The Volokh Conspiracy

My new article “What if Kelo v. City of New London Had Gone the Other Way?” is now available on SSRN. It is part of an Indiana Law Review symposium on “What if? Counterfactuals in Constitutional History.” Here is the abstract:

Kelo v. City of New London is one of the most controversial decisions in U.S. Supreme Court history. The Kelo Court held that the Public Use Clause of the Fifth Amendment allows government to condemn private property and transfer it to other private parties for purposes of “economic development.” This Article considers the question of what might have happened if the Supreme Court decided Kelo v. City of New London in favor of the property owners. Such counterfactual analysis may seem frivolous. But it is, in fact, useful in understanding constitutional history. Any assessment of the impact of a legal decision depends on at least an implicit judgment as to the likely consequences of a ruling the other way. Analysis can be improved by making these implicit counterfactual assumptions clear and systematically considering their implications.

Part I briefly describes the Kelo case and its aftermath, focusing especially on the massive political backlash. That backlash led to numerous new reform laws. However, many of them turned out to be largely symbolic. Part II discusses the potential value of a counterfactual analysis of Kelo. It could help shed light on a longstanding debate over the effects of Supreme Court decisions on society. Some have argued that court decisions have little impact, mostly protecting only those rights that the political branches of government would protect of their own accord. Others contend that this pessimistic view underrates the potential effect of Supreme Court decisions.

Part III considers the possible legal effect of a ruling in favor of the property owners. Such a decision could have taken several potential forms. One possibility is that the Court could have adopted the view advocated by the four Kelo dissenters: that economic development condemnations are categorically forbidden by the Public Use Clause. This would have provided strong protection to property owners and significantly altered the legal landscape. On the other hand, the Court could easily have decided in favor of the property owners on one of two narrower grounds. Such a ruling would have led to much weaker protections for property owners.

Part IV weighs the potential political impact of a decision favoring the property owners. Such an outcome might have forestalled the massive political backlash that Kelo caused. Ironically, a narrow ruling in favor of the owners that did not significantly constrain future takings might have left the cause of property rights worse off than defeat did. On the other hand, a strong ruling categorically banning economic development takings would likely have done more for property rights than the backlash did, especially considering the uneven nature of the latter. Furthermore, political movements sometimes build on legal victories, as well as defeats, as happened in the case of the Civil Rights movement in the wake of Brown v. Board of Education. It is possible that property rights advocates could have similarly exploited a victory in Kelo.

In a recent Wall Street Journal interview, retired Justice John Paul Stevens defended his controversial majority opinion in Kelo v. City of New London, which ruled that it was permissible for government to condemn private property for transfer to private parties in order to promote “economic development.” The Court ruled that this was a permissible “public use” under the Fifth Amendment. Stevens was particularly critical of Justice Sandra Day O’Connor’s dissenting opinion, which he claims contradicted her earlier opinion in Hawaii Housing Authority v. Midkiff

Stevens’ critique of O’Connor is not entirely without merit. In Midkiff, O’Connor wrote a majority opinion concluding that pretty much any rationale for a taking qualifies as a public use so long as it is “rationally related to a conceivable public purpose.” In Kelo, O’Connor dismissed this as merely “errant language.” But as Ben Barros has shown, it was actually deliberately inserted in the Midkiff opinion (O’Connor refused to take it out even after Justice Lewis Powell warned her that it would license virtually unconstrained takings).

That said, Stevens is wrong to suggest that the Court’s only options were either to overrule Midkiff and Berman v. Parker, or uphold the Kelo takings. Justice O’Connor’s dissent draws a perfectly reasonable distinction beween takings that eliminate some preexisting harm (severe blight in Berman, a supposed oligopoly in the property market in Midkiff), versus those that just seek to create some future public benefit. In the former case, there may be less danger that a taking that transfers property to a private party is just a scheme to benefit the new owner, since the public objective can be achieved simply by terminating the previous harmful use of the land. Many state supreme courts have adopted a similar approach under their state constitutions, permitting private-to-private takings for the purpose of eliminating severe blight, but forbidding them in most other situations.

It is not unusual for the Supreme Court to significantly narrow the scope of a precedent without completely overruling it. For example, the Supreme Court’s recent decisions in the Guantanamo cases narrow but do not overrule World War II-era precedents such as Korematsu and Quirin, which apply broad deference to the executive on wartime military decisions. Stevens voted with the majority in all those cases. Justice Stevens himself is the author of the Court’s decision in Gonzales v. Raich, which severely undercut its previous decisions in Lopez and Morrison, but did not overrule them completely. Like Justice Clarence Thomas, I wish the Court had overruled Berman and Midkiff completely. But I can understand why Justice O’Connor (along with Scalia and Chief Justice Rehnquist), preferred a more cautious approach.

It’s also worth noting that Stevens’ Kelo opinion misinterprets precedent at least as much as O’Connor’s did. For example, Stevens claimed that his position was supported by “a century” of precedent. But, as I explained in this article (pp. 240-44), all but the two most recent of those cases did not involve the Public Use Clause of the Fifth Amendment. They addressed challenges to takings brought under the Due Process Clause of the Fourteenth Amendment. Stevens also draws a distinction between takings that are part of a redevelopment plan and stand-alone “one-to-one” takings, claiming that broad judicial deference to the government is particularly appropriate in the former scenario, because the planning process protects property owners against abusive condemnations. However, as I explain here (pp. 228-29), the California district course he cites as a paradigmatic example of a “one-to-one” taking actually involved a redevelopment plan. This last mistake is more than just a minor technical error. Getting it right might have helped Stevens and the other majority justices understand that nearly all economic development takings occur in the context of redevelopment plans, and that the existence of a plan provides little or no protection against the use of eminent domain for the benefit of private interests. Influential interest groups routinely use the planning process to their advantage, as the Pfizer Corporation did in Kelo itself. Recognizing this might not have changed Stevens’ mind; but only one of the five majority justices would have had switch his or her vote for the case to have gone the other way.

Justice Stevens’ retrospective on Kelo is an interesting counterpoint to those of Justice Scalia and Connecticut Supreme Court Justice Richard Palmer. He makes some reasonable criticisms of the dissenting justices’ treatment of precedent. Perhaps in the future he will be equally forthcoming about his own similar mistakes.

UPDATE: As commenter “Steve” points out, I was wrong to suggest in my article that the Court did not mention the Public Use Clause of the Fifth Amendment in the 1896 case of Fallbrook Irrigation Dist. v. Bradley. The Court did mention it, but only to point out that it did not apply to the states:

There is no specific prohibition in the federal constitution which acts upon the states in regard to their taking private property for any but a public use. The fifth amendment, which provides, among other things, that such property shall not be taken for public use without just compensation, applies only to the federal government, as has many times been decided.

I am sorry I made this mistake, and grateful to the commenter for pointing it out. But getting it right would have actually strengthened my point.

As I noted in the article linked in my original post, the late nineteenth and early 20th century Supreme Court did consider challenges to state takings under the Due Process Clause of the Fourteenth Amendment. But it did so under a much more deferential standard of review than in the rare cases where it recognized that the Fifth Amendment does apply because the taking in question was conducted by the federal government.

The WSJ‘s Jess Bravin reports on an interview with recently retired Justice John Paul Stevens in which he defended his “most unpopular opinion” — Kelo v. New London — from recent criticism by Justice Antonin Scalia (see here and here).

“It’s the most unpopular opinion I ever wrote, no doubt about it,” Justice Stevens said in an interview. He said he empathized with Ms. Kelo, “but the legal issue would have been exactly the same if it had been a gas station or a pool hall.” . . .

“I had people at a bridge game stop me and ask, ‘How could you have written that opinion? We thought you were a good judge, but we learned otherwise,’ ” he said. “But you can’t explain the whole law of eminent domain to your bridge opponents.”

He particularly criticized the logic of Justice Sandra Day O’Connor, who wrote the 1984 opinion supporting eminent domain in Hawaii and then turned around to write a passionate dissent in favor of Ms. Kelo. . . .

Justice Stevens suggested that Justice Scalia’s view on Kelo had hardened over the years. When the decision came down, “Clarence wrote an intellectually honest opinion,” Justice Stevens said, referring to a dissent by Justice Clarence Thomas. “He said you’ve got to go back and overrule this whole line of cases, which would be a fairly dramatic thing.”

But Justice Scalia “did not join the opinion that would have overruled that. Rather, he joined Sandra’s,” Justice Stevens said.

FWIW, I’ve never been convinced that the Kelo dissenters are correct as a matter of constitutional law. While I think the use of eminent domain by the city of New London was horrendous policy, and I fully support efforts to constrain such eminent domain abuse through legislation and state constitutional amendments, I am not convinced such actions are barred by the Fifth Amendment, as I explained here and here.

In a recent public appearance, Justice Antonin Scalia predicted that Kelo v. City of New London will eventually be overruled, perhaps soon [HT: George Mason law student Michael Mortorano]:

Scalia predicted the court’s 2005 “Kelo” decision saying local governments can take take property from one owner to give to a developer will be reversed someday.

“I do not think that the Kelo opinion is long for this world,” Scalia said. “My court has, by my lights, made many mistakes of law during its distinguished two centuries of existence. But it has made very few mistakes of political judgment, of estimating how far … it could stretch beyond the text of the constitution without provoking overwhelming public criticism and resistance. Dred Scott [legalizing slavery [note: Dred Scott did not actually "legalize" slavery, which was already legal in many states; it prevented Congress from forbidding it in federal territories, though states were still permitted to ban it - IS]] was one mistake of that sort. Roe v Wade [legalizing abortion] was another … And Kelo, I think, was a third.”

I am somewhat less certain than Scalia that Kelo will be overruled. However, I still think there’s a good chance. If anything, the controversy generated by Kelo makes it more likely that the Court will rethink its highly permissive Public Use jurisprudence than if the Supreme Court had never taken the case. Before Kelo, most experts thought that the Fifth Amendment’s Public Use Clause was virtually a dead letter because two unanimous Supreme Court decisions had declared that almost any “public purpose” endorsed by the legislature counts as a public use. Kelo, however, was a close 5-4 decision that generated widespread controversy far beyond the small group of experts who normally follow takings decisions. Even many defenders of Kelo had to admit that the meaning of “public use” was now once again open to serious debate.

Kelo also got a hostile reception from many state courts, who repudiated it as a guide to the interpretation of their state constitutional public use clauses. More broadly, both legal elites and the general public have become more sympathetic to property rights over the last twenty to thirty years. This trend, especially if it continues, makes it more likely that Scalia’s prediction will turn out to be prescient.

On August 12, I testified at a US Commission on Civil Rights hearing on the “Civil Rights Implications of Eminent Domain Abuse.” The video of the oral testimony is available here. I have now made my more detailed written testimony available online here. Here is the Introduction, which includes a summary of the rest [footnotes omitted]:

I am grateful for the opportunity to address the important issue of the impact of eminent domain on racial and ethnic minorities. I would like to thank Chairman Castro, Vice Chair Thernstrom, and the other commissioners for their interest in this vital question. As President Barack Obama aptly put it, “[o]ur Constitution places the ownership of private property at the very heart of our system of liberty.” The protection of property rights was one of the main purposes for which the Constitution was originally adopted. Unfortunately, the Supreme Court has often relegated property rights to second class status, giving them far less protection than that accorded to other constitutional rights. And state and local governments have often violated those rights when it seemed politically advantageous to do so.

Americans of all racial and ethnic backgrounds have suffered from government violations of constitutional property rights. But minority groups have often been disproportionately victimized, sometimes out of racial prejudice and at other times because of their relative political weakness. Minorities are especially likely to be victimized by private to private condemnations that test the limits of the Public Use Clause of the Fifth Amendment, which requires that property can only be condemned for a “public use.” These include takings allegedly justified by the need to alleviate “blight” and promote “economic development.”

Part I of my testimony briefly surveys the constitutional law of eminent domain and public use. It documents the extent to which the Supreme Court has given condemning authorities a near-blank check to take property for whatever purposes they want.

Part II examines the impact of blight and economic development condemnations on minority groups. Both types of takings often victimize racial and ethnic minorities. Although such condemnations are defended on the grounds that they are needed to promote economic growth in poor communities, they often destroy far more wealth than they create. Economic development can be better promoted by other, less destructive means. African-Americans and Hispanics are targeted more often than other groups in large part because of their relative political weakness and comparatively high poverty rates. While, certainly, not all members of these groups are poor or politically weak, a disproportionately large number are.

Finally, in Part III I explain why the problem of abusive takings persists despite the wave of state reform laws adopted in response to the Supreme Court’s unpopular decision upholding economic development takings in Kelo v. City of New London. Many of the new laws actually impose little or no constraint on economic development takings. Even those that do impose meaningful restrictions usually still allow private-to-private condemnations in the types of “blighted” areas where many poor minorities live. Although post-Kelo reforms are a step in the right direction, much remains to be done before the property rights of poor minorities are anywhere close to fully protected.

UPDATE: Various commenters ask why this should be considered a “civil rights” issue and why it should matter whether there is a disproportionate impact on minorities. My answer is that property rights are in fact a major part of the “civil rights” that the framers and ratifiers of the Fourteenth Amendment sought to protect. And they particularly wanted to ensure their protection for African-Americans, whose property rights were at the time threatened by southern state governments. The disproportionate impact on minorities also matters because it is in part the result of past and (to a lesser extent) present racism, as is also the political weakness that makes it easier for even unbiased local governments to target the poor minority neighborhoods. It is not my view that the disproportionate impact on minorities is the only or even the most important aspect of this issue. But it’s certainly worth considering, and well within the mandate of the Commission on Civil Rights.

In the Hartford Courant, journalist Jeff Benedict, author of a major account of the Kelo case, reports on an interesting encounter last year, where Connecticut Supreme Court Justice Richard Palmer apologized to Susette Kelo for voting to uphold the the taking of her home for “economic development” [HT: Cory Andrews]:

If a state Supreme Court judge approaches a journalist at a private dinner and says something newsworthy about an important decision, is the journalist free to publish the statement?

I faced that situation at a dinner honoring the Connecticut Supreme Court at the New Haven Lawn Club on May 11, 2010. That night I had delivered the keynote address on the U.S. Supreme Court’s infamous 5-4 decision in Kelo v. New London. Susette Kelo was in the audience and I used the occasion to tell her personal story, as documented in my book “Little Pink House.”

Afterward, Susette and I were talking in a small circle of people when we were approached by Justice Richard N. Palmer. Tall and imposing, he is one of the four justices who voted with the 4-3 majority against Susette and her neighbors. Facing me, he said: “Had I known all of what you just told us, I would have voted differently.”

I was speechless. So was Susette. One more vote in her favor by the Connecticut Supreme Court would have changed history. The case probably would not have advanced to the U.S. Supreme Court, and Susette and her neighbors might still be in their homes.

Then Justice Palmer turned to Susette, took her hand and offered a heartfelt apology. Tears trickled down her red cheeks. It was the first time in the 12-year saga that anyone had uttered the words “I’m sorry.”

It was all she could do to whisper the words: “Thank you.”

Then Justice Palmer let go of her hand and walked off.

Justice Palmer’s statement is yet another indication that, at least at the state level, many judges have become more skeptical about economic development takings since Kelo was decided by the Connecticut Supreme Court in 2004 and the US Supreme Court in 2005. I document that skepticism more systematically in this article on the judicial reaction to Kelo.

In a later interview with Benedict, Justice Palmer partially retracted his apology:

Justice Palmer sent me a “personal and confidential” letter dated Nov. 8, 2010. In it he didn’t dispute my account. Nor did he ask me not to publish. Rather, he provided some important context.

“Those comments,” he wrote, “were predicated on certain facts that we did not know (and could not have known) at the time of our decision and of which I was not fully aware until your talk — namely, that the city’s development plan had never materialized and, as a result, years later, the land at issue remains barren and wholly undeveloped.” He later added that he could not know of those facts “because they were not yet in existence….”

Q: Looking back at the Kelo decision (by the Connecticut Supreme Court), how do you see it now? In other words, has it led to good law?

A: I think that our court ultimately made the right decision insofar as it followed governing U.S. Supreme Court precedent. Whether the Kelo case has led to good statutory law is not a question for me or my court; so long as that law is constitutional, its merits are beyond the scope of our authority. Of course, judges are also citizens and, therefore, we may hold a view on the merits, but that view should not interfere with or affect our legal judgment concerning the law’s constitutionality.

Justice Palmer lets himself off the hook too easily. It is true that the justices could not have known for certain that the Kelo condemnations would fail to produce the economic development that supposedly justified the use of eminent domain in the first place. But they could and should have known that such results have often occurred in similar cases, that the New London development plan justifying these particular condemnations was flimsy, and that there was no legal requirement compelling either the city of New London or the new private owners of the condemned property to produce enough development to offset the destruction caused by the takings. Some of these points were in fact noted in Justice Zarella’s dissenting opinion in the Connecticut Supreme Court. As he put it:

In my view, the development plan as a whole cannot be considered apart from the condemnations because the constitutionality of condemnations undertaken for the purpose of private economic development depends not only on the professed goals of the development plan, but also on the prospect of their achievement. Accordingly, the taking party must assume the burden of proving, by clear and convincing evidence, that the anticipated public benefit will be realized. The determination of whether the taking party has met this burden of proof involves an independent evaluation of the evidence by the court, with no deference granted to the local legislative authority. In the present case, the evidence fails to establish that the foregoing burden has been met….

