Government uses its eminent domain power for a host of reasons. Classic examples are the need to construct a bridge, a port, a national park, or a government office building. More contemporary instances include the elimination of a public nuisance like an unprotected hazardous waste dumping site or a row of dilapidated crack houses overrun by vermin. The public generally understands that the government will exercise its eminent domain power to take private property in only three circumstances: when government personnel will use it, when the public will use it, or when private parties will use or develop it for the public’s benefit in a quasi-governmental capacity.
A decade ago, however, the Supreme Court of the United States gave its approval to an unprecedented and remarkable use of the eminent domain power. In Kelo v. City of New London, the Court ruled that as long as a property owner is paid the fair market value of what is taken, the Constitution permits a city to transfer that property from one private party to another—literally from A to B, in that case, from a homeowner to a real estate developer—because the city prefers what B will do with that land.
New London decided that certain particular tracts of private property would be more profitable to the community if the property belonged to different owners and was put to a different use. Unlike what is supposed to happen in an urban renewal program, the city took perfectly kempt and functioning homes away from long-term city residents and gave the homes and the ground land to a private real estate developer in the hope of enticing a large corporation to locate a facility in the area.
The homeowners challenged the takings in court. They lost in the state courts, but the Supreme Court agreed to hear their plea. Unfortunately for the landowners, however, the Court ruled by a five-to-four vote that as long as just compensation is paid, the government may transfer property from one private party to another not to remedy a social ill, but as long as the government can mount the claim that the latter party will use the land in a manner that improves the local economy.
The Kelo decision did not sit well with the public, and the disquiet it caused reached across political lines. “The stark realization that one person could be booted off his property so that another could take his place brought forth a huge sigh of disbelief from all parts of the political spectrum.” Modern-day liberals (also known as progressives) treated the decision as yet another capitulation to a well-heeled business interest at the expense of politically powerless individuals, parties who would not even have had the means to defend their homes were it not for the assistance of a public-interest organization, the Institute for Justice. Conservatives (also known as classical liberals) saw the case as a violation of the principle that a person’s home is his or her castle, a tenet reflecting the belief that one’s home is a place of refuge, security, and comfort and should be protected by the law.
Seeing that their homes could now be taken by the government for use by a private developer in virtually any case, the public voiced an immediate and vocal opposition to the Kelo ruling. The public believed that the Kelo case did not involve a taking in circumstances remotely similar to the types of uses that historically justified the government’s exercise of the eminent domain power and put in jeopardy one of the rights that traditionally has defined the American dream: the right to own a home.
Some states responded by amending their constitutions and their statutory codes; others had state court rulings that rejected the rationale of Kelo. Congress has not responded to Kelo, however, and the Supreme Court has not revisited the issue in the past decade. Kelo therefore remains the Supreme Court’s most recent discussion of the meaning of the Public Use Clause.
Tenth anniversaries are fitting occasions for the re-examination of Supreme Court cases. A decade is ample time to witness how a ruling has played out in the lower federal and state courts; what, if anything, the Congress and state or local legislatures have done in response to the decision; whether the Supreme Court has revisited the issue and reaffirmed it, revised it, or tossed it into the ashbin; and how the public has responded to the ruling. In other words, have the states, cities, and public accepted the ruling and moved on to other issues, or do any of them still harbor a lingering distaste for what five people on Maryland Avenue have allowed the government to do to property owners?
This Legal Memorandum is one step in the re-examination process.
The Common Law
The common law strongly guarded property rights. Blackstone found that under English law and custom, “every man might use what trade he pleased.” John Locke wrote that men created civil society to protect “property” along with life and liberty. Adam Smith believed that the right to pursue a lawful occupation was an essential element of the right to “property.” “The seventeenth-century English constitutional maxim making liberty dependent on security in private rights to property may be the most familiar legal doctrine identified by historians of that period.” By the following century, in the “pantheon of British liberty there was no right more changeless and tireless than the right to property.”
The Colonists brought the common law with them to the New World, including its steadfast protection for property. The Framers of the Constitution also made known the value that they placed on property. “John Locke and the Whig emphasis on the rights of property owners profoundly influenced the founding generation.” As James Madison put it, “[g]overnment is instituted no less for the protection of the property, than of the persons of individuals.” Other members of the Founders’ generation also extolled the benefits of private property and supported strong legal protection for its ownership.
