Q: We’re talking in this film about different provisions of the Constitution and the debates about those provisions. One of the things we’re looking at is the Fifth Amendment, and in particular the eminent domain clause. Can you tell us what that is, for people who might not be familiar with it?
A: Sure. The power of eminent domain is a power of the sovereign. What the Fifth Amendment to the Constitution does, it provides a restriction on that power of eminent domain. What the Fifth Amendment says is, “nor shall private property be taken for public use, without just compensation.” The Constitution provides two specific limitations: there must be public use and there must be just compensation.
Q: Can you talk a bit about when the Founders crafted the Constitution and wrote words like ‘liberty’ into the document? Can you talk about that “liberty” idea in reference to private property?
A: Many theorists of the day when the Constitution was written understood that private property rights were the foundation for all of our rights. You can’t have a right to free speech if you don’t have a right to own a press. You can’t have a right to religion if you don’t have a right to own your church. So the Founders understood how important this right was. That’s why it’s included in the Bill of Rights.
Q: Tell me a little bit about the eminent domain power and its historical use - looking back a few years, before eminent domain became used more and more as an economic development tool by cities.
A: Until the 1950’s, the power of eminent domain was used for things that were traditionally considered public uses - things owned and used by the public: schools, roads, bridges, courthouses, and post offices. However, in the 1950’s that all shifted with the case called Berman versus Parker, a 1954 United States Supreme Court case where the Supreme Court said that the removal of blight was a public purpose under the Constitution. That was a very subtle but significant shift in the way the Supreme Court understood the power of eminent domain. ‘Public purpose’ doesn’t appear anywhere in the Constitution, it says ‘public use’. But as I said, this subtle but significant shift signaled to Americans that the way the Supreme Court would interpret the Public Use Clause was changing.
There was also a 1984 case, Hawaii Housing Authority versus Midkiff, where the Supreme Court again said that it was a public purpose to break up a land oligopoly in Hawaii. Hawaii had the remains of a feudal landlord system and the state passed a law to remove that land oligopoly - where the landlords had to sell their property to the tenants. And then last year of course, you had Kelo versus City of New London, where the Supreme Court wrote the death sentence for the Public Use Clause of the Fifth Amendment by saying that the mere possibility that your property can make more money as something else was the only justification necessary to take your property from you and give it to someone else.
Q: We’ll talk in a moment about cases that people have pointed to as examples of eminent domain abuse. But first, can you talk about your own views on the correct application of eminent domain authority?
A: We understand that the Constitution allows for public uses, and that means the common sense meaning of the term ‘use by the public’. As Justice Thomas pointed out in his dissent, it’s a very simple concept: the government or the public at large has to own, occupy, and enjoy the property. When I go around the country talking to people about this issue, they understand that their property may be taken for a school or for a road. But what they can’t understand is that their home can be taken to turn it into a luxury condominium, or their small business may be destroyed in order to build a big box store.
Q: Tell me about the idea of “takings” for the purpose of fixing blight, or some of the other things that have happened since the 1950’s, as eminent domain authority has changed and broadened.
A: Sure. The 1954, case, Berman versus Parker, involved a very bad neighborhood in Southwest Washington D.C. What the government said was that in order to fix the neighborhood - this was when Congress had control over the government of Washington D.C. - in order to fix the neighborhood, the government could use its power of eminent domain to take away those properties that were really bad. What happened in the 1954 Supreme Court case was the Supreme Court conflated the idea of the police power with the power of eminent domain. The government has always had the power to remove properties that are threats to public health and safety, and they could do that without compensation. But when the Supreme Court said that the removal of blight was okay under the eminent domain power, it moved those concepts together. And we’ve been paying for that mistake for the last fifty years.
The problem with blight removal cases is, nowadays, blight removal doesn’t mean taking houses that are unfit for human habitation or use. It doesn’t mean taking abandoned properties. What it means now is taking properties that are perfectly fine, that just happen to be in a good location near the interstate, near the water, near downtown.
