Fifth Circuit Decides Post-Kelo Eminent Domain Case:

The U.S. Court of Appeals for the Fifth Circuit Court has handed down its decision, in Western Seafood Co. v. City of Freeport, a noteworthy post-Kelo eminent domain case that I blogged about back in June (hat tip to Wright Gore, President of the Western Seafood Company). Western Seafood involves the condemnation of part of a property owner's lot for transfer to a neighboring business so that the latter can build a marina for the asserted purpose of promoting "economic development" in the area. As I expected, the court rejected the property owner's claim that this condemnation violates the Takings Clause of federal Constitution.

The Court's opinion on the federal issue is a fairly straightforward application of Kelo. In Kelo, the Supreme Court of course of course held that "economic development" is sufficient justification to allow condemnation of private property for transfer to a new private owner. Moreover, as I explained in detail in my previous post on Western Seafood, Kelo virtually immunizes from challenge any economic development condemnation that is undertaken pursuant to an "integrated redevelopment plan." Virtually all economic development takings - including that in Western Seafood - are undertaken as part of some sort of plan.

The Fifth Circuit did, however, remand the case to the District Court for further consideration of Western Seafood's claim that the taking violates the Texas state constitution. The opinion notes that Texas state courts use state legislation as a guide to interpretation of the state constitution's Takings Clause, and that Texas enacted a post-Kelo reform law after the District Court reached its initial decision rejecting Western Seafood's claim. It will be interesting to see how the District Court resolves the state constitutional issue. However, I am not terribly optimistic about Western Seafood's prospects. To the extent that state constitutional issue turns on the impact of the new Texas post-Kelo statute, it is likely to cut in favor of the government, since that statute does very little to constrain economic development takings (see my analysis of the Texas law in this paper, pp. 73-75).