The Public Use Clause
The Constitution protects private property in several ways. One of the explicit protections afforded property by the Constitution can be found in the Fifth Amendment. Read as a whole, the Fifth Amendment speaks directly to the government in two ways. First, it places certain actions completely out of bounds. No one may twice be put in jeopardy of losing life or limb for the same offense, and no one may be compelled to be a witness against himself in any criminal case. Those clauses contain some terms that need to be spelled out—When are two crimes “the same offense”? What does it mean to be a “witness” against himself or herself?—but the text is clear that what the Framers had in mind was a complete prohibition on particular government actions.
Otherwise, the amendment allows the government to pursue others only if it satisfies certain conditions. No one may be charged with a serious crime unless a grand jury has first made that decision. No one may be deprived of life, liberty, or property unless the government has afforded him or her due process of law. And no private property may be taken for public use unless the owner has received just compensation. Here, too, the clauses contain specific terms that need fleshing out—What compensation is “just”?—but the text only attaches a condition to the government’s exercise of sovereign power; it does not impose a flat ban.
The portion of that amendment discussed in Kelo provides as follows: “nor shall private property be taken for public use, without just compensation.” The portion referring to a taking “for public use” has come to be known as the Public Use Clause, even though it is really just a phrase. The clause could be read in different ways. One reading treats the term “public use” as a limitation on the type of takings that the government may pursue. That is, it assumes that the government can exercise its eminent domain power only in those instances where the property taken from its original owner will be used by or for the public. Examples would include bridges, seaports, public parks, military bases, government offices, and so forth.
A second interpretation of “public use” would limit not the government’s ability to take property, but the requirement to pay compensation. That is, the government must provide a property owner with just compensation only when the taking is for a public use; takings for a private use would not require any payment. That interpretation, however, while textually plausible, leads to anomalous results. A property owner suffers the same harm regardless of the recipient. Whether the government takes his land for a public wharf or hands the deed over to a private party for a private wharf, the owner has lost his property. Compensating only some takings, moreover, would readily skew the takings process toward whatever category is free. The government could always evade paying compensation simply by taking title to property for a private party, leasing the property back from that third party for some period, and eventually purchasing it. It is doubtful that the Framers, who saw private property as a feature to be protected, intended to allow the government to manipulate the eminent domain power in that way to avoid paying a landowner for his loss.
Another aspect of the Fifth Amendment also supports that conclusion. A condition necessary for a taking to be lawful is that the property owner must receive “just compensation” for his loss. That term has always been construed in an objective manner to mean the fair market price for the property. As a practical matter, that formula means a property owner cannot recover for the loss of any unique or special subjective value that he places on the land. It may be that the land the government needs for a military base has been in his family since the state entered the union or that he was born in the house that the state wants to turn into a federal office building. All that and more may be true, but the government does not need to compensate him for the loss of those attributes he holds so dear because that loss is “part of the burden of common citizenship.”
The standard for measuring just compensation sheds light on the proper interpretation of the Public Use Clause. The formula for determining what compensation is due is not oblivious to the unique value that a property owner may place on his homestead. The just compensation requirement does not require the government to pay a landowner for that loss because the “use” to be made of the property will benefit the property owner either because the government as the public’s representative will use it (think military base) or because he, like every other member of the public, can use it (think highway). The “public use” requirement therefore justifies the reduced compensation that a property owner will receive. Weaken or eliminate the “public use” requirement and you render unjust the compensation that an owner receives.
From the Gilded Age to the New Deal
The Supreme Court had interpreted various clauses in the Constitution before the 19th century was even one-quarter done. The Public Use Clause, however, was not among them. The Supreme Court did not decide that the federal government could exercise the eminent domain power until 1875. The Court also did not rule that the Takings, Public Use, and Just Compensation Clauses applied to the states until very late in the 19th century. The result is that most of the Supreme Court decisions interpreting the Public Use Clause are 20th century decisions.
