Brian L. Nagle, Esquire

In its recent decision in Kelo et al. v. City of New London, Connecticut et al., the United States Supreme Court affirmed the judgment of the Supreme Court of Connecticut that the city of New London's decision to take property for the purpose of economic development satisfies the "public use" requirement of the Fifth Amendment to the United States Constitution. The Takings Clause of the Fifth Amendment permits the government to take private property, also known as the power of "eminent domain," provided that the taking will serve a public purpose and just compensation is paid. The focus of Kelo was whether the taking of land by the city of New London for economic development satisfies the public use requirement.

In 1990, after decades of economic decline, a Connecticut state agency declared New London, which sits at the junction of the Thames River and the Long Island Sound in southeastern Connecticut, a "distressed municipality." Later, in 1996, the Federal government closed the Naval Undersea Warfare Center, a facility that had provided over 1,500 jobs in the city. With a citywide unemployment rate now double that of the state, and with the population reaching a 78-year low, New London was targeted by state and local officials for economic revitalization. Because this is not an uncommon circumstance in medium to small cities throughout the United States as the country traverses further into the post-industrial era, the Supreme Court's decision is compelling.

The ultimate goal of economic development, and thus the taking in Kelo, was to increase the tax revenue of the city by capitalizing on the arrival of a $300 million dollar research facility that pharmaceutical giant Pfizer Inc. planned to build next to the city's Fort Trumbull area. The redevelopment plan included the taking of properties that would ultimately be utilized for office space, retail services, and parking. Among the nine property owners who took their case to the highest court in the land were Susette Kelo and Wilhelmina Dery. Ms. Kelo had made significant improvements to her property and prized its waterfront vista. Ms. Dery lived in her Fort Trumbull home since her birth in 1918, and her husband lived there with her through 60 years of marriage. They argued, among other things, that using eminent domain for economic development impermissibly blurs the boundary between public and private takings.

The Supreme Court's Ruling
In its June 23, 2005 decision, the Supreme Court indicated that its prior decisions support that ultimate private benefit is not the benchmark of the public use question. Instead, the court noted, "any number of cases illustrates that the achievement of a public good often coincides with the immediate benefiting of private parties." The Court also noted that to the extent that there might be cases where the true goal of the taking is the private benefit of a third party, those cases can be dealt with on a case-by-case basis. States that are adverse to the case-by-case approach can curtail its effect by enacting public use standards for eminent domain cases that are more stringent than the federal standard. This is because individual states are generally free to expand constitutional protections beyond those provided in the United States Constitution. Pennsylvania is already considering action that would do just that.

Renewed Focus on State Legislatures
Although four Justices of the nine on the Court dissented in Kelo, and despite the current changes occurring on the Supreme Court, the focus on this issue in the near future will likely be on the state legislatures. Property owners, especially those in areas targeted for redevelopment or revitalization, would be well served to provide input on the issue to their state government representatives.

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