Facts of the Case Essay Example for Free

Facts of the Case Essay New London, a city in Connecticut, used its eminent domain authority to seize private property to sell to private developers. The city said developing the land would create jobs and increase tax revenues. Kelo Susette and others whose property was seized sued New London in state court. The property owners argued the city violated the Fifth Amendments takings clause, which guaranteed the government will not take private property for public use without just compensation. Specifically the property owners argued taking private property to sell to private developers was not public use. The Connecticut Supreme Court ruled for New London. In 1990, the city of New London was designated a distressed municipality. n6 The city was experiencing economic decline and suffered from an unemployment rate that was twice Connecticuts rate as a state. n7 As a result of these conditions, the New London Development Corporation (NLDC) was called upon by state and local officials to plan New Londons redevelopment. n8 After the NLDC developed a plan to build a Fort Trumbell State Park, Pfizer Inc., the pharmaceutical company, revealed its plan to build a $ 300 million research facility on a site immediately adjacent to Fort Trumbell. n9 The addition of Pfizer to the New London area was anticipated to entice other businesses to migrate to the city, effectively serving as a catalyst to the areas rejuvenation. n10 The NLDC received State approval, and the plan for Fort Trumbell State Park was completed. n11 The final plan for the Park encompassed services and businesses that would cap italize on the added commerce resulting from the inclusion of Pfizer to the area. n12 The NLDC intended to create jobs and increase tax revenue with the development plan, but the Park was also intended to bolster the areas aesthetic qualities and leisure activities. n13 The NLDC received permission from the city council to exercise eminent domain in the citys name, enabling it to acquire the property for the ninety-acre Park. n14 The NLDC was able to purchase most of the property in the target area; however, it was unable to secure fifteen pieces of real estate after negotiations. n15 One such piece of real estate was owned by Charles and Wilhelmina Dery who had lived on their property for over sixty years. n16 The properties of the nine owners who refused to sell, including the Derys property, were located in areas appropriated by the NLDC as sites for park support, such as parking, retail services, or office space. n17 In November of 2000, the NLDC condemned the fifteen properties that remained to be acquired in order for the development plan to advance. n18 LEGAL QUESTION: does a public purpose constitute a public use for purposes of the Fifth Amendments Taking Clause, nor shall private property be taken for public use, without just compensation? Specifically, does the Fifth Amendment, applicable to the states through the Due Process Clause of the Fourteenth Amendment (see main article: Incorporation of the Bill of Rights), protect landowners from the use of eminent domain for economic development, rather than, as in Berman, for the elimination of slums and blight? LENGTH: 8662 words STUDENT CASENOTE: Kelo v. City of New London NAME: Lia Sprague SUMMARY:? In Kelo v. City of New London, the Supreme Court debated whether the use of eminent domain for economic development purposes qualifies as a public use within the meaning of the Takings Clause of the Fifth Amendment to the Constitution. In November of 2000, the NLDC condemned the fifteen properties that remained to be acquired in order for the development plan to advance. Upon a finding that the proposed uses were not attributable to the above factors, the court affirmed the judgment for the parcel 3 takings and reversed the judgment regarding parcel 4A, allowing both parcels to be seized through eminent domain. The Court relied on this rationale to find that the use of private parties to further the public benefit was an acceptable method to achieve public use. Weighing this with the idea that transfers intended to confer benefits on particular, favored private entities, and with only incidental or pretextual public benefits, are forbidden by the Public Use clause, Justice Kennedy stated that courts should seriously investigate accusations of private party favoritism by the government entity. Justice Thomas agreed that replacing the words public use with public purpose effectively erased the Public Use Clause from the Fifth Amendment. Establishing such a safeguard appropriately balances the public policy concerns both supporting and criticizing the use of eminent domain for economic development. TEXT:? [*381] I. Introduction In Kelo v. City of New London, n1 the Supreme Court debated whether the use of eminent domain for economic development purposes qualifies as a public use within the meaning of the Takings Clause of the Fifth Amendment to the Constitution. n2 The city of New London attempted to use the power of eminent domain to seize property to give to private companies in order to increase commerce in the area. n3 The Court found that, deferring to precedent, the public use requirement had been interpreted broadly. n4 Accordingly, in a five-to-four vote, the Court held that New Londons plans constituted public use within