Susette Kelo dreamed of owning a home that looked out over the water. She purchased and lovingly restored her little pink house where the Thames River meets the Long Island Sound in 1997, and had enjoyed the great view from its windows. The Dery family, up the street from Susette, had lived in Fort Trumbull since 1895; Matt Dery and his family lived next door to his mother and father. Matt’s mother was born in her house in 1918 and had never lived anywhere else. The richness and vibrancy of this neighborhood reflected the American ideal of community and the dream of homeownership.
Tragically, the City of New London turned that dream into a nightmare.
In 1998, pharmaceutical giant Pfizer built a plant next to Fort Trumbull and the City determined that someone else could make better use of the land than the Fort Trumbull residents. The City handed over its power of eminent domain—the ability to take private property for public use—to the New London Development Corporation (NLDC), a private body, to take the entire neighborhood for private development. As the Fort Trumbull neighbors found out, when private entities wield government’s awesome power of eminent domain and can justify taking property with the nebulous claim of “economic development,” all homeowners are in trouble.
The Supreme Court’s Kelo v. New London Decision Made It Much Easier to Abuse Eminent Domain
The fight over Fort Trumbull eventually reached the U.S. Supreme Court in 2005. In one of the most controversial rulings in its history, the Court held that economic development was a “public use” under the Fifth Amendment to the U.S. Constitution.
Now instead of a “public purpose,” condemnations would be upheld based on “expected public benefits.” If a property could potentially generate more tax dollars or create new jobs as something bigger and newer, then using eminent domain to replace the current owner with a glitzier development served the public good. Worse, the Supreme Court explicitly allowed seizing private property without requiring “‘a reasonable certainty’ that the expected public benefits will actually accrue.”
The Supreme Court’s ruling in Kelo meant that Susette Kelo, her neighbors, and every property-owning American faced the threat of losing their homes and businesses to a private developer under the guise of raising tax revenue and creating jobs.
Emboldened, within just one year of the Kelo ruling, local governments threatened eminent domain or condemned nearly 5,800 homes, businesses, churches, and other private properties so they could be transferred to benefit another private party.
The Supreme Court’s 5-4 decision against Kelo and her neighbors sparked a nation-wide backlash against eminent domain abuse, leading eight state supreme courts and 43 state legislatures to strengthen protections for property rights. Moreover, Kelo educated the public about eminent domain abuse, and polls consistently show that Americans are overwhelmingly opposed to Kelo and support efforts to change the law to better protect home and small business owners. Moreover, since the Kelo ruling in June 2005, citizen activists have defeated 44 projects that sought to abuse eminent domain for private development.
“The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”
Backlash to Kelo
Fortunately, Kelo v. New London also triggered an unprecedented bipartisan backlash to the Supreme Court’s rulings. Since that decision:
- 47 states have strengthened their eminent domain laws.
- A dozen states have gone even further and amended their state constitutions to stop eminent domain for private gain.
- Eleven state supreme courts have either strengthened protections for property owners or even flat out rejected Kelo.
- Through community organizing and activism alone, the Institute for Justice has teamed up with local communities to help save nearly 20,000 homes and small businesses from condemnation or being labeled as “blighted” or “in need of redevelopment,” the precursor to eminent domain in many states.
The Aftermath: What happened to Susette Kelo, her home and her neighborhood after the Supreme Court’s ruling?
After the June 23, 2005 U.S. Supreme Court ruling that allowed the city of New London, Connecticut to take the entire neighborhood where Susette Kelo and her neighbors called home, the lives of Susette Kelo and her neighbors—and their neighborhood—would never be the same. The Court ruled 5-4 that the government could take and bulldoze the tightknit blue collar Fort Trumbull neighborhood with the goal of handing it over to a private developer who might pay more taxes on the land.
But what happened to Susette and her neighborhood after one of the least popular Supreme Court rulings of this century?
Soon after the ruling, Susette Kelo moved out of New London to a different home in a nearby town. She continues to work two and sometimes three jobs as a nurse.
Susette’s iconic little pink house was saved and moved to a new location in downtown New London: 36 Franklin Street (at the intersection of Franklin and Cottage Streets).
For nearly 20 years since the ruling, the entire Fort Trumbull neighborhood remained a vacant lot after being bulldozed by the city; a neighborhood once teeming with families who resided there for generations was home only to weeds and feral cats. The economic development the city promised the U.S. Supreme Court would materialize—if only the government could get its hands on the land—never materialized, even after spending more than $80 million in taxpayer money.
