June 23, 2005

The Kelo Decision: When Private Property Rights are Eroded, Our Freedom is Diminished

Private property rights have always been central to our free society. That right is now gravely weakened after the Supreme Court issued a ruling that expands the ways in which the government can seize our homes:

The Supreme Court today effectively expanded the right of local governments to seize private property under eminent domain, ruling that people's homes and businesses -- even those not considered blighted -- can be taken against their will for private development if the seizure serves a broadly defined "public use."

In a 5-4 decision, the court upheld the ability of New London, Conn., to seize people's homes to make way for an office, residential and retail complex supporting a new $300 million research facility of the Pfizer pharmaceutical company. The city had argued that the project served a public use within the meaning of the Takings Clause of the Fifth Amendment to the Constitution because it would increase tax revenues, create jobs and improve the local economy.

A group of homeowners in New London's Fort Trumbull area had fought the city's attempt to impose eminent domain, arguing that their property could be seized only to serve a clear public use such as building roads or schools or to eliminate blight. The homeowners, some of whom had lived in their house for decades, also argued that the public would benefit from the proposed project only if it turned out to be successful, making the "public use" requirement subject to the eventual performance of the private business venture.

The Fifth Amendment also requires "just compensation" for the owners, but that was not an issue in the case decided today because the homeowners did not want to give up their property at any price...

The majority endorsed the view that local governments are better placed than federal courts to decide whether development projects serve a public purpose and will benefit the community, justifying the acquisition of land through eminent domain...

New London officials "were not confronted with the need to remove blight in the Fort Trumbull area, but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference," Stevens wrote. "The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including--but by no means limited to--new jobs and increased tax revenue."

Stevens added that "because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment."...

Dissenting were justices Sandra Day O'Connor, Antonin Scalia and Clarence Thomas, as well as Chief Justice William H. Rehnquist.

In a strongly worded dissenting opinion, O'Connor wrote that the majority's decision overturns a long-held principle that eminent domain cannot be used simply to transfer property from one private owner to another.

"Today the Court abandons this long-held, basic limitation on government power," she wrote. "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 -- i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public -- in the process."

The effect of the decision, O'Connor said, "is to wash out any distinction between private and public use of property -- and thereby effectively to delete the words "for public use" from the Takings Clause of the Fifth Amendment."...

This article contains excerpts from oral arguments on the case. Here are the formal opinions from the case.

There are a lot of strong reactions to this ruling and Michelle Malkin provides links here and here to many of them. Professor Bainbridge offers his thoughts. John Eastman offers some historical perspective as does Ken Masugi, whose comments include:

...From the original intent to eliminate slums, the use of eminent domain has degenerated into corruption masquerading as statesmanship and delusion sold as sound public policy...

The Wall Street Journal, in its editorial (available for a fee) entitled Kennedy's Vast Domain, writes:

The Supreme Court's "liberal" wing has a reputation in some circles as a guardian of the little guy and a protector of civil liberties. That deserves reconsideration in light of yesterday's decision in Kelo v. City of New London. The Court's four liberals (Justices Stevens, Breyer, Souter and Ginsburg) combined with the protean Anthony Kennedy to rule that local governments have more or less unlimited authority to seize homes and businesses…

… the plain reading of th[e 5th] Amendment's "takings clause" also appears to require that eminent domain be invoked only when land is required for genuine "public use" such as roads…

The founding fathers added this clause to the Fifth Amendment -- which also guarantees "due process" and protects against double jeopardy and self-incrimination -- because they understood that there could be no meaningful liberty in a country where the fruits of one's labor are subject to arbitrary government seizure.

That protection was immensely diminished by yesterday's 5-4 decision, which effectively erased the requirement that eminent domain be invoked for "public use."…

…Justice Kennedy wrote in concurrence that this could be considered public use because the development plan was "comprehensive" and "meant to address a serious city-wide depression." In other words, local governments can do what they want as long as they can plausibly argue that any kind of public interest will be served.

