Kelo And Accountability

In the midst of economic contraction unseen since the Great Depression, it is unsurprising that the economic developments plans of the City of New London now lay in ruins. Opponents of a government that is accountable to voters are rejoicing in this opportunity to again criticize the Supreme Court's decision in Kelo. Here is the WSJ Editorial Page:

The Supreme Court's 2005 decision in Kelo v. City of New London stands as one of the worst in recent years, handing local governments carte blanche to seize private property in the name of economic development. Now, four years after that decision gave Susette Kelo's land to private developers for a project including a hotel and offices intended to enhance Pfizer Inc.'s nearby corporate facility, the pharmaceutical giant has announced it will close its research and development headquarters in New London, Connecticut.

The aftermath of Kelo is the latest example of the futility of using eminent domain as corporate welfare. [. . .] That's especially galling because the five Supreme Court Justices cited the development plan as a major factor in rationalizing their Kelo decision. Justice Anthony Kennedy called the plan "comprehensive," while Justice John Paul Stevens insisted that "The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue." So much for that.

(Emphasis supplied.) The demand for judicial activism by "unelected judges" to overturn the governing decisions of local ELECTED officials is, of course, ironic and hypocritical. But more importantly, it is bad Constitutional law. Let's revisit what the Kelo decision held:

[W]hen this Court began applying the Fifth Amendment to the States at the close of the 19th century, it embraced the broader and more natural interpretation of public use as “public purpose.” See, e.g., Fallbrook Irrigation Dist. v. Bradley, 164 U.S. 112, 158—164 (1896). Thus, in a case upholding a mining company’s use of an aerial bucket line to transport ore over property it did not own, Justice Holmes’ opinion for the Court stressed “the inadequacy of use by the general public as a universal test.” Strickley v. Highland Boy Gold Mining Co., 200 U.S. 527, 531 (1906).9 We have repeatedly and consistently rejected that narrow test ever since.10

The disposition of this case therefore turns on the question whether the City’s development plan serves a “public purpose.” Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field.

(Emphasis supplied.) Quoting the 1954 Berman case, the Kelo Court repeated:

“We do not sit to determine whether a particular housing project is or is not desirable. The concept of the public welfare is broad and inclusive… . The values it represents are spiritual as well as physical, aesthetic as well as monetary. .” Id., at 33.

(Emphasis supplied.) Deference to the elected local governing body is decried now by "conservatives." And yet, as the Kelo Court stated, it is settled Constitutional law:

Viewed as a whole, our jurisprudence has recognized that the needs of society have varied between different parts of the Nation, just as they have evolved over time in response to changed circumstances. Our earliest cases in particular embodied a strong theme of federalism, emphasizing the “great respect” that we owe to state legislatures and state courts in discerning local public needs. [Cite ommitted.] For more than a century, our public use jurisprudence has wisely eschewed rigid formulas and intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justify the use of the takings power.

(Emphasis supplied.) This is as it should be. Indeed, even the Wall Street Journal is compelled to recognize that the Kelo decision has led to accountability for elected officials:

Kelo's silver lining has been that it transformed eminent domain from an arcane government power into a major concern of voters who suddenly wonder if their own homes are at risk. According to the Institute for Justice, which represented Susette Kelo, 43 states have since passed laws that place limits and safeguards on eminent domain, giving property owners greater security in their homes. State courts have also held local development projects to a higher standard than what prevailed against the condemned neighborhood in New London.

(Emphasis supplied.) This is how a representative democracy is designed to function. Instead of now recognizing that of course the Kelo Court got it right, "conservatives" will continue to potshot the decision. Cuz that's what they do.

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    Amazing how close Kelo came to going (5.00 / 1) (#1)
    by andgarden on Wed Nov 11, 2009 at 12:37:27 PM EST
    the other way.

    Yeah and (5.00 / 2) (#7)
    by Wile ECoyote on Wed Nov 11, 2009 at 01:08:46 PM EST
    instead of weeds and promises, people would have houses and property.

