Amicus Curiae Brief — Kelo v. New London

In The —

Supreme Court of the United States

°

SUSETTE KELO, THELMA BRELESKY,

PASQUALE CRISTOFARO, WILHELMINA AND

CHARLES DERY, JAMES AND 1. AURA GURETSKY,

PATAYA CONSTRUTION LiMITED PARTNERSHIP,

and WILLIAM VON WINKLE,

Petitioners,

V.

CITY OF NEW LONDON and

NEW LONDON DEVELOPMENT CORPORATION,

Respondents.

¢

On Writ Of Certiorari To The

Supreme Court Of Connecticut

SJ

BRIEF OF CASCADE POLICY INSTITUTE,

AMERICAN ASSOCIATION OF SMALL PROPERTY

OWNERS, GRASSROOT INSTITUTE OF HAWAII,

JAMES MADISON INSTITUTE, JOHN LOCKE

FOUNDATION, ILLINOIS POLICY INSTITUTE,

INDIANA POLICY REVIEW FOUNDATION,

OREGONIANS IN ACTION LEGAL CENTER,

PIONEER INSTITUTE, SUTHERLAND INSTITUTE,

and TENNESSEE CENTER FOR POLICY

RESEARCH, AS AMICI CURIAE IN SUPPORT OF

PETITIONERS

o

JAMES L. HUFFMAN

5340 S.W. Hewett Blvd.

Portland, Oregon 97221

(503) 203-1583

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

t

TABLE OF CONTENTS

Page

Ge II cncnncncteinescetocsecncscccctesossccessee ii

INTEREST OF AMICI CURIAE,..00.........cccccccceceeeeeeeeees 1

SUMMARY OF ARGUMENT. ................cccceeceeeceereeeeeeeee 3

SETI éciiictiasinctedinsnatiiidigiieuniipiecintnrnenanenedueeseessonene 5

I. HEIGHTENED SCRUTINY OF PUBLIC USE

II.

CLAIMS IN EMINENT DOMAIN CASES

WILL BETTER MEET THE JUDICIAL RE-

SPONSIBILITY TO PROTECT INDIVIDUAL

LIBERTIES WHILE RESPECTING THE

CONSTITUTIONAL PREROGATIVES OF

THE LEGISLATIVE BRANCH................::c00e

A. PUBLIC USE AND JUST COMPENSA-

TION CLAIMS WARRANT THE SAME

HEIGHTENED STANDARD OF JUDI-

SE ED SEED covsnevevesensnesontrsecenesonecccosoneneces

B. HEIGHTENED SCRUTINY FOR THOSE

PET sctiencunnvcccnmncsnssssnsiesnensosenessnee

C. THE FUNDAMENTAL RIGHT TO EX-

D. PROTECTING AGAINST ABUSE AND

Ne Wie eccrnccccwrrsecsasencssesenesesescensocscese

STATES WHOSE COURTS APPLY HEIGHT-

ENED STANDARDS OF REVIEW IN EMI-

NENT DOMAIN CASES UNDER THE 5TH

AMENDMENT OR THEIR OWN CONSTITU-

TIONAL PUBLIC USE REQUIREMENT HAVE

SUCCESSFULLY MET THEIR RESPONSI-

BILITIES TO PROPERTY OWNERS AND TO

THE GENERAL PUBLIC WELFARE ................

ID tccccccssesenesnscenenssesssncnsesesssesousesnscssecessesecese

11

13

ii

TABLE OF AUTHORITIES

Page

CASES

99 Cents Only Stores v. Landcaster Redevelopment

Authority, 237 F.Supp.2d 1123 (C.D. Cal 2001)............ 14

Appeal of City of Keene, 693 A.2d 412 (N.H. 1997)........... 17

Armstrong v. United States, 364 U.S. 40 (1960)............... 10

Baycol, Inc. v. Downtown Development Authority,

315 So.3d 461 (Pia. 1976) ....ccccccssssccscssiessennnaannaan 16

Berman v. Parker, 348 U.S. 26 (1954).............ccccceeeeees 18, 19

Casino Reinvestment Development Authority v.

Banin, 727 A.2d 102 (N.J. Super.Ct.Law Div.

1GBS) ......0000cccccrcscseseccsescossscecnnssnesinnninninnnnnnnnnnnnnnnEE 14

City of Bozeman v. Vaniman, 898 P.2d 1208 (Mont.

1BBS) .....cccccccesesssesessosensesoosssennninnnnennnnnnnnnnnnnnnnnnnnEE 16

City of Little Rock v. Raines, 411 S.W.2d 486 (Ark.

1967) ....0.0ccccccccescsccesosonssiesesenssieniniaininnnnnnnnnnnnnnnnnnEE 17

City of Bozeman v. Vaniman, 898 P.2d 1208 (Mont.

BOBS) .....cccccosesecescoesesossseonenenoncnssesniennnninnnnnnnnnnnnnEEE 16

Cottonwood Christian Center v. Cypress Redevel-

opment Agency, 218 FSupp.2d 1203 (C.D.