The record contains scant evidence to suggest that the predicted public benefit will be realized with any reasonable certainty. To the contrary, the evidence establishes that, at the time of the takings, there was no signed agreement to develop the properties, the economic climate was poor and the development plan contained no conditions pertaining to future development agreements that would ensure achievement of the intended public benefit if development were to occur.

The evidence Justice Zarella relied on was also available to the majority justices. In fact, the latter did not dispute that evidence, but concluded that most of it was irrelevant to the question of whether the taking really promoted a “public use,” as required by the state and federal constitutions. They held that courts should not consider the actual economic costs and benefits of takings. This despite the logical point that even if “economic development” qualifies as a public use, it surely cannot justify a taking that doesn’t actually produce any economic development or is not likely to do so.

Justice Palmer is right that previous US Supreme Court precedent probably justified the takings under the federal constitution. Only the federal Supreme Court could reverse or narrow those earlier decisions. However, the Connecticut Supreme Court was applying not only the federal Public Use Clause but also that of the Connecticut state constitution. The latter is not controlled by federal Supreme Court precedent. Indeed, long before Kelo, many state supreme courts interpreted their state public use clauses more restrictively than the federal Supreme Court interpreted the Public Use Clause of the Fifth Amendment. The Connecticut Supreme Court could and should have done the same thing in Kelo.

UPDATE: It is not entirely clear whether Justice Palmer now believes that the court was justified in upholding the taking under the Connecticut state Public Use Clause. His statement that he and the other majority justices “made the right decision insofar as [they] followed governing U.S. Supreme Court precedent” could be interpreted to mean that they were wrong on those aspects of the case that were not governed by US Supreme Court precedent, including the question of whether the New London takings were justifiable under the Connecticut Constitution.

The Hartford Courant reports that Brooke Shields will star as Susette Kelo in a TV movie based on the notorious Kelo v. City of New London property rights case [HT: Cory Andrews]. The movie will be based on Jeff Benedict’s excellent journalistic account of the case, Little Pink House: A True Story of Defiance and Courage, which I reviewed here.

UPDATE: Timothy Sandefur notes that the really important question is who will play the amici. Also, who is going to play the authors of amicus briefs cited by the Court, such as this one? We all know that these characters should be the real heroes of the story! I’m holding out for Brad Pitt to play me.

Earlier today, I testified before the US Commission on Civil Rights at a hearing on the “Civil Rights Implications of Eminent Domain Abuse.” The other panelists were Georgetown law professor Peter Byrne, Hilary Shelton of the NAACP, and David Beito, a prominent historian and chair of the Alabama State Advisory Committee to the USSCR. A C-SPAN video of the event is available here.

I have previously written about the negative impact of blight and economic development takings on the minority poor here. I also discuss the issue in my recent article on “Federalism and Property Rights.”, where I point out that the political weakness of the minority poor who are the most common victims of eminent domain weakens the case for leaving property rights issues to the discretion of local political processes.

My recently published article “Federalism and Property Rights” is now available on SSRN. It’s part of the University of Chicago Legal Forum Symposium on Governance and Power. Here is the abstract:

Both the Supreme Court and leading legal scholars have often cited federalism as a reason to severely limit federal judicial enforcement of constitutional property rights. Defenders of the federalism rationale for judicial deference on property rights issues make two key arguments. One holds that abuses of property rights by state or local governments will be curbed by interjurisdictional competition, rendering judicial intervention unnecessary. The second is the superior knowledge and expertise of state and local governments relative to federal judges.

This article criticizes both claims. Part I explains why competitive federalism is unlikely to provide effective protection for property rights in land because property is an immobile asset. People who “vote with their feet” by leaving a jurisdiction cannot take their land with them. For this crucial reason, interjurisdictional competition will often fail to effectively protect property rights in land, though it may be more useful in the case of rights to mobile property.

Part II takes up the issue of diversity and expertise. While state and local governments may indeed have greater expertise than federal courts in assessing local conditions, federal judicial protection of property rights ultimately empowers not judges but property owners. It is the latter who will actually get to decide the uses of the land in question in cases where federal courts prevent state or local governments from condemning their property or restricting its use. Owners generally have greater knowledge of their land than local government officials do. Moreover, the local expertise rationale for judicial deference on property rights would, if applied consistently, justify judicial deference to state and local governments with respect to numerous other constitutional rights, including those protected by the First and Fourth Amendments.

Blogosphere mavens might be interested to learn that this is the first major article I wrote that was inspired by a blog post, specifically this exchange with NYU law professor Rick Hills (who is one of the “leading legal scholars” mentioned in the abstract). Although we continue to disagree on this issue, I’m grateful to Rick for the inspiration, and for his very helpful comments on the paper.

My article “The Judicial Reaction to Kelo” is now available on SSRN. It is the Introduction to the Albany Government Law Review Symposium on Eminent Domain in the United States, which includes contributions by several well-known eminent domain scholars including my colleague Steve Eagle, Amy Lavine, and David Schultz, among others.

Here is the abstract:

Kelo v. City of New London was one of the most controversial decisions in Supreme Court history, generating a massive political backlash that led 43 states to adopt eminent domain reform laws restricting economic development takings of the kind the Court ruled were constitutional. In addition to the better-known legislative reaction, Kelo was also followed by extensive additional property rights litigation in both federal and state courts. This is the first article to systematically analyze the judicial reaction to Kelo.

Part I briefly summarizes Kelo and its holding. Part II considers state court interpretations of their state constitutional public use clauses since Kelo. Most of these cases have repudiated Kelo, either banning economic development takings outright or significantly constraining them. Part III considers judicial interpretations of Kelo’s “pretext” standard. This is the one area where Kelo might potentially permit nontrivial public use constraints on condemnation. Kelo indicated that condemnations are unconstitutional if the officially stated rationale for the taking is a pretext “for the purpose of conferring a private benefit on a particular private party.” State and lower federal courts have not come to any consensus on what qualifies as a pretextual taking. Nevertheless, several decisions suggest that the pretext standard may have some bite.

Overall, state courts have taken a skeptical view of Kelo, often rejecting it as a guide to the interpretation of their state constitutions. This reaction continues the pre-Kelo trend of increasing judicial protection for property rights at the state level.

This article is a companion piece to my previous work assessing the much better-known political reaction to Kelo.

This Wednesday, I will be giving two talks in Madison, Wisconsin. One, sponsored by the Federalist Society Lawyers Division, will be at a panel on the Obamacare individual mandate litigation. The other two panelists are Wisconsin Attorney General J.B. Van Hollen (Wisconsin recently became one of the 28 states challenging the mandate in court) and Democratic state representative Jon Richards, who will defend the constitutionality of the mandate. It will be held at 11:30 AM. Logistical details available here.

My second talk will be at 6 PM at the University of Wisconsin Law School, in the Lubar Commons, and is sponsored by the Law School student Federalist Society chapter. It will be about Kelo v. City of New London, post-Kelo eminent domain reform, and recent judicial decisions on takings, especially the two big New York Court of Appeals decisions (the Atlantic Yards and Columbia cases).

VC readers are more than welcome to come to either or both events!

The December 2010 issue of Engage features not one but two items written by members of the Somin family: a debate on Kelo v. City of New London and eminent domain reform between University of Chicago Law Professor (and former Dean) Saul Levmore and myself; and an article on Title IX and women’s sports written by my wife Alison, who is a special assistant at the US Commission on Civil Rights.

The debate between Dean Levmore and myself was held at the University of Chicago in February. A podcast of the entire debate (including audience questions not reprinted in Engage) is available here.

There is some irony in the fact that Alison is the first of the two us to publish an article about sports, even though I am a big sports fan, and she – to greatly understate the contrast – definitely isn’t. I will have to publish a sports article of my own as soon as possible in order to restore my standing as the resident sports geek in our household.

Although conspiracy theorists (perhaps even Volokh Conspiracy theorists) will never believe it, the appearance of our two pieces in the same issue of Engage is entirely coincidental. The journal editors asked me for permission to publish the debate with Dean Levmore long after Alison’s article was already in the pipeline. But of course that’s exactly what conspiracy-mongers would expect me to say in order to divert attention away from the successful completion of the first stage of the Somin clan’s plan for world domination!

Sadly, the Supreme Court has refused to hear the Columbia University blight takings case. This New York state supreme court decision was a particularly egregious instance of the abuse of “blight” condemnations to take property that was not blighted in any meaningful sense and transfer it to a powerful private interest group. I wrote an amicus brief on behalf of the Cato Institute, Institute for Justice, and the Becket Fund for Religious Liberty urging the Court to take the case. As we pointed out in the brief, the case represented a valuable opportunity for the Court to clear up the massive confusion in state and federal courts over the issue of what qualifies as an unconstitutional “pretextual taking” – a condemnation where the official rationale is a mere pretext for a scheme to benefit a private party. Even in Kelo v. City of New London, the Supreme Court emphasized that such pretextual takings are still forbidden by Public Use Clause of the Fifth Amendment. But it gave very little guidance on the question of what counts as “pretextual.”

