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Debate Club

Banning Bans On Eminent Domain?

Judy Coleman and Steven D. Anderson debate.

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Last year's Supreme Court ruling that permitted local governments to seize private homes for public projects also benefiting private developers has stirred almost every state legislature to curb that power. The National League of Cities opposes this broad, bipartisan movement on grounds that it is crippling the ability of government to take private property for the public good.

A reader asks of last week's debate: What about judicial elections?

Are new laws the best response to the problem? Wouldn't the reform be more effective if it sought to make local politics more responsive to needs of communities, rather than passing laws that aren't likely to thwart partnerships between government and wealthy developers?

Judy Coleman is a third-year student at Yale Law School and editor of the Yale Law Journal's online magazine The Pocket Part. Steven D. Anderson is an attorney and serves as Coordinator of the Castle Coalition at the Institute for Justice.

Coleman: 2/27/06, 07:19 AM
First, I want to applaud the efforts of the Institute for Justice and the Castle Coalition in building a powerful grassroots movement that has reinvigorated politics at the local, state, and federal levels. The Coalition's response perfectly illustrates how interactions between courts and legislatures and popular movements are supposed to look.

I've read many of the letters to the editor that followed Kelo, as well as much of the blog commentary. There's a lot of rights-talk going on here, but the real culprit here is political alienation - a problem that is profound, and pervasive. It's not necessarily connected to the distinction between public use and private benefit that these proposed laws are primarily concerned with. Government takings for government use have incurred just as much wrath over the decades as takings for private use. What's missing here is clean-government reform, not takings reform.

I'd like to propose three questions for us to tackle over the course of the debate:
  1. Why are the legislatures the best place to start this fight?
  2. Having chosen the legislatures, how do you design a law to address a problem with such deep roots?
  3. Public entities have certainly embarked on their share of misguided development projects without private sector beneficiaries. In this environment of outrage, is there room left for eminent domain at all?
Tacking a crack at the first question, the public is now on guard about its property rights, and other branches of government may be able to respond sufficiently on their own. New laws that come out of this process, on the other hand, may be overbroad or, alternatively, gutted by interest group politics. Why can't we trust the existing system to handle this problem now, without the passage of potentially sloppy laws?

Take the executive branch, for example. Here in Connecticut, Governor Jodi Rell requested a moratorium on government takings, forcing the New London project at the center of the Kelo case to come to a halt. Rell and the New London city managers are currently in a mediation to attempt a compromise solution. This is basic democratic politics. Elected leaders don't need a new law to tell them their jobs are on the line. If they do, then the problem is too big for one little law to fix.

Judges also have a helpful role to play. The recent Michigan decision County of Wayne v. Hathcock developed a multi-part test to address the issue. Common law tests like this one might provide greater flexibility than a law that ties the hands of government. No statute can enumerate the many different considerations that should go into decisions about the fate of these projects.

Perhaps this is one area where state judges have more room, more independence, and greater competence than legislators to make the rules. The courts (here in Connecticut at least) have been a great venue for the prosecution of corruption in mayor's offices across the state. If we see local government officials as pests, judges may be able to design the better mousetrap.

Anderson: 2/27/06, 02:40 PM
Thanks, Judy. I'm looking forward to our debate this week. We've done what we can to raise awareness about the abuse of eminent domain around the country, and our efforts have certainly been enhanced by the Court's decision in Kelo. Nothing quite inflames the passion of the American people more than this nation's highest court saying their homes, small businesses, farms, and even their churches can be taken by the government on the mere possibility that the property would provide more tax revenue or jobs as something else.

Regarding your first question, it's not so much that legislatures are the place to start the fight—it's where we've been relegated after Kelo. To be sure, our litigation will continue under state constitutions—we just argued a case in Ohio—but since state laws allow this type of abuse, the place to fix law is in the legislature.