The late development of Public Use Clause precedent is unfortunate for two reasons. One is that there is no Supreme Court decision construing the clause by justices who were contemporaries of the Founders. We therefore may not know all of the reasons why the Framers of the Constitution and Bill of Rights included that clause in the Fifth Amendment. We certainly do not have the opinions of justices who knew the Framers far better than we do.
The other problem is that the Court did not develop a body of case law interpreting the Public Use Clause when the nation was principally a rural society and its economy was largely based on agriculture, a sector in which land is critical. Instead, the Court first began to construe the Public Use Clause when the cities were filling out and the economy was based on industry, especially heavy industry like the steel being manufactured for railroads.
Those differences may be quite significant because the value given to realty and personalty may have flip-flopped as the 19th century progressed. If so, that development could explain why the late 19th and early 20th century federal and state decisions read the Public Use Clause quite narrowly, interpreting it to include takings done for a “public purpose” as well as a “public use,” regardless of who the recipient was.
There was, however, a related body of Supreme Court decisions interpreting the Due Process Clause of the Fourteenth Amendment. The most famous—or infamous, depending on your perspective—decision in that series is Lochner v. New York.
Lochner involved the New York Bakeshop Act of 1895, a law that was allegedly motivated by the Progressive Era interest in advancing the secular welfare of mankind through government intervention. Among other things, the act limited to 60 per week and 10 per day the number of hours that a baker could work. New York defended the statute on the ground that it would redress squalid conditions found in New York City’s highly decentralized baking industry.
Arrested for violating the statute by allowing an employee to work during one week more than the maximum number of hours permitted by the law, Lochner was convicted at trial. He argued on appeal that the statute unconstitutionally interfered with his right to enter into contracts as he and his employees saw fit. The New York courts rejected Lochner’s argument, but he prevailed in the Supreme Court.
Writing for a five-to-four majority, Justice Rufus Peckham began by noting both that “the right to purchase or to sell labor” is a form of “liberty” protected by the Fourteenth Amendment’s Due Process Clause and that, accordingly, the government cannot arbitrarily deprive someone of that right. Justice Peckham then examined the health and safety rationale offered for the statute, undertaking a de novo review of the relationship between an hourly workday limitation and the alleged benefits of that cap. Finding none, he concluded that the purpose of the law was to limit competition for the benefit of unions rather than to protect individual bakers. That was an impermissible application of the police power, Justice Peckham reasoned, and, because it arbitrarily deprived Lochner of the liberty to enter into a contract that he and his workers found reasonable, the New York Bakeshop Act was unconstitutional. Lochner and some cases like it remained good law until well into the New Deal.
Over the next four decades, the Supreme Court decided a handful of cases raising issues under the Public Use Clause without developing a theory explaining why the Framers used that clause in the Fifth Amendment or what justifications were necessary to satisfy its requirements. Some consistent themes, however, developed over time. One theme was that the term “public use” meant “public use or public benefit,” while another was that there was an almost limitless number of public benefits that would satisfy the clause. There was also one additional common denominator to those cases: The property holder always lost, because the government could always articulate some public reason for its taking.
At the same time that the Court was deciding those cases, the Court came under fire for broadly interpreting the companion Due Process Clause as a protection against other types of innovative social and economic legislation. Lochner, in particular, came under heavy assault because it was seen as the standard-bearer for a so-called constitutional right to contract. Critics argued that the Supreme Court had illegitimately frustrated legislation designed to help the nation fight its way out of the Great Depression. Rather than allow the federal and state governments to experiment with solutions to that problem, critics claimed, the Supreme Court had come perilously close to constitutionalizing Darwin’s theory of “survival of the fittest” as an inflexible economic policy. Critics of Lochner further maintained that the right to own property or to engage in commerce does not include a right to immunity from regulations adopted for the benefit of the public and that legislatures are in a better position than courts to decide what best serves the nation’s or a state’s interests.
Those arguments eventually persuaded the Supreme Court. Beginning in 1938, the Court abandoned its de novo review of the rationality of economic legislation and substituted in its place a very deferential standard of review.