Q: Can you give me a couple concrete examples of controversial uses … site-specific cases that aroused a lot of public controversy, where there’s been a taking?
A: Sure. Two of them from Ohio that we’ve been involved in - one was in Lakewood, Ohio, which is a suburb of Cleveland, where the neighborhood was designated as ‘blighted’. Now in that case, what ‘blight’ meant was not having an attached two-car garage or not having two full bathrooms. Blight statutes are written so vaguely that they can literally apply to any property. In the case at Lakewood, it meant obsolescence. We just litigated a case before the Ohio Supreme Court, the first state Supreme Court to take up the public use issues since Kelo. And there, what we won at the trial level on a ‘deteriorated standard’, which is what they term blight in Norwood, which is a suburb of Cincinnati - but we lost on a deteriorating standard. And what deteriorating, one of the criteria to designate an area as deteriorating, is diversity of ownership. That simply means that everyone in the neighborhood owns their own home. That’s the American Dream. That shouldn’t be a reason to take people’s homes and small businesses away from them.
Q: The case that has obviously really propelled this issue into the headlines has been the Kelo case. Can you talk a little about the factual background of that case, so people have an idea of what it is?
A: In the late 1990s, Pfizer was in discussions with the City of New London to relocate its global research headquarters. In those discussions, Pfizer had a list of things that they wanted to happen in the neighborhood they had chosen to relocate to. The City of New London came up with a redevelopment plan and everything that Pfizer wanted was in that redevelopment plan. In fact, at the trial of this case, the expert for the City of New London said that Pfizer was the ten-thousand-pound gorilla. Usually it’s just an eight-hundred-pound gorilla, but here it was a ten-thousand-pound gorilla. That’s what they termed Pfizer when they were coming up with this redevelopment plan. What Pfizer wanted was office space, a hotel, conference center, arena. They wanted the neighborhood next to the Pfizer facility to be transformed according to their wishes. What they did is they wanted to take a ninety-acre parcel of property replete with homes, old homes. One of our clients was born and had lived in her house since 1918. So you have people that had been there for decades. But what the city wanted to do was kick them out in order to build these things that Pfizer wanted.
Q: Can you speak specifically about Kelo and the circumstances surrounding her home and the possible taking of her property?
A: Sure. Suzette Kelo lives in a pink Victorian cottage that overlooks the river. On a clear day she can see Long Island from her home. It’s a perfect location. It’s what anybody would want. It’s a beautiful old home that she’s fixed up. She lives there with her husband and she has really become the face of the fight against the abuse of eminent domain. Because here you have a hardworking woman that works several jobs to care for her disabled husband, and what the city wants to do is take her house away from her in order to build something that - they don’t even know what’s going to be there yet. At the Supreme Court argument, the city admitted that it doesn’t really know what’s going to be there - perhaps parking, perhaps something as ephemeral as park support - no one really knows. So it’s an even more egregious taking, because there’s no real plan. In fact, if you go to the Fort Trumble neighborhood in New London now, all you’ll see is a blank canvas. Houses have been clear-cut and there’s been no development there. The only things that have been left standing are our clients’ homes, the Italian Dramatic Club, which sits smack dab in the middle of the Fort Trumble neighborhood, but was somehow removed from the redevelopment plan, and a couple of old buildings that the government owned.
Q: Tell me about the Court’s decision, and its dissents in particular - because those are quoted quite widely.
A: What the majority said - and it’s a five-four decision, the slimmest majority you can have in a Supreme Court case. What the majority said was that the mere possibility that property can make more money as something else, whether through increased tax revenue or increased jobs, was the only justification necessary to take property from one person and give it to another private individual. The Court also reaffirmed its deference to legislative determinations as to what a public use is. So now not only does it have the ability to take your property, it has the ability to determine whether it has the power to take your property. The Supreme Court has basically thrown up its hands, according to the majority opinion, and said governments can do what they want, and absent things like fraud, you’re never going to be able to get your property back if the government takes it from you and gives it to a private individual.
