Last June the legal assault on property rights culminated in the U.S. Supreme Court’s five-to-four decision in the case Kelo v. City of New London (Connecticut). Prior to that ruling, seven homeowners, including Susette Kelo, had challenged the city’s efforts to condemn and take their properties, then turn them over to a private developer.
For legal help they turned to the Institute for Justice
, a nonprofit law firm that specializes in defending individual rights. IJ’s work was featured in the January 1998 Navigator
, in an interview with IJ attorney Scott Bullock. With co-counsel Dana Berliner, Bullock represented the New London property owners in their court battles, and he presented the oral argument on their behalf before the Supreme Court.
TNI editor-in-chief Robert Bidinotto sat down with Bullock recently to discuss the Kelo decision and the prospects for property rights protections in its wake.
TNI: Scott, how did this case first come to your attention?
BULLOCK: We at IJ are swamped with requests from people to take up their cases, many of which we simply can’t do due to limited resources. However, we are really the only organization that litigates the abuse of eminent domain from the trial court on up. So in 2000 we were contacted by folks in New London who wanted us to take a look at their situation. And we found that it contained the three elements that we always look for in a case.
One, it had a cutting-edge legal issue. The city of New London was using eminent domain simply for economic development purposes. They weren’t even saying that this was a blighted neighborhood, and they, of course, weren’t saying that the taking was for a public works project. They argued instead that the city needed more tax revenue and needed to revive its economy, and the new development was hopefully going to do that. Like the infamous Poletown case from Michigan in the 1980s. This was the furthest expansion of eminent domain that had yet been tried by governments, so we were looking for an opportunity to challenge it.
The second element it had were wonderful homeowners dedicated to fighting this assault on their rights: hard-working people who simply wanted to hold onto their homes. I am proud to say that these people are still in their homes today, despite the setbacks along the way.
And third, at issue was a horrific abuse of power. City officials and a private body, the New London Development Corporation, tried to walk all over these peoples’ rights and treated them with absolute contempt. They saw these homeowners as impediments in the way of their grand schemes to remake New London. So once I visited the city and saw what was going on, I knew we had to take on this case.
Our goal was not to win only for those homeowners, but to set broad precedents for people throughout the country, and to use these cases as educational vehicles to show how abusive eminent domain is. The issue is not just about Susette Kelo in New London; it’s about homeowners and small business owners throughout the United States.
TNI: So when you have to turn down some people, you can say: “Look, we’re working on a case that will serve as a precedent that will help you in your circumstances, too. If we win in New London, we can win for you.”
BULLOCK: That’s right.
TNI: At what stage had things reached when IJ came in?
BULLOCK: The property owners had been fighting this for a number of years. The New London Development Corporation was pressuring them to sell. Some people sold to NLDC voluntarily. Others sold very reluctantly—a number of elderly folks just didn’t have the wherewithal, either financial or emotional, to fight this. But a core of people said: We are not going to sell our homes to the NLDC. That’s when the NLDC announced that they were going to move to condemn the remaining homes in the neighborhood.
And that’s when we got involved—shortly after the city moved to take the properties. We filed a lawsuit challenging those condemnations. That was back, I believe, in December 2000, and we had a trial the following year. The trial court mostly ruled in favor of the homeowners and dismissed eleven out of the fifteen condemnation actions. For those homes where the court did not rule in our favor, it stayed the demolitions and evictions of the homeowners while the case went up the appeals process to the Supreme Court of Connecticut. The Court took over a year to decide the case, and the homeowners lost by a four-to-three margin. But that set it up for appeal to the U.S. Supreme Court. It was the first time that the Court had looked at the eminent domain issue in about fifty years.
TNI: Tell me a little bit about this NLDC. Who are these people?
BULLOCK: I’m sure some of them, at least when they first got involved with the group, were well-meaning community folks who wanted to bring economic revitalization to the city. And, of course, our clients are not against economic development or economic revitalization in New London. It’s just a matter of the means that you use to bring that about.
"The Kelo Decision violates fundamentally America’s respect for individual rights."
One of the most outrageous and stupid things that the NLDC did is that as soon as it acquired a house in the neighborhood, it tore it down. Very few homes actually remain standing. The not-so-subtle message to the remaining homeowners was: You’re next. Their argument for taking the land was to increase tax revenues. But now you have this land lying idle. Rather than let people stay there, thus having tax-producing properties, they took dozens of properties off the tax rolls. By their own argument this is completely counter-productive.
