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Monday, January 23, 2006

Kelo and the Limits of Government Power

I've spent most of the last week reviewing Constitutional Law for my comprehensive exam in American Politics. Oddly enough, during this last week, I also had a commenter on Tammany on the Hudson who was crowing about the Conservative members of the Supreme Court being the only ones who are willing to defend property rights, and gave the Kelo case as an example. Rah! Rah! Sis, boom, bah!

One of the most eye-opening aspects of Constitutional Law is understanding that the direction of the ruling is not the end-all of studying law. It matters how the Court arrived at that decision and what type of precedent was used to interpret the statute. In other words, it doesn't just matter what the answer is, it also matters how they got there. (You can read the actual decision here.)

For those who are simply scratching their heads at this point, here are the facts of the Kelo case. The "petitioners", the people bringing suit (Kelo), sought relief from a state court ruling that gave the city of New London, Connecticut the power to take the houses in which they lived through the use of emminent domain. New London wanted to develop the property as part of a revitalization program and several people refused to sell. The Court eventually ruled that New London could take the property through the use of emminent domain powers. Predictably, Conservatives went crazy, because, you know, all government is evil. Understandably, everyone (or at least, everyone whose blogs I read) focused entirely on the end result and not on the reasons the Court gave for its ruling.

To understand the case, we have to understand the Fifth Amendment:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.


There are three terms bolded in that quote that need attention: "private property", "public use" and "just compensation".

Private property is self-explanatory enough that I don't feel the need to define it. Furthermore, it was not challenged in Kelo that the property in question belonged to the petitioners.

"Just compensation" is generally taken to mean something close to market value. If the city decides to pave over your house; then they must pay you the value of your house - though they will probably try to minimize the value of it.

It is the term "public use" upon which Kelo turns. What exact uses can be accepted as "public" and what exactly is "use", anyway?

The Conservatives of the Court - Rehnquist, O'Connor, Scalia, and Thomas - dissented from the majority based on the definition of "public use", so it turns out to be central to the story. Specifically:

The public use requirement, in turn, imposes a more basic limitation, circumscribing the very scope of the eminent domain power: Government may compel an individual to forfeit her property for the public's use, but not for the benefit of another private person.


There are times, however, when what looks like the taking of property from one for the benefit of another is considered "public use". In Hawaii Housing Authority vs. Midkiff, the Court allowed the private property of Midkiff to be expropriated from his possession and transferred to the ownership of the HHA, from where it was sold to the public. The reason behind this has to do with the exact nature of housing in Hawaii. Apparently, the vast majority of land in Hawaii was held by a few very powerful families. By cornering the real-estate market, they were able to charge prices for housing that were above what the natural market would have sustained. Thus, private ownership of land in Hawaii had become antithetical to the public interest.

The Court refused to second-guess the legislature of Hawaii as to whether or not there was social injustice in the case. It thus upheld the right of the State of Hawaii to determine its own destiny (so "state's rights" opponents would do well to take note). It also ruled that simply taking property from one person and giving it to another was not, de facto, taking it out of "public use". The Court had to look at the underlying facts of the case to determine if the use served some public interest or not.

Key to the ruling was that Hawaii had not specifically set out to deprive Midkiff of his property. The statute was applicable to all landowners. It also set a means of ensuring just compensation. In other words, the only objection was that Midkiff wanted to keep his property so the rent rates could be inflated. The Court said, "No. You do not have the right to hold all of society hostage to your demands."

In Kelo, a similar situation was presented. The City Council of New London had commissioned an independent board to be in charge of revitalization - a common move used by municipalities to make sure that no one on the City Council plays politics with the development and planning of such projects. When Pfizer announced they were going to build a huge facility, New London decided that they would develop the land adjacent so as to make it easier for Pfizer to tie into city services and create a hub for revitalization. The New London Development Corporation set about acquiring the land - purchasing voluntarily when possible and exercising condemnation and emminent domain when nothing else worked.

At the point where the petitioners stalled procedings, NLDC had been entrusted with $15 million of the public's money through various bond issues. Part of the money had been used to buy up all of the remaining land and part in planning. The petitioners refused to sell, claiming their right of property ownership trumped the right of the City to develop property in the public's interest. In other words, the petitioners were saying that they hadn't approved of the $15 million bond issues and therefore they were not obliged to cooperate.

Based on the Midkiff ruling and the ruling in Berman v. Parker - where the Court held that Congress could, in fact, order that an entire block of slums be destroyed, even if one building was not a slum - the Court said that Kelo did not represent a capricious use of power (it was well-reasoned and planned) nor did it represent a personally antagonistic taking (the City had acquired ALL of the land, not just a few parcels). But was it going to be used for "public use"?

Conservatives say, "NO! They were going to give it to someone else to use! That's personal gain and that's wrong!" The majority on the Court, however, said, "The entire City will benefit from the development - not only in increased taxes (which is a tenuous statement, but the one most Conservatives scream) but in the creation of jobs and the rejuvenation of a historically run-down section of town.

Conservatives claimed, as did the petitioners, that this ruling would let any city give a parcel of land from group A to group B so long as B promised to make better use of it. The Court slapped aside that remark as not being at hand, and claimed that such a bald move would, indeed, be a violation of rights. Since that ruling, however, a wave of state laws have been passed in the hysteria that the Court was going to take everyone's house away from them.

It's hogwash, of course. The NLDC was a governmental body, imbued with governmental powers. It was appointed by the elected leaders of the City of New London. Apparently, the vast majority of New London residents didn't feel threatened by the NLDC making use of its powers and were sufficiently satisfied that it was, in fact, working in the public interest. Because the land is transferred to the governmental body, and used in a broad and general way, it is not giving land to any one person. In fact, allowing commercial development according to plan is more of a public use than was the case of Midkiff.

Compare a different case. In New York City, Rockefeller Square stands as a testiment to one man's ability to acquire some of the most expensive property in the country. Yet there is one piece of property that the Rockefeller family never owned - a small bar in the corner where the owner held onto his property in an effort to drive up the cost to Mr. Rockefeller. Instead, Rockefeller built around him. Mr. Rockefeller could not force the courts to give him the land simply because the current owner was an ass. That is simply because one individual has the right to be a complete ass to their neighbor.

For Kelo to have been decided the other way would have given a small group of landowners complete say over how and when and where the City had power to develop economic growth. I'm sure the petitioners spoke at the many public meetings. I'm sure there was every opportunity for them to mobilize public and political resistence. While the Court should always be a refuge for a minority targeted for brutal or injust treatment, this is simply not the case in Kelo. All of their neighbors had negotiated in good faith, and this group refused to accept a reasonable market value.

This country, every inch of it, belongs to the entire people of the United States of America. No one should ever be able to simply dig in and grind everything around them to a halt. Despite the fact that I never want my house to be taken for public use, I still understand that there are procedures for participating in the political decision to determine the public use. Ultimately, we are only a piece of the puzzle, and the puzzle doesn't exist so that our lives can have meaning. The Constitution does not list property rights as being inviolate - nor does the Declaration of Independence list them as "unalienable rights". That, too, is for good reason.

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