Homework Assignment Wk 2 MBA 524

Kelo v City of New London

545 U.S. 469 (2005)

Yes, Actually, They Can Take That Away From You

Facts

In 1978, the city of New London, Connecticut, undertook a redevelopment plan for purposes of creating a redeveloped area in and around the existing park at Fort Trumbull. The plan sought to develop the related ambience a state park should have, including the absence of pink cottages and other architecturally eclectic homes. Part of the redevelopment plan was the city’s deal with Pfizer Corporation for the location of its research facility in the area. The preface to the city’s development plan included the following statement of goals and purpose:

To create a development that would complement the facility that Pfizer was planning to build, create jobs, increase tax and other revenues, encourage public access to and use of the city’s waterfront, and eventually “build momentum” for the revitalization of the rest of the city, including its downtown area.

The affected property owners, including Susette Kelo, live in homes and cottages (15 total) located in and around other existing structures that would be permitted to stay in the area designated for the proposed new structures (under the city’s economic development plan) that would be placed there primarily by private land developers and corporations. The city was assisted by a private, nonprofit corporation, the New London Development Corporation (NLDC), in the development of the economic plan and piloting it through the various governmental processes, including that of city council approval. The central focus of the plan was getting Pfizer to the Fort Trumbull area (where the homeowners and their properties were located) with the hope of a resulting economic boost that such a major corporate employer can bring to an area.

Kelo and the other landowners whose homes would be razed to make room for Pfizer and the accompanying and resulting economic development plan filed suit challenging New London’s legal authority to take their homes. The trial court issued an injunction preventing New London from taking certain of the properties but allowing others to be taken. The appellate court found for New London on all the claims, and the landowners (petitioners) appealed.

Judicial Opinion

STEVENS, Justice Two polar propositions are perfectly clear. On the one hand, it has long been accepted that the sovereign may not take the property of A for the sole purpose of transferring it to another private party B, even though A is paid just compensation. On the other hand, it is equally clear that a State may transfer property from one private party to another if future “use by the public” is the purpose of the taking; the condemnation of land for a railroad with common-carrier duties is a familiar example. Neither of these propositions, however, determines the disposition of this case.

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 long-standing policy of deference to legislative judgments in this field.

In Berman v Parker, 348 U.S. 26, 75 S.Ct. 98, 99 L.Ed. 27 (1954), this Court upheld a redevelopment plan targeting a blighted area of Washington, D.C., in which most of the housing for the area’s 5,000 inhabitants was beyond repair. Under the plan, the area would be condemned and part of it utilized for the construction of streets, schools, and other public facilities. The remain- der of the land would be leased or sold to private par- ties for the purpose of redevelopment, including the construction of low-cost housing.

The owner of a department store located in the area challenged the condemnation, pointing out that his store was not itself blighted and arguing that the creation of a “better balanced, more attractive community” was not a valid public use. Writing for a unanimous Court, Justice Douglas refused to evaluate this claim in isolation, deferring instead to the legislative and agency judgment that the area “must be planned as a whole” for the plan to be successful. The Court explained that “community redevelopment programs need not, by force of the Constitution, be on a piecemeal basis—lot by lot, building by building.” “We do not sit to deter- mine 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. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as care- fully patrolled. In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is not for us to reappraise them. If those who govern the District of Columbia decide that the Nation’s Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.”

In Hawaii Housing Authority v Midkiff, 467 U.S. 229, 104 S. Ct. 2321, 81 L.Ed.2d 186 (1984), the Court considered a Hawaii statute whereby fee title was taken from lessors and transferred to lessees (for just compensation) in order to reduce the concentration of land ownership. We unanimously upheld the statute and rejected the Ninth Circuit’s view that it was “a naked attempt on the part of the state of Hawaii to take the property of A and transfer it to B solely for B’s private use and benefit.” Reaffirming Berman’s deferential approach to legislative judgments in this field, we concluded that the State’s purpose of eliminating the “social and economic evils of a land oligopoly” qualified as a valid public use.

Those who govern the City were not confronted with the need to remove blight in the Fort Trumbull area, but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference. The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including—but by no means limited to—new jobs and increased tax revenue. To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Ber- man, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.

