A TALE OF TWO CITIES
Kelo v. City of New London
Written by: Morton P. Fisher, Jr.
FROM DIRT - PUBLISHED BY THE ABA.
renovated waterfront has spawned new office buildings, restaurants and
entertainment and millions of tourists in an area that several decades ago was
inhabited by decaying wharves, dilapidated and boarded up buildings and
derelicts. Baltimore's inner harbor renewal has truly served as a model
for the nation.
None of this
would have been possible without the exercise of the power of eminent domain to
assemble the parcels on which redevelopment was to take place.
Connecticut's desire to accomplish a similar result has embroiled New London in
a dispute with property owners which is now before the Supreme Court in what
could be aptly described as the most important real estate related case in over
fifty (50) years when the Supreme Court in Berman v. Parker held that a taking
of land to alleviate blight (i.e., it is significant to note that the department
store which was taken in Berman v. Parker was not blighted but was in an area
declared to be blighted) is a public use within the meaning of the Fifth
Amendment of the Constitution of the United States which provides that no
property may be taken except for a public use and for just compensation.
presented in the property owner's brief was framed as follows:
protection does the Fifth Amendment's public use requirement provide for
individuals whose property is being condemned, not to eliminate slums or blight,
but for the sole purpose of 'economic development' that will perhaps increase
tax revenues and improve the local economy?"
as so framed does not take into account that the State of Connecticut declared
all of New London to be an economically distressed area.
Amendment to the United States Constitution provides in relevant party:
person shall be . deprived of life, liberty or property, without due process of
law; nor shall private property be taken for public use, without just
compensation." (Emphasis added.)
The Fifth Amendment's public use clause has been made applicable to the states
through the Fourteenth Amendment to the United States Constitution. See,
e.g., Hawaii Housing Authority v. Midkiff, 467 U.S. 229, 231, 104 S.Ct. 2321, 81
L.Ed.2d 186 (1984).
Kelo v. The City of New London, raises squarely the issue of whether the taking
of property for economic development purposes is a public use within the meaning
of the State and Federal Constitutions.
of the Kelo case may well determine the future of redevelopment and, indeed,
development in our country at a time when assemblage of multiple parcels for
development is increasingly difficult.
Kelo the State of Connecticut declared New London to be in a depressed economic
condition neither the properties which were condemned in Kelo nor the area where
the properties are located was declared to be blighted, a distinction which may
gives the Supreme Court the opportunity to decide whether the taking of property
solely for economic development purposes, (i.e., jobs and taxes) is permissible
under the Fifth Amendment.
We start with
the simple proposition as stated in the oral argument that the State cannot take
A's property and give it to B because the governor wants his friend B to have
the property. Similarly we start with the proposition that government can
take private property for traditional public uses such as schools and roads and
government buildings. Older cases also upheld takings for railroads,
obviously a private purpose.
discussed in the oral argument before the Supreme Court is the taking of a Motel
6 to turn the property over to a developer who will build a Ritz which will
create more jobs and increased taxes raises the issue as to whether this is a
public use without the meaning of the Constitution. The City of New London
argued that it was.
the property owners who live in the residences which were taken in Kelo argued
that it was neither fair nor permissible to take a home in which Kelo had lived
her entire life and that if acquired at all it must be acquired through
negotiation. Many public interest groups agreed and filed amices briefs.
seemed to focus on a variety of issues at the oral argument which took place on
February 22, 2005.
If acquisition through private purchase using tax dollars was a public use why
would not condemnation to acquire the same property be a public use?
Are the Courts giving to oversee the finding of legislative or the executive
branches of government on a case by case basis as to what constitutes a public
Should the determination of just compensation be different in a case where the
prior owner receives only appraised value and the property is turned over to a
developer for a nominal amount where there is the potentiality for large
Given that State appellate courts have widely different views on the main issue
in Kelo, should the Supreme Court supplement its opinion for the decisions in
Should the courts consider whether there has to be a reasonable assurance that
the public use will in fact take place in a reasonable amount of time?
of the Justices seem to give an indication of where the Justices stand:
"But you concede that on the facts, more than tax revenue was at stake.
The community had gone down and down and the town wanted to build it up."
(Page 4, lines 13-16)
"Oh, but Berman spoke, in the opinion, said that the determination of the
legislature about these things is virtually conclusive, that there is only the
narrowest, narrowest role for the judiciary. What kind of standard are you
proposing we should get into here to second-guess the public use aspect?"
(Page 5, lines 17-23)
"But there is no taking for private use that you could imagine in reality
that wouldn't also have a public benefit of some kind, whether it's increasing
job or increasing taxes, et cetera." (Page 6, lines 22-25)
"Well, in my example, the same thing is going on except that it's not using
the eminent domain power [using tax dollars to buy private property]. If
the purpose in my example is a proper public purpose, why isn't it a proper
public purpose when the government does it by eminent domain? What changes
about the purpose?" (Page 10, lines 11-16)
"As I understand, you're testing - you want me to make a distinction
between blight which is a permissible governmental use, governmental objective
and economic revival, which isn't." (Page 12, lines 24-25 and Page
13, lines 1 and 2)
"But what I am asking is if there has been any scholarship to indicate that
maybe that compensation measure ought to be adjusted when A is losing property
for the economic benefit of B." (Page 23, lines 2-6)
"For example, Motel 6 and the city thinks, well, if we had a Ritz-Carlton,
we would have higher taxes. Now, is that okay?" (Page 30, lines
"Mr. Horton, what, what difference does it make that, that New London was
in an economic depression? Would it not be fully as much, under your
theory of a public use, for a city to say, yes, we are not doing badly, but we
could do better. Let's attract some high-tech industry here. You
can't possibly draw a line between depressed cities and undepressed cities, can
you?" (Page 28, lines 21-25 and Page 29, line 1-3)
amices friend of the brief cases were filed in the case, many by cities and
states advocating the need for condemnation to support economic development and
many by public interest groups advocating the rights of private property owners.
The briefs include a most interesting brief filed by the City of Baltimore
recounting the history of Baltimore's revitalization. As stated in
Baltimore City's brief:
"The Mayor and City Council of Baltimore respectfully submits the brief in
support of respondents, because the petitioners' proposed restriction of the
concept of 'public use' would have a profound adverse impact on economic and
urban development in Baltimore and in other cities around the country."
There is of
course no way of predicating how the Supreme Court will rule in the Kelo case or
which of the primary issues in the case the Supreme Court will address.
We will end
with the first words of a Tale of Two Cities "It was the best of times and
it was the worst of times."
In Kelo, the
Supreme Court will decide whether the best of times will be for the property
owners or the City.