Eminent Domain Without Limits? U.S. Supreme Court Asked to Curb Nationwide Abuses

WHEN SUSETTE KELO PURCHASED her two-bedroom, pink house in 1997 along the Thames River—a beautiful stretch of waterfront property in New London, Connecticut—she thought she had her work cut out for her just restoring the house and designing the garden. That turned out to be the least of her worries.

Unbeknownst to Susette, the City, a private development corporation (New London Development Corporation), and a pharmaceutical company had reached an agreement. The pharmaceutical company would build a new facility nearby. The NLDC would take all the land in Susette’s neighborhood and transfer it to a private developer who would in turn build an expensive hotel for the pharmaceutical company’s visitors, expensive condos for its employees, an office building for biotech companies, and other projects to complement the facility. The State and the City would contribute millions of dollars. The only thing standing in the way was Susette and her neighbors.

Susette Kelo is not alone. All across the country, state and local governments are abusing the power of eminent domain to take private homes and businesses for the benefit of other, more politically favored private businesses who promise more jobs and taxes. In just five years, the government filed or threatened condemnation of more than 10,000 properties for private parties.

In the face of such statistics, the Institute for Justice, a public interest law firm in Washington, D.C., has waged a national campaign in court and in the court of public opinion to restrain government’s abuse of eminent domain and to restore constitutional protection for private property.

According to the Connecticut Supreme Court, the mere fact that your city is strapped for cash justifies condemning your home. After all, richer people could be living there and paying more taxes. Office buildings could be built there, and pay more taxes. Taking your home is for the good of the city—it’s “economic development.”

Using eminent domain for “economic development” alone is a new phenomenon. Usually governments try to at least claim that the area is a “slum” or “blighted,” but Connecticut has dispensed with that pretense and admits outright that if another business could make a profit on your land, the government can take it. The U.S. Constitution specifically prohibits this kind of taking, limiting the power of eminent domain to “public use.” The Connecticut Supreme Court decided that “public use” just means that it could have some benefit to the public, like more tax money in city coffers.

The Connecticut Supreme Court’s reasoning effectively reads the Constitution’s protections out of existence. Whose land wouldn’t produce more taxes if it were an office building instead of a home? Allowing condemnation for “economic development” just allows cities and developers to pick whatever land they want, without regard to the people who live or work there.

Now before the U.S. Supreme Court, Kelo v. City of New London gives the nation’s highest court the opportunity to address this radical departure from the language of the Constitution. The Court’s last case involving private development was 50 years ago, and it allowed the clearance of an area so blighted that most buildings lacked plumbing. For the last 50 years, without further guidance, it’s been up to states to set their own rules. Not surprisingly, the states have reached conflicting conclusions. Some states, like Connecticut, allow condemnations for “economic development.” Other states, like Washington, South Carolina and Maine, do not.

The Constitution is supposed to apply to all United States citizens, and U.S. Supreme Court guidance is desperately needed to prevent the continuing and growing abuse of eminent domain. The Court heard oral argument in Kelo in February and will issue a ruling by the end of June.

Coveting Thy Neighbor’s Land in New London

In early 1998, a pharmaceutical company announced that it would build a $270 million research facility in New London, purchasing the land along the Thames River from the State for $10 million. The company and other development groups associated with the project are slated to receive at least $118.2 million in federal and state subsidies over 13 years.

The plant, which was completed in 2001, bordered a well-established neighborhood called Fort Trumbull. The neighborhood is also along a scenic stretch of waterfront property connected to Fort Trumbull State Park. In January 2000, the New London City Council approved a Municipal Development Plan for the 90-acre Fort Trumbull neighborhood. The intent of the City of New London is to acquire all the remaining properties through eminent domain to build a hotel, private office space, high-income private housing, and other unspecified development projects that will enhance the plant.

Private Parties with Government Powers

The New London City Council solicited the New London Development Corporation— a private organization—to create the current development plan for the Fort Trumbull neighborhood, a plan that was approved by the City Council in January 2000. But the City Council did not stop there. It then delegated its authority over the project, including its eminent domain power, to the NLDC.

When the property owners in Fort Trumbull were served eminent domain papers, they read that the “City of New London, acting by the New London Development Corporation” seeks their home. The NLDC decided which properties were taken and demolished. It also made the ultimate determination on which developer would build the proposed projects.