As of May 2022, a private developer is now constructing 100 high-end apartments and a 100-unit extended stay hotel along with a community center that won’t pay any taxes. Homeowners and residents were kicked out so that a private developer could build…more homes.
Pfizer, which received major tax breaks to move into New London and was the intended beneficiary of the promised private development project in Fort Trumbull, closed their New London facility right before its tax breaks ended.
For a compelling account of the history and back-story of the New London controversy, read Jeff Benedict’s book Little Pink House: A True Story of Defiance and Courage published in 2009 by Grand Central Publishing. The book was also adapted into an award-winning feature film Little Pink House, which debuted in 2018, starring Catherine Keener as Susette Kelo, and is available to stream online.
President and Chief Counsel
Senior Vice President and Litigation Director
Chairman and Founding General Counsel
IJ's cert petition
IJ's U.S.S.C. Brief on the Merits
Amicus Brief by Urban Sociologist Jane Jacobs, Author of Death and Life of Great American Cities
Amicus Brief by NAACP, AARP, et al.
Amicus Brief by American Farm Bureau Federation, et al.
Amicus Brief by National Association of Homebuilders & National Association of Realtors
Amicus Brief by Cascade Policy Institute, et al.
Amicus Brief by Richard Epstein & the Cato Institute
Amicus Brief by Claremont Institute
Amicus Brief by Develop Don’t Destroy (Brooklyn), Inc., et al.
Amicus Brief by Pacific Legal Foundation & Property Owners Battling Eminent Domain Abuse
Amicus Brief by Goldwater Institute, et al.
Amicus Brief by Texas Property Owners Fighting Eminent Domain Abuse
Amicus Brief by Pennsylvania Property Owners Fighting Eminent Domain Abuse
Amicus Brief by Mountain States Legal Foundation, et al.
Amicus Brief by New London Landmarks, Inc. & Coalition to Save Fort Trumbull
Amicus Brief by New London R.R. Co., Inc.
Amicus Brief by John Norquist, President, Congress for New Urbanism
Amicus Brief by Property Rights Foundation of America
Amicus Brief by Reason Foundation
Amicus Brief by Hawaii Property Owners Fighting Eminent Domain Abuse
Amicus Brief by Rutherford Institute
Amicus Brief by Tidewater Libertarian Party
Amicus Brief by New Jersey Property Owners Fighting Eminent Domain Abuse
Amicus Brief by Becket Fund for Religious Liberty
Amicus Brief by Better Government Association & Other Community Groups
Amicus Brief by 13 Noted Property Law Professors
IJ's U.S.S.C. Reply Brief on the Merits
U.S.S.C. Opinion of Kelo
IJ's petition for rehearing of Kelo
When Susette Kelo purchased her two-bedroom, pink house in 1997 along the Thames River—a beautiful stretch of waterfront property in New London, Conn.—she thought she had her work cut out for her just restoring the house and designing the garden. That turned out to be the least of her worries.
Unbeknownst to Susette, the City, the New London Development Corporation (a private development corporation) and Pfizer Corporation had reached an agreement. Pfizer would build a new facility nearby. The NLDC would take all the land in Susette’s neighborhood and transfer it to a private developer who would in turn build an expensive hotel for Pfizer visitors, expensive condos for Pfizer employees, an office building for biotech companies, and other projects to complement the Pfizer facility. The State and the City would contribute millions of dollars. The only thing standing in the way was Susette and her neighbors.
Susette Kelo is not alone. All across the country, state and local governments are abusing the power of eminent domain to take private homes and businesses for the benefit of other, more politically favored private businesses who promise more jobs and taxes. In just five years, the government filed or threatened condemnation of more than 10,000 properties for private parties. 1
In the face of such statistics, the Institute for Justice, a Washington, D.C., public interest law firm, has waged a national campaign in court and in the court of public opinion to restrain government’s abuse of eminent domain and to restore constitutional protection for private property.
According to the Connecticut Supreme Court, the single fact that your City is strapped for cash justifies condemning your home. After all, richer people could be living there and paying more taxes. Office buildings could be built there, employ more people than you employ at your house, and pay more taxes. Taking your home is for the good of the city—it’s “economic development.”
