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The U.S. Supreme Court's Holding in Kelo v. City of New London: An Interview that Reveals an Insider's Perspective


Friday, Jul. 01, 2005

On June 23, the U.S. Supreme Court, in a closely-watched 5-4 decision, found it constitutional, under the Takings Clause, for the State of Connecticut, and the city of New London, to condemn fifteen homes, owned by seven families, for "economic development." Although the owners had urged the Court to hold that the condemnation was not for "public use," as the Takings Clause requires, the Court held otherwise - and allowed the condemnation to go forward.

While the Takings Clause requires that the families receive "just compensation" for their homes, the Court's decision ensures that there is no way they can hold onto their property - despite emotional attachments and significant investments of time and money in improving the homes.

Joining Institute For Justice attorney Scott Bullock in representing the families opposing this action was IJ attorney Dana Berliner, whom I asked to share her insights about the case.

First, I asked Dana for a brief thumbnail sketch of each of her clients, who all will soon be without their homes in New London. As you will see in her later responses, these seven families have good reason to be upset about the holding. The development plans are highly speculative. But the Institute For Justice has not given up its fight.

Homeless In New London? Not Just Yet

In 1997, Susette Kelo, a registered nurse, found her little pink house by the water, in New London. Although it was in disrepair, it was her dream home, and she lovingly restored it and nursed a beautiful garden there.

Wilhelmina Dery was born 87 years ago in the house where she still lives in Fort Trumbull. She has never lived anywhere else. Her husband, Charles Dery, has been living there a mere 50 years. Her son, Matt; his wife, Sue; and their son live next door, in a house given to them by Matt's grandmother as a wedding present.

Bill Von Winkle owns (and lives in) a six-unit apartment building that used to house the Fort Trumbull Deli on the ground floor. He also owns two other homes that together have another five apartments.

Jim and Laura Guretsky own a triplex, and live in one of the homes with their two daughters.

Pasquale Cristofaro purchased a home in Fort Trumbull after the family's home was condemned supposedly for a seawall but actually for private development. It has been a home for several members of the family; it is currently occupied by some of Mr. Cristofaro's grandchildren.

Richard Beyer purchased two dilapidated homes in Fort Trumbull in 1994. He had completely restored one, and had partially restored another, when the City told him it was taking his property.

Byron Athenian's house used to be right next to his business, an auto repair shop. But when the repair shop building was sold to the new development project, Byron was left with his house, but no place for his repair business.

Some Background Information About The Case

QUESTION: Dana, would you please tell FindLaw readers how you became involved in this case? But first, is that one of the litigants in the picture relating to the case on your website?

ANSWER: The picture on our website is lead plaintiff Susette Kelo -- standing in front of her home, which the Supreme Court last week ruled could be condemned for economic development. Kelo and the other plaintiffs found us after they had tried for more than a year, unsuccessfully, to convince New London and the New London Development Corporation not to take their homes.

When the time for the government's exercise of its eminent domain power grew closer, one of the homeowners saw an article that mentioned the Institute for Justice and sent us a letter in the summer of 2000. The letter immediately drew our attention because it contained three elements we always look for in our cases: an important, cutting-edge constitutional issue; a dedicated group of people willing to stand up for their rights; and an outrageous violation of individual liberty at the hands of arrogant government officials.

One visit to look at the homes and meet these homeowners told us this was a case we had to take.

QUESTION: Were you present during the oral argument before the Court? Did any of the questioning by the Justices surprise you?

ANSWER: Yes, I was the "second chair" at the U.S. Supreme Court when Scott Bullock presented our oral argument. Scott and I tried the case together in the Connecticut Superior Court, the trial court, and argued the case together at the Connecticut Supreme Court. When it was time to go to the U.S. Supreme Court, we flipped a coin to see who would present the case.

The only question that truly surprised me was Justice Kennedy's question about scholarly articles relating to just compensation. Since the case was about public use, not just compensation, that one came out of left field. [As noted above, the Takings Clause requires that a taking be both for "public use" and for "just compensation"; here, it is undisputed that the government must pay what a court deems to be "just compensation." The issue before the Court was whether the taking was for "public use." - Ed.]

QUESTION: Nonetheless, have these people been justly compensated, or will they be?

ANSWER: Just compensation isn't the issue. There are some things you can't compensate for. Wilhelmina Dery is in her late 80s and in fragile health. She doesn't want money. She wants to stay in the home where she was born, with her family around her.

QUESTION: From reading the Court's ruling, it seems that New London adopted an economic redevelopment plan to increase jobs and tax revenues by turning over some 115 privately owned properties to a private developer -- with many of these properties located on the waterfront of the Thames River and Long Island Sound, along with some 32 acres once occupied by a Federal Government's Naval Undersea Warfare Center. Is it pure speculation by the planners that this proposed project will provide jobs and tax money for this officially "distressed" city?

