Posts Tagged ‘ Supreme Court ’

Elements of Failure

    

Kelo vs. City of New London

 

The other day while at the gym I overheard a man complaining about how the town of Ellington, via eminent domain, took a segment of his front yard to have a traffic rotary built.  This is considered a typical use of eminent domain and how most people in the United States in envision the government use of eminent domain.  However in the post-war World War II era the use of eminent domain has taking a radical shift in its implications, cultivating into what would become the landmark case of Kelo v. New London.  This shift has to do with economic issues, such as job creation and the increase of tax revenue.  Although the need for municipalities to increase tax revenues is the primary reason for this shift has taking place in the use of eminent domain.  Cities and towns see tax revenue drying up so local governments have no issue with taking land from person A and giving it to person B because person B usually is a business that will develop that land increasing the value of that land, which in turn brings in more tax revenue than what was previously there. 

For many in the United States the Kelo decision would be a welcome outcome, for many others the decision would take what they held as sacred and place it in the crosshairs of any entity that saw a value in the land their homes stood on.  Across the United States in any given year there could be as many as ten thousand cases in which governments are using the power of eminent domain to take land from tax paying homeowners or business owners and handing that land over to development companies or wealthier business owners claiming that doing so will increase tax revenue for the city or town and spurring economic growth[1].  Businesses and their supporters would point to changing market conditions and the need for economic growth should take precedence over everything else, even if it takes from person A and gives it to person B[2].  The Kelo decision would swing the pendulum into an area that would let a segment of the population infringe on the rights and liberty of another, however the pendulum was starting to swing that way for some time.

To get to the Kelo decision one must take a look at how the process of Prior to the Civil War the concept of eminent domain was limited to the federal government in that the government could take land from a private owner for use to build a project that would benefit the general public, like a road or bridge.  What gave the federal government the right to do this was the 5th Amendment[3], however the government had to give just compensation.  The first change to eminent domain, or the takings clause, would not come until the 14th Amendment when it was decided by the Supreme Court that the states, and local town governments, have a right to take land via eminent domain under the equal protection clause[4].  It would not be until after the Second World War, which ushered in a period of unprecedented prosperity in the United States, that the takings clause would again change.

The United States since the beginning of the 20th century has promoted urban renewal by means of urban redevelopment.  One such project that succeeded in urban redevelopment, and did not need to use eminent domain, was the building of Grand Central Terminal in New York City, The New York Central Railroad already owned the land the new terminal was built on.  However projects like the Terminal are rare because the land the Terminal was built on so there was no need to use eminent domain to acquire land.  With successes like Grand Central Terminal comes a need to continue that success.    Railroads are what most people think of when they think of eminent domain, the greedy railroad baron trying to steal land from honest Americans.  With an increase in industrialization and changes in the national economy it would not be the greedy railroad robber-baron trying to get peoples land for nothing by eminent domain, it would become corporations wanting the land to build factories, hotels, and office space.

As urban renewal hit full steam state and local governments face the problem land was limited, so to make up for the lack of land the governments would look for areas within cities and towns that were blighted.  Now in most blighted neighborhoods most of the people may not have much and are willing to take the compensation offered.  However there would be some whose property was in good shape, or better, but unfortunately fell into the blighted zone.  In Washington D.C. one case like this would arise in 1954, Berman v. Parker.   In the District of Columbia there arose a need to improve blighted areas because these substandard areas could be “…injurious to the public health, safety, morals, and welfare…” of the citizens within these areas[5].  The District of Columbia Redevelopment Land Agency was given the authority to take in possession of properties for redevelopment and in doing so blighted a neighborhood that the Berman’s department store stood.  The Berman’s store was in better shape compared to the rest of the neighborhood in which the overwhelming majority of buildings were beyond repair and still had outside toilets, some even lacked electricity[6].  Without dissent the Court affirmed the decision of the lower court stating it is “…fruitless…” to define the limits of eminent domain, which the Court defined as a police power.  It was, and is; in the eyes of the Court a police power municipal governments need to insure “public safety, public health, morality, peace and quiet, law and order[7].”   The Court further explains it is not the responsibility to of the “…courts to oversee the choice of the boundary line…nor size of a particular project area[8].”  The Court explains why takings such as this are important to the public, but gives a stinging rebuke to the Bermans and others that may want to challenge the takings clause in the future with the final sentence of the opinion.  The Court said in that rebuke “The rights of these property owners are satisfied when they receive that just compensation which the Fifth Amendment exacts as the price of the taking[9].”  This one sentence is very powerful and it alone, despite the precedents the court used, explains what eminent domain is and will be in the future.  It more or less says to take the money that is offered as compensation, do not dispute eminent domain because the government will always win.