Using eminent domain for “economic development” alone is a new phenomenon. Usually governments try to at least claim that the area is a “slum” or “blighted,” but Connecticut has dispensed with that pretense and admits outright that if another business could make a profit on your land, the government can take it. The U.S. Constitution specifically prohibits this kind of taking, limiting the power of eminent domain to “public use.” The Connecticut Supreme Court decided that “public use” just means that it could have some benefit to the public, like more tax money in City coffers.
The Connecticut Supreme Court’s reasoning effectively reads the Constitution’s protections out of existence. Whose land wouldn’t produce more taxes if it were an office building instead of a home? Allowing condemnation for “economic development” just allows cities and developers to pick whatever land they want, without regard to the people who live or work there.
The Supreme Court needs to address this radical departure from the language of the Constitution. Its last case involving private development was 50 years ago, and it allowed the clearance of an area so blighted that most buildings lacked plumbing. For the last 50 years, without further guidance, it’s been up to states to set their own rules. Not surprisingly, the states have reached conflicting conclusions. Some states, like Connecticut, allow condemnations for “economic development.” Other states, like Washington, South Carolina and Maine, do not. The Constitution is supposed to apply to all United States citizens, and U.S. Supreme Court guidance is desperately needed to prevent the continuing and growing abuse of eminent domain.
Coveting Thy Neighbor’s Land in New London
In early 1998, pharmaceutical giant Pfizer announced that it would build a $270 million research facility in New London. 2 Pfizer bought the land along the Thames River from the State for $10 million. The company and other development groups associated with the project are slated to receive at least $118.2 million in federal and state subsidies over 13 years.
The Pfizer plant, which was completed in 2001, bordered a well-established neighborhood called Fort Trumbull. (Bordered—in the past tense—because most of the neighborhood has been bulldozed under the threat of eminent domain. Only a few individuals, those who are holding on to vindicate their property rights, remain.) The neighborhood is also along a scenic stretch of waterfront property connected to Fort Trumbull State Park. In January 2000, the New London City Council approved a Municipal Development Plan for the 90-acre Fort Trumbull neighborhood. The intent of the City of New London is to acquire all the remaining properties through eminent domain to build a hotel, private office space, high-income private housing, and other unspecified development projects that will enhance the Pfizer plant.
Private Parties With Government Powers: The Role of the NLDC in Eminent Domain
The New London City Council solicited the New London Development Corporation—a private organization—to create the current development plan for the Fort Trumbull neighborhood, a plan that was approved by the City Council in January 2000. But the City Council did not stop there. It then delegated its authority over the project, including its eminent domain power, to the NLDC. When the property owners in Fort Trumbull were served eminent domain papers, they read that the “City of New London, acting by the New London Development Corporation” seeks their home. The NLDC decides which properties must be taken and demolished and when the properties will go. It also made the ultimate determination on which developer would build the proposed projects. Now six years into the destruction of the Fort Trumbull neighborhood, the NLDC still has not finalized plans for the development 3 with Boston-based contractor Corcoran Jennison, which it teamed up with to carry out a part of the development project. 4
But the New London City Council authorized the NLDC to use eminent domain to force Fort Trumbull residents to give up their homes and businesses. The NLDC remains unapologetic about the use of eminent domain to accomplish its redevelopment plan. As former NLDC President Claire Gaudiani, who initiated the destruction of the Fort Trumbull neighborhood, said in a speech to higher education and civic leaders justifying the NLDC’s actions in Fort Trumbull, “Anything that’s working in our great nation is working because somebody left skin on the sidewalk.” 5 Thus, according to Gaudiani, the home and business owners must be sacrificed for the supposed “greater good” of the community.
A notable exception to the NLDC’s plan to clear-cut the neighborhood is the Italian Dramatic Club, a politically connected “social club” of Connecticut’s political establishment, which is located in the very same neighborhood as all the homes targeted for destruction. Among the Italian Dramatic Club’s patrons was former Connecticut Gov. John Rowland, who helped direct much of the State funding for the NLDC’s work in New London and who resigned in June 2004 amid an ethics scandal. The club was informed in September 2000 that it could remain in the neighborhood. 6 The un-elected NLDC decision to preserve the politically powerful Italian Dramatic Club while demanding that New Londoners move out led Fort Trumbull homeowner Matt Dery to quip that the NLDC’s actions in his neighborhood have been both shameful and shameless.
