It was ten years ago this month that the Supreme Court handed down the odious Kelo v. New London decision legitimizing the expansion of eminent domain powers to include the seizure of property for private interests. I count it among the court’s worst decisions. Not as bad as Roe v. Wade, but pretty atrocious.
Eminent domain is a fancy phrase that means nothing more than the government taking private property from its owner and putting it to public use. Eminent domain is authorized under the takings clause of the Fifth Amendment which permits governments to seize property as long as the owner is paid “just compensation,” which has been traditionally interpreted to mean market value. In other words, the government has to pay but the owner can’t refuse to sell.
For more than two centuries, “public use” was understood to mean government use. If the state wants to build a highway it doesn’t need to convince every single property owner along its path to sell. As unjust as that may sound, the alternative is unworkable.
In the Kelo case, a group of private citizens sued the City of New London, Connecticut to avoid losing their homes to Pfizer, Inc., a private company that manufactures pharmaceuticals.
Wait a second, can they do that? Surely, eminent domain doesn’t permit private companies to take people’s homes. That was the issue before the court. The legal geniuses in robes decided that yes, private companies can take your property as long as they use the government as a middle man.
Here’s how it works: a private company decides that they want to raze a few city blocks to build a new office complex. First, they ask the inhabitants to sell. If the inhabitants want too much or refuse to sell at any price, the company bypasses them and goes to city hall instead. They convince the bureaucrats that their project is the answer to all their prayers, that it will result in a lot of jobs, and most importantly, tax revenue. A single multinational corporation will probably pay more in taxes than all of those working stiffs combined. It helps if the city condemns the property first, though that’s a formality and everyone knows that the property is only being condemned because a private company is salivating over the real estate. After seizing the property, the city sells it to the corporation.
That’s the reality of eminent domain in the twenty-first century. We can “thank” the purveyors of the “living, breathing” Constitution for this injustice. The Fifth Amendment, though thoroughly unambiguous, doesn’t mean the same thing today as it did in days gone by. When the Constitution can mean anything, it means nothing.
Conservatives and libertarians were rightfully upset with the Kelo decision. One group of libertarians even hatched a plot to seize the New Hampshire home of Justice David Souter, who voted with the majority, just to give him a taste of his own medicine. A ballot initiative to make a hotel out of his home—the aptly named Lost Liberty Hotel—failed.
To be fair, some liberals didn’t like the decision either, though they seemed fixated on all the wrong issues. To them, it was the tale of a big, evil pharmaceutical corporation driving working class people from their modest homes. It was a story that could have sprung from the imagination of a Hollywood screenwriter. Howard Dean blasted the Kelo decision, though he placed the blame on exactly the wrong people. “The president and his right-wing Supreme Court think it is ‘okay’ to have the government take your house if they feel like putting a hotel where your house is,” he boomed. The president he was referring to was Bush, of course, though Bush opposed the decision and later issued an executive order prohibiting federal agencies from seizing property for non-governmental purposes. Dean seemed unaware that it was the liberal wing of the court—Ginsburg, Souter, Breyer, Kennedy, and Stevens—who approved this monstrosity. The court’s liberals even seemed swayed by the city’s argument that more tax revenue was a public good in and of itself, and therefore seizing the property amounted to public use. While big business’s hands are not clean in this affair, it was the government, driven by its insatiable appetite for tax revenue, that yanked these people from their homes.
File it under ‘lessons learned’: the behemoth of government devours the little people first. Powerful people cut deals. These days, they don’t even have to resort to the proverbial “back room.” All business is conducted up front.
Pfizer never did build its complex in New London. The jobs and tax dollars never materialized. In 2009 it sold the property and left town, leaving a vacant lot where a tight-knit neighborhood once stood.
Corporations have naturally been emboldened by the Kelo decision. The Supreme Court has given them the green light to snatch whatever property they desire.
A new eminent domain controversy has sprung up in the scenic Ozark Mountains of northwest Arkansas. The Southwestern Electric Power Company (SWEPCO) wants to cut a swath across the landscape to build power lines. They intend to purchase right-of-way access to the land (“easement”) from its owners, though some property owners have refused the offer. A local citizens group calling itself Save The Ozarks has organized to oppose SWEPCO. Legal wrangling continues and the issue remains unresolved.
In the post-Kelo era, SWEPCO doesn’t even have to convince the people who own the coveted property to accept easement. From their website: “Easement negotiations [will] continue as long as practical to reach a voluntary agreement. If it becomes evident that a voluntary agreement between the company and the property owner cannot be reached and other viable alternatives do not exist, the company may exercise the right of eminent domain to secure required easements through condemnation proceedings.”
So easement is voluntary…unless you don’t want to do it.
If you say no, SWEPCO will have the government condemn and seize your property, at which point they will purchase it from the government. With ground rules like that, local property owners don’t have a strong hand to play. Prior to Kelo, it would have been their prerogative to drive a hard bargain or simply to refuse to be bought.
Those days are over. Of course, they can still take a hard line with SWEPCO, but if the big company grows weary of Farmer Joe and his “unreasonable” price, it can always go to the government. It would therefore behoove Farmer Joe to reach an agreement with SWEPCO, which ultimately holds all the high cards.
Settle with us or lose your land to the state. Your move, Farmer Joe.
This kind of eminent domain abuse is big government at its very worst. Not content to be a passive arbiter, big government creates winners and losers. The loser is often the little guy who doesn’t have much clout in the halls of government. Ten years of eminent domain abuse are enough.