Kelo v New London: Taking Land for Private Development Doesn’t Violate Constitution

In Kelo v New London, 545 U.S. 469 (2005), the U.S. Supreme Court held that using eminent domain to transfer land from one private owner to another private owner to further economic development did not run afoul of the Fifth Amendment’s Takings Clause.

Facts of Kelo v New London

After approving an integrated development plan designed to revitalize its ailing economy, the City of New London, Connecticut, through its development agent, purchased most of the property earmarked for the project from willing sellers. However, it also initiated condemnation proceedings when petitioners, the owners of the rest of the property, refused to sell.

Petitioners filed suit, alleging that the taking of their properties would violate the “public use” restriction in the Fifth Amendment’s Takings Clause. The trial court granted a permanent restraining order prohibiting the taking of the some of the properties but denying relief as to others. Relying on cases such as Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), and Berman v. Parker, 348 U.S. 26 (1954), the Connecticut Supreme Court affirmed in part and reversed in part, upholding all of the proposed takings.

The Majority’s Decision in Kelo v New London

By a vote of 5-4, the Court held that city’s taking of private property to sell to a private developer qualified as a “public use” under the Takings Clause. Justice John Paul Stevens wrote on behalf of the majority, which included Justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg, and Stephen Breyer.

In reaching its decision, the majority highlighted that the Court had embraced the broader and more natural interpretation of public use as “public purpose.” With regard to the takings in the case, the majority held that the city’s determination that the area at issue was sufficiently distressed to justify a program of economic rejuvenation was entitled to deference.

“Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan,” Justice Stevens explained. The majority further held that because that plan unquestionably serves a public purpose, the challenged takings satisfied the Fifth Amendment. 

The majority rejected calls on the Court to adopt a new bright-line rule that economic development does not qualify as a public use. As Justice Stevens wrote, the proposal was “supported by neither precedent nor logic.” He added: “Promoting economic development is a traditional and long accepted governmental function, and there is no principled way of distinguishing it from the other public purposes the Court has recognized.”

The majority also rejected the petitioners’ argument that the Court should require a “reasonable certainty” that the expected public benefits will actually accrue in such takings cases. “Such a rule would represent an even greater departure from the Court’s precedent. The disadvantages of a heightened form of review are especially pronounced in this type of case, where orderly implementation of a comprehensive plan requires all interested parties’ legal rights to be established before new construction can commence,” Justice Stevens wrote. “The Court declines to second-guess the wisdom of the means the city has selected to effectuate its plan.”

The Dissent in Kelo v New London

Justice Sandra Day O’Connor authored a dissent, which was joined by Justices Rehnquist, Scalia, Thomas. The dissenters argued that the majority decision eliminated “any distinction between private and public use of property — and thereby effectively delete[s] the words ‘for public use’ from the Takings Clause of the Fifth Amendment.” As Justice O’Connor further wrote: “Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”