Under pressure from the NLDC—which included posting eviction notices on the day before Thanksgiving in 2000 on the doors of residents who refused to move—the Fort Trumbull neighborhood has been transformed. After obtaining properties from those who wanted to sell and others who felt like they had no choice but to surrender their homes or businesses, the NLDC moved swiftly and demolished the structures. Today, vast empty dirt fields give the neighborhood the feel of a moonscape with the remaining homes and businesses left standing on less than two acres along the edge of the 90-acre parcel of land slated for private development. The vast majority of the NLDC’s development could move forward without taking the few remaining homes, but the NLDC wants it all.

The Property Owners

In a neighborhood that once teemed with dozens of families, only seven property owners who own 15 total parcels remain. Despite the NLDC’s threat demanding they move out no later than March 2001, these seven families continue to fight for their property rights. Here are the stories of a few of them.

Matt & Sue Dery

The Fort Trumbull neighborhood was once largely made up of Italian immigrants. In fact, right up the street from Kelo is the Dery family, who has lived in Fort Trumbull since 1895. Matt Dery, his wife Suzanne and their son live right next door to Matt’s mother and father. Matt’s great-grandmother, Maria Ballestrini, purchased that house in 1901. Matt’s mother, Wilhelmina, was born in the house in 1918. She and her husband, Charles, have lived there together since he finished his service in the Merchant Marines in World War II. The Derys liked the neighborhood so much that they bought two more houses and now rent them out.

Matt said, “My grandmother opened a grocery store on our threatened property. She extended credit to everyone in the neighborhood when they needed it, and when the property went into receivership during the Depression, she worked until 1958 to earn it back. Through good times and bad over the course of the past century, we’ve been good neighbors and good citizens. We were good enough to pay taxes for more than 100 years. Any town should want residents like us, but now New London has decided that they want better people here, and they’re trying to move us out.”

Bill Von Winkle

Around the corner from the Derys is Bill Von Winkle’s Fort Trumbull Deli. Von Winkle also owns six apartments above the deli, two homes with another five apartments, and one commercial building with three storefronts once leased out by Bill and his wife, Jennifer. The deli served oversized hoagies to eager customers from 1986 until 2001, when the NLDC’s actions forced the Von Winkles to shut it down and forgo its income.

Bill said, “The government decided that despite the fact that my apartments were full, that someone else could make a more profitable use of my land. The New London Development Corporation working with the City has done everything in its power to take what’s mine and give it to a private developer so they can get richer. It’s just not fair. Nothing like this is supposed to happen in this country. America is supposed to be different. It is supposed to be a place where our rights are protected by the government, not a place where they are sold to the highest bidder, but that’s exactly what is happening.”

“The same rules that applied to me should apply to anyone who wants to purchase private property in New London,” Bill said. “No home or business owner should be forced to sell simply because someone with more political influence wants that property.”

Conclusion

If private property may be condemned and given to another private organization or company for private profit, and if the determination of which properties are to be condemned may be delegated to a private group unaccountable to the electorate, then are there any limits on the exercise of this government power?

Without accountability or constitutional constraints, all the incentives promote aggressive, unbridled use of the eminent domain power, regardless of the impact on innocent property owners. It is time to shift the balance away from government power and back to its citizens. The Institute’s case on behalf of Fort Trumbull property owners seeks to end another sad chapter in the government’s modern- day abuse of its awesome eminent domain power.

As Susette Kelo said, “We begged and pleaded for three years and no one heard us, not until the Institute for Justice took our case. Now, we are protected, we are no longer the ones backed in a corner, fighting for the simple right to live in our homes.”

Americans should not be forced to beg for their rights. The case of Kelo v. The City of New London reminds the public that property rights are the foundation of all our rights. They are constitutionally enshrined and they must be preserved; when property rights are lost, the loss of other rights will inevitably follow.

Litigation Team

The litigation team is headed by Institute for Justice Senior Attorneys Scott G. Bullock and Dana Berliner. Joining them on the team is Institute President and General Counsel William H. Mellor. The Institute is joined by local counsel Scott W. Sawyer of New London.

The Institute for Justice’s mission is to advance a rule of law under which individuals can control their own destinies as free and responsible members of society, using strategic litigation, training, communication and outreach. It litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government. This article is reprinted with permission from the Institute for Justice. For more information on Kelo and eminent domain abuse, visit www.ij.org.