the meaning of the Fifth Amendment to the Federal Constitution. n5 II. Statement of Facts A. New Londons Development Plan and the Taking In 1990, the city of New London was designated a distressed municipality. n6 The city was experiencing economic decline and suffered from an unemployment rate that was twice Connecticuts rate as a state. n7 As a result of these conditions, the New London Development Corporation (NLDC) was called upon by state and local officials to plan New Londons redevelopment. n8 After the NLDC developed a plan to build a Fort Trumbell State Park, Pfizer Inc. , the pharmaceutical company, revealed its plan to build a $ 300 million research facility on a site immediately adjacent to Fort Trumbell. n9 The addition of Pfizer to the New London area was anticipated to entice other businesses to migrate to the city, effectively serving as a catalyst to the areas rejuvenation. n10 The NLDC received State approval, and the plan for Fort Trumbell State Park was completed. n11 [*382] The final plan for the Park encompassed services and businesses that would capitalize on the added commerce resulting from the inclusion of Pfizer to the area. n12 The NLDC intended to create jobs and increase tax revenue with the development plan, but the Park was also intended to bolster the areas aesthetic qualities and leisure activities. n13 The NLDC received permission from the city council to exercise eminent domain in the citys name, enabling it to acquire the property for the ninety-acre Park. n14 The NLDC was able to purchase most of the property in the target area; however, it was unable to secure fifteen pieces of real estate after negotiations. n15 One such piece of real estate was owned by Charles and Wilhelmina Dery who had lived on their property for over sixty years. n16 The properties of the nine owners who refused to sell, including the Derys property, were located in areas appropriated by the NLDC as sites for park support, such as parking, retail services, or office space. n17 In November of 2000, the NLDC condemned the fifteen properties that remained to be acquired in order for the development plan to advance. n18 B. The Procedural History Petitioners filed suit in the Superior Court of Connecticut for the Judicial District of New London seeking injunctive relief to prevent the acquisition of their property through the use of eminent domain. n19 Petitioners argued that the takings at issue could not satisfy the public use requirement of Article 1 Â § 11 of the Connecticut Constitution (equivalent to the Fifth Amendment of the Constitution of the United States) which reads in pertinent part: The property of no person shall be taken for public use, without just compensation therefor[e]. n20 The petitioners submitted that a taking cannot be for a public use if it is motivated by a private entity. . . and if ultimately a private entity is to determine the fate of the property owners. . . . n21 The Superior Court found that broad statements on public use and deference to the legislature must be qualified. n22 The Superior Court further stated of its role in eminent domain actions: If the court considers the [*383] purpose not to be reasonable or connected to a valid public use, it is the duty of the court to declare the act authorizing the taking as unconstitutional. n23 After review of the facts, the Superior Court held that the statements regarding the use of parcel 4A were too vague and uncertain to allow the court to conclude the takings here [were] necessary and would not be unreasonable. n24 The court granted a permanent injunction against destroying the properties located in parcel 4A and granted a temporary injunction against the destruction of the properties in parcel 3 after finding that the takings were justified as to allow the petitioners to appeal without losing their homes. n25 Both parties appealed the trial courts judgment to the Supreme Court of Connecticut. n26 The appellate court stated that since the takings were authorized by the legislature, the standard the judiciary must apply was one of unreasonableness, bad faith, or abuse of power. n27 Upon a finding that the proposed uses were not attributable to the above factors, the court affirmed the judgment for the parcel 3 takings and reversed the judgment regarding parcel 4A, allowing both parcels to be seized through eminent domain. n28 The Supreme Court of the United States granted certiorari and affirmed the judgment of the Supreme Court of Connecticut. n29 III. Decision and Rationale A. The Majority Opinion of the Court The Supreme Court held that the takings proposed by the City for the purpose of economic development are for a public use as directed by the Fifth Amendment to the Federal Constitution. n30 It has been well established that the government is barred from taking private property solely for the purpose of transferring it to a private entity for its use. n31 The Court analyzed whether New London would be barred from taking property from petitioners to allocate to private parties for support services for Pfizer, a private corporation. n32 In order for the takings at issue here to violate the public use [*384] clause, the plan must have been adopted with the purpose of benefiting a particular class of identifiable individuals. n33 The Court stated that the governments pursuit of a public purpose will often benefit individual private parties. n34 The Court directed the focus to be on the future use of the taking, rather than on the immediate benefit. n35 The Court warned that by focusing solely on the benefit to private parties, the purpose of [the] taking becomes confused with the mechanics of how the resulting public benefit was accomplished. n36 The Court relied on this rationale to find that the use of private parties to further the public benefit was an acceptable method to achieve public use. However, a determination still had to be made regarding whether the development plan encompassed public use of the condemned property. n37 Even though, in this case, the property would not be opened for use by the general public, the Court had previously embraced a broad interpretation of public use that was satisfied in this situation. n38 At the end of the nineteenth century, the Court began to apply a public purpose standard, effectively rejecting the notion that the general public must be allowed actual use of the taken property. n39 Therefore, the Court applied this public purpose standard to New Londons development plan which promoted creating jobs, generating tax revenue, and helping to build momentum for the revitalization of downtown New London. n40 The Court examined how the concept of eminent domain met the changing needs of society during its public purpose analysis. n41 In Berman v. Parker, n42 the Court upheld a plan seeking to distribute property in a blighted area to both public and private entities for the purpose of redevelopment and found that non-blighted property was still a justified taking because the project was analyzed as a whole. n43 Thirty years later, the Court decided Hawaii Housing Authority v. Midkiff n44 where it found that the elimination of a land oligopoly was a sufficient public use even though the property was put back in the hands of private parties. n45 In the same year, the [*385] Court held in Ruckleshaus v. Monsanto n46 that the benefit to competition in the pesticide market outweighed any benefit given to subsequent applicants. n47 The Court applied this trend of increasingly broad interpretations of the phrase public use to the facts of the present case and found that New Londons redevelopment plan served a public purpose. n48 New London developed a plan that it hoped would enable the city to overcome its economic strains. This plan included a variety of commercial, residential, and recreational uses of land, with the hope that they [would] form a whole greater than the sum of its parts. n49 According to Berman, the Court cannot judge the plan on a piecemeal basis, but must examine the possible outcomes of the plan as a whole. n50 The Court compared the economic benefit in this case to the previously mentioned cases and found no reason to distinguish between economic benefit received through tax revenue and increased job prospects from the economic benefits that have been previously upheld by the Court. n51 This rationale was further justified after looking at New Londons development plan. n52 Courts have long deferred to the decisions of state legislatures, absent a showing that the purpose was illegitimate or that the taking was validated by irrational justification. n53 The Courts position is to adjudicate the issue of public use and once that issue has been resolved, the legislature may use its discretion in determining by what means the plan will be accomplished. n54 The Court pointed out that states are able to place restrictions on its ability to procure property through eminent domain. n55 In this case, Connecticut had a statute specifically permitting the use of eminent domain for economic development. n56 As a result of this deference to legislation, combined with a broad interpretation of public use and the allowance of private parties as an intermediary towards the final goal of public purpose, the Court held that New Londons proposed takings satisfied the [*386] public use requirement of the Fifth Amendment of the Federal Constitution. n57 B. The Concurring Opinion of Justice Kennedy Justice Kennedy emphasized the utilization of a rational-basis standard of review for cases analyzing the public use clause. n58 Weighing this with the idea that transfers intended to confer benefits on particular, favored private entities, and with only incidental or pretextual public benefits, are forbidden by the Public Use clause, Justice Kennedy stated that courts should seriously investigate accusations of private party favoritism by the government entity. n59 Petitioners attempted to establish a need for a rule that presumptively invalidates any takings for purposes of economic development in order to allow the Court to discover the true motives behind the takings. n60 Justice Kennedy pointed out that the trial court in this case carefully examined the evidence and found that the primary motivation of the plan was to utilize Pfizers presence in the city to create an increase in commerce, a finding that eliminated the need to establish a higher standard of review in this case. n61 He was careful to note that some cases may warrant a presumption of invalidity. n62 However, Justice Kennedy stated that because the city developed a plan with substantial anticipated economic benefits that was subject to the review of the citys underlying motivations, and because the identities of the private entities were not established at the onset of the development planning, this case presented no circumstances that would justify an increased standard of review. C. The Dissenting Opinion of Justice OConnor, joined by the Chief Justice, Justice Scalia, and Justice Thomas Justice OConnor disagreed with the majoritys opinion which stated that there were incidental private benefits in this case that were inferior to a substantial public benefit. n63 She felt that the reverse was true, and that by ruling in such a way, the Court had effectivelydelete[d] the words for public use from the Takings Clause of the Fifth Amendment. n64 This was consistent with the petitioners argument stating that the government may not take their property for the private use of other owners simply because the [*387] new owners may make more productive use of the property. n65 The premise of this argument was based upon the judiciarys position to determine the meaning of public use as it differed from the legislatures opinion. n66 Justice OConnor conceded that the Court should defer to the legislatures determination of what constitutes public use. n67 However, if the legislatures power to define this term was unlimited, without the possibility of a review from the judiciary branch, the Public Use Clause would amount to little more than hortatory fluff. n68 Justice OConnor recognized that certain circumstances exist in which the Public Use Clause should be interpreted broadly. She disagreed, however, that this should be a generalized holding allowing the inclusion of economic development as a public purpose. n69 As support for this argument, Justice OConnor distinguished two of the cases upon which the majority relied to reach their holding. n70 In Berman, the Court upheld a taking of blighted property, part of which was passed to private parties for the sake of redevelopment. n71 Congress had determined that the blighted area was hazardous to the health, safety, morals, and welfare, and thus eminent domain was appropriate to eliminate these conditions. n72 Looking at the neighborhood as a whole, the public purpose of eliminating hazardous conditions took precedence over allowing an owner of a non-blighted store to keep his property. n73 In Midkiff, the Court upheld a taking for the purpose of eliminating a land oligopoly that was skewing the States residential fee simple market, inflating land prices, and injuring the public tranquility and welfare. n74 Justice OConnor distinguished the two cases from the case at bar because the takings in Berman and Midkiff eliminated an affirmative harm on society rather than the public receiving a benefit that was secondary to private parties benefit. n75 By distinguishing the above cases, Justice OConnor found that precedent did not compel the majority to uphold such a broad rule that contained no limitations. n76 [*388] D. The Dissenting Opinion of Justice Thomas Justice Thomas agreed that replacing the words public use with public purpose effectively erased the Public Use Clause from the Fifth Amendment. n77 He stated that the present case is not the only case that has misconstrued the Takings Clause; rather, the line of cases leading up to the present have strayed from the Clauses original meaning. n78 Examining the language of the Fifth Amendment, Justice Thomas concluded that the phrase public use would be unnecessary verbiage if not interpreted as a limitation, and thus states that the Public Use Clause is therefore an express limit on the governments power of eminent domain. n79 After examining the plain language of the public use requirement, Justice Thomas further concluded that the drafters intended the clause to carry a narrow meaning requiring actual public employment of the taken property. n80 He also analyzed the Constitutions common-law background as well as the historical uses of eminent domain to reach the same narrow definition of public use. n81 Justice Thomas then examined a case relied on by the majority, Fallbrook Irrigation Dist. v. Bradley, n82 by stating that the majority improperly relied on dicta in the case that was unnecessarily broad and cited no supporting authority. n83 This reasoning was brought up again by Justice Thomas when discussing United States v. Gettysburg Electric R. Co. , n84 from which the court relied on dicta stating that the judiciary shall respect the legislatures judgment when deciding a question of public use unless that judgment is unreasonable. n85 Justice Thomas claimed that the courts should not exhibit deference to the decisions of the legislature in such cases because a court owes no deference to a legislatures judgment concerning the quintessentially legal question of whether the government owns, or the public has a legal right to use, the taken property. n86 He also hypothesized that the Framers would not have subjected only the Public Use Clause to legislative deference out of all the provisions of the Bill of Rights. n87 He further argued that the Public Use Clause limits the legislative power of eminent domain, and thus by removing [*389] the power of the judiciary to oversee the limitation of that power, the purpose of the Clause is eliminated. n88 He analyzed the two cases Berman and Midkiff, and stated that the Court was wrong in those cases to equate the eminent domain power with the police