James McCusker

James McCusker

Scalia eminent domain dissent should be heeded

The late Justice Antonin Scalia’s often pointed remarks and writings have been showing up in the press. They are part of his legacy.

On one important issue decided by the court, though, he chose not to write his own dissent but to join with Justice Sandra Day O’Connor, Chief Justice William Rehnquist and Justice Clarence Thomas. It is probable that his thinking on the issue infused the dissent written by Justice O’Connor but it is an admirable tradition of the court to attribute authorship to one writer.

The important court case, Kelo v. The City of New London, dealt with eminent domain and the majority opinion was that as part of its redevelopment plan the city of New London, Connecticut, could proceed in taking the private property of nine individuals, including Suzette Kelo, for whom the case was named.

Kelo and the other individuals had petitioned the courts for relief on the grounds that the planned use of their property did not qualify as “public use” under the Fifth Amendment. After a state Superior Court issued a temporary restraining order, the Connecticut Supreme Court eventually ruled that New London’s redevelopment plan qualified as public use, and the issue was left for the U.S. Supreme Court.

The court, in a 5-4 decision, allowed as how “public use” could not be parsed to distinguish between economic gains and other types of benefits to the public and that the added jobs for the high-unemployment area of New London were sufficient to justify the property taking under eminent domain procedures.

In this decision, the Supreme Court displayed a singular insularity from the realities of redevelopment projects and the often wide gap between the wording of projects and how things are actually done.

In this regard, the court itself noted that, “While this litigation was pending before the Superior Court, the NLDC (the entity created by New London to implement the redevelopment) announced that it would lease some of the parcels to private developers in exchange for their agreement to develop the land according to the terms of the development plan. Specifically, the NLDC was negotiating a 99-year ground lease with Corcoran Jennison, a developer selected from a group of applicants. The negotiations contemplated a nominal rent of $1 per year, but no agreement had yet been signed.”

What it boiled down to was that the property of Suzette Kelo and others was going to be given away to developers who were going to build a shopping center there.

In the dissenting opinion, after referencing a 1798 case precedent, Justice O’Connor wrote that “Today the Court abandons this long-held, basic limitation on government power. 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, i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public in the process. To reason, as the Court does, that the incidental public benefits resulting

From the subsequent ordinary use of private property render economic development takings ‘for public use’ is to wash out any distinction between private and public use of property and thereby effectively delete the words ‘for public use’ from the Takings Clause of the Fifth Amendment.”

The Kelo case was an important decision in its own right, but it may eventually have an impact on our 2016 presidential election as well. Eminent domain has come up as a campaign issue a few times already, addressed by Donald Trump, who calls it “wonderful” and favors its use, and Senators Cruz and Rubio, who are concerned about its use for private developments, including Mr. Trump’s.

Although he did not write a separate dissent in the Kelo case, Justice Scalia was not silent about his views. During oral arguments, he asked the lawyer representing the City of New London if his argument meant that “you could take (private property) from A and give it to B if B is richer and would pay higher municipal taxes, couldn’t you?” The lawyer’s answer was “yes, your honor.”

Economic forecasts are, at best, imperfect, but when conjoined with government development plans the product is a work of the purest, perfect fantasy. It is no wonder that states feel the need to legalize marijuana usage, for only immoderate usage of it can transform most public transportation plans into anything but sci-fi comedy.

Unfortunately, the Kelo decision had the effect of elevating economic forecasts and economic development fantasies to the point where they are legally considered as real. This was, at best, a mistake that needs to be remedied — and it is a mistake that deserves to be elevated to a campaign issue.

James McCusker is a Bothell economist, educator and consultant. He also writes a column for the monthly Herald Business Journal.

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