In his clarifying dissent, Justice Clarence Thomas exposes this logic for the government land grab that it is. He accuses the majority of replacing the Fifth Amendment's "Public Use Clause" with a very different "public purpose" test: "This deferential shift in phraseology enables the Court to hold, against all common sense, that a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation, is for a 'public use.'"…

…the unsual coalition supporting the property owners in the case, ranging from the libertarian Institute for Justice (the lead lawyers) to the NAACP, AARP and the late Martin Luther King's Southern Christian Leadership Conference. The latter three groups signed an amicus brief arguing that eminent domain has often been used against politically weak communities with high concentrations of minorities and elderly. Justice Thomas's opinion cites a wealth of data to that effect.

And it's not just the "public use" requirement of the Fifth Amendment that's undermined by Kelo. So too is the guarantee of "just compensation." Why? Because there is no need to invoke eminent domain if developers are willing to pay what owners themselves consider just compensation.

Just compensation may differ substantially from so-called "fair market value" given the sentimental and other values many of us attach to our homes and other property. Even eager sellers will be hurt by Kelo, since developers will have every incentive to lowball their bids now that they can freely threaten to invoke eminent domain…

These kinds of judicial encroachments on liberty are precisely why Supreme Court nominations have become such high-stakes battles…

Justice Clarence Thomas' dissenting opinion included this comment:

Something has gone seriously awry with this Court's interpretation of the Constitution.

Sheldon Richman writes about the decision and further discusses Justice Thomas' dissenting opinion:

O'Connor's words are to be savored, although she largely accepts the precedents, striving only to distinguish them from the current case. But it is to Justice Clarence Thomas we must turn for a model of proper constitutional interpretation and reasoning. His dissenting opinion goes further than O’Connor’s by calling the precedents into question. It is refreshing indeed.

Thomas writes: "Today's decision is simply the latest in a string of our cases construing the Public Use Clause to be a virtual nullity, without the slightest nod to its original meaning. In my view, the Public Use Clause, originally understood, is a meaningful limit on the government's eminent domain power. Our cases have strayed from the Clause's original meaning, and I would reconsider them."

Thomas proceeds to show, first, that it is sound constitutional principle to regard every word in the Constitution as meaningful and purposeful; second, that use at the time of the framing meant the "act of employing"; third, that to construe use more broadly would make the takings clause duplicative of powers already expressly delegated; and fourth, that the common law and great legal authorities such as Blackstone support this narrow reading of the word.

Thus, "The Constitution's text, in short, suggests that the Takings Clause authorizes the taking of property only if the public has a right to employ it, not if the public realizes any conceivable benefit from the taking…. The Takings Clause is a prohibition, not a grant of power.… The Clause is thus most naturally read to concern whether the property is used by the public or the government, not whether the purpose of the taking is legitimately public."

Since that is the case, the issue of deference to the legislature is put into perspective: "[I]t is most implausible that the Framers intended to defer to legislatures as to what satisfies the Public Use Clause, uniquely among all the express provisions of the Bill of Rights."

He concludes: "When faced with a clash of constitutional principle and a line of unreasoned cases wholly divorced from the text, history, and structure of our founding document, we should not hesitate to resolve the tension in favor of the Constitution's original meaning."

Richard Epstein, in a WSJ editorial (available for a fee) entitled Supreme Folly observes:

…for in [Justice Stevens’] view New London had made its case when it asserted, without evidence, that the new projects would both increase tax revenues and create new jobs. It hardly mattered that its projections had been pulled out of thin air and were already hopelessly out of date when the case reached the Supreme Court. All that need be shown to Justice Stevens was procedural regularity and some claim that the proposed project served some "public benefit."

