Reason Magazine - Topics > Property Rights

Appeals Court Rules in Rack 'n' Roll Pool Hall Case

rbalko@reason.com (Radley Balko) — Sat, 12 Jul 2008 14:35:00 EDT

A few weeks ago, a three-judge panel from the United States Court of Appeals for the Fourth Circuit tossed out (pdf) most of the civil rights suit filed by David Ruttenberg, owner of the Rack 'n' Roll Pool hall in Manassas Park, Virginia. Fortunately, the court did leave one Fourth Amendment claim that could save Ruttenberg's case.

For a couple of years now, I've been reporting on how officials in the tiny town of Manassas Park have been harassing Ruttenberg and attempting to take away his business. The police there have been investigating Rutenberg for several years, for what they've recently said are drug crimes. As of yet, they've found no evidence of criminal wrongdoing by Ruttenberg. They've arrested him twice on charges unrelated to drugs—once for filing a false police report and once for bouncing a check—and in both cases the charges were eventually dropped.

The police in Manassas Park have hired informants to set up drug deals in Ruttenberg's bar (which they later cited as evidence that Ruttenberg's bar was a filled with drug activity). They've pulled over Ruttenberg's former girlfriends, and threatened them with charges unless they provided information against him. They've even co-opted security Ruttenberg had hired specifically for the purpose of keeping drugs out of his bar, and had them set up drug transactions in the bar.

The story took a particularly weird twist last year when local politics blogger Greg Letiecq and I revealed that one of the charges levied against Ruttenberg by the Department of Alcoholic Beverage Control—that he was allowing lewd activity to go on at the bar—was due to photos dozens of photos of women dancing in various stages of undress that were taken by then-Manassas Park Vice Mayor Kevin Brendel. At the time, Brendel was working at Ruttenberg's bar as a part-time D.J. Current and former Rack 'n' Roll staff say Brendel encouraged the women to strip and put on lewd contests when Ruttenberg wasn't around, despite repeated warnings from Ruttenberg.

I've personally witnessed police harassment of Ruttenberg's customers. And I've gone through hours of surveillance video with him showing countless attempts to set him up.

Ruttenberg has shown remarkable resolve through all of this. He records every phone conversation. He keeps meticulous surveillance video that covers every corner of his property. He collects statements and affidavits from staff, friends, and witnesses. He has hired private investigators. He has a formidable collection of evidence of public corruption and police misconduct (I've spent hours with him at the bar going through it all). Unfortunately, local prosecutor Paul Ebert (the same prosecutor in the Ryan Frederick case) seems uninterested. As does the FBI. And the Virginia State Police.

The appeals court ruling was pretty dismissive of Ruttenberg's suit (the ruling also misstates several facts about the case). But the one claim they left intact may turn out to be enough. The appeals court panel reversed the district court's dismissal of Ruttenberg's Fourth Amendment claim that the tactics the police used in a 2004 raid on Rack 'n' Roll were excessive. And they most certainly were.

The police initially sought a criminal search warrant for the raid. They couldn't find a judge to grant them one. So instead, they claimed they were conducting a routine alcohol inspection, and raided the place anyway. This "regulatory inspection" was clearly intended to intimidate Ruttenberg and his customers, and to find evidence of criminality—the police brought more than 70 officers from Manassas Park and surrounding jurisdictions, some in uniform, some in plain clothes, and still others in ski-mask hats and camouflage pumping shot guns as the stormed the place (on Ladies' Night).

If this was a routine alcohol inspection, you have to wonder what an actual drug raid might have looked like. Here's Ruttenberg's surveillance video of the raid. Er, "inspection":

The only people arrested in the raid were either undercover cops or people Ruttenberg later learned were working for the police as confidential informants.

The bad news is that while the ruling remands the remaining claim back to the district court for further proceedings, the panel then expresses a good deal of skepticism about whether the remaining claim should ultimately survive. In fact, the ruling nearly instructs the district court on how to dismiss it.

The good news is that Ruttenberg has several state claims that remain intact, which he can now attach to his federal case. That gets him into discovery, where he can demand to see everything the town of Manassas Park has accumulated in its long investigation of him.

Ruttenberg's other problem right now is that he has run out of money to pursue the case any further. He had kept his bar open at a loss for a couple of years in hopes of selling it. He was finally able to sell it at a steep loss last year, but that and the legal fees he has accumulated have wrecked him. He's currently looking for legal representation to help him continue the case.

Going to the Dogs

jsullum@reason.com (Jacob Sullum) — Fri, 11 Jul 2008 11:29:00 EDT

In a recent New York Times op-ed piece, Boston College law professor Ray Madoff explains how we're all footing the bill for Leona Helmsley's $8 billion bequest to the world's canines: Nearly half that money is rightfully the U.S. government's, since Helmsley's estate would be taxed at a rate of 45 percent had she not devoted it to charity. "The charitable deduction constitutes a subsidy from the federal government," Madoff writes. "In Mrs. Helmsley's case...her $8 billion donation for dogs is really a gift of $4.4 billion from her and $3.6 billion from you and me."

