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An End to Eminent Domain Abuse?

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Among the many ways in which American citizens have become less secure at the hands of government is the possibility that they will be victimized by eminent domain. At one time limited only to seizures of land necessary for some public use — and then only with the payment of just compensation — the use of eminent domain expanded greatly in the latter half of the 20th century, owing to court decisions approving of its use for projects thought by politicians to provide some “public benefit.”

The U.S. Supreme Court opened this Pandora’s box in 1954 with its decision in Berman v. Parker (348 U.S. 26), allowing Washington, D.C., to condemn a department store simply because local authorities wanted the land for a private development. The land was not to be put to any public use at all, but was simply to be transferred to a different private owner. Anyone familiar with the proclivities of politicians would have foreseen that the result of that decision would be a rash of eminent-domain seizures. The temptation to expropriate people’s property is one few politicians can resist and the Court had just cut the constitutional tether that formerly kept eminent domain a limited phenomenon.

In a case the Court heard this year, Kelo v. City of New London, the justices have an opportunity to restore eminent-domain law to its constitutional moorings. Kelo squarely presents the question whether local governments will be permitted to continue dispossessing people whose homes and businesses are coveted for “redevelopment” because politicians want to expand the city’s tax base. In 2005 it has the chance to correct its 1954 blunder that gave local governments free rein to trample upon unfortunate property owners whose land happens to lie in the way of some political vision of “the public interest.”

Here are the facts. In 1998, the City of New London, Connecticut, and the New London Development Corporation, a private, nonprofit corporation, began legal proceedings to condemn land allegedly needed to create a 90-acre redevelopment park in the city. The grandiose political vision was that redeveloping the area (a euphemism for shooing away the people already there and destroying their homes so something the politicians prefer can be built) would help “build momentum” for the “revitalization” of the city. That wishful thinking was enough justification for the seizure of numerous homes, including that of Susette Kelo.

Under the plan, the 90-acre tract, adjoining property owned by Pfizer, Inc., would become a gleaming new commercial center with a luxury hotel, office buildings, new housing, shops, and a river walk. Naturally, the city didn’t bother to ask the landowners if they would be willing to sell and try to negotiate the purchase of the 115 parcels of land it wanted. It simply decided to use eminent domain to take what it wanted. Why bother with the messy business of negotiating when the easy expedient of a forced transaction is available?

The land seizure was challenged by a number of property owners, including Kelo. Predictably, the Connecticut state courts that ruled on the case found the taking to be perfectly all right. The U.S. Supreme Court has agreed to review the case, creating an opportunity to slam the door on one of the worst abuses of power since the end of the Jim Crow era.


The abuse of “public use”

The U.S. Constitution’s Fifth Amendment states that government shall not take private property except for “public use” and must then pay “just compensation” for it. Sad to say, governments now routinely take land for projects that can be termed “public use” only by distorting the meaning of words, and, to make matters worse, the owners seldom receive anything close to “just compensation.” For many landowners, eminent domain is merely a fancy term for a legal mugging.

Consider, for example, a distressing case that arose in Lakewood, Ohio. In that Cleveland suburb, city officials decided that they would rather have a new condominium and retail shopping development in place of a quiet old residential neighborhood. To justify the legal seizure, officials declared the area “blighted” and therefore in need of redevelopment. The houses were neat, middle-class dwellings that no reasonable person would call “blighted,” but nothing compels government planners to be reasonable.

Once the area had been declared blighted — in a surreptitious move that gave the residents no opportunity to attempt to block the plan — residents were told that they would have to move within three months because the bulldozers would start demolition then. This was rank power politics, taking property from some people lacking in money and political influence to give it to other people with both, the vile deed facilitated by the elected “representatives” of the residents.

The Lakewood case (one of many ably discussed by journalist Steven Greenhut in his recent book Abuse of Power) had an unexpectedly happy ending for defenders of property rights. The homeowners managed to fight back successfully. With expert legal and media advice from the Institute for Justice, they were able to cause so much adverse publicity on the proposed seizure that the developer backed off and eventually the designation “blighted” was removed. The Lakewooders weren’t forced out, but avoiding condemnation had cost them dearly in money, time, and anguish. A successful battle to save what is yours is better than a losing one, but in a free society, you shouldn’t have to fight such battles at all. Greenhut’s book makes it clear that the deck is so stacked against property owners that most can’t or don’t fight eminent-domain seizures, those who do usually lose (while being pilloried as “greedy” for getting in the way of “progress”), and almost no one is ever made whole after the taking of his property.

