High Court Takes Up Eminent Domain Case

By Pete Yost

Associated Press

WASHINGTON D.C. — The Supreme Court struggled Tuesday to balance the rights of property owners against the goals of town officials who want to sweep away old neighborhoods and turn the land over to private developers.

Riverfront residents who are suing the town of New London say their working-class neighborhood is slated for destruction primarily to build an office complex that will benefit a pharmaceutical company that built its research and development headquarters nearby.

But an attorney representing the city, Wesley Horton, told the court the revitalization project will create new jobs and trigger much-needed economic growth. He said increased tax revenue is enough of a legal basis for the city to exercise the power of eminent domain and compel the residents to sell their homes.

If a city wanted to seize property in order to turn a “Motel 6 into a Ritz-Carlton, that would be OK?” Justice Sandra Day O’Connor asked.

“Yes, your honor, it would be,” Horton replied.

The justices expressed sympathy for the longtime residents. At the same time, they questioned whether they have the authority to stop the town’s plans.

The outcome could have significant implications.

In recent years, there have been more than 10,000 instances of private property being threatened with condemnation or actually condemned by government for private use, according to the Institute for Justice. The group represents the New London residents who filed the case.

Scott Bullock, representing the neighborhood residents, argued that government cannot take private property from one owner and provide it to another just because the new commercial project will boost the city’s finances. The city plans to give the developers a 99-year lease for a dollar a year.

“More than tax revenue was at stake,” Justice Ruth Bader Ginsburg replied. “The town had gone down and down” economically.

Justice O’Connor questioned whether the homeowners were asking the court to “second-guess” the governmental power of eminent domain.

The legal arguments concern the Fifth Amendment prohibition against taking private property for public use without just compensation. The city says it is willing to pay a fair price.

“You are paying for it, but you are taking it from somebody who doesn’t want to sell,” Justice Antonin Scalia told Horton, the lawyer representing New London.

Several justices focused on the residents’ argument that the court should impose standards for governments to meet when they want to sweep away neighborhoods for economic revitalization.

“A lot of times governments have no clue what they’re going to do with the property,” Dana Berliner, co-counsel for the neighborhood residents, said after the court arguments ended.

New London, a town of less than 26,000, once was a center of the whaling industry and later became a manufacturing hub. The revitalization project is a few miles downriver from the US Navy’s submarine base in Groton.

The starting point for Tuesday’s arguments was a Supreme Court ruling five decades ago that allowed governments to take private property for urban renewal.

The neighborhood’s lawyer, Bullock, seized on that case, contending there is a difference between the urban blight of 1954 and the current circumstance of an economically depressed town.

Justice Anthony Kennedy questioned Bullock’s position, with the justice saying that economically depressed areas can quickly become blighted areas.

Justice Ginsburg also wondered whether the urban renewal case offers much hope for the neighborhood. She pointed out that the issue in that case involved a department store that was not contributing at all to the blight in the area. The court nonetheless cleared the way for local government to take the department store’s property for the renewal project.

Chief Justice William Rehnquist, who is battling thyroid cancer, did not attend the arguments and will be absent for the next two weeks. He has not attended arguments since October. Justice John Paul Stevens was out of town and missed the day’s arguments.

The case is Susette Kelo v. City of New London and New London Development Corp., 04-108.