power of the States. n89 He differentiated the two powers by concluding that the customary uses of police power do not require compensation to the citizens, while the uses of eminent domain always require compensation, concluding that the two powers were separate. n90 Justice Thomas further concluded that the combination of the above factors constructively eliminates the Public Use Clause from the Fifth Amendment, and he therefore stated that the appropriate interpretation of public use is that the property be used by the government or the public. n91 IV. Analysis Public policy dictates that the government should not be expected to compensate owners that hold out on selling their property in order to demand an unreasonably high payment. The Takings Clause of the Fifth Amendment effectively overcomes this societal detriment; however, the public policy benefit favoring governmental takings needs to be balanced against the public policy favoring a citizens right to keep his property. With this in mind, the Framers added the Public Use Clause to the Fifth Amendment in order to limit the governments power to exercise eminent domain at its own discretion. Courts also need to remember this desire for balance between competing public policy issues when interpreting the Public Use Clause. The Supreme Court has gradually shaped the Public Use Clause to allow, in theory, any taking by the government that benefits the public regardless of whether that proposed effect is primary or secondary, substantial or minimal. The latest holding regarding eminent domain from the Supreme Court in Kelo allowed the taking of property for the abstract reasons of increased tax revenue and job opportunities. In the Courts holding, there were no express limitations on this new ability to confiscate property for such intangible benefits. Conversely, the Court stated that deference should be given to the legislatures decision of the appropriateness of the taking. n92 While the Court reviewed a comprehensive plan developed by the City outlining the intended uses of the condemned property, it did not require the City to show any proof that the intended uses [*390] were reasonably certain to result in the proposed public benefit. n93 The Court reasoned that if it were to impose such a requirement of proof, a significant impediment to the successful consummation of many such plans would result. n94 While there is a significant interest in promoting commerce, the Court seemingly overlooks the equally significant interest of affording homeowners protection from unnecessary takings. It seems reasonable to expect that if a city has an extensively planned development plan, such as was exhibited by the city of New London, it should further have planned out the financial details of such a development plan. This one additional step in the planning of the proposed takings could eliminate development plans that successfully complete the takings stage of the plan only to have the financing fall through, thus leaving the condemned homes empty and the land wasted. The law of waste is a basic property concept stating that land should be used in a way that maximizes the propertys value. n95 There can be no greater waste of property than to force owners to leave their homes and then allow the property to remain vacant while sources of funding are sought. There are many examples illustrating the aftermath of approving such a plan without forcing the legislature to obtain the means to institute that plan before issuing condemnation. n96 One particularly unjust case took place in Cincinnati, Ohio. n97 Nordstrom, the retail store, decided to locate in the city of Cincinnati. n98 However, a Walgreens store currently occupied the location that it wanted. n99 Walgreens agreed to move to a new location, but the new location was home to a CVS store. n100 The CVS store refused to move, and the city initiated condemnation proceedings in order to utilize its power of eminent domain, [*391] after which CVS agreed to settle. n101 The settlement required that the city move Walgreens to the lot across the street from CVS, which unfortunately held many small businesses of which the city condemned in order to give the land to Walgreens. n102 The problem looked resolved (at the expense of the small businesses that were forced to close their doors), but the city overlooked a clause in the agreement with Nordstrom. n103 Under the parties initial agreement, the city agreed to leave vacant the very parcel that it had just handed to Walgreens so that additional upscale' shops could be built adjacent to Nordstrom. n104 The city never rearranged the parcels, and Nordstrom never began building. n105 Nordstrom eventually announced that it would no longer be opening in Cincinnati on account of declining profit margins. n106 The city paved the vacant lot so that it could exist as a parking lot. n107 Luckily, a similar situation was resolved between the New London Development Corporation (NLDC) and Corcoran Jennison, the developer with whom the city contracted to build the hotel and convention center in Fort Trumbell. n108 An Associated Press article revealed that the NLDC claimed that Corcoran Jennison failed to find financing for the project and thus wanted to downgrade the quality of the hotel. n109 Corcoran Jennison rebutted that the NLDC was at fault because it set unrealistic