Pursuing their ambition to have a larger tax base, politicians have figured out that eminent domain is an easy way for them to take land away from people who aren’t making very good use of it — because they don’t pay a lot in taxes — and hand it over to others who will make “better” use of it — because they will be subject to much higher taxation. The dispossessed are almost always owners of small homes or businesses, while the beneficiaries are big-business interests. In the socialistic mindset of typical government officials, if the existing pattern of land use in their jurisdiction doesn’t provide them with the maximum amount of tax revenue, they are justified in taking land away from its owners and transferring title to others. Higher taxes, which officials can then spend on the supposed “public interest,” justify treating peaceful landowners like medieval serfs.


Defending property rights

Kelo has attracted quite a bit of attention, both from an officialdom that’s afraid the Court might rule against its nasty little game and from defenders of the constitutional approach to property rights. A devastating amicus curiae brief has been submitted by three Cato Institute legal scholars and University of Chicago law professor Richard Epstein, a long-time critic of eminent domain whose book Takings was first published in 1985. In that brief, they demonstrate that the likelihood of any net benefit to New London is extremely small; that the city’s calculations are laughably weak in that they ignore the cost of the “massive state subsidies needed to make the project viable”; and that the significant uncompensated costs (such as moving) that would be imposed on the property owners were never taken into account in the city’s cost-benefit calculation.

The Cato/Epstein brief hits the bull’s eye in observing that eminent-domain cases like this one “result in a systematic unfairness to the individuals who are forced to sacrifice their property to some fuzzy vision of the public good.” Court decisions going back to Berman v. Parker have invited scurrilous politicians (often, incidentally, “liberals” who like to claim that they are champions of “the little guy”) to use eminent domain as a means of accomplishing grandiose civic-improvement plans through coercion. Naturally, they have chosen that path rather than peaceful means of attracting new commerce to their cities. To listen to local politicians, you’d think that stealing land and then handing it over to favored businesses is the only conceivable way to “revitalize” a city. Has it ever occurred to politicians that there would be more investment, both in existing and new enterprises, if government simply did a better and more efficient job of performing its core functions and otherwise stopped harassing people with taxes, fees, regulations, and red tape? Do they have any sense that central planning is far inferior to the uncoerced planning that individuals do when free of governmental interference?

Alas, the answer to those questions is “No.” Most politicians cannot conceive of the growth potential of a free society. They have been raised in the socialistic belief that improvement can come only from deliberate planning through government power, something that eminent domain allows them to do on the cheap. So long as eminent domain and other coercive tools are available, few officials will resist them merely because they wreck innocent people’s lives.

Think of it this way: Imagine that a college professor assigned a term paper, but then told his students, “I don’t care whether you research and write the paper yourself, or merely do some plagiarizing.” Most students would take the cheap and easy route, copying others’ work to fulfill the assignment.

Politicians are no different. If allowed to take the cheap and easy route to civic improvement, they will. And just as there is no benefit to the student in plagiarizing, there is no benefit in the negative-sum game of trying to redirect building and investment from those places where it would naturally occur to places where it occurs only because officials can use the bait of stolen, cut-rate real estate.


Kelo’s importance

That’s why Kelo is such a critical case. The Court can set forth clear rules that would once again confine eminent domain to its intended constitutional boundaries — only for public uses where just compensation is paid. If it does so, the Court will put an end to the tawdry business of dispossessing people who happen to own homes or businesses where politicians envision condos or Costcos.

My worry, however, is that the Court will avoid the big issue presented in Kelo and instead find some narrow ground for ruling. The current Court has shown an annoying tendency to do that, crafting “compromise” decisions that ignore clear constitutional language in its search for politically expedient means of resolving cases. Let us hope that it does something unexpected here and brings our wayward law back in line with the Constitution.

This article originally appeared in the April 2005 edition of Freedom Daily.


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    George C. Leef is the research director of the John W. Pope Center for Higher Education Policy in Raleigh, North Carolina. He was previously the president of Patrick Henry Associates, East Lansing, Michigan, an adjunct professor of law and economics, Northwood University, and a scholar with the Mackinac Center for Public Policy.