Astute readers will quickly note that the phrase "public benefit" is far broader than the constitutional words "public use." That last phrase clearly covers only two situations. The first arises when land is taken to build government facilities, such as forts, or to construct infrastructure, such as highways, open to all. The second covers those cases where property is taken by, or conveyed to, private parties who are duty bound to keep it open to all users. Private railroads and private grist mills, both of which are subject to the common carrier obligation of universal service, are two obvious examples. Note too that once a given use is properly identified as public, it does not matter for constitutional purposes whether the project is wise or is as foolish as New London's redevelopment program. The constitutional inquiry is over once it is proved that the project falls into these categories. Factually, the standard of review hardly matters, for it takes little genius to prove that a given structure is a fort or a highway.

There are, however, good reasons why the public use language has long been extended to cover some cases of takings for private purposes with indirect public benefits. One recurrent problem of social coordination arises when one party is in a position to blockade the productive ventures of another…

The great intellectual blunder of the public use law over the past 50 or so years is that it has wrenched the public benefit language out of this narrow holdout context. In the mid-1950s, the Supreme Court held that takings were for public use when they were intended to relieve various forms of urban "blight" -- a slippery term with no clear constitutional pedigree. Thirty years later, the Court went a step further by allowing Hawaii to force landlords to sell their interests to sitting tenants, as a means to counteracting ostensible "oligopolistic" market conditions. Now any "conceivable" indirect social benefit would do, without regard to the attendant costs.

Given this past legacy, Justice Stevens found it easy to take New London at its word. Any comprehensive public project will produce some benefit for someone…his test always allows the legislature to gin up some rationale for taking public property for just compensation…

The Court could only arrive at its shameful Kelo ruling by refusing to look closely at past precedent and constitutional logic. Courts that refuse to see no evil and hear no evil are blind to the endemic risk of factional politics at all levels of government. And being blind, this bare Supreme Court majority has sustained a scandalous and cruel act for no public purpose at all.

This decision is a complete and total outrage. Tom Bethell, in his book entitled The Noblest Triumph: Property and Prosperity Throughout the Ages, offers an explanation on why it is such an outrage:

...There are four great blessings that cannot easily be realized in a society that lacks the secure, decentralized, private ownership of goods. These are: liberty, justice, peace and prosperity...private property is a necessary (but not a sufficient) condition for these highly desirable social outcomes.

Of these, the relationship between liberty and property is by now fairly well understood...Milton Friedman has said that "you cannot have a free society without private property."...

Rights are held against the state, and property is an important bulwark against state power...like all genuine rights, property rights protect the weak against the strong...

The institution of private property also plays a key role in establishing justice in a society. This is one of the most important arguments in its favor, yet the connection between private property and social justice has rarely been made, mainly because social justice has been equated with the distribution of already existing goods. Inequality is equated with injustice. Nonetheless, a private property regime makes people responsible for their own actions in the realm of material goods. Such a system therefore ensures that people experience the consequences of their own acts...Both the prudent and the profligate will tend to experience their deserts...As Professor James Q. Wilson has said, property is a "powerful antidote to unfettered selfishness."

Property is also the most peaceable of institutions. In a society of private property, goods must be either voluntarily exchanged or laboriously created. As long as such ownership is protected by the state, goods cannot easily be taken by force. Furthermore, a society with legal institutions that encourage the creation of wealth poses a diminished threat to the wealth of neighbors...Private property also allows a country to become rich enough to defend itself against aggressive neighbors, thereby reducing the likelihood of conflict.

Private property both disperses power and shields us from the coercion of others...It leaves us free to act without interference, within our own autonomous spheres..

Prosperity and property are intimately connected. Exchange is the basic market activity, and when goods are not individually owned, they cannot easily be exchanged. Free-market economies, therefore can only be built on a private property base...

This Supreme Court decision highlights another reason why the nomination of any new justice to the Court is so important to our freedom. And why the appointment of Janice Rogers Brown to the D.C. District Court of Appeals was so important.

Power Line offers further valuable insights that re-connect us with the Founding principles of America:

...The right to property was central to our founding; it occupied a vital place in the system of free government the founders built. The right to property was an instrument to defend common people from the power of the establishment...

