June 24, 2005

Capitalistic Socialism, or Kelo v. New London

by Sean Sirrine

JUSTICE STEVENS: Well, that would reduce demand and increase price, it seems to me. It's the other way around.

MR. BARNETT: Well, it would reduce demand and reduce prices, I think. But �

JUSTICE STEVENS: If you reduce demand, you reduce prices? Are you sure?

MR. BARNETT: Yes. [Laughter.]

JUSTICE STEVENS: Oh, you're right. You're right. Okay. Yeah. Yeah.

So as you can see, Justice Stevens is a smart guy, but is a bit rusty on econ 101. (For more links between Kelo and Raich read Orrin Kerr�s post here.)

Justice Stevens fails to adequately impart his reasoning for why a heightened level of scrutiny shouldn�t be used. As far as he�s concerned your Constitutional Right not to have your property seized is only worthy of the rational basis test.

Justice Stevens also relies on Berman v. Parker (1954) to show that an individual has absolutely no right to fight the government�s eminent domain power. This is the point where Justice Stevens loses any sense of justice. You have no Constitutional Right to your land because it is the collective, not the individual, that has the decision-making power:

Writing for a unanimous Court, Justice Douglas refused to evaluate this claim in isolation, deferring instead to the legislative and agency judgment that the area �must be planned as a whole� for the plan to be successful. The Court explained that �community redevelopment programs need not, by force of the Constitution, be on a piecemeal basis�lot by lot, building by building.

Who would have guessed it? The Constitution doesn�t protect individual rights, just those of collective groups. Is this starting to sound like utilitarian dogma? Of course it is! It makes me think of the great line from Star Trek:

The needs of the many outweigh the needs of the one.

Except in this case, the needs of the many outweigh the Constitutional Rights of the one. (For good commentary as to why utilitarianism won�t work check out this post from the Conglomerate.)

(As Timothy Sandefur points out over at Crime & Federalism.) Justice Stevens then goes on to proclaim that:

Promoting economic development is a traditional and long accepted function of government.

He does this without in any way validating this long held function. As Sandefur points out, segregation was also a long accepted function of government. That surely doesn�t make it just. This is where Justice Stevens opinion pretty much ends. �We�ve done it this way for a long time, so we�re not going to evaluate it.�

On to Justice Kennedy�s concurrence, here we see a confused and utterly illogical argument:

The determination that a rational-basis standard of review is appropriate does not, however, alter the fact that transfers intended to confer benefits on particular, favored private entities, and with only incidental or pretextual public benefits, are forbidden by the Public Use Clause.

Now, I really like Justice Kennedy, but what the hell is this? The rational basis review will favor the government if it can show a rational reason for making a decision. So, when Justice Kennedy says incidental benefits would be forbidden he is in clear error. Incidental benefits are rationally related and therefore will be acceptable under this new ruling.

He then goes on to make even more categorically silly remarks:

There may be private transfers in which the risk of undetected impermissible favoritism of private parties is so acute that a presumption (rebuttable or otherwise) of invalidity is warranted under the Public Use Clause. Cf. Eastern Enterprises v. Apfel, 524 U. S. 498, 549�550 (1998) (KENNEDY, J., concurring in judgment and dissenting in part) (heightened scrutiny for retroactive legislation under the Due Process Clause). This demanding level of scrutiny, however, is not required simply because the purpose of the taking is economic development.

Again, what the hell is that? This case didn�t get before the Supreme Court �simply because the purpose of the taking is economic development�. There was a claim that there was a transfer from A to B. If the claim is �the risk of undetected impermissible favoritism of private parties� why can�t we have that higher standard? The key term is undetected, just because you didn�t detect it doesn�t mean it isn�t there Justice Kennedy.

Okay, enough of the bad parts, let us move on to the dissent. Justice O�Connor makes herself perfectly clear from the beginning:

Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded�i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public�in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings �for public use� is to wash out any distinction between private and public use of property�and thereby effectively to delete the words �for public use� from the Takings Clause of the Fifth Amendment. Accordingly I respectfully dissent.

Yep, that is what I would have said too, probably not as well, but it would have had the same sense. The majority opinion essentially has incorporated a new socialistic capitalism. As long as we�re bring more benefit to the majority we can screw the minority all we want.

I believe that one of the most important parts of all the opinions came out of Justice O�Connor�s dissent:

In February 1998, Pfizer Inc., the pharmaceuticals manufacturer, announced that it would build a global research facility near the Fort Trumbull neighborhood. Two months later, New London�s city council gave initial approval for the New London Development Corporation (NLDC) to prepare the development plan at issue here. The NLDC is a private, nonprofit corporation whose mission is to assist the city council in economic development planning. It is not elected by popular vote, and its directors and employees are privately appointed. Consistent with its mandate, the NLDC generated an ambitious plan for redeveloping 90 acres of Fort Trumbull in order to �complement the facility that Pfizer was planning to build, create jobs, increase tax and other revenues, encourage public access to and use of the city�s waterfront, and eventually �build momentum� for the revitalization of the rest of the city.�

Explain to me how, as Justice Stevens put it, �the area was sufficiently distressed to justify a program of economic rejuvenation�. It was sufficiently distressed? It was so distressed that Pfizer had decided to locate there without a development plan. Aha! I know some of you econ people are thinking, �it could have been distressed and because it was cheap Pfizer was moving in�. Well done, now we�re talking economics. However, wait, if the community is rejuvenated they may well price Pfizer out of the area. But that�s not a legal distinction, that�s politics you�d reply. Okay, I agree with you on that, but wait a second. Who put this plan together? A private corporation that acted �consistent with its mandate� to �complement the facility that Pfizer was planning to build�. If that doesn�t rise to �the risk of (potential) undetected impermissible favoritism of private parties� what the hell does?