Over time, the result has been the development of a two-tiered standard of judicial scrutiny. Since those decisions, the Supreme Court has generally taken a “hands off” approach to judicial review of federal and state economic legislation. The Court has treated social and economic legislation as presumptively constitutional and has stated that it will hold such legislation invalid only if it cannot be said to advance any conceivable legitimate state interest, whether or not the legislature actually had that purpose in mind when it enacted the relevant law. At the same time, the courts must strictly scrutinize the rationale offered to justify laws that trespass on express constitutional rights or injure a “discrete and insular minority.” Those two tiers of scrutiny remain the law today.
Those two lines of decisions—cases interpreting the Public Use Clause and cases interpreting the Due Process Clause—intersected in three decisions decided since the middle of the 20th century. Those cases—Berman v. Parker, Hawaii Housing Authority v. Midkiff, and Kelo v. City of New London—have defined the term “public use” as it stands today. In so doing, they have effectively denuded the Public Use Clause of any effective protection of property rights that the clause should have offered. As a practical matter, the Berman, Midkiff, and Kelo decisions have erased the “public use” limitation from the text of the Fifth Amendment.
The Modern Trilogy of Public Use Cases
Berman v. Parker. The first case in the trilogy is Berman v. Parker. At stake in Berman was the District of Columbia Redevelopment Act of 1945, a federal statute designed to provide a comprehensive remedy for blighted areas in the nation’s capital. The act created the District of Columbia Land Redevelopment Agency for the purpose of acquiring from the owners property situated in blighted areas for the purposes of transferring it to government agencies for use as streets, schools, or recreational facilities and leasing or selling it to private parties in accordance with a comprehensive land use plan.
Berman and the other plaintiffs owned property with a department store. They challenged the constitutionality of the act on the ground that it would simply transfer property from them to another private party, in violation of the Public Use Clause. The Supreme Court unanimously rejected that argument.
The Court concluded that the case involved an analysis of the proper application of the “police power”—that is, the authority possessed by every government to protect the public safety, order, health, morality, and peace and quiet, as well as to advance whatever other “physical,” “spiritual,” “aesthetic,” and “monetary” goals the legislature should deem important. Elimination of slum conditions in the nation’s capital, the Court decided, was a permissible goal for Congress to achieve, which left only the question whether Congress had acted appropriately in the means it chose to pursue community redevelopment. The Court did not stop to inquire whether urban development tools—such as zoning, tax breaks, eminent domain seizures, and the like—truly improve local economies overall, rather than merely shift or divert development to particular areas or industries, or ask whether the displaced residents were the type of politically powerless individuals for whom the Court had promised enhanced protection by the courts. Skipping over those issues, the Court decided that it was for Congress, not the courts, to decide what means are best to achieve the permissible end of ridding a community of blight: “Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legislative branch.”
As if to emphasize that it did not see the Public Use Clause as playing any important role in eminent domain, the Court ended its opinion by saying that “[t]he rights of these property owners are satisfied when they receive that just compensation which the Fifth Amendment exacts as the price of the taking.” That ominous sendoff foretold the outcome of the next two cases in the trilogy.
Hawaii Housing Authority v. Midkiff. Following Berman was Hawaii Housing Authority v. Midkiff. The facts in Midkiff, however, did not remotely resemble those in Berman. While Berman involved large areas of ramshackle housing dotting a decaying urban area, the land in Midkiff was usable, kempt, inhabited, and desirable—very desirable, in fact. The Hawaii legislature, however, believed that the strong demand for the property in Midkiff was a harm to the community, not a benefit. The alleged problem, according to the state legislature, was that a relatively small number of parties owned the bulk of residential property in the state, so much in fact as to oligopolize the housing market. To remedy the problem, the legislature enacted the Land Reform Act of 1967. The act enabled residents who owned a house, but not the underlying real estate, on a single-family residential lot to petition the Hawaii Housing Authority to condemn the property and sell it to the residents.
The trustees of the estate created by the will of the last surviving lineal descendant of Hawaii’s first monarch owned residential property subject to the Land Reform Act, and they challenged the statute under the Public Use Clause. Again acting unanimously, the Supreme Court rejected the land owners’ public use claim.
