New London homeowners won public support, but constitutional argument did not save properties

The U.S. Supreme Court had just two days remaining in its term, but as the attorneys from the Institute for Justice gathered on the morning of Thursday, June 23, 2005, the court had not yet announced its ruling in Kelo v. City of New London, which had been argued before the court four months earlier.

As Scott Bullock, Dana Berliner and others refreshed a high court website, anxious for any indication of whether the court would rule on Kelo that day, Bullock’s phone rang.

“I’m calling from the Supreme Court office to tell you a decision has been rendered in the Kelo case,” Bullock recalled the court’s clerk telling him.

“Almost in a clinical type of fashion,” Bullock said, the clerk told him, “I wanted to let you know that the decision was affirmed.”

Bullock knew what that meant: The Connecticut Supreme Court’s 4-3 ruling that the New London Development Corporation — a private, nonprofit organization acting as an agent of the city — legally could use its eminent domain power to seize 15 parcels from seven property owners in the Fort Trumbull neighborhood in the name of economic development, had been upheld.

“I said, ‘Thank you,’ hung up and told the rest of the team,” he said, reflecting last week on the Kelo case, the court’s decision and its legacy 10 years later. “We all sat there for a few moments in a stunned silence, just shocked that the Supreme Court would sign off on this and would violate the Constitution in this way and permit the takings of these homes.”

The lawyers knew they had to call their clients quickly. Bullock and Berliner divided up the list of homeowners and started making the calls.

“It was extremely difficult to do that,” Bullock said. “Those were very, very tough calls to make. Obviously, they were very emotional and they were stunned by it as well.”

Between arguing the case on Feb. 22 and the court’s decision on June 23, the lawyers and homeowners were “optimistic, but also quite worried about it,” Bullock said.

“There would be no twists or turns, it was a matter of waiting,” he said. “At least they knew there would be no further actions taken by the city or the NLDC.”

By 2005, the redevelopment of the Fort Trumbull peninsula had been in the works for almost a decade, and the process had been fraught with twists and turns.

In 1996, the Pentagon announced it would close the Naval Undersea Warfare Center at Fort Trumbull, clearing 32 acres for development. In 1998, the pharmaceutical giant Pfizer announced it would locate its global research and development headquarters at the site of the former New London Mills linoleum factory, on a parcel just south of Fort Trumbull.

To complement the $300 million Pfizer facility, the city and NLDC in 2000 approved a Municipal Development Plan that laid out the intended uses of the land in the 90-acre Fort Trumbull neighborhood.

When the City Council approved the plan, it also relinquished to the NLDC the power of eminent domain, which the NLDC began to use shortly thereafter to acquire the property that had not been voluntarily sold.

The Fifth Amendment to the Constitution gives governments the power to take private property "by eminent domain" — regardless of the wishes of the owner — so long as the government proves the property is needed for a public use and the owner is paid fairly for the property. Connecticut law supports that right for municipalities.

Ultimately, the Institute for Justice, a libertarian public interest law firm, challenged the NLDC’s takings in a December 2000 lawsuit in Superior Court in New London on behalf of seven property owners. In March 2002, the court ruled that some of the takings were justified, but others were not.

The Institute for Justice appealed the decision to the Connecticut Supreme Court, and the city soon filed a cross appeal. In March 2004, the state’s highest court ruled 4-3 in favor of the city. The Institute for Justice appealed to the U.S. Supreme Court, which agreed to hear the case.

Split decision

For one hour on the morning of Feb. 22, 2005, the Supreme Court heard arguments from both sides, questioned the attorneys and grappled with the question “Is economic development a sufficient public use as described in the Fifth Amendment?”

“This case is about whether there are any limits on government’s eminent domain power under the public use requirement of the Fifth Amendment,” Bullock said to open his argument before the Supreme Court. “Every home, church or corner store would produce more tax revenue and jobs if it were a Costco, a shopping mall or a private office building. But if that’s the justification for the use of eminent domain, then any city can take property anywhere within its borders for any private use that might make more money than what is there now.”

The last line of the Fifth Amendment — commonly referred to as the “takings clause” — stipulates that “private property (shall not) be taken for public use, without just compensation.”

The crux of the Kelo case was whether the development plan championed by the NLDC, city and state as a significant benefit to the local economy qualified under the Constitution as a public use.

The Institute for Justice argued in favor of a narrow interpretation of “public use” — that the taking of the condemned property must be by government or by a private owner that is legally required to serve the public, like a public utility company.

The city argued for a broad interpretation — that “public use” could be understood to be the same as “public purpose” or “public benefit.”

The redevelopment of Fort Trumbull would create jobs, increase tax revenue to the city and grow the local economy, all of which would benefit the public, the city argued.

The homeowners were not suing the city to stop any development at all from happening at Fort Trumbull, Bullock said. Surely the NLDC could carry out its plans without razing the remaining 15 properties, he argued. As evidence Bullock pointed to the Italian Dramatic Club, a private social club in Fort Trumbull frequented by the political elite that the NLDC "miraculously found a way to save."