Coal. S008).......ccccccoseccsscesesecnssconnnsennsnensainninnnnnnnnnnEEEE 16

County of Wayne v. Hathcock, 684 N.W.2d 765

(Déiets, 3BB6) ...0ccccccosceccscoccsesonsnsensnnsnininnnnnnnnn 18, 19, 20

Dolan v. City of Tigard, 512 U.S. 374 (1994)............. passim

Dunn v. Blumstein, 405 U.S. 330 (1972)... eee es 12

Edens v. City of Columbia, 91 S.E.2d 280 (1956) ............. 17

Georgia Department of Transportation v. Jasper

County, 586 S.E.2d 853 (S.C. 2003) 0.0... eeeeeeeeeeeeeeees 17

ili

TABLE OF AUTHORITIES — Continued

Page

Hawaii Housing Authority v. Midkiff, 467 U.S. 229

IItiistiidliiaieaiateinictinnrtenecdatedeesnsaseoccsscsocenccececcecoocecey passim

Hodgson v. Minnesota, 497 U.S. 419 (1990) ............ccccee 12

Kaiser Aetna v. United States, 444 U.S. 164 (1979).......... 11

Kelo v. City of New London, 843 A.2d 500

anaes ceercenenesenenesnenssooosees 14

Loretto v. Teleprompter Manhattan CATV Corp.,

ar 12

Lucas v. South Carolina Coastal Commission, 505

er passim

Manufactured Housing Communities of Washington

v. State, 13 P.3d 183 (Wash.2000)................cccccccceeeeeeees 17

Merrill v. City of Manchester, 499 A.2d 216

ra rc eeensnenennsnnosoneccnsees 17

Nollan v. California Coastal Commission, 483 U.S.

IIT ii nnercerenenincnsneescensccsssseesccoceey passim

Opinion of the Justices, 131 A.2d 904 (Me. 1957)............. 17

Opinion of Justices, 250 N.E. 2d 547 (Mass. 1969) .......... 17

Penn Central Transportation Co. v. City of New

iE, cca scnnenennenenscnnnesensnscccoccscscoses 10

Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922)........... 11

Petition of Seattle, 638 P.2d 549 (Wash.1981)................... 17

Poletown Neighborhood Council v. City of Detroit,

304 N.W.2d 455 (Mich. 1981) ..............ccccccceceees 18, 19, 20

Randolph v. Wilmington Housing Authority, 139

ce 16

iv

TABLE OF AUTHORITIES - Continued

Page

Richardson v. City & County of Honolulu, 124 F.3d

Se ee Ee ee nnsniucsrnsestcniienteniiinniianiiinenienal passim

Sherbert v. Verner, 374 U.S. 398 (1963) .............ccccccceeeeeees 12

Southwestern Illinois Development Authority v.

National City Environmntal, L.L.C., 768,N.E. 2d

Bp Gi Sai inchicsinincintctcnensirisitniatitieiiias ininitariiataceandtii 16

Township of West Orange v. 769 Associates, 800

as Ce iaitsinicsieiciinticiaieriianitaimatiaieiiiniaiisiciaid 14

United States v. Carolene Products, 304 U.S. 144

iar icesniscisericcinssesiscsichaspaiesieibaienaibasatesianipetiasiantiaalaiadaiia 9, 10

Wilmington Parking Authority v. Land with Im-

provements, 521 A.2d 227 (Del. 1987) ...............:cceeseeees 16

OTHER PUBLICATIONS

ELY, DEMOCRACY AND DISTRUST (1980) ................cccccceeeeeeees 9

Garnett, The Public-Use Question as a Takings

Problem, 71 GEORGE WASHINGTON L. REV. 934

Siri csnesiinsnenenationisnetanientinnsentaiasrnasnaneasasiniamssiliacicetamatiitaa dani 14

Levmore, Takings, Torts, and Special Interests, 77

VIRGINIA L. REV. 1333 (1991) ...............cc0cccssscossseesseresseres 9

Michelman, Property, Utility and Fairness: Com-

ments on the Ethical Foundations of “Just Com-

pensation” Law, 80 HARV. L. REV. 1165 (1967)............. 21

Sunstein, Lochner’s Legacy, 87 COLUMBIA L. REV.

SUE GUT EE casenensmacunsuscstinnnmninenntnsmneiannianienistiinnbisntantin 15

1

INTEREST OF THE AMICI CURIAE’

All the amici are non-profit organizations which have,

as one of their prime public policy objectives, the protec-

tion of private property rights. They are therefore all

keenly interested in the outcome of this case. The amici

are:

Cascade Policy Institute is a non-profit public policy

research organization based in Portland, Oregon. Its

mission is to explore and advance public policy alterna-

tives that foster individual liberty, personal responsibility,

and economic opportunity, including the protection of

private property rights.

American Association of Small Property Owners is a

nonpartisan, nonprofit corporation that has been working

since 1993 for the right of small property owners to pros-

per freely and fairly — to make possible the American

dream of building wealth through real estate. Based in

Washington, DC, AASPO has chapters or affiliates in more

than 25 states.

Grassroot Institute of Hawaii is a state-based free-

market think tank that works to protect individual rights,

including the right to private property.