Now the dissents, there were two very stirring dissents. Justice O’Connor, in her last thing that she wrote for the Court before she left, made very good points about the fact that Motel 6’s can now be turned into Ritz-Carltons; any farm can be turned into a factory. She also made the point that the results of this case are not going to be random. As we’ve seen since the 1950’s with urban renewal, the power of eminent domain, eminent domain abuse, disproportionately affects minorities and the elderly.
Back in the 1950’s, urban renewal was also called ‘Negro removal’. And what’s ironic about the urban renewal plan is they were an abject failure. Supporters and opponents both agree that the urban renewal plans of the fifties and sixties were failures. They destroyed inner cities. What they did was they took residential residences that were above commercial or retail, destroyed those, and threw everybody into high-rise public housing developments. The ironic thing is now, what they want to do is destroy those public housing developments and then build new residential above retail developments to put people back in.
Justice Thomas made a good point by saying it’s a very simple issue – ‘public use’ means ‘public use’. But according to the majority opinion, the Public Use Clause has been transformed into the ‘Ever Evolving Needs of Society Clause’. And the moment that that happens, then we literally… if the interpretation of the Constitution is going to be based on the evolving needs of society, then we’re never going to be secure in our rights, because we’re never going to know what they are.
Q: As a follow up, can you tell me a bit about what has happened in New London since the Kelo case? What developments with your clients’ properties have occurred?
A: Our clients remain in their homes. And what has happened is, in New London itself, there has always been a lot of tension between the city of New London and the New London Development Corporation, this nonprofit entity that owns the property in the Fort Trumble neighborhood. What happened was the city tried to fire the New London Development Corporation as it’s developer in the area. The governor stepped in and said that’s probably not a good idea. What happened was the NLDC ended up firing either their President or their Executive Director. There’s still a lot of tension between the two. There was a mediator that was appointed by Governor Jody Rell to try to come up with a workable solution for both sides. One of the city council members, Beth Sabilia, earlier this week announced a plan that would move some of the properties to one of the parcels - the properties that people have lived in since condemnations actually occurred - which I think is four of our seven clients. So we’re still trying to figure out a solution, but there’s still no plan for the neighborhood. The neighborhood remains empty. In fact, if you ride around New London you’ll see lots of “For Lease” signs, lots of available land for development. So in the end, the area where our clients live probably wasn’t even necessary for development to occur.
I guess I should also talk about the plan that’s currently… the one that was…
Q: Yeah, you may want to touch on that as well.
A: One of the New London city councilors earlier this week announced a plan that would remove some of the homes to one of the parcels, the homes where people have lived since the condemnations actually occurred. Our attorneys are in discussions with the state and the city of New London about this plan.
Q: One thing we’re trying to do with this program is … people sometimes think that debates over constitutional provisions are academic and don’t touch them. But we want to show that there are real world consequences. So what could you tell somebody about … let me phrase it this way: What do you think is the most surprising thing, the biggest surprise contained in the Kelo decision for an ordinary American citizen who has not been following this case?
A: The big surprise is that the government has the power to take their property and give it to somebody else on the mere promise that it may make more money as something else. And that’s particularly troubling because anybody’s home is going to make more money as a luxury condominium. Any small business will make more money as a big box store. Any church, any Moose Lodge will make more money if it’s turned into an office building. It’s a very simple issue. In fact, it’s not one that many people disagree on. There was a bill before the House of Representatives, HR-41-28, that passed overwhelmingly 336 to 38. And this bill, the supporters, you had people working together, you had Tom Delay working with Maxine Waters, because everyone understands how important this issue is. And every poll that’s been taken since the Kelo case, upwards of 90% to 95% of the American people disagree with what the Supreme Court said in Kelo. So it’s something that everyone understands. It’s something that resonates with American home and small business owners. Unfortunately, there are very powerful interests on the other side with a lot of money that don’t want to give up this power.