I too worry about the responsiveness of lawmakers and the interest-group politics public choice theory warns us against, but what we saw in Michigan with County of Wayne v. Hathcock (and what we'll hopefully see in Ohio with Norwood v. Horney) took over two decades to happen. In eminent domain cases, judges routinely defer to legislative determinations on this issue—legislatures, and not the courts, often decide what constitutes a "public" use as well as what meets the (typically over-broad) definition of blight. The outrage is now, and elected officials are where it needs to be aimed.

As both Justices Sandra Day O'Connor and Clarence Thomas correctly point out in their dissents in Kelo, the problem of eminent domain abuse disproportionately affects those with less money and influence in the political system. This is no doubt indicative of a larger political alienation problem, but I don't believe eminent domain reform can only come with clean-government reform. (As an aside, the so-called "clean government" movement is now employing campaign finance laws to quash the First Amendment rights of the politically unpopular. "Clean" government, in reality, is becoming merely "big" government, but that is a debate for another day.)

In every poll taken on the subject, everyone in the country who is not a municipal official, planner or developer almost universally rejects the use of eminent domain for private development. This is an issue that resonates profoundly with individuals of all philosophical and ideological stripes, striking at one of the things that makes this nation unique—the ability to keep what you've worked hard to own.

I'm far more optimistic that real reform will happen through the legislature, as it has already in some form in South Dakota, Alabama, Texas, and Michigan. The issue's a simple one and there are simple solutions, ones we'll obviously talk about this week. But here's the bottom line: no matter where the changes come from they must do two things—restore common sense limitations on the power of eminent domain and reform states' blight or urban renewal laws.

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Coleman: 2/28/06, 09:36 AM
Good morning, Steven.

I'll start with your last line first: How do you legislate common sense?

The difference between good public use and evil private development is largely intuitive. You know a terrible taking when you see one. It is precisely in areas like this where lawmakers run into trouble. Why don't we just define pornography? Why is it so hard to determine how much religious imagery in courtrooms is too much? Common sense doesn't always have the answer. We might see it as a "simple problem" because there are truly egregious examples out there—the yacht club that's replacing a working-class Florida neighborhood comes to mind. The difficult cases don't make good news stories.

So how does the IJ's model legislation stand up to the problem of difficult cases? It's clearly the product of much thought and great brainstorming sessions. Still, I see areas where judges could make room to defer to local government if they wanted to. For example:
  • What constitutes a public nuisance? Some courts have seemed eager to expand "nuisance" to include crime, drugs, and guns. If Susette Kelo lived in gang territory, would her case be different?
  • Your definition of blight in the model statute also includes "attractive nuisance"—isn't that blowing the door wide open for cities to condemn property?
  • Eminent domain would be allowed only when it is "reasonably necessary" for a public use. Even the Supreme Court trips over itself in determining what is "necessary and proper"—and it tends to err on the side of thinking most everything is necessary.
  • What does it mean for property to be "for" economic development? Entirely for, somewhat for, incidentally for? The real action of the model legislation is in that idea, but that seems to me a "know it when you see it" kind of question.
The point of doing this "issue spotting" is to show that if we have (1) a very cynical view of local politicians and (2) a very limited optimism that judges will compensate for it, the problems are just going to continue, as those two groups learn how to manipulate statutory language to allow some of the "bad" projects in, as well.

And it could be problematic vice-versa, too. A judge could adopt a very narrow conception of nuisance, or read "reasonably necessary" to mean "absolutely necessary" and end up blocking projects we might think of as promising, if not "good." It seems that legislators, at least, see this latter risk most clearly—IJ has had to fight new battles to get legislatures to pass the strong, rather than the weak versions, of the eminent domain laws.

To believe that these laws can overcome the risks of wayward interpretation, we have to believe that the background assumptions have changed in the rest of the system. If common sense is as common as you seem to think it is, would we really need new laws, after all?

Anderson: 2/28/06, 08:41 PM
What I advocate is not legislating common sense, but rather returning some common sense to the application of this nation's eminent domain laws—common sense shared by more than 90% of the public. Leaving that aside, the problem is not one of "good public use" versus "evil private development," the problem is whether it's right to take property from one person and transfer it to another private party. I don't make judgments about how "promising" a project is, I judge on the basis of where the property ends up. If it's not ultimately owned and used by the public, then transferring it is wrong, both morally and constitutionally.