Under extreme pressure from the NLDC—which included posting eviction notices on the day before Thanksgiving in 2000 on the doors of residents who refused to move—the Fort Trumbull neighborhood certainly has been transformed. Once obtaining properties of those who wanted to sell as well as others who felt like they had no choice but to surrender their homes or businesses, the NLDC moved swiftly and demolished the structures. Today, vast empty dirt fields give the neighborhood the feel of a moonscape with the remaining homes and businesses left standing on less than two acres along the edge of the 90-acre parcel of land slated for private development. The vast majority of the NLDC’s development could move forward without taking the few remaining homes, but the NLDC wants it all.
Three of the property owners in the lawsuit have homes in so-called Parcel 3 of the redevelopment area. That parcel is slated for development as privately owned office space. Four of the property owners live in Parcel 4A of the project. Throughout much of the battle over Fort Trumbull, the NLDC had no specific plan or use for the site; it simply wanted to acquire the land, bulldoze the homes and businesses, and then sell it to developers. This led the Institute for Justice, which represents the property owners for free, to question, “How can you have a Ôpublic use’ for taking someone’s property, which the Constitution demands, when you don’t know what that use will be?” (More recently the U.S. Coast Guard has made overtures to construct a museum on the site.)
The Property Owners
In September 2000, the Connecticut Trust for Historic Preservation named the nine-acre Fort Trumbull neighborhood one of the most threatened historic places in Connecticut. 7 And rightfully so. In a neighborhood that once teemed with dozens of families, only seven property owners who own 15 total parcels remain. These individuals do not wish to sell and have refused any offers on the property; they simply want the government and the developer to leave them alone. Despite the NLDC’s threat demanding they move out no later than March 2001, these seven families continue to fight for their property rights.
Susette Kelo, a registered nurse, purchased her dream home on East Street in Fort Trumbull in July 1997. From her dining room window on a clear day she can see Montauk Point at the tip of Long Island.
When Susette first purchased the cute little Victorian, it was so overgrown with weeds that she literally needed a hatchet to reach the front door. But soon thereafter, the house was lovingly restored into a little pink “show home” for herself and her husband Tim. They were happy there until a notice was posted on their door the day before Thanksgiving in 2000 by the New London Development Corporation. It informed Susette that she and Tim would have to leave their home by March 2001 or the police would forcibly remove them and their belongings.
Less than two years later, Tim drove his truck into a concrete embankment while driving home from work and was nearly killed. Tim relearned to walk and to talk, but as a result of the accident, her husband is now like a child whom Susette must care for as she works two nursing jobs all the while fighting to save her home from the abuse of eminent domain.
“There are no words to explain what it feels like to have someone try to take your home away from you,” she said. “You have to worry all the time . . . worry about where you are going to live . . . worry about how you’re going to continue to fight for what is yours . . . and it has been a worry every single day now since the NLDC posted that notice.”
She said, “What galls me is the developer is taking my land so someone else can live here. I don’t understand why I’m not as good as someone else to live here. There was an article that recently appeared in the newspaper that said they were going to put 80 housing units on East Street. I LIVE ON EAST STREET! That’s what they want to do—put up new houses. I’m not good enough to live here, yet someone else is good enough to live here.”
“If the taking of our property were for a bridge, road or firehouse, I would be prepared to sell without a fight,” she said. “But the government should not be able to force me to sell my home for just any purpose. I was told that the NLDC wants my land to market it to a developer for projects that will Ôcomplement’ the new Pfizer facility in our area. This is for private profit, not public use.”
Matt & Sue Dery
The Fort Trumbull neighborhood was once largely made up of Italian immigrants. In fact, right up the street from Susette is the Dery family, who has lived in Fort Trumbull since 1895. Matt Dery, his wife Suzanne and their son live right next door to Matt’s mother and father. Matt’s great-grandmother, Maria Ballestrini, purchased that house in 1901. Matt’s mother, Wilhelmina, was born in the house in 1918. She and her husband, Charles, have lived there together since he finished his service in the Merchant Marines in WW II. The Derys liked the neighborhood so much that they bought two more houses and now rent them out.
