Tag: Kelo

Using Eminent Domain to Personally Benefit the Mayor Is Unconstitutional

One of the biggest dangers of not providing adequate constitutional protections for private property is that public officials can misuse their power to take property for private gains. Government actors, after all, have an incentive to act in a way that maximizes political gains and minimizes costs, so without adequate protection from the courts, they can be expected to use eminent to take private property for political (or even personal) benefit.

In 2005, in the now infamous case of Kelo v. City of New London, the Supreme Court unfortunately eroded the protections of the “public use” portion of the Fifth Amendment’s Takings Clause — “nor shall private property be taken for public use without just compensation” — by ruling that the potential for increased tax revenue from a large corporation can count as a “public use.” Suzette Kelo’s house was thus taken and given to Pfizer (which ended up not doing anything with the land).

It’s hard to imagine that government abuse of the Takings Clause could get any worse than that, but one such unfortunate case has arisen in Guam — which, as a U.S. territory, is covered by the Constitution. Artemio Ilagan owns and operates an apartment building in Agana, Guam. His neighbors, Engracia and Felix Ungacta, own an adjoining, residential lot that once lacked access to a road. Unfortunately for Mr. Ilagan, Mr. Ungacta was also the mayor of Agana when the city took a parking lot from Mr. Ilagan and gave it to Mayor Ungacta.

When challenged, the city claimed that the taking was done in accordance with a post-World War II “economic development” plan — the “Agana Plan” — that was enacted to reconfigure irregular lot lines in Agana. At the time of the taking (1981), the Agana Plan had not been used for seven years and, during the years it was used, was never used to take any lots. Moreover, the Plan has not been used in the 30 years since the taking of Mr. Ilagan’s lot.

The Guam trial court held the taking unconstitutional, but Guam’s Supreme Court reversed the holding by purportedly applying Kelo’s standard of judicial deference. Mr. Ilagan is now petitioning the U.S. Supreme Court to review his case, asking the Court whether it wants to allow other courts to use Kelo to cross the final bridge in eviscerating the Takings Clause — the blatantly pretextual taking of private property to give it to a public official.

Cato has joined the National Federation of Independent Business, 10 other organizations, and a group of constitutional and property law professors, on an amicus brief arguing that the Court should take the case in order to clarify, if not overrule, the broad language of Kelo. Kelo itself says 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.”

In Kelo, taking the property as part of an “economic development plan” was held to constitute a public purpose. Here, however, the “economic development plan,” was clearly a pretext to take property to benefit a known private party who just “happened” to also be the mayor. We point out that, despite the Court’s distaste with “pretextual takings” articulated in Kelo, courts across the country are split over what a pretextual taking is. Some courts have even ruled out the possibility of their existence. Yet, from the misuse of “blight” condemnations—a designation often used to tear down old neighborhoods for the purposes of gentrification—to situations like Mr. Ilagan’s, pretextual takings occur far too often.

The egregious case of Ilagan v. Ungacta is a perfect vehicle for the Court to clarify the concept of a pretextual taking and to bring some semblance of coherence back to a vital constitutional provision. More on our brief from Ilya Somin at the Volokh Conspiracy.

A Property Rights Victory in the Magnolia State

One of the unambiguously good results from last Tuesday’s off-year elections came in Mississippi, the state I called home the year before I moved to D.C.  By the impressive margin of 73% to 27%, voters in the Magnolia State took a stand against judicially sanctioned eminent domain abuse, specifically the government’s taking of private property in the name of so-called “economic development.”  

By passing Measure 31, which prohibits most transfers of condemned land to private parties for 10 years after condemnation, Mississippi joins 44 other states in enacting legislation that strengthens property rights in the wake of the Supreme Court’s horrific ruling in Kelo v. New London.  In Kelo (2005), you’ll recall, the Court held that state and local governments can condemn private property not for some sort of public project like a highway or military base nor because it is a “blight” that creates a health or safety risk, but simply to transfer to another private party who claims to put it to better economic use. 

We at Cato are all in favor of economic development, of course, but not if that development comes via raw government power that treads on constitutionally protected individual rights.  If a developer thinks he can put a given piece of land to a higher-value use, let him buy that property fair and square from the owner rather than effectively forcing a sale at below-market value.

Indeed, Kelo’s holding was flawed precisely because its rationale that transferring ownership of “economically blighted” property would promote economic development is bad economics. If a proposed project were actually a better use of a given property, the developer would be willing to pay a price sufficient to induce the current owners to leave.

Kelo also undermines property security, making owners less willing to invest in their property and use it productively, lest the government swoop in, declare it “blighted,” and sell it to someone else. And securing property rights is not just a good thing economically.  It also helps prevent powerful private interest groups from undercutting the property rights of minorities and other groups who may be vulnerable due to prejudice or political disadvantage.

And the American people agree: Kelo turned out to be a Pyrrhic victory for developers and their public-official cronies, such that most of the country is now better protected against eminent domain abuse than it was before Kelo.  Notably absent from the list of states where property rights are better off, however, is New York (see my comment on a recent instance of eminent domain abuse in the Empire State).