I share Megan McArdle’s frustration about the Court’s refusal to take the case. But I do quarrel somewhat with her lament that “this is an issue that only fires up libertarians.” Among the amicus briefs urging the Court to take the case was this one, by liberal Democratic New York state Senator Bill Perkins, a prominent critic of eminent domain abuse in the state. The Becket Fund, one of my own clients in this case, is certainly not a libertarian organization. More broadly, among those strongly opposing the Kelo decision were such liberal groups and activists as the NAACP, the Southern Christian Leadership Conference, Ralph Nader, Howard Dean, and Representative Maxine Waters, as well as various conservatives. It is certainly true that libertarians have been the leaders in the campaign to protect property rights against eminent domain. But concern about the issue is hardly limited to us, and it is not too late to form a broad cross-ideological coalition to address it.

Kelo v. City of New London, which ruled that government has the power to forcibly transfer property from one private owner to another in order to promote “economic development,” was one of the most unpopular decisions in the history of the Supreme Court. Polls conducted soon after the decision was issued in 2005 found that over 80% of the public opposed it.

Recent survey data compiled by Stephen Ansolabehere and Nathaniel Persily as part of a general study of public attitudes on constitutional issues sheds new light on public attitudes towards Kelo. The study, which is based on a poll taken in July 2009, finds that the public remains just as strongly opposed to economic development takings as in 2005. But it also indicates considerable public ignorance about the Court’s decision.

Question 215 in the 2009 survey asked respondents the following:

Governments sometimes use the power of eminent domain to acquire a person’s property at a fair market price for other uses. Recently, a local government transferred someone’s property to private developers whose commercial projects could benefit the local economy. Do you think the local government should be able to use eminent domain for this purpose or not?

This wording is quite favorable to the pro-Kelo side. It mentions the rationale for the taking (“benefit [to] the local economy”) and notes that the owners will get a “fair market price.” Respondents who are not experts in this field might believe that the latter actually means a “fair price” that takes account of the full extent of the owners’ losses, even though it only actually means “fair market value,” which is often not enough to fully compensate owners for the loss of “subjective value.” On the other hand, the question doesn’t mention any of the arguments against such takings, such as the strong likelihood that they will destroy more economic value than they create. Nonetheless, 81% of respondents said that government “should not be able” to engage in economic development takings, while only 16% concluded that it should have the power to do so. There was little disagreement between respondents with different partisan commitments or ideologies. This is almost exactly the same result as in the 2005 surveys. It suggests that public opposition to economic development takings is not a temporary artifact of the Kelo backlash, nor is it the product of question wording that favors opponents.

On the other hand, Question 301 in the same survey found that only 42% realized that the Court ruled that economic development takings were permissible, while 14% thought that the Court had ruled the other way and 43% were not sure. These figures likely overstate the true degree of public knowledge of Kelo because some people probably hit on the right answer by guessing without actually knowing it (a random guesser had a 50% chance of getting the right result). Previous research shows that a substantial minority of survey respondents prefer to guess rather than admit ignorance. Individuals who don’t even know which way the Court ruled in Kelo are probably also unlikely to keep track of post-Kelo reforms. As I argued in this article, this kind of public ignorance helps explain why so many of the latter have been ineffective. A 42% rate of correct answers is higher than we would get for most Supreme Court decisions. It also beats the mere 21% who knew (in a 2007 survey) whether their states had enacted post-Kelo reforms, and the mere 13% who both knew that and whether their state’s reforms were likely to be effective. But the 42% figure is still unimpressive for a ruling that drew such widespread press coverage and political opposition.

I do not believe that the strong public opposition to Kelo by itself proves that the case was wrongly decided or even that economic development takings are bad policy. After all, I have repeatedly argued elsewhere that public political attitudes are often the result of ignorance and irrationality. Nonetheless, the depth and persistence of public opposition to economic development takings is interesting, as is the extent to which it is coupled with widespread ignorance about the issue.

I recently wrote an amicus brief urging the Supreme Court to hear the Columbia University blight takings case, on behalf of the Institute for Justice (the public interest law firm that litigated Kelo v. City of New London, among many other important property rights cases), The Becket Fund for Religious Liberty, and the Cato Institute. The brief is available here. As I explained in this post, the New York Court of Appeals’ decision in the Columbia case is an extreme example of a very common problem: the use of dubious “blight” condemnations to transfer property from the politically weak to the locally powerful interest groups – in this case a major university.

The case also represents an important opportunity for the Court to address a major unresolved issue in eminent domain law. In Kelo, the majority ruled that “economic development” counts as a public use that justifies the use of eminent domain to transfer property to private parties. But the Court also noted that “pretextual” takings – condemnations where the official rationale is “a mere pretext…. when [the] actual purpose was to bestow a private benefit” – are unconstitutional. Unfortunately, the Court was extremely unclear about what qualifies as a pretextual taking. As we explain in Part I of the brief, lower federal courts and state supreme courts have been all over the map in trying to develop rules for what counts as a pretext. The New York Court of Appeals decision in the Columbia case is at an extreme end of a continuum, defining pretext so narrowly that it is almost impossible to imagine a successful pretext case. Other courts – including the supreme courts of Pennsylvania, Hawaii, Rhode Island, and the District of Columbia, and the federal Ninth Circuit – have defined pretext more broadly. But they disagree among themselves about what kind of evidence matters.

The Columbia case is particularly notable because it features all four of the factors that the Supreme Court and various lower courts have said might prove the presence of a pretextual taking: evidence of pretextual motive, benefits that flow primarily to a private party, an identifiable private interest that benefited from the taking whose identity was clear in advance, and the absence of a thorough and unbiased planning process. For details, see pp. 12-18 of the brief. For this reason, it’s a great opportunity for the Supreme Court to determine how important each factor is, and establish a clear rule for lower courts to follow.

Legal journalist Damon Root, who has written several articles about the case, has a good discussion of its connection to the pretext issue here (though he errs slightly in regarding Justice Kennedy’s concurring opinion in Kelo as binding, since Kennedy also joined the majority opinion; regardless Kennedy is certainly a key swing voter on property rights issues).

Ilya Shapiro (no relation), who helped out with the brief on behalf of Cato, has a post about it here.

UPDATE: The Pacific Legal Foundation has also filed a brief urging the Supreme Court to hear this case. It is available here.

For those who might be interested, I will be speaking at Lewis & Clark Law School in Portland, Oregon tomorrow. The topic is my work on Kelo v. City of New London and post-Kelo eminent domain reform. I will also touch briefly on post-Kelo developments in state constitutional law on public use issues, including the Atlantic Yards and Columbia University decisions, the two important recent eminent domain cases decided by the New York Court of Appeals.

The talk will start at noon in Room 2.

In an exchange with Republican Senator Charles Grassley yesterday, Elena Kagan made some interesting comments on property rights and the controversial Kelo decision:

GRASSLEY: …. I want to start with private property.

The takings clause of the Fifth Amendment states, “Nor shall private property be taken for public use without just compensation.” The plain language of the Constitution says an individual’s property shall not be taken for public use.

Yet, the majority of the Supreme Court case in Kelo wrote that the government could take a person’s private property for public purpose, not using the word “use,” which they determined included private redevelopment of land.

Do you believe that the Supreme Court correctly decided the Kelo case or do you believe that the Supreme Court improperly undermined constitutionally protected private property rights?

KAGAN: Senator Grassley, it was obviously a very controversial decision that has inspired a great deal of action in the state legislatures.

I’ve — I’ve — I’ve not commented on particular cases, I’ve not graded cases, but a few thoughts about Kelo.

Of course, what — what the — what the court in Kelo did was to say that the question of public use was not necessarily use by the public, but instead was use for a public purpose. And the court said that in the context of a taking of property that was done pursuant to a broad-scale urban development plan.

So I think it remains an open question whether that public purpose test would apply in any other context without such a broad- scale urban development plan…..

It’s also true — it’s also true that in some sense what the — what the — what the court did in this area when it said this was to kick the question back into the political process. In other words, the court didn’t say, of course, that the government had to do such takings. What the government said was that a state was permitted to do so.

And what states have done in the wake of that decision, in a — in a — in a very striking manner, I think, is to say, “Thanks, but no thanks, you know. We don’t want that power. We don’t want to be — we don’t want to do this. We think doing this, taking property from one person to give it to another person, even in the context of a broad redevelopment plan, is not appropriate public policy.”

And so a number of states, I know — I don’t know the exact number, but quite a number — have passed these kinds of anti-Kelo legislation, which makes sure that the — that the question never arises because the state government doesn’t try to effect such a taking in the first instance…..

GRASSLEY: Under Kelo, the court said that the pretextual (ph) takings are still unconstitutional violation of public use doctrine. Could you give me an example of a condemnation that’s an unconstitutional pretextual (ph) taking?

