Amicus Curiae Brief — Kelo v. New London

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(er)

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No. 04-108

In The

Supreme Court of the United States

SUSETTE KELO, &7 AL.,

Petitioners,

Vv.

City OF NEW LONDON, AND NEW LONDON DEVELOPMENT

CORPORATION,

Respondents.

ON WRIT OF CERTIORARI

TO THE SUPREME COURT OF CONNECTICUT

BRIEF OF AMICI CURIAE

THE NATIONAL ASSOCIATION OF HOME BUILDERS

AND THE NATIONAL ASSOCIATION OF REALTORS®

IN SUPPORT OF THE PETITIONERS

JOHN J. DELANEY MARY LYNN PICKEL*

Of Counsel National Association of

7200 Wisconsin Ave., Ste. 800 Home Builders

Bethesda, MD 20814 1201 15" Street, N.W.

(301) 961-5115 Washington, D.C. 20005

(202) 266-8200

LAURENE K. JANIK

RALPH W. HOLMEN

National Association of REALTORS®

430 N. Michigan Ave.

Chicago, IL 60611

(312) 329-8200

Counsel for Amici

*Counsel of Record

TABLE OF CONTENTS

INTERESTS OF THE AMICT CURITAE 000000... eccceccccecccesesessseeeees |

SUMMARY OF THE ARGUMENT .......00.. 0. eeeceeceeseeeeeenees 4

UTITETIITIIITTTE axeenincioianetisannendninaneaitinmendedtunidanuneteiimiiisissineebideness 4

THERE NEED NOT BE A BRIGHT-LINE TEST FOR

PUBLIC-PRIVATE TAKINGS, BUT CAREFUL

JUDICIAL REVIEW OF GOVERNMENT ACTION IS

ETE IAs oxiisionsircnenindnsnbvanineniipccsinnieainntiinisinidedeesmenieniaainnedebieonevn 4

A. Berman and Midkiff represent extraordinary

circumstances which are not applicable to modern

economic development situations. .................cccccccceeeeeeees 5

i. In Berman and Midkiff, the focus of this Court

shifted from the public nature of the proposed

future project to the eradication of a current

IY eovensinincitemanensnmniiennieininintetbiaidinnanetes 6

ii. The two cases do not anticipate public uses being

justified by local legislative bodies. .................cccceee 8

iii. If the legislative deference afforded by this Court

in Berman and Midkiff is extrapolated to all non-

blight economic development situations like Kelo,

then the public use clause becomes irrelevant............ 11

B. This Court needs to review most public-private

condemnations with a higher level of scrutiny.............. 15

1.

CONCLUSION

i

TABLE OF CONTENTS cont.

The clear and convincing evidence standard of

review for cases with significant private interest

makes the most sense at this time in view of all of

the facts and circumstances of this case. ...................

In reviewing the evidence presented by the

government, this Court should balance several

factors to determine whether a taking is for a

BUDUC OF PIVEED UBB.......00.ccrcsesescesensessossesosssosensonessenens

©. Entent OF CORB SIIIIOR .....0cccscccesssesescesenssssonnninnnnn

b. Feasibility of Proposed Development..................

c. Government Accountability to the Public ...........

While most public-private | condemnation

situations require heightened scrutiny, blight and

collective action cases practically may be held to a

ROSBOP GRIIREII, .acc<eccoecccccesccseecesssntensenneianiniennananannan

COREE EEE EEE HEHEHE HEHEHE EHH Oe

Di

.28

TABLE OF AUTHORITIES

Cases

Berman v. Parker, 348 U.S. 26 (1954) .2...0..cccccccccccceee coves passim

Board of County Comm’ s of Brevard County v. Snyder.

i ccebonscovnccooes 10

Casino Reinvestment Awh. v. Banin, 727 A.2d 102

a 25

Cherry Hills Resort Dev. Co. v. City of Cherry Hills Vill.,

De sesescuuncoonosscecs 10

City of Cuyahoga Falls v. Buckeye Cmty. Hope Found.,

a. sssusmnponsecnsonace 17

City of Louisville v. McDonald, 470 S.W.2d 173 (Ky. 1971)... 10

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

a couensnonovons passim

Devaney v. City of Burlington, 545 S.E.2d 763

(N.C. Ct. App.), review denied, 550 S.E.2d 772

a scnsssunssnonccnsonscene 10

Dolan v. City of Tigard, 512 U.S. 374 (1994) .0.......cccc. 19, 20

Fasano v. Bd. of County Comm'rs. of Washington County,

Ss cssssnnosononee 9,10

ooo eee

iv

Vv

TABLE OF AUTHORITIES cont. TABLE OF AUTHORITIES cont.

Fleming v. City of Tacoma, 502 P.2d 327 (Wash. 1972).......... 10 West Old Town Neighborhood Ass'n v. City of

Albuquerque, 927 P.2d 529 (N.M. Ct. App. 1996) 0.000.000... 10

Golden v. City of Overland Park, 584 P.2d 130 (Kan. 1978)... 10

Woodland Hills Conservation Ass'n, Inc. v. City of Jackson,

Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (19884)......... passim 443 So. 2d 1173 (MiSS. 1983) occcccccccccccssseee-eecceeeseeeeeeeceeeceessee 10

Kelo v. City of New London, 84? A.2d 500

(Conn. 2004) ........... setaienansenianstauinduiessitceibeilaiaidinilibiabaniniiiiaiay passim Other

Lucas v. South Carolina Coastal Council, | Stephen J. Jones, Trumping Eminent Domain Law:

es ee icrctcnsintccintensiscienisinneniisiebiatitiahaiiiaaiatilias 13, 14, 15 An argument for Strict Scrutiny Analysis under the Public

New Castle County Council v. BC Dev. Assocs., sStuaet ton peg ry 17

Fae Cae GTO Ce Ce ecitrcrniciniteicnieninciiinnictinndbinniaananes 10 , ee ee

| ; Hudson Hayes Luce, The Meaning of Blight:

Owensboro v. McCormick, 581 S.W.2d 3 (Ky. 1979).............. 18 A Survey of Statutory and Case Law.