standards for the hotel that were not economically feasible. n110 The president of the company, Marty Jones, stated that the company felt that the NLDCs tactics [did] not serve the communitys interests in generating timely economic development and new tax revenue at Fort Trumbull. n111 According to David Goebel, Chief Operating Officer of the NLDC, as of September 7, 2005, Corcoran Jennison has since obtained zoning approval for the plan and the plan is undergoing review as per the development agreement. n112 While funds have not been secured yet, the [*392] developer is currently pursuing final financial arrangements for construction of the hotel. n113 The fact that the city possessed an extensive proposed development plan could not have curtailed the dispute between the NLDC and the developer. The city is fortunate that it was able to compromise on its plan, thus preserving the premise that legitimized the takings, even though final funding is still absent from the project. However, a better safeguard than simply being fortunate should be required by the Court before upholding such takings. This safeguard is simple and legitimate; require proof to a reasonable certainty that such benefit will occur. If the city had been required to show proof of its financial backing, the developer would have been forced to find final funding before the condemnations were upheld by the Supreme Court. If the city of Cincinnati had been required to prove to a reasonable certainty that condemning small businesses for the sake of moving the Walgreens would allow a Nordstrom store to open in the city, perhaps city officials would not have missed the clause in the contract which delayed development of the store after which Nordstrom could no longer afford to open there. If the Court is unwilling to review the decisions of state legislatures, then it should impose a different safeguard for the property owners. This safeguard was appropriately suggested by the petitioners in Kelo and the benefit of such a review was promptly disregarded by the majority. n114 While it can be assumed that the legislature will not abuse its discretionary power, it is unreasonable to think a legislature that favors using eminent domain for the purposes of economic development will subject itself to safeguards favoring the property owners if it is not held to any review by the courts. With this in mind, some legislatures are taking it upon themselves to impose either stricter guidelines regulating the Public Use Clause or they are expressly stating that economic development is not a proper interpretation of public use. n115 This is evidenced by the fact that [j]ust five weeks after the U. S. Supreme Court upheld the use of eminent domain to seize private property for economic development, more than half of the states have introduced legislation to thwart potential abuses. n116 A legislative change route was suggested by the majority opinion and was apparently embraced by twenty-eight states. Such a change is also being embraced by federal legislation, as the House of Representatives is currently examining a bill that [*393] prohibits the dispersion of government funding to any city that uses eminent domain as a means to promote private commercial development. n117 While these twenty-eight states have taken the responsibility to ensure the fair treatment of their citizens, there remain twenty-two states that have not dealt with this pressing issue. For that reason, it is imperative that courts examine the possibility that the legislation might not have obtained all the avenues (and financing) necessary to achieve a successful result for both the city and the property owner. A balance can be struck between the needs of the public via eminent domain and the needs of the private property owner who is sacrificing his home for the public utility. The implication of a simple safeguard requiring a city to prove that its plan will be successful in achieving a public benefit is all that stands in the way of achieving this balance. V. Conclusion Eminent domain is a necessary action employed by legislatures for a variety of reasons. The Court held in Kelo v. City of New London that economic development was an appropriate reason for which eminent domain could be exercised. While noting that the city of New London possessed a comprehensive development plan, the Court imposed no express restrictions upon the ability of the legislature to exercise eminent domain for such purposes. The Court rejected the petitioners argument that the city should be required to show to a reasonable certainty that the public benefit would occur before the condemnation was allowed. This lack of legislative review by the Court constructively removed the Public Use Clause from the Fifth Amendment of the Federal Constitution as the legislature now has free reign with which to decide for itself whether a proposed taking constitutes public use. While there is an assumption that the legislature will not abuse its power when deciding to take its citizens property, it should not be assumed that the same legislature will take the appropriate measures to safeguard that its citizens property will be utilized successfully. These measures should be implemented by the Court in the form of a review requiring the city to show with a reasonable certainty that the public benefit will occur. Th