The Kelo Effect: Eminent Domain and Property Rights in Louisiana

• Author: Scott P. Ledet
• Pages: 171-194

Page 171

At the time of this publication, the Louisiana Legislature has proposed an amendment to the Louisiana Constitution, Article I, Section 4(B). The proposal awaits a vote of the citizens. See S.B. 1, 2006 Leg. Reg. Sess. (La.).

The author wishes to thank Professor Paul R. Baier for his continuous support in drafting this comment.

I Introduction

Most property owners in America have never contemplated the idea that one day the government might force them to leave their home. However, United States law has long recognized the power of a government as sovereign to take private property for what has sometimes been deemed a "public good,"¹ "public benefit,"² or "public necessity."³ The traditional notion of the purposes for which the government was authorized to take private property included building roads,⁴ railroads,⁵ and erecting dams.⁶

Justification for these types of takings rests upon the belief that the individual must forego his right to property for the sake of a common good benefiting society at large.⁷

From this country's beginnings, the founders recognized the potential for abuse with respect to the government's eminent domain power. In order to combat potential abuse, they placed a restriction on "takings" in the Fifth Amendment: "nor shall private property be taken for public use, without just compensation."⁸ At first glance, this clause plainly seems to contain a restriction, i.e., that the government shall not take property unless it is for public use and just compensation is paid. The evolution of the "public use" limitation evidences an ever- Page 172broadening interpretation by both legislatures and courts. Thus, a once-meaningful restriction is in danger of becoming an empty guarantee.⁹

The constitutional line dividing justified and unjustified takings has become a highly debated issue both at the federal and state levels. The United States Supreme Court's latest pronouncement on the issue in Kelo v. City of New London, Connecticut¹⁰ has fueled the debate. In Kelo, a five to four decision, the Court explicitly held that "[the] city's decision to take property for the purpose of economic development satisfies the 'public use' requirement of the Fifth Amendment."¹¹

Louisiana, like many other states, has sprung into action in response to this decision. Specifically, Louisiana legislators are in the process of drafting provisions in an attempt to protect property owners in this state from the sort of taking that occurred in Kelo.¹²

This comment focuses on Louisiana's law of eminent domain and on Kelo's impact on the interpretation of that law. It also gives suggestions as to the future path of Louisiana law so that this state might protect property rights to a greater extent than required by the United States Constitution as interpreted in Kelo. This landmark case undoubtedly broadened, for better or for worse, the scope of the government's power to use eminent domain. The initial reaction among many is that Kelo was wrongly decided. As Justice John Paul Stevens points out in the majority opinion, however, states are free to enact greater protections of property than those required by the United States Constitution.¹³ This comment is meant to function as a guide for Page 173 the State of Louisiana as to measures that might prevent the type of taking that occurred in Kelo.¹⁴

The following section, Part II, analyzes the Kelo facts and the reasoning of the majority, concurring, and dissenting opinions of the United States Supreme Court. Part II concludes by outlining the historical basis concerning the law of eminent domain. The current Louisiana constitutional provision on property rights and the ways in which it might be interpreted to prevent a Kelo taking are discussed in Part III-A. Part III-B analyzes a recent case in which a Louisiana court addressed an issue very similar to the one in Kelo and how that case, or one like it, could be decided if it were to reach the Louisiana Supreme Court. Possible revisions of the constitutional provision on property are assessed in Part IV-A. Part IV-B addresses a Michigan case which might serve as a model for the Louisiana courts when addressing any future Kelo takings.

II Background: Kelo vs. New London and Historical Analysis

The decision in Kelo stands as a vitally important development in the law of eminent domain because it has the potential to affect the lives of many in this country. This section discusses the facts from which the case arose, along with the majority, concurring, and dissenting opinions. This case arguably represents the outer limits of the government's power to take property under the Federal Constitution. Understanding this limit helps to guide the development of Louisiana's constitutional law on takings as will be explored later in this comment. At the end of this section, the origin of the power of eminent domain and its development in this country are also discussed.

A Kelo Facts

In 2000, on the day before Thanksgiving, Susette Kelo returned to her home in New London, Connecticut, to find a Page 174 condemnation notice nailed to her door.¹⁵ The reason for her eviction was that the City of New London had approved a redevelopment plan that called for the condemnation of approximately 115 privately-owned properties so that the area could be turned into an industrial park, including office space, hotels, and restaurants.¹⁶ The New London Development Corporation ("NLDC"), a private nonprofit entity which had been created some years earlier to assist the city in economic development, was authorized by the city to condemn the properties in this area.¹⁷ Moreover, as long as Ms. Kelo remained in the house, the city required that she pay rent.¹⁸

Most of the owners of these properties in New London acquiesced to the city's demand and voluntarily sold their homes to the NLDC. Susette Kelo and a few of her neighbors, however, refused to leave and subsequently filed suit in the New London Superior Court in December 2000. Petitioners claimed, inter alia, that the taking of their property violated the "public use" restriction in the Fifth Amendment.¹⁹ After a seven-day bench trial, the court issued a permanent restraining order prohibiting the taking of the part of the condemned property owned by the plaintiffs.²⁰ On appeal by both sides, the Connecticut Supreme Court reversed the trial court and held that all of the city's takings were constitutional.²¹ The Supreme Court of the United States granted Susette Kelo's petition for certiorari.²²

B Kelo Decision

The Supreme Court of the United States presented the issue very succinctly: "We granted certiorari to determine whether a city's decision to take property for the purpose of economic development satisfies the 'public use' requirement of the Fifth Page 175 Amendment."²³ At the outset, the Kelo Court recognized two distinctly opposite approaches to the problem.²⁴ The first is the longstanding and widely-accepted principle of Justice Samuel Chase, who proclaimed in Calder v. Bull that the government cannot take property from one citizen and give it to another.²⁵

The competing approach, and the one ultimately adopted by the Court in Kelo, proclaims that "a State may transfer property from one private party to another if future 'use by the public' is the purpose of the taking."²⁶ The Court recognized that this was a close case; it did not involve a purely private taking, which was condemned in Midkiff,²⁷ nor was this development to be used by the general public in the same way as a road or post office. This case presented a novel question for the Court to consider.

Justice Stevens's majority opinion very quickly deviated from the words of the Constitution. Stevens proclaimed that past jurisprudence had "embraced the broader and more natural interpretation of public use as 'public purpose'" when interpreting the takings clause of the Fifth Amendment.²⁸ After essentially redefining the term "public use" in this manner, the Court went on to discuss Berman and Midkiff, precedents that arguably controlled the outcome of the present case.²⁹ As would be expected when affirming the actions of a legislature, the Court described the test for the restriction on takings as being very broad, "reflecting our longstanding policy of deference to legislative judgments in this field."³⁰ The Court quoted from Midkiff: "[T]he State's purpose of eliminating the 'social and economic evils of a land oligopoly' qualified as a valid public use."³¹ While the majority felt that the condemnations in Kelo were not beyond federal constitutional limits, the majority opinion closed by pointing out that states are not precluded from Page 176 imposing greater restrictions against the power of eminent domain, either by state constitution or statutes.³²

Justice Anthony Kennedy concurred in the majority opinion, but wrote separately to add further observations. His opinion recognized "the possibility that a more stringent standard of review than that announced in Berman and Midkiff might be appropriate for a more narrowly drawn category of takings."³³

While Justice Kennedy did not speculate as to what types of "cases might justify a more demanding standard," he ultimately decided that this was not a case that required a departure from the deferential standard articulated in Berman and Midkiff.³⁴ Justice Kennedy's concurrence is significant...