Supreme Court: Big Corporations Can Take Your Home

by Len Hart, The Existentialist Cowboy

Since the 1980s, it has become very nearly impossible to find anything about which the GOP is right. But --I've done it! In the interest of fairness, I have ferreted out a SCOTUS decision of 2005 that merits special mention, primarily because Antonin Scalia, whose thought processes were scrambled, backward and fallacious in Bush v Gore, was absolutely correct this time around. Secondly, the so-called court "liberals" were absolutely wrong. The decision has not yet replaced Roe v Wade as a "conservative" cause celebre, but it's close. It should be a progressive cause celebre as well.

The decision is Kelo v. City of New London, 545 U.S. 469 (2005) in which SCOTUS ruled that the city of New London could invoke imminent domain for the benefit of a private development project. I would think this a violation of the Fifth Amendment on its face.

Two polar propositions are perfectly clear. On the one hand, it has long been accepted that the sovereign may not take the property of A for the sole purpose of transferring it to another private party B, even though A is paid just compensation. On the other hand, it is equally clear that a State may transfer property from one private party to another if future "use by the public" is the purpose of the taking; the condemnation of land for a railroad with common-carrier duties is a familiar example. Neither of these propositions, however, determines the disposition of this case.

--KELO et al. v. CITY OF NEW LONDON et al.

There was apparently no attempt to make the case that the end use would benefit anyone but private, corporate development. Simply, because of Kelo v City of New London, if a private developer covets your lake front property and, further, if the developer can persuade the city to condemn your house, the development can move in, move you out, and put up fancy, highly profitable condos. That is what has happened in New London, Connecticut. What you thought you owned can be taken away if a big, influential corporation covets it and has friends on the City Council.

The case arose when New London, Connecticut condemned the privately owned homes ideally situated lakeside. The huge pharmaceutical firm, Pfizer, claimed that the property was to be used as a part of a comprehensive redevelopment plan. In a 5-4 decision, SCOTUS ruled that the "general benefits" a community enjoyed from economic growth were sufficient to qualify as "public use" under the Takings Clause of the Fifth Amendment." A stretch by any standard --liberal or conservative!

In fact, the development plan included a resort hotel, a conference center, 80–100 new high income residences consisting of townhouses and apartments, and fashionable office and retail space. Given the history of "trickle down" theory, it is difficult to see how such a development benefits anyone other than developers. Two words --high income --exclude most of the public. It is hard to make the case that the public as a whole benefits when those not earning high incomes are excluded. Moreover, improving the general tax base of a city upon the backs of retirees and persons of modest income is most certainly not what the founders had in mind by the term "public".

The project moved forward upon a 5–4 decision of June 23, 2005 but it was not Antonin Scalia but Justice John Paul Stevens who wrote the majority decision favoring the City of New London. Stevens was joined by Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer. Justice Kennedy's concurring opinion was, in fact, an apologia, a rationale for the idea that government policy need only bear a rational relation to a legitimate government purpose. In other words, big corporations, like Pfizer, who wish to displace you need only meet a very minimum and exceedingly vague standard to displace you from your home: rational relation.

(a) Though the city could not take petitioners' land simply to confer a private benefit on a particular private party, see, e.g., Midkiff, 467 U. S., at 245, the takings at issue here would be executed pursuant to a carefully considered development plan, which was not adopted "to benefit a particular class of identifiable individuals," ibid. Moreover, while the city is not planning to open the condemned land--at least not in its entirety--to use by the general public, this "Court long ago rejected any literal requirement that condemned property be put into use for the ... public." Id., at 244. Rather, it has embraced the broader and more natural interpretation of public use as "public purpose."

--KELO et al. v. CITY OF NEW LONDON et al.

The city, it was decided, need not prove that the development would, in fact, benefit the entire community in any measurable way. The corporate entities coveting your property need not spell out concrete, tangible ways in which the community as a whole would benefit. The city need not prove that merely increasing the tax base benefits the community as a whole. Nor was the city required to prove that the alleged improvement was not offset by new liabilities and/or services.

In 2000, the city of New London approved a development plan that, in the words of the Supreme Court of Connecticut, was "projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city, including its downtown and waterfront areas."

--KELO et al. v. CITY OF NEW LONDON et al.

Justice O'Connor, with whom The Chief Justice, Justice Scalia, and Justice Thomas join, dissenting.

The Fifth Amendment to the Constitution, made applicable to the States by the Fourteenth Amendment, provides that "private property [shall not] be taken for public use, without just compensation." When interpreting the Constitution, we begin with the unremarkable presumption that every word in the document has independent meaning, "that no word was unnecessarily used, or needlessly added." Wright v. United States, 302 U. S. 583, 588 (1938). In keeping with that presumption, we have read the Fifth Amendment's language to impose two distinct conditions on the exercise of eminent domain: "the taking must be for a 'public use' and 'just compensation' must be paid to the owner." Brown v. Legal Foundation of Wash., 538 U. S. 216, 231-232 (2003).