People ex rel. Klaeren v. Vill. of Lisle, 737 N.E.2d 1099 Pe PO ee Be Br i cccccenctccnctticntnevetannnnnaniaiiiainsiinns 28

(Ill. App. Ct. 2000), appeal allowed, 744 N.E.2d 289

GE Meee ccrevscceninnnccccincsnieitcsiesiiiibiaaniainiaihaciuanitigiiiimpaiaiateamaatiaaaiaaiite 10 | — 7

Constitutional and Statutory Provisions

Poletown Neighborhood Council v. Detroit, | Federal

IO NW .26 455 (MACH. NCL) .nn-naeeeeeereeeneensnnnnnnenreenernn 21,23 Sens ety MINIS, Wi cscesesierscnstahtentaniiapiilaaniiiciaieian lila aaiealas 17

Southwestern Illinois Dev. Auth. v. Nat'l City Envil., LLC,

pot id |) 0d See 11,23

Tibert v. City of Minto, 679 N.W.2d 440 (N.D. 2004).............. 18

INTERESTS OF AMICI CURIAE

The National Association of Home Builders (“NAHB”) and

the National Association of REALTORS® have received

consent of the parties to file this brief as amici curiae in

support of the Petitioners pursuant to a blanket consent

issued by each party. Letters of such consent have been

filed with the Clerk of the Court.'

NAHB is a trade association representing more than

215,000 members involved in home building, remodeling,

multifamily construction, property §|§ management,

subcontracting, design, housing finance, building product

manufacturing and other aspects of residential and light

commercial construction. Known as “the voice of the

housing industry,” NAHB is affiliated with more than 800

state and local home builders associations around the

country. NAHB's builder members will construct about 80

percent of the more than 1.77 million new housing units

projected for 2004, making housing one of the largest

engines of economic growth in the country.

While NAHB members include property owners and

development interests, its primary goal is to preserve

opportunities for housing. Affordable housing projects

have proven to be helpful to support the widely-recognized

public purpose of redevelopinent of a blighted area or

slum. Additionally, many NAHB members participate in

non-blight redevelopment projects at the local level.

' Pursuant to Supreme Court Rule 37.6, amici state that their

counsel authored this brief and amici paid for it. No counsel for a

party authored this brief in whole or in part, and no person other

than amici made a monetary contribution to the preparation of the

brief.

However, NAHB recognizes that housing will almost never

afford a community with the economic development

benefits that a commercial application will. If economic

development as a sole justification for public use is decided

using a rational basis test with deference to local legislative

bodies, then the door is left open for local governments to

abuse their eminent domain powers and take developable

land from NAHB members as they could from any other

property owner. Therefore, NAHB must adhere in this case

to its long-standing objective to protect private property

rights from abuses by local government.

The National Association of REALTORS” (“NAR”) is a

non-profit association representing over one million

members engaged nationwide in all phases of the real estate

business, including, but not limited to, brokerage,

appraising, management, and counseling. NAR was

created to promote and encourage the highest and best use

of the land, to protect and promote private ownership of

real property, and to promote professional competence. Its

members contribute to such activities as safeguarding real

property rights, promotion of equal opportunity in housing,

real estate licensing, neighborhood revitalization, public

service, and cultural diversity. Like NAHB, NAR and its

members embrace a deep appreciation for the value of

homeownership in American society, and the importance of

safeguarding private property rights.

To the end of their respective concerns, NAHB and NAR

provide this brief in support of the petitioners, homeowners,

with the understanding that there must be a balance

between redevelopment opportunities and protection of

private property rights.

OO ee ee

NAHB has been before this Court as amici curiae or “of

counsel” to the land owner in a number of cases involving

rights of property owners and the remedies available to

them when their rights are obstructed. These include Agins

v. City of Tiburon, 447 U.S. 255 (1980); San Diego Gas &

Elec. Co. v. City of San Diego, 450 U.S. 621 (1981);

Williamson County Reg'l Planning Comm'n v. Hamilton

Bank, 473 U.S. 172 (1985); MacDonald, Sommer & Frates

v. Yolo County, 477 U.S. 340 (1986); First English

Evangelical Lutheran Church of Glendale v. County of Los

Angeles, 482 U.S. 304 (1987), Nollan v. California Coastal

Comm'n, 483 U.S. 825 (1987): Yee v. City of Escondido,

503 U.S. 519 (1992); Lucas v. South Carolina Coastal

Council, 50S U.S. 1003 (1992); Dolan v. City of Tigard,

512 U.S. 374 (1994); Babbitt v. Sweet Home Chapter of

Communities for a Great Oregon, 515 U.S. 687 (1995);

Suitum v. Tahoe Reg'l Planning Agency, 520 U.S. 725

(1997), City of Monterey v. Del Monte Dunes at Monterey,

Lid., 526 U.S. 687 (1999); Palazzolo v. Rhode Island, 533

U.S. 606 (2001); Tahoe-Sierra Pres. Council, Inc. v. Tahoe

Reg'l Planning Agency, 535 U.S. 302 (2002); Borden

Ranch P'ship v. United States Army Corps of Eng'rs, 537

U.S. 99 (2002); City of Cuyahoga Falls v. Buckeye Cmty.

Hope Found., 538 U.S. 188 (2003); and S. Fla. Water

Mgmt. Dist. v. Miccosukee Tribe of Indians, 124 S. Ct.

1537 (2004).

Similarly, NAR has participated as amicus before this

Court in cases including Yee v. City of Escondido, 503

U.S. 519 (1992); Lucas v. South Carolina Coastal

Council, 505 U.S. 1003 (1992); Dolan v. City of Tigard,

512 U.S. 374 (1994); Babbitt v. Sweet Home Chapter of

Communities for a Great Oregon, 515 U.S. 687 (1995);

* This Court's opinion cited the NAHB’s brief. 483 U.S. at 840.

City of Monterey v. Del Monte Dunes at Monterey, Ltd.,

526 U.S. 687 (1999); Allegheny Pittsburgh Coal Co. v.

Webster County, 485 U.S. 976 (1989); and Preseault v.

ICC, 494 U.S. 1 (1990).