Really? By Madoff's logic, every charitable donation for which someone, living or dead, receives a deduction is partly "a gift...from you and me." So is every child, home mortgage, adoption, medical expense, and student loan that reduces anyone's tax bill. Unlike Madoff, who wants to change the rules for charitable bequests to make sure the money goes to "good causes," I don't think the tax code should be used for social engineering. But as long as it is, people who take advantage of deductions aimed at encouraging certain kinds of behavior are accepting a "subsidy" in Madoff's sense—i.e., keeping more of their own money than they otherwise would get to keep.

The deduction-equals-subsidy argument is actually weaker in the case of Helmsley's bequest than it is for the average itemizing taxpayer, since the money that's going to the dogs has already been taxed. Madoff is complaining that failing to tax it again is unfair to the rest of us, at least as long as the money is supporting a cause he doesn't like.

Swift SLAPP

jsullum@reason.com (Jacob Sullum) — Wed, 09 Jul 2008 17:35:00 EDT

Last May property rights activists in Clarksville, Tennessee, ran an ad in a local paper urging their neighbors to oppose a redevelopment project that involves the use of eminent domain. The ad, sponsored by the Clarksville Property Rights Coalition, noted that Mayor Johnny Piper, City Councilman Richard Swift, and Downtown District Partnership member Wayne Wilkinson "are all developers" and declared:

This redevelopment plan is about private development. Our city government is controlled by developers....This redevelopment plan is of the developers, by the developers, and for the developers.

Not only did the plan win the city council's approval, but now Swift and Wilkinson are suing the coalition for defamation, seeking $500,000 in damages. Bert Gall, the Institute for Justice attorney who is defending the activists, says:

Swift and Wilkinson are thin-skinned bullies trying to silence and intimidate their critics with frivolous litigation. All citizens have a First Amendment right to speak out against government abuse-without getting sued for their speech by the very people whose actions they are protesting.

Careful there, Bert. Swift and Wilkinson might sue you too.

Not for Sale

info@reason.com (Scott G. Bullock) — Mon, 23 Jun 2008 15:00:00 EDT

The little pink house that was the centerpiece of the U.S. Supreme Court's infamous Kelo v. New London decision is standing once again. The house, moved from the now destroyed Fort Trumbull neighborhood, will stand as a monument to the bravery of Susette Kelo and her neighbors, and to the thousands of others who have battled and are battling the abuse of eminent domain across the country. In contrast, the project for which the City of New London forced out its citizens is dead in the water.

Today marks the three-year anniversary of the Court's ruling, easily one of the most despised decisions in the Court's history. In Kelo, the Court, by a narrow 5-4 margin, ruled that New London could take homes and small businesses to give to a private developer in the name of "economic development." The case caused a nationwide backlash against eminent domain abuse, resulting in judicial decisions, citizen activism, initiatives, and legislation in favor of property owners.

Since Kelo, two state supreme courts have explicitly rejected the decision, while another three have questioned the validity of the decision under their respective state constitutions. As cases come before them, more state courts are likely to do the same.

Moreover, there has been massive public awareness brought to the issue of eminent domain abuse. Although there was growing concern about the issue and some awareness before Kelo, after the decision, just about every reasonably well-informed person in the country now knows about the issue—and a vast majority of them oppose eminent domain for private development.

This significant public opposition to eminent domain abuse has led to a complete change in the Zeitgeist on the issue. While public officials, planners, and developers in the past could keep the condemnations for private gain under the public's radar and thus usually get away with the seizure of homes and small businesses, that is no longer the case. Property law expert Dwight Merriam notes: "The reaction to Kelo has chilled the will of government to use eminent domain for private economic development."

Also, in a mere three-year period, 42 states have changed their eminent domain laws either through citizen initiative or legislation. About half of these provide strong protection against the abuse of eminent domain and virtually all of them represent an improvement over the truly terrible eminent domain laws that were on the books before Kelo.

Even more remarkably, eminent domain reforms have been passed despite the fact that powerful interest groups—developers, municipal officials, and planners—have fought desperately to preserve their power. Certainly, much work remains to be done. For example, Connecticut, home of the Kelo decision, has passed no substantive reforms even though it has one of the most sweeping laws in the country authorizing eminent domain for private commercial development. Likewise, its neighbor, New York, has rampant eminent domain abuse and a legislature that refuses to act. For anyone who cares about property rights, what has happened post-Kelo, however, is a classic example of losing the battle but winning the war.

Meanwhile, a mile away from the pink house's new location, history is repeating itself in the Fort Trumbull neighborhood. Urban renewal, backed by eminent domain and taxpayer subsidies, has a sad and dispiriting history over the past 50 years, resulting in the destruction of poorer neighborhoods, and their replacement with failed or underperforming newer projects.