Another astonishing thing is that so much land is already available in the area for new development. The NLDC had twice the amount of land for development than New York City has to rebuild the WorldTradeCenter. But the NLDC just didn’t want anything surrounding or adjacent to them.
A key issue is that the city delegated its eminent domain authority—one of the most awesome powers that government has—to a private, nonprofit corporation. In effect, this was a way of insulating local political officials from accountability and letting a private body do their dirty work for them.
TNI: It’s as if private interests were deputized with police powers, not for the just enforcement of some objective law, but for their own benefit.
BULLOCK: That was another of the more outrageous aspects of this case. Oftentimes condemnations are done through redevelopment agencies. But those are still public bodies in that they’re appointed by city officials. They’re not private bodies like the NLDC. This is so far removed from what eminent domain was originally intended for—a limited power to be used only for true “public use” projects.
TNI: Another ugly aspect of this case is that the government officials themselves became a special interest through a separate organization that injected itself into this controversy, the Community Rights Counsel. As you described it in a recent article, CRC is made up largely of local government interests, and carries water for governmental officials. So here you have officials who want to increase their powers getting involved through the CRC, in order to benefit politically connected private interests through NLDC.
BULLOCK: That’s right. Once this case got before the Supreme Court the Community Rights Counsel rushed to the aid of the city of New London. It’s one of the few nonprofit organizations that actually did that.
TNI: Observers from across the political spectrum have described this arrangement as essentially fascistic. The government is not claiming direct ownership of private property, but a government-business partnership takes over the property and then transfers it to other private parties who are politically connected.
BULLOCK: Yes, and to the detriment of individual homeowners and small business owners, oftentimes poor folks and minorities. That’s why many folks on the political left opposed the Kelo decision—because it is corporate welfare. It is corporatism: a combination of private power and public power that’s being used for private gain, with local governments hoping that a few benefits will eventually trickle down to their communities in the form of higher tax revenues and jobs.
TNI: I’d like to ask you about the history of the erosion of private property rights through eminent domain. Let’s talk first about the courts’ ever-expanding, ever-more-arbitrary definitions of what constitutes “the public”—and the evolution from the constitutional definition of “public use,” to “public purpose,” and then to “public benefit.”
BULLOCK: Initially, eminent domain was confined largely to public works projects, or to what is known in the law as “common carriers.” These are quasi-private bodies, but regulated to such an extent by governments that they are essentially public entities, such as utility companies and railroads. They are regarded as “common carriers” because, under the law, people have the right of equal access to them, their rates are controlled, and in return they get special privileges and powers from the government.
But in its 1954 Berman v. Parker ruling, the Supreme Court expanded dramatically the power of eminent domain. It read the “public use” clause in the Constitution very broadly to mean “public purpose.” The public purpose that the Court upheld was a very popular goal at that time: urban renewal—also known as slum clearance or blight removal. The thinking was that America had gotten out of the Depression, had won World War II, and it was now time to turn our cities around and eliminate offensive conditions that existed in many places. The area at issue in Berman was in southwest Washington, D.C. It was in bad shape. About eighty percent of the properties didn’t even have indoor plumbing. It was truly what most people would consider a blighted neighborhood.
So the idea was: We’ll move these residents into efficient, well-managed public housing facilities on the outskirts of town, where they’ll live happily under the auspices and control of well-meaning planners. And in the blighted areas we’ll build new development projects, both public and private. The language in the Court’s opinion is incredibly sweeping about the importance of urban renewal programs, and the need to have a broad interpretation of the “public use” clause in order to transfer property from one private owner to another.
Berman was a legal revolution. Cities began to use eminent domain aggressively in urban renewal programs. Many state courts interpreted their own state constitutions as broadly as the Supreme Court did.
TNI: This appears to be one of the many cases where an erosion of individual rights takes place by establishing a precedent with something very popular, or against something very unpopular. Since slums are universally unpopular, the violations of rights are rationalized.
BULLOCK: Yes. An exception will be made.
TNI: But it doesn’t remain an isolated exception, does it?