Writing for the Court, Justice Sandra Day O’Connor said that Berman provided the starting point for any analysis of the Public Use Clause. Berman, she wrote, essentially equated the scope of the Public Use Clause with the reach of a state’s police power. Quoting from Berman, the Court stated that “[t]he ‘public use’ requirement is thus coterminous with the scope of a sovereign’s police power.” While the courts have a role to play in deciding whether a taking satisfies the Public Use Clause, that role is extraordinarily limited. A court may not substitute its judgment for a legislature’s, the Court wrote, “‘unless the use be palpably without reasonable foundation.’” As long as a taking has “a conceivable public purpose,” the state may use eminent domain to achieve its end, even if the state fails to accomplish its hoped-for result. Moreover, the state may transfer land from one private party to another to reach its goals without at any time taking title to the property. The “government does not itself have to use property to legitimate the taking; it is only the taking’s purpose, and not its mechanics, that must pass scrutiny under the Public Use Clause.”
To be sure, the Court stated in dicta that “[a] purely private taking could not withstand the scrutiny of the public use requirement; it would serve no legitimate purpose of government and would thus be void.” But—and anyone who had read that far in the Midkiff opinion would have known that there was a “but” coming—the Court held that “no purely private taking is involved in these cases.” A taking done to redistribute valuable land now took its place alongside a taking done to redistribute worthless land as a permissible “public purpose.”
Kelo v. City of New London. The last case in the trilogy is Kelo v. City of New London. Like Berman and Midkiff, Kelo rejected a Public Use Clause challenge to the exercise of eminent domain, but Kelo stands out among the trilogy for two reasons. One is that Kelo is the only decision in which the Court was not unanimous. The Court upheld the city’s condemnation, but this time by only a five-to-four majority. The other reason is that Justice O’Connor, who wrote the unanimous opinion in Midkiff, authored a dissent in Kelo.
Late in the 1990s, the city of New London, Connecticut, was suffering through considerable economic troubles. The Navy had recently closed a local base in the Fort Trumbull area; the local unemployment rate was twice that of the entire state; and the city’s population was at its lowest point in more than 70 years. The pharmaceutical company Pfizer, Inc., announced that it might build a multimillion-dollar research facility near the Fort Trumbull area. To stimulate the economy, the New London Development Corporation (NLDC) developed a plan to renovate the area by constructing a “mixed-use complex” with “homes, a hotel, a marina, restaurants, shops, office space, and other amenities.” After reviewing the plan, the city council authorized the NLDC to acquire the necessary property by purchase or through eminent domain. Ten homes and a few other properties were scheduled to be condemned.
The NLDC wanted to use property owned by several local residents—Suzette Kelo and her neighbors—for the new development, but they refused to sell. Instead, they sued the NLDC, claiming that the taking would violate the Public Use Clause. The plaintiffs lost in the Connecticut state courts and, later, in the Supreme Court as well.
Justice John Paul Stevens began his opinion for the Court by stating that “[t]wo polar propositions are perfectly clear.” The government may not transfer property from A to B “for the sole purpose” of redistributing ownership even if A is justly compensated for his loss, but the government may transfer property from one private party to another if “the purpose of the taking” is to enable a “future ‘use [of the property] by the public.’” Relying on the findings made by the state courts, the Supreme Court concluded that the New London development plan “was not adopted ‘to benefit a particular class of identifiable individuals’” and therefore did not run afoul of the first proposition.
Turning next to the second proposition, the Court explained that the meaning of the term “public use” had evolved over the 19th and 20th centuries as legislatures saw the need to expand the reach of state legislation in order to address new and more deeply rooted social and economic problems. The Supreme Court’s jurisprudence had afforded the state legislatures considerable deference to address such ills, the majority noted, by enlarging the “public use” concept to reach takings that sought to remedy systemic problems rather than merely acquire property for use by the government or private individuals. The Court had interpreted the “public use” term in the Fifth Amendment in order to enable the states to address modern needs. The result, the Court noted, was that as long as just compensation is provided, the Constitution now permits states to exercise their eminent domain authority to achieve takings done for a “public purpose” or to meet a “public need,” as well as takings that historically had been accomplished for the simple purpose of obtaining property so that it could actually be used by the public. The takings in Kelo satisfied that requirement, the Court held, because they were part of a comprehensive area redevelopment project that the city hoped would pump up the local economy: “The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community, including—but by no means limited to—new jobs and increased tax revenue.”
