The Institute for Justice on Post-Kelo Eminent Domain Reform:

Bert Gall of the Institute for Justice has a piece on TechCentralstation defending a significantly more optimistic assessment of Post-Kelo reforms than I have expressed here and here, among other places. IJ represented the property owners in Kelo and has probably done more to protect constitutional property rights in recent years than any other organization. So their take on post-Kelo reform efforts must be taken seriously by anyone interested in the issue. While Gall makes several good points and is certainly right to emphasize that legislative reform efforts should continue, I am still not as optimistic as he is.

First, the points where we agree:

Gall is absolutely right that the reform efforts represent an improvement over a pre-Kelo status quo that in many states was absolutely abysmal. In numerous jurisdictions, there was pretty much nowhere to go but up, because pre-Kelo law allowed local governments to condemn pretty much any property they set their sights on. He is also correct that some states (notably Florida, Alabama, Georgia, and South Dakota), have passed laws that represent major improvements and go a long way towards banning all or most condemnations for "economic development." I noted several such states in a previous post on this subject, and the list has expanded since then. Finally, Gall is also right to note that many reform movements take years or decades to achieve their goals (though this point has an important flipside that I will note below). By my count, there are now eight states that have enacted meaningful reform, and this number is likely to increase (I will perhaps provide a list and discussion of categorization criteria in a future post).

That said, there are also important reasons to be less optimistic than he suggests:

First, the substance of many of the bills already enacted actually makes little or no improvement on preexisting laws. Indeed, many of these laws may be intended to persuade voters that meaningful reforms have been undertaken without actually enacting any real change. I lack the space to fully address these issues, but they are discussed in some detail in Tim Sandefur's paper here, and some early post-Kelo laws are also dissected in my own forthcoming article on Kelo (pp. 65-84). Both Tim's paper and especially mine are somewhat dated, but several of the laws enacted in the last few weeks have weaknesses similar to those in the earlier laws that we discussed.

The federal reform efforts cited by Gall also suffer from comparable shortcomings. For example, Gall notes the Property Rights Protection Act, a bill which passed the House of Representatives last year. The PRPA, which would cut off federal "development" funds to localities that engage in Kelo-style condemnations, has serious shortcomings that I discuss in a forthcoming article (see here, at pp. 73-76), the most important of which is the fact that it probably only affects a tiny percentage of federal funds available to the offending states and localities. Moreover, the PRPA is currently bottled up in the Senate, and it is far from clear that Judiciary Committee Chairman Senator Arlen Specter (the person holding it up) will let it move forward.

A second ground for skepticism is the fact that the window of opportunity for reform may be closing. As time passes since the Kelo decision, public attention will move on to other issues. This is especially like at a tme when numerous other compelling stories are competing for public attention (including the War in Iraq, immigration reform, and others).

Can we be certain that the momentum of backlash will wane? Perhaps not. But it is worth remembering the lessons of the massive outcry occasioned by the 1981 Poletown condemnations, which displaced some 4000 people so that General Motors could build a new factory in Detroit. Although Poletown was, at the time, almost as widely denounced as Kelo today, it resulted in little lasting reform, and the issue soon faded from the public's radar screen. I suspect that eminent domain is not the kind of issue that is likely to become a permanent part of the political landscape, both because it affects only a small percentage of the population at any one time and because it does not neatly divide the parties from each other; both Republican and Democratic politicians often have strong ties to developers and other interest groups that benefit from condemnation, and thus both have important incentives to allow the issue to die down over time. For these reasons, Gall's observation that reform movements often take years to succeed is not as comforting as we might wish.

Third, as discussed here, several of the states that have passed the best reforms (e.g. -Georgia and South Dakota) had little or no prior record of abusive development condemnations. Many of the states that, according to IJ studies (see here and here), have the most severe records of abuse, have enacted purely cosmetic reforms or none at all. New York, New Jersey, and California are particularly noteworthy in this respect. In many cases, the states that are enacting the best reforms are the ones that need them the least, while many of the most egregious offenders tend to do little or nothing.