James Madison Institute is a Florida-based research

and educational organization engaged in the battle of

* Pursuant to Rule 37.3, the parties have consented to the filing of

this brief. The parties’ letters of consent have been lodged with the Clerk

of the Court. Pursuant to Rule 37.6, amici curiae state that no counsel for

a party wrote this brief in whole or in part, and no person or entity, other

than the amici curiae, their members, or their counsel, have made a

monetary contribution to the preparation or submission of this brief.

2

ideas. The Institute’s ideas are rooted in a belief in the

U.S. Constitution and such timeless ideals as limited

government, economic freedom, federalism, and individual

liberty coupled with individual responsibility.

John Locke Foundation is a nonprofit, nonpartisan

think tank that studies public policy issues at the state

and local government. Key areas of interest include state

fiscal policy, education, regulation, transportation, and

property rights.

Illinois Policy Institute is a state based free market

oriented think tank in Springfield, Illinois. The Institute’s

mission is to preserve and strengthen critical societal

institutions in Illinois.

Indiana Policy Review Foundation’s mission is to

marshal the best thought on governmental, economic and

educational issues at the state and municipal levels. It

seeks to accomplish this in ways that exalt the truths of

the Declaration of Independence, especially as they apply

to the interrelated freedoms of religion, property and

speech.

Oregonians In Action Legal Center, based in Tigard,

Oregon is a nonpartisan, non-profit, public interest law

center focusing on litigation to protect the constitutional

rights of landowners from excessive and increasingly

burdensome federal, state, and local regulations. The

Legal Center successfully represented the Petitioner in the

United States Supreme Court case Dolan v. City of Tigard,

and recently filed a Petition For a Writ of Certiorari with

the United States Supreme Court in Rogers Machinery

Company, Inc. v. City of Tigard and Washington County.

3

Pioneer Institute is an independent, non-profit or-

ganization that specializes in the support, distribution,

and promotion of research on market-oriented approaches

to Massachusetts public policy issues.

Sutherland Institute is a non-profit, non-partisan,

Utah-based public policy research institute whose goal is

to encourage public policy solutions that allow private

initiative to flourish, and that support private property

rights and personal responsibility.

Tennessee Center for Policy Research is an independ-

ent, nonprofit, and nonpartisan research organization

dedicated to providing concerned citizens, public leaders,

and government officials with expert empirical research

and timely free market solutions to public policy issues of

the day. The Center encourages solutions to public policy

issues grounded in individual liberty, competition, per-

sonal responsibility, and the social capital of community

bonds to achieve a freer and more prosperous Tennessee.

¢

SUMMARY OF ARGUMENT

This Court’s standard of review in regulatory takings

cases should be applied in eminent domain cases. The

reasons that call for heightened scrutiny when a regula-

tory taking is alleged apply with equal force when the

government seeks to condemn private property through its

eminent domain powers. While the public purposes that

might be served by eminent domain are the same as those

that might be served through the general police power,

the eminent domain power is limited by the public use

4

requirement of the 5th Amendment. This limitation serves

to protect property owners from being singled out, recog-

nizes that fair market value will often not make property

owners whole, assures that the fundamental right to

exclude will not be violated without a compelling public

purpose, and guards against the abuse of public authority

and the corruption of our democratic process.

Reliance on heightened scrutiny in eminent domain

cases w’'] not significantly handicap the government in

the pursuit of its legitimate purposes. Numerous states

have applied heightened scrutiny on the basis of their

reading of either the 5th Amendment or of the comparable

prov.sions of their own constitutions. Notwithstanding

their heightened scrutiny in public use cases, all of these

states have been able to promote economic development,

protect their environments, and pursue other public

purposes in competition with the other states in the

Union.

In reviewing the claims of property owners under the

public use limitation of the 5th Amendment, this Court

should demand that governments utilize the least burden-

some means available. In the instant case, this Court

should find that the City of New London has exceeded its

legitimate authority in condemning the petitioners’ prop-

erty for immediate lease to private developers. Individual

lives and livelihoods should not be so easily sacrificed to

the profits of other private puties and the abstract pros-

pect of economic development and increased tax revenues.

¢

5

ARGUMENT

I. HEIGHTENED SCRUTINY OF PUBLIC USE

CLAIMS IN EMINENT DOMAIN CASES WILL

BETTER MEET THE JUDICIAL RESPONSIBILITY

TO PROTECT INDIVIDUAL LIBERTIES WHILE

RESPECTING THE CONSTITUTIONAL PRE-

ROGATIVES OF THE LEGISLATIVE BRANCH.

A. PUBLIC USE AND JUST COMPENSATION

CLAIMS WARRANT THE SAME HEIGHT-

ENED STANDARD OF JUDICIAL REVIEW.

Judge Diarmuid O’Scannlain suggested in Richardson

v. City & County of Honolulu, 124 F.3d 1150, 1167 (9th Cir.

1997), that, in light of this Court’s decisions in Nollan v.

California Coastal Commission, 483 U.S. 825 (1987),

Lucas v. South Carolina Coastal Commission, 505 U.S.

1003 (1992), and Dolan v. City of Tigard, 512 U.S. 374

(1994), the Court might take the opportunity to reconsider

what has come to be understood as a total deference

standard articulated in Hawaii Housing Authority v.