ANSWER: Certainly the development contract provides no assurance of tax increases or jobs. The property is being leased to the developer for 99 years at $1 per year. One of our arguments was that if the "public use" was economic development, there should at least be contractual and statutory assurances in place at the time of condemnation that created a reasonable certainty that the project would indeed result in the claimed benefits. But the Court rejected that suggestion and held instead that the government can condemn even without any assurances that the supposed economic development will occur.

QUESTION: The New London Superior Court, as a result of the bench trial, ruled that the town's redevelopment plans violated the "public use" restriction of the Fifth Amendment. The City of New London appealed to the Supreme Court of Connecticut, which overturned the trial judge with a 4-3 ruling. So at that point, there were four judges who believed this was an improper taking (the trial judge and the three dissents on the highest court in the state). Did you expect another close ruling in the U.S. Supreme Court?

ANSWER: Actually, the Connecticut Superior Court upheld the condemnation of four homes but dismissed the condemnations of the other eleven. The eleven homes are being taken for a use that is not exactly clear. The plan said "park support," but no witness could, or did, explain what this meant.

The trial court held that it was impossible to say that a condemnation was for a public use, and necessary for a public use, if no one knew what the use was. The other four homes are being condemned for an office building that even the developer itself has called "speculative" and "not feasible at this time." As to those four homes, the trial court judge held that he had enough information to uphold the condemnations.

So the trial court split down the middle, and the Connecticut Supreme Court was divided 4-3. We knew it was going to be a divided U.S. Supreme Court opinion, and I wasn't surprised that it was 5-4.

The Real World Implications Of The Court's Ruling

QUESTION: Dana, explain how developers and big corporations often work with local and state politicians to accomplish land grabs for their private benefit, at the expense of those without the wherewithal to fight back.

ANSWER: The union of private developers and government power comes about in a few different ways, but the result is the same--the threat of eminent domain to get people to sell "voluntarily," and the subsequent use of eminent domain "as a last resort" if anyone refuses to give up their home or business so that someone else can establish a home or business there. Sometimes a particular business or developer will offer to bring more tax dollars to the city by a new development, but only if the city can guarantee the land the developer wants.

Other times, cities bring in big-box stores or other large private developments and then agree to eminent domain as part of a "corporate welfare" package. And still other times, cities market large chunks of land (owned by often unknowing private citizens) to private developers or businesses.

In New London, the City and the NLDC, a private nonprofit development corporation, reached a deal with Pfizer, under which Pfizer would move to New London and the City and the NLDC would redevelop the Fort Trumbull area, which is near the Pfizer facility. The "process" of plans and public hearings and votes all occurred after that agreement had already been reached. It was a done deal before the residents and local businesses could even object.

QUESTION: Before addressing the legal implications of this ruling, would you please tell me about the human impact this ruling will have on your clients? How did these redevelopment plans impact the lives of Susette Kelo, and the others? What will happen to the Dery family?

ANSWER: The plaintiffs brought this case because they didn't want to move. They still don't want to move, and they (and we) will do everything possible to allow them to remain in their homes. If they are forced to leave, Susette will lose her dream home. She won't be able to find another with that kind of view.

Neither Wilhelmina Dery nor her husband Charles is in good health, and being forced to move in their 80s will certainly not improve the quality of their lives. Matt Dery will lose the memories of his family history, the home where he grew up, and the home where his children grew up.

The Cristofaros will lose their second family home to eminent domain for private business.

QUESTION: What has been the reaction of Connecticut's leading political figures to the ruling?

ANSWER: Former Governor John Rowland was a major proponent of this project. His successor, M. Jodi Rell, has said it would be appropriate to review eminent domain legislation in Connecticut because she was concerned about it. She hasn't said anything specific about these homeowners yet.

There was a move to convene a special session of the Connecticut legislature (which is currently out of session) to address eminent domain. That move failed, so the legislature won't be coming to the rescue any time soon.

QUESTION: How many states have adopted statutes similar to that of Connecticut? How many have laws that prohibit the type of taking the High Court has now ruled to be constitutional?

ANSWER: That's a hard question to answer. Around ten states have statutes that look like Connecticut's, but other states have statutes allowing property to be declared "blighted" if it could be more economically productive. And still other states just leave it up to the municipalities to use eminent domain under their general police powers or to create their own ordinances.

Whatever statutory mechanism is used, eminent domain for economic development occurs in almost every state. Nine states, however, have state supreme court decisions barring economic development condemnations: Arkansas, Florida, Illinois, Kentucky, Maine, Michigan, Montana, South Carolina, and Washington. This past year, Utah passed a statute removing the power of eminent domain from redevelopment agencies.

I'm not aware of any other state statutes explicitly prohibiting the use of eminent domain for economic development.

The Plaintiffs' Attorneys' Strategy In Presenting The Case To Supreme Court

QUESTION: You (and Scott Bullock) urged the Court to find "a new bright-line rule" prohibiting the type of economic development plan contemplated by New London, which was operating under statutory provisions enacted by the Connecticut legislature. Was this a strategic decision, trying to get one or more swing votes, thinking you probably had the votes of Chief Justice Rehnquist and of Justices Scalia and Thomas?

