Kelo v. New London and the Backlash That Reached Statehouses Nationwide

The Supreme Court decides who wins in court. The people decide who wins in the end. In June 2005 the Court decided a property-rights case that most of the country had never heard of. Within a year, legislatures in states red and blue were moving to undo it, and within a few years most states had. A President signed an executive order in response. Voters in several states went to the ballot box and rewrote their own constitutions. And the winners in the case, the city that took the homes, never got the project it took them for.

If you want to understand how the American system really responds to a bad ruling, this is the case to study. It is a story of a little pink house, a pharmaceutical company, a nonprofit with big plans, five justices against four, and a public that refused to take no for an answer. Let me tell it in order.

What the Constitution says

Start with the text. The Fifth Amendment ends with a clause that every landowner should know by heart: private property shall not be taken for public use without just compensation. That sentence does two jobs. It grants the government the power of eminent domain, the power to take property from an unwilling owner. And it limits that power with two conditions: the taking must be for "public use," and the owner must be paid.

The fight in Kelo was over the first condition. What does "public use" mean? One reading says the government may take land only for things the public actually uses or owns, such as a road, a courthouse, a school, a military base, or a railroad that serves the public. A broader reading says "public use" means any public purpose or benefit, which could include a private business expansion if the community benefits. The Supreme Court had been drifting toward the broad reading for fifty years. In Berman v. Parker (1954), it upheld taking property in a blighted section of Washington, D.C., for redevelopment. In Hawaii Housing Authority v. Midkiff (1984), it upheld a land-reform statute that broke up concentrated landholdings. Both cases involved real social problems. Neither had involved taking a healthy, well-kept home from one private owner and handing it to another for profit.

New London and the Fort Trumbull plan

Enter New London, Connecticut, a small port city that had been in a long economic decline. In 1998 the pharmaceutical giant Pfizer announced a large research facility next to a neighborhood called Fort Trumbull. City officials saw an opportunity. They turned to the New London Development Corporation, a private nonprofit that the city had designated to plan economic development. In 2000, the city council approved a development plan for roughly ninety acres of the Fort Trumbull area. The plan called for a hotel and conference center, new residences, retail and office space, a riverfront walk and a state park, all meant to complement the Pfizer facility and to bring jobs and tax revenue to a struggling city.

The plan needed land. Most owners sold. But a handful would not, and the city authorized the Development Corporation to use eminent domain against them. The holdouts were nine owners of fifteen properties. Their houses were not blighted. Nothing in the record said the homes were unsafe or the neighborhood a slum. The city's case was that the area would be put to a better use and generate more taxes.

The best-known holdout was Susette Kelo, a nurse who had bought a small house on the water, painted pink, and fixed it up. With help from the Institute for Justice, a public-interest law firm that defends property owners, the owners sued. The state trial court ruled against part of the taking and for part of it. In 2004, the Connecticut Supreme Court, by a 4-3 vote, upheld the taking of all the properties. The case went to Washington.

The decision: June 23, 2005

The Supreme Court heard argument in February 2005 and ruled on June 23. It split 5 to 4, and the lineup surprised people. Justice John Paul Stevens wrote the majority opinion, joined by Justices Kennedy, Souter, Ginsburg and Breyer. Justice Sandra Day O'Connor wrote the principal dissent, joined by Chief Justice Rehnquist and Justices Scalia and Thomas. Thomas also wrote his own dissent.

Here is what the majority held, in plain words.

1. Economic development is a traditional and long-accepted function of government. A city may seek to revive a depressed area, and the Court would not second-guess a city's judgment about what improves the community.
2. The city had a comprehensive plan, carefully formulated, not a scheme to hand property to one favored buyer. So the plan satisfied "public use" as the Court had come to read it.
3. The Court would defer to the legislature's determination of what counts as a public purpose, rather than require proof that the benefits would actually come.

Justice Kennedy, in a concurrence, added a caution. A court should be alert to a taking that is really a disguised favor to a private party and should look closely at the facts if a plan is a pretext. He did not find that here.

Then Justice Stevens added a sentence that turned out to matter a great deal: nothing in the opinion stops any state from placing further restrictions on its exercise of the takings power. In other words, the Fifth Amendment sets the floor. The states may build a higher one.

O'Connor's dissent and Thomas's

Justice O'Connor's dissent is one of the clearest statements of a conservative property case ever written. She argued that the Court's earlier cases had involved takings that either served a public purpose by public ownership or access, or removed a real harm, such as blight. Now, she warned, the line between public and private use had been erased. Under the majority's reasoning, any home could be taken and given to a private developer so long as the new use might produce more tax revenue or jobs. The beneficiaries, she wrote, would be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. The homeowner would lose to the better-connected.

Justice Thomas went further. He argued for returning to the original meaning of "public use" and noted that eminent-domain projects of the urban-renewal era had fallen hardest on poor and minority neighborhoods. This is an important point. Whatever you think of property rights as an abstraction, a government that can take any home for a better-funded purpose will usually take from those with the least ability to fight back. The cause of the small owner is not only a conservative cause. It is the cause of the poor, the elderly and the unconnected, everywhere.