Midkiff, 467 U.S. 229 (1984). While the instant case can

and should be decided for Petitioners by simply clarifying

that the deference required by Midkiff is with respect to

legitimate state purposes, not means of achieving those

purposes, this Court has an opportunity in this case to

provide a clear and concise explanation of the limitations

on the eminent domain power imposed by the “public use”

requirement.

In Midkiff this Court stated that the “[public use]

requirement is coterminous with the scope of a sovereign’s

police powers.” 467 U.S. at 230. This suggests that any end

the state may promote pursuant to the police power is an

end the state may seek to achieve through the means of

eminent domain. But this is demonstrably not the case.

6

For example, the state clearly has the power to redistrib-

ute wealth among its citizens in the interest of alleviating

poverty (as it does through a progressive income tax), but

few would suggest that an American state or the United

States can engage in forced purch ses of private land to be

subdivided and granted to the poor as home sites; or that

city center condominiums can be acquired by eminent

domain for the purpose of giving them to the homeless.

And if such actions to benefit the poor cannot be accom-

plished through eminent domain, surely the government

does not remedy the constitutional shortcoming by selling

the taken land to those who can afford it in the interest of

promoting economic development.

The eminent domain power is coterminous with the

police power in the sense that it can only be used for ends

within the police power. But this does not mean that the

eminent domain power can be used for every end within

the police power. The compensation requirement of the 5th

Amendment is one of several limits (e.g., due process and

equal protection) on the means that may be employed in

pursuit of the ends inherent in the police power. That is,

where the government takes property as a means to

achieve its legitimate police power ends, it must pay just

compensation. The public use requirement of that same

amendment must be understood as a limit on the use of

compensated takings. Otherwise the “public use” language

is superfluous. As Judge O’Scannlain states in questioning

the “conceivable public purpose” test of Midkiff, 467 U.S.

at 230, “[i]f the Clause is to have any effect at all, it must

mean that a court will not feign blindness when it sees

through a patently transparent legislative recital that a

taking is for a public use.” Richardson, 124 F.3d at 1168.

Judge O’Scannlain observes in Richardson that the

state can pursue its legitimate ends through regulation,

eminent domain and acquisition of properties from willing

sellers. 124 F.3d at 1167. In a free society, we should prefer

that all property acquisitions by government be the result

of arms length market transactions. But where govern-

ment needs to acquire numerous parcels (as in the case of

a public road) or where a specific parcel is needed (as in

the case of the preservation of an historic structure), the

public good can be thwarted by property owners who hold

out for a price far in excess of fair market value. The

eminent domain power exists to counter this “holdout

problem.” But the necessity of resorting to the extreme

power of eminent domain where individual property

owners would otherwise take unfair advantage of their

fellow citizens and taxpayers does not justify the use of

that power in the pursuit of every public purpose. Indeed,

the iact that it is a coercive act by government should

result in the taking of extra precautions in its use. That is

the purpose of the “public use” limitation of the 5th

Amendment.

Because the eminent domain power has deep roots

and has been widely used for the entire history of our

Constitution, it is all too easy to see it as unexceptional

and not extreme. Indeed it is often suggested that a

property owner is made whole when fair market value is

paid for taken land. But a moments reflection reminds us

that, although commonly employed, eminent domain is

among the most coercive powers available to our govern-

ments. A fair market price is not everyone’s price. Some

may come out ahead, in the sense that they would have

been willing to sell for less. Some will find that the price

paid is fair. But others will be paid less than they were

8

willing to sell for. “Whether because of a sentimental

attachment to his property or a conviction that the prop-

erty is actually worth more than what the market will

currently bear, a landlord might choose not to sell, even at

the ‘fair market value.’” Richardson, 124 F.3d at 1168.

Similar variations exist in every market, but, absent

eminent domain, those whose price is too high do not sell.

It is often the case with property, particularly residences,

small businesses and family farms, that owners will not

sell at any price others are willing to pay. This behavior,

which some economists might describe as irrational, may

reflect the importance of family roots and an attachment

to place. To force such owners to sell at fair market value

is a deep personal affront — a taking of what may be the

most important thing in their lives.

This does not mean that eminent domain is never

appropriate, nor does it deny that it will be difficult to

distinguish the holdouts from those who truly would not

sell at fair market price. But it does mean that we should

minimize the risk of eminent domain being used against

some individuals to benefit other individuals rather than

the general public. The “public use” requirement serves

that end by restricting the use of eminent domain to public

acquisition for public ownership or clearly public purposes.

9

B. HEIGHTENED SCRUTINY FOR THOSE

SINGLED OUT’

The “public use” limitation on eminent domain serves

individual liberty and constrains the abuse of government

power by assuring that voters (and taxpayers) will bear

the costs of government property acquisitions. When the

public does bear the costs of government action it is

appropriate for the courts to be deferential to the democ-

ratic process for the reasons suggested many years ago by

Justice Stone in United States v. Carolene Products, 304

U.S. 144, 152, fn4 (1938). But where, as in the instant

case, government acts as an intermediary in the forced

transfer of property from one private owner to another,

there will be no cost to the voters who will therefore be

less attentive to their democratic responsibilities. In such

cases, property owners become like the discrete and

insular minorities protected in other areas of constitu-

tional law by heightened scrutiny.

