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.