'Despotic Power' in the Decade Since Landmark Eminent Domain Ruling

WASHINGTON – An attorney for the organization that represented homeowners in a controversial U.S. Supreme Court case that made it easier for governments to appropriate property and hand it over to another private entity for economic development purposes said the ruling continues to pose a threat to all landowners and called on lawmakers to address the potential abuse of eminent domain.

Dan Alban, an attorney for the Virginia-based Institute for Justice, told the House Judiciary Committee that studies show that the outcome of the Kelo v. City of New London case, decided by the high court 10 years ago, “disproportionately impacts minorities, the less educated and the less well-off” and provides the government with “despotic power.”

“The Kelo case demonstrated that a majority of justices sitting on the Supreme Court believed the U.S. Constitution provides very little protection for the private property rights of Americans faced with eminent domain abuse,” Alban said. “Indeed, the court ruled that it is acceptable to use the power of eminent domain when there is a mere possibility that something else could make more money than the homes or small businesses that currently occupy the land.”

The ruling, Alban told lawmakers, poses a threat to the rights of American property owners, particularly those who are disadvantaged and lack the financial resources and political connections to fight back. While the decision resulted in substantial public outcry, federal legislation to combat what he characterized as the “abuse of eminent domain” has yet to be adopted.

“The federal government should not be complicit in an abuse of power already deemed intolerable by most states,” he said. “Congress should take action to prevent federal dollars from being used to fund projects that abuse the power of eminent domain by taking property from one private person to give to another. Congress should not be sending scarce economic development funds to projects that abuse eminent domain and strip hard-working, tax-paying home and small business owners of their constitutional rights, particularly when these projects may ultimately fail.”

The Kelo case involved the efforts of the city of New London, Conn., to use its right of eminent domain to transfer land from one private owner to another private owner to further economic development. Several homeowners in the Fort Trumbull neighborhood, including Susette Kelo, filed suit against the city, maintaining that its actions violated the “Takings Clause” of the Fifth Amendment to the Constitution.

New London wanted the property to develop a $300 million research center for Pfizer, Inc., the giant pharmaceutical corporation, along with office buildings, luxury condominiums, hotels, a conference center and upscale retail stores. The homeowners asserted the use of eminent domain did not constitute the sort of public use necessary to take the land.

But in a 5-4 decision, written by former Justice John Paul Stevens, the court sided with the city, asserting that the court “long ago rejected any literal requirement that condemned property be put into use for the general public.”

The city subsequently gained control of the property but, ironically, the development never occurred.

“Let New London be a lesson -- after $80 million in taxpayer money spent, years tied up in litigation and ten years after the disastrous U.S. Supreme Court ruling, the Fort Trumbull neighborhood where Susette Kelo’s little pink house once stood is now a barren field that is home to nothing but feral cats,” Alban said.

The developer balked and abandoned the project. Pfizer closed its plant and left New London.