Yet the Midkiff ruling has come to represent mini-

mum scrutiny, if any scrutiny at all, in contrast to the

heightened scrutiny this Court has applied in recent cases

brought under the “just compensation” clause of the 5th

Amendment. Judge O’Scannlain explains in Richardson why

“(i]t may be time for ... [this] Court to reconsider Midkiff.”

“The underlying thrust of the Nollan-Lucas-Dolan decisions

* The “singling out” problem exists when “the government singles

out a private party, in the sense that the government’s aims could have

been achieved in many ways but the means chosen placed losses on an

individual. ...” Saul Levmore, Takings, Torts, and Special Interests, 77

VIRGINIA L. REV. 1333, 1344-45 (1991).

* For an elaboration of the Carolene Products theory of heightened

judicial scrutiny see JOHN HART ELY, DEMOCRACY AND DISTRUST (1980).

10

— increasing the scrutiny of regulations to determine if

they go ‘too far’ (enough to require compensation) — is

inconsistent with Midkiff’s sweeping deference.” There is,

notes Judge O’Scannlain, a “tension between these two

lines of authority.” 124 F.3d 1150 at 1167.

The Carolene Products rationale for varying levels of

scrutiny helps explain this Court’s reliance on heightened

scrutiny in the Nollan, Lucas and Dolan cases. A central

point made in each of these cases is that individual prop-

erty owners ought not have to bear the costs of widely

shared public benefits.‘ When this appears to be the case,

the courts will demand that the state demonstrate an

“essential nexus” between a legitimate state interest and

the regulation, Nollan, 483 U.S. at 837, and a regulatory

impact “roughly proportional” to the impact of the regu-

lated property use, Dolan, 512 U.S. at 395-96. Without

such nexus and proportionality, it is determined to be

unfair to impose the costs on one or a few property owners.

Where the costs are widely spread among those who will

also benefit from the government’s action, there exists

what Justice Holmes called “reciprocity of advantage,”

* “The Commission may well be right that it is a good idea, but

that does not establish that the Nollans (and other coastal residents)

alone can be compelled to contribute to its realization.” Nollan, 483 U.S.

at 841. “Surely, at least, in the extraordinary circumstance when no

productive or economically beneficial use of land is permitted, it is less

realistic to indulge our usual assumption that the legislature is simply

‘adjusting the benefits and burdens of economic life,’ in a manner that

secures an ‘average reciprocity of advantage’ to everyone concerned.

(Citing Penn Central Transportation Co. v. City of New York, 438 U.S.

104, 124 (1978) Lucas, 505 U.S. at 1018-1019. “One of the principal

purposes of the Takings Clause is ‘to bar Government from forcing some

people alone to bear public burdens which, in all fairness and justice,

should be borne by the public as a whole.’” (Citing Armstrong v. United

States, 364 U.S. 40, 49 (1960)) Dolan, 512 U.S. at 384.

11

meaning that costs are approximately offset by benefits.

Pennsylvania Coal v. Mahon, 260 U.S. 393, 415 (1922). In

these reciprocity of advantage cases (like much general

zoning or building code regulation), it is also reasonable to

defer to the democratic process since costs as well as

benefits are widely distributed.

The just compensation and public use requirements of

the takings clause should receive parallel interpretations.

Where the public will share the costs as well as reap the

benefits of government action, as in public acquisition and

reciprocity of advantage cases, a deferential standard of

review is appropriate. But where the costs will be borne by

a few while the many enjoy the benefits, as in the instant

case and regulations like those in Nollan, Lucas and

Dolan, a proper respect for individual rights requires a

higher standard of review.

C. THE FUNDAMENTAL RIGHT TO EXCLUDE

The “public use” limitation further serves individual

liberty and constrains the abuse of power by underscoring

the difference between a regulation that reduces property

value by limiting its permitted uses and a government

mandate that a property owner can no longer exclude

others. As this Court found in Dolan, it is no less an

unconstitutional taking for government to mandate public

access to private property as it is for the government to

occupy the property as its own. Even if there is no meas-

urable economic loss for the property owner, there is, in

both cases, a loss of the fundamental right to exclude.

“(This) Court emphasized [in Kaiser Aetna v. United

States, 444 U.S. 164, 176 (1979)] that the servitude took

the landowner’s right to exclude, ‘one of the most essential

12

sticks in the bundle of rights that are commonly character-

ized as property.’” Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 433 (1982).

Government can achieve many if not most of its

legitimate purposes through regulation that may or may

not require compensation depending on the case by case

analysis required by this Court’s takings jurisprudence.

Where compensation is required the government will have

effectively acquired one or more of the sticks in the prop-

erty rights bundle, but the property owner will generally

retain ownership including the righ. to exclude. The

“public use” clause requires that government or public use

be necessary to achieving a public purpose before resorting

to the more extreme measure of eminent domain. Regula-

tion, though often burdensome and sometimes requiring

compensation, is less burdensome on property owners

than is the forced sale of eminent domain. This Court has

often held that where legitimate government action

impacts on individual rights, the government is required

to resort to a less burdensome means if one is available.°

The “public use” clause should be understood as requiring

the government to pursue the less burdensome means of

regulation where actual public use is not required to

achieve a public purpose. By insisting on this interpreta-

tion of the “public use” clause, this Court is not second

guessing the legislature on what constitutes a public

* E.g., Hodgson v. Minnesota, 497 U.S. 419, 455 (1990) (minor's

welfare can be protected by “less burdensome means” than a two parent

notification requirement for abortion); Dunn v. Blumstein, 405 U.S. 330,

343 (1972) (“state interest may be served with lesser burden on

constitutionally protected activity”); Sherbert v. Verner, 374 U.S. 398,

407 (1963) (state must show that no alternative would avoid substantial

infringement on 1st Amendment rights).