BULLOCK: No. And, of course, the legacy of urban renewal is a complete public policy disaster. In The Death And Life Of Great American Cities, Jane Jacobs documents what happened as a result of urban renewal programs like the ones that were upheld in Berman. What was supposed to be incredibly beneficial to folks within the cities and lead to revitalization actually led to wholesale destruction of many inner city neighborhoods. It led to the displacement of people and the destruction of real communities where they lived together, worked together, struggled to eke out a living and pursue the American dream. Many cities have yet to recover from this.
"In 1981 the City of Detroit used eminent domain to take an entire neighborhood called Poletown."
One of the most notorious examples of eminent domain abuse occurred in 1981. The City of Detroit used eminent domain to take an entire neighborhood called Poletown. It was one of the last integrated neighborhoods within Detroit, an ethnic community originally made up largely of Poles. But General Motors wanted to expand its automobile facility. This is the early 1980s; the automobile industry is tanking; the City of Detroit wants to please General Motors. So the City used eminent domain to destroy an entire neighborhood to allow General Motors to build its plant.
The plant never lived up to expectations; it never hired as many people as promised. Most studies have shown that more jobs actually were lost from the destruction of the Poletown neighborhood than were gained from building the new GM plant. But the Michigan Supreme Court, in a five-to-two decision, read the “public use” clause in the state constitution even more broadly to mean that public benefits of increased taxation and jobs for the community justified the use of eminent domain. Most law students in the 1980s and 1990s, including me, studied the Poletown decision in law school because it said, in essence, that the “public use” clauses of the U.S. Constitution and state constitutions are dead.
TNI: Let’s back up for a second. Berman expanded the constitutional definition of “public use” to what?
BULLOCK: To “public purpose.” But the justification in Berman was not that the public purpose was to transfer property to other private parties. The public purpose was slum clearance, the removal of blight, the removal of offensive conditions. What happened to the property after it was transferred was really of no concern to the Court. Over the next several decades, however, other courts and governments pushed the envelope even further, saying: Well, if “public use” means “public purpose,” why can’t it also mean “public benefit”? That is what the city of New London did.
TNI:The whole point of the Constitution, of course, was not to charter an expansive government, but to limit and constrain government. Read in that context, then, the eminent domain clause in the Constitution was intended to codify restrictions on the taking of private property: it had to be taken for a specific public use, and just compensation had to be paid whenever that happened.
BULLOCK: The founders recognized that occasionally government has to use eminent domain power. It was known as a sovereign power of government. But—and this is an important point—the framers of the U.S. Constitution, and every state constitution as well, were so concerned about potential abuse of this power that they limited it through “takings clauses,” which essentially did the two things that you mentioned. First, when the government takes your property, they have to pay you for it. But second, they can only take it if it is for a “public use.” And the founders, like most people today—especially those who are not lawyers or planners—know what “public use” means: it’s a road, it’s a bridge, it’s a public building, it’s a reservoir.
TNI: Did the founders actually describe and define “public use” that way?
BULLOCK: It was treated as almost self evident, so there was not a lot of discussion of it. But one of the earliest Supreme Court decisions from the 1790s actually described the eminent domain power as “the despotic power” of government. They recognized that apart from putting you in jail, about the most serious thing the government can do to you is take away your land, take away your home, take away your business. They also recognized that the government cannot take property from A to give it to B. That was in one of the early Supreme Court decisions, and for a number of years governments used eminent domain authority sparingly for true public use projects, or for common-carrier projects like railroads and utilities when those came into prominence in the late 1800s.
The public use clause provides an added shackle on the power of government: recognition by the framers that property has value beyond its mere monetary worth—that people value their property as an extension of who they are and what they hold important, of their traditions and their history. If it were just a matter of money, the takings clauses in the U.S. and state constitutions would have said only, “private property cannot be taken without just compensation.” But they added that other important restriction to it: that the purpose of takings had to be for “public uses”—recognizing that the takings power is so extreme that it should be used sparingly, and only for important public projects.
TNI: The founders clearly wanted to put some restraint on society’s power over the individual, through the Constitution and the Bill of Rights. That might explain why the takings clause is worded as it is. But neither the founders nor anyone else in our nation’s history repudiated the notion of “the public interest,” or argued that the Constitution and the Bill of Rights should be an insurmountable barrier to the actions of government. An argument can be made that “eminent domain” represents the utilitarian premise in ethics gone wild. Do you agree that the takings clause can be viewed in one way as a constraint on government, but in another way as a camel’s nose under the tent for government power?