The strongest case for the majority, stated fairly

I want to give the other side its best day, because there is a serious argument here and it deserves an honest answer.

One. The Constitution does allow takings, so the question is where to draw the line. Two. The judiciary is poorly equipped to decide which economic plans are wise and which are not. Three. Drawing a line between "public use" and "private benefit" is hard, because nearly every public project also benefits private parties, from the contractors who build a highway to the stores that open beside a stadium. Four. A city that has studied its needs and followed a public process has done what we usually ask of a democratic government. Five. The proper remedy for a bad use of the power is the ballot box and the legislature, not a lawsuit.

The fifth point is the interesting one, and the story that follows proves the majority half right. The remedy was indeed the legislature. Where the majority erred was in assuming that the courts should supply none of the protection. The Fifth Amendment is a limit on government. When a limit is in the text, a court's job is to enforce it, not to hand the keys back to the politicians who are testing it. Nobody asks the legislature to protect free speech because "the ballot box is the remedy." The same should be true of property.

The backlash

The reaction was fast and it crossed party lines. Lawmakers of both parties rushed to introduce bills in the months after the decision, and within a few years most states had enacted some kind of reform, through statute or through a change to the state constitution. Here is a sampling of how it went, and I would urge you to check the details in your own state.

• Michigan. The state's supreme court had already acted. In County of Wayne v. Hathcock (2004) it overruled its own earlier decision in Poletown Neighborhood Council v. Detroit (1981), which had allowed the clearing of a Detroit neighborhood for a General Motors plant. After Kelo, Michigan voters went further and amended the state constitution in 2006 to bar takings for private economic development.
• Florida. Lawmakers acted in 2006, and Florida voters added a constitutional amendment that makes it harder for the legislature to allow transfers of taken property to private parties.
• Texas. The legislature passed a statute in 2005 that curbed the use of eminent domain for economic development.
• Washington. On the first anniversary of the decision, June 23, 2006, President George W. Bush signed an executive order directing federal agencies to use eminent domain only for the benefit of the general public and not merely to advance the economic interest of private parties.

States differ in how tightly they restrict the power, and some of the reforms left loopholes, such as exemptions for blight declarations that cities could stretch. That is the nature of the work. Rights get protected unevenly, state by state, as long as citizens keep paying attention. It is federalism doing its job, and it is the point of Brandeis Called the States Laboratories and Conservatives Took Him at His Word.

The punchline: the project never came

Now for the part that stings. The city won the lawsuit. The plan did not follow. The Fort Trumbull homes were cleared, except for Susette Kelo's house, which was moved to a new location, and the development the city had promised did not materialize as planned. Pfizer announced in 2009 that it would close its New London research facility, and for years much of the land the city had cleared sat largely empty. Check local reporting for the state of the site today, but the broad outline is not in dispute: the community lost its homes and the promised benefits did not arrive.

That is the lesson I would draw for every town council. Projections about jobs and tax revenue are guesses. A guess is a thin reason to take a family's home. When a government forces a sale, it should be sure that the public purpose is real and the plan is sound, and if it isn't sure, it should wait. The better path in a growing economy is to buy land from willing sellers at a fair price. Many of the owners in New London did sell, and the city could have built around the rest.

What this means for a landowner today

If you own a farm, a home or a small business, the law of your state is your first line of defense, not the federal Constitution. So do this.

1. Read your state's eminent-domain statute and any constitutional provision on takings. Your legislature's website has them. Look for what counts as "public use," whether economic development qualifies, and what compensation is required.
2. Find out who in your state may condemn property. In many places, private companies such as pipeline operators hold that power under state or federal law, and the rules are different from a city's.
3. If a taking is proposed, attend the hearings. Ask for an independent appraisal. The right moment to fight is before the vote. how a bill becomes a state law, and where a citizen can step in shows how to reach your legislator, and How a Backyard Lot and a Farm Pond Became Federal Waters, Then Didn't shows what happens when a government stretches an old law over private land.
4. Remember the constitutional baseline. The Fifth Amendment guarantees just compensation, and Originalism Explained for People Who Skipped Law School explains why many conservatives read "public use" the way Justice O'Connor and Justice Thomas did.

The bottom line

• Kelo v. City of New London (2005) held, 5 to 4, that taking homes for a comprehensive economic-development plan can count as "public use" under the Fifth Amendment.
• The ruling invited states to restrict the power, and they did. Most states enacted reforms, and some wrote the limit into their constitutions. A President also limited federal takings by executive order in 2006.
• The cleared land did not become the promised development, a reminder that official projections are not a reason to take a family's home.
• Your best protection is your own state's law. Read it, ask your legislators where they stand, and show up when a taking is proposed.
• The fix for a bad ruling is not despair. It is organizing, state by state, one statute and one vote at a time.