--KELO et al. v. CITY OF NEW LONDON et al, Justice O'Connor, with whom The Chief Justice, Justice Scalia, and Justice Thomas join, dissenting.

The project is most certainly not a public asset nor is it used by the public in the same way that a public park, a public lake or a municipal auditorium is used. This project was not essentially different from the huge Allen Center, Greenway Plaza, Cullen Center, or the mega Houston Center projects in Houston. The "public" may work in the offices, patronize shops, and sit in open spaces. The public may walk from Enron to One Allen Center to Hyatt Regency --but to claim that these are "public" projects is absurd.

In February 1998, Pfizer Inc., the pharmaceuticals manufacturer, announced that it would build a global research facility near the Fort Trumbull neighborhood. Two months later, New London's city council gave initial approval for the New London Development Corporation (NLDC) to prepare the development plan at issue here.

The NLDC is a private, nonprofit corporation whose mission is to assist the city council in economic development planning. It is not elected by popular vote, and its directors and employees are privately appointed. Consistent with its mandate, the NLDC generated an ambitious plan for redeveloping 90 acres of Fort Trumbull in order to "complement the facility that Pfizer was planning to build, create jobs, increase tax and other revenues, encourage public access to and use of the city's waterfront, and eventually 'build momentum' for the revitalization of the rest of the city." App. to Pet. for Cert. 5.

--KELO et al. v. CITY OF NEW LONDON et al, Justice O'Connor, with whom The Chief Justice, Justice Scalia, and Justice Thomas join, dissenting.

It is reasonable to assume that some jobs were created initially. But construction is temporary. How many net jobs were created, if any? How many long term jobs were created? How does the public benefit and in what ways? Did the public benefit from the impact on the environment? What criteria are used to determine public benefit?

Those questions were not raised. Neither the city or the developers were required to put forward a program designed to generally improve the infrastructure, the schools, the water supply or any number of amenities expected of a community in which all citizens contribute monetarily and in which all citizens have a stake. Nor was the city required to prove that the displacement of long time residents would not prove of greater liability to the city. This looked like a private development by private enterprise for private enterprise and benefiting private enterprise. The public be damned!

The public use requirement, in turn, imposes a more basic limitation, circumscribing the very scope of the eminent domain power: Government may compel an individual to forfeit her property for the public's use, but not for the benefit of another private person. This requirement promotes fairness as well as security. Cf. Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U. S. 302, 336 (2002) ("The concepts of 'fairness and justice' ... underlie the Takings Clause").

--KELO et al. v. CITY OF NEW LONDON et al, Justice O'Connor, with whom The Chief Justice, Justice Scalia, and Justice Thomas join, dissenting.

The role played by the city of New London was simply that of making it easier for the big pharmaceutical company to get the land it needed --cheap!

The decision was a cop out and I am ashamed to say that the so-called "liberals" on the court were hoaxed. Certainly, wealth does not trickle down and I dare say none of the said "public benefits" of this development have "trickled down" to the "public", the residents of New London and most certainly not to the original residents of the coveted property.

It is also a safe bet that the residents were compensated only at existing market value --not at projected market value after the construction of fancy, schmancy hotels, conference centers, jacuzzis and condos. Sadly, this is a case in which the corporate rich coveted the lands of those less fortunate and schemed a way to get good property cheap. And they did it with municipal complicity. This is a case in which big business and crooked government screwed the people. Tragically, this case is just a milestone on the road to corporate fascism.

An update:

Shock and Tasers in New Orleans

By Naomi Klein, HuffingtonPost.com, December 22, 2007

Readers of my book The Shock Doctrine know that one of the most shameless examples of disaster capitalism has been the attempt to exploit the disastrous flooding of New Orleans to close down that city's public housing projects, some of the only affordable units in the city. Most of the buildings sustained minimal flood damage, but they happen to occupy valuable land that make for perfect condo developments and hotels.

The final showdown over New Orleans public housing is playing out in dramatic fashion right now. The conflict is a classic example of the "triple shock" formula at the core of the doctrine.

- First came the shock of the original disaster: the flood and the traumatic evacuation.

- Next came the "economic shock therapy": using the window of opportunity opened up by the first shock to push through a rapid-fire attack on the city's public services and spaces, most notably it's homes, schools and hospitals.

-Now we see that as residents of New Orleans try to resist these attacks, they are being met with a third shock: the shock of the police baton and the Taser gun, used on the bodies of protesters outside New Orleans City Hall yesterday. ...

From Le Thé Chez Vierotchka: The Frontline - R.I.P.

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