Reading Kelo v. New London Case Excerpts

0:00 Can the government take an individual’s property and give it to a private developer in the furtherance of economic development? In 2005, the Supreme Court took up this question in the case of Kelo v. New London. Hi, my name is Joshua Schmid and I work on the content team at the Bill of Rights Institute.

0:22 Today I am joined by Dr. Josh Dunn to discuss this case. Thanks for joining us, Josh. Thanks for having me. Great. So this case involves this constitutional question that I read at the beginning. It’s revolving around property rights and specifically the Fifth Amendment.

0:48 And so we have here the wording of the final clause of the Fifth Amendment "nor shall private property be taken for public use without just compensation." And this is the definition, basically, of eminent domain. Can you tell me a little bit about what eminent domain means?

1:09 So, eminent domain really is, as it says on the screen there, that the government can take property for public use. And it’s often used by state and local governments to engage in, as we’ll see in Kelo versus New London, but elsewhere around the country, and economic redevelopment, quite often it’s used for the building

1:32 of things like roads or a hospital or a school. So it’s been part of the Fifth Amendment from the beginning, but clearly the people who wrote the Fifth Amendment, the founding generation, wanted to put limits on the government’s power to use this. Right. Yes. And this has really been a question

1:54 throughout US history about how should we interpret eminent domain? Like, what are the limits on what the government can and cannot do when it comes to individuals private property? Because the founders placed a lot of emphasis on an individual’s private property rights, but they also included

2:19 the power of eminent domain as a power that the US government has because they understood that the public also needed these services that you mentioned, hospitals, roads, things like that, for the common good of society.

2:39 So tell me a bit about what Kelo versus New London. What happened? What are some details of the case? So, New London, Connecticut had what was called the New London Development Corporation and the town had fallen on economic hard times, and so there was an attempt to revive it economically.

3:00 There was support from the Governor of Connecticut as well, who wanted to improve the economy in New London. However, the Governor at the time was a Republican and he couldn’t work with the Democrats who controlled the town of New London and also was trying to bypass them for other reasons. So they decided to use this New London Development Corporation,

3:23 which was a private entity, to create this redevelopment program. And so they had recruited Pfizer, the pharmaceutical company, to come and build a facility in New London, Connecticut. And then along with that facility, Pfizer wanted there to be shopping and housing that they thought would be appropriate for the people who would be

3:45 working at Pfizer or coming to visit Pfizer. And so in order to do that, they had to condemn a neighborhood known as the Fort Trouble neighborhood, and to essentially take the property and the homes that were there, destroy the homes, and then turn them over to another private developer,

4:05 who would then build out these things that FISA wanted. Some people, though, namely Suzette Kelo, who lends her name to the case, but she had other supporters, and there were others in the neighborhood oppose this. They didn’t want to give up their homes. They were attached to them. They tended to be people of fairly modest means. You would not call this neighborhood

4:26 anything close to wealthy, lower middle income neighborhood, perhaps. But they resisted because they didn’t want to sell their homes. And they thought that it was unjust to take their homes and then turn over their land to another private owner. And so they ended up, after failing to get other attorneys to represent them, getting an organization

4:48 called the Institute for Justice to represent them in court. And so the Institute for justice ended up litigating their claims all the way through the Supreme Court, where the issue was, can you transfer their private property, Suzette Kelo’s private property, to another private owner and have that count as public use? So the Supreme Court ended up ruling five to four in favor of New London.

5:16 So it went through local court, state court, et cetera, until the final decision came. And so the court essentially ruled that eminent domain does allow the government to take an individual’s

5:38 private property and give it to another private group or private individual. And we see here, just as John Paul Stevens argument for this idea, and he mentions her new jobs and increased tax revenue as being part of the benefits to the community.

5:58 So he’s not just saying Pfizer benefits from this. He’s saying it’s actually going to be all of New London that is going to see the benefits of taking Kelo’s home and her neighbors’ homes. And because there’s going to be those public benefits,

6:18 then this meets the requirements of the Fifth Amendment Right. So what the majority said is it serves a public purpose. So public use essentially means public purpose, according to the Supreme Court. Now, this idea was not new, by the way. You go back to really 50 years earlier

6:39 in a case of 1954, Berman versus Parker, the Supreme Court said the same thing, where there was an economic revitalization program where they’re trying to clear out blighted areas, they said in Washington DC. And they wanted to take a man’s store that was not blighted, didn’t meet the definition that Washington DC had used for blighted.

7:00 And he challenged it, or the state challenged it as a violation of the Fifth Amendment, and they essentially redefined public use as public purpose. This was then also reaffirmed by the Supreme Court in 1084 in a case called Hawaii Housing Authority versus Midkiff. And in that case there was a significant percentage into the land on the island

7:21 of Oahu that was owned by about half a dozen families. And so they said this was distorting the housing market and so they wanted to take that land and then allow other individuals to purchase it to make the housing market fair. And in that case, the Supreme Court ruled

7:41 nine to nothing in favor of Hawaii or Hawaii Housing Authority. So this wasn’t new, but the circumstances surrounding it in many ways clarified some of the real issues that are often come up in these kinds of cases because in this case, Suzette Kelo was obviously of modest means

8:03 and then it’s basically her versus Pfizer and then the city leaders of New London. And that’s often how it works in these redevelopment cases that the people whose property is taken and transferred to other developers tend to be not the most well heeled members of the community, certainly by no means wealthy.

8:26 So the burden often falls on lower income groups and often minority groups. This is another excerpt that we have from Justice Stephens. He’s going to argue that there is a question around the wisdom of using eminent domain to promote economic development and there is debate,

8:47 you mentioned. As you mentioned, there is a number of people who argue against doing this because it does affect people of lower income. But he says the Court is limited in what it’s ruling here. It’s not saying whether it does work or it doesn’t work.

