WASHINGTON—Today, the Institute for Justice (IJ) asked the U.S. Supreme Court to overturn one of the most reviled decisions in recent decades, Kelo v. New London. In Kelo, which was narrowly decided in 2005, the Court ruled against homeowners who were trying to protect their neighborhood from being bulldozed to make way for a new private development. In doing so, the Court allowed eminent domain to be used for private gain. Now, IJ has partnered with a landowner to ask the Court to take up a similar case in New York where a government agency seized a piece of land to provide private parking for a nearby private office building.
“The Constitution says the power of eminent domain is limited to public use,” said IJ Deputy Litigation Director Bob McNamara “But somehow in New York, ‘public use’ turns out to mean ‘giving it to a private owner we like better than you.’”
The reaction against Kelo was intense, sparking 47 states to amend their constitutions and pass laws preventing eminent domain from being used for private development. New York was among a handful of states that chose not to protect property owners.
Utica recently built a new, centrally located hospital. Across the street, the CNY Cardiology group put up a new building for itself and to rent offices. Bryan Bowers and his business partner Mike Licata heard that other doctors wanted an alternative to the cardiology building’s high rental rates. So, Bowers Development, LLC purchased 411 Columbia Street, right next door.
The cardiologists were not pleased to have competition cutting into their profits. They asked the Oneida County Industrial Development Agency (OCIDA) to use eminent domain to seize Bowers’ property so that they could use it for a parking lot. OCIDA obliged, claiming that the parking lot would create “improved job opportunities” even though there are multiple surface parking lots and a parking garage within easy walking distance.
“Taking our property wasn’t for the public; it was to benefit our competitors,” said Bryan Bowers. “New York’s abusive use of eminent domain should not stand under the U.S. Constitution. We hope that the Supreme Court rights a historic wrong and affirms that the government can’t take private property to benefit another private party.”
The power of eminent domain is found in the Fifth Amendment of the U.S. Constitution, which requires that property can only be taken for “public use” and with “just compensation.” Historically, this power was intended to allow the government to acquire land for essential public projects such as roads, schools, and infrastructure. However, in Kelo, the 5-4 majority held that creating jobs and increasing tax revenue was a “public use.” The dissent countered that this broad definition of public use made the power of eminent domain practically unlimited. Justice Sandra O’Connor wrote for the minority that “the government now has license to transfer property from those with fewer resources to those with more.”
The planned development of the Fort Trumbull neighborhood that led to the Kelo case ultimately fell through, as did other plans over the past two decades. Today, the neighborhood where Susette Kelo’s little pink house once stood remains mostly vacant, with a pricy community center under construction (which will pay no taxes, the original justification for the takings) and the city offering millions of dollars in tax incentives to finally lure a private developer to the peninsula.
“In the 20 years since Kelo, everyone from the person-on-the-street to legislators to highly respected judges have said it was wrong the day it was decided,” said IJ President and General Counsel Scott Bullock, who argued Kelo at the Supreme Court. “It is high time for the Supreme Court itself to join that chorus, remove this blot on its jurisprudence, and restore constitutional guardrails to the use of eminent domain.”
While this marks the first time IJ has asked the Supreme Court to overrule Kelo, it has continued to defend property owners from eminent domain abuse where it arises. Currently, IJ is defending small business owners in Missouri from blight designations that would allow their city to take property and give it to private developers. In Mississippi, IJ is defending homeowners from blight designations done in secret and that cannot be challenged under state law. And in Georgia, IJ is trying to stop a private railroad from taking homes that have been in some families for generations.