Until the 1950s, with very few and limited exceptions, the power of eminent domain was restricted to those situations where the public actually owned and used the property after it was taken, for things like roads, courthouses and post offices. Everyone we talk to understands, though some do it grudgingly, that the government can take property for these reasons. But they are completely baffled by the Court's outrageous decision that government can take property for a shopping mall or big-box store. That's the common sense I'm referring to—and it's a return to a more meaningful understanding of public use that the Castle Coalition is trying to accomplish through our "Hands Off My Home" campaign and related legislative efforts.

Beginning with Berman v. Parker, a 1954 U.S. Supreme Court case, the Public Use Clause has slowly eroded, so much so that exceptions have now become the rule. The Berman court held that the removal of "blight" was a public "purpose" under the Fifth Amendment (and did so with very little law to back it up)—a subtle but significant shift in the Court's understanding of the Public Use Clause. Later, Hawaii Housing Authority v. Midkiff went a little farther, allowing the government to use the power of eminent domain to break up the remnants of a land oligopoly in that state. And now Kelo—by allowing the exercise of eminent domain for private commercial development—has erased the public use restriction from the Constitution. For this discussion, one common thread among these three cases is particularly important: in each, the government was specifically enabled by statute to use eminent domain.

New—or at least revised—laws are undoubtedly an important answer to the problems of eminent domain abuse. And legislatures are the one branch of government uniquely situated to react to the overwhelming public outrage on this issue. Take so-called blight laws. Under a typical state statute, an area can be considered "blighted" if it's economically or socially unproductive or undesirable or if it impairs economic values or tax revenue. Areas are also subject to eminent domain where they are obsolescent, or have diversity of ownership or faulty layout. These criteria have invariably led to abuse, as local officials pick out the neighborhood that's been targeted by a developer and then hire a consultant who knows what to do to keep the city's business: find blight. I only know of one situation anywhere in the country where the consultant didn't do so—but the city demanded a finding of blight, and the consultant reversed its opinion.

To the extent a state retains the power of eminent domain over blighted properties, our model language removes the subjective criteria that are so subject to abuse. Instead, blight is defined as something identifiable, using well-known legal concepts, like nuisance, that aren't as susceptible to bizarre interpretations by judges. And if it's necessary for a judge to comment on legal concepts, I'd rather his opinion be anchored in common law than in ideas from the Progressive Era. Reforms can include specific instructions that the judiciary not defer to local governments on the question of blight or public use, in addition to mandating a higher burden of proof.

Assuming you don't agree with the use of eminent domain for private economic development (if I can make that assumption) what solution do you propose that will allow home and small-business owners to keep what's theirs? The outrage and momentum for change is now, and the floodgates are open.

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Coleman: 3/1/06, 11:18 AM
My proposal includes not only laws, but also campaigns to oust local officials who misuse eminent domain and better checks on the quasi-public executives who run organizations like the New London Development Corporation.

It also would involve looking at Kelo as a roadmap rather than a scar on American jurisprudence. Though in dicta, Justice John Paul Stevens's opinion explicitly states two cases where a taking would not have been allowed:
  1. where the city was "conferring a private benefit on a particular private party", and
  2. where the city used the "mere pretext of a public purpose, when its actual purpose was to bestow a private benefit"
If I were litigating on behalf of a displaced property owner, I'd start right there. Most takings cases include an extensive paper trail and broad media coverage, both of which provide substantial evidence about officials' true motives. The New London Day, for example, ran a story last October about the extent of Pfizer's involvement in the taking at issue in Kelo.

It seems like your complaint extends beyond the specific holding in Kelo, though, even if that's the impetus for the current raft of state laws. It sounds like your goal is to undo Berman, as well. Building off of Supreme Court and state court decisions before it, Berman crystallized the idea that a project's "public purpose" could meet the "public use" requirement. This substitution, you argue, is plainly wrong.