    We elect our representatives (5.00 / 1) (#10)
    by Big Tent Democrat on Wed Nov 11, 2009 at 01:13:54 PM EST
    For example, even though the Iraq Debacle was disastrous and obviously so to anyone with a thinking brain at the time, it would be unthinkable to have the Supreme Court find some legal pretext for stopping the federal government from engaging in that debacle, even if doing so would have saved over a trillion dollars and tens of thousands of lives, American and Iraqi.

    I'll give you one thing (none / 0) (#12)
    by Wile ECoyote on Wed Nov 11, 2009 at 01:18:25 PM EST
    though, People had gotten slack about thinking the gov't really had no interest in their property.  I bought it, it is mine.  The Kelo decision woke people up to the fact, that some gov't think of personal property as community property in holding.  Especially if corporations throw some cash around.

    Ever read the story about the (none / 0) (#28)
    by Inspector Gadget on Wed Nov 11, 2009 at 02:55:16 PM EST
    Texas Rangers stadium?

    Big and (none / 0) (#38)
    by Wile ECoyote on Wed Nov 11, 2009 at 03:56:54 PM EST
    round?  Built with taxpayer money?  

    How about the land it is (none / 0) (#41)
    by Inspector Gadget on Wed Nov 11, 2009 at 04:14:15 PM EST
    built on? Who owned it and how were they convinced to move?

    The issue was decided when the 5th was (none / 0) (#21)
    by jpe on Wed Nov 11, 2009 at 02:14:33 PM EST
    incorporated against the states.  A supermajority has already settled the matter, and local representatives have no authority to override the constitution.

    Or: your policy arguments re: the desireability of local control beg the question.  You can't reach the policy questions before disposing of the constitutional question.


    There is no policy question (none / 0) (#45)
    by Big Tent Democrat on Wed Nov 11, 2009 at 08:27:42 PM EST
    in that the Constitutional question dictates it.

    You can adopt the Constitution in Exile view on this as you seem to. But that is not what the constitution intended nor what the Supreme consistently ruled for over 100 years.


    This analogy is awful (none / 0) (#36)
    by Dadler on Wed Nov 11, 2009 at 03:42:41 PM EST
    The money I couldn't give a sh*t about, it is worthless paper anyway.  But the mass murder we committed? I'd easily have our country suffer under a lousy, REVERSIBLE decision by the SCOTUS, than have those IRREVERSIBLE murders on our hands.

    Sorry, I don't get your logic or your humanity on this one.


    Redevelopment agencies (5.00 / 1) (#8)
    by MKS on Wed Nov 11, 2009 at 01:09:59 PM EST
    are important to local economies.  Beat-up, crime-ridden downtowns have been wonderfully revitalized.  

    And, abuses should be rare because the decisions are usually all made at the local level.  To stop a City council, you only need a few thousand votes.... A couple hundred at a rally, and two or three thousand signatures on a petition, will get a lot of attention.

    You want the land? Pay for it. (none / 0) (#13)
    by JPB on Wed Nov 11, 2009 at 01:23:53 PM EST
    If I get a cop to take your stuff and I put it to better use, is that fair?

    Of course not.

    But if we get the government take land from these poor, criminally infested inner-city folks who either don't or can't vote (thanks in part to felon disenfranchisement laws) and relocated them, their problems be damned, at least we have a shiny new downtown!

    If you want to make a city better, that's great. But don't get the government to do your dirty work for you when it comes time to actually pay for what you're doing. That abuse is "rare" is hardly solace for those whose land was re-appropriated to more influential, richer people.

    I am surprised that so many people who deride powerful "special interests" and "corporations" can look at Kelo and think it's any different from corporate welfare.


    Yes, it is fair (none / 0) (#15)
    by MKS on Wed Nov 11, 2009 at 01:38:21 PM EST
    You assume the poor actually own the properties being taken--that is usually not the case.