Like the Berman case, there is another that the Supreme Court used in the Kelo decision as a precedent was the case of Hawaii Housing Authority v. Midkiff from 1984.  Even though the Midkiff case is an eminent domain case it is nothing like the Berman or Kelo case.  The Midkiff case had to deal with breaking up a long-standing feudal tradition in Hawaii were that 47% of the land was owned by 72 private landowners who leased the land to tenants[10].  The State of Hawaii contended that because of the vast amounts of land these 72 landowners held the value of land was overly inflated and limited growth within the state.  The State wanted to take possession of the land to sell to private individuals; therefore the Hawaiian Legislature enacted legislation to seize the land from the landowners[11].  The landowners claimed they wanted to sell their land but federal tax code would inflict substantive monetary costs, making leasing the land more profitable for them[12].  Like the Kelo case the state of Hawaii wanted to give the land to private homeowners, however many of these homeowners already were leasing the land from the landowners.  It would be because of this that the Court would “…have no trouble concluding that the Hawaii Act is constitutional[13].”  The Midkiff case lacked the usual elements of an eminent domain case in that the land was not blighted and in some cases the renters improved the land.

A case that gets a single mention in each, the Supreme Court decision and the Connecticut Supreme Court, decision is Poletown Neighborhood Council v. City of Detroit.  The Poletown case is from 1981 and was decided in the Supreme Court of Michigan, never made it to the United States Supreme Court.  The Poletown case is very much like the Kelo case, in that a corporation is involved.  By time Kelo was argued in the United States Supreme Court Poletown would be overturned by the Supreme Court of Michigan in 2004 with the Wayne County v. Hathcock case[14].  The details of the Poletown case are eerily similar to that of the Kelo case, which makes one wonder why the Connecticut Supreme Court did not reference it more in the decision it rendered, the Poletown case deals with many of the same elements as Kelo.  The Poletown case revolves around a neighborhood of mostly Polish immigrants that was blighted by the city and taken by eminent domain by the city of Detroit to be given to General Motors, so that a factory can be built on the land. Michigan Supreme Court decided that the land should be given to General Motors because the plant would “…alleviate and prevent conditions of unemployment…” in the state and any “…benefit to a private interest is merely incidental[15].”  To make the point clear the Michigan Supreme Court quoted former Michigan Supreme Court Chief Justice Thomas Cooley from an eminent domain case just over a century prior that said “…the most important consideration in the case of eminent domain is the necessity of accomplishing some public good which… the law does not so much regard the means as the need[16].”

The Kelo case is similar to that of Poletown in that a private corporation is involved in that the private corporation will be receiving the taken land to develop for its own need.  In Poletown General Motors was directly involved in the need to take the land, in Kelo Pfizer Pharmaceutical was involved, however Pfizer’s amount of involvement may never be truly known.  It would be safe to say Pfizer was very involved in the process, to the point that some felt there was a backroom deal between Pfizer and then Governor John Rowland[17].  It would be the State of Connecticut issuing the funds, seventy million dollars, to New London and New London Development Council to move forward with what become known as the Fort Trumbull Project, that was to be injection of jobs and tax revenue into the city of New London, with Pfizer building a new state-of-the-art research center next to the proposed project[18].  The land for this proposed project consisted of a scrap metal yard, water treatment plant, residential housing, and abandoned AMTRAK station, and the closed Naval Underwater Sound Laboratory totaling ninety acres of undervalued waterfront property[19].  Not the most attractive pieces of land, certainly showing the elements of a dead city, and one could question why anyone would want to live in this neighbor, but yet a home is a home.