The Court also declined to create a bright-line rule prohibiting general economic development takings on the ground that “neither precedent nor logic” justified that exception. The Court’s precedents permitted the state to use its eminent domain power for that purpose, the Court concluded, and there was no “principled way of distinguishing economic development from the other public purposes” that the Court had already upheld.
Justice Anthony Kennedy joined the majority opinion, but he also wrote a separate concurring opinion. In his view, the majority correctly applied the same “rational basis” review generally appropriate to analyzing social or economic legislation under the Equal Protection Clause, a standard of review that would justify holding unconstitutional only those takings where it can “clearly” be shown that the purpose “is to favor a particular private party, with only incidental or pretextual public benefits[.]” That was not true in Kelo, Justice Kennedy found, because the city adopted the redevelopment plan not to benefit a particular developer, corporation, or individual, but to deliver an “‘economic advantage to a city sorely in need of it[.]’”
Justice Kennedy did leave open the possibility that some takings might not qualify as legitimate: “There may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption (rebuttable or otherwise) of invalidity is warranted under the Public Use Clause.” Kelo was not such a case, however, because (1) the taking arose “in the context of a comprehensive development plan meant to address a serious citywide depression”; (2) “the projected economic benefits of the project cannot be characterized as de minimis”; (3) the “identities of most of the private beneficiaries were unknown” when the city formulated its plans; and (4) New London “complied with elaborate procedural requirements that facilitate review of the record and inquiry into the city’s purposes.”
Justice O’Connor, joined by Chief Justice William Rehnquist and Justices Antonin Scalia and Clarence Thomas, dissented. Like the majority, she started from the principle that the government may not transfer property from A to B simply to rearrange ownership, but she disagreed with the majority whether the purpose of the taking in Kelo was anything else. That taking was not accomplished to establish a military base or a public transit system, uses for or by the public that historically would have qualified under the Public Use Clause.
Nor was mere possession of the property harmful to the public due to “blight resulting from extreme poverty” as in Berman or an “oligopoly resulting from extreme wealth” as in Midkiff. The takings in those cases were justified, she believed, because both sought to eliminate a harmful use of property. By contrast, the takings in Kelo were defended only on the ground that they would “generate some secondary benefit for the public—such as increased tax revenue, more jobs, maybe even aesthetic pleasure.” Those justifications, she wrote, had no “realistic limitation” because only a “stupid staff[er]” could fail to devise some rationale explaining why a taking had some public benefit. Justice O’Connor acknowledged that there was “errant language in Berman and Midkiff” equating the “public use” requirement with the police power, but she wrote off those passages as dicta. “The trouble with economic development takings is that private benefit and incidental public benefit are, by definition, merged and mutually reinforcing,” Justice O’Connor wrote. “In this case, for example, any boon for Pfizer or the plan’s developer is difficult to disaggregate from the promised public gains in taxes and jobs.”[ 114] The result, she concluded, is to make it impossible to distinguish private from public takings.
Justice Thomas also dissented. Unlike Justice O’Conner, however, he believed that the Court’s mistakes ran even deeper than Justice O’Connor had explained. In his view, the Public Use Clause not only should be given a meaning, but also should be interpreted to require that the public (or the government as the public’s representative) have use of the property.
The common law and early state decisions addressing takings supported the conclusion that the police power could be used to address nuisances without a public use or compensation precondition, but the eminent domain power was subject to both restrictions. The Court’s error, he said, was directly attributable to prior decisions, such as Berman, that mistakenly equated the scope of the state’s police power with the meaning of “public use.” In fact, he wrote, a state’s proper reliance on its police power is not subject to the same restrictions that apply when the government uses its eminent domain power. The majority’s interpretation of “public use” denied that term any independent constitutional meaning and made principled application of that term impossible. Accordingly, Justice Thomas would have junked the Court’s precedents and started over from scratch. “I would revisit our Public Use Clause cases and consider returning to the original meaning of the Public Use Clause: that the government may take property only if it actually uses or gives the public a legal right to use the property.”