New London's Fort Trumbull project has so far been an unmitigated disaster. Despite the infusion of close to $80 million in taxpayer funds and three years elapsing since the Kelo decision, there has been no new construction in the area whatsoever. The preferred developer for part of the site, Corcoran Jennison, just missed its latest deadline for securing financing for building something—anything—on the site of the old neighborhood. The developer was so desperate for funding that it applied to the federal Housing and Urban Development agency to obtain taxpayer-subsidized loans to build luxury apartments in the area. Even the former editor of the local newspaper, who was a strong supporter of the project from its inception, admitted this month, "The city is unlikely to get much new tax revenue anytime soon in Fort Trumbull and a hotel [the supposed centerpiece of the project] is at least five years away, if at all."

Although Susette Kelo and her neighbors endured a tragic loss of their neighborhood, they can take comfort in the fact that they have left a legacy of real change and inspiration for millions of other property owners throughout the nation. On June 21, a ribbon-cutting ceremony and party was held at the little pink house, celebrating the fact that it will still be a home, and one that changed the nation for the better.

Scott Bullock is a senior attorney at the Institute for Justice, the non-profit, public interest law center that litigated the Kelo case. Bullock argued the case before the Court.

What Ever Happened to the Kelo House?

info@reason.com (Damon W. Root) — Fri, 20 Jun 2008 10:17:00 EDT

This Monday is the third anniversary of Kelo v. City of New London, the notorious decision where the Supreme Court upheld that city's use of eminent domain on behalf of the Pfizer Corporation. So what's the status of the "comprehensive" and "revitalized" development site today? Here's the Institute for Justice, the libertarian public interest firm that litigated the case:

Like so many other projects that use eminent domain and rely on taxpayer subsidies, New London's Fort Trumbull project has been a failure. After spending $78 million in taxpayer dollars, the city of New London and the private developer have engaged in no new construction since the project was approved in 2000. Indeed, since the property owners disputing the takings owned less than two acres in a 90-acre project area, the city has always had a vast majority of the land available for development. Yet, no new development has occurred. The preferred developer for part of the site, Corcoran Jennison, recently missed its latest deadline for securing financing for building on the site and was terminated as the "designated developer."

The property at the center of the case, the house owned by plaintiff Susette Kelo, has since been relocated in its entirety to another part of town. And tomorrow is the grand re-opening, complete with a ribbon cutting ceremony. If you're in the area, stop by and thank Susette Kelo and the fine folks at the Institute for Justice for fighting the good fight. Details here.

Your Seeing-Eye Ferret Will Have to Wait at the Door, Sir

jsullum@reason.com (Jacob Sullum) — Tue, 17 Jun 2008 18:27:00 EDT

Under regulations proposed by the Bush administration, The New York Times reports, "the use of monkeys as 'service animals' for people with disabilities...would be forbidden." Well, not quite. The regulations would narrow the range of helper animals that businesses open to the public are required to allow on their property under the Americans With Disabilities Act:

When the existing rules were adopted in the early 1990s, the Justice Department said, few people anticipated the current trend toward "the use of wild, exotic or unusual species" as service animals.
The proposed rules define a service animal as "any dog or other common domestic animal individually trained to do work or perform tasks" for a person with a physical or mental disability.
Under this definition, the administration says, monkeys could not qualify as service animals, nor would reptiles; amphibians; rabbits, ferrets and rodents; or most farm animals.

Isn't a ferret or a hamster a "common domestic animal"? What about parrots or cats, which are now more common than dogs? Granted, these are hard questions. But if the federal government did not decide whether to allow pot-bellied pigs in your restaurant, who would?

A Man's Home is Another Man's Castle

info@reason.com (Damon W. Root) — Wed, 11 Jun 2008 15:00:00 EDT

Last Tuesday, voters in California faced the choice between two statewide initiatives, each claiming to protect property rights against eminent domain abuse. The loser, Proposition 98, which was sponsored primarily by the Howard Jarvis Taxpayers Association, would have imposed significant limits on the ability of state and local officials to seize private property using eminent domain, and would have phased out rent control everywhere in California. The winner, Proposition 99, which was championed by the League of California Cities, will do neither of those things.

In fact, despite being titled the "Homeowners and Private Property Protection Act," Prop. 99 will dramatically undermine the rights of California property owners, farmers, landlords, and renters. Of particular concern is the fact that Prop. 99 specifically protects only "owner-occupied residence[s]" from eminent domain abuse, leaving apartment buildings and other rental properties, not to mention family farms, churches, and small businesses, wide open for the taking. And even that flimsy safeguard contains loopholes. Under the most notable exception, owner-occupied residences may be condemned on behalf of "private uses incidental to, or necessary for," public works and improvements (emphasis mine). As George Mason University law professor Ilya Somin notes, "This means that homes could still be taken for transfer to private developers if the proposed project allocated some space for a ‘public' facility such as a community center or library."