    And, the owners are paid fair market value for their properties, and, here in California, relocation assistance on top of that.....

    Without governmental involvement, you generally can't "make a city better."  In order to build nice shops with residences on top--the new trend--one lone hold-out who will not sell will torpedo the whole project.

    In San Francisco, any new residential development, and there are (or were) new condo high-rises going up, must set aside a certain percentage of units as low income housing.  The City of San Francisco issues subsidies to the lower income folks, so that the developer still gets fair market value.  The criticism is that the "low income" folks who benefit are in reality recent college graduates just starting out....

    There will always be those who oppose city involvement in planning, zoning and development.  Take a look at gawd-awful Houston--no zoning at all.

    To do something as complicated as revitalizing a downtown, you need governmental help....Otherwise it won't get done.

    Your concern about the poor chiefly helps slumlords....The poor don't own much.....


    Trust me, I'm aware of who owns the places (none / 0) (#22)
    by JPB on Wed Nov 11, 2009 at 02:17:54 PM EST
    But sometimes, poor--tho certainly not impoverished--people own homes in areas with depressed real estate value. Sometimes, that's all that's left to pass down in the family. Without reasonable compensation--and let's not kid ourselves about most governments' views of "just compensation"--that's the last bit of land may be all they have.

    I've seen neighborhoods "flipped" in my hometown on several occasions, moving the blacks out of one area and inducing white flight in another. But at least the owners were offered apparent market value for their property. Those depressed values in the new areas may, in fact, promote home ownership among the working poor as those who were bought out may buy again. As I intimated above, I'm not against "revitalization" as they so often call it.

    And yes, our downtown looks great now. And as far as I know, it was done the right way.

    But I've also seen government condemn private land and sell it well-below market price to private investors. That is the wrong way. This isn't about single hold outs that stand in the way of highways and infrastructure--it's about companies using government agents for private gain. No one is arguing that eminent domain shouldn't be a power of the government--it's that government shouldn't be used by one party to subvert the rights of another.

    If the developers can make a profit, they can buy the land outright and don't need a city to steal it for them. I've seen it done, and done well.


    And, redevelopment funds (none / 0) (#16)
    by MKS on Wed Nov 11, 2009 at 01:42:32 PM EST
    can be used to help the poor.

    The government generally "takes" the property as a last resort, and tries to negotiates sales from the owners--who are typically wealthy themsevles.  The government then sells the property to a developer under an agreement that requires the developer to do several things....Cities usually do not go into the red under such agreements.....

    There is also increased tax money received from the new businesses....That money can be used to do a lot of things...including helping the poor.


    In New London (none / 0) (#24)
    by me only on Wed Nov 11, 2009 at 02:47:36 PM EST
    Susanne(sp?) Kelo was paid $450,000 for a house that was appraised closer to $100,000 (IIRC).  The government did pay for it.  That really isn't the issue.

    New London spent $80 million for this development in order to increase tax revenue.  Except they got nothing and lost tax revenue.


    It is still amazing (5.00 / 1) (#18)
    by Steve M on Wed Nov 11, 2009 at 01:58:08 PM EST
    how people act as if the Kelo decision invented eminent domain out of thin air.

    The same people who are advocates of a limited federal government in every other case nevertheless want federal judges to create a new right to override state and local judgments about land use - which is probably the quintessential local issue, from a historical perspective.

    States are perfectly free to have laws or constitutional provisions mandating that there shall be no eminent domain for any reason whatsoever, if that's what the voters want.  Or they can pass a law against condemnations for economic development purposes, if they want.  But it's not a federal issue.

    i think (5.00 / 1) (#39)
    by cpinva on Wed Nov 11, 2009 at 04:07:26 PM EST
    It is still amazing how people act as if the Kelo decision invented eminent domain out of thin air.

    you've seriously misunderstood the reaction. it wasn't to the concept of eminent domain itself, but to how that concept has been historically viewed, by most people.

    most people (and i was one of them) accepted eminent domain for the purpose of "public use", ie: a park, a public building, etc., not for the private use and profit of developers.

    apparently, many state legislators were of the same opinion, hence the newly enacted laws, curbing the eminent domain powers in 43 states, subsequent to kelo. since the majority of those state legislators are attorneys, i don't feel too bad about my lack of knowledge on the subject.