Q: Your organization, and others as well, have been active since the Kelo decision in trying to find a state-level method - either constitutional amendments or statutory corrections - to get around the Kelo decision and curb some of its excesses. Can you talk about what’s going on at the state level?
A: Sure. After the Kelo case came out, the Institute for Justice and Castle Coalition launched a three million dollar Hands Off My Home campaign, which is an aggressive attempt to affect change at the state and local legislative levels. As a result of this campaign and as a result of campaigns of others, there has been some movement at the state level. Both Texas and Alabama passed laws that prohibit the transfer of property for private commercial development. Unfortunately, both of those states also left large loopholes for the removal of blight as a justification for eminent domain. But Alabama, as we speak, is looking at a constitutional amendment to make sure that that loophole is closed. Ohio recently passed a moratorium on the use of eminent domain in that state. As I said, there’s an ongoing litigation there before the Ohio Supreme Court to determine what exactly property rights are of Ohio citizens. Ohio is also studying the issue and perhaps legislation will come out of that. Delaware passed something but it’s essentially meaningless. Michigan has referred a measure to its citizens that will be on the November ballot. What that measure will do is codify County of Wayne versus Hathcock, which is a Michigan Supreme Court decision that overturned an earlier decision that allowed eminent domain for economic development. What HJRE will also do is make sure that any blight removal is done on a parcel-by-parcel basis, as opposed to an area-wide basis. And that’s especially important, because right now, when government claims that they are removing blight, really it’s just a few troubled properties within a nicer neighborhood. But they’ll take the entire neighborhood and hand that over to a developer. At last count, there were roughly 43 states that either passed or were considering passing eminent domain reforms. So states understand the issue because their constituents understand the issue.
Q: We’ve covered the points that I wanted to cover, but is there anything else that you want to add to the discussion we’re having about this issue?
A: I would say that development is not the problem. Development occurs everyday without eminent domain, but it has to occur the old-fashioned way, and that’s as a result of private negotiation and not government force. When you have the threat of condemnation hanging over your head, there is a disincentive for you to invest in your properties, and this is what we see all across the country. It’s not necessarily a condemnation lawsuit. It’s not the government taking you to court. But if they have this power hanging over you and say to you, “Sell us your property or we’re going to take it from you,” there’s no negotiation at all. You can’t negotiate at the point of a gun. That’s why eminent domain abuse is such an important issue and why so many people understand it.
I would also say that when you remove the threat of eminent domain from neighborhoods, you’ll see a considerable amount of investment pour in. In fact, there’s a situation in Scottsdale, Arizona right now where the city has recently lifted its fifth redevelopment designation. And as a result of that, two billion dollars in private development money has poured into that city.
There are lots of examples of situations that involve large-scale developments without the use of eminent domain. All of Disney World was built without eminent domain. There’s a large-scale development in Nevada, I think twenty-seven hundred acres, where everything was privately assembled. A developer may not get exactly what they want, but they’ll get something close. And we’ll all be safer, because we’ll know that we can keep our properties that we’ve worked hard to own and the developer will get the property that he worked hard to negotiate for.
A lot of the problems that we see are caused by the developers themselves who are working with the governments. When you have this unholy alliance between tax-hungry governments and land-hungry developers, you’re going to see this abuse of eminent domain. When a developer comes into a neighborhood and says, “I need this exact block to do my development,” then obviously there’s going to be resistance. But if a developer comes in and works with people and says, “I have a plan that’s going to make this city a better place to live. We’re going to have better places to eat, better places to live, better places to shop. I want to work with the people in this neighborhood.” Because most people want to live in a nicer town, they want to live in a nicer city, but they don’t want the government coming in and telling them they have to move because somebody else wants their property.
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