Finally, as I have argued in all the posts and articles cited above, widespread political ignorance makes it difficult or impossible for the average voter to tell the difference between reform laws that make meaningful changes and those that do not. This suggests that it will often be very hard to prevent politicians from enacting meaningless reforms and passing them off as real achievements.

My friends at IJ are understandably concerned that people not give up the fight for post-Kelo reform out of a sense of hopelessness; that is certainly a valid point. But it is also important to guard against the opposite danger - the possibility that support for reform (and for judicial protection of property rights) will dissipate because of a false perception that the problem has been "solved" by reforms that actually have little or no effect.

CONFLICT OF INTEREST WATCH: I worked at IJ as a law student clerk during the summer of 1998, receiving a small stipend funded by the Yale Law School Student Funded Fellowship program. Since graduating, I have also written several amicus briefs for IJ on a pro bono basis.

Common Problems in Post-Kelo Reform Legislation:

Over the last few weeks, I have blogged extensively about the fact that much of the legislation produced by the Kelo backlash actually does little or nothing to curb eminent domain abuse. Many new laws that seem to restrict condemnation of property for "economic development" actually have loopholes that keep them from doing so. Legislators often have incentives to enact ineffective "reforms" because it is often difficult for nonexpert voters to tell the difference between real reforms and purely cosmetic ones.

This handy Institute for Justice white paper has a helpful list of common pitfalls to look for in post-Kelo legislation:

Common pitfalls in proposed reform legislation:

• Giving a complete exemption for any property taken under urban development laws and failing to change the [often very expansive] definition of blight.

• Forbidding eminent domain for economic development without defining economic development.

• Forbidding condemnation for "solely" or "primarily" for economic development or private benefit. Whether a particular condemnation is solely or primarily for a particular purpose requires a judge to look at the intent of the governmental decision-makers. The legality of eminent domain should not depend on the subjective motivations of city officials, and proving intent as a factual matter is extremely difficult.

• Creating specific exemptions for pet projects. This will set a bad precedent for the future.

• Forbidding only ownership by private parties but not control. This leaves open the common practice of sweetheart lease arrangements.

• Making loopholes or accidentally omitting some of the political entities that engage in condemnation for private development.

I would add a few points of my own to the IJ list:

1. Requiring that condemnation be for a "public use" without defining "public use," thus implicitly endorsing the almost limitless status quo definition of t the term (Delaware).

2. Requiring that condemnations be for a "public" as opposed to "private" benefit or "purpose," a formula that sounds good but in practice will permit virtually any taking. For an excellent example, see President Bush's recent executive order on Kelo).

3. An otherwise comprehensive ban with major geographic exemptions (e.g. - Pennsylvania's law, which exempts most condemnations in Philadelphia and Pittsburgh,the state's two largest cities). Sometimes, the exemptions are craftily hidden under euphemisms such as "Area 1," "Area 2," etc.

4. Punting the issue to a newly created "special commission," especially one stacked with representatives of development interests and other beneficiaries of open- ended condemnation rules (Ohio).

5. Seemingly banning takings for economic development, but actually permitting them to continue under another name, such as "community development" (Texas).

It is probably unrealistic to expect ordinary voters to closely scan the text of proposed legislation to look for these kinds of subterfuges. But if you are a state legislator, legislative staffer, political activist or otherwise influential person who cares about property rights, I hope you will take the time to check your state's proposed post-Kelo laws (for quick access to the text of all such laws, both proposed and already enacted see here). If you find any of the above tricks in there, I hope that you will do what you can to get them out.

The details of the Delaware, Ohio, Texas, and Pennsylvania laws are discussed in my forthcoming article on Kelo.

CONFLICT OF INTEREST WATCH: As noted here, I am a former Institute for Justice summer clerk, and have done pro bono work for IJ in recent years.