9:10 It’s simply saying that it does fall under the public use section of the Fifth Amendment. Yes, the response to that by critics of the decision and they ended up being from all across the ideological spectrum, there really was a kind of bipartisan or trans-ideological response to this,

9:35 was that if public use actually just means public purpose, then that means that there’s really no limit on the power of the eminent domain. And then that just makes that clause of the Fifth Amendment a dead letter because really anyone’s private residence, if that property were to be

9:56 rezoned and converted to commercial use, would generate more tax revenue. And so that would be I think one of the primary arguments is that there has to be some limit on this power and given the way the Court treated it in Kelo versus New London and the logic here, as we see with Justice Stevens is that

10:18 it wouldn’t seem to allow for any limit at all. So that, I think, was the most powerful response to the majority. And as we’ll talk about later, I’m certain that there was something of a political reaction to this. Speaking of just that idea of unlimited interpretation, I believe that after this

10:42 ruling was handed down, a group actually pushed to take Justice. Souter one of the justices who ruled in the majority, they pushed to take his home his private home and turn it into some sort of commercial land development.

11:04 They wanted to turn it into an inn or a bed and breakfast and they were going to call it the Lost Liberty Hotel. It was a home that he lived with, with his mother in New Hampshire. Yeah, just kind of as a way of saying, look, if you want to do this to other people, we’re going to do it to you. Kind of a slap in the face. Right.

11:25 So let’s take a look at the dissent. Now. Here we have Justice Sandra Day O’Connor and she kind of alludes to this David Angliasque battle that we have here, where essentially anything can become public, benefit the public.

11:51 Right. So, interestingly, the person who wrote the majority opinion in Hawaii Housing Authority versus Midriff was Justice O’Connor. And so some of what she’s doing here in her dissent is trying to distinguish between the issue in Hawaii Housing Authority versus Midship and Kelo versus New London. It’s not clear that she’s successful

12:13 in that, though, because the principle is still the same. What they were doing in Hawaii was taking privately owned land and transferring it to other private owners. And that was the same thing that was happening in Kelo versus New London. The difference was that the landowners in Hawaii were often wealthy and she was a Kelo was not wealthy. But of course,

12:33 that’s not how constitutional principles are supposed to work. They’re supposed to oblige a rich and poor equally. It just turns out that in this case, again, the court had to confront that most of the time the wealthy aren’t concerned about seeing their land declared blighted and therefore taken from them.

12:53 It does most often fall upon lower income individuals. The dissent by O’Connor is an interesting one because she’s trying to argue that she was being consistent between the two decisions and others can decide for themselves whether or not they believe she was successful in that.

13:16 Sure. Now, there was some backlash after this ruling and I think it’s really fascinating what it was because it shows that, well, the Supreme Court’s decision is final, they’re not the only aspect of our government and they can make their decisions, but state governments can actually adopt different policies

13:41 restricting themselves and the powers that they have to take private property. And that’s exactly what happened. Could you tell me a bit about that? Right, yeah. So there were several states that passed restrictions on the power of emminent domain after Kelo versus New London because there was significant political backlash.

14:01 If you look at them, though, it’s not clear that they had much effects because even if they sometimes they would say, well, we’re going to restrict the authority of government, our government, state and local government, to take private property and transfer it to another private owner. But often there was a caveat

14:21 in those laws that said unless it met the definition of blight, now the problem with blight is that that’s a very fluid and flexible thing. And so sometimes governments have been very creative and expansive in how they have defined blight. So some of the people who are most upset about the Supreme Court’s decision in Kelo

14:43 versus New London, who wanted to see a political response to it, they were happy that there was some response, but there’s a fear that most of those new laws have been toothless and that they don’t actually really restrict what state and local governments can do, exercising this power.

15:03 Sure. And then today it’s kind of a sad story because Pfizer ended up pulling out of the whole contract to move into New London and the place where Kelo’s House used to stand is actually just barren and bulldozed or whatever and nothing.

15:25 Well, her house was actually saved and moved to be a monument to emminent domain of use. So it’s somewhere nearby, I believe. But you’re right that Pfizer did back out of the deal. The development never went forward. And today I heard of feral cats has dominion over the Fort Trumble neighborhood in New London, Connecticut.

15:47 And so that actually points to one of the economic arguments against this. Is that part of the reason that you put this public use requirements on it? So it has to really be something that the public can use because if it’s transferred to Pfizer some or developers building buildings that are going to house restaurants and condos for people who work at Pfizer, that’s not open for public use.

16:11 So the concern is that if you aren’t really having to lay your own money on the line, it’s going to lead to poor decision making. And that’s what we saw in New London was that Pfizer just decided it wasn’t in their

16:33 economic interest and there was no cost to them in the initial project. So they kind of played along for a little while, but then they backed out. If they had been forced to put up the other developers who were building these things to service the Pfizer facility, if they had been forced to put up their own money, they might have been made

16:53 a better economic calculation about the value of this development. Give me a quick summary. Can the government take an individual’s property and give it to a private developer in the furtherance of economic development? Well, the brief answer is yes, they are allowed to do this unless there, of course, other laws restricting them.

17:16 And then you’d have to just go and examine the laws from various states to see how effective you actually think they are in restricting that power. Well, thank you so much, Dr. Dunn, for joining me in this discussion. The Bill of Rights Institute has a variety of videos for you to use, whether they be close reads like this, or we have homework help videos.

17:41 We’re actually soon going to be releasing a homework help video on this case. Of Kelo versus New London for students. We have Scholar Talks, where we’re interviewing prominent scholars on historical or political topics. And we also have what’s called BRIdge from the Past, where one of our hosts takes a look

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