It's worth examining what the public-private distinction looks like in the 21st century, before we consider returning to 19th-century doctrine . A strict "public use" definition ignores the increasing, and often beneficial, intertwining of government and the private sector (including nonprofits). Property might serve a public purpose without public ownership, and without public use, in the 19th-century sense. It might, in short, be possible to keep Berman's "public purpose" permission, while avoiding the nasty version of Kelo you get when you overlook Justice Stevens's dicta.

Consider the redevelopment of cities in the wake of catastrophes. The restoration of New Orleans, for example, will rely on partnerships between government and the private sector. The resulting housing developments and commercial districts won't be owned by the public—or even used by the public—but they serve the public purpose of restoring an American city.

The environment is another area where privately-held property can provide a public purpose. Think of conservation easements, where private landowners contract away development rights over their property to a nonprofit holding organization. Not publicly owned, not publicly used, but serving a public purpose, like reducing air and noise pollution.

Separating out the violence of the property transfer (which we should certainly discuss), can't we acknowledge this new category of publicly-purposed private property? Governments and private parties have developed at least some creative ways to blend market mechanisms and public goods in ways that don't always increase the number of Motel 6's per capita.

Anderson: 3/1/06, 09:53 PM
Kelo's not a scar—it's the final blow in the Court's 50-year odyssey that's rescinded the public use requirement from the Fifth Amendment. And as you note, the two constraints mentioned by Stevens are dicta, so they are by no means binding.

Even if they were, what protections do they offer? The first invites local governments to condemn now and name a developer later (and in practice, the municipality will identify the developer in advance and simply delay the announcement until after the taking). The second offers nothing new. Pretextual takings have always been prohibited. They're also difficult to prove for lack of evidence. In pretextual cases, you're relying on the oft-described "stupid staffer," someone who makes a mistake so egregious that a judge will abandon the automatic deference allowed local officials and invalidate a taking. Unfortunately, cities are quite adept at the process of condemning property, and they rarely get caught in this situation. In New London, coverage in The Day and the clear involvement of Pfizer in the development—all of which was known years ago—did nothing to stop those condemnations.

You're right that my complaint is much bigger than Kelo. But it's Kelo that finally awakened all Americans to the horrors of eminent domain abuse. As I've said before, people understand that eminent domain can be used for schools and roads, yet they almost universally reject the use of the power for private commercial development.

This is not 19th-century thinking—it's today's home and small business owners speaking out against a wrong so insidious that it's sparked almost every state legislature to consider eminent domain reform. Scholars can wage all the battles they want about the meaning of the Constitution. I'll stick with the interpretation by guy who runs the corner store.

The point you make about modern governance and its closer association of government and the private sector is, frankly, frightening. The issue of eminent domain abuse is decidedly not about what benefits are derived from the power, but who ends up with the property, which is what the Fifth Amendment used to be about. Public "purposes" and "benefits" don't enter into the equation. The moment they do, we're left with what we have now, a Constitution that provides no protection for people to keep their homes, business, farms and churches. Many things may be beneficial to the public, but the Constitution was originally designed to protect against public benefits trumping the rights of individuals. If cops could enter any home without reason, it may benefit the public by finding more criminals. If trials didn't have juries, the public may benefit from a streamlined judiciary. If certain newspapers weren't allowed to print, the public may benefit by having uniformity of thought. Thankfully, we have a document that prevents all of those things from happening.

Before I go, I also want to respond to your comment about Katrina. It may indeed take partnerships to rebuild the New Orleans. But the people of that area, both in the city and throughout the Gulf Coast, have already been victimized once by the hurricane. They shouldn't be victimized again by taking the one thing they may have left in the world—their property.

Talk to you tomorrow.

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Coleman: 3/2/06, 03:58 PM
I think we both agree that polls reveal overwhelming public opposition to the abusive use of eminent domain. The puzzle, then, is why elected officials have seemed so deaf to all this clamoring, and why some of the eminent domain legislation has stalled in various states.

Perhaps they're concerned about tying the government's hands in an area where we expect government to have some role. The public does envision a role for local government in managing land use and providing for the continuing economic sustenance of our cities. By returning cities back to a set of constraints they haven't had to confront—in the modern era, at least—new laws might throw the baby out with the bathwater.