SUMMARY OF THE ARGUMENT

By deferring to a legislature for the determination of

whether economic development is a valid justification for

condemnation under the Fifth Amendment of the U.S.

Constitution, the Connecticut Supreme Court has

effectively sanctioned condemnations for any purpose, as

long as the government can relate the proposed use to some

increased tax revenue or potential job opportunities. This

standard requires minimal, if any, justification by the

government to the courts for its actions. As a result, local

governments are at liberty to abuse the public use

requirement, to the detriment of property owners, with little

check on their activities.

This Court must not only reverse the lower court’s decision

as to the redevelopment plan of the City of New London,

but also it should provide a framework for an intermediate

level of scrutiny such that other courts can determine

whether a condemnation involving significant private

interests is appropriate, especially in cases where economic

development is the sole justification for condemnation.

ARGUMENT

THERE NEED NOT BE A BRIGHT-LINE TEST FOR

PUBLIC-PRIVATE TAKINGS, BUT CAREFUL

JUDICIAL REVIEW OF GOVERNMENT ACTION IS

CRITICAL.

It is widely recognized that state supreme courts are split on

the issue of whether property may be taken for solely for

economic development and there is no consistent legal

standard for evaluating whether these condemnations are

for a public use. See Pet. for Cert. at 10; and Kelo v. City of

New London, 843 A.2d 500 (Conn. 2004). In order to

resolve the conflict, it is not necessary for this Court to

determine that all public-private takings using an economic

development justification are unconstitutional. Instead, the

Court need only clarify that careful judicial review of

condemnations involving significant private interests,

including pure economic development situations, is

appropriate such that courts will not rely merely on the

stated purpose of a condemnation but rather examine all

available evidence to determine whether the proposed use

would in fact be for public or private purpose.

A. Berman and Midkiff represent extraordinary

circumstances which are not applicable to

modern economic development situations.

Two U.S. Supreme Court cases have been put forth as the

most applicable to the question presented by the petitioners

about whether the Fifth Amendment’s public use

requirement allows for condemnation solely for economic

development. While the two cases may provide a historical

perspective on the public use doctrine, neither of these

cases is particularly instructive for the City of New London

factual situation.

Berman v. Parker, 348 U.S. 26 (1954), addressed the

complaint of a department store owner whose property was

being condemned as part of a broad plan to rid the District

of Columbia of slums. The action was pursuant to a

declaration by Congress that redevelopment plans to

eliminate “substandard iiousing and blighted areas,

including the use of buildings in alleys as dwellings for

human habitation” are a public use because they protect the

public health, safety, morals and welfare. /d. at 28.

However, the heart of the issue was whether a viable

commercial property rightfully could be condemned as part

of the housing redevelopment plan since it did not

contribute to the blight or substandard housing situation

targeted by Congress.

Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984),

dealt with a land oligopoly traceable to the early high chiefs

of the Hawaiian Islands. The Hawaii legislature created a

plan to transfer title of real property from the few land

owners to their leasing tenants in order to reduce the

concentration of land ownership, which was determined to

be “responsible for skewing the State’s residential fee

simple market, inflating land prices, and injuring the public

tranquility and welfare.” /d. at 232. Landowners argued

that this condemnation to effectuate the transfer from one

private property owner to another private property owner

was in violation of the public use clause.

i. In Berman and Midkiff, the focus of this Court

shifted from the public nature of the proposed

future project to the eradication of a current

undesirable use.

The inclusion of the redevelopment statutes seeking to cure

slums and blight conditions not only expanded the

definition of public use to include “public benefit,” but also

shifted the thinking of the courts in how to assess that use.”

* The shift is clearly captured by the dissenting justices below. “At

the time that our federal constitution was written, a government

taking meant just that, namely, a taking for a government purpose

Intentionally or not, the courts in the middle of the

twentieth century began to defer review of the benefit of the

proposed use in favor of the eradication of the present use.

In essence, courts deferred to the legislature with the

understanding that any rational plan would be better than a

slum.* Legally, it was determined that the use of eminent

domain was appropriate to effectuate police powers to

protect public safety, public health, morality, peace and

quiet, and law and order. As a result, this Court in Berman

held that “the legislature, not the judiciary, is the main

guardian of public needs to be served by social legislation.”

Berman, 348 U.S. at 32.

Midkiff followed the Berman rationale and the Court

deferred to the legislature when it determined that “there is,

of course, a role for courts to play in reviewing a

legislature’s judgment of what constitutes a public use,

even when the eminent domain power is equated with the

police power. But the Court in Berman made clear that it is

‘an extremely narrow’ one.” Midkiff, 467 U.S. at 240.

Again, it seems that any rational plan would be better than

an oligopoly—‘“to attack certain perceived evils of

concentrated property ownership” is a “classic exercise of a

State’s police powers.” /d. at 241-42.

such as a public building. As the population grew and collective

needs of our society changed, however, the takings power was

construed more broadly. Government authorities condemned

private properties not just for a ‘public use,’ but also to achieve a

‘public benefit’ such as the elimination of urban blight.” Kelo, 843

A.2d at 574.

* Related to the case before this Court, the dissenting justices cite

Connecticut General Statutes 8-124 and point out that “in

redevelopment projects, it is the elimination of blight and not the

development that follows that constitutes the public benefit.” Kelo,

843 A.2d at 576.

The Kelo situation, as with all non-blight economic

redevelopment cases, is distinctly different. The city

sought to develop approximately 90 acres adjacent to both a

state park and a Pfizer global research facility with

commercial and residential interests with the hopes of

revitalizing its downtown area. The issue at hand is not

about finding a means to stamp out an existing evil or to

protect the community from a current danger. Clearly, the

circumvention of a market-based system of land

acquisition, without a clear evil to eliminate, makes this

type of condemnation particularly troublesome. The goal

of the government merely is to “trade up” on a property that

is already a viable part of the community.

Consequently, the Berman and Midkiff standards are

inapplicable outside the scope of eradicating slums,

dismantling an oligopoly or some other egregious fact

pattern. G.~erally, the focus of the courts in public-private

takings, including non-blight economic development cases,

needs to be on the proposed use and whether its scope is

truly public or private in nature.

ii. The two cases do not anticipate public uses

being justified by local legislative bodies.