The Current Status of the Public Use Clause
Like specific elements of a contract, particular constitutional provisions should be read together with their cognate elements and in light of the structure and purpose of the entire document. Here, doing so reveals that the Constitution sought to protect property rights in several ways. The Framers, for example, put “property” on a par with “life” and “liberty” in the Fifth Amendment because they believed that all three interests must be protected against arbitrary deprivation. The Founders gave Congress the authority to regulate interstate and foreign commerce but not local activities like farming or blacksmithing; governance of those activities was left to the states. The expansion of the Commerce Clause that Congress today would invoke to regulate those practices lay 150 years in the future. That may explain why the Framers did not bar Congress from interfering in the operation of commercial contracts in the same way that they kept the states at bay.
The Constitution also did not corral the states’ authority to regulate property because the Framers saw no real threat to property from that direction. Eighteenth century state constitutions protected property rights; the states could establish the qualifications to hold state office; and they could define the qualifications to vote in state (or federal) elections, which often included property ownership. Aside from what is now the District of Columbia, the Constitution did not put land aside in the states for use by the federal government, perhaps because the Framers assumed that the federal government would purchase whatever land it needed. Nonetheless, the Framers made sure that the new federal government could not take property from its owners unless they were paid and the property was put to a “public use,” however strict or loose a reading that term might receive.
All that changed later on. In the New Deal era, the Supreme Court decided to treat social and economic welfare legislation as a class by itself, a category of law in which the legislature would have tremendous freedom to experiment with different approaches to achieve whatever ends the political branches thought worthwhile. No longer would the Supreme Court second-guess the judgments of elected officials as to what goals were legitimate ones for society to pursue: greater protection against the economic vicissitudes of life, greater safeguards against unsafe working conditions, and the like. Legislatures also would be free to select from among the several means that might enable society to achieve those goals: minimum wage laws, occupational safety laws, collective bargaining laws, and so forth.
Despite the fact that the Constitution expressly referred to “life, liberty, and property” as entitled to equal dignity under the Constitution, the Supreme Court retreated from its early 20th century position that property rights should not be left to the protection of the electoral process. Constitutional restraints on the ability of the legislature to reallocate property rights in order to avoid the harms of a laissez faire approach to macroeconomic policy largely disappeared. The principle that the political process could be trusted to rectify any mistakes that elected officials make in economic policy decisions now reigned. Gone was the principle that the political process always puts the possession of property rights at risk because, when a majority of people find themselves without property, they will want to use their political clout to force the legislature to reassign others’ property rights to themselves.
There was another influence operating here too. Since the 1930s, the fear that courts would make erroneous or illegitimate, class-based economic policy judgments if they could second-guess legislatures has haunted American constitutional law like Banquo’s ghost. The result has been that the courts almost consistently—supported by the academy almost unanimously—have declined to hold unconstitutional federal or state laws that diminish property rights.
The fallout from the explosion of substantive due process has almost killed the Public Use Clause as well.
- The Supreme Court struck the first blow in Berman, ruling that the Public Use Clause and the police power were coterminous; whatever legislation a state could justify under its police power was, by definition, legislation that served a “public use.”
- When the Court next addressed the issue in Midkiff, it could have limited Berman to urban renewal programs that sought to enable a community to “use” or “benefit from” the elimination of what politely goes by the name of “urban blight.” The Court again, however, chose to enable the political process. Deeming large-scale property ownership a social harm—a harm not remotely like the type of nuisance for which the common law provided a remedy—the Court allowed Hawaii to force landowners to sell their ground land to the owners of the houses built atop it. The Court seemed oblivious to the irony that the only reason why private parties owned those homes was that the Midkiff plaintiffs had leased the land to them years beforehand, so that the taking truly was done merely for the purpose of transferring property from A to B.
- Kelo dropped the last clod on the Public Use Clause when it upheld a city’s decision that a parcel of land was worth more in B’s hands than A’s, even though, as a matter of logic and economics, A obviously valued the land more than B because A was unwilling to sell it at the price B was offering and the property harmed no third party (no C, no D, and so forth).
