High court upholds eminent domain

Private homes, businesses can be seized as part of economic revitalization

Cities are handed broad powers

June 24, 2005|By Gail Gibson | Gail Gibson,SUN NATIONAL STAFF

A divided Supreme Court ruled yesterday that local governments can seize homes and small businesses in the name of economic revitalization, handing cities broad powers to raze private properties to make room for shopping centers or office complexes that generate tax dollars and jobs.

In a 5-4 decision in one of its most closely watched cases of the year, the court dealt a blow to property-rights advocates who argue that cities increasingly have abused the power of eminent domain by turning homes over to private developers even where there is little showing of public benefit.

The court majority held that acquiring private land to promote economic development is as much a constitutionally permitted "public use" as clearing space for roads or eliminating swaths of blighted property. But a sharp dissent from the court's most conservative members warned: "The specter of condemnation hangs over all property."

"Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory," wrote Justice Sandra Day O'Connor.

A group of seven landowners in economically troubled New London, Conn., had challenged plans to replace their modest homes in the waterfront Fort Trumbull neighborhood with a multimillion-dollar commercial center designed to draw the pharmaceutical giant Pfizer to the area along with a luxury hotel and high-end townhouses.

Writing for the majority, Justice John Paul Stevens said city planners should be given wide deference to make decisions about the best way to reverse New London's economic troubles.

Leaders in New London "were not confronted with the need to remove blight in the Fort Trumbull area, but their determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference," Stevens wrote. "The city has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community."

His majority opinion was joined by Justices Stephen G. Breyer, Ruth Bader Ginsburg and David H. Souter. In a concurring opinion, Justice Anthony M. Kennedy warned that not every private development deal should escape the scrutiny of the courts.

The majority noted that states have the power to enact laws to restrain eminent domain powers. At least eight states have restricted the use of eminent domain for economic development unless it specifically eliminates blight.

In the dissent, O'Connor said that suggesting that property owners turn to the states was an "abdication of our responsibility," and that the ruling amounts to a victory for the well-to-do and well-connected.

"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random," she wrote. "The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."

The dissent was joined by Chief Justice William H. Rehnquist and Justices Antonin Scalia and Clarence Thomas, who wrote a dissent calling the decision "far reaching and dangerous."

Under the U.S. Constitution and most state constitutions, governments can condemn property for a "public use" if the owner is compensated. The Connecticut case tested what constitutes public use, with eminent domain being used historically for public projects that required large tracts of connected land - roads and railroads, for instance, or schools and parks.

But eminent domain also has been used for major economic development projects in which the seized land is then turned over to private developers to enhance local tax bases and economies. The redevelopment of Baltimore's Inner Harbor three decades ago is regarded as a widely successful example, and the city filed a friend of the court brief supporting officials in New London.

Jeffrey A. Finkle, president of the Washington-based International Economic Development Council, said yesterday's decision ensures that cities can better compete for top employers and remake depressed areas.

"For those who have had to go through eminent domain, it's not fun, and I wouldn't wish it on anyone," he said. "But if this is what is needed to make governments and communities viable places, then it would be my hope that communities would do what's necessary to make sure the streets get paved and the police department gets paid."

Baltimore's assistant city solicitor, Joshua N. Auerbach, praised the decision and said it did not create a radical change. Instead, he said, the court recognized the importance of allowing local governments to make their own determinations about how best to turn around economically depressed areas.

"The question is, what's in the public interest - and that's the sort of question that generally city councils and state legislatures ought to be deciding," Auerbach said.

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