The legislative deference afforded by the Court in Berman

and Midkiff does not account for the broad authority of

local governments in non-blight economic development

Situations.

Midkiff affirmed the concept first put forth in Berman that

some judicial deference was appropriate because the power

of Congress over the District of Columbia includes all the

legislative powers which a state may exercise over its

affairs — including the police power. Berman, 348 U.S. at

31. Midkiff clarified the fact that a state legislature, instead

of Congress, made the public use determination does not

mean that judicial deference to that legislative body is less

appropriate. Midkiff, 467 U.S. at 244. This Court

determined that state legislatures are as capable as Congress

of making such determinations within their respective

spheres of authority. /d.

It is not clear that the decisions of local governments should

be afforded the same deferential treatment as_ the

determinations of a state legislature. In the case at hand,

whether the same level of judicial deference is appropriate

for the findings of the New London City Council and its

development corporation is certainly a debatable question.

The findings that the project “intended” to benefit the

public interest rather than a private entity’ must not be

given the same deference as that accorded to the determina-

tions of a state legislative body.

In Fasano v. Bd. of County Comm'rs. of Washington

County, 507 P.2d 23 (Or. 1973),° a much heralded

landmark case on the role of the court in reviewing a

rezoning decision of a local legislative body, the Supreme

Court of Oregon answered this question with a resounding

“no.” Rather, the court found that such an exercise of the

police power is “an exercise of judicial authority,” and

therefore is not entitled to deferential review.” Jd. at 26, 29

(emphasis added). The court explained:

* 843 A.2d at 540.

° Disapproved on other grounds, Neuberger v. City of Portland, 607

P.2d 722 (Or. 1980).

10

At this juncture we feel we would be

ignu.“"° reality to rigidly view all zoning

decisions by local government bodies as

legislative acts to be accorded a full

presumption of validity and shielded from

less than constitutional scrutiny by the theory

of separation of powers. Local and small

decision groups are simply not the equivalent

in all respects of state and _ national

legislatures. There is a growing judicial

recognition of this fact of life...

Fasano, 507 P.2d at 26 (emphasis added).

A growing minority of state courts follow Fasano. The

most recent of these is North Carolina.’ The Fasano

rationale merits consideration by this Court in determining

” See, e.g., Devaney v. City of Burlington, 545 S.E.2d 763 (N.C. Ct.

App.), review denied, 550 S.E.2d 772 (N.C. 2001) (City Council

proceeding on zone change application was quasi-judicial). Other

state court decisions following Fasano include: People ex rel.

Klaeren v. Village of Lisle, 737 N.E.2d 1099 (Ill. App. Ct. 2000),

appeal allowed, 744 N.E.2d 289 (Ill. 2001); New Castle County

Council v. BC Dev. Assocs., 567 A.2d 1271 (Del. 1989); Board of

County Comm'rs of Brevard County v. Snyder, 627 So. 2d 469 (Fla.

1993); Golden v. City of Overland Park, 584 P.2d 130 (Kan. 1978);

City of Louisville v. McDonald, 470 S.W.2d 173 (Ky. 1971); Cherry

Hills Resort Dev. Co. v. City of Cherry Hills Village, 757 P.2d 622

(Colo. 1988); Woodland Hills Conservation Ass'n, Inc. v. City of

Jackson, 443 So. 2d 1173 (Miss. 1983); West Old Town

Neighborhood Ass'n v. City of Albuquerque, 927 P.2d 529 (N.M.

Ct. App. 1996), superseded by statute on other grounds by C.F.T.

Dev., LLC v. Bd. of County Comm'rs of Torrance County, 32 P.3d

784 (N.M. Ct. App. 2001); Fleming v. City of Tacoma, 502 P.2d

327 (Wash. 1972), overruled on other grounds by Raynes v. City of

Leavenworth, 821 P.2d 1204 (Wash. 1992).

the appropriate level of review to be applied to the actions

of the New London City Council and its development

corporation in this case.

In economic development situations, the problems with the

local nature of the decision-making process are

compounded by the fact that, in many instances, public

housing or blight statutes fundamentally are different from

economic redevelopment statutes. The latter are usually

broad and may not provide local governments with

guidance as to how to accomplish the goals of the statute—

leaving an inexperienced local body to interpret its power

of condemnation more broadly than is appropriate. See

e.g., Southwestern Illinois Development Authority v. National

City Environmental, L.L.C., 768 N.E.2d 1 (Ill. 2002).

iii. If the legislative deference afforded by this

Court in Berman and Midkiff is extrapolated to

all non-blight economic development situations

like Kelo, then the public use clause becomes

irrelevant.

In its decision below, the Connecticut Supreme Court used

a subjective “intent” test in determining whether, in light of

the transfer of the condemned property to as yet unknown

private parties for economic development, the exercise of

the eminent domain power in this case was an

“unreasonable violation of the public use clause.” Kelo, 843

A.2d at 541-42. Indeed, the majority’s opinion cites

approvingly the conclusion of the trial court that “the

primary motivation for the city and its development

corporation was to take advantage of Pfizer’s presence, and

that the primary motivation and effect of the development

plan and its conditions was to benefit the distressed city,

not Pfizer.” /d. at 540. Accordingly, the lower court con-

12

cluded that the “trial court’s finding that the takings were

not primarily intended to benefit a private party” was not

“clearly erroneous.” /d. at 542 (emphasis added). See also

id. at 543-44.

Coupling this subjective analysis with the most deferential

standard of review (i.e., the clearly erroneous standard)

meant that to prevail, the condemnees had to show that

there was no evidence in the record to support the

condemnor’s decision. Kelo, 843 A.2d at 544 (emphasis

added). This virtually preordained the result. Under the

extremely deferential standard of review adopted by the

lower court, a condemnation would fail to promote a public

purpose only if it was “primarily intended” to benefit a

private party rather than “primarily intended” to benefit the

public. /d. at 541-44. Thus, as noted by the condemnees,

condemnation of private property for a private business ia

Connecticut is a public use “so long as the government

claims that the purpose of the condemnation is to improve

the City’s tax base and to increase employment.” Pet. for

Cert. at 25.

