As anniversaries go, this one might not be up there on your list of memorable dates, but it should be. One year ago this week, the Supreme Court heard arguments in a case that someday may affect your life in a devastating way: Kelo v. City of New London. The case involved eminent domain — the power of the government to seize private property, ostensibly for public use. I say ostensibly because the Court’s 5-4 decision significantly expanded the power of local governments to take whatever homes, businesses, even farms from private parties and give them to other private parties to build offices, luxury condos and hotels — or pretty much whatever else the new owners (or in some cases leaseholders) choose to do with the property. Although the home and business owners whose property is taken receive compensation, it is often well below true market value because they have no choice in whether to sell once the government has exercised eminent domain. While eminent domain makes sense when it is used to clear the way for such things as railroads or utilities, it’s hard to see how the "public use" requirement embodied in the Fifth Amendment is satisfied when, as former Justice Sandra Day O’Connor noted in her dissent, the government is simply replacing a Motel 6 with a Ritz-Carlton.
The Court’s decision in Kelo sparked considerable controversy and may be the one recent public policy debate that united many conservatives and liberals. Conservatives generally don’t like government interfering in private transactions anyway, and the thought that a city or county could decide to condemn otherwise sound property in order to increase tax revenue by replacing it with a more valuable property strikes many conservatives as a good example of the rapacious appetite of Big Government. Liberals, on the other hand, see this as government choosing the wealthy over the poor and middle class, Big Business triumphing over the Common Man, whites displacing blacks and other minorities. Ironically, though, most of the Supreme Court justices who sided with New London, Conn., in allowing the city to condemn 15 homes in a waterfront neighborhood in order to allow a developer to build a luxury hotel, condos and office buildings were from the liberal wing of the Court. Former Chief Justice Rehnquist and Justices Scalia and Thomas joined O’Connor in dissenting from their more liberal peers, Justices Stevens, Souter, Ginsburg and Breyer, with Justice Kennedy, often a swing vote, joining the liberals this time. One of my liberal friends wrote me the day the decision was handed down both amused and confused that she found herself on the same side of the argument with Justice Thomas instead of Justice Ginsburg.
This type of strange bedfellows reaction has spurred a new coalition of groups fighting eminent domain abuse in the wake of Kelo. The NAACP, the League of United Latin American Citizens and the National Council of Churches have joined with the Institute for Justice (which represented plaintiffs in the original Kelo case), the Farm Bureau and the National Federation of Independent Businesses, among others, to form the Castle Coalition, a grass-roots organization that hopes to stop eminent domain abuses in local communities. Some 43 state legislatures have passed or will soon consider eminent domain reform, including Alabama and Texas, which specifically limited the kind of development scheme allowed by Kelo. Even Justice Stevens, who wrote the majority opinion, said shortly after the decision that he thinks exercising eminent domain merely for economic development is bad public policy and hopes legislatures will find a political solution. "My own view is that the free play of market forces is more likely to produce acceptable results in the long run than the best-intentioned plans of public officials," he said, noting that if he had been a legislator instead of a justice, he would have opposed what the city did in the Kelo case.
Unlike some Supreme Court decisions, the worst effects of Kelo can be limited if the citizenry acts. Unless states move quickly to stop the misuse of eminent domain, no one’s home, farm or business will be safe from greedy government officials and big developers looking to make a killing at ordinary citizens’ expense.