Justice O�Connor then goes on to rebut the ridiculous reading of the majority of both the Berman and Midkiff cases:

The Court�s holdings in Berman and Midkiff were true to the principle underlying the Public Use Clause. In both those cases, the extraordinary, precondemnation use of the targeted property inflicted affirmative harm on society�in Berman through blight resulting from extreme poverty and in Midkiff through oligopoly resulting from extreme wealth. And in both cases, the relevant legislative body had found that eliminating the existing property use was necessary to remedy the harm. Berman, supra, at 28�29; Midkiff, supra, at 232. Thus a public purpose was realized when the harmful use was eliminated. Because each taking directly achieved a public benefit, it did not matter that the property was turned over to private use. Here, in contrast, New London does not claim that Susette Kelo�s and Wilhelmina Dery�s well-maintained homes are the source of any social harm. Indeed, it could not so claim without adopting the absurd argument that any single-family home that might be razed to make way for an apartment building, or any church that might be replaced with a retail store, or any small business that might be more lucrative if it were instead part of a national franchise, is inherently harmful to society and thus within the government�s power to condemn.

The public purpose that this court so loosely interprets was previously used only to describe the act of removing harmful land use. Now, Justice Stevens has given the government a definition that includes �less than optimal� land use. (Take a look at this post at Mirror of Justice to see why this sucks.) (Or here at Dagny�s Law Blog for the possible reaction of companies.) It seems obvious to me that the majority is failing to follow the basic tenants of jurisprudence.

Justice O�Connor then gives us a quote to chew on which makes me sick to my stomach:

In the prescient words of a dissenter from the infamous decision in Poletown, �[n]ow that we have authorized local legislative bodies to decide that a different commercial or industrial use of property will produce greater public benefits than its present use, no homeowner�s, merchant�s or manufacturer�s property, however productive or valuable to its owner, is immune from condemnation for the benefit of other private interests that will put it to a �higher� use.� 410 Mich., at 644�645, 304 N. W. 2d, at 464 (opinion of Fitzgerald, J.).

(By the way, Poletown was overruled last year.)

Wow, this is a long post, I�m sorry, but this case really irks me. Finally we�re on to Justice Thomas� dissent. Justice Thomas (Southern Appeal really likes his opinion) makes an argument to the actually writing in the Constitution:

If the Public Use Clause served no function other than to state that the government may take property through its eminent domain power�for public or private uses�then it would be surplusage. See ante, at 3� 4 (O�CONNOR, J., dissenting); see also Marbury v. Madison, 1 Cranch 137, 174 (1803) (�It cannot be presumedthat any clause in the constitution is intended to be without effect�); Myers v. United States, 272 U. S. 52, 151 (1926)

Granted, another sense of the word �use� was broader in meaning, extending to �[c]onvenience� or �help,� or �[q]ualities that make a thing proper for any purpose.� 2 Johnson 2194. Nevertheless, read in context, the term �public use� possesses the narrower meaning. Elsewhere, the Constitution twice employs the word �use,� both times in its narrower sense. Claeys, Public-Use Limitations and Natural Property Rights, 2004 Mich. St. L. Rev. 877, 897 �(hereinafter Public Use Limitations). Article 1, �10 provides that �the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States,� meaning the Treasury itself will control the taxes, not use it to any beneficial end. And Article I, �8 grants Congress power �[t]o raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years.� Here again, �use� means �employed to raise and support Armies,� not anything directed to achieving any military end. The same word in the Public Use Clause should be interpreted to have the same meaning.

Now, some people, (here�s KipEsquire�s view) have commented that they don�t like this line of reasoning, but damn if it doesn�t make sense. Why should the use in public use be read differently than the use found elsewhere in the Constitution? Oh yeah, that�s right, its just too hard!

Justice Thomas then has the ultimate quote from this case:

The Court has elsewhere recognized �the overriding respect for the sanctity of the home that has been embedded in our traditions since the origins of the Republic,� Payton, supra, at 601, when the issue is only whether the government may search a home. Yet today the Court tells us that we are not to �second-guess the City�s considered judgments,� ante, at 18, when the issue is, instead, whether the government may take the infinitely more intrusive step of tearing down petitioners� homes.

See, isn�t that great! We give deference to the government�s judgment about tearing down a home, but not to searching the home. That sure makes sense, not! (Here�s some more good commentary on this issue at the Knolwledge Problem) (And from one of my favorite writers Todd Zywicki here.)

Justice Thomas then goes on to make a weird argument about how minorities are going to be disproportionally affected. This is true, but seems rather irrelevant to this case.

So there you have it, the longest post imaginable. Any questions?

(For more great commentary go to SCOTUSblog.)

(Or if you want to read something that will make you cringe and laugh at the same time take a peek at Norm Pattis� look into the future here.)

(Here�s a song you can sing in the shower while you thinking about this case.)

June 24, 2005 6:27 PM | TrackBack