The Connecticut Supreme Court characterized the

“principal issue” in the condemnees’ appeal as being

“whether the public use clauses of the federal and state con-

stitutions authorize the exercise of the eminent domain

power” in the manner in which it was carried out herein.

Kelo, 843 A.2d at 507 (emphasis in original). In so doing,

it ruled that the trial court’s determination that the city’s

legislative authority primarily intended a taking to benefit

the public interest, rather than a private entity — is “a

question of fact that we review pursuant to the clearly

erroneous standard of review.” 843 A.2d at 540 (emphasis

13

added).* However, the dissent casts serious doubt as to

whether this ruling is legally correct. Relying upon

respected authority, the dissent asserts that “the question of

what is a public use is always one of law,” or at least is a

mixed question of fact and law “because the trial court’s

determination as to public use rests on numerous factual

findings regarding the goals, motives and interests of the

public officials and the private parties associated with the

project.” /d. at 595. Accordingly, as noted by the dissent,

“the conclusion that the development plan was intended

primarily to benefit the public, per se, is insufficient to

justify the takings.” /d. at 596.

Support for the dissent’s position that virtually

unquestioned judicial deference should not be given to the

city government’s conclusory findings and declarations of

intent may be found in Lucas v. South Carolina Coastal

Council, 505 U.S. 1003 (1992).'° In Lucas, the landowner

filed suit in state court alleging that application of the

state’s Beachfront Management Act (“BMA”) to his

property constituted a taking without compensation.

Significantly, as in the case at bar, one of the “findings” of

* A finding of fact is clearly erroneous “when there is no evidence

in the record to support it” or when it is obvious that a mistake has

been made. /d.

* Id. at 595 (citing 2 T. Cooley, Constitutional Limitations 1141 (8"

ed. 1927)) (Zarella, J. dissenting).

'° In this regard, it is noteworthy that in Midkiff, cited extensively

by the lower court, this Court stated that the “public use

requirement is ... co-terminus with the scope of a sovereign’s

police powers.” Midkiff, 467 U.S. at 240. Amici understand this to

mean that it is subject to the same boundaries as the exercise of the

police power.

14

the state legislature in enacting the BMA was that the local

economy would benefit from “tourism industry revenue.”

Lucas, 505 U.S. at 1024, n. 11.'' In reversing the trial

court, which had found a taking and awarded compen-

sation, the Supreme Court of South Carolina held that it

was required to accept the “uncontested findings” of the

South Carolina legislature that new construction in the

coastal zone threatened that public resource. /d. at 1010.

Accordingly, said the court, when a regulation respecting

the use of property is designed “to prevent serious public

harm,” no compensation is due under the takings clause,

regardless of the regulation’s effect on the property's value.

Id. This Court rejected that proposition,'’ and in so doing,

took note of the fact that some of the state legislature's

“findings” seemed to be “phrased in ‘benefit-conferring’

language instead.” /d. at 1024, n. 11.

Of particular relevance to the case at bar, the Court further

noted that if the test for required compensation was whether

the legislature had recited a harm-preventing justification

for its action, such a justification could be formulated in

practically every case, thus amounting to “a test of whether

the legislature has a stupid staff.” /d. atn. 12. Similarly, in

the instant case when non-blighted private property is

condemned and then is to be transferred to as yet unknown

private entities for economic development, the test for

constitutionally required “public use” would not be satis-

fied merely by relying on the condemnor’s recitations that a

'' The South Carolina legislature also made a finding that the BMA

would benefit the state’s citizens by providing “a natural healthy

environment” in which to spend their “leisure time.” /d.

"? Id. at 1022-23.

15

development plan “primarily was intended to benefit the

public interest rather than private entities.”'

To that end, the Lucas Court “emphasized” that to win its

case on remand:

South Carolina must do more than proffer the

legislature’s declaration that the uses Lucas

desires are inconsistent with the public

interest, or the conclusory assertion that they

violate a common-law maxim such as sic

utere tuo ut alienum non laedas. As we have

said, a “State, by ispe dixit, may not

transform private property into public

property without compensation ....”

505 U.S. at 1031 (emphasis added).

Applying the Lucas instruction to the case at bar suggests

that even deferential review should not result in acceptance

of mere proffers of declarations by the condemnor that the

taking of the condemnees’ properties and transferring them

to private ownership will benefit the public interest rather

than a private entity. See, e.g, Kelo, 843 A.2d at 542-43.

If the abuse of discretion standard allows such a result in

circumstances like these, then there is no refuge for

property owners from legislatures run amuck.

B. This Court needs to review most public-private

condemnations with a higher level of scrutiny.

When the range of activities proposed by the government

entity is unquestionably private, a heightened scrutiny by

'? 843 A.2d at 542-543.

16

this Court is imperative. To be clear, it is not NAHB’s

position that all condemnation actions need to be reviewed

with heightened scrutiny. It is well established that those

projects that will be of actual use by the community (/.e.,

parks, roads, and schools) or are infrastructure necessities

to be shared by the public at large (i.e., water & sewer

treatment facilities) are of public use.

However, a higher level of scrutiny should be triggered by a

factual situation wherein a government is not only

condemning property but also there will be a transfer of

property interest such tnat a private party will maintain

primary ownership, control, or jurisdiction over the

property. This is not to contend that public ownership 1s

the sole method of promoting the public purposes of

community redevelopment projects. See Berman, 348 U.S.

at 34. Simply, it would allow for a more careful review of

the use to which the property will be put to determine

whether the public use or purpose is primary or incidental.

The Connecticut Supreme Court contends that “a public use

defies absolute definition, for it changes with varying

conditions of society, new application in the sciences,

changing conceptions of the scope and functions of

government, and other differing circumstances brought

about by an increase in population and new modes of

communication and transportation.” Kelo, 843 A.2d at 524

(citing Katz v. Brandon, 245 A.2d 579 (Conn. 1968)).

Additionally, this Court has offered that when dealing with

what is traditionally known as the police power, “an

attempt to define its reach or trace its outer limits is

fruitless,” for “each case must turn on its own facts.”