At the core of the defense were a small number of homeowners, nine in total. Some like Suzette Kelo lived there a short while, Kelo herself had just bought her house in the Fort Trumbull neighborhood 1997, a year prior to the project being announced.  Others like, Wilhelmina Dery, lived in the neighborhood for long periods of time.  Dery herself was born in the house she lived in, and would die in that house[20].  It is east to see why Dery would choose not to sell her house; it would be tough for her to replace all the memories.  Suzette Kelo on the other had could have should with the possibility of making a profit, granted it would be at taxpayer expense.

The question in the Kelo case was far beyond that of public use, because to many involved it was exactly how the land would be used.  Many felt the land was going to be used for the benefit of Pfizer, not the public, because Pfizer asked for a hotel, upscale condos, and office buildings be put on the land.  These are all things that were worked into the final proposal, giving the Fort Trumbull project a direct similarity to the Poletown case.  The proposal from the New London Development Corporation would have in one parcel of the project close to ninety thousand square feet of “…high technology research and development office space…located close to other research and development facilities, including those of Pfizer[21].”  New London is not known for high technology research, there are other areas in the state that may fit that description, and New London would be more suited for naval research and development with the Electric Boat Shipyard across the Thames River.  Another issue involved in this project was doubt of any success, Pfizer included or not, because of a number of failures the New London Development Corporation has had since it was formed in 1990[22].  This feeds in the publics beliefs that Pfizer was indeed the entity behind the project with its self interests being served.

New London is a dying city, if not a dead one already.  With the United States Coast Guard Academy and Connecticut College takes up the vast amounts of the land in New London, neither of which is taxable.  Including the parks and churches fifty six percent of the land in New London is nontaxable, leaving the city to struggle to find ways to bring money in[23]. With limited tax revenue coming into the city, the city struggles to pay for services such as police, fire and education.  There is a negative impact to the citizens of New London, an impact that was starting to be felt within the city.  Not helping New London, to the north two casinos were opening up on Native American reservation land.  Growth was all around New London, but not in New London.  There were few options for New London, and the city government knew something would have to be done soon to help the city.

It could be said the Supreme Court may have had the best of intentions in mind when it affirmed the ruling by the Connecticut Supreme Court, helping a city that is dying a slow death rebuild and prosper benefiting those who live in the city.  Cities over time become stagnate and need to find sources of increased revenue.  However its borders limit a cities growth, which means they have to take from one and give to another to generate new streams of tax revenue.  However what the Supreme Court failed to do was protect the rights of citizens, who put time and effort in making a home a home.  It is a difficult balance that the society needs to maintain.  With history as a guide we can see that many times the Supreme Court has not always made the best decisions, sometimes choosing a perceived benefit over actual law and actual benefits.  Today in the city of New London the neighborhood that was fought over, the piece of land the Supreme Court said there would be perceived benefits of tax revenue and job growth, is nothing but a empty plot of grass, void of any buildings, jobs, and increased tax revenue.  It seems everyone in New London knew this project would be a failure, except the Supreme Court.

Bibliography:

Berman V. Parker, 348 US 26 (Supreme Court 1954).

Berman V. Parker, 348 US 26 (Supreme Court 1954).

“Bill of Rights Transcript Text”, n.d. http://www.archives.gov/exhibits/charters/bill_of_rights_transcript.html.

Cohen, Charles E. “Eminent Domain After Kelo V. City of New London: An Argument for Banning Economic Development Takings.” Harvard Journal of Law & Public Policy 29, no. 2 (Spring 2006): 491–568.

