Understanding the Kelo Case

At the turn of the twenty-first century, New London, Connecticut, was a city in trouble. Hammered by deindustrialization and the closure of military facilities, it suffered from high unemployment. Locked into its boundaries by surrounding towns, it had a high proportion of tax-exempt land despite its reliance on property taxes.

In 1998, the pharmaceutical company Pfizer began to construct its Global Research Facility adjacent to the Fort Trumbull neighborhood, a waterfront district of 90 acres with 115 residential and commercial parcels including a sewage treatment plant and junkyard. The city directed the New London Development Corporation, a development agency under city control, to develop redevelopment plans for Fort Trumbull that could capitalize on Pfizer’s investment and presence. The plans included a resort hotel and conference center, office and retail space, a new state park, and residences. The Development Corporation purchased 100 of the parcels from willing sellers, but needed to use the power of eminent domain to acquire the other 15 parcels. New London’s effort depended on $70 million in state money, and it was the state that suggested the city should acquire Fort Trumbull under legislation authorizing economic development efforts, rather than a different statute relating to removal of blight.

Homeowner Susette Kelo and several other reluctant property owners challenged the acquisition with the argument that the Fifth and Fourteenth Amendments prohibited the city and its agents from forcibly acquiring property from one private owner simply to transfer it to another private owner or entity (the New London Development Corporation and any future owners who might purchase from it). The argument hinged on the proper definition of “public use” (as possibly distinct from “public purpose”). The case made its way through the Connecticut Supreme Court to the Supreme Court of the United States, which heard arguments on February 22, 2005, and issued a five-to-four decision upholding the city on June 23, 2005.

The decision unleashed a wave of criticism, since the majority sided with large impersonal institutions rather than individual property owners. The decision became an organizing point for property rights advocates. President George W. Bush in 2006 issued an executive order prohibiting federal agencies from using eminent domain “merely for the purpose of advancing the economic interests of private parties to be given ownership or use of the property taken.” Several states–including New Hampshire, Florida, and Oregon–moved quickly to prohibit such takings within state law, whether or not there was a record of abuse.

The majority decision (John Paul Stevens, Anthony Kennedy, David Souter, Ruth Bader Ginsburg, Stephen Breyer) was judicially conservative. It relied on precedent, particularly the landmark case Berman v. Parker from 1954. In that case, a small business owner in the southwest quadrant of Washington, D.C., challenged the use of eminent domain to acquire his property as part of a massive urban renewal project that turned a mixed neighborhood into middle-class housing, L’Enfant Plaza, and new federal office buildings (ironically for HUD and DOT), and made Washington a national example of the possibilities and pitfalls of large scale clearance and redevelopment projects. As Clarence Thomas noted in dissent on Kelo, the overwhelming majority of residents affected by the Berman decision were African Americans.[1]

In Berman the Court unanimously accepted an expansive view of public use. “It is within the power of the legislature,” wrote William O. Douglas, “to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled.” Fifty-one years later, a very different Supreme Court membership declined to break from the precedent and articulated the view that a carefully prepared and comprehensive redevelopment plan was strong evidence that a local jurisdiction, such as New London, had adequately defined a public purpose justifying the application of eminent domain.

Although property rights advocates attacked the majority decision as “judicial activism,” it was anything but. It was judicially conservative not only in deferring to frequently reiterated precedents, but also in its deference to the states. The Court declined to second guess the local and state policy-making process in its particulars. At the same time, the majority showed some unease with the substantive results of the New London policy by inviting states to put their own houses in order: “Nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power. Indeed, many States already impose ‘public use’ requirements that are stricter than the federal baseline.”

The minority (Sandra Day O’Connor, William Rehnquist, Antonin Scalia, and Clarence Thomas) were in this case the judicial activists. It is likely that the Court took Kelo, its first major eminent domain case since Hawaii Housing Authority v. Midkiff (1984), because some members hoped that it would an opportunity to probe behind the surface of plans and precedents to scrutinize the content of New London’s actions. In effect, they were hoping to do for property rights what Brown did for school integration by looking at the real world effects behind legal formulations.

Although they failed to shake loose a fifth vote, the minority were vigorous in mobilizing the examples of urban history. They made the argument–in a nutshell–that the use of eminent domain to promote private land development almost inevitably favors big government and big business, and victimizes poor people and minorities. Jane Jacobs offered an “amicus” brief that reiterated her belief in the problems of large-scale planning schemes. John Norquist, former mayor of Milwaukee and now executive director for the Congress for the New Urbanism, argued that subsidies to attract corporate investment into distressed cities were nearly always flawed interventions in the market. The National Association for the Advancement of Colored People and the Southern Christian Leadership Conference argued that urban renewal had a long record of burdening the poor and disrupting their lives, and that current neo-renewal efforts have the same very strong tendency. The policy debates of the 1960s lived again with citations to Martin Anderson and Herbert Gans.

