government, says in part that "private property be taken for public use, without just compensation"; under Section 1 of the Fourteenth Amendment, this limitation is also imposed on the actions of U.S. state and local governments. Kelo and the other appellants argued that economic development, the stated purpose of the taking and subsequent transfer of the land to the New London Development Corporation, did not qualify as public use. The Connecticut Supreme Court heard arguments on Dec. 2, 2002. The state court issued its decision (268 Conn. 1, SC16742) on March 9, 2004, siding with the city in a 4-3 decision, with the majority opinion authored by Justice Flemming L. Norcott, Jr., joined by Justices David M. Borden, Richard N. Palmer and Christine Vertefeuille. Justice Peter T. Zarella wrote the dissent, joined by Chief Justice William J. Sullivan and Justice Joette Katz.
Certiorari to the U.S. Supreme Court
This case was the first major eminent domain case heard at the Supreme Court since 1984. In that time, states and municipalities had slowly extended their use of eminent domain, frequently to include economic development purposes where applicable. In the Kelo case, there was an additional twist in that the development corporation was ostensibly a private entity; thus the plaintiffs argued that it was not constitutional for the government to take private property from one individual or corporation and give it to another, if the government was simply doing so because the repossession would put the property to a use that would generate higher tax revenue.
The first eminent domain case since Midkiff to reach the Supreme Court, Kelo became the focus of vigorous discussion and attracted numerous supporters on both sides. Some 40 amicus curiae briefs were filed in the case, 25 on behalf of the petitioners. Suzette Kelo's supporters ranged from the libertarian Institute for Justice (the lead lawyers) to the NAACP, AARP, the late Martin Luther King's Southern Christian Leadership Conference and South Jersey Legal Services. The latter groups signed an amicus brief arguing that eminent domain has often been used against politically weak communities with high concentrations of minorities and elderly.
Oral argument
The case was argued on February 22, 2005. The case was heard by only seven members of the court with Associate Justice Sandra Day O'Connor presiding, as Chief Justice William Rehnquist was recuperating from medical treatment at home and Associate Justice John Paul Stevens was delayed on his return to Washington from Florida; both absent Justices read the briefs and oral argument transcripts and participated in the case decision.
During oral arguments, several of the Justices asked questions that forecast their ultimate positions on the case. Justice Antonin Scalia, for example, suggested that a ruling in favor of the city would destroy "the distinction between private use and public use," asserting that a private use which provided merely incidental benefits to the state was "not enough to justify use of the condemnation power."
The Court's decision
Majority and concurring opinions
On June 23, 2005, the Supreme Court, in a 5–4 decision, ruled in favor of the City of New London. Justice John Paul Stevens wrote the majority opinion, joined by Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer. Justice Kennedy wrote a concurring opinion setting out a more detailed standard for judicial review of economic development takings than that found in Stevens's majority opinion. In so doing, Justice Kennedy contributed to the Court's trend of turning minimum scrutiny—the idea that government policy need only bear a rational relation to a legitimate government purpose—into a fact-based test.
In Hawaii Housing Authority v. Midkiff, 467 US 229 (1984), the Court had said that the government purpose under minimum scrutiny need only be "conceivable." In two 1996 cases the Court clarified that concept. In Romer v. Evans, 517 US 620, the Court said that the government purpose must be "independent and legitimate." And in U.S. v. Virginia, 518 U.S. 515, the Court said the government purpose "must be genuine, not hypothesized or invented post hoc in response to litigation." Thus, the Court made it clear that, in the scrutiny regime established in West Coast Hotel v. Parrish, 300 US 379 (1937), government purpose is a question of fact for the trier of fact.
Kennedy fleshed out this doctrine in his Kelo concurring opinion; he sets out a program of civil discovery in the context of a challenge to an assertion of government purpose. However, he does not explicitly limit these criteria to eminent domain, nor to minimum scrutiny, suggesting that they may be generalized to all health and welfare regulation in the scrutiny regime. Because Kennedy signed on to the Court's majority opinion, his concurrence is not binding on lower courts. He wrote:
A court confronted with a plausible accusation of impermissible favoritism to private parties should ….a careful and extensive inquiry into ‘whether, in fact, the development plan is of primary benefit to . . . the developer…, and private businesses which may eventually locate in the plan area…, and in that regard, only of incidental benefit to the city…’" Kennedy is also interested in facts of the chronology which show, with respect to government, awareness of…depressed economic condition and evidence corroborating the validity of this concern…, the substantial commitment of public funds…before most of the private beneficiaries were known…, evidence that reviewed a variety of development plans… chose a private developer from a group of applicants rather than picking out a particular transferee beforehand and… other private beneficiaries of the project …unknown because the…space proposed to be built not yet been rented….
Kelo v. City of New London did not establish entirely new law concerning eminent domain. Although the decision was controversial, it was not the first time “public use” had been interpreted by the Supreme Court as “public purpose.” In the majority opinion, Justice Stevens wrote the "Court long ago rejected any literal requirement that condemned property be put into use for the general public" (545 U.S. 469). Thus precedent played an i
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