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‘Kelo’ Revisited

Properties were seized and a neighborhood razed in the name of ‘economic development’ that never came

Feb 10, 2014, Vol. 19, No. 21 • By CHARLOTTE ALLEN
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Nor did it help that the Fort Trumbull tract where the razed homes once stood never did get built on, despite a $78 million incentive package from the state of Connecticut. In 2008, after the nationwide real-estate bubble burst, the construction company, Boston-based Corcoran Jennison, that the NLDC had engaged to develop the site announced that it couldn’t obtain enough financing for the ambitious enterprise and pulled out. In 2009 Pfizer itself left New London, abandoning its new digs only eight years after the building had been completed. In 2010 Pfizer sold the New London facility for a reported $55 million​—​a small fraction of what it had spent to build it​—​to General Dynamics’s Groton-based Electric Boat division, a submarine manufacturer. Few of the 1,400 or so Pfizer employees who worked there had chosen to live in New London, so its contribution to the city’s economic base had always been questionable.

After Kelo, more than 40 state legislatures passed laws that banned or restricted the use of eminent domain for the purpose of economic rejuvenation, especially when it meant displacing homeowners. At least seven states amended their constitutions to ban the use of eminent domain for economic development, and some state courts explicitly rejected the Kelo ruling as precedent for interpreting those states’ own taking laws.

The Kelo decision inspired ideological mass confusion, as when then-Democratic National Committee chairman Howard Dean declared in 2005 that the Kelo ruling had been all the fault of President George W. Bush. “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,” Dean announced at a college rally.

In fact, the Supreme Court’s conservative bloc​—​the late Chief Justice William Rehnquist, the now-retired Justice Sandra Day O’Connor, and Justices Antonin Scalia and Clarence Thomas (none of whom was a Bush appointee)​—​had dissented from Stevens’s majority opinion. It was the High Court’s liberal faction​—​Stephen Breyer, Ruth Bader Ginsburg, and the since-retired David Souter​—​along with swing-voter Anthony Kennedy​—​who had formed the narrow majority. O’Connor’s dissenting opinion was particularly scathing. “Today the Court abandons [the Fifth Amendment’s] long-held, basic limitation on government power,” she wrote. “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded, i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public​—​in the process.”

Susette Kelo and the other plaintiffs had been represented by the Institute for Justice, a libertarian public-interest law firm headquartered in Arlington, Virginia. The city of New London and the NLDC were represented by Wesley W. Horton, a prominent civil-rights lawyer in Hartford, Connecticut, who had some years earlier won a landmark ruling from the Connecticut Supreme Court that de facto racial segregation in Hartford-area schools violated the state constitution.

The Kelo decision did not come out of the blue, constitutionally speaking. In a 1954 decision, Berman v. Parker, the High Court had ruled unanimously, in an opinion written by William O. Douglas, perhaps the most liberal justice ever to sit on the Supreme Court, to uphold the power of a redevelopment agency created by Congress to seize and demolish almost the entire Southwest quadrant of Washington, D.C., on the ground that it was a “blighted area” and “blighted areas .  .  . tend to produce slums.” Blight removal was a “public use,” according to Douglas​—​and from there it was only a short step to economic development as a public use. The Berman and Kelo rulings affirmed a particular kind of liberal vision: that large-scale and intricate government plans trump individuals’ property rights. The Berman case involved a thriving department store in Southwest that could not in any way have been said to be a slum property and whose owners wanted it to stay where it was​—​just as Susette Kelo and the Cristofaros wanted to stay where they were. The only thing to be said for the Berman decision is that Southwest did eventually get rebuilt​—​although in a blockish, Brutalist fashion that made many architectural critics nostalgic for the old days of “blight.”

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