13

purpose. Rather, this Court would simply limit the gov-

ernment to constitutionally permitted means, just as it

does in interpreting the equal protection and due process

clauses of the same Amendment.

D. PROTECTING AGAINST ABUSE AND COR-

RUPTION

The heightened review of Nollan, Lucas and Dolan

serves to protect against the unfair or inappropriate use of

the regulatory process to benefit politically influential

individuals or interests. Because virtually every regulation

results in winners and losers, an essential function of

judicial review must be to assure that these gains and

losses are the incidental result of political give and take,

and not the intended result of influence or corruption. The

majority in Richardson saw “nothing inconsistent in

applying heightened scrutiny when the taking is uncom-

pensated, and a more deferential standard when the

taking is fully compensated.” 124 F.3d at 1158. Judge

O’Scannlain agreed that “there is less reason to be suspi-

cious of a fully compensated taking than an uncompen-

sated one, [but] more deference is not absolute deference.”

“The public use requirement, ...” he went on to say,

“[forces] the government to prove that it is upholding the

public welfare and not merely transferring wealth to a

class o: persons with a stronger political voice.” 124 F.3d at

1168.

Dissenting in the decision below, Justice Zarella

argued that the majority decision “represents a sea change

in the evolution of the law of takings because it blurs the

distinction between public purpose and private benefit and

cannot help but raise the specter that the power will be

14

used to favor purely private interests.” Kelo v. City of New

Lendon, 843 A.2d 500, 575 (Conn.2004). Professor Nicole

Stelle Garnett suggests that “(bly demanding that a

condemning entity link the means by which it seeks to

acquire land, a court may well uncover ‘ulterior’ purposes

for the exercise of eminent domain.”*

These ulterior w~t:ves have surfaced in some of the

cases in which courts have questioned the total deference

understanding of Midkiff. Costco sought to have the

Landcaster Redevelopment Authority condemn the space

owned by 99 Cents Only Stores. The Authority complied

because they were fearful of Costco’s relocating to another

city. 99 Cents Only Stores v. Landcaster Redevelopment

Authority, 237 F.Supp.2d 1123, 1126 (C.D.Cal. 2001). New

Jersey has followed suit in refusing to allow Donald

Trump to use condemned property for a limousine holding

lot. Casino Reinvestment Development Authority v. Banin,

727 A.2d 102,103 (N.J. Super.Ct.Law Div. 1998). Here the

court reaffirmed the established principle that where the

real purpose of the condemnation is other than the stated

purpose, the condemnation may be set aside. Township of

West Orange v. 769 Associates, 800 A.2d 86, 94 (N.J. 2002)

citing Banin, 727 A.2d at 104.

In a world of intense competition among cities and

states for business development, the risks of unfair influ-

ence or corruption of democratic processes are very real.

The instant case also evidences the influence that private

interests can have on legislative outcomes to the detriment

of other, less influential, private parties. Large developers

* Nicole Stelle Garnett, The Public-Use Question as a Takings

Problem, 71 GEORGE WASHINGTON L. REV. 934, 963 (2003).

15

and businesses can easily exercise undue influence on

governments desperate for employment opportunities and

a larger tax base. Individual property owners have only

the courts to protect them from these powerful forces. As

Professor Cass Sunstein has written,“[t)he careful scrutiny

of the means-ends connections operates to ‘flush out’

impermissible ends.”’

II. STATES WHOSE COURTS APPLY HEIGHT-

ENED STANDARDS OF REVIEW IN EMINENT

DOMAIN CASES UNDER THE 5TH AMEND-

MENT OR THEIR OWN CONSTITUTIONAL

PUBLIC USE REQUIREMENT HAVE SUC-

CESSFULLY MET THEIR RESPONSIBILITIES

TO PROPERTY OWNERS AND TO THE GEN-

ERAL PUBLIC WELFARE.

The experiences of several states in different regions

of the country demonstrate that a heightened standard of

review in eminent domain cases does not prevent govern-

ment from achieving its legitimate purposes. Several

states. and a few lower federal courts, have limited the use

of eminent domain to public acquisition of property for

public retention and use or where the act of condemnation

itself will achieve a legitimate public purpose. In other

words, they have interpreted “public use” to mean public

use, not “public purpose.”

“Courts must look beyond the government’s purported

public use to determine whether that is the genuine

reason or if it is merely pretext.” Cottonwood Christian

” Cass Sunstein, Lochner’s Legacy, 87 CoLumBiA L. REV. 873, 878

(1987).