The judiciary’s abdication of its role as a protector of property rights is bad enough, but our elected officials haven’t done much better. Tellingly, the drivers of successful anti-Kelo legislation have tended not to be state legislators (with some exception) but rather citizen-activists.  While special-interest groups, such as big car companies in Mississippi, may pressure legislators to avoid anti-Kelo legislation, even as referenda show that popular opinion is on the side of the property rights activists.

Measure 31 is not perfect, but it is a step in the right direction. The Founders took care to protect private property rights in the Constitution, and it’s heartening to see citizens taking an active role to vindicate those protections even when the Supreme Court abdicates its duty to do so.

For more commentary on the Mississippi vote, see Ilya Somin’s recent op-ed.

More on Columbia’s Abuse of Property Rights

Six weeks ago, Cato filed an amicus brief supporting a challenge to Columbia University’s strong-armed attempt to condemn and take over certain land in Upper Manhattan.  Tomorrow, the Supreme Court will consider the cert petition our brief supports, with a decision on whether it hears the case expected Monday.

In what is probably not a coincidence, then, the Columbia Spectator today came out with a lengthy feature story examining the story behind the dispute, controversial “blight” designations and all.  This is excellent student journalism – heck, excellent journalism, period – and here are some key excerpts (full disclosure: the author interviewed me for the piece):

Since it proposed the expansion, Columbia has rapidly made deals with property owners and gained control over nearly every lot in the zone – except for two who have fought to hold on to their land….

And Columbia has repeatedly said that those parcels, which represent a total of around nine percent of the expansion zone, are vital to the vision. 

Eminent domain – the process by which the state seizes private property for the “public good,” providing just compensation for the owner – officially came into the picture in 2004, when the University asked the state to consider condemnation.

And here’s the crux of the legal dispute:

Some neighborhood tenants and owners – most no longer in Manhattanville as Columbia continues to break ground and demolish properties – have strongly contested this blight label.

Nuss remembers a community vibrant enough to support his improvisational group – the No-Neck Blues Band – local businesses, and his family. He raised his daughter in the Hint House….

But it’s sometimes hard to believe Nuss is talking about the same area as other residents who say they agree with the determination of blight….

This disparity in views on Manhattanville’s conditions touches upon a fundamental question when evaluating the process that paved the way for Columbia’s expansion: Was the neighborhood really blighted, and given the process by which the criteria of blight were determined, was the state’s designation of blight an appropriate justification for the use of eminent domain for a private university?

My sense is that whatever ”blight” there is was caused by Columbia itself:

“It’s akin to the kid who kills his parents and begs the court’s mercy for being an orphan,” says Ilya Shapiro, senior fellow with the Cato Institute, which filed an amicus brief to the U.S. Supreme Court supporting the Manhattanville property owners. “You’re creating your own blight. It doesn’t pass the smell test.”

Read the whole thing.

Ground-Breaking Constitutional Theories

As Larry Solum notes and Randy Barnett seconds, Georgetown law professor and friend-of-Cato Nick Rosenkranz has just published a tremendous article in the Stanford Law Review.  I saw an earlier version of it and can tell you that it offers one of those singular re-thinks of accepted learning.  As Randy puts it, “It is one of those rare pieces that hits you between the eyes and causes you to reconsider how you think about the Constitution.”  The article, entitled “The Subjects of the Constitution,” argues that all of us are going about our constitutional theorizing, at least with respect to judicial review, the wrong way.  Here’s the first paragraph of the abstract:

Two centuries after Marbury v. Madison, there remains a deep confusion about quite what a court is reviewing when it engages in judicial review. Conventional wisdom has it that judicial review is the review of certain legal objects: statutes, regulations. But strictly speaking, this is not quite right. The Constitution prohibits not objects but actions. Judicial review is the review of such actions. And actions require actors: verbs require subjects. So before judicial review focuses on verbs, let alone objects, it should begin at the beginning, with subjects. Every constitutional inquiry should begin with a basic question that has been almost universally overlooked. The fundamental question, from which all else follows, is the who question: who has violated the Constitution?

In thinking about who violated (or allegedly violated) the Constitution, Rosenkranz contends, we get to a truer understanding of whether the Constitution was violated, and how.  Fascinating stuff, which you can download here – and the sequel, titled “The Objects of the Constitution,” is coming soon to a legal journal near you (perhaps for next summer’s blockbuster law review article season).  (Coincidentally, today the Supreme Court unanimously ruled against Nick in his first argument before the Court – a technical case regarding the award of attorneys fees under Employee Retirement Income Security Act (ERISA) – so we now know where his comparative advantage lies!)

And while I have you thinking about such high-fallutin’ theoretical matters, let me also direct your attention to a new article by an up-and-coming legal scholar, also a friend-of-Cato (and my sometime co-author), Josh Blackman.  Josh argues that the Supreme Court’s relatively new “class of one” doctrine, by which a single person can present himself as a class discriminated against in violation of the Equal Protection Clause, should be used to challenge eminent domain abuse.  That is, homeowners can establish a class of one (i.e., the person whose home the government takes) if their property is singled out for condemnation while other similarly situated properties are not.  The singled-out homeowner(s) can thus challenge the arbitrariness of the government’s taking of their property.

