February 23, 2005

KEEPING THE SEAT WARM FOR CHIEF BROWN:

Defining Limits of Eminent Domain: High Court Weighs City's Claim to Land (Charles Lane, February 23, 2005, Washington Post)

There were two empty chairs at the bench, with Chief Justice William H. Rehnquist absent because of illness and Justice John Paul Stevens out because his flight from Florida, where he maintains a home, had been canceled.

That created an opportunity for Justice Sandra Day O'Connor, the most senior remaining justice, to become the first woman to preside over an oral argument at the court.

Sounding skeptical that there could be a blanket rule against using eminent domain to promote private redevelopment, O'Connor pressed Bullock repeatedly to say under what circumstances it might be allowable.

When Bullock suggested that a "minimum standard" might be to require cities to show there is a good chance that the promised public benefits of redevelopment might materialize, O'Connor replied, "Do you really want the courts in the business of deciding whether a hospital will be successful . . . or a road will be successful?"

But when Wesley W. Horton rose to argue on New London's behalf, O'Connor asked whether it would be "okay" for a city to replace a Motel 6 with a Ritz-Carlton "if the city felt Ritz-Carlton could pay more tax."

Horton said yes, prompting several justices to pepper him with questions about the basic fairness of shifting resources from one set of private owners to another, richer, set.

"What this lady [Kelo] wants is not more money," Justice Antonin Scalia said. "She says I'll move if it's for the public good, but not just so that someone else can pay more taxes. This is an objection in principle that 'public use' in the Constitution seems to be addressed to."


The simple decision seems to be to compensate owners as if the development were going to be successful.

Posted by Orrin Judd at February 23, 2005 11:27 AM
Comments

Or, in addition to the paltry one-time payment, the person whose land is being seized gets a lien on a percentage of all profits. Or instead of taking outright ownership, the land is forcibly leased for the stardard 99-years (or 49 years, etc.)and the gov't assumes the cost of restoring the land back to the original condition (if the owner so desires) at the expiration.

Posted by: Raoul Ortega at February 23, 2005 11:58 AM

I've got an even BETTER idea: Let the rich man PAY for what he wants, and keep government guns out of it.

Posted by: Ptah at February 23, 2005 12:29 PM

The city's assumption regarding higher tax collections are probably wrong. Does anyone remember the urban renewal craze from the 60's? Downtown business districts which served the people for 100 or more years were replaced with pedestrian malls and other such products of urban planning. They are ghost-towns to this day. Poughkeepsie, N.Y. Yonkers, N.Y., Syracuse,N.Y. and Springfield, Mass. come immediately to mind as examples of politicians replacing normal business and economic pressures with business ditrict "planners". Free people, operating within free economies, even at the micro level, seems to be a tough concept for these morons to swallow. The jokers running the city governmnet up there in New London have nearly ruined the town as it is. They hardly deserve another try, particularly at the expense of private property rights.

If they honestly believe that the tax revenue stream will be increased dramatically through the use of the property, pay the owners for that increased revenue stream.

Posted by: Tom C., Stamford,Ct. at February 23, 2005 2:29 PM

Prediction: in 10 years they'll be giving tax abatements to the hotel in order to convince it to stay downtown and dumping millions of dollars in public funds to try to entice people to use the new downtown facilities.

As Coase showed, the important thing is just granting definite property rights. Negotiations will then create the optimal market distribution of property.

Permitting this sort of thing only encourages rent-seeking behavior by developers and business (schmoozing the city planners). Preventing it means firmer rights for downtown property owners and business owners (a good thing), only modest increases in cost for large developments (hold outs can be paid or designed around), and less opportunity for graft and influence peddling.

I suspect that the Supreme Court will go the wrong way on this, though.

Posted by: Kevin Bowman at February 23, 2005 4:20 PM

3 issues here. First, what does the public use restriction mean?

Second, to whom does the restriction apply to.

Third, in light of 1 and 2 how should this case be decided.

1. The 5th amendment contains five clauses requiring indicment, forbiding self incrimination, proscribing double jepordary, requiring due process, and limiting takings. The clauses are independent in nature, note that due process is fourth.

The public use restriction was meant to limit the ability of the Federal government to seize private property for the limited uses that its limited powers could make of it. E.G. Fortresses. Post Offices, Court Houses, etc. It was the flip side of the limited powers concept expressed in Art I and the reason why Madison had not appended a Bill of Rights with the original document.

2. Early in the history of SCOTUS, Marshall in Baron v. Baltimore held that the clause applied only to the Federal government.

After the adoption of the 14th amendment, it was argued that the inclusion of the due process language therein against the states dragged the other clauses of the 5th or even the first 8 amendments into the 14th. This argument was not widely accepted until the Warren Court.

Even though it is widely accepted dogma now, that does not make it right.

There is no support for the the dogma in the text of the constitution nor is there much support for it in history. (There is no support for the pernicious doctrine of substantive due process either.) It was invented by Hugo Black in order to avoid the substantive due process doctrine and it has been adopted by SCOTUS which has kept substantive due process.

The states, unlike the Federal government, have unlimited powers. My conclusion is that the public use restriction was not meant to nor should it apply to the States.

3. The instant case. The public use restriction does not apply to the states. The only restriction that does is the due process restriction of Amnd 14. That restriction requires that the State cannot seize property without due process. Where the seizure is not a criminal matter, the State must pay fair market value for the property as determined by an unbiased trier of fact.

Posted by: Robert Schwartz at February 23, 2005 4:39 PM

What does the Connecticut constitution say?

Posted by: Bart at February 24, 2005 7:22 AM

Bart: DK, that is for the Connecticut SC to say, not SCOTUS, which is my point. This should not be a federal matter.

Posted by: Robert Schwartz at February 24, 2005 11:01 AM
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