So what happened? Did Prop. 99 trick voters into thinking they were protecting property rights when they were actually undermining them? Or did a majority of Californians simply reject Prop. 98's controversial attack on rent control?

The short answer is yes to both. As critics charged, Prop. 99 looked like a legitimate reform measure, despite the fact that it actually leaves city and state officials with vast powers to condemn and seize property. Moreover, for those voters opposed to eminent domain abuse but unaware of Prop. 99's fine print, it would have made sense to vote yes on both measures, just to be safe. Yet under Prop. 99, if both measured passed, "the provisions of this measure [99] shall prevail in their entirety." In other words, Prop. 99 benefited—by design—from both intentional and miscast votes.

But Prop. 98's critics had a point, too. Limiting what a landlord charges in rent is a far cry from seizing somebody's house and handing the property over to a developer. Furthermore, while reforming eminent domain is a popular issue in California (and elsewhere), ending rent control is highly controversial. So not only was including the anti-rent control plank a bad strategic move, it gave Prop. 98 the appearance of bad faith as well. To put it another way, why bundle an unpopular proposal with an extremely popular one unless you're trying something fishy?

In hindsight, it seems clear that Prop. 98 should have been a straightforward assault on eminent domain abuse. That approach would have attracted a broad coalition of support. Consider the various liberal and left-of-center voices that spoke out against Kelo v. City of New London (2005), where the Supreme Court allowed the Pfizer Corporation to acquire private property via eminent domain under the city's "economic revitalization" scheme. Rep. Maxine Waters (D-Calif.), for instance, declared, "the taking of private property for private use is in my estimation unconstitutional, un-American, and is not to be tolerated."

Similarly, the National Association for the Advancement of Colored People (NAACP), in the amicus curiae brief it filed on behalf of the victimized Kelo homeowners, charged that not only were Kelo-style takings in violation of the Constitution, their burden "has and will continue to fall disproportionately upon racial and ethnic minorities, the elderly, and the economically disadvantaged." In California, however, groups representing racial and ethnic minorities and the elderly overwhelmingly lined up against Prop. 98, a testament to the measure's narrow appeal.

But the future isn't entirely bleak. Chip Mellor, President of the Institute for Justice, the libertarian public interest firm that litigated Kelo, recently told reason that the outcry against the Court's decision has resulted in forty-two states enacting "laws that change the status quo that was in existence at the time of Kelo." And while not all of these laws are perfect, "all of them are better than what existed before."

Prop. 99, of course, is now the exception to that statement, but Mellor's point remains strong. The Kelo backlash has sparked eminent domain fights from Brooklyn, New York to Raytown, Missouri. Too bad the authors of Prop. 98 squandered their shot at winning a real victory in California.

Damon W. Root is a reason associate editor.

Rant: The War on Renters

paul.thornton@latimes.com (Paul Thornton) — Wed, 04 Jun 2008 12:00:00 EDT

One of the biggest obstacles to my dream of owning a home any time in the near future would be the election of Hillary Clinton.

Or Barack Obama.

Or John McCain.

All three senators hope to move into new digs come January, but they want the rest of us to sit tight and stay put. While you won’t hear the Oval Office wannabes coming out explicitly in favor of the astronomically high home prices that stand between renters and ownership, each candidate seeks to prevent the housing bubble’s post-boom correction from flooding the market with millions of relatively cheap properties.

In their concerted attempt to “keep Americans in their homes,” Clinton, Obama, and McCain have called for the federal government to spend billions of dollars to curtail foreclosures and shield Americans from the consequences of their own risky investment decisions. Makes you think the candidates are on your side.

Not if you’re a renter. Foreclosures boost the supply of housing at a faster than expected clip. With supply for potential buyers (i.e., renters) increasing, home prices stand to fall (albeit modestly) to less insane levels, particularly in overheated areas such as Southern California, the region I call home. That increasing supply of housing and those lower prices could be why a Zogby poll released in April showed that, despite the economy’s tailspin, most Americans think now is a good time to buy a home.

And here, dear renters, is where our electoral triumvirate comes in to foil us.

Clinton’s proposal is the most far-reaching. The junior senator from New York would stop foreclosures by fiat—a proposal that wins the “I Didn’t Know a President Could Do That” award—and spend around $30 billion on restructuring troubled mortgages. Obama stops short of Clinton’s 90-day “moratorium,” but the Illinois pol also wants to inject $30 billion into the mortgage market.

Until the middle of April, McCain was alone among the major presidential aspirants in calling bullshit on this idea. The Arizona senator’s line on the mortgage meltdown—that he would refuse to “play election-year politics with the housing crisis,” as quoted in the Los Angeles Times—showed such deference to the free market, it was too good to last. So it didn’t. By April the straight talker was peddling his own multibillion-dollar borrower assistance package—which, he insisted, would help only “deserving” borrowers, of course.

