Supreme Court Furor

Monday, June 27, 2005

With the whispers of Rhenquist or possibly O'Connor departing the Court in short order, the moment we've all been waiting for is drawing nearer. Has it really been about 150 years since we went this long without a change to the court? It's a moment for which millions of dollars have been raised and will be spent. But as we wait for the dust storm to settle, the Court has offered a subject for us to sink our teeth into as an appetizer. Eminent domain.

Yeah, I know, not the most engaging of topics. It's not war. It's not abortion. But the court missed an important one here in my opinion and paves the way for a really bad model of Eminent Domain. The case is Kelo v. City of New London.

The facts go something like this. State and local officials targetted a 90 acre plat of property in New London, Connecticut, known as Fort Trumball for economic revitalization. The area included about 115 residences. The city adopted a development plan calling for the creation of 7 parcels. Parcel 1 was designated for a hotel. Parcel 2 for about 70 new upscale homes. Parcel 3 called for 90,000 sqf of R&D space in an area adjacent to a proposed Pfizer development. Parcel 4 was dedicated to support of an adjacent state park and a marina. Parcels 5-7 were allocated for a variety of retail spaces, parking and other commercial uses. The plan was to be executed by a private development firm, the New London Development Corporation.

The pertinent portion of the Fifth Ammendment says "nor shall private property be taken for public use, without just compensation."

The court granted certiorari for the specific purpose of determining "whether a city's decision to take property for the purpose of economic development satisfies the 'public use' requirement of the Fifth Ammendment."

In legal terms, such an exercise of eminent domain is referred to as a taking. The purpose of the 5th Ammendment was to proscribe the use of this power, so that the government could not take property from party A, except where the taking would generate a justification of use by the general public. The 5th Ammendement clearly permits the government to take under the specified conditions. Case law on the subject has permitted taking from private party A in favor of private party B, so long as the 'public use' requirement is met. There are elements of the development plan which might rise to the level of public use, specifically the planned uses for parcel 4. Parcel 4 was actually described by the court in 2 parts. 4A pertains to a 2.4 acre plot dedicated to support of the adjacent state park. 4B pertains to the marina. These 2 small pieces out of a 90 acre piece of property in which 115 residences house property owners and their families.

The case was decided on a vote of 5-4. The majority opinion (penned by Stevens and joined by Kennedy, Souter, Ginsberg & Breyer) cited a series of cases in which the Court had previously enlarged the concept of 'general public use' to a broader definition of 'public benefit'. It then, somewhat oddly, urged an essentially "states rights" defense of this decision that the state and local government know best the needs of their constituents and can well determine which property uses will generate public benefits. But this is a strange sort of de facto justification. The public benefits if the economic development plan works? So, does that mean that any successful economic development plan justifies the taking that fueled it? Does it also mean that every failed economic development plan was unjustified? The court actually seems to permit either, so long as the government's heart is in the right place.

George Will wrote persuasively on the Court's decison last Friday. He recognized an important and subtle reality. While a taking by the government from private party A in favor of private party B does not appear to directly benefit the government, it is also not a disinterested party in these cases. Hence, trusting the government to deal fairly in such matters would be naive to the extreme. He observed that "during oral arguments in February, Justice Antonin Scalia distilled the essence of New London's brazen claim: 'You can take from A and give to B if B pays more taxes?' " The court's decision combined with the government's own tax-maximizing self-interest constitutes both the spark and fuel necessary to start a wildfire, whether actually intentioned or mere coincidence.

Justice O'Connor wrote the dissent in which Rhenquist, Scalia & Thomas joined. She drew her dissent to a conclusion writing:

"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result. 'That alone is a just government,' wrote James Madison, 'which impartially secures to every man , whatever is his own.'"

The impact of this decision causes the names affixed to the votes seem counter-intuitive. I'd expect the Justices in this majority to be champions of the individual, especially the underprivileged. I guess it's another question of trust. The majority trusts the government to apply its takings with less interference than I do. And the worst part of this decision is that replacing O'Connor or Rhenquist on the court, as all the discussion has recently turned, will have no impact whatever on this decision in the future.