Josh obviously hopes that some court will accept this novel strategy of borrowing equal protection jurisprudence to check rampant eminent domain abuse and vindicate property rights.  Here you can download his article, which is titled “Equal Protection from Eminent Domain: Protecting the Home of Olech’s Class of One.”  Coincidentally, two years ago Roger Pilon wrote an essay on the Supreme Court’s most recent “class of one” decision, which you can read here.

‘Avatar’ Is about Property Rights

In the Los Angeles Times today, I write about “Avatar”, which has just become the biggest-grossing movie in Hollywood history, and how conservatives have missed the issue at its core:

Conservatives see this as anti-American, anti-military and anti-corporate or anti-capitalist. But they’re just reacting to the leftist ethos of the film.

They fail to see what’s really happening. People have traveled to Pandora to take something that belongs to the Na’vi: their land and the minerals under it. That’s a stark violation of property rights, the foundation of the free market and indeed of civilization….

“Avatar” is like a space opera of the Kelo case, which went to the Supreme Court in 2005. Peaceful people defend their property against outsiders who want it and who have vastly more power. Jake rallies the Na’vi with the stirring cry “And we will show the Sky People that they cannot take whatever they want! And that this is our land!”

Economists may wonder about the claim that “Avatar” is the highest-grossing film of all time. The Hollywood Reporter estimates that so far it may only have sold half as many tickets as the 1997 “Titanic,” and Box Office Mojo says that adjusted for inflation “Gone with the Wind” remains the movie with the highest U.S. revenue, followed by “Star Wars.”

Taking Land for Public Uselessness

Over at the Washington Examiner, Tim Carney reports that Pfizer is abandoning its New London offices and deciding what to do with the property it gained in the infamous Kelo v. New London land-grab:

The private homes that New London, Conn., took away from Suzette Kelo and her neighbors have been torn down. Their former site is a wasteland of fields of weeds, a monument to the power of eminent domain.

But now Pfizer, the drug company whose neighboring research facility had been the original cause of the homes’ seizure, has just announced that it is closing up shop in New London.

To lure those jobs to New London a decade ago, the local government promised to demolish the older residential neighborhood adjacent to the land Pfizer was buying for next-to-nothing. Suzette Kelo fought the taking to the Supreme Court, and lost. Five justices found this redevelopment met the constitutional hurdle of “public use.”

That this purported “public use” is now exposed as the façade for corporate welfare that it always was is, of course, little comfort to Suzette Kelo and the other homeowners whose land was seized. But hopefully this will be an object lesson for other companies considering eminent domain abuse as a route to acquire land on the cheap – and especially for state and local officials who acquiesce in this type of behavior.

You can read Cato’s amicus brief for the ill-fated case here. Cato also hosted a book forum for the story of Suzette’s struggle, Little Pink House, featuring the author, Jeff Benedict, the attorney who argued the case, the Institute for Justice’s Scott Bullock, and Ms. Kelo herself, here.

HT: Jonathan Blanks

Beach v. Florida

Cato Adjunct Scholar and Pacific Legal Foundation Senior Staff Attorney Tim Sandefur published an excellent op-ed in the National Law Journal this week on the upcoming Supreme Court case Stop the Beach Renourishment v. Florida Department of Environmental Protection:

The case involves a Florida statute determining the boundaries of oceanfront property. Under a 1961 law, the state drew a brand-new line separating public and private land on certain beaches, meaning that some land that would have been privately owned would belong instead to the state. A group of property owners filed suit, arguing that the law deprived them of property without just compensation, violating the state and federal constitutions.

Last December, Florida’s highest court rejected their arguments. It held that, while the new boundary gave the state ownership of the beach land, the former owners actually had no such right to begin with. Despite more than a century of Florida law to the contrary, the court announced that the owners actually only had a right to “access” the ocean, and because the state promised to allow them to keep crossing the land to reach the water, it actually hadn’t taken anything away when it seized the land itself.

Thus, by simply reinterpreting state property law, the court allowed the state to take property without compensation with a mere stroke of a pen. Yet the U.S. Constitution forbids states from confiscating property - even through legal legerdemain - without payment.

[.]

[T]he U.S. Constitution also guarantees every American’s right to due process of law and to protection of private property. If state judges can arbitrarily rewrite a state’s property laws, those guarantees would be meaningless. More than four decades ago, Justice Potter Stewart warned that, without a constitutional limit on the states’ power to determine the nature of property, states could “defeat the constitutional prohibition against taking property without due process of law by the simple device of asserting retroactively that the property it has taken never existed at all.”

It is well-worth a full read here.

Despite the dreadful decision in the Kelo case several years ago, the fight to maintain the fundamental right to private property continues in our courts and legislatures. Tim and PLF have been doing yeoman’s work in the fight for property rights, and I am proud to team Cato up with them and the NFIB Legal Center in filing an amicus brief on behalf of the rightful property owners in this case. You can download the PDF of the brief here.