    Well (none / 0) (#42)
    by Steve M on Wed Nov 11, 2009 at 04:19:09 PM EST
    as the Kelo decision documents, the use of eminent domain where the direct benefit flows to private corporations has been going on for a hundred years or longer.  Yet people reacted to Kelo as if this were some kind of brand-new thing going on, and how dare the Supreme Court not put a stop to it!

    I think your assumption that the state legislators must have seen things the same way as you is misplaced.  The reason they passed these reform laws now, and not 10 or 20 years ago, is because people didn't demand them until now.  That doesn't mean that lawyers and legislators were all under the impression that eminent domain could only be used for parks, it means they assumed that no one had a problem with the status quo.


    i'll have to agree (none / 0) (#47)
    by cpinva on Wed Nov 11, 2009 at 11:48:39 PM EST
    I think your assumption that the state legislators must have seen things the same way as you is misplaced.

    with you on that. as i thought about it, after posting, that's exactly what came to mind.

    however, my position, with regards to the average citizen's perception of eminent domain, still stands.


    Kelo was based squarely on settled (5.00 / 1) (#20)
    by jpe on Wed Nov 11, 2009 at 02:07:20 PM EST
    and incorrect precedent.

    So is Ilya a conservative? (none / 0) (#2)
    by me only on Wed Nov 11, 2009 at 12:39:14 PM EST
    In those 43 states at least some of the voters have been hoodwinked.  The laws still allow takings for blight.  There is an ongoing fight in Florida over "blight" where the housing is not sufficiently grand for the property.

    In the end federal officials are lousy, but local elected officials are some of the absolute worst.

    Ilya is open is his embrace of (none / 0) (#3)
    by Big Tent Democrat on Wed Nov 11, 2009 at 12:48:40 PM EST
    judicial activism.

    From that standpoint, he is no "conservative."


    Ah, you are referring (none / 0) (#4)
    by me only on Wed Nov 11, 2009 at 12:52:11 PM EST
    to Conservative<sup>TM</sup> not to conservative.

    Oh, and of course the blog (none / 0) (#5)
    by me only on Wed Nov 11, 2009 at 12:53:45 PM EST
    doesn't support superscript.

    Selective Incorporation? (none / 0) (#6)
    by JPB on Wed Nov 11, 2009 at 01:07:48 PM EST
    Is it then safe to say that this is another argument for selective incorporation? That the fundamental right to property enshrined in Amendment V should only apply to the federal and not the state governments?

    The subsequent state remedies are good, but not without significant loopholes for companies and local governments to slide through.

    The fact that (presumably well-off) town council members can just willy nilly kick people--more often than anyone, the poor and disenfranchised--out of their homes by governmental fiat seems awfully illiberal, BTD.

    The takings clause should not be used simply to raise revenue, otherwise depressed and low income areas become targets for corporations and other private developers that can promise to raise more money for the city while getting land on the cheap.

    This, as the other protections in the Bill of Rights, should be as applicable to the states and localities as it is to the federal government and used for public use, not private gain.

    Taking residential property (5.00 / 2) (#9)
    by MKS on Wed Nov 11, 2009 at 01:13:18 PM EST
    for a commercial redevelopment project is very rare--that is why Kelo was really a distorted view of how redevelopment typically works....

    Actually, the new trend (5.00 / 1) (#11)
    by MKS on Wed Nov 11, 2009 at 01:18:20 PM EST
    is to develope commerical property into a mixed use project:  the new fad in SoCal is to copy the  old European model of a multi-story building that has commerical use on the ground floor and residences on the second and third floors....