Petitioners contend that using eminent domain for economic development impermissibly blurs the boundary between public and private takings. Again, our cases foreclose this objection. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects. It is further argued that without a bright-line rule nothing would stop a city from transferring citizen A’s property to citizen B for the sole reason that citizen B will put the property to a more productive use and thus pay more taxes. Such a one-to-one transfer of property, executed outside the confines of an integrated development plan, is not presented in this case. While such an unusual exercise of government power would certainly raise a suspicion that a private purpose was afoot, the hypothetical cases posited by petitioners can be confronted if and when they arise. They do not warrant the crafting of an artificial restriction on the concept of public use.

Just as we decline to second-guess the City’s considered judgments about the efficacy of its development plan, we also decline to second-guess the City’s determinations as to what lands it needs to acquire in order to effectuate the project. “It is not for the courts to over-see the choice of the boundary line nor to sit in review on the size of a particular project area. Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legislative branch.”

The judgment of the Supreme Court of Connecticut is affirmed.

Dissenting Opinion

O’CONNOR, Justice, joined by Justices SCALIA, THOMAS, and REHNQUIST 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. Accordingly I respectfully dissent.

Where is the line between “public” and “private” property use? We 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. An external, judicial check on how the public use requirement is interpret- ed, however limited, is necessary if this constraint on government power is to retain any meaning.

Even if there were a practical way to isolate the motives behind a given taking, the gesture toward a purpose test is theoretically flawed. If it is true that incidental public benefits from new private use are enough to ensure the “public purpose” in a taking, why should it matter, as far as the Fifth Amendment is concerned, what inspired the taking in the first place? And whatever the reason for a given condemnation, the effect is the same from the constitutional perspective— private property is forcibly relinquished to new private ownership.

CASE BRIEF 5.6

Kelo v. City of New London

545 U.S. 469 (2005)

FACTS:

In 1978, the city of New London, Connecticut undertook a redevelopment plan for purposes of creating a redeveloped area in and around the existing park at Fort Trumball. The plan had the goals of achieving all the related ambience a state park should have, including the absence of pink cottages and other architecturally eclectic homes. Part of the redevelopment plain was the city’s deal with Pfizer Corporation for the location of its research facility in the area. The preface to the city’s development plan included the following statement of goals and purpose:

“to create a development that would complement the facility that Pfizer was planning to build, create jobs, increase tax and other revenues, encourage public access to and use of the city's waterfront, and eventually "build momentum" for the revitalization of the rest of the city, including its downtown area.”

.

The redevelopment plan included detailed and extensive documentation on its socioeconomic impact. The affected property owners, including Susette Kelo, live in homes and cottages (15 total) located in and around other existing structures that will be permitted to stay in the area for the proposed new structures that will consist of primarily private land developers and corporations. In fact, the city was assisted by a private, nonprofit corporation, the New London Development Corporation (NLDC), in the development of the economics plan and the ferrying of it through the various governmental processes, including that of city council approval. Such

approval seems a mere formality given the fact that the city council created the NLDC. The central focus of the plan was attracting Pfizer to the Fort Trumbull area (where the homeowners and their properties were located) with the hope of the economic boost and benefits a major corporate employer can bring to an area.

Kelo and the other landowners whose homes would be razed to make room for Pfizer and the accompanying and resulting economic development plan filed suit challenging New London’s legal authority to take their homes.

DECISION BELOW:

The trial court issued an injunction preventing New London from taking certain of the

properties but allowing others to be taken. Following an injunction, the property owners who were denied relief appealed and the city cross-appealed. The appellate court found for New London on all the claims, and the landowners (petitioners) appealed.

ISSUES ON APPEAL:

1. Can a city delegate its economic development role and its eminent domain duties

and powers to a redevelopment corporation?

2. Can a city pick and choose which properties will be retained by owners and

which will be condemned and taken?

3. Is economic development a constitutionally permissible use of the eminent

domain power?

DECISION:

In a 5-4 decision delivered by Justice Stevens, joined by Justices Kennedy, Souter, Ginsberg and Breyer, the U.S. Supreme Court upheld the decision of the Connecticut Supreme Court.

New London’s taking of the homes of Kelo and others qualifies as a "public use" within the meaning of the Takings Clause. Local governments cannot take private land simply to confer a private benefit on a particular private party, but when the takings will be executed pursuant to a carefully considered development plan and the plan was not adopted "to benefit a particular class of identifiable individuals," the takings are constitutional. Government projects often benefit individuals, with some individuals benefiting more than others. Such imbalance does not violate the constitution. The court concludes that public purpose is a broad category for purposes of determining when takings are constitutional. Local governments’ determinations that areas at issue are sufficiently distressed to justify a program of economic rejuvenation are entitled to deference of the courts and the courts should not second-guess local authorities.