Court widens scope of property seizure

Government officials do not violate the US Constitution when they seize and demolish homes and businesses to make room for private development.

In a major decision that narrows the constitutional protection of property owners, the US Supreme Court ruled Thursday that the Fifth Amendment's Takings Clause authorizes government seizure of private property even when it merely offers a benefit to the public, rather than actual public use.

The 5-to-4 decision means that state and local officials can continue to use the government's power of eminent domain to take private property and turn it over to a private builder as a form of economic development. Writing for the majority, Justice John Paul Stevens said that a century of case law interpreting the Takings Clause "dictates" that the court adopt a permissive interpretation of the government's eminent-domain power.

In a dissent, Justice Sandra Day O'Connor warned that the ruling could bring dangerous consequences for owners of homes and other properties. "Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded," she writes.

The ruling is a major victory for planning and development officials in economically depressed regions struggling to spark economic renewal. The decision will make it easier to encourage some private development projects by exempting them from the usual requirement that property be purchased on the open market.

At the same time, the court's action marks a crushing defeat for a group of New London, Conn., residents who filed suit in December 2000 to block efforts by the city to seize and demolish their homes and businesses to make room for a 90-acre office, hotel, and housing complex. Facing the wrecking ball are 15 homes and businesses owned by seven families in the city's Fort Trumbull neighborhood.

Scott Bullock, a lawyer with the Institute for Justice, which represented the homeowners, said the court's decision marks "a sad day for the country and a sad day for the Constitution."

"The fight against eminent-domain abuse will now turn back to the state supreme courts, where the battle will be fought out under state constitutions," he says. "We and many other people will be there to fight [on behalf of] homeowners."

City officials said the riverfront project was necessary to boost New London's sagging tax base, and thus it qualified as an economic development project, justifying the city's use of its eminent domain power.

Residents countered that the project was a land grab. since their property was being turned over for $1 a year to a private developer who would retain all profits from the completed project. The benefit to the city was an anticipated boost to local tax rolls.

The Constitution's Fifth Amendment says that private property may be taken by the government if fair compensation is paid to the owner. But there is a second requirement: The property may be taken only if it is for "public use."

The precise issue before the Supreme Court was whether a privately owned development project amounts to a "public use" of the homeowners' former properties.

Such public uses include a public highway, public school, or military base. Public use also includes the taking of property for privately owned businesses such as railroads, power companies, and other firms that need contiguous land to offer regulated services to the public. Elimination of urban blight has also been identified as a public-use taking.

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