In each case, the Court justified its hands-off approach by claiming that the political branches were in a far better position than the courts to decide what action promoted the public safety, health, and welfare. The judiciary therefore should leave that arena entirely to the play of politics, the Court decided—which was precisely the fear that the Framers had when the Public Use Clause became law. Accordingly, the policy implications of Berman, Midkiff, and Kelo for property rights are devastating.
To be sure, even before it laid Lochner to rest, the Supreme Court had never construed the Public Use Clause to limit the government’s eminent domain power. The Court has often said that the government may not take property from A simply to give it to B, but it had never found a taking to fail that test. Before and after the New Deal, the Court has stretched the clause to encompass legislation that served “a public purpose” or was “a matter of public interest,” a phrase that eventually replaced the “public use” that the Fifth Amendment’s text requires. Since the end of the New Deal, however, the Court has virtually abandoned any pretense of even requiring the government to manufacture some credible public justification for a taking. The result is that a hearing in the Supreme Court today on a Public Use Claim would proceed as follows: The lawyer for the government would pretend that there is a public purpose for the taking, and the Court would pretend to believe him before ruling in his favor.
One irony of that development can be seen in the great divide that the Supreme Court has created in constitutional law. Statutes that trespass on specific Bill of Rights guarantees like the First Amendment Free Speech Clause are subjected to strict judicial scrutiny, and most fail. Statutes that impair fundamental rights to “liberty” also are subject to strict scrutiny, and again most fail. Yet, despite the fact that the Public Use Clause is an express textual component of the Fifth Amendment—a provision that, after all, refers to “life, liberty, and property”—the Supreme Court has eschewed any serious review of the government’s eminent domain power to ensure that it predominantly serves a “public purpose,” let alone constitutes a “public use.” The Court has relegated the Public Use Clause to the same constitutional suburbs occupied by cases such as Lochner.
The trilogy of decisions from Berman to Midkiff to Kelo has effectively left the Public Use Clause without any independent role to play in the Fifth Amendment. Of course, in each case, the Supreme Court has reiterated the maxim that the government may not simply transfer property from A to B, but those passages had as much effect on the outcome of those cases as the “Oyez” that the Court’s Marshal proclaims at the beginning of every oral argument session. Justice O’Connor was right to note that no one but a “stupid staff[er]” could fail to imagine some public benefit from any taking, because any transfer of property can always further some government purpose if a court is free to imagine whatever that purpose may be, regardless of whether a reasonable person would have drawn that conclusion, and is free to hypothesize that the legislature actually had that purpose in mind. Berman, Midkiff, and Kelo have effectively transformed the relatively straightforward phrase “for public use” into almost anything that the legislature might put forward as a conceivable public use or benefit.
The Court’s decision in Kelo would at least have had the virtue of candor if the majority had just said that the Public Use Clause no longer makes sense, so the Court will no longer require government to manufacture justifications that are to some degree “public.” Such a ruling would have been illegitimate because courts have no warrant to disregard constitutional text that judges find obsolete, inconvenient, or difficult to interpret. But at least it would have been honest.
Ten years ago, the Supreme Court’s ruling in Kelo sparked considerable public outrage. The prospect that any homeowner could lose his or her house and property to a corporation whose operation a city thought could better serve its needs generated uncertainty and fear. But that day has passed. The tenth anniversary of Kelo is marked more by public sufferance of the Supreme Court’s ruling than by continued public outrage. The Supreme Court has not returned to the subject during that period. Congress has done nothing. State and local governments have taken some steps in response to Kelo. How effective they are remains to be seen. The Kelo decision itself, however, has not gone away. The Supreme Court has remained silent.
Kelo stands as the Supreme Court’s last word on the meaning of the Public Use Clause, a meaning that, for all intents and purposes, is vacuous. Like the civil servant in a highway tollbooth, Kelo simply ensures that the government pays its way before moving on for whatever reason the government finds necessary to use eminent domain. The problem for the public and property rights advocates is that the Kelo decision not only has retreated into the background, but also has been forgotten. But like the bear who hibernates in a cave until it needs nourishment, Kelo could return to prominence whenever a state or city prefers B to A as a property owner. Unfortunately, when that happens, the Constitution may offer property owners no protection against whatever public benefits that a majority of a state or local government can imagine.—Paul J. Larkin, Jr., is Senior Legal Research Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.