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A case that raises what property rights advocates say may be the most important land use issue in decades goes before the Supreme Court at its private conference Sept. 27. At issue in Kelo v. City of New London, Connecticut, No. 04-108, is whether governments, under their eminent domain power, may condemn property for the benefit of private developers rather than for such traditional public uses as roads or parks. The Court will announce soon after the conference whether it will review the case. With municipalities eager to generate higher tax revenues through redevelopment, more and more home owners nationwide are finding their unblighted properties seized and turned over to commercial and residential developers, says Dana Berliner, senior attorney at the Institute for Justice, which petitioned the Court in the case. “People get really angry when their homes are taken so that someone richer can live there,” she says. “Every house in the country would generate more tax revenue if it were turned into a bigger house or a Costco.” In a 2003 study, Berliner documented more than 10,000 condemnations for private-to-private transfers of property between 1998 and 2002. The institute represents Susette Kelo, who owns a home on the Thames River in New London, Conn. As part of an economic development plan to complement a new research facility for the Pfizer pharmaceutical company, the city wanted to obtain Kelo’s property and others nearby for a range of commercial and residential uses. The city authorized the private corporation that was developing the area to exercise eminent domain over property owners who did not agree to sell their plots. At one point the city argued the properties were blighted, but it has dropped that claim and now gives economic development as its reason for exercising eminent domain. When Kelo and other resisters took the city to court, Connecticut courts including the state Supreme Court upheld the city’s actions, setting the stage for high court review. Kelo’s petition argues that the city’s actions violate the Fifth Amendment to the U.S. Constitution, which allows government to take private property only for “public use” and with just compensation. The private benefit served by the condemnations in New London don’t qualify, the brief argues. “Eminent domain is one of the most awesome powers a government has at its disposal,” the institute’s brief for Kelo argues. “It is imperative that this court determine the limits on government’s eminent domain authority.” In opposition, the city’s brief tells the Court that New London had suffered economic reversals and was “desperate” for economic redevelopment. “Seen in the light of these dire circumstances, the rejuvenation of New London’s dying economy clearly is a public use,” wrote Wesley Horton of Horton, Shields & Knox in Hartford, who represents the city. The city also invoked the two key Supreme Court precedents in the area: the 1954 decision in Berman v. Parker and the 1984 decision in Hawaii Housing Authority v. Midkiff, both of which give broad deference to government determinations of what constitutes a public use and an “extremely narrow” role for courts in reviewing those determinations. But Berliner responds that Supreme Court review is needed to end the “chaos” in lower courts over what public use means. “It’s time,” she says. One recent decision in Michigan reached an opposite conclusion from the Connecticut ruling at issue in Kelo. The Michigan Supreme Court in July reversed its controversial 1981 ruling in Poletown Neighborhood Council v. City of Detroit, which allowed Detroit to condemn hundreds of properties for the benefit of General Motors. The Michigan court said it was rejecting the view that “a private entity’s pursuit of profit was a ‘public use’ for constitutional takings purposes simply because one entity’s profit maximization contributed to the health of the general economy.” An amicus brief filed to support Kelo also argues that the expansion of eminent domain has given unfair advantage to rich and powerful interests over poorer property owners. “Only this court can restore the ‘public use’ clause as an effective constitutional limit on the abuse of government power,” writes James Burling of the Pacific Legal Foundation. Joining in the brief were George Mason University economists James Buchanan, a 1986 Nobel Prize winner, and Gordon Tullock.

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