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.