    LA has made an effort to bring residences to downtown--with the success of that in the eye of the beholder.  Of course, there isn't much development going on right now--because of the economy.

    And low income housing always remains a challenge....


    Also, there are not that many (5.00 / 1) (#14)
    by MKS on Wed Nov 11, 2009 at 01:27:13 PM EST
    truly low income people who are aggrieved by having their (usually commercial) properties taken by local governments for a redevelopment project.

    Most of the landowners in beat-up downtowns are people who own several buildings and rent the properties to others....Some of them are...well....slumlords....Most all are speculators who put no money into their properties.


    But it's happening in burbs (5.00 / 1) (#17)
    by Cream City on Wed Nov 11, 2009 at 01:44:35 PM EST
    like one near me, and it's not a lousy location but a prime one, and it's for a commercial development.  And the current owner had plans for it, plans for which he already had paid, and he has a pretty good argument from what I've read that the local government's offer is underpriced.  So he may well win his case, but the costs are mounting for him to the point that he may have to give up.  And those costs may mean that, even if he wins, he will not be able to go ahead with all of his plans.

    There still are cases like that -- perhaps few, but that there are any is worrisome.


    The current owner (none / 0) (#19)
    by MKS on Wed Nov 11, 2009 at 02:03:41 PM EST
    should consider going to trial on the valuation issue.  His lost opportunity/future profits and development costs may be recoverable....Landowners can recover attorneys fees (here in California) if they win the valuation issue at trial.

    There was a valuation trial for a parcel of commercial property taken for the BART (Bay Area Rapid Transit) extension to SFO a few years ago.  The concern was that because BART was (and is) so beloved in the Bay Area, a fair trial would not be possible.  Not so.

    Kelo is the epitome of the old saying, "hard cases make bad law."  


    Going to Trial (none / 0) (#23)
    by JPB on Wed Nov 11, 2009 at 02:25:12 PM EST
    Do you have the money to take on someone like Pfizer?

    Always a problem (none / 0) (#25)
    by MKS on Wed Nov 11, 2009 at 02:50:06 PM EST
    But if attorneys fees are recoverable, the risk to the city of being abusive goes up.

    The chief problem is that a city will budget how much to spend (and the incentive is to budget the least amount possible so as to appear frugal), and no one with the City will ever, ever want to recommend going over budget to pay a landowner....So, inertia among civil servants, more than evil intent, is the problem.

    A landower would never be in litigation against Pfizer--it would be against the city. If Pfizer were the actual party to the litigation, it would actually be better....You would have someone who would more likely respond to the risks of losing a valuation trial.  Civil servants operate under a different set of incentives and often seem  beyond reason....

    All I can tell you is that here in California, especially in SoCal, there are few if any local elected officials who would vote for a Resolution of Necessity to take property.  It is the political kiss of death.  The recriminations are swift and very nasty. That is why it took three decades to finish the Pasadena Freeway and to build the 105 Freeway that connects LAX with Norwalk.

    One of the last major redevelopments here of a blighted downtown was of Oakland--done by Jerry Brown while he was Mayor of Oakland.  Downtown Oakland is now a real nice place.  The criticism, and there really isn't that much of it, is not that the project hurt the poor, but rather that it didn't help them very much.  The poor in Oakland are still poor and the schools are still a problem.


    I hope JB's experience there (none / 0) (#27)
    by andgarden on Wed Nov 11, 2009 at 02:53:27 PM EST
    will make him a better Governor in the second go round.

    You mean Governor Moonbean II? (none / 0) (#29)
    by MKS on Wed Nov 11, 2009 at 03:02:01 PM EST
    It looks like a cakewalk for him now.  

    Moonbeam (none / 0) (#30)
    by MKS on Wed Nov 11, 2009 at 03:03:06 PM EST
    Yup (none / 0) (#32)
    by andgarden on Wed Nov 11, 2009 at 03:07:12 PM EST
    He was in and out of office before I was born, but I figure he's got another 8 years in him.