The most frequently cited comparison was to Poletown, the low-income neighborhood that the city of Detroit leveled in order to create an in-city site for a new Cadillac plant for General Motors. The goal of the city, of course, was to bring living-wage jobs back to the city and to increase its tax base. The project cleared 1500 homes, sixteen churches, and 144 businesses. The long, failed resistance by the neighborhood has been well-documented in books and documentary film and has long been a staple topic in urban studies classes.[3] Dissents in the Michigan Supreme Court case upholding the action, Poletown Neighborhood Council v. City of Detroit, have been a fertile source for property rights analysis, now expanded by its use as an example by Justices O’Connor and Thomas in an additional dissenting opinion.

New London, of course, is a victim of its context. The effort to redevelop Fort Trumbull is one more example of the distorting effects of tax-base competition. Where cities rely on property taxes, they seek to replace low-value and high-cost uses (i.e., rundown neighborhoods with lots of children) with high-value, low-cost uses (i.e., offices, and condos for empty nesters). Where they depend on sales taxes, every city wants a new shopping center just inside its boundaries, where tax revenue flows to city hall but traffic crowds streets in the adjacent town.[4] In the New London case, city officials were trying to rebalance a regional development pattern that has put the growth of tax base outside the city but burdens the inside (for the education of children of low-wage service workers.)

For urban policy specialists, the Kelo case illustrates the concept of an urban regime, or alliance of elected and appointed officials with a specific set of private economic interests.[5] As Justice O’Connor recognized, in most comparable property takings, “the beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.” The redevelopment plan clearly met Pfizer’s needs for a hotel and condos to house visitors and employees, for removing eyesores, and for “doing something” about the low-income neighborhood. In the regime context, big projects such as large new mixed-use developments or convention centers not only benefit large private interests, but also make the reputations of public professionals and give elected officials something to point to in re-election campaigns. They are like playing Earl Weaver baseball, always waiting to be saved by a home run rather than playing for singles, steals, and bunts.

Susette Kelo’s case grounded the abstractions of property rights in the everyday community life. Public officials may have expertise and information on their side, but they remain talking heads behind office desks or in front of law books. In contrast, Kelo was able to tell her story with the help of emotionally powerful language and imagery. She grew up in the neighborhood and returned to her roots in mid-life. In interviews she was able to speak from the comfortable interior of her home, which she bought and fixed up, and describe herself as a “working class person.” She has expressed a special animosity toward the president of Connecticut College, who stated a desire to make New London a hip city (meaning a place for high-income people, in Kelo’s version). Kelo had repainted her house pink as she fixed it up, bringing to mind John Mellencamp’s populist lyrics in his 1983 song “Pink Houses”:

Oh but ain’t that America for you and me
Ain’t that America somethin’ to see baby
Ain’t that American home of the free
Little pink houses for you and me.

There is much to ponder in the way that both the majority and minority on the Supreme Court understood and mobilized urban history. The majority used legal precedent, deferred to local judgment, and presumably saw a range of quality in the actual projects: they were conservative and non-activist. The minority were more fully steeped in the troubled history of urban renewal and revitalization efforts, and less willing to cut slack for one more big redevelopment project with ambitious goals to “reinvent” part of a city.[6]

Notes

[1]. Howard Gillette Jr., Between Justice and Beauty: Race, Planning, and the Failure of Urban Policy in Washington, D.C. (Baltimore: Johns Hopkins University Press, 1995).

[2]. Martin Anderson, The Federal Bulldozer: A Critical Analysis of Urban Renewal, 1949-1963 (Cambridge, MA: MIT Press, 1964); Herbert Gans, The Urban Villagers: Groups and Class in the Life of Italian Americans (New York: Free Press, 1962); and James Q. Wilson, ed., Urban Renewal: The Record and the Controversy (Cambridge, MA: MIT Press, 1966).

[3]. Armand Cohen, Poletown, Detroit: A Case Study in “Public Use” and Reindustrialization (Cambridge, MA: Lincoln Institute of Land Policy, 1982); Poletown Lives (Detroit: Information Factory, Inc., 1992); and Jeanne Wylie, Poletown: Community Destroyed (Urbana: University of Illinois Press, 1990). Poletown even makes an appearance in Elmore Leonard’s crime novel Split Image (New York: Harper Torch, 2002).

[4]. William Fulton, The Reluctant Metropolis: The Politics of Growth in Los Angeles (Point Arena, CA: Solano Press Books, 1997).

[5]. Clarence Stone, Regime Politics: Governing Atlanta, 1946-1968 (Lawrence: University Press of Kansas, 1989).

[6]. For more on Kelo from legal perspectives, see Dwight H. Merriam and Mary Massaron Ross, eds., Eminent Domain Use and Abuse: “Kelo” in Context (Chicago: American Bar Association Section of State and Government Law, 2006).


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