16

Center v. Cypress Redevelopment Agency, 218 F.Supp.2d

1203, 1229 (C.D. Cal.2002). Delaware, Florida, Illinois and

Montana courts have agreed with this thinking and

imposed a heightened standard of review in 5th Amend-

ment eminent domain cases. The Delaware Court first

expressed “very gravest doubt(|s]” as to whether the state

could condemn because property was “not used in the most

efficient or economical manner.” Randolph v. Wilmington

Housing Authority, 139 A.2d 476, 484-485 (Del.1987). The

same court later imposed heightened scrutiny to deter-

mine whether the asserted public purpose is primary or

incidental to the use of eminent domain. Wilmington

Parking Authority v. Land with Improvements, 521 A.2d

227, 231 (Del. 1987). Florida, Illinois and Montana courts

also review eminent domain challenges to determine if the

public purpose is primary or incidental to the condemna-

tion itself. If public benefit could not exist but for the

private use, then the private purpose is primary and the

public purpose is incidental. In the words of the Florida

Court, the “tail cannot wag the dog.” Baycol, Inc. v. Down-

town Development Authority, 315 So. 2d 451, 456 (Fla.

1975). If public benefit is incidental then it is not sufficient

to sustain a finding of a public use. Southwestern Illinois

Development Authority v. National City Environmental,

L.L.C., 768 N.E. 2d 1, 10-11 (Ill. 2002). In assessing

whether condemnation for private use exceeds the emi-

nent domain power, the Montana Court does not defer to

the legislature but weighs the public and private costs.

City of Bozeman v. Vaniman, 898 P.2d 1208, 1214 (Mont.

1995).

Arkansas, Maine, Massachusetts, Michigan, New

Hampshire, South Carolina and Washington courts have

all found the 5th Amendment protections, as set forth in

17

Midkiff, inadequate and have interpreted their respective

state constitutions to require greater judicial scrutiny.

Arkansas, Maine, South Carolina and Washington hold

that if the public benefit would not exist but for the pri-

vate use, then the private use is primary and the public

purpose incidental. City of Little Rock v. Raines, 411

S.W.2d 486, 494 (Ark. 1967); Opinion of the Justices, 131

A.2d 904, 907-908 (Me. 1957) (beneficial “in a broad sense”

does not mean there is any direct public use); Georgia

Department of Transportation v. Jasper County, 586

S.E.2d 853 (S.C. 2003); Petition of Seattle, 638 P.2d 549,

556-557 (Wash.1981) (“If a private use is combined with a

public use in such a way that the two cannot be separated,

the right of eminent domain cannot be invoked.”). Wash-

ington went even further in finding that although preserv-

ing dwindling housing stocks for a particularly vulnerable

segment of society provides a “public benefit,” this public

benefit does not constitute a public use. Manufactured

Housing Communities of Washington v. State, 13 P.3d 183,

196 (Wash.2000).

Similarly, the South Carolina Constitution prohibits

the state from condemning land solely for purposes of

developing commercial or residential areas. Edens v. City

of Columbia, 91 S.E.2d 280, 283 (1956). Like Montana,

Massachusetts and New Hampshire employ a balancing

test to compare public and private benefits. Opinion of

Justices, 250 N.E. 2d 547, 558 (Mass. 1969); Appeal of City

of Keene, 693 A.2d 412, 416 (N.H. 1997); Merrill v. City of

Manchester, 499 A.2d 216, 217 (N.H.1985) (“If the social

costs exceed the probable benefits, then the project cannot

be said to be built for a public use.”). In Merrill the loss of

open space that benefitted the public health outweighed

any possible economic incentives. Jd. at 217-218.

18

In all of these states, the New London plan to con-

demn private property for the express purpose of promot-

ing economic development by the resale of the property to

a private developer would require the courts to give

heightened scrutiny in determining whether or not the

plan is a public use for the purposes of the 5th Amend-

ment. All of these states distinguish condemnation for the

removal of blight or other public nuisances from the

encouragement of private economic development that will

incidentally benefit the public. All of these states have

concluded that the public use requirement of the 5th

Amendment takings clause, or the comparable provision of

their state constitution, is not satisfied by the sole public

purpose of economic development.

The most significant state court decision in recent

years is County of Wayne v. Hathcock, 684 N.W.2d 765

(Mich. 2004), in which the Michigan Supreme Court

overturned Poletown Neighborhood Council v. City of

Detroit, 304 N.W.2d 455 (Mich. 1981). Poletown had been

widely relied upon by other courts and commentators on

the 5th Amendment for the proposition that courts should

give total deference to legislative determination of what

constitutes a public use for the purposes of the 5th Amend-

ment and the many identical and similar state constitu-

tional provisions.

In Poletown, the Michigan Court stated that “(t]he

United States Supreme Court has held that when a

legislature speaks, the public interest has been declared in

terms ‘well-nigh conclusive.’” 304 N.W. 2d at 459 (quoting

from Berman v. Parker, 348 U.S. 26, 32 (1954). This same

language was quoted by this Court in Midkiff, 467 U.S. at

239, in concluding that Berman was correct in finding that

the judicial role “in reviewing a legislature’s judgment of

19

what constitutes a public use .. . is ‘an extremely narrow’

one.” 467 U.S. at 240 (quoting Berman, 348 U.S. at 32).

Upon reconsideration in 2004, the Michigan Supreme

Court came to a conclusion more consistent with the

history and purpose of the public use limitation on the

power of eminent domain.