BULLOCK: Not if it’s interpreted in the way that I think it was written in the plain language of the Constitution. Because it doesn’t say “public interest” or “public purpose” or “common good.” The founders could have used that language—those notions were used and discussed at the time. But they used the very specific phrase of “public use,” which meant things that were to be owned or controlled by the government.
Many on the political left opposed the Kelo decision—because it is corporate welfare.
Now there’s an interesting discussion as to whether or not eminent domain is even necessary to build public works projects, or whether a lot of government services could be provided privately. But those considerations were not really in play at the time of the founders. Justice Clarence Thomas, in his dissent in Kelo
, went through that history meticulously and set forth what the founders were trying to do.
So does the takings clause provide some small camel’s nose under the tent? Perhaps. But I think interpreting the public use provision the way that it is written really does provide a significant check on the abuse of power in ninety-five percent of the controversies out there. A courthouse is a public use; a Wal-Mart is not.
TNI: And to my broader point, you could also say that we make exceptions during times of war about whether government can appropriate or move troops over private lands—things of that nature—because in certain emergency situations the rights of everyone are in jeopardy if the particular public use is not made.
BULLOCK: True. Remarkably enough, many countries with a weaker tradition of respect for individual rights and individualism have stronger protections for property when it comes to eminent domain. This sort of thing doesn’t happen much in Sweden or Germany or Japan. But it’s happening in America, the country that has traditionally respected individual rights the most. About the only other country where this is a real problem is China.
TNI: What caused the erosion in thinking in terms of principles with regard to constitutional interpretation? This whole notion that treats the Constitution as plastic, as something that we reshape based on our current caprices—aren’t there schools of legal theory that provide an excuse for doing these sorts of things?
BULLOCK: Legal scholar Randy Barnett just wrote a book called Restoring the Lost Constitution that traces how this happened. In Barnett’s account the positivist trend in legal theory encouraged this elasticity and subjectivity. As a result, courts today interpret provisions in the Constitution broadly. They view the Constitution as creating a vast sea of government power with small islands of individual rights. But the Constitution actually did exactly the opposite: it created a sea of individual liberty, with defined islands of government power and specific authorizations for government to act in only certain areas.
For example, everybody recognizes that the fundamental purpose of government is to protect us from the bad guys, to go after criminals. However, in the Bill of Rights are certain protections. The police can’t just go out and search everybody’s home in a certain neighborhood if somebody’s committed a heinous crime.
It’s the same with economic development. Sure, communities need economic development. However, it can’t be done in a way that violates people’s constitutional rights. Yet you see in many government offices the attitude that we are not going to abide by limiting principles, and the justification is that “we’re doing this for the common good.”
TNI: If these people thought in principles, they would be able to see that the precedents established by Kelo could be applied in ways that the ramifications would shock them. If we apply across the boards the premise that a “public purpose” can trump individual rights, why not that “midnight knock on the door,” invading and searching everybody’s home for the public benefit of catching the bad guys?
BULLOCK: Justice [Clarence] Thomas had a great line about that in his Kelo dissent. He said the decision now meant that the government isn’t allowed to go into your home under most circumstances, but it can take the home itself away from you and knock it down.
TNI: I was amazed at the breadth of hostility to the Kelo decision across the political spectrum. Even the more principled liberals realized that once you obliterate protections for the individual with regard to his home—rationalizing that the individual can be sacrificed for public benefits and public purposes—then the Bill of Rights no longer provides any restraints on government actions.
BULLOCK: People are absolutely outraged about this decision. One of the reasons why many people on the political left objected to the decision is because they know exactly how decisions are made on the local level.
TNI: Justice Sandra Day O’Connor was explicit about that in her own dissent.
BULLOCK: Yes. She observed that you could always dress up even the most blatantly private taking in the guise of some public benefit, since all private businesses have at least the potential to create jobs and create more tax revenues.
Justice O’Connor’s description of what would happen in the aftermath of the Kelo
case—the obliteration of rights and of constitutional protections—parallels Ayn Rand
’s descriptions of the “institutionalized gang warfare” of the welfare state. Governmental bodies become political footballs competed over by warring economic factions. In that kind of game, only one kind of victor will emerge: the most ruthless, the most powerful, and the richest are going to prevail.
