High court to rule on
private property rights

The Supreme Court has not
dealt with the issue since ruling
in a Hawaii case 20 years ago

WASHINGTON » The Supreme Court agreed yesterday to decide when local governments may seize people's homes and businesses against their will to make way for projects like shopping malls and hotel complexes that produce more tax revenue.

The court already has given governments broad power to take private property through eminent domain, provided the owner is given "just compensation." This often involves blighted neighborhoods residents are eager to leave.

But in recent years more cities and towns have been accused of abusing their authority, razing nice homes to make way for parking lots for casinos and other tax-producing businesses.

"If you own a home, if you own a small business, this could directly affect you," said Scott Bullock, senior attorney for the Institute for Justice, a Washington public interest law firm representing the land owners.

In agreeing to hear a Connecticut case early next year, justices will revisit an issue they last dealt with 20 years ago. The court unanimously ruled then that Hawaii could take land from large property owners and resell it to others, and determined that decisions about takings were best left to elected leaders. The decision upheld a Hawaii leasehold conversion law that was passed in 1967 to help break up land ownership.

In the latest case, Susette Kelo and several other homeowners in a working-class neighborhood in New London, Conn., filed a lawsuit after city officials announced plans to bulldoze their homes to clear the way for a riverfront hotel, health club and offices. The residents refused to budge, arguing it was an unjustified taking of their property.

The neighborhood included Victorian-era houses and small businesses that in some instances had been owned by several generations of families. New London, a town of less than 26,000, had been losing residents and jobs when it planned the land takeover, city leaders said.

The Fifth Amendment allows governments to take private property for "public use."

The appeal turns on whether "public use" involves seizures not to revitalize slums or build new roads or schools, but to raze unblighted homes and businesses to bring in more money for a town.

"I'm not willing to give up what I have just because someone else can generate more taxes here," said homeowner Matthew Dery, whose family has lived in the New London neighborhood known as Fort Trumbull for more than 100 years.

New London contends development plans serving a public purpose -- such as boosting economic growth -- are valid "public use" projects that outweigh homeowners' property rights.

The Connecticut Supreme Court agreed with New London, ruling 4-3 in March that the mere promise of additional tax revenue justified the condemnation.

Nationwide, more than 10,000 properties were threatened or condemned between 1998 and 2002, according to the Institute for Justice.

In many cases, according to the group, cities are pushing the limits of their powers to accommodate wealthy developers. Courts, meanwhile, are divided over the extent of city power, with six states saying economic development can justify a taking and nine states allowing seizures only if they eliminate blight. Over the summer, the Michigan Supreme Court restricted the power of local governments to take property for development projects.

With all the attention to takings cases, "the Supreme Court got intrigued and felt they at least wanted to explore the issue," said Douglas Kmiec, a Pepperdine University constitutional law professor.

Kmiec said the Connecticut landowners have a sympathetic case, but they may have difficult time winning because Supreme Court justices do not want to become an appeals board for every property case.

In New London, city officials envision replacing a stagnant enclave with commercial development that would attract tourists to the Thames riverfront, complementing an adjoining Pfizer Corp. research center and a proposed Coast Guard museum.

"The record is clear that New London was a city desperate for economic rejuvenation," city lawyers wrote in a filing, asking the high court to defer to local governments in deciding what constitutes "public use."

Daniel Mandelker, a law professor specializing in land use at Washington University School of Law, said towns have legitimate reasons to take property, but the high court should redefine their limits.

In recent years the court has considered several cases involving claims that government restrictions on land use amounted to an unconstitutional taking.

Justices, however, have repeatedly refused to be drawn into eminent domain disputes. Last year they turned back appeals from real estate companies that argued the government wrongly seized land to be redeveloped as an office complex for the New York Times and other companies.