KAGAN: Gosh, you know, I don’t remember that exact line from Kelo. So I’m a little bit guessing as to the context.

But I think probably what the court meant was a taking that the government does not truly to serve a public purpose, but instead more to give the property to another individual person, the kind of Calder v. Bull scenario, take property from A, give it to B, under the guise of a public purpose.

So I would think that that’s what the court meant, although I don’t recall that exact statement. And I think that that also would provide a limit of the kind you’re speaking about on the doctrine.

GRASSLEY: Can you think of any areas where, in your opinion, the Supreme Court has failed to provide adequate protection of constitutional property rights? And if you can think of any, then I’d like to know examples — or an example.

KAGAN: Well, you know, I’ve tried very hard, Senator Grassley, not to suggest where I see deficiencies with — in — in — in the court’s handling of cases. So I think, you know, I think I won’t answer that question with that degree of specificity.

I mean, it is quite clear that the — that the Constitution does in various ways, and most notably by the takings clause, protect property rights, and that the job of the courts in — with respect to those rights, as any other, is to ensure that government does not overstep its proper bounds.

GRASSLEY: The president who appointed you, in “Audacity For Hope,” his book, said our Constitution places the ownership of private property at the very heart of our system of liberty. Do you agree with that statement?

KAGAN: Well, I do think that property rights are a foundation stone of liberty, that the two are intimately connected to each other in our society and in our history.

I. A Sign of Progress for Property Rights.

Unlike Sotomayor, Kagan does not have an extensive prior record on property rights. The fact that these issues came up in her hearings nonetheless is a further step forward for property rights, on the heels of the extensive questioning of Sotomayor on that subject. Property rights has now become a subject that any Supreme nominee must address. That is a small but genuine sign of progress.

I am happy that Kagan believes that “property rights are a foundation stone of liberty” and that “the job of the courts.. with respect to [property] rights, as any other, is to ensure that government does not overstep its proper bounds.” At the same time, I’m not optimistic that this means she will go against the Court’s oft-repeated pattern of giving property rights far less protection than other enumerated constitutional rights.

II. Kagan’s Discussion of Kelo.

Kagan’s comments on Kelo are reasonable and largely accurate. It’s a substantial improvement over Sonia Sotomayor’s mischaracterizations of the decision during her testimony last year (see here and here).

However, I do have a few bones to pick. First, it is slightly incorrect to state that Kelo said that the “public purpose” test applies only to cases involving “a broad-scale urban development plan.” The Kelo majority opinion was quite clear in stating that the test applies to all takings. Kagan was probably confused by the majority’s statement that “a one-to-one transfer of property, executed outside the confines of an integrated development plan” might not deserve as much judicial deference as one that is part of a plan. However, as the Court emphasized, the “public purpose” test applies even to these types of cases; it’s just that courts might not be as deferential to the government’s claim that a public purpose existed.

Much more importantly, Kagan was wrong to suggest that the existence of a “development plan” is a meaningful constraint on the scope of condemnation authority under Kelo. As I emphasized in this article, virtually all economic development and blight takings are pursuant to some plan or another. Ironically, even 99 Cents Only Stores vs. Lancaster Redevelopment Agency, a California district court cases specifically cited by the majority as an example of an impermissible “one to one taking” was actually part of a redevelopment plan. And the Kelo majority’s refusal to even consider the quality of the plans in question ensures that it is possible for a state or local government to create a “plan” justifying virtually any taking.

I also think that Kagan is a bit too optimistic in suggesting that post-Kelo reform in the states ensures that “the question never arises because the state government doesn’t try to effect such a taking in the first instance.” As I have explained in my academic work on post-Kelo reform, many of these are primarily symbolic and don’t actually restrain condemnations in any significant way. However, Kagan is not an expert on post-Kelo reform and it is understandable that she might not be well-informed about the nature of these laws.

Finally, Kagan and Grassley were right to note that the Kelo majority stated that “pretextual” takings are unconstitutional. What exactly counts as a pretextual taking under Kelo is hotly disputed. For a good discussion, see this article by Daniel Kelly. Justice Sotomayor, the president’s last Supreme Court nominee, ruled in the Didden case that even blatant extortion for the benefit of a private interest doesn’t qualify as a pretextual taking. That was the main reason why I testified against her.

Very extreme cases like Didden aside, the Supreme Court’s broad definition of “public purpose” ensures that even cases of fairly blatant favoritism will often be upheld. It’s easy to claim that almost any taking potentially benefits the public in some sense, especially since the Kelo Court explicitly held that the government has no obligation to prove that the claimed benefits will actually materialize. In Kelo itself, there was a great deal of evidence that the condemnations were undertaken as a result of lobbying by the Pfizer corporation.

Overall, I suspect that Kagan probably thinks that Kelo was rightly decided, and I doubt that she will be a strong protector of property rights on the Court. That said, I think she may turn out to be better on these issues than Sotomayor, and I see no reason to reconsider my view that Kagan is less bad from a libertarian perspective than most other plausible Obama nominees would have been. I am not opposed to her nomination, and what she said in answer to Grassley’s questions doesn’t alter my overall impression of her.

FULL DISCLOSURE: I should mention that a member of Senator Grassley’s staff consulted with me on property rights issues prior to the hearings. However, it is important to emphasize that it was not I who persuaded the senator to question Kagan about either property rights generally or Kelo specifically. Rather, his staff approached me because he was already interested in asking about these subjects, and wanted to go over some details with an outside expert.

UPDATE: I have edited this post slightly to remove some repetitive or non-substantive statements from the exchange between Grassley and Kagan. As per usual practice, I have used ellipses to note my omissions.

In Kaur v. New York Urban Development Corporation, its recent decision upholding the condemnation of property for transfer to Columbia University, the New York Court of Appeals claimed that the use of eminent domain to transfer land to a private university is more defensible than its use to transfer land to commercial corporations, as in the Atlantic Yards case:

Unlike the [New Jersey] Nets basketball franchise [one of the key beneficiaries of the Atlantic Yards takings], Columbia University, though private, operates as a non-profit educational corporation. Thus, the concern that a private enterprise will be profiting through eminent domain is not present. Rather, the purpose of the Project is unquestionably to promote education and academic research while providing public benefits to the local community. Indeed, the advancement of higher education is the quintessential example of a “civic purpose”…. It is fundamental that education and the expansion of knowledge are pivotal government interests.

I think this line of argument is seriously flawed. I tried to explain why in one of my earliest posts on the Columbia University takings back in 2006:

…Columbia President Lee Bollinger and [others] defend the use of eminent domain to transfer property to universities on the ground that universities create “public benefits.” While universities do provide important benefits to society, this does not justify allowing them to condemn property.

Most of the benefits provided by universities are “private goods” that are fully captured by their students and faculty. For example, going to college greatly increases a student’s earning prospects, but that student will himself capture the benefits. Basic economics shows that there is no need for government subsidies for these kinds of private goods.

Universities do also provide some “public goods” – benefits to society that the university, its faculty, and its students cannot fully capture. Perhaps the most important is basic scientific research. Another might be educating underprivileged students, though this is less clearly a public good than basic research is, since most of the benefits are captured by the students themselves. However, both research and student tuition are already heavily subsidized by the government through a wide variety of programs… There is no reason to believe that they require the additional subsidy provided by the use of eminent domain. Even if additional public subsidy is warranted, the best way to provide it is to allocate additional funds earmarked for research or education, not allow universities to use eminent domain. Condemnation of property is rarely if ever actually useful for the purposes of advancing research or educating poor students. In general, research can be undertaken and students educated just as well on voluntarily purchased land. Education and research can be conducted in a wide variety of locations and thus are not vulnerable to the “holdout” problems usually cited as a justification for condemning property. Even if holdouts do become an issue, universities can and do use secret purchase and other market-based methods to get around them without resorting to eminent domain….

Obviously, students and faculty sometimes can benefit from acquiring land through condemnation. But the benefits in question (primarily esthetic and lifestyle-related) are not public goods that should be subsidized by the state. If universities wish to pursue these goals by acquiring additional land, they should do it by competing with other potential buyers in the real estate market.

Finally, a possible argument for allowing universities to use eminent domain is that they supposedly act only for the public interest. As President Bollinger puts it, “We are not a profit-making institution looking out for our own advantage… We are trying to do things that help the world more broadly.” Unfortunately, this claim is at best a half-truth. Universities do sometimes “help the world more broadly,” but their policies are also heavily influenced by the self-interest of faculty, administrators, and…. students. Anyone familiar with academic politics knows that self-interest plays a major role. The mere fact that a university is a nonprofit entity does not prove that it acts only out of altruism. Self-interested behavior by universities is often perfectly legitimate, but it does undercut claims that universities should be allowed to use eminent domain because they do not “look out for [their] own advantage” and only “do things that help the world more broadly.”