Matt said, “My grandmother opened a grocery store on our threatened property. She extended credit to everyone in the neighborhood when they needed it, and when the property went into receivership during the Depression, she worked until 1958 to earn it back. Through good times and bad over the course of the past century, we’ve been good neighbors and good citizens. We were good enough to pay taxes for more than 100 years. Any town should want residents like us, but now New London has decided that they want better people here, and they’re trying to move us out.”
In Connecticut, once a government body claims a property through eminent domain, the title of that property automatically shifts to the condemning authority. Typically, all rents and profits from businesses such as those owned by the Fort Trumbull residents immediately go to the government, or in this case the New London Development Corporation. Even individuals who own their own homes outright are expected to pay “rent” to the government or the development corporation. (But for an agreement negotiated through the court by the Institute for Justice, this would have been the case for Fort Trumbull homeowners.
“This home is more than just bricks and mortar, wood and nails,” Matt explained. “My grandmother gave my wife and me this house about 20 years ago. My grandmother planted and tended to the same garden that I take care of every year. If you look on the lintel of our kitchen doorway, you’ll see the marks on the wall where my son grew year by year until now he is taller than I am. Those are the things that make this a home, not just a house. And that’s what makes it so impossible to understand that the government—my own city’s government—is working to kick me out so some developer can make money by tearing all this down. It is morally wrong. It is an outrage. Every holiday for the past seven years has been our last in the home we love. Every birthday brings anxiety that next year we may be celebrating somewhere else. And yet, now, we appreciate every minute, every occasion, more than ever. That’s the paradox. In preparing to lose our home any moment, we cherish it all the more.”
Matt concluded, “People who’ve never experienced this sort of treatment at the hands of the government should realize that this could happen to them, especially if we should not prevail in our lawsuit. As Americans, we should all be willing to fight this kind of robbery in the guise of economic development. You take for granted that, in America, you own your property until you choose to sell it, but that’s not the way it is in New London or in Connecticut. If the City and the NLDC are allowed to get away with their unjust abuse of eminent domain, no property owner in America will be safe. The knock at your door could be next.”
Bill Von Winkle
Around the corner from the Derys is Bill Von Winkle’s Fort Trumbull Deli with six apartments above, two homes with another five apartments, and one commercial building with three storefronts once leased out by Bill and his wife, Jennifer. The deli served oversized hoagies to eager customers from 1986 until 2001 when the NLDC’s actions forced the Von Winkles to shut it down and forgo its income.
Bill said, “The government decided that despite the fact that my apartments were full, that someone else could make a more profitable use of my land. The New London Development Corporation working with the City has done everything in its power to take what’s mine and give it to a private developer so they can get richer. It’s just not fair. Nothing like this is supposed to happen in this country. America is supposed to be different. It is supposed to be a place where our rights are protected by the government, not a place where they are sold to the highest bidder, but that’s exactly what is happening.”
“A tenant in my New London apartment building found himself being locked inside: someone was padlocking his door from the outside,” Bill explained. “That same day, in the middle of January, the NLDC forced my tenants out into the street in their stocking feet. I wish I could say that these were pranks, but these was deliberate acts by my town’s government and a private development corporation to make property owners like me give up what is rightfully ours. It was typical of the pettiness all of us in Fort Trumbull have been subjected to. The NLDC, unlike any other private party, has all the power of the government with none of the accountability, since executives aren’t elected by the public.”
“The same rules that applied to me should apply to anyone who wants to purchase private property in New London,” Bill said. “No home or business owner should be forced to sell simply because someone with more political influence wants that property.”
The Guretsky Family
Down the street from Bill Von Winkle’s deli, Jim Guretsky, his wife, Laura, and two young daughters own a triplex property. They lived together in one home and rented out the other two attached to theirs, but because of the dust and hazardous material like lead and asbestos in the air from the destruction of older homes in the neighborhood around them, Jim and his wife decided it would be best for their daughters’ health if they moved to Pennsylvania until things settled back down.
Jim said, “When they tore down the home next to ours, the heavy equipment the NLDC operators were using lost control of the building and it slammed into my home, right where my wife and daughter were in the kitchen. It could have been disastrous. The scar left from their negligence is still on the side of our home to this day.”
Jim said, “This is a home where my children grew up. Now it is also a place that provides income . . . a place where I collect rent. But the government is working to take all that away from me so someone else can profit off my land. This type of power can be easily used in other neighborhoods to put people out of their homes. If this can happen to us, this can happen to anyone.”