“Eminent Domain – 60 Minutes – CBS News”, September 28, 2003. http://www.cbsnews.com/video/watch/?id=7380308n&tag=mncol;lst;1.

“FORT TRUMBULL PLAINTIFF DIES: [5 NORTHWEST CONNECTICUT/SPORTS FINAL Edition]”, n.d. http://0-search.proquest.com.www.consuls.org/hartfordcourant/docview/256969587/135404C5AAB37FA166B/7?accountid=9970.

Hawaii Housing Authority V. Midkiff, 467 US 229 (Supreme Court 1984).

Kelo, Susette, Thomas B Metzloff, Sarah Wood, Todd Shoemaker, Duke University. School of Law., and Distinctive Aspects of American Law (Project). Kelo V. City of New London 545 U.S. 469 (2005). Durham, NC: Distinctive Aspects of American Law Video Project, Duke University School of Law, 2006.

Kelo V. City of New London, 268 Conn. 1 (Supreme Court 2004).

Kelo V. New London, 545 US 469 (Supreme Court 2005).

Poletown Neighborhood Council V. City of Detroit, 410 Mich. 616 (Supreme Court 1981).

Saginor, Jesse, and John F. McDonald. “Eminent Domain: A Review of the Issues.” Journal of Real Estate Literature 17, no. 1 (January 2009): 3–43.

STEWART, GEOFFREY T., JERILYN BOWIE-HILL, ANNE K. KEATY, and RAJESH SRIVASTAVA. “The Influence of Kelo V. City of New London, Connecticut on the Use of Eminent Domain in Place Marketing and Economic Development.” Marketing Management Journal 18, no. 2 (Fall 2008): 179–190.


[1] “Eminent Domain – 60 Minutes – CBS News”, September 28, 2003, http://www.cbsnews.com/video/watch/?id=7380308n&tag=mncol;lst;1.

[2] Geoffrey T. Stewart et al., “The Influence of Kelo V. City of New London, Connecticut on the Use of Eminent Domain in Place Marketing and Economic Development,” Marketing Management Journal 18, no. 2 (Fall 2008): 179.

[4] Jesse Saginor and John F. McDonald, “Eminent Domain: A Review of the Issues,” Journal of Real Estate Literature 17, no. 1 (January 2009): 3.

[5] Berman V. Parker, 348 US 26 (Supreme Court 1954).

[6] Berman V. Parker, 348 US 26 (Supreme Court 1954).

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Hawaii Housing Authority V. Midkiff, 467 US 229 (Supreme Court 1984).

[11] Charles E. Cohen, “Eminent Domain After Kelo V. City of New London: An Argument for Banning Economic Development Takings,” Harvard Journal of Law & Public Policy 29, no. 2 (Spring 2006): 512.

[12] Hawaii Housing Authority V. Midkiff, 467.

[13] Ibid.

[14] Cohen, “Eminent Domain After Kelo V. City of New London,” 515; Saginor and McDonald, “Eminent Domain,” 11.

[15] Poletown Neighborhood Council V. City of Detroit, 410 Mich. 616 (Supreme Court 1981).

[16] Ibid.

[17] Susette Kelo et al., Kelo V. City of New London 545 U.S. 469 (2005) (Durham, NC: Distinctive Aspects of American Law Video Project, Duke University School of Law, 2006).

[18] Ibid.

[19] Kelo V. City of New London, 268 Conn. 1 (Supreme Court 2004); Kelo V. New London, 545 US 469 (Supreme Court 2005); Kelo et al., Kelo V. City of New London 545 U.S. 469 (2005).

[20] “FORT TRUMBULL PLAINTIFF DIES: [5 NORTHWEST CONNECTICUT/SPORTS FINAL Edition]”, n.d., http://0-search.proquest.com.www.consuls.org/hartfordcourant/docview/256969587/135404C5AAB37FA166B/7?accountid=9970.

[21] Kelo V. City of New London, 268.

[22] Kelo et al., Kelo V. City of New London 545 U.S. 469 (2005).

[23] Ibid.

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