Lost in the rush to help troubled borrowers is an understanding of what this crisis isn’t: a situation in which “Americans are losing their homes.” More accurately, borrowers who can no longer afford their mortgage payments are becoming—gasp!—renters. “Americans are living in other people’s homes” doesn’t quite tug at the heartstrings the same way, which is part of the reason you’re not hearing about it.

Also lost in the flood of campaign promises is the housing bubble’s true crisis, which barely anyone in Washington cares to mention. In 2001 renters who wanted to buy a house in Los Angeles County could expect to spend about $200,000, roughly the area’s median home price at the time. By the peak of the housing bubble in 2007, the median price had shot up to about $550,000, which the California Association of Realtors estimated would easily take more than $100,000 in annual pre-tax income for a family to afford.

Wrap your civic-minded intellect around that one: more than $100,000 a year to afford a modest home. Candidates, there’s your crisis—and thankfully, the market is already taking care of it, through the correction of foreclosures and the resulting increase in the supply of available housing. All a President Clinton, Obama, or McCain would have to do is watch from the Oval Office as that great American dream of homeownership becomes more and more accessible to the likes of me. Unless, that is, the next president is against affordable housing.

Paul Thornton is an assistant articles editor at the Los Angeles Times editorial page.

California Voters Endorse Eminent Domain Abuse

info@reason.com (Damon W. Root) — Wed, 04 Jun 2008 10:37:00 EDT

Voters in California yesterday overwhelmingly supported Proposition 99, a ballot measure that will significantly empower state and local officials to seize private property via eminent domain, and rejected Proposition 98, which would have protected property rights and ended rent control. As legal scholar Ilya Somin noted in the Los Angeles Times, Proposition 99, though masquerading as a defense of private property, was actually sponsored by groups representing counties, cities, and other redevelopment interests who drafted it specifically to counter Proposition 98. Among other crimes, Proposition 99 will protect only owner-occupied residences from condemnation, leaving apartment buildings and other rental properties wide open for abuse. Moreover, as Somin observed:

Even the protection for homeowners covered under Proposition 99 is likely to be ineffective, because the measure allows the condemnation of owner-occupied homes if they are "incidental" to a "public" project. This means that homes could still be taken for transfer to private developers if the proposed project allocated some space for a "public" facility such as a community center or library.

Proposition 98, on the other hand, would have placed significant limits on such abuse. But while that might have gone over with the voters, ending rent control was far less popular, even though the law would only affect rent controlled apartments once they became vacant, thus leaving current tenants unaffected. Gov. Arnold Schwarzenegger came out against Prop. 98, however, claiming it "would undermine California's ability to improve our infrastructure."

Finally, as the Pacific Legal Foundation's Timothy Sandefur has warned, Prop. 99 will "make things far worse not only by providing fake protection, but because the courts would interpret it as meaning that Californians did not want more serious protections for property rights."

Invasion of Privacy, Copyright Infringement, or Just Shame at Sending a Ziggy Card?

gillespie@reason.com (Nick Gillespie) — Wed, 28 May 2008 15:00:00 EDT

NFL Hall of Famer Joe Montana is suing an ex-wife and an auction house for violating "his copyright and privacy rights," reports The Smoking Gun. The first of three Mrs. Montanas recently sold a bunch of letters and memorabilia from the San Francisco 49ers star's college days at Notre Dame.

This case raises potentially interesting intellectual property rights issues: What is privacy to begin with? Especially for a celeb? Are love letters copyrightable and, if so, should most of us be sued for plagiarism too? Etc.

But mostly the case is just another reason to turn to Ziggy, a comic strip created by a father and continued by a son that is every bit as unfunny as the English protectorate under Cromwell I and II, Tom Swift under Victors Appleton I and II, and the current U.S. republic cum empire under Bush 1.0 and 2.0.

I half-suspect that Montana is simply upset at a Ziggy card going public, even one from the '70s, during Ziggy's zigariffic heyday. Based on the stuff below, it's hard to know what is Montana's own feeling and what is mass-produced sentiment. But personal embarrassment should never be enough to justify lawsuits.

"This whole thing has been built on a foundation of lawlessness"

info@reason.com (Damon W. Root) — Mon, 19 May 2008 17:17:00 EDT

Here's a nice look at how Homeland Security gets the job done:

Texas mayors and business leaders filed a class-action lawsuit Friday alleging Homeland Security Secretary Michael Chertoff hoodwinked landowners into waiving their property rights for construction of a fence along the Mexican border.

Members of the Texas Border Coalition said Chertoff did not fairly negotiate compensation with landowners for access to their land for six-month surveys to choose fence sites.

[...]

"They are determined to build a wall to appease mid-America," [Brownsville Mayor Pat] Ahumada said. "This is a political problem that's being addressed at the expense of all the border communities."