"That demonstrated that powerful people in New London and Connecticut wanted that property saved so they found a way to save it," he said. "But they refused to do the same thing for what turned out to be 15 (properties)."

After the hour in front of the Supreme Court, anxiety set in for the lawyers. The case was now out of their hands.

“From the tenor of the arguments, we knew it was going to be a very close decision. You could tell that certain justices were clearly on our side, some justices were just clearly not on our side and some were perhaps somewhere in the middle,” Bullock said. “I thought it was going to be 5-4, but I hoped it would be 5-4 our way.”

Shortly after the court’s ruling was announced publicly, an Institute for Justice paralegal returned to the office with the written decision and the opinions crafted by associate justices.

As Bullock had suspected, the nine justices were split 5-4. 

Poring over the legal reasoning the justices gave for reaching their decisions, Bullock and the others were struck by the “impassioned” dissent opinion written by Associate Justice Sandra Day O’Connor.

“Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,” O’Connor reasoned in her dissenting opinion. “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”

Chief Justice William Rehnquist, and Justices Antonin Scalia and Clarence Thomas — regarded at the time as the high court’s conservative wing — concurred with O’Connor’s dissent.

If O’Connor was the first to register her disappointment and outrage at the Supreme Court’s ruling, she would be far from the last.

"A perversion of the Fifth Amendment"

In the immediate wake of the ruling, public opinion polls reported that as many as 95 percent of respondents disagreed with the Kelo decision.

"People saw this case as an injustice ... they looked at Susette Kelo’s little pink house and said, ‘That’s the house I grew up in’ or ‘That’s the house I would like to own some day’ or ‘That’s the house my family members live in,’” Bullock said. “This case hit home, literally, in a way that very few constitutional decisions do.”

The court’s decision became a punchline on late night talk shows, with then-California Gov. Arnold Schwarzenegger expressing his disbelief during an interview with Jay Leno on “The Tonight Show.”

Libertarian political groups outraged by the Kelo ruling organized attempts to take the homes of two justices, Stephen Breyer and David Souter, by eminent domain and to replace them with hotels or monuments to the Constitution.

“This was an issue that seemed to capture the attention of the nation, too. People just couldn’t believe it,” Bullock said. “I remember walking along the street a day or two after the decision came down and hearing snippets of people saying things like ‘Did you hear about that Supreme Court case?’”

In the years since Kelo was decided, the outspoken Scalia has said he believes the court was surprised by the reaction nationwide and has included it alongside the Dred Scott and Roe v. Wade decisions as what he called “mistakes of political judgment.”

The indignation at the court’s declaration that a city can take a citizen’s property against his or her will and give it to someone else who will pay more in taxes has not dissipated in 10 years.

Just this month, New York Congressman Tom Reed, who established the private property rights caucus in the House of Representatives, called the Kelo decision “a perversion of the Fifth Amendment.”

The Kelo decision put the issue of eminent domain abuse on the map, the Institute for Justice’s Dana Berliner said, and started a grass roots activism movement against the use of eminent domain.

“Before Kelo came down, this was a backwater of the law. Virtually no one had ever heard of eminent domain, despite the fact that it was used throughout the country to take people’s homes and businesses away from them,” Berliner, who along with Bullock represented the Fort Trumbull homeowners, said at a recent conference on the enduring legacy of the Kelo case. “Up until the moment the decision came down — and then everything changed. There was a just overwhelming backlash against it. But there was also tremendous change politically.”

That change was led, in part, by the Institute for Justice. O’Connor’s dissent, Bullock said, galvanized his team to continue to fight against takings like those at Fort Trumbull.

“We were determined to channel what truly was this outrage into productive change,” Bullock said.

Within a week, the Institute for Justice launched its $3 million "Hands Off My Home" campaign to direct the energy of the backlash against the Kelo decision toward lobbying state courts and legislatures, and drafting model legislation to strengthen private property rights.

Since the Kelo case was decided, 40 states have changed their statutes to limit the use of eminent domain, 30 have narrowed their definition of what constitutes a public use, 25 have changed their definition of blighted property, and two have outlawed the transfer of condemned property to private parties entirely, Berliner said.

And though the Supreme Court ruled against the homeowners, and the land taken in Fort Trumbull sits unoccupied to this day, Bullock said some good came of the case.

“The lasting legacy is that even though the homeowners were not able to stay in that neighborhood, this fight has fundamentally transformed the law in this country; not just the law but the attitude toward private property rights,” said Bullock, who next year will assume the role of president of the Institute for Justice. “That is a wonderful legacy that arose out of a tragic situation that played out in Fort Trumbull. And I know the homeowners, although they’re very sad about losing their homes, can take a great degree of pride in what is happening in the wake of that.”

Twitter: @ColinAYoung


Kelo v. New London: 10 Years Later


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