BULLOCK: And those who know how to play the game. The ones who are used to going to city council meetings and have great PowerPoint presentations about all the benefits that are going to come to the city. The people who are best able to take advantage of the process are the ones in the know—who have power, influence, money, who know all the local influential people within the community.
Homeowners like Susette Kelo can’t do that. She’s a registered nurse who was working three jobs, eking out a living, trying to get by while taking care of her disabled husband. She’s not politically savvy. She doesn’t know how to work with city council members. She did the best that she could, but she doesn’t know that game.
That’s why so many on the left opposed the Kelo decision. The NAACP was on our side, the Southern Christian Leadership Conference, the AARP—because they recognize that oftentimes the communities targeted by eminent domain have older people and minorities living there. So non-traditional alliances were formed. We had twenty-five briefs filed on our side.
TNI: Kelo was a narrow five-to-four decision. Obviously the points of law were sufficiently balanced that the Court could have come down either way. So what could have possessed the justices here, and in the earlier cases in Connecticut, to come down in favor of unleashing government power in this dangerous way?
BULLOCK: Of course I don’t know. But Supreme Court justices live in a pretty rarefied atmosphere. No doubt they saw the broad precedents from the past fifty years and said: Well, this is in keeping with what we have endorsed in recent cases. Yes, it is an expansion of power; and yes, we have not approved explicitly the use of eminent domain for raising more tax revenue. But this is in keeping with cases that we’ve decided from 1954 on, so we’re going to continue that tradition.
The legacy of urban renewal is a complete public policy disaster.
They should have recognized what this is actually going to mean, especially given the very powerful dissent of Justice O’Connor. I bet they’re taken aback by the reaction of the public. I don’t know if they were aware of how offensive most Americans would find this decision to be, not only to the Constitution but to common notions of fairness and justice. How could the Supreme Court say that it is okay for the government to take my land to give to another private entity that just happens to be wealthier and perhaps pays more tax revenue? Some Supreme Court justices recognize that this has damaged the reputation of the Court—the defender of the individual, the defender of ordinary folks against powerful entities within the U.S.
TNI: The rebellion also has taken the form of symbolic protests against Justice Souter, and, I believe, against one of the other justices. This represents in my mind a kind of populist backlash—“Well, let’s give them a taste of their own medicine. Let’s force them to live under the legal conditions they’ve created, and have a taste of what it’s like to be victimized.”
BULLOCK: I understand the point of those protests. But more encouraging is the fact that people have been awakened by this action. After years of ignoring this abuse, there is a serious move afoot now in many state legislatures to change the laws.
In Kelo the Court was incredibly divided, with very powerful dissents by Justice O’Connor and Justice Thomas. Even the majority went out of its way to say that state supreme courts are free to interpret their state constitutions differently. While the federal Constitution simply provides a floor of protection, states are free to recognize greater protections for citizens under their own constitutions.
Now state supreme courts know that and feel freer to rein in eminent domain abuse. Thankfully, the trend in the state courts has been to provide greater protection—and we’re going to work very hard to make sure that trend continues. I mentioned previously the Poletown decision. We participated in a case last year decided by the Michigan Supreme Court in which it unanimously overturned its Poletown ruling, saying that it had been a mistake, something that never should have been decided in the government’s favor. I think that trend will continue, especially given the public outrage about Kelo.
TNI: IJ has announced a “hands off my home campaign,” and the launch of the “Castle Coalition.” Explain what those efforts are.
BULLOCK: The is a grassroots activist network we have formed. It’s a project of IJ that aims at defeating eminent domain abuse before it goes to litigation. We’ve had a number of success stories, and we are going to work very hard with property owners, activists and even legislators to institute changes at the state level throughout the country.
The “hands off my home” initiative was in direct response to Kelo, to try to take the momentum and anger that’s out there and turn it into productive activism. We initially committed $3 million to this campaign. It will employ litigation, legislation, grassroots activism, and other activities to capitalize on one of the most despised court decisions in recent memory, and, I hope, put a stop to this abuse.