Whole thing here. For reason's coverage of anti-immigrant hysteria, look here, here, here, and here.

Eminent Domain As a Civil Rights Issue

jwalker@reason.com (Jesse Walker) — Mon, 28 Apr 2008 10:30:00 EDT

An event in Alabama tomorrow that looks like it'll be worth watching:

Few policies have done more to destroy community and opportunity for minorities than eminent domain. Some 3 to 4 million Americans, most of them ethnic minorities, have been forcibly displaced from their homes as a result of urban renewal takings since World War II....

On Tuesday, the Alabama Advisory Committee of the U.S. Commission on Civil Rights will hold a public forum at Birmingham's historic Sixteenth Street Baptist church to address ongoing property seizures in the state. The church was not only a center of early civil rights action, but also, tragically, where four schoolgirls lost their lives in a bombing in 1963.

Whole article here. Event details here.

D.I.Y. Eminent Domain

jwalker@reason.com (Jesse Walker) — Wed, 23 Apr 2008 10:12:00 EDT

RIA Novosti reports:

A villager in south Russia's Astrakhan Region has been detained on suspicion of stealing his neighbor's house, which is common practice in remote areas, a local police spokesman said Monday.

The spokesman said the hapless house owner, who had been away for four months, reported the theft to police after he returned home to find his house gone and just the foundations remaining.

"A local resident decided that if no one was living in the house, it could be taken away piece by piece, and he dismantled it for construction materials and put them inside his yard," the police spokesman said, adding the suspect faced a maximum of three years in prison, if found guilty.

They Want to Buy Our Crappy Assets. Run For Your Lives!!!

matt.welch@reason.com (Matt Welch) — Thu, 27 Mar 2008 09:12:00 EDT

Sovereign wealth funds, this year's Dubai Ports World-style ooga-booga man of international finance, are the subject of an interesting Washington Post feature today.

The star of the piece is Bader al-Saad, a former Chase Manhattan and First National Bank of Chicago man who came to the Kuwait Investment Authority in 2003 and started remodeling the state-owned, oil-fed investment fund on the endowments of Harvard and Yale, which meant getting out of the Persian Gulf and looking for diversified opportunities abroad. And it turns out, with the U.S. dollar and American asset prices deflating, those opportunities began presenting themselves in these United States. Excerpt:

It was not Bader al-Saad's idea to buy huge chunks of Citigroup and Merrill Lynch.
It was early January and Saad ... was in his office as usual, reviewing potential deals in Kuwait and elsewhere in the Persian Gulf region, when the banks asked him to invest, he recalled.
"They called us.... We receive calls on most transactions," said Saad, whose fund bought stakes of $3 billion in Citigroup and $2 billion in Merrill Lynch. [...]
He said the next big purchases of assets in the United States may be in the real estate sector, which he expects will peak as an investment target -- in other words, hit rock bottom -- in the next few months. Saad said he also thinks U.S. telecommunications companies and more financial firms would make good investments.
"There are certain opportunities which do not come every day," he said. "We consider the recent crisis as creating some opportunities in certain sectors. I look at history, such as the savings-and-loan problem. It created golden opportunities."

But fear not -- legislators are busy looking for ways to discourage global liquidity from washing in to cash-starved Washington. The EU and U.S.-backed International Monetary Fund are drawing up targeted regulations and extracting you-will-only-come-seeking-profit pledges from the scary foreigners. Future president Barack Obama vows to stop "transferring wealth to these countries." The Council of Foreign Relations has issued a jeremiad against the "New Financial Superpower" [PDF] who will bring us to our knees by, uh, selling the U.S. assets they have already bought? It's all very confusing.

Some thoughts from Marginal Revolutionary Tyler Cowen here. Science Correspondent Ron Bailey explained how foreign ownership is not a threat, but stupid legislation is back in March 2006. And Kenton E. Kelly explained how a bogus security panic is alienating an ally and endangering our country in February 2006.

Put on Your Red Shoes and Dance the Blues

matt.welch@reason.com (Matt Welch) — Thu, 20 Mar 2008 09:16:00 EDT

George Will devotes his column today to a case well-known to reason.tv viewers: the family-owned Arizona bar/restaurant getting hassled and fined nonstop by local nanny-boos for allowing its customers to dance. Will -- who has been writing this season's most withering attacks on John McCain (1, 2, 3, 4) -- makes an interesting point about the necessary role of judicial activism in rolling back such nonsense:

Beyond the weeds there is this mighty oak of a principle: There must be a judicial leash on governments to prevent them from arbitrarily asserting that the plain language of a statute means something that it plainly does not say.
The 14th Amendment's guarantees of equal protection and due process of law should mean that government may interfere with a citizen's economic liberty only to promote important government interests that cannot be advanced through less restrictive means. Under today's weak "rational basis" standard, courts validate virtually any abridgement of economic liberty, no matter how tenuous the connection to even a minor public purpose. Conservatives, note well: Restoring economic liberty requires a kind of judicial activism -- judges judging rather than merely ratifying government's caprices.

