Supreme Court Expands the Power of Eminent Domain

In its 5-4 decision in the case of Kelo v. City of New London, issued on June 23, 2005, the U.S. Supreme Court issued an important, if very controversial, interpretation of the governments power of eminent domain, or the power of the government to take land from property owners. The power of eminent domain is granted to governmental bodies -- federal, state and local -- by the Fifth Amendment to the U.S. Constitution, under the simple phrase, ...nor shall private property be taken for public use, without just compensation. In simple terms, the government can take privately owned land, as long as the land will be used by the public and the owner is paid a fair price for the land, what the amendment calls, just compensation. Before Kelo v. City of New London, cities typically exercised their power of eminent domain to acquire property for facilities clearly intended for use by the public, like schools, freeways or bridges. While such eminent domain actions are often viewed as distasteful, they are generally accepted because of their overall benefit to the public. The case of Kelo v. City of New London, however, involved a new trend among cities to use eminent domain to acquire land for the redevelopment or revitalization of depressed areas. Basically, the use of eminent domain for economic, rather than public purposes. The city of New London, Connecticut developed a redevelopment plan city fathers hoped would create jobs and revive downtown areas by generating increased tax revenues. Property owner Susette Kelo, even after an offer of just compensation, challenged the action, claiming that the citys plan for her land did not constitute public use under the Fifth Amendment. In its decision in favor of New London, the Supreme Court further established its tendency to interpret public use as the much broader term, public purpose. The Court further held that the use of eminent domain to promote economic development is constitutionally acceptable under the Fifth Amendment. Even after the Supreme Courts decision in Kelo, the vast majority of eminent domain actions will, as they historically have, involve land to be used for purely public uses. Typical Eminent Domain Process While the exact details of acquiring property by eminent domain vary from jurisdiction-to-jurisdiction, the process generally works like this: The property owner is notified by mail and will soon be visited by a government employee, often a right-of-way agent, who will further explain why the owners property is needed.The government will appoint an independent appraiser to evaluate the land and come up with fair price to pay the land owner for his or her land -- the just compensation.The property owner and the government may negotiate to come up with a final price to be paid the property owner. In some cases, a judge or a court-appointed arbitrator will be called in to oversee the negotiation.The owner is paid the agreed price and ownership of the property is transferred to the government. Since the Kelo Decision The Supreme Court’s decision against Kelo and her neighbors set off a nationwide outcry against abusive imposition of eminent domain by local governments. Since the Kelo decision, eight state supreme courts and 43 state legislatures have acted to strengthen protections of private property rights. Multiple polls conducted since Kelo have shown that a sizeable majority of Americans support efforts to change the law to better protect owners of homes and small businesses. In addition, since the Kelo ruling in June 2005, citizen activists have defeated 44 projects they believed represented abusive uses of eminent domain solely to benefit private development over public interests. Today, New London’s economic redevelopment project has proven to be a dismal failure. Despite the expenditure of close to $80 million in taxpayer money, no new construction has been done and Susette Kelo’s neighborhood is now a barren field. In 2009, pharmaceutical industry giant Pfizer, the driving force behind the economic development plan, announced it and its 1,400 promised jobs were leaving New London for good, just as its city-provided incentive tax breaks expired.