I’m sure most of you have heard about the recent U. S. Supreme Court decision in the case of Kelo v. City of New London.  That’s the case where the Court, in a 5 to 4 decision, said the City of New London, Connecticut, could force homeowners to sell their properties to the City so that the City could in turn sell the properties to private business interests for construction of commercial buildings.  The court in doing so adopted an expansive reading of the “takings clause” of the Constitution.

Here’s what the takings clause says (it’s part of the Fifth Amendment):

nor shall private property be taken for public use, without just compensation

That’s it.  Now to narrow it down still further, the Kelo case was really only about the purpose for which government can take private property.  Some commentators have talked about whether the New London homeowners are truly getting “just compensation” within the meaning of the Constitution, but that isn’t what the case was really about.  The case was really about what is meant by the words “public use” in the Fifth Amendment.

There has been a lot of very alarmed commentary about this decision, most of it, in my opinion, entirely justified.  It helps in understanding the decision, however, to be aware of the legal history that led to it.  This decision did not just come out of nowhere, despite what some of the commentary would lead you to believe.  The Supreme Court’s decisions on the takings clause have for many years been heading toward the destination reached in the Kelo case.

The Supreme Court decided over fifty years ago that in certain circumstances, takings that serve a “public purpose” are authorized under the Fifth Amendment even if the property taken is destined for subsequent private use.  The most common descriptions of the circumstances under which such takings have been permitted are that the property is “blighted” or must be “redeveloped.”  The key idea here, as reflected in the terminology used in the Court’s opinions, is that the “public use” requirement in the Fifth Amendment evolved into “public purpose,” and has now, in the opinion of the majority of the Court in the Kelo case, become “public need.”

The five Justices who sided with the City of New London in the Kelo case concluded that a taking of private property that is justified solely by anticipated economic benefit is constitutionally permitted as meeting a “public need.”  This is where I believe that the Court, although not taking a giant step beyond the previous cases, has gone off the edge, constitutionally speaking. The Court justifies its conclusion by saying that “[p]romoting economic development is a traditional and long accepted function of government,” and that there is “no principled way of distinguishing economic development from the other public purposes” that the Court has said are constitutionally acceptable rationales for taking private property.  In a footnote near the end of the opinion, the Justices take their argument to its logical conclusion when they say that “the Takings Clause largely operates as a conditional limitation, permitting the government to do what it wants so long as it pays the charge.”

Just like that, “public use” has turned into “permitting the government to do what it wants.”  Apparently the five Justices don’t see any difference between not second-guessing the government when it decides that private property must be taken because a new highway is needed, and allowing the government to conclude that improving the tax base is a sufficient reason to take private property from one citizen and sell it to another no matter what the use.

As at least one commentator has pointed out, this expansion of the meaning of “public use,” in addition to removing a fundamental limitation on the legislative authority to take private property, opens another Pandora’s box of government activity, i.e. greatly expanded review by the courts of decisions by legislative bodies to take private property.  Since “public use” now means “public need,” there is much more room for argument about whether a taking of a particular private property will sufficiently benefit the “public” (read “government”) so as to meet the “public need” test.

We already have a situation in Arizona where the courts are trying to figure out whether or not, in individual cases, taking of private property will be sufficiently beneficial to the public.  I last reported to you about this in March 2004, shortly after the Bailey family’s brake shop in Mesa was spared, and just before Tempe set out to take properties suddenly visible from a new freeway.  According to a recent news item, the Arizona Court of Appeals has ruled against Tempe, which has asked the Arizona Supreme Court to review that decision. We’ll see if that case results in any clear directions on how to tell when a taking meets a “public need.”

The uncertainty we are seeing in Arizona seems likely to occur across the country, unless state legislatures take action to limit takings to a more concrete standard.  Some state legislatures are already in the process of doing so.  Without such limits, the Supreme Court’s decision in the Kelo case leaves things pretty unclear, and will likely encourage governments to seek takings in situations where they would not have been attempted in the past.

Justice O’Connor gives a good summation in her opinion dissenting from the majority decision in Kelo when she says that the Court’s ruling means that the government “may take private property currently put to ordinary private use, and give it over for new, ordinary private use, so long as the new use is predicted to generate some secondary benefit for the public.”  Personally, I don’t think that is what the Constitution means where it says that the government can take private property for “public use.”