For more along those lines, see Damon Root's excellent libertarian case for judicial activism back in July 2005. And for Kevin Bacon's sake, watch Drew Carey lord over the dance ban here.

No Tiger, No Volcano, No Gamblers

jsullum@reason.com (Jacob Sullum) — Thu, 10 Jan 2008 12:28:00 EST

I never thought I'd live in a place where people go to Oklahoma for fun, but evidently a lot of people in Dallas pop over the border to gamble in Indian casinos. Although that's a depressing thought, it's not as depressing as the thought of gambling in this place:

Station Casinos opened a nondescript 40-by-10-foot trailer on a vacant 26-acre plot about six miles east of the [Las Vegas] Strip with just 16 slot machines....
The biggest payout on the bank of video poker and blackjack machines was $2.50....
The trailer...came complete with a portable toilet outside and, to comply with the Americans With Disabilities Act, a wheelchair-accessible entrance. A casino floor manager sat at one end of the narrow room ready to pay out winnings should there be any.

If that doesn't sound like much fun to you, that's OK, because the trailer casino was not intended to attract customers. Open just for one day, it was intended solely to satisfy a zoning requirement. To retain the option of someday building an actual casino on the land, formerly the site of the Showboat and Castaways, Station Casinos has to offer betting opportunities to the general public for at least one shift every two years. A representative of the company that provided the slot machines for the day explains:

There are probably four or five places that have to do this in order to preserve their grandfathered zoning rights to have nonrestricted gaming there. That makes the property millions and millions of dollars more valuable.

The Right to Shout 'Boycott' in a Crowded Shopping Mall

jsullum@reason.com (Jacob Sullum) — Fri, 28 Dec 2007 13:05:00 EST

This week the California Supreme Court ruled that the state constitution requires a private shopping mall to allow demonstrations urging customers to boycott its tenants. The case stemmed from a labor dispute that led 30 to 40 members of the Graphic Communications International Union to distribute leaflets in front of the Robinsons-May department store at San Diego's Fashion Valley Mall in 1998. The leaflets laid out the union's complaints about The San Diego Union-Tribune's treatment of its employees and asked people not to shop at Robinsons-May, a major advertiser in the paper. The mall stopped the leafletting, noting that the union had not applied for a permit and in any event was violating the mall's rule against "impeding, competing or interfering with the business of one or more of the stores or merchants in the shopping center by...urging, or encouraging in any manner, customers not to purchase the merchandise or services offered by any one or more of the stores or merchants in the shopping center."

By declaring that the mall has no right to enforce that rule, the California Supreme Court extended a line of cases in which it has held that people have a constitutional right to freedom of speech on other people's property. The U.S. Supreme Court at one time dallied with that notion but has since repudiated it, so the California Supreme Court now bases its position on the state constitution's free speech guarantee, rather than the First Amendment. As Justice Ming W. Chin noted in dissenting from this week's decision, California is virtually alone in holding that the constitutional right to freedom of speech applies to private parties as well as the government. With the exception of New Jersey, all the other states, including those with free speech guarantees essentially the same as California's, either have never taken this approach or have renounced it.

There's a good reason for that. Freedom of speech depends on property rights. If you are forbidden from buying, renting, or borrowing the means to get your message out, whether it's a printing press, a meeting room, TV time, or a computer with an Internet connection, your right to speak your mind does not amount to much. By the same token, property rights help define the limits of the right to free speech. I don't have a right to hold a rally in your living room or write an article on your computer (or cry "fire" in your theater) without your permission. Once freedom of speech is divorced from property rights, courts have to weigh the importance of the speech against the interests of the property owner on a case-by-case basis, which leads to arbitrary and unpredictable results. Meanwhile, by undermining property rights, courts ultimately make freedom of speech less secure.

A PDF of the decision is available here.

Border Fence = Land Grab

jwalker@reason.com (Jesse Walker) — Mon, 10 Dec 2007 09:58:00 EST

Please give us your property -- we'd like to build a symbolic gesture on it:

Some landowners have complained that they could lose access to the Rio Grande, the only freshwater source in the region, which they rely on for irrigating crops and livestock. Others would have their land behind the fence, cut off from the rest of the United States in a border no-man's land.

Opponents have said federal officials have failed to keep them fully informed on fence plans and refused to listen to residents' proposals for alternatives. Others say the fence is a waste of taxpayers' money and will hurt border economies.

"It's just a continuation of a battle with our government. We are for security. However the way they are approaching solving security problems, we just disagree with," said McAllen Mayor Richard Cortez. "We just don't see how a non-continuous fence, when you have 6,000 miles of land borders, is going to stop terrorism and illegal immigration. We continue to believe it is a waste of taxpayers' money."

