Kelo v. City of New London
125 S. Ct. 2655 (2005)

  • The City of New London, Connecticut was not doing well. Unemployment was high and the area was “blighted.”
    • When the military base closed, a lot of jobs and economic activity went away.
  • The non-profit, private, New London Development Corp. (NLDC) proposed revitalizing the area by redeveloping the former base and surrounding area.
    • Grandiose plans were proposed to add fancy housing, office space, high-end retail, recreational parks, and a museum.
    • The plan required the use of 115 privately owned lots.
  • New London authorized NLDC to buy out the 115 homeowners. Nine didn’t want to sell. New London authorized the homes be taken by NLDC via eminent domain.
  • Kelo, a homeowner, sued to prevent NLDC from taking her home.
    • There was no evidence that Kelo’s home (or any of the others) was “blighted” or otherwise in poor condition. They were condemned solely because they were located in the development area.
    • Kelo argued that the taking was a violation of the 5th Amendment, which authorizes taking of property for public use.
      • This was not public use, this was for private companies to develop private offices/retail/residential space.
  • The Trial Court came to a split decision. Both sides appealed.
    • The Trial Court found that NLDC couldn’t take property for a park, but could take property for office space.
  • The Connecticut Supreme Court found that all of the takings were valid. Kelo appealed.
    • The Connecticut Supreme Court found that the takings were authorized by the State’s municipal development Statute, which stated that the taking of land as part of an economic development project is public use and in the public interest.
  • The US Supreme Court affirmed.
    • The US Supreme Court found that a sovereign may not take someone’s property for the sole purpose of transferring it to another private party, even if they pay compensation.
    • However, a sovereign may transfer property from one private party to another if future “use by the public” is the purpose of the taking.
      • For example, giving land to railroads with common carrier duties.
        • “Common carrier” means that the general public uses the service. Everybody can ride a railroad, not everybody gets to enter a private office building.
    • The Court found that New London was not forced to remove “blight” from the area, but as long as they determined that the area was “sufficiently distressed” to justify the taking they deserved the Court’s deference.
      • Basically, the Court was saying that the definition of “public use” is a legislative decision, and the courts should defer to local governments in setting limits.
        • Some States have regulations specifically preventing this sort of taking. The Court felt that if Kelo didn’t like the law, the place to take it up was with the State government, not the courthouse.
    • The Court suggested looking at the public benefits of the “entire plan,” not just on the impact on specific homeowners.
      • See Hawaii Housing Authority v. Midkiff (467 U.S. 229 (1984)).
    • Kelo unsuccessfully argued that economic development does not qualify as a “public use,” but the Court found that promoting economic development is a traditional and long accepted function of government.
      • Does that mean it’s ok to take a poor person’s land and give it to a rich person since rich people build larger houses and pay higher taxes?
  • In a dissent, it was argued that three categories of takings that have been held to satisfy the public use requirement:
    • Transfers of private property to public ownership, as for a road.
    • Transfers to private parties such as common carriers, like railroads, who make the property available for public use.
    • Transfers to private parties as part of a program to serve a public purpose.
      • In Midkiff and Berman v. Parker (348 U.S. 26 (1954)), the purpose was to cure public harms, but this decision goes further because now nearly any lawful use of private property could be said to generate some incidental public benefit. In addition, the beneficiaries of this decision are likely to be rich developers with disproportionate influence, and the victims are likely to be the disenfranchised lower class.
  • This decision caused a huge public outcry.
    • Most of the public thought this was completely unfair, even the Governor intervened.
    • After this decision, a group of private citizens attempted to get Justice Souter’s personal home condemned to make way for a private museum about the Bill of Rights.
    • Based on the decisions in Berman and Midkiff, this decision was no big surprise to the property law community.
      • In a way, despite the final result of Kelo, this was a bit of a reversal from those previous decisions, since they were both unanimous, and Kelo was a 5-4.
  • Ironically, a few years after this decision, the main company that requested the land be taken so they could have an office building abandoned the property, and the area is now desolate and unoccupied.