By Judy Coleman
Sunday, October 9, 2005
This year's story about property rights is a tale of two cities.
The first is New London, a Connecticut port town whose economy depends upon two pieces of property -- a submarine base, which it nearly lost this summer, and a planned waterfront development, which has been the subject of legal wrangling since 1998. The city seized homes to assemble land for the project, which includes a research center for the drug giant Pfizer that's already been built. One resident named Susette Kelo sued, claiming that the city had abused its powers of eminent domain by taking her property for the redevelopment project. The Supreme Court recently ruled in the city's favor in Kelo v. New London , and the result was a firestorm of public resentment that cut across party and ideological lines.
The second city is New Orleans.
It will be the center of a colossal rebuilding effort costing an estimated $200 billion. Much of this funding will go to tax incentives and multimillion-dollar contracts with private corporations. Eminent domain, to clear blighted and flood-devastated areas, will no doubt be involved. Had Kelo turned out the other way, the plan to rebuild New Orleans would certainly have taken a different tack. The incendiary public reaction to Kelo , on its own, has influenced how lawmakers think. A House committee recently nixed a provision that would have enlarged federal eminent domain powers so that new oil pipelines could be built to back up those damaged during Hurricane Katrina.
It's not surprising that Kelo incited a hostile reaction. On its face, the ruling appears to dilute classical American values, such as the right to own property and the freedom from government intrusion. That's certainly how many commentators and editorial writers have interpreted the decision. Some bemoaned "the death of private property." Letters to the editor from San Diego to Sarasota echoed that view, invoking Madison, Jefferson and Enlightenment philosophers as support.
These arguments are poetic and viscerally powerful, but they are also overstated and abstract. After the hurricane, it was easier to see why so many different people felt threatened by eminent domain. What fuels their outcry is not the more abstract concept of "freedom." Instead, it's a very concrete fact of American life -- class inequality. The poor residents of New Orleans and the middle-class homeowners railing against Kelo agree on at least one thing: The rich are about to get richer.
Through eminent domain, the government theoretically sacrifices the property rights of a few to create public projects that benefit the many. Because corporate interests invariably take the lead in developing these projects, though, some people have come to see eminent domain as benefiting the privileged few at the expense of the hapless many.
This division between the rich and the rest explains the breadth of the reaction to the Kelo ruling. Members of Congress have expressed their disapproval and 30 state legislatures have taken action on bills and constitutional amendments proposing limits on the power of eminent domain. Governors in three states have declared moratoriums on property seizures.
Despite this backlash, Kelo actually changes little in the legal landscape. Citizens still have two options when government acts in ways that negatively affect their property. They can go to the voting booth, and they can go to court. Elections certainly work, while the courts have been less amenable. For decades, both federal and state courts have deferred to local governments on the use of eminent domain. In the 1954 landmark case Berman v. Parker , the Supreme Court decided that the Fifth Amendment's "takings" clause allows government to seize land for any "public purpose." The court defined public purpose broadly, to include, for example, economic redevelopment to solve the problem of urban blight.
The Berman decision came down during the decade after World War II, a time of great optimism about the power of government. Cities were embarking on massive urban renewal efforts, using federal funds. These plans, despite meeting the "public purpose" requirement, often met with failure rather than success -- parts of many American central cities look like brutalist concrete ghost towns.
The "public purpose" served by the Pfizer development in New London is the city's very economic survival. In the 1990s, a state agency declared it a "distressed municipality" after its unemployment numbers hit double the rate in the rest of Connecticut. The Supreme Court majority, in its ruling, made clear that it was deferring to the city's judgment that the Pfizer development would be, in the words of the opinion, "a catalyst to the area's rejuvenation." New London would be allowed to seize Susette Kelo's home.
Generally, the right to private property has never been absolute -- think of taxes, or zoning laws. So why did Kelo strike such a powerful chord?
The letters, columns and commentary that followed the decision had a common theme: The government's motives were suspect. The city of New London might have invoked the "public good" in explaining its redevelopment plans, but the opponents of Kelo saw the government as a too-eager partner of private interests -- in this case, Pfizer.
There's a deeper distrust at play here. Many opponents of Kelo feel alienated from their elected leaders, and, with respect to property rights, disenfranchised. It's not just that government can seize your property, it's that government is taking it to benefit people who matter more -- because they can pay more.
The Institute for Justice, which represented Susette Kelo, has compiled a list of over 10,000 such "abuses" of eminent domain. Among them: Ace Hardware convinced the city of Mesa, Ariz., to condemn a nearby auto repair shop so that it could build a bigger store. Donald Trump, using the leverage of a local redevelopment agency, tried to evict an elderly woman from her Atlantic City home.
It seems everyone can dream up a different, well-heeled villain. A Florida man, in a letter to the editor, tells a cautionary tale about a mobile home park condemned to make way for a townhouse development. A professor writing online in the Volokh Conspiracy, a blog about legal issues, warns that Wal-Mart will be able to capture city governments and leapfrog over citizen opposition. Justice Sandra Day O'Connor, in her Kelo dissent, lists the Motel 6 chain and Ritz-Carlton hotels as likely beneficiaries of future eminent domain decisions.
Though multinational franchises make easy rhetorical scapegoats, the real problem here is a malfunction of democracy. Hurricane Katrina revealed a dangerously entrenched caste system in America; Kelo alerted members of the middle class that they weren't at the top of it.
When the people in power are not affected by the decisions that affect everyone else, citizens have good reasons to start distrusting government. Some eminent domain opponents have turned to action: an enterprising Californian has filed a petition to condemn the New Hampshire home of Supreme Court Justice David Souter, who voted with the Kelo majority. This proposal made a forceful statement because it turned the tables on someone in power -- one unlikely to have his home seized because he is a member of the elite.
The stories of New Orleans and New London do not fit easily into the one-dimensional narratives favored by friends or foes of eminent domain. The situation in New London is a time-extended version of the crisis in New Orleans. The lawmakers in New London observed a long trend of economic decline, which would culminate in the city's obsolescence if government did not intervene. The city benefited from having time to make a choice about its future, but has lost public support exactly because it had time to choose otherwise. Now a state moratorium on property seizures has stalled the plan yet again.
New Orleans, meanwhile, saw its demise in the course of days instead of decades. There was no choice but to create a package of initiatives that would bring in the private sector to assist in the rebuilding effort. Eminent domain, in some areas, may be the only answer.
The urgency of government planning in New Orleans, however, is offset by the fact that the first contracts went out to some of the usual suspects -- namely, corporations with strong ties to the administration in Washington. After an outcry, govenrment officials promised last week to open the Katrina contracts to competitive bidding.
Neither New London nor New Orleans presents a clear case of representation at its finest, nor cronyism at its worst. What matters is that citizens are increasingly likely to see only the latter. Just as the future of New Orleans depends upon the ruling in Kelo , the legacy of Kelo will depend on how government uses New Orleans to erase the fault lines of class that the case laid bare.
Judy Coleman, a third-year law student at Yale University, edits the Pocket Part, the online magazine of the Yale Law Journal.