ANSWER: It wasn't a strategic decision related to the Justices and their votes. We really believe that the rationale of taxes and jobs is so expansive that it erases the Constitution's public use requirement. Every legal business produces taxes and jobs. If that's a public use, what's a private one? Any property can be taken for "economic development."

You can always imagine (and write a plan for) a more "productive" use for any piece of property. Every house would produce more taxes if it was an office tower. We wanted the Court to completely reject that reasoning and give some actual content to "public use."

QUESTION: What is the political philosophy underlying your position vis-à-vis cities like New London and laws like that of Connecticut?

ANSWER: Eminent domain is a power of government and it should only be used when truly necessary for public projects like roads and public buildings. It is not a tool for private developers to assemble prime real estate, or for cities to increase their coffers. We believe Connecticut's law violates both the U.S. and Connecticut constitutions. If developers want property, they can buy it just like everyone else.

QUESTION: It appears there were at least forty amici briefs filed by others in this case. How did these briefs fall, in supporting and opposing your position? On balance, what -- if any -- impact did the amici briefs have on the ruling? And what generated so many outsider briefs?

ANSWER: Twenty-five of the amicus briefs were filed in support of the homeowners. There were briefs filed by groups that generally support property rights, like Pacific Legal Foundation, the Cato Institute, the Reason Foundation, and the Property Rights Foundation; briefs from groups concerned about the social impact of eminent domain, like the NAACP, AARP, and Better Government Association; and briefs by state think tanks, individual property owners, and law professors. Jane Jacobs, who wrote several classic books about urban theory, and John Norquist, the former Mayor of Milwaukee, also filed briefs.

Several of the briefs were cited in the decision. And I think they told the Court--or should have told the Court--that the threat of eminent domain for private development affects everyone, that it has alarming personal and social consequences, and that eminent domain isn't necessary for private development. Unfortunately, five members of the Court weren't listening.

QUESTION: What, if anything, surprised you about the ruling?

ANSWER: I was surprised that the majority was so willing to throw open the floodgates. I thought if they were going to affirm the Connecticut decision, they would at least create an actual standard for lower courts to use.

What The Future, Under The Court's Ruling, Will Look Like

QUESTION: Justice Stevens, in writing the majority's holding, suggests that if the "hypothetical cases" you envisioned should come to pass, the Court would have to revisit this subject. What were those hypothetical situations, and how likely are they to occur?

ANSWER: Justice Stevens suggested that there could be cases of outright corruption, or significant procedural irregularity, that might violate the public use requirement. Certainly, such cases do occur, but in the vast majority of economic development condemnations, it will not be possible to prove outright corruption, and jumping through bureaucratic hoops is something that local governments excel at.

A few owners may be able to benefit, but the rest are left utterly without hope of protection under the U.S. Constitution. The "hypothetical cases" are so likely to occur that they have actually happened -- in fact, in our hypotheticals, we were describing a few lower court cases, including one where church property was taken for a Costco.

QUESTION: Given the fact that Kelo is a 5-4 ruling do you anticipate that it will be overturned if the Court is realigned by Bush appointments?

ANSWER: I anticipate that Kelo will one day be overturned. Its interpretation of the Constitution is just plain wrong. Whether it will be Bush's appointee or someone else's who tips the balance, I don't know. But the last time the Court decided an eminent domain case involving private development, it was 9-0. The case was Berman v. Parker The last time they decided a major public use case, it was also 9-0. That case was Hawaii Housing Authority v. Midkiff. We're moving in the right direction.

QUESTION: What are the future plans of the Institute For Justice, in this area, given this ruling?

ANSWER: The majority of states have never ruled on whether economic development is a public use under the state constitution. And the vast majority of states haven't heard a case about eminent domain for private development in decades. We'll be aggressively pursuing state constitutional litigation. Eventually, we'll bring this issue back to the U.S. Supreme Court.

And on the non-legal front, IJ and the Castle Coalition, which is an IJ project, have launched the "Hands Off My Home" campaign. The campaign will provide grassroots activists with the information, tools, and strategies to oppose the use of eminent domain for private profit in their own communities, municipalities and states.

We've been overwhelmed by the support we've gotten, and the wave of outrage from ordinary citizens that has followed in the wake of the Supreme Court decision. So we decided to help focus that outrage. The first two activities are a rally in New London, to ask the City Council to allow the homeowners to stay, and a request to the Governors of all 50 states to pledge to work to stop the use of eminent domain for private development in their state.

QUESTION: Thanks, Dana. I'll be watching.

ANSWER: My pleasure. We'll be busy, so stay tuned.

John W. Dean, the interviewer, is a FindLaw columnist, and former counsel to the president. Dana Berliner, the interviewee, is a senior attorney at the Institute for Justice. She serves as co-counsel in the Kelo case and also authored the report Public Power, Private Gain: A Five-Year, State-by-State Report Examining the Abuse of Eminent Domain (2003).

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