Given the Court of Appeals’ ultradeferential approach to blight condemnations, I have no doubt it would have reached the same result even if Columbia were a for-profit corporation. I just wanted to make the point that such judicial abdication does not become more defensible merely because the new owner of the condemned property is a university.

UPDATE: I have fixed what was previously an incorrect link to my 2006 post on this subject.

In today’s decision in Kaur v. New York State Urban Development Corp., The New York Court of Appeals (the state’s highest court) has upheld the condemnation of property in the Manhattanville area of New York City for transfer to Columbia University. This outcome is not surprising. In fact, I predicted it back in December. In the recent Atlantic Yards case, the Court of Appeals had already held that state and local officials could declare virtually any area “blighted” and thereby make it eligible for condemnation and transfer to favored private interest groups.

The problem of over-broad definitions of blight is hardly limited to New York. It is present in numerous other states too, including many that have enacted post-Kelo eminent domain reform laws. Nonetheless, the Atlantic Yards and Kaur cases set a new low in this field. Not only has the New York Court of Appeals applied an extraordinarily broad definition of blight, it has also endorsed blight designations based on studies that are probably rigged in favor of private interests who benefit from condemning the areas in question. Moreover, it has opened the door to condemnations based on the presence of “blight” created by the very people who will get to own the property after it is taken.

UPDATE: Tim Sandefur and the Inverse Condemnation blog have further comments on the decision.

UPDATE #2: Matt Festa of the Land Use Prof blog comments here:

I expected the standard Kelo-style deference to legislative and executive officials to determine what things are in the public benefit (although I thought the Court rather passively accepted the argument that Columbia = education (nonprofit!) and education = good = constitutionally sufficient public benefit). But I was still a little surprised at the extent to which the Court seems to bend over backwards to disclaim any competence at all to evaluate the sufficiency of a “blight” determination by the government (which also gets to decide to use eminent domain). That’s the rational basis test taken to its logical extreme.

Today is the fifth anniversary of Kelo v. City of New London, one of the most controversial decisions in Supreme Court history. In Kelo, a narrow 5-4 majority of the Court ruled that the condemnation of private property for transfer to other private individuals for purposes of promoting “economic development” was permitted by the Fifth Amendment, which allows government to condemn property only for a “public use.” Kelo was a flawed decision and it drew a massive political backlash. There are lesson to be learned from both.

I. The Shortcomings of Kelo.

In my view, Kelo was wrong both because it goes against the text and original meaning of the Constitution and because it embodies an unrealistic view of the political process. On the former point, this article by leading property rights historian Jim Ely does a good job of summarizing the relevant historical evidence. The Founders and early 18th and 19th century jurists disagreed among themselves about the exact meaning of “public use.” But there was widespread agreement that government lacked the power to condemn property owned by one private individuals and transfer it to another merely because the government claimed there might be some sort of public benefit.

Kelo was also mistaken because the majority justices wrongly assumed that the existence of a “plan” would minimize the likelihood that private interests would exploit the condemnation process to take from the politically weak. In reality, the political process makes it very easy for this to happen, as voters have great difficulty monitoring the quality of economic development takings. Moreover, the new owners of condemned property generally have no legal obligation to actually provide the economic benefits that supposedly justified the condemnation in the first place. This predictably results in condemnations that not treat property owners unjustly, but actually destroy more economic value than they create, as happened in the Kelo case itself. I develop these points in greater detail in this article.

More generally, it seems contradictory and self-defeating for courts to allow legislators to define “public use” as they see fit. The whole point of the Bill of Rights is to constrain government power. That objective is undercut if the scope of the rights to be protected is defined by the very government officials whose abuses are supposed to be constrained. It is a bit like appointing a committee of wolves to guard your chicken coop in a world where predation by wolves is the whole reason why you need guards in the first place. As Ely notes, “among all the guarantees of the Bill of Rights, only the public use limitation is singled out for heavy deference to legislatures.” Unfortunately, this is part of the Court’s more general policy of relegating constitutional property rights to second-class status.

II. The Post-Kelo Backlash.

Kelo generated a broader political backlash than any other Supreme Court decision in decades. As I explained in this article, over 80% of the public opposed the decision, and a record 43 states passed eminent domain reforms in the wake of Kelo. Many observers, including legal luminaries such as Richard Posner, argued that this backlash shows that judicial protection for property rights in this field is unneccessary.

Unfortunately, my work on post-Kelo reform also shows that the majority of the new laws provide little or no meaningful protection for property owners. In many cases, they ban Kelo-style takings for “economic development,” but allow the same types of condemnations to continue under the guise of combating “blight.” Blight, in turn, is defined so broadly that almost any area qualifies.

Several factors account for this result, including resistance by interest groups who benefit from unconstrained eminent domain power. In my view, a key problem is widespread voter ignorance that makes it difficult for most citizens to tell the difference between effective reforms and those are primarily for show. Given the overwhelming public opposition to economic development takings, I doubt that interest group lobbying could have prevented strong post-Kelo laws from being enacted if voters had been well-informed about the legislation in question.

The Institute for Justice, the libertarian public interest law firm that litigated Kelo, has a more optimistic take on the results of the backlash in its well-written report on the fifth anniversary of the case. Several of their points are valid. Thus, IJ points out that a number of state supreme courts have recently struck down Kelo-style takings under their state constitutions. This is true, though it’s hard to tell how much of this is the result of Kelo, and how much a continuation of a preexisting trend under which six state supreme courts ruled that way in the ten years before Kelo; with only two (including the Connecticut Supreme Court in Kelo itself) going the other way.

On the legislative reforms, there is perhaps less difference between my assessment and IJ’s than meets the eye. In this article (pp. 15-16), University of Illinois law professor Andrew Morriss has compared my evaluations of the state reforms with IJ’s and finds only three cases where there is a significant divergence (including one – Idaho – where I rated the reform law much more favorably than IJ did). I would perhaps add a couple more cases to this list that arose after Morriss’ paper was finished.

I also agree with IJ that a significant number of states (albeit, in my view, a minority) have passed strong reform laws and that we are today substantially better off than before Kelo. For example, I have long emphasized that reforms passed by referendum initiative tended to be quite strong. The main point of my analysis is to dispute claims that legislative reform is sufficient to address the problem, and take issue with various social science theories that predicted a much more effective backlash.

III. Lessons for the Future.

The Kelo experience offers several valuable lessons. First, there is the need to combine litigation and political action in any reform strategy. IJ and the broader property rights movement could not have been as effective if they had stuck to just one or the other. For example, most of the public would have remained unaware of the problem of eminent domain abuse if not for the media coverage generated by the Supreme Court case. Although preexisting Supreme Court precedent and eminent domain law in most states was even more hostile to property rights than the Kelo decision, the “rationally ignorant” general public was oblivious to this reality.

Second, the shortcomings of the Kelo backlash undercut the widely held belief that we don’t need judicial intervention to protect rights that are supported by majority public opinion. Although bolstered by such authorities as James Madison’s Federalist 10, this view has serious flaws that the Kelo experience highlights. A combination of political ignorance and interest group lobbying can easily lead to violations of rights that majorities value. It also makes it extremely difficult to correct those violations using the political process alone.

On a more positive note, the widespread political reaction to Kelo shows the potential for cross-ideological alliances on property rights issues. Kelo was denounced not only by conservatives and libertarians, but also by numerous left-liberal leaders and activist groups, such as Ralph Nader, Bill Clinton, Maxine Waters, the NAACP, and the Southern Christian Leadership Conference. They recognized that economic development and “blight” condemnations often target the poor and politically weak. It is unfortunate this potential alliance has been allowed to atrophy in recent years. Effective protection for property rights is unlikely to be achieved so long as the issue remains primarily a parochial concern of libertarians and conservatives.

Finally, I can’t resist pointing out that Kelo and the resulting backlash has been a great gift to takings scholars that just keeps on giving. For example, it enabled me to publish numerous articles, get offered various visiting appointments, and ultimately get tenure. I am currently writing a book on Kelo and its aftermath which is scheduled to be published by the Harvard University Press. And I owe it all to the justices in the Kelo majority.

As far as the public interest is concerned, I fervently hope that the the Supreme Court improves its takings jurisprudence. But when it comes to my own career interests, I hope the justices keep up the bad work!

CONFLICT OF INTEREST WATCH: As in previous posts on Kelo-related subjects, I want to note that I have written various pro bono briefs for the Institute for Justice. I also wrote a pro bono amicus brief in the Kelo case itself on behalf of the late Jane Jacobs.

In a recent post on Kaur v. Urban Development Corporation, the Columbia eminent domain case currently before New York’s state supreme court, NYU lawprof Rick Hills argues that the debate over eminent domain is largely meaningless. Kaur, like the Atlantic Yards case before it, addresses a key issue in takings law: whether the condemnation of “blighted” property for transfer to a private party qualifies as a “public use” under state and federal constitutions even if “blight” is defined so broadly that almost any area can be declared blighted and condemned.

