The Supreme Court announced yesterday that it will decide whether the Constitution permits governments to transfer property from one private owner to another in the name of creating jobs and tax revenue -- a case that could affect local economic development policy and individual property rights nationwide.
Returning after a summer recess to the annual task of sifting the thousands of appeal petitions that have accumulated in their absence, the justices said they will hear the case of Kelo v. New London, Conn., No. 04-108, in which a group of New London residents say their constitutional rights would be violated by the poverty-stricken city's plans to buy up their homes and move them out to make room for a hotel-office-retail complex.
Separately, the court said it would decide whether the federal law guaranteeing disabled people access to public accommodations, the Americans With Disabilities Act, applies to cruise ships in U.S. waters -- which serve millions of U.S. citizens a year but are registered in foreign countries.
And the court took on a potentially significant issue of election law, agreeing to decide whether states may restrict participation in the political parties' primary elections to registered party members plus independents.
The Constitution's Fifth Amendment has long given local governments the right to condemn private property and take it for a "public use," such as bridge or highway construction, in return for what the amendment calls "just compensation." In 1954, the Supreme Court interpreted that language to permit the use of eminent domain for clearing blighted or neglected private property. The court loosened the standard further in 1984.
But the court's decision to take the New London case may signal concern by some justices that local governments have gone too far.
The city government makes no claim that the property it wants to transfer to developers is blighted or neglected. The city simply says that it can be put to a much better use, with widely shared benefits.
The land in question is adjacent to a new research facility belonging to pharmaceutical giant Pfizer Corp., and the new upscale housing, retail and other buildings were planned to enhance the area for Pfizer workers and visitors.
In a 4 to 3 decision earlier this year, the Connecticut Supreme Court sided with New London, ruling that the city had acted constitutionally because its intent was to benefit the public.
In its petition urging the U.S. Supreme Court to let that ruling stand, New London cited its 1954 and 1984 rulings and noted that more than 3,000 jobs depend directly or indirectly on the plan, as well as up to $1.2 million in annual property tax revenue.
"[C]omprehensive redevelopment is sometimes necessary to correct the myriad of social and economic ills that plague economically distressed cities such as New London," the city argued.
But the Institute for Justice, a Washington-based property rights organization that represents the homeowners in this case, argued in its appeal petition that this was too malleable a standard and that the Supreme Court needs to set a clear and "objective" definition of public use.
There were more than 10,000 threatened or filed condemnations that involved a transfer of property from one set of private owners to another in 41 states between 1998 and 2002, the institute says, with states defining permissible public uses in a variety of ways.
These cases "blur the line between public purpose and private benefit," the institute's brief says.