TCS Daily


Unhappy Birthday, Kelo

By Pejman Yousefzadeh - June 29, 2006 12:00 AM

Just over one year ago, the Supreme Court validated eminent domain abuse in its decision in Kelo v. City of New London. At the time of the decision, it was predicted by some as way of consolation that the Court's decision would prompt a spate of anti-Kelo legislation designed to curb eminent domain abuse. In every cloud, they say, there is a silver lining. And it was thought that local governmental action preventing further episodes of takings abuse would be the silver lining in the dark cloud that was and is the Kelo decision.

It has not turned out that way. And things will not improve until the issue of eminent domain abuse occupies a larger place in the public consciousness than it currently does.

Some time ago, law professor Ilya Somin referenced this paper by Tim Sandefur of the Pacific Legal Foundation. In the abstract to the paper, Sandefur points out some uncomfortable and disappointing truths about the supposed anti-Kelo backlash:

"So far, fifteen states have enacted new laws limiting eminent domain; of them, only five provide significant protection for property owners. Proposals in other states even appear to have been consciously designed to placate voters without effecting any meaningful change."

And if this isn't depressing enough, Somin elaborates:

"In my view, the situation may be even worse than Sandefur suggests. Of the five states that have enacted meaningful legislation, two (South Dakota and Georgia) have little or no history of private-to-private condemnation for economic development in any case, and one (Florida) already has a judicial ban on economic development takings (though the new Florida law also restricts "blight" condemnations). As Sandefur points out, the Pennsylvania law to a large extent excludes the cities of Philadelphia and Pittsburgh, where most of the state's development condemnations actually occur. Thus, only the Indiana and (to a lesser extent) Florida laws represent truly significant progress. I also think, for reasons discussed in my own forthcoming article on Kelo, that Sandefur is overly optimistic about anti-Kelo legislation being considered by the US Congress."

Somin goes on to point out that the political ignorance of the general public regarding eminent domain abuse and the relatively superior knowledge of the issue brought to the table by developers helps give politicians an incentive to pass "toothless" reforms purporting to curb eminent domain abuse. These "toothless" reforms are sufficient to cause the general public to believe that something substantial is being done to curb eminent domain abuse, when in fact nothing is being accomplished and politicians inveighing against abuse in public are still able to curry favor with developers and associated interest groups in private. And he has a point. Consider this report from Reuters:

"President George W. Bush issued an executive order on Friday to limit the U.S. government from taking private property only for the benefit of other private interests, like corporations.

The order came exactly a year after a divided Supreme Court ruled a city could take a person's home or business for a development project to revitalize a depressed local economy, a practice known as eminent domain.

"The federal government is going to limit its own use of eminent domain so that it won't be used for purely economic development purposes," White House spokeswoman Dana Perino said."

Seems promising, right? Here is the actual Executive Order. The problem -- as the eagle-eyed Somin demonstrates -- is that the order is, for all practical purposes, worthless:

"Unfortunately, this language validates virtually any economic development condemnation that the feds might want to pursue. Officials can (and do) always claim that the goal of a taking is to benefit "the general public" and not "merely" the new owners. This is not a new pattern, but one that bedeviled takings litigation long before Kelo. Indeed, the New London authorities made such claims in Kelo itself and they were accepted by all nine Supreme Court justices, including the four dissenters, as well as by the Connecticut Supreme Court (including its three dissenters). This despite considerable evidence that the takings were instigated by the Pfizer Corporation, which at the time hoped to benefit from them. Not all the evidence of Pfizer's role was available at the time of the trial, but enough was submitted to demonstrate that Pfizer played a crucial role (e.g. the head of a firm that helped prepare New London's development plan testifed that Pfizer was the "10,000 pound gorilla" behind the takings). Nonetheless, the courts accepted New London's claims that its officials acted in good faith, since they could have been intending to benefit the public as well as Pfizer.

Even had President Bush's order been better worded, its impact would have been limited. The vast majority of economic development condemnations are undertaken by state and local governments, not by federal agencies. Nonetheless, it is unfortunate that the Bush administration has chosen to join in the charade of pretending to do something about Kelo while actually doing little or nothing."

The lack of progress in curbing eminent domain abuse has, sadly, been matched by an increased tempo in the perpetration of such abuse as the Institute for Justice points out:

"Consider this fact: in just the past year, more than 5,700 properties nationwide have been threatened by or taken with eminent domain for private development -- a figure that compares with more than 10,000 examples over a five-year period preceding the Kelo argument, according to one of five reports released today by the Institute for Justice (which argued the Kelo case before the U.S. Supreme Court) and its grassroots activism project, the Castle Coalition. Coupled with this increase in eminent domain abuse, however, has been a virtually unprecedented grassroots and legislative response to the most universally despised Supreme Court ruling in recent memory."

And to top things off, supposedly natural allies of the anti-eminent domain abuse forces have too often sought to validate the ruling. In an interview noted at the Division of Labor blog, Judge Alex Kozinski of the Ninth Circuit Court of Appeals, a favorite jurist in conservative and libertarian camps, states that he "just can't imagine" having the decision in Kelo come out "any other way," because the plaintiffs were offered just compensation for their property. As the blog post notes, Judge Kozinski's notion is a flawed one:

"Elsewhere in the interview Judge Kozinski says he was influenced by Milton Friedman and Adam Smith while studying economics as a UCLA undergraduate. One could search a long time for that influence in Kozinski's Kelo argument, which seems to wholly ignore the price system as a rationing device. If a society would be better off with a business on the site of your house, then it's the job of that business to come pay you for your property. (I believe that's how Milton Friedman might put it.) Kozinski seems to think the only entity capable of paying someone for their property is the government, and then only because the framers included just compensation in the 5th Amendment."

So, continued public ignorance regarding the effects of eminent domain abuse, the political class's determination to cater to vague public outrage while doing little to nothing to actually curb abuse, the increased tempo of private development takings and the lack of outrage on the part of natural allies of the anti-eminent domain abuse forces have combined to make the first year after Kelo a bad one for those who wish to see eminent domain abuse controlled.

What is to be done? Perhaps the best way to increase the public's understanding of what is at stake with eminent domain abuse is to make the issue a major part of the 2006 election cycle. Increased journalistic coverage, increased Blogospheric coverage and increased attention paid to the issue by the legal community -- including the legal punditry class -- will help elevate the issue in the public consciousness. It will also increase pressure on politicians who promise to do something about curbing eminent domain abuse by engaging the citizen class and making anti-eminent domain abuse forces as politically powerful as the developers and their related interest groups are.

There is, then, a way to improve the political standing and power of the anti-abuse forces. But before that can be done, we must face certain facts. The year after Kelo has largely seen anti-abuse forces fail in the political arena to organize any kind meaningful pushback against the dangers posed by the Kelo ruling. Despite grand promises of a backlash, one has just not come about. And it is not too late to foment a backlash. Thus far, however, the anti-abuse forces have not engaged on the issue of eminent domain abuse as strongly and as emphatically as they might have. And if their intensity does not change, their luck won't change either.

Pejman Yousefzadeh is a lawyer and TCS contributing writer.

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