Blight elimination takings as eminent domain abuse: the great lakes states in Kelo's public use paradigms.

• Author: Pepper, Trent L.

INTRODUCTION

The visceral response of elected officials and the body politic to the Supreme Court's Kelo v. City of New London (1) decision reflected a collective desire to limit the government's eminent domain authority. One week following the June 23, 2005, ruling, the House of Representatives passed a resolution, 365-33, expressing "disagree[ment] with the majority opinion in Kelo" and "reserv[ing to Congress] the right to address through legislation any abuses of eminent domain by State and local government in light of the ruling in Kelo." (2) Opposition to eminent domain abuse in the wake of Kelo crossed party lines for the general public as well, with sixty-two percent of Democrats, seventy percent of Republicans, and seventy-four percent of independents supporting further limitations on the government's eminent domain authority. (3)

Although troubled by the Kelo ruling, property rights advocates hoped that the decision would serve as an impetus for reforming American eminent domain practice. Grover Norquist, president of Americans for Tax Reform, called Kelo "manna from heaven" for property rights advocates because of its anticipated effect of galvanizing the property rights movement. (4) Kelo does indeed present property rights advocates with the opportunity to limit the government's eminent domain authority to its properly circumscribed role. To do so, however, property rights advocates must reject the legitimacy of not only economic development takings as were at issue in Kelo, but also blight elimination takings, which are less controversial and have largely escaped the ire of Kelo's detractors.

This Note argues that American eminent domain practice is in need of an even more sweeping overhaul than is recognized or advocated by most of Kelo's opponents. As the widespread opposition to Kelo reveals, most Americans agree that the government violates property rights when it condemns property for economic development purposes. (5) Largely unnoticed and unaddressed in the nation's post-Kelo debate over eminent domain, however, is the government's violation of property rights when it uses its eminent domain authority to effectuate blight elimination. (6)

Part I of this Note provides the necessary context for understanding the Kelo decision, demonstrating that Kelo was not a radical departure from Supreme Court precedent but was a natural extension of the Court's interpretation of the Fifth Amendment's Public Use Clause in Barman v. Parker (7) and Hawaii Housing Authority v. Midkiff. (8) Part II relates the facts of Kelo and describes the respective interpretations of the Public Use Clause delineated in the Kelo majority opinion of Justice Stevens and in the Kelo dissents of Justice O'Connor and Justice Thomas (the three "public use paradigms" of the opinion).

Part III distinguishes the rationales of the Kelo dissents and argues for the superiority of Justice Thomas's public use paradigm (in which blight elimination takings are prohibited) over that of Justice O'Connor (in which blight elimination takings are permitted). Specifically, Part III explains that blight elimination is a legitimate government function under a state's regulatory authority as embodied in nuisance laws and other "police power" regulations, but not under a state's eminent domain authority. When states and localities eliminate blight through eminent domain, they endanger property rights in three ways. First, unlike when the government abates a nuisance under its regulatory authority, the government may seize blighted property through eminent domain without providing the owner time to address the violation and without regard for less intrusive means of eliminating the blight. Second, because even well-maintained properties often satisfy broad definitions of "blight" and can be transferred to private parties for development under a blight elimination rationale, the government can use blight elimination takings as a facade for economic development takings. Third, property that is in fact not blighted to meet even a broad definition of blight may be condemned simply because it happens to be near other properties that are blighted and thus falls within a larger redevelopment area. (9)

Part IV analyzes the understanding of the public use in the Great Lakes states to show that states have failed to afford their citizens the level of protection outlined in Justice Thomas's Kelo dissent. The analysis of the states in the Great Lakes region reveals first, that even those states that prohibit economic development takings permit blight elimination takings, and second, that the legislative responses to Kelo largely fail to address blight elimination takings.

This Note intends to demonstrate that the perspective reflected in Justice O'Connor's oft-cited Kelo dissent, which forbids economic development takings but authorizes blight elimination takings, is an inadequate basis for imposing limits on the government's eminent domain authority. Rather, it is Justice Thomas's public use paradigm, in which both economic development takings and blight elimination takings are prohibited, that property rights advocates should adopt and champion. As Grover Norquist observed, Kelo presents property rights advocates with the opportunity to address the long-standing problem of eminent domain abuse. Kelo will never become the "manna from heaven" (10) that he anticipated, however, if property rights advocates focus their opposition solely on economic development takings, thus excluding blight elimination takings from post-Kelo eminent domain reforms.

1. THE SUPREME COURT'S MODERN PUBLIC USE JURISPRUDENCE

   The Fifth Amendment of the United States Constitution states: "nor shall private property be taken for public use, without just compensation." (11) As with the Bill of Rights as a whole, the restraints of the Fifth Amendment initially were not applied against the states. (12) With the subsequent incorporation of the Fifth Amendment via the Fourteenth Amendment, however, states became bound by the Fifth Amendment's public use requirement. (13)

   In two seminal twentieth-century rulings, the Supreme Court adopted an expansive interpretation of the Fifth Amendment's Public Use Clause that served as the basis for the Court's validation of economic development takings in Kelo. In its 1954 Berraan v. Parker decision, the Supreme Court upheld the constitutionality of the District of Columbia Redevelopment Act of 1945, which provided for the condemnation of "sub-standard housing and blighted areas" for redevelopment by private parties. (14) Writing for a unanimous Court, Justice Douglas posited a very limited role for the judiciary in reviewing a legislative determination that a particular use is public in nature. (15) The Court effectively equated "public use" with "public welfare" and found the "concept" to be "broad and inclusive," representing values that "are spiritual as well as physical, aesthetic as well as monetary." (16) Considering it to be within the legislature's authority "to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled," the Court implied that the scope of the public use is equivalent to a state's "police power" to regulate for the protection of the public health, safety, welfare, and morals. (17) Only under such a broad interpretation of the Public Use Clause could the Berman Court sanction blight removal as a public use for Fifth Amendment purposes. (18)

   Thirty years after Berman, Justice O'Connor delivered the Supreme Court's 8-0 Midkiff decision, which upheld the constitutionality of a Hawaii law authorizing the condemnation of property owned by Hawaii's "land oligopoly" and the subsequent sale of that property to tenants. (19) Unwilling to engage in textual or historical analysis of the Public Use Clause, the Court announced its "starting point" for analyzing the constitutionality of the Hawaii law to be Berman. (20) The Court cited the Hawaii legislature's findings-that the extreme concentration of land ownership within the state distorted the housing market, caused land price inflation, and harmed the public welfare--to conclude that the deconcentration of land ownership was "a legitimate public purpose." (21) The Court explicitly declared what it had implied in Berman: "The 'public use' requirement is thus coterminous with the scope of a sovereign's police powers." (22) After Midkiff, the Constitution's public use requirement was, in fact, "largely a truism." (23)

   Together, "the Berman-Midkiff duo marked a turning point in eminent domain jurisprudence." (24) In those two cases, the Supreme Court interpreted the Public Use Clause so broadly that economic development could arguably be deemed a public use; indeed, after Berman and Midkiff, the outcome of Kelo was foreseeable.

2. KELO V. CITY OF NEW LONDON

   In its 5-4 Kelo decision, the Supreme Court ruled that economic development constitutes a public use under the Fifth Amendment. (25) Justice Stevens's majority opinion, Justice O'Connor's dissenting opinion, and Justice Thomas's dissenting opinion represent three disparate interpretations and applications of the Public Use Clause. (26) Of these three public use paradigms, only the approach articulated by Justice Thomas adequately limits the government's eminent domain authority.

   The city of New London, Connecticut, was in the throes of economic decline when it embarked on a multimillion dollar development program in 1998. When the pharmaceutical company Pfizer announced that same year that it would construct a research facility in New London, the city targeted ninety acres near the proposed facility for development. The city also authorized the New London Development Corporation ("NLDC"), a private nonprofit organization assisting the city in its development plans, to exercise eminent domain in the city's name. (27) Some of the landowners in the...