We have presented to state legislators model legislation to try to put some real limits on eminent domain. The Castle Coalition Web site maintains updates on where things stand in every state. It gives citizens a way to contact their representatives and make clear that they want laws changed to protect homeowners and small business owners.
TNI: Alabama was the first to initiate a significant statutory change, right?
BULLOCK: It is a law that prohibits the type of condemnations specifically at issue in the Kelo case—the use of eminent domain simply to generate more tax revenues, or for economic revitalization. It is a good first step. The law has to be further changed, however, to remove the abuse of blight laws, because oftentimes that’s a backdoor way of seizing private property for private developers. At one time “blight” meant a truly blighted neighborhood; then it meant a sort of blighted neighborhood; and now some state blight laws contain such vague language that just about any neighborhood could be declared blighted as a way of gaining eminent domain authority to give the property to private developers.
TNI: The definition of “blight” probably being that your existing property has less desirability than the projected property.
BULLOCK: Exactly. Economic obsolescence is one of the criteria in a number of state blight laws. So those have to be tightened up to make sure that again, blight laws are not used as a backdoor way of abusing eminent domain for private development.
TNI: Are you involved in any litigation at the state level right now?
BULLOCK: Yes. Ohio has a terrible eminent domain abuse problem. We’re involved in a case out of Norwood, a suburb of Cincinnati. This is a blight case. A private developer essentially bought off the city’s eminent domain authority. A developer wasn’t able to obtain all the property for his private development project so it told they city that it must do a blight study—funded by the developer. And the study found—guess what?—that the neighborhood is blighted. The developer agreed to pay not only for the cost of acquiring the property and to reimburse the city for it, but to pick up the city’s tab for the condemnations as well. In other words, the city has hired a private law firm to defend an eminent domain action paid for by a private party. This is almost a complete contracting out of the city’s eminent domain power.
The judge in the case held that the city abused its discretion in declaring this neighborhood to be blighted. But the city of Norwood has another provision in its statute which said that eminent domain could be used not just for a blighted neighborhood, but for a deteriorating neighborhood—which, of course, under their interpretation could encompass literally any residential neighborhood whatsoever.
TNI: Sure. Any home that you put up is immediately deteriorating. You also are insisting that governors sign a pledge. What’s that about?
BULLOCK : We want legislators, governors, and public officials to go on the record saying that they oppose the use of eminent domain for private development. That’s another thing we’ll be pushing.
TNI : Where do you see this ultimately going?
BULLOCK: We’re going to do everything in our power to make sure that substantive changes are made to the laws, and that precedents are established within the states. And we think we have real momentum behind us. However, there are going to be big challenges because while the powerful folks on the other side might not have public support, they have a lot of influence with legislators. Developers and business interests and city officials, for example, have been rallying to prevent substantive changes to eminent domain laws. But we are confident, given the outrage about this decision—the fact that so many people think that this is simply wrong.
TNI: Wrong because the Constitution is supposed to protect individuals?
BULLOCK: Yes. Wrong from just about any perspective. Most people think that this shouldn’t be happening in this country. America is a country that respects individual rights. That was what it was founded upon. This decision violates fundamentally America’s respect for individual rights—those of homeowners, small business owners, and ordinary people who work hard to obtain their piece of American dream, and are simply trying to hold on to what is rightfully theirs. We in America respect people’s homes, we respect people’s small businesses, and the government can’t take those things away unless they have a really compelling justification.
TNI: And IJ’s agenda is to protect individual rights.
BULLOCK: Absolutely—to protect individual rights from government abuses. That’s true in private property rights cases, and in other areas in which we litigate—defending entrepreneurs from excessive and unreasonable government regulations, protecting free speech rights—all the issues that we’re involved in are directed toward the preservation of individual rights.
TNI: One thing that has always impressed me about IJ is the fact that you understand tactical positioning. You always position yourselves on behalf of the victims against the bad guys.
BULLOCK: The individual human story is what most people are interested in. That’s what really motivates folks. We just ask our clients to tell their stories, and that really resonates with people.
It’s one thing for the lawyers to go out and talk about it. But for Susette Kelo to face this—to come home the day before Thanksgiving and find an eviction notice posted on her door saying, You’ve got to be out of this home in 90 days—what that does to her, personally, the effect that this has upon her—now that really speaks to people.
> Sidebar: "Scott Bullock and the Kelo Case"