In response to questions posed by Republican Senator Charles Grassley, Judge Sotomayor made another misstatement about Kelo v. City of New London:
[T]he issue in Kelo, as I understand it, is whether or not a state who had determined that there was a public purpose to the takings under the — the takings clause of the Constitution that requires the payment of just compensation when something is — is condemned for use by the government, whether the takings clause permitted the state, once it’s made a proper determination of public purpose and use, according to the law, whether the state could then have a private developer do that public act, in essence. Could they contract with a private developer to effect the public purpose? And so the holding as I understood it in Kelo was a question addressed to that issue.
The problem with this answer is that Kelo didn’t simply hold that the state could “contract with a private developer to effect the public purpose” justifying a taking. It held that the state could actually transfer ownership of the land to a private party and that this was a constitutionally permissible “public use” if done for the purpose of promoting “economic development.” This is very different from simply hiring a private contractor to do work on public land, such as hiring a private construction firm to build a publicly owned bridge on government-owned land. Moreover, the “contract” metaphor is misleading, since the new private owners of condemned land in Kelo and other similar cases were not legally required by contract (or anything else) to actually provide any “economic development” – the “public purpose” that supposedly justified the condemnations in the first place (I cover this point in detail in this article, pp. 193-97).
The fact that Kelo allows the transfer of ownership to private parties who have no contractual obligation to provide economic development in exchange makes the case very different from merely “contracting with a private developer to effect the public purpose.” If the private interest gets full ownership of the condemned land and does not have to provide any economic development in return, the risks of abuse are far greater than if a private entity is merely hired to do work on publicly owned land that it has a contractual obligation to perform.