Kelo v. City of New London decision spurs state oversight on eminent domain law.

Will Rogers is credited with saying, "No man's life, liberty or property are safe while the legislature is in session." If the Oklahoma-born humorist were alive today, he might want to include the U.S. Supreme Court as a major threat to private property rights.

In one of the final rulings of the 2004-05 session, the high court sided with the city of New London, Conn., against Susette Kelo and nine of her neighboring homeowners in a condemnation case where the city sought to seize property not for a road, school or other public use, but to make the real estate available to private developers.

The case, decided by a thin 5-4 majority, grew out of a plan by New London to develop the Fort Trumbull area of the city's waterfront, where Pfizer Corporation is building a $300 million global research facility. Developers wanted to add a marina, hotel, offices, residential units and shops. In the way were working-class, middle-income homeowners, some whose families had owned their individual properties for well over 100 years.

Many of the homeowners voluntarily sold their property, but some refused. The city brought condemnation proceedings against these hold-outs on the basis that economic development of the area was in the "public interest" because the development would create jobs and increase the tax base. The homeowners fought back, all the way to the U.S. Supreme Court, claiming that the city was making improper use of eminent domain, under the Constitution's Fifth Amendment.

And they lost. Voting in favor of the city of New London were justices John Paul Stevens, Anthony Kennedy, Stephen Breyer, David Souter and Ruth Bader Ginsburg. Dissenting were Chief Justice William Rehnquist, along with Justices Sandra Day O'Connor, Antonin Scalia and Clarence Thomas, who argued for the rights of private homeowners.

Interestingly, the concept of "public use" gives way to "public purpose" in the Court majority view. Writing for the five justices who ruled in favor of the City of New London, Justice Stevens penned, in part: "Nor would the City be allowed to take property under the mere pretext of a public purpose [emphasis added], when its actual purpose was to bestow a private benefit. The takings before us, however, would be executed pursuant to a 'carefully considered' development plan. The disposition of this case therefore turns on the question whether the City's development plan serves a public purpose." [emphasis added.]

The Court's majority ruling seems to permit government to take property from one private owner and give title to another private owner, as long as there is a development plan in place and as long as the taking ultimately serves a "public purpose"-more jobs, higher tax revenues, increased economic activity. New London's development plan was anchored on the construction of Pfizer's new facility. Apparently, neither the city nor the Supreme Court considered what might happen if Pfizer decided to locate their research unit somewhere else-or if the company went belly-up before the development was completed. It would be difficult to un-bulldoze homes if the development "plan" did not pan out.

Justice O'Connor questioned the logic of the Court's decision. "...The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory."

Justice O'Connor (now retired) added in her dissenting opinion. ". . .Today, the Court abandons [a] long-held, basic limitation on government power. 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-that is, given to an owner who will use it in a way that the legislature deems more beneficial to the public-in the process.

To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings 'for public use' 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."

Justice Clarence Thomas agreed with Justice O'Connor, and added: ". . .In my view, it is 'imperative that the Court maintain absolute fidelity to' the [Fifth Amendment] Clause's express limit on the power of the government over the individual, no less than with every other liberty expressly enumerated in. . .the Bill of Rights. . .The consequences of today's decision are not difficult to predict, and promise to be harmful. So-called 'urban renewal' programs provide some compensation for the properties they take, but no compensation is possible for the subjective value of these lands to the individuals displaced. . .[This makes] the legacy of this Court's 'public purpose' test an unhappy one. . .."

Many of the Founding Fathers probably would have agreed with the O'Connor/Thomas position. James Madison certainly did. The author of the Bill of Rights thought property rights ranked with personal liberties. Writing in The Federalist Papers, Madison noted ". . .Government is instituted no less for protection of the property than of the person of individuals. . .The rights of property are committed into the same hands with the personal rights."

Except during national emergencies (such as the Civil War), both state and federal governments followed a narrow definition of "public use" where eminent domain was concerned-for 160 years. Then, after World War II, some larger U.S. cities wanted to clear slums and replace them with urban renewal developments. Where property owners did not wish to sell, city governments condemned the property. In 1954, the Supreme Court ruled that this was permissible, so long as the government doing the condemning did not hold title and become a developer itself. Instead, government had to transfer ownership to other private parties that would eliminate blight and dangerous health conditions.

The Kelo vs. New London decision stretched that concept to include whatever has economic development benefits in the view of the local government. This gives a green light to cash-strapped city planners and land-hungry developers to plan what they want where they want, without being hampered by private property rights-as long as the development promises to boost the tax base and create jobs.

In a sort of "pass-the-buck" sentence in his majority opinion, Justice Stevens wrote: "We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power."

Several states reacted quickly to do just that. Four days after the Supreme Court decision was announced, Missouri Governor Matt Blunt issued an executive order creating a task force to examine both federal and Missouri laws on eminent domain. Gov. Blunt's legal counsel, Terry Jarrett, was named chairman of the nine-member panel, which will also get help from the state departments of agriculture and economic development.

Other members appointed to Missouri's eminent domain task force are: Gerard T. Carmody, St. Louis attorney; Chris Goodson, also of St. Louis, president and owner of The Goodson Company; Sen. Chuck Gross, St. Charles, vice president for business development for UMB Bank; Rep. Steve Hobbs, Mexico, Mo., president of Hobbs Farms, Inc.; Leslie Holloway, Jefferson City, director of state and local governmental affairs, Missouri Farm Bureau; Lewis Mills, Jefferson City, Missouri's consumer advocate in the area of utility regulation, Department of Economic Development; Spencer R. Thomson, Kansas City, attorney with Blackwell, Sanders, Peper and Martin law firm; and Howard Wright, Springfield, special counsel for the city of Springfield.

"Our first task is to review laws in place now," said Jarrett. "Missouri's laws on eminent domain are scattered among several different statutes. The task force is coming up with suggestions that fit Missouri's situation; that will put our laws into a consistent coherent system."

The task force's deadline for making these recommendations is Oct. 1. Then, the group will hold public hearings on how Missouri's eminent domain laws need to be changed or amended. Results are due in December.

Arkansas state senator Kim Henderson said a legislative panel is being appointed to study that state's laws on eminent domain.

Oklahoma state senator Clark Jolley will introduce the "Oklahoma Private Property Owners Protection Act" in the next legislative session. In addition, two Oklahoma state representatives are calling for a constitutional amendment to prevent eminent domain for economic development.

Illinois legislators have a bill introduced in the fall session that requires eminent domain to be employed only for "qualified public use" and prohibits the condemnation of private property for other private ownership or control of the property, including for economic development.

So, Will Rogers' barb notwithstanding, maybe state legislatures are the surest guarantors of private property rights after all. The U.S. Supreme Court is not.