Hills argues that efforts to address this question are ultimately futile and tend to elide the really important issues:

[T]he doctrinal battle… [in Kaur] really is rooted in empty, incoherent blather that can never be a satisfying basis for a doctrine. “Blight” is an epithet in search of a definition, while “public use” is either merely a requirement of public benefit (in which case, it is judicially unmanageable) or a requirement of public title (in which case, it is a perverse encouragement of statist inefficiency).

The concepts of “public use” and “blight” ignore the real and fundamental dilemma raised by over-fragmented land — viz.: (a) land markets tend to do a poor job of re-assembling over-fragmented parcels but (b) assemblers use eminent domain to hog all of the post-assembly surplus, to the justified resentment of the dispossessed owners. Absent some assembly mechanism beyond arms’ length private bargaining, Manhattanville will be locked into drab industrial uses — gas stations, storage facilities, auto repair, etc — that, I strongly suspect, the owners themselves would quickly jettison if they could get a reasonable share of the “post-assembly” value. Getting rid of eminent domain will not vindicate these owners’ private property rights: It will simply insure that they can remain trapped in a collective action problem

Hills’ argument is interesting. But I think it is ultimately wrong on all counts.

I. Why a Narrow Definition of Public Use Does not Lead to “Statist Inefficiency.”

If, as I have advocated, “public use” is interpreted to require either government ownership of condemned property or at least a right of access by the general public (as in the case of land used by common carriers or public utilities), it will reduce “statist inefficiency,” not aggravate it. Such an approach would block takings like those in the Kelo and Poletown cases, where property was taken from politically weak owners for transfer to politically powerful ones. In the process, far more economic value was destroyed than created. In Poletown, for example, some 4000 people were expelled from their homes and dozens of businesses, churches and schools were destroyed, in order to give the land to General Motors to build a factory, which ultimately failed to generate anything remotely approaching the economic benefits that were promised.

Hills’ argument implicitly assumes that if government is not allowed to condemn property and transfer it to private entities, it will simply undertake the exact same condemnations and use the land for the same purposes itself. This, however, is highly implausible. If the whole purpose of the condemnations was to transfer the land to politically powerful interest groups, that objective won’t be accomplished if the government can’t give them the land they covet. If Detroit were forbidden to transfer Poletown to General Motors, it is hardly likely that the city would have still condemned it and then built a government-owned auto factory on the site. Almost certainly, the condemnation would never have been undertaken in the first place.

To be sure, sometimes public ownership can be a mere fig-leaf for control by a private interest group. In my article on Poletown, I discuss the hypothetical possibility of the government retaining ownership of the area, but giving GM a long-term lease for a nominal fee. Effective enforcement of public use limits on takings requires judicial policing of such subterfuges.

II. The Case for a Narrow Definition of “Blight.”

Hills is right to suggest that “blight” is a vague term. Still, it is more than just an “epithet.” As I argue in this article, there is a strong case for using government intervention (though not necessarily condemnation) to eliminate blight defined as conditions on one property that inflict serious harm on the entire neighborhood, for example by spreading disease. If the effects are spread out over a large area, private parties face a collective action problem in trying to alleviate them.

On the other hand, there is no good justification for using eminent domain or other government coercion to alleviate “blight” defined merely as a lesser degree of development than government bureaucrats consider to be desirable. Market competition can generally do a good job of determining which land should be developed and to what extent. Indeed, defining “blight” so broadly that virtually any area can be declared blighted and condemned will actually undermine development by rendering property rights insecure, thereby deterring investment. Such blight condemnations merely enable politically powerful interest groups to take property that they covet from the politically weak.

Even in genuinely “blighted” areas, condemnation is extremely problematic, often leading to the expulsion of poor and minority populations to benefit more influential groups. But the case for government intervention in such areas is at least a plausible one.

III. Why Private Developers (Usually) Don’t Need Eminent Domain to Prevent Holdout Problems.

Hills also makes the standard argument that we need eminent domain to prevent holdouts from blocking valuable assembly projects. I have answered this claim at some length in this article (204-10). Interested readers should also check out this excellent article by Notre Dame property scholar Daniel Kelly. To briefly summarize, Kelly and I point out that private developers can effectively prevent holdouts by assembling property using secret purchases that prevent potential holdouts from learning that a major assembly project is ongoing. Therefore, they cannot use that knowledge to try to extract so large a share of the profit that the project becomes infeasible. This is how Disney assembled the land it needed for Disney World. Of particular relevance to the Columbia University case, it is also how Harvard University has routinely assembled property it needed in the Boston area. Secret assembly doesn’t perfectly solve all holdout problems. But it does work quite well.

Not only does secret assembly alleviate holdout problems, it is also superior to eminent domain because it sifts out those development projects that create more value than preexisting uses of the land in question from those that do not. By contrast, the use of eminent domain often leads to the transfer of land to uses that are actually less valuable than those of the original owners, as happened in both Kelo and Poletown. If the current owners genuinely value the land more than the would-be developer does, we should actually want the holdouts to succeed. This point is well addressed in Kelly’s article.

Finally, I think that Hills also errs in suggesting that the main problem with eminent domain is that current owners don’t get enough compensation for their losses. Owners are indeed often undercompensated. Yet even perfect compensation would not eliminate the danger that unconstrained eminent domain power leads to takings that actually destroy more economic value than they create. The problem is not so much that developers “hog all of the post-assembly surplus,” as we often end up with a post-assembly loss.

UPDATE: At another time, I will comment on Hills’ and Michael Heller’s important and innovative proposal to operate eminent domain through “land assembly districts” that would give greater protection for current property owners than traditional takings. My general view is that LADs would in many places be an improvement over the status quo, but still inferior to strict enforcement of “public use” constitutional limits on takings. I intend to discuss LADs in some detail in the book on Kelo and public use that I am currently writing.

The New York Court of Appeals (which, despite the misleading name, is New York’s state supreme court), held oral arguments yesterday in Kaur v. New York Urban Development Corporation, the case in which New York City is trying to condemn a large amount of property in the Manhattanville neighborhood in order to transfer it to Columbia University. The Columbia Spectator has an interesting summary of the oral argument here.

Columbia and the government’s Urban Development Corporation are claiming that the property can be taken because it is “blighted.” However, a lower court decision recently invalidated the takings because that the studies that supposedly prove the existence of blight are flawed and may have been deliberately cooked up to justify a bogus taking.

I have been very critical of both the Columbia takings specifically (see here for the most recent post and links to earlier ones), and the more general use of broad definitions of “blight” to justify condemnation of virtually any property that might be coveted by politically influential businesses and other interest groups.
At the same time, for reasons I discussed here, I am not optimistic that the Court of Appeals will uphold the lower court’s decision.

In the recent Atlantic Yards case, the court endorsed the constitutionality of condemnations under an extremely broad definition of “blight” that would allow the taking of any property that might be “underdeveloped.” I think the Atlantic Yards decision was badly misguided. Among other things, it grossly misinterpreted the blight provision New York’s state constitution, which only allows condemnation of “substandard an insanitary” areas. Nonetheless, it is difficult to distinguish the Atlantic Yards case from Kaur. However, the Spectator’s description of the oral argument suggests that the judges were tough on both sides, which may indicate that they have some skepticism about the government’s position.

The issue of broad definitions of “blight” is not limited to New York. It undermines protection for property rights in many other states as well. Since the Supreme Court’s controversial decision in Kelo v. City of New London, some 43 states have enacted laws banning or limiting the condemnation of private property for transfer to other private individuals in order to promote “economic development.” Unfortunately, as I explained at length in this article, most of these states’ laws define blight so broadly that virtually any area can still be designated as blighted and condemned. In other words, any property that government might want to take under an “economic development” rationale can instead be taken under a blight rationale.

UPDATE: NYU lawprof Rick Hills comments on the case and the more general questions it raises here. I disagree with several of Rick’s points and will try to address them in a later post, time permitting.

Vanderbilt lawprof James Ely – a leading expert on constitutional property rights – has an interesting column on the relevance of property rights to the current Supreme Court nomination:

In seeking a replacement for retiring Supreme Court Justice John Paul Stevens, President Obama indicated that he wanted to name someone in the Stevens mold. Among the qualities of Justice Stevens that Mr. Obama hoped to find in a successor, the president noted “a keen understanding of how the law affects the daily lives of the American people.”

However, in at least one important area of constitutional law – the rights of property owners – Justice Stevens’ record fell woefully short of protecting the interests of average citizens. In fact, Justice Stevens consistently dismissed property rights claims and voted to strengthen government control over the lives of individuals….