For the past hundred years the attack on private property has been central to the Progressive assault on the Constitution, beginning with J. Allen Smith's The Spirit of American Government (1907) and continuing most importantly with Charles Beard's An Economic Interpretation of the Constitution (1913). Smith and Beard portrayed the constitutional protection of private property by the founders as the weapon of an elite interested in preserving its privilege...

The American Revolution is of course the appropriate place to begin to understand the role of property rights in the American legal order. The American Revolution was in part a rebellion against the feudal order...In the feudal order all property belonged to the King; the King retained ownership but conditionally granted the use of property to his subjects.

By contrast, the idea that men possessed the right to acquire and enjoy property separate and apart from the prerogative of sovereign government was one of the "unalienable rights" grounded in "the laws of Nature and Nature's God" at the heart of the American Revolution. In the founders' view, property rights did not emanate from government. Rather, they emanated from the nature of man, and it was the function of government to protect the rights conferred on man by nature. Indeed, Jefferson characterized property rights as "the first principle of association, the guarantee to everyone [of] the free exercise of industry and the fruits acquired by it." As Jefferson's comment suggests, the right to acquire property was the critical right for the founders; it made property rights the friend of the poor by allowing them to earn and safeguard wealth ("the fruits acquired by" work).

Accordingly, when the founders crafted the Constitution and Bill of Rights, they provided numerous protections of property rights...

Further, putting property on a par with life and liberty, the Constitution prohibited the government from taking property in any criminal case without due process. And in the takings clause of the Fifth Amendment, the government was prohibited from taking private property for public use without just compensation; the government was not even afforded the power to take private property for anything but public use.

The founders extended these and other specific protections to the property of Americans in the fundamental law of the United States for the sake of freedom. The freedom to exercise and profit from one's abilities without regard to caste or class was in the view of the founders the essence of freedom.

As James Madison wrote in the Federalist Papers, "the first object of government" is the "protection of the diversity in the faculties [abilities] of men, from which the rights of property originate." In the eyes of the founders, the protection of property rights was a bulwark for the poor in assuring them that the wealth earned with the sweat of their brow could not arbitrarily be expropriated by the heavy hand of government.

It was precisely on this ground that Lincoln sought to persuade Americans of the injustice of slavery...He often spoke of the heart of slavery as a denial of property rights: "It is the same tyrannical principle that says, 'You work and toil and earn bread, and I'll eat it.'"...

The founders' study of history taught them that majority rule was susceptible to tyranny and that the protection of property rights was an indispensable condition for the preservation of freedom and for the growth of national wealth. The founders observed that tyrannical rule and material scarcity had by and large been the fate of man through the ages. They saw the confiscation of property by government in the name of the sovereign power of the state as an old and sorry story. Through the protection of property rights they aimed to forge a new order of the ages. It lies to us to regain their understanding and act on it.

The Kelo decision goes against the Founding principles of America. Slowly but surely, our freedom is being diminished. And don't forget that the people most at risk of losing their freedom are those least able to fight against the tyrannical power of government. Professor Bainbridge reinforces this point with a quote from Justice O'Connor's dissenting opinion:

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.
Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

Unbelievable. This country has lost all sense of perspective in regard to private property.
Confiscation of cars for being in the wrong place at the wrong time.
Confiscation of large cash sums, on the PRESUMPTION of drug dealing.
Confiscation of homes SUSPECTED of being involved in drug dealing.
(All of the above on the presumption of guilt until proven innocent!)
Confiscation of homes and businesses at the behest of (currently) more favored businesses.
The list goes on - even in genuine Public Use cases, compensation should include the value of the property, the costs of researching and buying an equivalent property, and the costs of moving the household or business, including lost wages or business income. FAT CHANCE under the current legal climate.
Clarence Thomas for Chief Justice. Bring on the strict coonstitutionalists! Unleash the nuclear option and simply hold up/down votes on all candidates: Advice and consent, not obstruct and reject. 51 votes is enough.
Bush is not perfect, but he is good and honest, and has the "vision thing" which his father lacked. His candidates deserve a vote.

Posted by: Mike Rogers at June 28, 2005 10:31 PM