Government’s power to seize private property must be reined in

OPINION:

 

Editor’s note: This is one in a series examining the Constitution and Federalist Papers in today’s America. Click HERE to read the series.

First of two parts

Despite the deep polarization of American politics right now and the concurrent divides on a wide range of constitutional issues, there is at least one issue on which there is considerable cross-ideological agreement: limiting the power of eminent domain. 

Eminent domain is the government’s power to take private property from unwilling owners in exchange for “just compensation.” Both historically and today, that authority has been subject to severe abuses, disproportionately targeting the poor, racial minorities and others lacking in political influence.

Furthermore, eminent domain is often used by the government for projects that destroy more economic value than they create, including cases in which it is used for projects that may never even get built. Owners of condemned property often receive compensation that doesn’t come close to truly offsetting their losses.

In recent years, progress has been made in addressing some of these longstanding problems. But much still remains to be done.

For many Americans, the problem of eminent domain abuse first became visible as a result of the Supreme Court’s controversial ruling in Kelo v. City of New London in 2005. Although the Fifth Amendment permits the taking of private property only for  “public use,” the high court ruled that the transfer of condemned land to private parties for “economic development” is permitted.

A closely divided 5-4 majority ruled that virtually any potential benefit to the public qualifies as a “public use.” Consequently, the court upheld the seizure of 15 private residential properties in New London, Connecticut, for the purpose of transferring them to a new private owner to facilitate “development.”

The broad interpretation of “public use” adopted by the court in Kelo and some earlier cases is at odds with the original meaning of the term, which holds that a public use exists only if the condemned property is transferred to government ownership (as in the case of public infrastructures such as roads and bridges) or a private owner that is legally required to serve the entire public, such as a public utility. That was the dominant view both at the time of the nation’s founding and when the 14th Amendment first made the Fifth Amendment (and the rest of the Bill of Rights) applicable to state and local governments in 1868.

During both periods, most jurists and other prominent legal thinkers placed a high value on property rights and rejected the idea that the government should be able to take property from one private owner and give it to another, for virtually any reason.  At the time of the adoption of the 14th Amendment, its framers sought to use the Fifth Amendment to protect property rights against state governments. They were motivated, in part, by fear that state governments in the South would target the property of Blacks and of Whites who had supported the Union against the Confederacy.

After retiring from the court, Justice John Paul Stevens, author of the majority opinion in Kelo, admitted he had made an “embarrassing to acknowledge” error. He conceded he had made a mistake in claiming that Kelo’s broad reading of public use was backed by a century of precedent. Justice Stevens continued to believe he got the bottom-line decision right, albeit for a completely different reason. Still, there are few major Supreme Court decisions where the author of the majority opinion actually admitted he made a serious error in his analysis.

Kelo exemplified two broader flaws of takings for private projects, including both “economic development” condemnations (like the ones in Kelo itself) and those that supposedly alleviate “blight.” First, such takings tend to victimize the relatively poor and politically weak, often for the benefit of politically influential interest groups. In New London, pharmaceutical giant Pfizer Inc. hoped to benefit from the condemnations.

Historically, blight and economic development takings also often victimized minority groups, particularly African Americans. James Baldwin, the famed African-American writer, dubbed “urban renewal” takings “Negro removal,” because of this tendency. The disproportionate impact on these groups persists to this day.

A second problem is that condemnations for private projects routinely destroy far more economic value than they create. In the Kelo case, the poorly-planned project predictably failed. To this day, nothing has been built on the condemned property, which is used only by a colony of feral cats. Such underperformance is far from unusual, though total failure to build anything is an extreme case.

When influential interest groups can use the political process to seize land from the politically weak, they have little incentive to actually deliver on their promises of development, especially since the failure to do so will only become clear years after the fact, by which time public attention will have moved on to other issues. 

A recent example is the failure of the FoxConn condemnations in Wisconsin, in which eminent domain was used to seize numerous homes to transfer the land to a Taiwanese firm planning to build an electronics factory. Despite massive state subsidies and rosy promises by both state officials and then-President Trump (who said the project would be “the eighth wonder of the world”), little has been built, and nothing has been achieved that could justify the enormous cost.

Both Republican and Democratic public officials have often succumbed to the temptation to seize property for the benefit of powerful private interests, relying on dubious estimates of the economic growth that doing so would create.

Kelo generated a broader political backlash than virtually any other Supreme Court decision in modern history. Polls showed that more than 80% of the public disapproved of the court’s ruling. It was a rare issue on which Rush Limbaugh, Ralph Nader, libertarians and the NAACP were all on the same side. One of the very few defenders of the ruling was Mr. Trump, who said, “I happen to agree with it 100%,” perhaps because of his own history of benefiting from eminent domain abuse.

Forty-five states passed eminent domain reform laws after Kelo. Several state Supreme Courts issued rulings holding that Kelo-like economic development takings were forbidden by their state constitutions.

Unfortunately, much of the new legislation was largely ineffective, enacted to allay public anger without actually doing much to limit takings. Still, thanks to the Kelo backlash, property rights are much better protected than before. Some 20 states did enact meaningful reforms, and several state supreme courts strengthened judicial scrutiny of public use.

Much remains to be done to curb takings that run afoul of constitutional public use limits, however. Many states still have few constraints on eminent domain abuse, including large blue states, such as New York and California. New York’s highest court recently upheld a condemnation for a pipeline that may never be built. 

Because of the flaws of the Kelo decision and the extensive criticism it has generated, the Supreme Court may well eventually overrule or limit it. But reformers should not sit back and wait for the court to act. To the contrary, history shows that efforts to strengthen protection for constitutional rights work best if they combine litigation with political action. 

The next essay in “To The Republic” will address other reforms that can curb eminent domain abuses, besides limiting the range of purposes for which property can be condemned in the first place.

• Ilya Somin is a law professor at George Mason University and author of “The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain” and  “Free to Move: Foot Voting, Migration and Political Freedom.”