A disastrous Supreme Court decision against property rights

Majority: Your rights are for sale to the highest bidder

For a thorough encyclopedia entry on the case, see http://en.wikipedia.org/wiki/Kelo_v._New_London

For the Institute for Justice news release on the decision, click here.

For the magisterial dissent of Justice Clarence Thomas, click here.

WASHINGTON -- The Supreme Court has ruled that local governments may seize people's homes and businesses -- even against their will -- for private economic development.

The case is Susette Kelo et alia v. City of New London, Connecticut. The picture at the left shows one of the homes sacrificed by the Supreme Court's ruling. The decision carries huge implications for every American, particularly those who live in rapidly growing urban and suburban areas with conflicts between development and property ownership rights.

The 5-4 ruling represented a defeat for Connecticut home-owners whose homes will be destroyed to make way for an office complex. The owners argued that cities have no right to take their land except for projects with a clear public use, such as roads or schools, or to revitalize blighted areas.

With the Kelo decision, the high court gave cities wide power to bulldoze residences for projects such as shopping malls and hotel complexes to generate tax revenue.

Local officials, not federal judges, know best in deciding whether a development project will benefit the community, justices said.

"The city has carefully formulated an economic development that it believes will provide appreciable benefits to the community, including -- but by no means limited to -- new jobs and increased tax revenue," Justice John Paul Stevens wrote for the majority.

He was joined by Justice Anthony Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

The key issue was the scope of the Fifth Amendment, which allows governments to take private property through eminent domain if the land is for "public use."

Susette Kelo and several other homeowners in a working-class neighborhood in New London, Connecticut, filed suit after city officials announced plans to raze their homes for a riverfront hotel, health club and offices.

New London officials countered that the private development plans served a public purpose of boosting economic growth that outweighed the homeowners' property rights, even if the area wasn't blighted.

Justice Sandra Day O'Connor, who has been a key swing vote on many cases before the court, issued a stinging  dissent. She argued that cities should not have unlimited authority to uproot families, even if they are provided compensation, simply to accommodate wealthy developers.

The lower courts had been divided on the issue, with many allowing a taking only if it eliminates blight.

"Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random," O'Connor wrote. "The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."

She was joined in her opinion by Chief Justice William H. Rehnquist, as well as Justices Antonin Scalia and Clarence Thomas.

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