A block from the Guretskys are two houses owned by Richard Beyer, who saw promise in the neighborhood and bought the properties back in 1994 to spruce up and rent out. Richard and his business partner poured thousands of hours of sweat equity into renovating the two homes and the lots they purchased. Dumpsters full of trash were removed. They hand-laid 15,000 bricks between the homes to form a parking area. Granite and other stone was hand cut to create countertops and other touches.
“We were in the middle of renovating the second building when the NLDC came in and told us they were taking our property from us,” Richard recalls. “They said that we had to take their offer. I wanted to complete the project, but we were prohibited from doing so. The NLDC put their name on the title of our property, which stopped us from getting building permits. When we contacted the police to file a report about the vandalizing of my building under the NLDC . . . hand-bent metal fittings around each of the windows were torn up, claw hammers were dug into the new siding I had put on the outside of the home . . . the police threatened to arrest us saying that we were trespassing on NLDC property, which in fact, was our property.”
“I don’t just have a lot of sweat equity in these homes, my partner and I both invested money out of our own pockets to buy and renovate these homes . . . not from some bank loans,” Richard said. “No one wanted anything to do with these homes until my partner and I bought them. We took a risk and we thought that our work would better this neighborhood and the City would appreciate what we were doing. Not one person in the City told us what we were about to get into. If they had, we might have second-guessed our decision to invest. But the City let us go forward even though they knew this plan was in the offing. They let us continue with the development and now we’re being chased out.”
The Cristofaro Family
Next door to one of Richard Beyer’s homes, you encounter the Cristofaro family home.
Michael Cristofaro is his family’s spokesperson. His brother Anthony’s children live in the Fort Trumbull home now threatened. Michael said, “This is a home where my father transplanted trees and plants from our first home with the hope that someday he’d be able to pass it along to his kids and grandkids with the knowledge that he had made something beautiful for them.”
Michael said, “This is the second time someone from my family may have to move because the government wants to take their home for another private party. Early in the 1970s, the City of New London told us they were taking our home for a sea wall. That wall was never built there but a private development was. If that can happen to us twice, it can happen to anyone, anywhere, not just here in Connecticut. Basically, it’s homeowner beware.”
Michael concluded, “My family has been in New London for 40 years, and we’d like to stay. We’re willing to work with the City to welcome new development, but there should still be room for us, too. The City and NLDC should work with property owners to improve New London, rather than simply removing us.”
Behind the Cristofaros’ home, you’ll find Byron Athenian’s home. Byron used to be employed at a small auto body shop right next door to his home until the owner sold out to the NLDC and it was demolished in 2002.
“My home is the only thing I have,” he said. “I already lost my job right in my own neighborhood through eminent domain and for two and half years that land has been left vacant. I could have been working there during that time.”
Even with all the NLDC’s destruction, to Susette and her neighbors Fort Trumbull remains the place they want to call home. But if the City of New London gets its way, she and all of her neighbors will be forced to leave.
Eminent Domain and Public Use: 50 Years of Blurred Language, Lost Rights
Eminent domain is the power of government to take away a person’s home or business. It has rightly been called a “despotic” power of government. Because of the vast potential for abuse of such a serious and drastic power, the words of the Connecticut and U.S. constitutions state clearly that private property shall not be “taken for public use without just compensation.” 8 This constitutional provision imposes two important limits on the taking of private property: first, that the use must be public, and second, that just compensation must be paid. If private property could be taken for any use at all, the term “public” would not have been included.
Originally, “public use” was understood by everyone—courts, local governments and the general citizenry—to have its ordinary meaning, and eminent domain was used only for projects that would be owned by and open to the public, such as roads or public buildings. Courts further explained that government was limited to taking only that property “necessary” for the public use. It could not simply grab additional land to increase its holdings.
The “public use” restriction in the takings clause of the U.S. Constitution fundamentally changed with the U.S. Supreme Court’s 1954 decision in Berman v. Parker. 9 The case upheld the constitutionality of “urban renewal”—misguided efforts by the federal government and local officials to revitalize urban areas to supposedly remove slums and eliminate blight. The case arose in Southwest Washington, D.C., in a poor area populated largely by minorities. Congress granted the District government the ability to acquire tracts of land through eminent domain for the purpose of redevelopment, including the resale of the land to private developers. A department store owner objected to his land being taken and given to another private party.
In this one decision, the Court transformed the words “public use” to mean “public purpose” as defined by a legislature or administrative agency. Although the circumstances in Berman were extreme—the area lacked plumbing and had the highest infant mortality rate in the District of Columbia—the decision had much broader legal implications. Many state courts followed the U.S. Supreme Court’s lead and started to uphold virtually any use of eminent domain, even for private parties. What was once a largely well-meaning exception to the Constitution’s public use requirement born in a time of concern about urban decline became a means for governments to take property from one private owner to transfer to another private party for their financial gain.
Two things happened in the wake of Berman. First, the definition of blight was expanded dramatically. For many cities, blight is now no longer a run-down slum but merely an area that the government has determined is “functionally” or “economically obsolete.” Cities—like Lakewood, Ohio, for instance—declare neighborhoods blighted on the basis of criteria like the lack of a two-car attached garage, no central air conditioning, and less than two full bathrooms.
Second, some governments pushed even further to take perfectly fine areas in the name of “economic development.” The Michigan Supreme Court’s Poletown opinion in 1981 was the first to sanction this new trend. 10 In that case, the City of Detroit took an entire neighborhood everyone admitted was not blighted on the grounds that expansion of the nearby General Motors plant would create “public benefits” in the form of higher tax revenue and more jobs. The Michigan Supreme Court bought this argument, ruling that eminent domain could be used for public benefit. The closely knit community could not be replaced, and the plant did not live up to its promise of bringing economic prosperity to the city. 11
In one of the most stunning reversals of legal precedent, however, in July 2004, the Michigan Supreme Court unanimously overturned the Poletown. In County of Wayne v. Hathcock, the Court decisively rejected the notion that “a private entity’s pursuit of profit was a ‘public use’ for constitutional takings purposes simply because one entity’s profit maximization contributed to the health of the general economy.” In Hathcock, the Court called Poletown a “radical departure from fundamental constitutional principles.” “We overrule Poletown,” the Court wrote, “in order to vindicate our constitution, protect the people’s property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law.”
The Michigan Supreme Court also decided another important eminent domain case, although one that has received less attention. In Detroit Wayne County Stadium Authority v. Alibri, the Stadium Authority told Frida Alibri it would condemn her property if she didn’t sell “voluntarily.” It promised, among other things, that it would not be given to a private party. After the sale, it was indeed transferred to a private corporation. At that point, Alibri sought to get her property back, because the Stadium Authority didn’t have the power to condemn for that purpose, and it had told her that the purpose was not transfer to a private party. The trial court agreed with Alibri; the appellate court, however, agreed with the Stadium Authority. The Michigan Supreme Court returned the property to its rightful owner—Mrs. Alibri.
And in 1984, the U.S. Supreme Court allowed Hawaii to engage in a wholesale transfer of the land from owners to renters. 12
The Court decided Berman v. Parker in 1954. It has not looked at a development case since then.
Meanwhile, public use became public purpose, which then became public benefit. What we are left with today amounts to government by the highest bidder—where government force advances the interests of the financially powerful rather than protecting the rights of citizens.
Condemnations for private parties now occur throughout the United States, with new condemnations happening all the time. In June 2004, an Ohio court ruled the City of Norwood could use eminent domain to take homes and businesses so Cincinnati-based developer Jeffrey Anderson, who has $500,000,000 in assets, could create a new development on their property even though the court determined that the neighborhood was not blighted. 13 In 2003, the Kansas State Supreme Court upheld the taking of private property for the construction of a distribution center for the retail giant Target. 14 Similar projects involving the displacement of hundreds and in some cases thousands of residents are deep in the development phases in Long Branch, N.J.; Riviera Beach, Fla.; Brooklyn, N.Y.; and Philadelphia.
The Kelo v. New London case puts the issue to the U.S. Supreme Court in the clearest possible terms: Does the U.S. Constitution allow the government to take property from one private party in order to give it to another private party because the new owner might produce more profit from the land? The rights of all home and business owners hang in the balance.
A National Backlash
But at the same time a growing grassroots and legal rebellion is underway against abusive eminent domain actions. Among the recent victories against eminent domain are:
In March 2004, Lakewood, Ohio, voters repealed the “blight” label from the city’s vibrant and well-kept West End neighborhood. 15 As long as the label was in place, the City could have used eminent domain to tear down the neighborhood for a private developer, and it had in fact threatened to do so.
In October 2003, the Arizona Court of Appeals unanimously struck down the City of Mesa’s use of eminent domain against brake shop owner Randy Bailey; the City had sought to take Bailey’s property and hand it over to an Ace Hardware store. 16
In April 2002, the State of Mississippi, which had sought to take the homes and 24 acres of land owned by the Archie family to give to Nissan Motor Co. to build a manufacturing plant, capitulated. The State announced that Nissan would redesign its manufacturing facility so that the Archie family could hold on to their land and homes, and the State dropped its eminent domain lawsuit against the family.
In January 2001, citizens in New Rochelle, N.Y., successfully fought an effort by the City to condemn an entire neighborhood to make way for an IKEA department store. 17
Also in November 2000, Pittsburgh residents joined by the Institute for Justice defeated a proposal to demolish about one-fifth of the downtown area and displace more than 120 businesses so the city could give the land to a developer to build an urban shopping mall. 20
In October 2000, the Institute also filed a lawsuit in federal district court in New York challenging New York’s unconstitutional eminent domain procedures and asking for an injunction to prevent the condemnations of business properties and a church. The case is ongoing.
In 1998, the Institute successfully defended Vera Coking, an elderly widow from Atlantic City, against the attempts by a New Jersey state agency to condemn her house of more than 35 years for Donald Trump’s casino across the street. 21
Litigation History & Strategy
The Institute for Justice is committed to litigation that will restore judicial protection of private property rights—the basic right of every American to responsibly use and enjoy his or her property. On December 20, 2000, the Institute for Justice filed a lawsuit in Superior Court in New London, Conn., challenging the City of New London and the New London Development Corporation’s unconstitutional and illegal eminent domain proceedings on behalf of seven property owners in the Fort Trumbull neighborhood. The lawsuit asked the court to declare the City’s and the NLDC’s actions in these matters unconstitutional and unlawful. The defendants in the lawsuit are the City of New London, the New London Development Corporation, and the New London Development Agency.
On March 13, 2002, the Superior Court of New London ruled in favor of four of the property owners in the case. Both sides appealed. On March 3, 2004, the Connecticut Supreme Court ruled against the property owners by a 4-3 vote, holding that so long as a government body declared it was in financial hardship and that a private development company promised its plan would deliver jobs and taxes, the private-to-private takings were constitutional. On April 20, 2004, the Connecticut Supreme Court declined to reconsider its ruling; it did, however, issue a stay pending appeal to the U.S. Supreme Court. The Institute for Justice will file a petition for certiorari to the U.S. Supreme Court on behalf of the New London property owners on July 19, 2004.
If private property may be condemned and given to another private organization or company for private profit, and if the determination of which properties are to be condemned may be delegated to a private group unaccountable to the electorate, then are there any limits on the exercise of this government power?
Without accountability or constitutional constraints, all the incentives promote aggressive, unbridled use of the eminent domain power, regardless of the impact on innocent property owners. It is time to shift the balance away from government power and back to its citizens. The Institute’s case on behalf of Fort Trumbull property owners seeks to end another sad chapter in the government’s modern-day abuse of its awesome eminent domain power.
As Susette Kelo said, “We begged and pleaded for three years and no one heard us, not until the Institute for Justice took our case. Now, we are protected, we are no longer the ones backed in a corner, fighting for the simple right to live in our homes.”
Americans should not be forced to beg for their rights. The case of Kelo v. The City of New London reminds the public that property rights are the foundation of all our rights, they are constitutionally enshrined and they must be preserved; when property rights are lost, the loss of other rights will inevitably follow.
The litigation team is headed by Institute for Justice Senior Attorneys Scott G. Bullock and Dana Berliner. Joining them on the team is Institute President and General Counsel William H. Mellor. The Institute is joined by local counsel Scott W. Sawyer of New London.
The Institute for Justice is a Washington, D.C.-based public interest law firm, which through strategic litigation, training and outreach, advances a rule of law under which individuals control their own destinies as free and responsible members of society. It litigates to secure economic liberty, school choice, private property rights, freedom of speech and other vital individual liberties, and to restore constitutional limits on the power of government. In addition, it trains law students, lawyers and policy activists in the tactics of public interest litigation to advance individual rights.
For more information contact:
Vice President for Communications
Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203
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