Supporting Individual Rights, Opposing Eminent Domain Abuse

A recent blogpost published by Doug Kendall of the Constitutional Accountability Center (with whom we sometimes work with on op-eds and briefscriticized Cato’s involvement in Mount Holly v. Mount Holly Gardens Citizens in Action as cowardly, and inconsistent with our ideals. While Cato has great respect for any organization that, like the CAC, works “to preserve the rights and freedoms of all Americans,” their criticism of our brief is baseless, and grossly mischaracterizes Cato’s position in the case and track record generally. 

While I’m wary of misrepresenting the post through over-simplification, it can be boiled down to the following: 

  1. Mount Holly is a case about eminent domain;
  2. Pro-property rights groups (including Cato) have a history of “howling” against eminent domain;
  3. Those groups’ failure to argue against eminent domain in this case (and their support of the Township of Mount Holly), is inconsistent with their previous stance on property rights, and evinces a lack of moral courage;
  4. That failure can be explained because this case is also about civil rights and equality, and conservative groups hate equality, and live to help the state further oppress the downtrodden masses. 

 CAC’s criticism stems from an incorrect framing of the case at hand:

an important case out of Mount Holly, New Jersey, that involves Fair Housing Act (FHA) claims in the context of an effort by Mount Holly Township to use eminent domain to redevelop its only predominately minority community—and in the process, displace and raze the homes of its residents.

While that description is accurate in that the case is important, originates in Mount Holly, and concerns the applicability of the Fair Housing Act to a redevelopment plan, the case before the Supreme Court has nothing to do with eminent domain. The question to be argued before high court couldn’t be plainer: “Whether disparate impact claims are cognizable under the Fair Housing Act.”

It’s surprising that CAC would make such a basic mistake about the case, given that they filed a brief in the case, supporting the Mount Holly residents (a brief which makes no mention of eminent domain – at all).

“Eminent domain” refers to a specific way that the government can acquire private property against the will of the owner. So far, Mount Holly Township hasn’t resorted to eminent domain. Of the 329 properties that the township wants to include in the redevelopment plan, it has been able to acquire all but 70 of them through voluntary sales. If those remaining 70 owners – some of whom are parties to the case – were to challenge any attempts to expropriate their homes, Cato would be first in line to file a brief in their support, probably joined by those “howling”  pro-property groups like the Institute for Justice and Pacific Legal Foundation. (Sadly, it’s unlikely that we would garner CAC’s support, because the group has “long supported the reasonable use of eminent domain for redevelopment purposes.”)

No, this case isn’t about eminent domain because the residents aren’t challenging the township’s acquisition of property, but what it intends to do with that property. In a nutshell, the plaintiffs argue that the Fair Housing Act – which forbids governments and private individuals from refusing “to sell or rent … or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin” – bars not just intentional discrimination like restrictive covenants, but also any action that, even if entirely neutral and colorblind,  has a “disproportionate impact” on the ability of members of a protected class to buy or rent a home. They argue not that Mount Holly is intentionally discriminating against minority residents, but that the increase in property values as a result of redevelopment would effectively price the poor out of the neighborhood – and that counts as discrimination because the poorer residents are disproportionately drawn from minority groups

Cato opposes that theory of law generally, for the same reason that we oppose governmental abuse of eminent domain: we stand firmly against attempts by the government to control how people may dispose of their property. A homeowner should be able to sell his house for whatever price he thinks fair – without worrying that if his asking price is too high, he’ll be accused of racism and forced to defend himself in court. Our position in Mount Holly is the product of the reasoned and consistent application of well-articulated liberal principles, not “cowardice.”

As a closing note, we take issue with the implication that Cato “detests civil rights statutes.” Cato supports laws that protect individual freedom and opposes those that don’t. We may disagree with CAC on whether a law falls in the first or second category, regardless of whether it’s a “civil rights” statute or otherwise, but make no mistake that we support individual civil (and other) rights.

Indeed, we believe that the first and foremost duty of civil rights legislation (and constitutions) is to protect citizens from undue state interference with their daily lives and liberties. A reading of the FHA that embraces disparate impact claims doesn’t protect individuals from the state but instead represents an expansion of state interference. Behavior that was once lawful – selling your home for whatever price you wish – would become sanctionable. Disparate impact theory holds private individuals responsible not for personal bigotry, or the direct consequences of their actions, but for economic realities beyond their control – and that makes no one freer, nor more equal.

Update: Repeating what happened in the previous disparate-impact FHA case, Magner v. Gallagher, this case has apparently settled. The only question now is what the administration did to keep this issue away from the Supreme Court again. 

Further update: A couple of readers familiar with the facts on the ground in Mount Holly point out that while it’s technically correct that Mount Holly “hasn’t resorted to eminent domain,” the town’s redevelopment plan is indeed all-too-typical of eminent-domain abusers. That is, while not employing eminent domain – no condemnation proceedings have (yet) been filed – the town threatened to use it and then claimed “voluntary” sales when the homeowners capitulated. The redevelopment authority has represented that the incentives it offered for relocation were greater than what homeowners would’ve gotten from the eminent domain process – that alas is probably true, because the compensation paid for government takings is rarely “just” – but of course they would’ve had to sweeten the deal even more if they couldn’t threaten eminent domain in the first place. In other words, as we and our pro-property-rights allies have long argued, the ultimate solution is to reverse Kelo v. New London and take away the government’s ability to forcibly transfer property from one private party to another. If such eminent-domain-abuse claims aren’t foreclosed by the Mount Holly settlement, I suggest that the town’s residents hire IJ to litigate them. Cato would look forward to filing an amicus brief in support.

This blogpost was co-authored by Cato legal associate Gabriel Latner.