Justice Stevens’ propensity to minimize the rights of property owners was demonstrated vividly in his opinion in the controversial case of Kelo v. City of New London (2005). At issue was a city economic redevelopment plan under which land acquired from residents through eminent domain would be transferred to private parties for the construction of new residences, stores and recreational facilities…. Pfizer Corp. helped instigate the redevelopment plan in the hope that the new facilities would benefit its planned new headquarters. The area slated for redevelopment was a middle-class neighborhood that was not blighted or dilapidated. A few of the neighbors challenged the condemnation on grounds that it was not permissible under the takings clause of the Fifth Amendment, which limits the exercise of eminent domain to “public use.” Writing for the court majority, Justice Stevens rejected this argument and upheld the taking of property for economic development purposes. He stressed heavy deference to governmental determination of what amounted to public use and was especially impressed with the notion that this taking was part of a development plan….

Because Justice Stevens barred courts from attempting to “second guess” the quality of a plan, as a practical matter, municipalities could easily prepare a plan that in reality benefited private interests. There is yet another problem with the Stevens opinion. The very purpose of the Bill of Rights is to safeguard individuals from abuses of governmental power. Broad deference to the officials it is intended to restrain is inconsistent with this purpose.

In Kelo, Justice Stevens virtually eviscerated the public use limitation of the Fifth Amendment at the federal level. Under his reading of public use, legislators appear to have almost unlimited power to take homes and businesses for economic development. The beneficiaries likely will be corporations and others with political clout…..

The framers of the Constitution and Bill of Rights believed that protection for private property was essential for self-government and individual liberty. In sharp contrast, Justice Stevens invariably manifested statist thinking about the property rights of individuals. His legacy is a testament of how far we have wandered from the constitutional vision of the framers.

Hopefully Elena Kagan, Mr. Obama’s nominee to replace Justice Stevens, holds a more balanced view of the importance of property rights in the American constitutional order. As in many other fields of law, however, Ms. Kagan’s record with respect to property rights is a blank slate. It certainly would be appropriate for senators at Ms. Kagan’s confirmation hearing to ask about her thoughts on this subject.

As I have argued previously, there is a potential for fruitful left-right alliances in this area. Many left-wing organizations and activists, including the NAACP, Rep. Maxine Waters, and Ralph Nader, vehemently opposed the Kelo decision because they correctly recognized that giving government unconstrained power to condemn property and transfer it to private parties would tend to victimize the poor, minorities, and the politically weak.

In The Audacity of Hope, President Obama wrote that “[]o]ur Constitution places the ownership of private property at the very heart of our system of liberty…. The result of this business culture has been a prosperity that’s unmatched in human history.” Unfortunately, his first Supreme Court nominee, Sonia Sotomayor, had a very poor record on property rights, as I explained in my Senate testimony at her confirmation hearings.

As Ely points out, Elena Kagan has almost no record in this field. Hopefully, her relative openness to ideas that depart from liberal orthodoxy might come into play here.

In the federal Supreme Court, property rights issues have split the justices along left-right lines over the last thirty years. But as the left-wing reaction to Kelo demonstrates, such a division is not inevitable. In some state judiciaries, liberal judges have voted to enforce tight state constitutional restrictions on eminent domain and exclusionary zoning, a point I discussed in the last part of this article.

If he is so inclined, it is not too late for President Obama to start appointing relatively pro-property rights liberals to the federal courts. Breaking the ideological logjam that has hobbled federal judicial protection of constitutional property rights would be an admirable example of change we can believe in.

UPDATE: Readers interested in this subject should check out Ely’s excellent 2005 article “Poor Relation Once More: The Supreme Court and the Vanishing Rights of Property Owners,” where he critiqued several of Justice Stevens’ important opinions in this area in more detail. Ely’s book The Guardian of Every Other Right is perhaps the best general history of constitutional property rights, and is must-reading for students of the field.

The last property owner in the condemned Atlantic Yards area of Brooklyn, New York has agreed to sell his land in order to avoid the condemnation of his property by the city government [HT: Josh Blackman]:

The last man standing in front of the Atlantic Yards bulldozer has stepped aside.

Daniel Goldstein — founder of the anti-Atlantic Yards group Develop Don’t Destroy Brooklyn and plaintiff in numerous unsuccessful suits against the $4.9 billion project — has reached an agreement with the project’s developer, Forest City Ratner, to move out of his condo on Pacific Street in Prospect Heights.

Mr. Goldstein confirmed that he would receive $3 million from Forest City. He bought his condo in 2003 for $590,000, but the state seized title to it under eminent domain last month, leaving Mr. Goldstein facing eviction. Mr. Goldstein said he would move by May 7.

He had told The Brooklyn Paper in an article published Wednesday morning that his lawyer would fight the condemnation or “get fair market value and just compensation” for the apartment, as eminent domain law requires when the state seizes property. He had said the state had previously made a lowball offer of $510,000 to him.

Goldstein may have received a higher than market value price for his land in exchange for agreeing not to speak out against the development project anymore:

According to executives who have been briefed on the negotiations, Mr. Goldstein also agreed to a highly modified form of the gag agreement that Forest City had initially imposed on those it bought out, under which he would step down as spokesman for Develop Don’t Destroy Brooklyn.

Mr. Goldstein said that he retains his right to free speech but is no longer allowed to “actively oppose the project.”

“There’s no end to the criticism and opposition to the project,” he said.

The release from Forest City was short on specifics and did not even speak Mr. Goldstein’s name.

“We are not going to discuss the details of the agreement,” Joe DePlasco, a spokesman for the developer, said in the statement.

Goldstein’s land and a great deal of other property in the area was condemned in order to transfer it to politically influential developer Bruce Ratner, under an extremely dubious rationale of alleviating “blight.” I criticized the recent New York state supreme court decision upholding the condemnation in this post; back in 2008, I commented on the federal court decision upholding the condemnation against challenges under the Takings Clause of the federal Constitution.

In my view, that federal decision was probably dictated by the Supreme Court’s 2005 decision upholding economic development takings in Kelo v. City of New London. The state decision, by contrast, was deeply flawed because it was based on a ridiculously broad definition of “blight” according to which virtually any area could be declared blighted and condemned; for reasons I explicate in my earlier post, such blight condemnations almost certainly violate the New York state constitution. Unfortunately, many other states also define “blight” just as broadly. Ultra-expansive definitions of blight have undermined the effectiveness of the majority of the many eminent domain reform statutes enacted since Kelo.

On the plus side, Goldstein’s dogged resistance to these condemnations helped focus public attention on the problem of eminent domain abuse. The state court decision upholding it is an important setback for property rights. However, many other state courts have gone the other way over the last 15 years. During that time, numerous state supreme courts have invalidated Keo-like “economic development” takings under their state constitutions – including Illinois, Michigan, Montana, Ohio, Oklahoma, and South Carolina (see this article for cites to these cases). Only the Atlantic Yards case and the Connecticut Supreme Court’s narrow 4-3 decision in Kelo itself have gone the other way.

UPDATE: Please don’t bother pointing out that the New York state supreme court is officially called the Court of Appeals. I know this, and was using the term “supreme court” as a generic term for the highest court of a jurisdiction. That way, I can avoid confusing readers who are not familiar with New York’s extremely confusing terminology.

UPDATE #2: Goldstein has issued this statement about the agreement, in which he denies agreeing to stop criticizing the Atlantic Yards takings and development project [HT: Scott Bullock]:

Contrary to press reports I have not given up my First Amendment rights or my involvement with Develop Don’t Destroy Brooklyn. (Ratner, though he tried to hide it, did require this of nearly all those who sold their homes to him years ago, and they agreed to it.) Ratner and ESDC tried very hard to force me to agree to give up those rights and the work I do with the organization I helped found. It wasn’t enough, I guess, for Ratner to decimate my neighborhood, take my home, and kick me out, they also felt they had to cut out my tongue. For nearly 3 hours of talks mediated by Judge Gerges I refused to accept any kind of gag order. I would not have taken any amount of money to do that, and I did not.

I did agree to give up my title as “DDDB spokesman”, but that’s just a title. And I did agree to remove my name from one outstanding lawsuit which remains in court despite that. Otherwise I can do and say whatever else I want, and my agreement explicitly states that I have maintained my First Amendment rights.

Nicole Gelinas has an interesting article on the expansive use of “blight condemnations” in New York. As she points out, New York courts have defined blight so broadly that virtually any area can be designated as such, and then condemned. This has created massive opportunities for abuse by politically connected interest groups who can use eminent domain to get the government to take property they covet.

Gelinas has an extensive discussion of two famous recent New York blight condemnation cases: the Atlantic Yards case, and Columbia University’s efforts to acquire property through condemnation in Manhattanville. I have written about both extensively. See here for my analysis of the Atlantic Yards decision, and here for the Columbia case. Both posts include links to earlier cases.

Unfortunately, New York is far from the only state that defines blight broadly enough to justify the condemnation of almost any area. As I discuss here and here, numerous other states have similar laws. This enables many state legislatures to pretend that they have banned Kelo-style “economic development” condemnations even as they allow them to continue under the guise of alleviating blight.