Writing for a Court that was unanimous in overruling

Poletown, Justice Young observed that “Poletown’s ‘eco-

nomic benefit’ rationale would validate practically any

exercise of the power of eminent domain on behalf of a

private entity.” 684 N.W.2d at 482. Rather than accept

that the “public use” clause of the 5th Amendment imposes

virtually no limits on the eminent domain power, while not

also concluding that private property could never be

condemned for private use, the Hathcock Court articulated

three exceptions to a general prohibition against condem-

nation for such private use.

(1) where “public necessity of the extreme sort”

requires collective action [e.g. highways, rail-

roads, canals, and other instrumentalities of

commerce]; (2) where the property rernains sub-

ject to public oversight after transfer to a private

entity fe.g. a highly regulated industry like a

utility]; and (3) where the property is selected

because of “facts of independent public signifi-

cance,” rather than the interests of the private

entity to which the property is eventually trans-

ferred [e.g. slum clearance or removal of blight).

684 N.W.2d at 783 (quoting from Poletown, 304

N.W.2d at 478 and 480, Reyerson, J. dissenting).

These exceptions to a general requirement of public

use, as distinct from public purpose, are consistent with

the theories set forth in Part I supra. Condemnations

rooted in public necessity will normally affect numerous

20

land owners and are thus more likely to be scrutinized for

public legitimacy in the democratic process. The private

beneficiaries of such condemnation are also generally of

the category noted in the second exception — private

entities subject to public oversight. This public oversight

assures that the condemned property will continue to be

used for public purposes and not diverted to private ends.

The third exception covers situations where private

property owners are imposing significant costs on the

public through neglect or poor management. The imposi-

tion of these costs on the public, like a public nuisance,

warrants appropriate public response which in some cases

will be condemnation.

This Court should review its Midkiff decision with the

same critical eye the Michigan Court brought to the even

older Poletown case. By being somewhat less deferential to

legislative determinations of public use, this Court can

achieve a better balance between the state’s ability to

serve the public interest and the interests of private

property owners who are the foundation of American

freedom and prosperity.

There is little doubt that the State of Michigan will

continue to prosper economically notwithstanding the

overruling of Poletown. Indeed there is good reason to

believe that the expanded protection of private property

resulting from the new rule of Hathcock will have net

benefits for the economy of Michigan. Secure and clearly

defined property rights are critical to private investment

in the maintenance and development of land and other

natural resources. This Court’s decisions in Nollan, Lucas

and Dolan reflect a recognition that government interfer-

ence with property rights is not only unfair but a disincen-

tive to private investment and initiative. These disincentive

21

effects result from straightforward calculations of risk, but

also from what Professor Frank Michelman has described

as “demoralization costs.”* Professor Garnett demon-

strates that these demoralization costs are not limited to

uncompensated takings.

For a number of reasons, compensation does not

always eliminate these demoralization costs in

the eminent-domain context... the measure of

damages awarded in an eminent-domain pro-

ceeding — namely, the fair market value of the

property — frequently fails to make property

owners “whole,” especially with respect to subjec-

tive losses. (At 944-945) .

Professor Garnett also notes that many non-subjective

costs are also not included in fair market value compensa-

tion. “[T]he fair-market-value award may also fail to make

displaced property owners whole with respect to relocation

expenses, good will associated with a business’s physical

location, or, importantly, the cost of replacing the con-

demned property.” (At 948)

As the Michigan Supreme Court has recognized in its

Hathcock opinion, these realities call for heightened

judicial review of eminent domain actions — review that

can be accomplished without interfering with the legisla-

ture’s exclusive determination of the public interest. As

Justice Holmes reminded us in his oft quoted language

from Pennsylvania Coal: “We are in danger of forgetting

that a strong public desire to improve the public condition

is not enough to warrant achieving the desire by a shorter

* Frank Michelman, Property, Utility and Fairness: Comments on

the Ethical Foundations of “Just Compensation” Law, 80 HARV. L. REV.

1165, 1214 (1967).

22

cut than the constitutional way of paying for the change.”

260 U.S. at 416. Surely Justice Holmes’ admonition has

application with respect to every constitutional protection

of individual rights. Heightened scrutiny to assure that

individual liberties receive due respect in the face of the

immense powers of the state should be the rule in eminent

domain cases as it is in regulatory takings cases.

¢

CONCLUSION

As part of an ambitious development plan for the Fort

Trumbull neighborhood, the City of New London has

condemned homes and small businesses that are the life

and lifeblood of their owners. The condemned land is to be

_owned by the New London Development Corporation and

leased for ninety-nine years to private developers. This

Court should agree with Petitioners that this taking of

their land for transfer to other private interests is a

violation of their rights under the public use clause of the

5th Amendment. The City of New London will remain free

to promote economic development by other constitutional

means, but use of the eminent domain power to coerce the

effective sale of property by one private party to another

infringes the most fundamental principles of the United

States Constitution and should be invalidated by this

Court.

Respectfully submitted,

JAMES L. HUFFMAN

5340 S.W. Hewett Blvd.

Portland, Oregon 97221

(503) 203-1583

Counsel for Amici Curiae