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Supreme Court backs municipal land grabs

Justices affirm property seizures for private development

By Bill Mears
CNN Washington Bureau

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Connecticut

WASHINGTON (CNN) -- In a victory for cities, a divided Supreme Court concluded Thursday that local governments have the authority to seize private land and turn the property over to private developers for economic development.

Government's authority to condemn land for public use traditionally has been used to eliminate slums or build highways, schools and other public works.

But Tuesday's 5-4 ruling found that local officials can use their "eminent domain" power to condemn homes in a working-class neighborhood for private development in hopes of boosting tax revenue and improving the local economy.

Connecticut case

The case pitted the city of New London, Connecticut, against homeowner Susette Kelo and six other families who were trying to keep the municipality from condemning their homes for use as part of a redevelopment project, centered around a $270 million global research facility built by the pharmaceutical giant Pfizer.

Kelo and her neighbors filed suit, arguing their property rights were being violated by well-connected developers. But the Supreme Court found the city could go forward with the project and condemn the homes.

"Promoting economic development is a traditional and long-accepted function of government," Justice John Paul Stevens wrote for the majority.

O'Connor: Court overstepped

But writing for the dissenters, Justice Sandra Day O'Connor wrote that the court overstepped its authority.

"The court today significantly expands the meaning of public use," O'Connor wrote. "It holds that the sovereign may take private property currently put to ordinary private use, and give it over for new, ordinary private use."

Scott Bullock, the homeowners' lawyer, said, "Every home, church or corner store" would be vulnerable to being replaced by commercial development under the ruling, "since they produce more tax revenue." He said a very high standard should be used when applying eminent domain since "every city has problems and wants more tax revenues."

Stevens concluded that the city's plan "unquestionably serves a public purpose" and the majority appeared to defer to the judgment of local officials over the courts to navigate that standard.

"The city has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including -- but by no means limited to -- new jobs and increased tax revenue," he wrote.

Cities hail the decision

The National League of Cities hailed the decision, saying it would allow cities to keep "one of their most effective tools for ensuring economic development."

"Eminent domain is not a power to be used lightly," Washington, D.C. Mayor Anthony Williams, the group's president, said in a written statement. "We must be sensitive to those who may be displaced. However, as part of a legislative process, with citizen input and discussion, it is one of the most powerful tools city officials have to rejuvenate their neighborhoods."

The case stems from New London's 2000 plan to redevelop 90 acres of the Fort Trumball neighborhood. The city council transferred eminent domain power to the New London Development Corporation, a private, non-profit group of citizens, business owners and community leaders.

The company wants to build a conference center, hotel complex, offices, condominiums and, eventually, an aquarium in New London, located about 125 miles east of New York.

Residents were ordered out of their homes in 2000, but several rejected the city's compensation package and fought the move in court.

"There's no amount of money that can compensate for what the other side of that coin would be," said Matt Dery, who said his family has lived in Fort Trumball for a century. "Truly, my parents don't want to wake up rich ... they just want to wake up tomorrow where they live."

'Blow to homeowners'

The libertarian Cato Institute, which filed a friend-of-the-court brief on Kelo's behalf, called the decision a "blow to homeowners and small business people."

"With today's decision, no one's property is safe, since any time a government official thinks someone else can make better use of your property than you're doing, he can order it condemned and transferred," Roger Pilon, the group's director of constitutional studies, said in a written statement.

Wesley Horton, an attorney for New London, said the city understands the situation the homeowners face, "but you have to remember that can happen if there was a road going in, or a school. It doesn't make any difference what type of condemnation there is.

"Obviously that's a sad situation, there's no question about it," he said. "But you can't have one rule for roads and another rule for blight and a third rule for economic development. It's all the same thing."

Joining Stevens in the majority were justices Stephen Breyer, Ruth Bader Ginsburg, David Souter and Anthony Kennedy. Chief Justice William Rehnquist, and justices Antonin Scalia and Clarence Thomas joined O'Connor's dissent.

In a concurring opinion, Thomas predicted the ruling would cause long-term problems.

"The consequence of today's decision are not difficult to predict, and promise to be harmful," he wrote. "So-called 'urban renewal' programs provide some compensation for the properties they take, but no compensation is possible for the subjective value of these lands to the individuals displaced and the indignity inflicted by uprooting them from their homes."

The case is Kelo v. City of New London (04-0108).

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