    Downtown Oakland (none / 0) (#33)
    by Spamlet on Wed Nov 11, 2009 at 03:17:05 PM EST
    is actually not a "real nice place" now, not even close. Yes, there was some redevelopment, and I supported it. But there was not enough, and the failure of governance, from Mayor Dellums on down, has done nothing to remedy the problems you mention, or to address the inadequately staffed police force and the intransigent violent crime that keeps most people from wanting to be anywhere near downtown Oakland, or even nearby Uptown, after dark. Speaking, just for the record, as one who lives within walking distance of downtown Oakland. And now please carry on with the Kelo discussion--very interesting.

    Hmm, I really like downtown (none / 0) (#35)
    by MKS on Wed Nov 11, 2009 at 03:32:49 PM EST
    Oakland....They have real nice sandwhich shops--and an old fashioned, very large butcher's shop.  It looks really interesting with the 1930s style facades.....

    But I haven't been there much after dark....


    What part of downtown do you mean? (none / 0) (#37)
    by Spamlet on Wed Nov 11, 2009 at 03:51:55 PM EST
    If you can remember. Sounds like you were visiting from SoCal?

    Anyway, it's good to hear that someone from out of town thinks our downtown is a nice place! We need the traffic. And I will say that, downtown apart, Oakland at large is becoming quite a mecca for new and interesting restaurants.

    I love Oakland and am ever optimistic that we can make it better. But we're in a real bind now, not at all helped by current "leadership." Quite the opposite.


    West of Broadway, North of 880 (none / 0) (#43)
    by MKS on Wed Nov 11, 2009 at 04:45:06 PM EST
    7th-11th streets.

    they weren't the ones (none / 0) (#40)
    by cpinva on Wed Nov 11, 2009 at 04:11:36 PM EST
    Do you have the money to take on someone like Pfizer?

    exercising eminent domain, it was the city of new london, that's who would be sued.


    As I wrote, he is appealing (none / 0) (#26)
    by Cream City on Wed Nov 11, 2009 at 02:51:37 PM EST
    it all, but it's costing a fortune in legal fees, and it is reported that he may not be able to hang on all the way to court.  And again, even if he does do so, that leaves a lot less left for him to go forward with this (good) plans for the land.

    The landowner is smart to go to (none / 0) (#31)
    by MKS on Wed Nov 11, 2009 at 03:07:10 PM EST
    the press....That is where local civil servants and elected officials often feel the most heat.  They are otherwise often impervious to simple cost/benefit analyses....

    Yep. Me, I would hire (none / 0) (#34)
    by Cream City on Wed Nov 11, 2009 at 03:25:20 PM EST
    a PR pro as well as a lawyer in such cases, or a lawyer who hires a PR person, or a lawyer who knows how to use the media, too.  I'm following this case since it emerged in media to see how it goes. . . .

    Sandra Day O'Connor said: (none / 0) (#44)
    by Lora on Wed Nov 11, 2009 at 07:40:19 PM EST
    From Findlaw
    ...Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded--i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public--in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings "for public use" is to wash out any distinction between private and public use of property--and thereby effectively to delete the words "for public use" from the Takings Clause of the Fifth Amendment....

    I agree.

    O'Connor in Midkiff (none / 0) (#46)
    by Big Tent Democrat on Wed Nov 11, 2009 at 08:29:22 PM EST
    disagreed with that.

    Therein lies the problem with O'Connor.


    On Midkiff (none / 0) (#48)
    by Lora on Thu Nov 12, 2009 at 09:43:03 PM EST
    From Findlaw:

    The Hawaii Legislature enacted its Land Reform Act not to benefit a particular class of identifiable individuals but to attack certain perceived evils of concentrated property ownership in Hawaii - a legitimate public purpose. Use of the condemnation power to achieve this purpose is not irrational.

    Quite different.