Berman, 348 U.S. at 32. While it is a pointless exercise to

make a list of all types of potential condemnation actions

and determine whether each is a public use, it is imperative

17

for this Court to give guidance to the lower courts for

reviewing public-private condemnations so that as the

meaning of public use is shaped, the courts do not render

the federal Public Use Clause irrelevant. U.S. Const.

amend. V.

i. The clear and convincing evidence standard of

review for cases with significant private interest

makes the most sense at this time in view of aii

of the facts and circumstances of this case.

To resolve the tension between public and private uses, this

Court must consider requiring a heightened or intermediate

level'* of review to be used by the lower courts in

determining whether the public use requirement has been

satisfied in these circumstances.

* Amici propose intermediate standards with the understanding that

there are more extreme levels of scrutiny which may be applied by

this Court. Of course, the most deferential would be the rational

basis test or the abuse of discretion standard (also called the “clearly

erroneous” standard adopted by the Connecticut Supreme Court in

Kelo, 843 A.2d at 543.) At the other end of the spectrum, the

highest standard would be strict scrutiny. Strict scrutiny requires

that the government show a “compelling” government objective for

transferring property from one private property owner to another. It

would be most appropriate in the event this Court were to find that

ownership of private property is a fundamental right. See, e.g.,

Stephen J. Jones, Trumping Eminent Domain Law: An argument for

Strict Scrutiny Analysis under the Public Use Requirement of the

Fifth Amendment, 50 Syracuse L. Rev. 285, 314 (2000). While

NAHB has argued previously that the right to own property is

fundamental, this Court has declined to address the matter recently.

Brief for the National Association of Home Builders, City of

Cuyahoga Falls v. Buckeye Cmty. Hope Found., 538 U.S. 188

(2003) (No. 01-1269). With that acknowledgement, amici consider

this argument beyond the scope of the case before the Court at this

time.

18

The most persuasive is the “clear and convincing evidence”

standard espoused by the dissent below. Kelo, 843 A.2d at

588. The argument is that this standard of review applies in

civil cases in Connecticut to protect particularly important

individual interests. /d. It forces the government to prove

that “the evidence induces in the mind »! ‘he trier a

reasonable belief that the facts asserted are /iz/:/y probably

true, that the probability that they are true or exist is

substantially greater than the probability that they are false

or do not exist.” /d. (emphasis added). The dissent cites

adverse possession claims in Connecticut as a similar land

use dispute to condemnation requiring clear and convincing

evidence to justify the taking.

The clear and convincing evidence standard is supported by

other land use cases throughout the states. For instance, the

Kentucky Supreme Court in Owensboro v. McCormick, 581

S.W.2d 3 (Ky. 1979), overturned a section of an economic

development statute finding that “public use” and “public

benefit” are not synonymous. The court in Kentucky

distinguished this case from others where eminent domain

was appropriate by noting that those cases contained

condemnors showing blighted property or public uses by

clear and convincing evidence. As another example, the

Supreme Court of North Dakota in Jibert v. City of Minto,

679 N.W.2d 440 (N.D. 2004) recently affirmed that the

dedication of an easement for a public street, precluding the

former owner “from resuming his right of private property,

or indeed any use inconsistent with the public use” must be

proven by clear and convincing evidence. /d. at 445.

Property rights, whether or not fundamental, certainly

should be considered important enough for the public use

19

clause of the Constitution to require a “highly probably

true” justification for the loss of an owner’s title to land.

As an alternative if the clear and convincing evidence

standard is unpersuasive to this Court, then a somewhat less

demanding but still intermediate standard is that of

heightened reasonableness discussed and adopted by the

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

In Dolan, this Court applied a heightened level of review in

determining the constitutionality of certain regulatory

exactions. It expressly rejected “very generalized

statements as to the necessary connection” between the

required exaction and a proposed development’s impact as

being “too lax” to protect the property owner’s right to just

compensation when her property is taken for “public

purposes.” /d. at 391. The Court noted that the “reasonable

relationship” test approximated the federal constitutional

standard, but it did net adopt this standard because it could

be confused with the most deferential “rational basis” level

of review. /d. To avoid confusion, this Court applied a

new “rough proportionality” standard, and in so doing,

explained:

We think the “reasonable relationship” test

adopted by a majority of the state courts is

closer to the federal constitutional norm than

either of those previously discussed. But we

do not adopt it as such, partly because the

term “reasonable relationship” seems

confusingly similar to the term “rational

basis” which describes the minimal level of

scrutiny under the Equal Protection Clause of

the Fourteenth Amendment. We think a term

such as “rough proportionality” best

20

encapsulates what we hold to be the

requirement of the Fifth Amendment. No

precise mathematical calculation is required,

but the city must make some sort of

individualized determination that the

required dedication is related both in nature

and extent to the impact of the proposed

development.

* * *

[T]he citv must make some effort to quantify

its findings in support of the dedication for

the pedestrian/bicycle pathway beyond the

conclusory statement that it could offset

some of the traffic demand generated.

Dolan, 512 U.S. at 391 (footnotes omitted) (emphasis

added).

The key to any intermediate level of scrutiny, whether it is

by clear and convincing evidence or heightened

reasonableness, is the shifting of the burden of proof to the

condemnor to show that the proposed use is a public one.

After the condemnee has shown that there will be a transfer

of property interest such that a private party will maintain

primary ownership, control, or ‘urisdiction over the

property to trigger a heightened scrutiny, a burden shift is

necessary.'° In this instance, the city and development

corporation should be required to present probative

evidence, including a plan explaining or “quantifying” in

'* The dissent below points out that a shifting burden of proof is

appropriate “because the taking party has greater access than the

opposing party to information regarding developer interest in the

properties and the progress of negotiations relating to the

disposition of the properties.” Kelo, 843 A.2d at 588.

21

reasonable detail how the goals of the development plan

will in fact be achieved (e.g., identification of redevelopers

and execution of formal agreements, providing a time frame

and staging plan for redevelopment, and meaningful public

oversight of the private entity’s financial capability and

accountability to the public in its use of the condemned

properties).

Providing evidence is the /east the condemnor should do in

view of all the circumstances related to public-private

condemnations. For the owners of the condemned

properties in the City of New London, the social costs are

enormous and the stakes are far too high to risk relying

upon conjecture or conclusory “declarations” regarding the

condemnor’s intentions that might well be wrong.'® The

rational basis review provided by the Connecticut Supreme

Court simply does not take into account the private nature

of economic development condemnations.

ii. In reviewing the evidence presented by the

government, this Court should balance several

factors to determine whether a taking is for a

public or private use.

Amici have identified three key areas which on balance

would show whether a public or private taking is occurring:

government intent, project feasibility, and government

'© At the end of the day, it is the condemnees herein who are the

most at risk and who have the most to lose if the condemnor is in

fact wrong. What recourse will they have after 30 years? One need

only look at the Michigan Supreme Court’s decisions in Poletown

and Hathcock to find the likely answer. See Poletown

Neighborhood Council v. Detroit, 304 N.W.2d 455 (Mich. 1981);

County of Wayne v. Hathcock, 684 N.W.2d 765 (Mich. 2004).

22

accountability to the public. Again, following a

presentation of significant private interests by the

condemnee, the government should bear the burden of

showing that the proposal will amount to a public use.

a. Intent of Condemnor

The first issue is the intent of the government for the

condemnation to determine whether the proposed use will

primarily benefit the public or a private party. As discussed

supra, mere declarations of public purpose are inadequate

and the use must be examined carefully. While this Court

need not grapple with every detail of a redevelopment plan,

for example, it is imperative for the Court to consider the

existence of planning documents and confirm that the

condemnor adequately studied the situation. Additionally,

this Court may consider the timeline of development for the

project, whether there is one and to note whether the

condemnation itself is suspect based on the timing set out in

the plan. Another instance for consideration in terms of

intent may be the origination of compensation for the

project. It is understood that private parties are required for

many redevelopment projects and the local government

capital for condemnation may be acquired through private

parties, but if a private party is driving the condemnation

proceedings primarily for its own use or benefit, the

compensation mechanism will be worthy of a court’s

notice. Finally, the condemnor’s intent may show through

the transfer itself to the third party if significantly less than

fair market value or fair rental value is included in the

terms.

In the case at hand, the government may well show that the

plan presented for condemnation of this property truly was

intended to benefit the public through economic

23

development and not for the benefit of Pfizer or any other

particular private entity. While intent is a crucial element

in many cases, mere expressions of declarations of intent

must not be the only basis of a court’s examination.

For example, in Southwestern Illinois Development

Authority v. National City Environmental, L.L.C., 768

N.E.2d 1 (Ill. 2002), the development authority (after

advertising its ability to condemn to entice business

interests to the area) sought to condemn 148 acres adjacent

to a racetrack in order to allow the racetrack owners to

develop additional parking. /d. at 4. 1%. condemnor

argued that the taking was necessary to reduce the danger

of increased traffic congestion. /d. at 6. The Illinois

Supreme Court provided more than broad judicial review

and determined that the chief reason for the condemnation

was for the convenience and profit of the racetrack owners.

In fact, the court considered that racetrack owners had

other, though more expensive, options including building a

parking deck on existing raceway property. /d. at 10-11.

Had the court merely accepted the expressed intentions of

the condemnor and relied on the findings of the local

development authority, the court might not have saved the

adjacent property owner from condemnation.

b. Feasibility of Proposed Development

The second area for consideration is whether the

government can show that the development plan is feasible.

Much backlash has occurred regarding the Poletown

decision because the project did not produce the revenue

predicted by the city.'’ While amici recognize that this

'? Notwithstanding the Hathcock court’s utter rejection of its

Poletown decision 23 years earlier, it remains to be seen whether

Poletown's 1,200 families, or its 100 business owners, 16 churches

24

Court would be wary about trying to predict the future and

second-gulessing monetary projections, there are basic

questions to be asked of the local government to provide

confidence that a project will go forward. After all, the

effects of condemnation are irreversible for the property

owner and the government must provide proof that it takes

this responsibility seriously. To that end, it is important to

determine whether the development is imminent.

For example, if after comprehensive planning and

condemnation proceedings commence, developers have not

been identified to develop the property according to the

plan, then there should be some question as *9 the

feasibility of the project. At the bottom line, if the real

estate market does not suggest that the use will be

profitable for a developer, then the required private parties

will not become involved.

To satisfy these concerns, the City of New London needs to

show that it has carefully studied the real estate market to

make the determination that the economic development

projected will occur. The city and its development

corporation should have the burden of going forward with

some sort of individualized determinations, based on

empirical evidence rather than generalized declarations of

intent, explaining how the professed goals of the

development plan will actually be achieved and the public

benefited. This is crucial in light of the acknowledged

“lack of any formal commitments” from developers,'* no

and 278-bed hospital, destroyed by the original decision, will ever

recover their properties or have any meaningful recourse. Poletown,

304 N.W.2d 455.

'* 843 A.2d at 545.

25

signed development agreements despite “extensive

negotiations,” the inability of the development

corporation to attract investors for several years,”’ the lack

of marketing studies, evidence of favorable economic

trends, or other “documentation [of the] ‘present

development environment’ [that would indicate] a near-term

demand” for the proposed uses.”'

c. Government Accountability to the Public

Finally, a third issue for consideration is the government's

accountability to the public for a condemnation with

significant private interests. To what degree does the

condemnor ensure that the property will be developed

according to the proposed use? In short, the condemnor

should provide a guarantee that the use for which the

property is condemned is the use to which it is put.

In New Jersey the highest court specifically has declined to

extend a heightened scrutiny to economic development

cases, however, the accountability factor proved to be of

great weight in Casino Reinvestment Authority v. Banin,

727 A.2d 102 (NJ. Super. Ct. Law. Div. 1998). The

condemnation action was to support redevelopment of a

residential lot for parking for the adjacent casino. The court

ultimately found that the primary interest to be served was

private, but the case hinged upon the fact that there would

be no control ove the property by the condemning

'° Id. at 596 (Zarella, J. dissenting).

® Id. at 596-597.

2" 843 A.2d at 590, n. 19 (emphasis in original).

26

authority and no assurance that the property would be

developed or used as planned. /d. at 109.

Arguably, in the case before this Court, New London has

provided little, if any, assurance that the development will

occur. Although the lower court essentially parroted the

generalized recitals of the condemnor’s intent regarding

“substantial state oversight,” and -oncluded that “ample

judicial machinery was available ‘ur enforcement of the

development plan,””’ it acknowledged that the record re-

vealed, “no primary or secondary authorities” regarding the

use of the term “reasonable assurances of future public

uses.””’ Additionally, the dissent in Ke/o points out that

the statutory scheme applicable to this condemnation

contains no clear description of how the economic

redevelopment goals are to be accomplished and that a

development plan may be abandoned within three years of

it approval, such that any properties acquired thereunder

may be conveyed free of the plan’s restrictions if they

cannot be conveyed to a private party at fair market value

pursuant to the plan. Kelo, 843 A.2d at 580. The

development corporation condemned property for this

project more than six years ago but no committed rede-

velopers have come forward and no “formal

mechanisms,”* or “formal commitments” for achieving

the goals of the development plan (such as executed

development agreements), yet exist. It remains to be seen

at what point the City of New London will abandon this

?? Id. at $44, n. 63, 545, n. 65.

°° Id. at $43.

** Hathcock, 684 N.W.2d at 784.

> 843 A.2d at 545.

27

project and attempt to sell the condemned property outright

for any other private use.

A few months after the lower court’s decision was issued, a

searching review of this very issue was conducted by the

Supreme Court of Michigan in County of Wayne v.

Hathcock, 684 N.W.2d 765 (Mich. 2004). On a strikingly

similar fact pattern to the case at hand, the Michigan

Supreme Court found that the condemnor:

intends for the private entities purchasing

defendants’ properties to pursue their own

financial welfare with the single-mindedness

expected of any profit-making enterprise.

The public benefit arising from the Pinnacle

Project is an epiphenomenon of the eventual

property owners’ collective attempts at profit

maximization. No formal mechanisms exist

to ensure that the businesses that would

occupy what are now defendants’ properties

will continue to contribute to the health of

the local economy. Finally, there is nothing

about the act of condemning defendants’

properties that serves the public good in this

case. The only public benefits cited by

plaintiff arise after the lands are acquired by

the government and put to private use. Thus,

the present case is quite unlike Slum

Clearance because there are no facts of

independent public significance (such as the

need to ~~ health and safety) that might

justify the condemnation of defendants’

lands.

Hathcock, 684 N.W.2d at 784 (emphasis in original).

28

iii. While most public-private condemnation

situations require heightened scrutiny, blight

and collective action cases practically may be

held to a lesser standard.

While the amici advocate an intermediate level of judicial

review for those condemnations wherein a transfer of

property interest such that a private party will maintain

primary ownership, control, or jurisdiction over the

property, it also recognizes the impracticality of application

of a heightened scrutiny by the courts in two situations.

While the most common standard of review for blight cases

has been abuse of discretion, a higher standard has been

used by a few courts in blight situations.”

Amici concede that there is little need to apply a higher

level of scrutiny to plans for slums or blighted areas. Amici

do not question the case law _ supporting blight

redevelopment from Berman forward and the well

established deference to the state legislatures as to blight

statutes. While clearly the case before this Court does not

address a blighted property, it is necessary to distinguish

this particular type of redevelopment statute from any other

°° “The trend in states where many cases have reached the appellate

level 1s that the standard of review tends to change from the more

deferential standard of arbitrary and capricious behavior to the less

deferential standard of clear error. In the clear error standard,

‘substantial evidence,” as prescribed by statute, must be presented

as evidence for the findings of the redevelopment agencies or local

governments.” Hudson Hayes Luce, The Meaning of Blight: A

Survey of Statutory and Case Law, 35 Real Prop. & Tr. J. 389, 412

(2000).

29

for the judicial review of public-private takings outlined

herein to be most effective. :

The Michigan Supreme Court in County of Wayne v.

Hathcock, 684 N.W.2d 765 (Mich. 2004), attempted to

capture this concept with its term “facts of independent

significance”’’ to support selection of a particular property

for condemnation. While the attempt is reasonable, relying

on a legislature, especially a local one, to determine “facts

of independent significance” is tantamount to endorsing

creative writing to justify condemnations. This Court

should narrowly limit the exception to the intermediate

scrutiny level of review to cases wherein eradication of

slums or blight, as defined by federal or state law, is the

object.

* s!

Second, it is obvious that there are condemnations with

significant private benefit, but without a particular

condemnation scheme, the project would be infeasible.

For example, railroad tracks inherently must run in a

straight line and require easements from many adjacent

property owners as part of a large plan for condemnation.

The court in Hathcock described these cases as “public

necessity of the extreme sort requir[ing] collective

action.””” Amici agree that it would be efficient for courts

to allow legislative deference for collective actions of this

sort.

” Hathcock, 684 N.W.2d at 783 (the court defined the phrase as

meaning that the underlying purposes for resorting to

condemnation, rather than the subsequent use of condemned land,

must satisfy the Constitution's public use requirement).

** 684 N.W.2d at 783.

30

Amici concede that it is conceivable that either of these

situations could be stretched or abused by a local

government. However, it is presupposed that the courts

would maintain an abuse of discretion or clear error

standard for these two exceptions such that blatant abuses

would not go unchecked.

CONCLUSION

The National Association of Home Builders and the

National Assouiation of REALTORS” respectfully request

that this Court reverse the ruling of the Connecticut

Supreme Court and determine that legislative deference

generally is not a proper standard of review for

condemnations involving significant private interests,

especially those with economic development as the sole

justification.

DATED: December 3, 2004

Respectfully submitted,

Mary Lynn Pickel*

National Association of

Home Builders

1201 15" Street, NW

Washington, D.C. 20005

*Counsel of Record for

Amici Curiae

Laurene K. Janik

John J. Delaney Ralph W. Holmen

Of Counsel National Association of

7200 Wisconsin Ave., Ste. 800 REALTORS®

Bethesda, MD 20814 430 N. Michigan Ave.

Chicago, IL 60611