Education provides a useful analogy here. Local governments have created morally revolting disparities between schools in rich areas and schools in poor areas, but no one is passing laws to restrict local government's ability to run schools, or proposing that government quit the education business. The guy on the corner doesn't want to close down public schools.

Instead, education reformers have proposed other changes. They want to reduce schools' reliance on property taxes or dilute the political clout of teachers' unions. One class-action lawsuit in California ended in a settlement with the state that would provide better supplies for the worst-off students. Though reform will probably take a long time, these attempts target that real issue here: the class divide, not government-provided education.

I don't think people, even those who hate Kelo, support the idea that government should exit the development business entirely. I brought up New Orleans because it provides a potent example of a situation when we expect government to lead the charge. We expect government will redevelop the damaged land and property there—and not just in a strictly limited, public-ownership kind of way.

So why not propose reform along the education model? Perhaps government can better account for the cost of its actions—including sentimental costs—so that "just compensation" truly is just. And why not restrict financing mechanisms, like massive debt offerings, that encourage governments to spend now and default later? Finally, can we restrict the political power of unions or lobbies that have too much influence today?

In both the education and eminent domain contexts, we're working against Supreme Court decisions that have refused to acknowledge class differences as having meaningful constitutional consequences. Perhaps if we focus on eminent domain as a class problem, we can develop our expectations for local government and convince courts that the more pressing constitutional violation here is about equal political representation. I think the recent education settlement in California, and the strength of the Kelo dissent, might show the possibilities for doing so.

Thanks very much for taking the time to elaborate on the Castle Coalition's positions and reasons. As long as we both agree there's a problem to be solved, the solution can't be too far away.

Anderson: 3/2/06, 09:24 PM
There are probably various reasons to explain the lack of reform in some states so far, but the principal one was clearly stated in Justice O'Connor's dissent—the people most affected by eminent domain abuse don't have the money or power necessary to persuade the politicians. I don't see it as a class problem, but as one of disproportionate influence by interest groups. It's the same way in our economic liberty cases, where you have a small cartel afraid of competition that clamors for the government to professionalize or license their industry in order to keep entrepreneurs out.

The answer, I believe, is not to tinker at the edges, but to restrain the power of government to dole out benefits. This is not a new concept. The Founders were well aware of the stranglehold that well defined factions could have on government—that's why our system was designed to diffuse power among three branches. And that's why there's a public use clause in the Constitution.

Which brings me to your analogy. I just don't think the problems with public education provide instruction here. There's no portion of the Bill of Rights that specifically addresses that topic, which I believe is an important distinction. What we're talking about here is a fundamental issue of not just about what it means to be American, but what it means to be human. Putting aside the legal discussion, it's morally wrong to take something from someone and give it to someone else.

Folks may envision some amount of land use planning, though I'm not as convinced that they believe government should be responsible for the sustenance of cities. In fact, government, through planning, especially the urban renewal schemes of the 1950s and 60s (which are roundly decried as abject failures), is precisely the reason many cities are failing today. For five decades, government has had the power of eminent domain for economic development in some form, and it hasn't helped much, if at all. To continue with that is pure folly.

As a practical matter, I do think that abuses of eminent domain are aided by laws that don't provide real compensation, by financing mechanisms that throw good money after bad, and especially by the dominance of developer, planner and municipal lobbies. None of that would matter, though, if the government couldn't take property for private development. That's where our energy should be focused—restoring some semblance of restraint of the power of government.

To me, as I've said, it's not question of class. I base my interpretation of the Constitution on the words—not the outcome, benefits or effects—and I believe the Court should make its decisions in same way. Our founding document applies equally to everyone, and if we removed the government from the development industry and all the others it's restricted from being in, we'd all be a lot safer, whether we believe we're represented or not.

Judy—I've enjoyed our discussion. I too am optimistic that at least some of the more than 40 states that are now considering eminent domain reform will provide serious, common sense protections. We'll just need to keep talking about it.

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