Tag: Institute for Justice

Eminent Domain Shenanigans

Five years ago, in the landmark property rights case of Kelo v. New London, the Supreme Court upheld the forced transfer of land from various homeowners by finding that “economic development” qualifies as a public purpose for purposes of satisfying the Fifth Amendment’s Takings Clause.  In doing so, however, the Court reaffirmed that the government may not “take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit.”

State and federal courts have since applied that pretext standard in widely differing ways while identifying four factors as indicators of pretext: evidence of pretextual intent, benefits that flow predominantly to a private party, haphazard planning, and a readily identifiable beneficiary.  Moreover, since Kelo, 43 states have passed eminent domain reform laws that constrain or forbid “economic development” condemnations.

While many of these laws are strong enough to curtail abuse, in at least 19 states the restrictions are undercut by nearly unlimited definitions of “blight.”  The state of New York has seen perhaps the most egregious examples of eminent-domain abuse in the post-Kelo era, and now provides the example of Columbia University’s collusion with several government agencies to have large swaths of Manhattan declared blighted and literally pave the way for the university’s expansion project.  In this brazen example of eminent-domain abuse, the New York Court of Appeals (the highest state court) reversed a decision of the New York Appellate Division that relied extensively on Kelo’s pretext analysis and thus favored the small business owners challenging the Columbia-driven condemnations.  The Court of Appeals failed even to cite Kelo and ignored all four pretext considerations, instead defining pretext so narrowly that even the most abusive forms of favoritism will escape judicial scrutiny.

Cato joined the Institute for Justice and the Becket Fund for Religious Liberty in a brief supporting the condemnees’ request that the Supreme Court review the case and address the widespread confusion about Kelo’s meaning in the context of pretextual takings.  Our brief highlights the need for the Court to establish and enforce safeguards to protect citizens from takings effected for private purposes.  We argue that this case is an excellent vehicle for the Court to define what qualifies a taking as “pretextual” and consider the weight to be accorded to each of the four criteria developed by the lower and state courts.

The Supreme Court will decide whether to hear the case later this fall. The name of the case is Tuck-It-Away, Inc. v. New York State Urban Development Corp and you can read the full brief here (pdf).  You can read more from Cato on property rights here.

Victory for Free Trade - At Least Within the Country

In July, I blogged about the case of Minnesota farmers who were facing criminal sanctions for engaging in interstate trade.  Now I am happy to report that the city of Lake Elmo has torn down its onerous and unconstitutional trade barriers:

The change was made in response to a federal judge’s opinion in August that Lake Elmo’s protectionist law likely violated the U.S. Constitution because it discriminated against interstate commerce.  Magistrate Judge Franklin L. Noel stated that the law “squelche[d] competition … altogether, leaving no room for investment from outside,” and would likely have “obliterate[ed] … the Lake Elmo markets in pumpkins and Christmas trees… . In fact, Plaintiffs have shown that the markets will be wiped out.”

Congrats to our friends at the Institute for Justice who spearheaded this case!  You can read more here.  And you can find Judge Noel’s opinion here.

Hat tip to Baylen Linnekin at Crispy on the Outside.

Frivolous Lawsuit Aimed at Silencing Critics of Eminent Domain Abuse

In Kelo v. City of New London, the Supreme Court ruled that a locality could use its eminent domain authority to seize private property to sell to private developers. Cato’s amicus brief opposing this abuse of the Takings Clause is available here, and an article on Kelo and other property law rulings of the 2004-2005 term by law professor James W. Ely, Jr. is available here.

One positive outcome of Kelo was the legislative restriction of eminent domain usage in state houses across the country. On the other hand, developers and localities have attempted to muzzle their critics with frivolous lawsuits. The Institute for Justice is currently litigating one of these actions in Texas:

Investigative journalist Carla Main wrote a book about eminent domain abuse in Freeport, Texas.  The city is attempting to force out a generations-old family shrimp and marine supply business to make way for a luxury marina development that was to be owned and operated by Royall’s private company.  When the victims of this eminent domain abuse complained, Royall sued them for defamation.  Main’s book, Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land, tells the story of the Gore family’s generations-old shrimp business and how Royall and the city tried to take their land.  Prominent law professor Richard Epstein (University of Chicago and New York University) contributed a blurb to the back cover of Bulldozed.

Royall sued Main, Epstein and Encounter Books (the publisher) for defamation over the contents of Bulldozed.  He also sued two newspapers and a journalist who published reviews of Bulldozed.  Royall is attempting to use the power of the courts to silence his critics.

A Dallas trial court ruled last year that the lawsuit was not barred by the First Amendment, even though Royall could not point to any statement in Main’s book that came close to the legal standard for defamation. The Institute for Justice is appealing the trial court’s decision. As Bill McGurn writes in today’s Wall Street Journal, this suit is one of the “high costs of Mr. Kennedy’s concurrence” in Kelo. Here’s hoping that rights protected by both the First and Fifth Amendments can prevail.

Susette Kelo, the owner of the Little Pink House at the center of the Kelo case, spoke at the Cato Institute about her ordeal, and her story is the subject of this Cato Institute video.

Bulldozing Homes, Billing Homeowners

Officials in Montgomery, Alabama, are bulldozing homes in their historic civil rights district – and billing the homeowners for the cost of demolition:

Christina Walsh of the Institute for Justice writes about this injustice at the Daily Caller:

Imagine you come home from work one day to a notice on your front door that you have 45 days to demolish your house, or the city will do it for you.  Oh, and you’re paying for it.

This is happening right now in Montgomery, Ala., and here is how it works: The city decides it doesn’t like your property for one reason or another, so it declares it a “public nuisance.”  It mails you a notice that you have 45 days to demolish your property, at your expense, or the city will do it for you (and, of course, bill you).

Your tab with the city will constitute a lien on your property, and if you don’t pay it within 30 days … the city can sell your now-vacant land to the highest bidder.

The rest of her article is here.  Also, see ABC News, Big Government and Reason magazine.  And you can find Cato’s work on property rights here.

The Power of One Entrepreneur

The Institute for Justice has launched a new economic liberties program called “The Power of One Entrepreneur.”  They have five detailed reports produced by successful local writers, highlighting five individual entrepreneurs. 

The power of one entrepreneur, the reports explain, is the key to helping our nation recover from this economic slump and to restoring our inner cities and countless lives through honest enterprise.  Together, they showcase the importance of economic liberty and the fact that countless people are fighting Big Government to secure their American Dream. 

These reports do two important things:

First, they document the positive impact one single entrepreneur can have on those around him or her, not only by offering employment, but through charitable work and mentoring to grow other entrepreneurs in the community, thereby growing the economic pie.

Second, through tangible examples, they make the point that if the government wants to do something to help Americans in this “jobless recovery,” it can do one simple thing:  Get out of the way so entrepreneurs like these can be free to create jobs for themselves and for others.

This is part of IJ’s laudable long-time effort to put a human face on the issue of economic liberty — the right to earn a living free from arbitrary and unnecessary government regulation.