Justices Uphold Taking Property for Development
By LINDA GREENHOUSE
Published: June 24, 2005
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WASHINGTON, June 23 - The Supreme Court ruled on Thursday, in one of its
most closely watched property rights cases in years, that fostering economic
development is an appropriate use of the government's power of eminent
The 5-to-4 decision cleared the way for the City of New London, Conn., to
proceed with a large-scale plan to replace a faded residential neighborhood
with office space for research and development, a conference hotel, new
residences and a pedestrian "riverwalk" along the Thames River.
The project, to be leased and built by private developers, is intended to
derive maximum benefit for the city from a $350 million research center
built nearby by the Pfizer pharmaceutical company.
New London, deemed a "distressed municipality" by the state 15 years ago,
has a high unemployment rate and fewer residents today than it had in 1920.
The owners of 15 homes in the Fort Trumbull neighborhood, including one
woman who was born in her house 87 years ago and has lived there since, had
resisted the plan and refused the city's offer of compensation.
After the city condemned the properties in November 2000, the homeowners
went to state court to argue that the taking would be unconstitutional. The
Connecticut Supreme Court upheld the use of eminent domain in a ruling last
In affirming that decision, the majority opinion by Justice John Paul
Stevens resolved a question that had surprisingly gone unanswered for all
the myriad times that governments have used their power under the Fifth
Amendment to take private property for public use. The question was the
definition of "public use."
The homeowners, represented by a public-interest law firm, the Institute for
Justice, which has conducted a national litigation campaign against what it
calls eminent domain abuse, argued that taking property to enable private
economic development, even development that would provide a public benefit
by enhancing the tax base, could never be a "public use."
In its view, the only transfers of property that qualified were those that
gave actual ownership or use to the public, like for a highway or a public
But the majority concluded on Thursday that public use was properly defined
more broadly as "public purpose." Justice Stevens noted that earlier Supreme
Court decisions interpreting the public use clause of the Fifth Amendment
had allowed the use of eminent domain to redevelop a blighted neighborhood
in Washington, to redistribute land ownership in Hawaii and to assist a
gold-mining company, in a decision by Justice Oliver Wendell Holmes in 1906.
"Promoting economic development is a traditional and long accepted function
of government," Justice Stevens said, adding, "Clearly, there is no basis
for exempting economic development from our traditionally broad
understanding of public purpose."
In a dissenting opinion, Justice Sandra Day O'Connor objected that "the
words 'for public use' do not realistically exclude any takings, and thus do
not exert any constraint on the eminent domain power."
Justice O'Connor said, "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."
Justice Stevens, examining the New London plan in light of the majority's
general analysis, said the plan "unquestionably serves a public purpose,"
even though it was intended to increase jobs and tax revenue rather than
He described the plan as "carefully formulated" and comprehensive. Sounding
a federalism note, Justice Stevens said that state legislatures and courts
were best at "discerning local public needs" and that the judgment of the
New London officials was "entitled to our deference."
Justices Stephen G. Breyer, Ruth Bader Ginsburg, Anthony M. Kennedy and
David H. Souter joined the majority opinion in Kelo v. City of New London,
No. 04-108. Justice Kennedy also wrote a separate concurring opinion to
emphasize that while there was no suggestion in this instance that the plan
was intended to favor any individual developer, "a court confronted with a
plausible accusation of impermissible favoritism to private parties should
treat the objection as a serious one and review the record to see it if has
Justice O'Connor's dissenting opinion was joined by Chief Justice William H.
Rehnquist and by Justices Antonin Scalia and Clarence Thomas. She wrote that
rather than adhering to its precedents, the court had strayed from them by
endorsing economic development as an appropriate public use.
"Who among us can say she already makes the most productive or attractive
use of her property?" Justice O'Connor asked.
She added: "The specter of condemnation hangs over all property. Nothing is
to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any
home with a shopping mall or any farm with a factory."
Both Justice O'Connor and Justice Thomas, who also filed his own dissent,
said the decision's burden would fall on the less powerful and wealthy.
"The government now has license to transfer property from those with fewer
resources to those with more," Justice O'Connor said. "The founders cannot
have intended this perverse result."
Justice Thomas, who called the decision "far reaching and dangerous," cited
several studies showing that those displaced by urban renewal and "slum
clearance" over the years tended to be lower-income minority residents.
"The court has erased the Public Use Clause from our Constitution," he said.
In the majority opinion, Justice Stevens said, "The necessity and wisdom of
using eminent domain power to promote economic development are certainly
matters of legitimate public debate."
The court did not "minimize the hardship that condemnations may entail," he
said, despite the fact that the homeowners will receive "just compensation."
Justice Stevens said that states remained free to place restrictions on
their own use of eminent domain power through their own constitutions and
laws, as many have; California, for example, has a law restricting to
blighted areas the use of eminent domain for economic development.
Scott G. Bullock, the lawyer who argued the case for the New London
homeowners, said in an interview that his organization, the Institute for
Justice, would accept the court's invitation and "continue the fight in the
state supreme courts." As a result of the decision, he said, "we are going
to see more eminent domain abuse and a growing grass-roots rebellion against
this type of government action."
Allan B. Taylor, a partner in the Hartford law firm Day, Berry & Howard who
filed a brief on New London's behalf for the Connecticut Conference of
Municipalities and organizations of cities in 31 other states, said an
opposite outcome in this case would have ushered in an "extraordinary
If the court had not upheld the Connecticut Supreme Court, he said in an
interview, "it would greatly limit what cities and towns all over the
country could do." Mr. Taylor said he read the opinion not as a green light
for the wholesale use of eminent domain, but as "a green light for
continuing to do careful and responsible planning."
The decision was a clear defeat for the long-term effort by Chief Justice
Rehnquist and Justice Scalia to limit government control over private
property. Although a series of decisions from the mid-1980's through the
early 90's had appeared to indicate a major shift in the court's traditional
deference to government land-use policies, that effort has stalled in recent
By the same token, the decision was the latest success for Justice Stevens,
the 85-year-old senior associate justice, who appears to be having one of
the most productive terms in his 30 years on the Supreme Court.
The New London case was among the final decisions the court was expected to
make in this term. The court indicated that Monday would be the final day of