Sunday, 26 June, 2005

Supreme Court further erodes private property rights

The U.S. Supreme Court on Thursday released its opinion in the Kelo v. New London (PDF) case.  When I saw a news headline saying that the decision had been handed down I decided to read the entire decision myself before reading any of the commentary.

In 2000, the city of New London, CT approved a development plan intended to revitalize the city.  The 90 acres to be redeveloped were adjacent to a large manufacturing facility proposed by the pharmaceutical company Pfizer.  As part of the development plan the city obtained property from willing sellers and attempted to use its power of eminent domain to force the remainder of the property owners to relinquish their property for "just compensation" as required by the Fifth Amendment of the Constitution.  Several of the landowners protested, arguing that the takings violated the "public use" clause of the Fifth Amendment.

The city argued that economic development is a valid reason for exercising eminent domain, even though the property in question would eventually be sold or leased to private parties.  The case worked its way through the Connecticut courts and finally to the State Supreme Court, which held that the takings were valid.  The U.S. Supreme Court agreed to hear the case.  Thursday the Court ruled in favor of the city, upholding in a 5-4 decision the ruling of the Connecticut Supreme Court.

I was dismayed when I first heard about the decision, thinking that this was a huge departure from the idea of private property.  But in reading the Court's decision I learned that this is just one more step down that road.  Two prior cases in particular have established government's ability to use its power of eminent domain to transfer property from one private party to another.

In Berman v. Parker (1954), the Court upheld a redevelopment plan targeting a blighted area of Washington, D.C. in which most of the housing was beyond repair.  The city invoked eminent domain to condemn the property, use some of it for public purposes, and sell or lease the remainder to private parties.  To complete its plan the city also took some non-blighted property and the owner protested.  In a unanimous ruling the Court ruled in favor of the city, stating:

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.  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 carefully 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, the Court considered a Hawaii statute whereby title was taken from land owners (lessors) and transferred other private properties (lessees) in order to reduce the concentration of land ownership.  The Ninth Circuit (which ruled against the Hawaii Housing Authority) ruled that the taking 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."  The Supreme Court, in another unanimous decision, reversed the Ninth Circuit's ruling, holding that the State's purpose of eliminating the "social and economic evils of a land oligopoly" qualified as a valid public use.

In light of the Court's ruling on those two cases, it is no surprise that the Court ruled in favor of the city of New London in the current case.  The Court rarely reverses itself, and the Kelo v. New London case is similar enough to those two and to others that the outcome isn't a huge departure from other rulings.  It does place in question, though, the value of the takings clause in the Fifth Amendment.

I'm inclined to favor Justice Thomas' opinion in his dissenting view: that the Court should strictly interpret the Fifth Amendment, that this case should have been decided in favor of the petitioners, and that the Berman and Midkiff decisions should no longer be used blindly as precedent when deciding similar cases in the future.

But nobody asked me.