Today in 2005: SCOTUS decides Kelo v. City of New London

June 23, 2016

Today in Legal HistoryEleven years ago today, one of the most controversial Supreme Court decisions in recent history was handed down: Kelo v. City of New London.

In case you needed a reminder, in Kelo, the Supreme Court upheld by 5-to-4 the seizure of private property of seven different homeowners who refused to sell.  The property was to be used in a development project in the small city of New London, Connecticut.  The project was created by the New London Development Corporation, a private nonprofit organization, and strongly influenced by major pharmaceutical company Pfizer, which was to receive a new headquarters as part of the plan.

The case was indeed poorly received by the public: in response to backlash over Kelo, over 42 states have enacted reforms that were intended to make it more difficult – or in the case of around half of those states, nearly impossible – to use eminent domain powers for the purpose of economic development, increasing tax revenue, or transferring property to a private entity.

As controversial as the case may be, most legal scholars weren’t surprised by the decision – and many were instead surprised that the Supreme Court agreed to review the Connecticut Supreme Court’s decision to uphold the takings to begin with.

Before you decide to shake your fists at these eggheads for their lack of outrage at Kelo, you should understand that the 2005 ruling was perfectly in line with eminent domain rulings by the Supreme Court since the 1950s.  In short, Kelo didn’t create any new powers for federal, state, and local governments that they didn’t have already.  It only served as a reminder to a public that had seemingly forgotten about this power.

Interestingly, because of vague language and major loopholes, many of the laws enacted as part of the massive backlash against Kelo would be largely ineffective at preventing a similar eminent domain taking as that which occurred in Kelo.  What’s more, many states that enacted anti-Kelo legislation have no verifiable history of any such takings occurring within their own borders.

In any case, the public’s response to the ruling may be somewhat justified, considering that the “economic development” promised by the project responsible for the takings never blossomed.  Much of the affected area remains undeveloped, and the one major “job-creator” that came to the area because of the redevelopment (Pfizer) left before the property tax break expired (Pfizer’s property tax bill would have increased over 400%).  Moreover, the exit of Pfizer from the community caused the loss of 1,500 jobs.

Nevertheless, the impact that Kelo has had on the legal landscape as well as the awareness of the public is undeniable.