Kelo v. City of New London

Brief Fact Summary.

The petitioners whose properties in the city of London were taken by the city for its development plan sued the city. There is no allegation that these properties were blighted or in poor condition. They were condemned only because they happen to be located in the development area. The City’s development plan was not adopted to benefit a particular class of identifiable individuals.

Synopsis of Rule of Law.

A State may transfer property from one private party to another if future use by the public is the purpose of the taking.

Facts.

The city of New London suffered prolonged economic decline that led a state agency to designate the city a distressed municipality. To revitalize the city, New London approved a development plan to create more jobs, increase tax and revenues.The city’s development agent purchased property from willing sellers and proposed to use the power of eminent domain to acquire the remainder of the property from unwilling owners in exchange for just compensation.

Issue.

Does the city’s disposition of private property to transfer it to another private party after paying just compensation qualifies as a public use within the meaning of the Takings Clause of the Fifth Amendment?

Held.

Yes, the city’s disposition of private property to transfer it to another private party after paying just compensation qualifies as a public use within the meaning of the Takings Clause of the Fifth Amendment. This is because the City’s purpose of eliminating the social and economic blight qualifies as a valid public use. The City’s determination that the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to the Court deference.

Dissent.

Justice O’Connor and Thomas

O’Connor: Economic development takings are not constitutional. The Court already emphasized the importance of deferring to legislative judgments about public purpose. However, the Court noted that a purely private taking could not withstand the scrutiny of the public use requirement and it would serve no legitimate purpose of government. Unlike any previous cases, where the Court held the takings valid, here New London did not claim that petitioners‘ homes are the source of any social harm.

Thomas: The Court shall not defer to a legislature’s determination of circumstances that establish when a search of a home would be reasonable. The government may take property only if it actually uses or gives the public a legal right to use the property. The benefits of economic development plan, however, will fall disproportionately on poor communities against the highest and best social use.

Concurrence.

Justice Kennedy

A Court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit. Here, the trial court conducted a careful and extensive inquiry and concluded that benefiting the private entities was not the primary motivation or effect of the development plan. Unlike the majority’s opinion, a more stringent standard of review might be appropriate for the takings at issue, because there may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption of invalidity is warranted under the Takings Clause.

Discussion.

The Court has refused to establish rigid formulas with respect to public use of land in favor of affording legislatures broad latitude in determining what public needs justify the use of the takings power. The City of New London has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community. The plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement.