Homeowners Ask U.S. Supreme Court: Rehear Eminent Domain Case

John Kramer
John Kramer · July 18, 2005

Washington, D.C.—The U.S. Supreme Court has one final chance to correct one of its most-despised decisions in recent memory—its ruling in Kelo v. City of New London, which allows the use of eminent domain for private development. Today the Institute for Justice will file a petition for rehearing on behalf of New London, Conn., homeowners asking the U.S. Supreme Court to reconsider its 5-4 ruling from June 23 that has already opened up the floodgates to eminent domain abuse.

“We will be the first to admit that our chances of success with this motion are extremely small, but if there is any case that deserves to reheard by the Supreme Court, it is the Kelo case,” said Scott Bullock, senior attorney at the Washington, D.C.-based Institute for Justice. “This is the worst Supreme Court decision in years. Hopefully the Court will see the abuse of power that it has unleashed and will reconsider its misguided and dangerous opinion.”

Forget Hypotheticals: Floodgates are Opened With Ruling

As the petition points out as the first basis for the rehearing, the floodgates to eminent domain abuse have already begun to swing open. “Justice O’Connor predicted a world in which a Motel 6 can be taken for a Ritz-Carlton, and homes for a shopping mall,” said Dana Berliner, a senior attorney at the Institute and co-counsel in the Kelo case. “The majority wrongly dismissed these as hypotheticals when in fact such takings are already occurring throughout the country.”

Among many other examples of lower-tax producing businesses being taken for higher-tax producing ones just since the Supreme Court’s ruling, the Institute for Justice cited:

  • Hours after the Kelo decision, officials in Freeport, Texas, began legal filings to seize two family-owned seafood companies to make way for a more upscale business: an $8 million private boat marina.
  • Homes are already being taken for shopping malls. On July 12, 2005, Sunset Hills, Mo., voted to allow the condemnation of 85 homes and small businesses. This is the first step in allowing the private Novus Development Corp. to use eminent domain against the property owners to build a planned $165 million shopping center and office complex. Also in Missouri, the City of Arnold plans to take 30 homes and 15 small businesses, including the Arnold Veterans of Foreign Wars (VFW) post, for a Lowe’s and a strip mall.

The Poor & Middle Class Will Be Targets

The Institute for Justice pointed out to the Court that because property owners must pay their own litigation costs in eminent domain, many eminent domain abuse cases will never make it to court because property owners will simply be unable to afford the legal and other costs associated with challenging an eminent domain action on public use grounds.

For less wealthy individuals and businesses, the cost of litigation will very quickly exceed the value of the property, which is why nearly all appellate public use cases in the state courts involve challenges by larger business owners. Homeowner and small business cases, when they are brought at all, typically involve rare pro bono or public interest litigation. The Institute for Justice wrote in its petition to the U.S. Supreme Court, “As a result, eminent domain for economic development purposes directed at poorer individuals, minorities and the politically powerless will rarely make it to the courts for evaluation on a case-by-case basis [as the Court suggested in its Kelo opinion] and those individuals and groups will in large part bear the brunt of these takings. Petitioners respectfully ask this Court to rehear this case so it may prohibit the use of eminent domain for private economic development or, at a minimum, provide greater protections to property owners.”

“Rarely does a Supreme Court decision generate such uniform and nearly universal outrage,” said Chip Mellor, president of Institute for Justice. “Clearly, Americans understand just how threatening the Court’s decision is for ordinary home and small business owners everywhere.”

Short of actually rehearing the entire case, the property owners ask the Court as the second basis for the rehearing to at the very least “vacate” the judgment of the Connecticut Supreme Court and allow more evidence to be submitted about the takings in this case. The Court announced new standards in the use of eminent domain for economic development in Kelo and four years have passed since the trial in the case. Petitioners ask the Supreme Court to allow for reexamination of facts in the trial court in light of the new standards it announced.

Hands Off My Home

In addition to asking the U.S. Supreme Court to rehear the Kelo case, less than one week after the decision, IJ and its Castle Coalition announced a $3 million “Hands Off My Home” campaign—an unprecedented financial commitment—to halting eminent domain for private profit. “Hands Off My Home” will focus the universal wave of opposition to the Kelo ruling to, among other actions, ask state courts to enforce the “public use” limitations found in every state constitution and to support citizen activists nationwide who are urging their state and local officials to set stricter standards for the use of eminent domain. Already, legislators in 25 states have introduced or promised to introduce legislation reforming the use of eminent domain for private development, but unless all 50 states enact such legislation, homeowners could be left in jeopardy. The U.S. Congress is also considering several bills to prohibit the use of federal funds for municipal projects that use eminent domain for private development.