things kevin hates

The Supreme Court has done some stupid things throughout the years–Dred Scott v. Sandford, anyone? Today I’d like to discuss a very recent, shockingly stupid decision, one which was attacked by a diverse coalition, everyone from the NAACP to the AARP to the Libertarian Party. That decision is Kelo v. New London. New London is a Connecticut city of some 26,000 people. Since the city was a rusted out dump (albeit one with lots of pretty old buildings), some folks in the city government decided that they should seize some old houses so that they could give it to a business which would redevelop it as a commercial property.

The Fifth Amendment says, in part, “nor shall private property be taken for public use without just compensation.” This is called eminent domain. The federal and state governments are allowed to take property for “public use[s],” such as building highways, government buildings, etc. But they must compensate the property owners. But in New London, the city was using the power of eminent domain to take land from private citizens and give it to corporations, not put it to a public use. Five Supreme Court justices decided that the additional tax revenue which the city expected to gain after the redevelopment counted as a “public use.” Sandra Day O’Connor’s dissent notes that a line must be drawn between public and private use, saying that the court would “give considerable deference to legislatures’ determinations about what governmental activities will advantage the public. But were the political branches the sole arbiters of the public-private distinction, the Public Use Clause would amount to little more than hortatory fluff.” And the majority decision turned the Public Use Clause into just that. The local, state, and federal governments could merely decree that they think something will be of benefit to the public, then give it to whomever they want. Aside from attacking the majority opinion’s perverse misunderstanding of the phrase “public use,” the dissent foresaw nasty repercussions:

“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.”

A little bit paranoid, perhaps, but the Kelo case would have been a huge benefit to Pfizer, which wanted to build a $300 million research facility on the site. As Justice John Paul Stevens’s majority opinion points out, very often any sort of eminent domain seizure will often have benefits for some private party even if it has a public use (regardless of how strictly we define “public use”), but the idea of taking away private property from homeowners and giving it to a multibillion dollar corporation for a “public purpose” is a bit fishy. It’s one thing to get all paranoid and start making slippery slope arguments, but this instance doesn’t require any sort of exaggeration or imagination to become outrageous, which is probably why it inspired more of a popular uproar than any Supreme Court decision of the past thirty years. The most similar precedents were Berman v. Parker and Hawaii Housing Authority v. Midkiff. In Berman the court allowed the seizure of a large group of properties because most (though not all) were horribly blighted, and in Midkiff it approved Hawaii’s decision to seize the property from an oligopoly of landowners who owned vast amounts of residential real estate, in an effort. Questionable or not, these clearly didn’t rise to the galling heights of the Kelo case–Berman was a guy whose department store got caught up in the crossfire of an attempt to tear down blocks upon blocks of blighted hosuing, and Midkiff ostensibly took property from big, bad trust companies and gave it to the people who had lived there for a long time in an attempt to lower property prices.* But Kelo was taking land and well-maintained houses from longtime property owners, the majority of whom lived in those houses themselves. Not really the ideal people to go picking on, but New London got away with it.

Well, sort of.

The humorously tragic postscript is that the property which was seized remains undeveloped, as noted in this article. Way to go, New London.

P.S. The good thing is that a vast majority of states moved to outlaw such uses of eminent domain power in the wake of this egregious decision.

P.P.S. The famed libertarian Republican Congressman from Texas, Ron Paul, wrote that “the Supreme Court should have refused to hear the Kelo case on the grounds that the 5th amendment does not apply to states.” Which is an argument that has its merits (and flaws), but the incorporation cat is out of the bag at this point, so there’s really no point in trying to get the cat back into the bag, and though I’ve never tried it, I’m guessing it would be rather difficult to get a cat into the bag, and I’d really rather not find out firsthand.

* Except it didn’t work out like that. When the former tenants acquired outright ownership of their properties, they were besieged by Japanese investors, who, buoyed by a strong yen and weak dollar, paid excellent money for some nice vacation homes. The Hawaiians then turned around and bought other houses, and the increased demand trickled down throughout Hawaii, jacking up prices throughout the state. Whoops. Click here to read more.