Georgia Supreme Court Rejects Banishment of Sex Offenders

jsullum@reason.com (Jacob Sullum) — Mon, 26 Nov 2007 11:01:00 EST

Last week the Georgia Supreme Court unanimously overturned that state's draconian restrictions on where sex offenders may live after they're released from prison. Georgia's law prohibited sex offenders from living within 1,000 feet of schools, churches, and other places where children may gather, including the state's 150,000 or so school bus stops. The upshot was that entire counties, except for a few spots here and there (where there might not have been any actual housing), were off limits. Worse, the opening of a playground or day care center, or the designation of a new bus stop, could render previously legal locations illegal, forcing sex offenders to move repeatedly. "Under the terms of that statute," the state Supreme Court noted, "it is apparent that there is no place in Georgia where a registered sex offender can live without being continually at risk of being ejected." The court ruled that the law violated the Fifth Amendment's ban on uncompensated takings of property.

A PDF of the decision is available here. Kerry Howley called attention to the wide reach and onerous requirements of state and local sex offender residence restrictions in a reason online essay last year. In a column last fall, I noted that such restrictions are part of a broader political fashion.

Eminent Domain Gone Wild

Thu, 15 Nov 2007 06:00:00 EST

...

Now Playing at Reason.tv: Eminent Domain Gone Wild

Thu, 15 Nov 2007 06:00:00 EST

Click on the image to see the full video.

Reason.tv host Drew Carey visits National City, California, where the local government is taking eminent domain abuse to new lows.

Eminent domain is the constitutionally sanctioned practice of taking land for legitimate public uses. Traditionally, that's meant things like roads and schools. Over the past several decades, however, governments have gone hog wild with eminent domain, routinely condemning property and turning it over to well-connected private developers as a way of subsidizing economic development and increasing tax revenues (never mind that it doesn't always work out that way).

Officials in National City, a predominantly Hispanic community near San Diego, have pushed to bulldoze a popular athletic center for struggling kids to pave the way for private developers to build new luxury condos.

As tragic and absurd as this may sound, such outrageous affronts to property rights are an almost daily occurrence. Episode 3 of The Drew Carey Project chronicles the devastating impact of eminent domain abuse on the lives of people whose property the government can threaten to take, not for public use, but for the benefit of wealthy developers.

Your Place: The Final Frontier

jsullum@reason.com (Jacob Sullum) — Wed, 10 Oct 2007 06:22:00 EDT

During Prohibition, making and selling liquor was illegal, but drinking it was not. With tobacco, we are moving toward the opposite situation, where it will be legal to make and sell cigarettes but not to smoke them.

A smoking ban recently approved by the city council of Belmont, California, a town halfway between San Jose and San Francisco, is so sweeping that saying where it does not apply is easier than saying where it does. Smoking will still be allowed in tobacco shops, in automobiles, in some hotel rooms, in private residences that do not share a floor or ceiling with other private residences, and on streets and sidewalks, assuming you can find a spot that is not within 20 feet of a smoke-free location.

That may be hard, since Belmont's smoke-free areas include not only buildings open to the public but outdoor locations where people wait, such as ATM lines and bus stops, or work, such as construction sites and restaurant patios. But a smoker who despairs of finding an outdoor area where smoking is allowed can still light up even if he does not own a car and is unlucky enough to live in an apartment or condominium. He just has to land a role in a theatrical production "where smoking is an integral part of the story."

Meanwhile, the Los Angeles suburb that dubbed itself "Clean Air Calabasas" when it was leading the smoke-free march into the great outdoors is considering an extension of its ordinance that would cover apartments. Even if your landlord doesn't care whether you smoke, Clean Air Calabasas does.

The official justification for these ever-more-intrusive smoking bans is that the slightest whiff of secondhand smoke poses an intolerable hazard. The Belmont ordinance claims tobacco smoke is "extremely dangerous," regardless of dose, and warns that even "exposure to outdoor secondhand smoke may present a hazard under certain conditions of wind and smoker proximity."

Predictably, the ordinance cites former Surgeon General Richard Carmona's assertion that "there is no risk-free level of secondhand smoke exposure." But this pseudoscientific leap of faith amounts to saying that every little bit hurts, even if the damage can't be measured.

Epidemiological studies generally find that adults who live with smokers for decades are slightly more likely to get lung cancer and heart disease. The difference is so small that it's hard to say whether it signifies a causal relationship. There is also evidence that very young children of smokers are more prone to earaches and lower respiratory infections.

What do these studies of prolonged, relatively intense exposure prove about a little smoke seeping under the door of your apartment or wafting your way on the street? Absolutely nothing.

But the politicians who take the misleading statements of public health officials like Carmona and run with them cannot be bothered by the facts. New York Assemblywoman Sandra Galef (D-Ossining), who wants to ban smoking on playgrounds, recently told Newsday "the scientific reports say that secondhand smoke has as much of a negative effect on your health as smoking directly."

Got that, kids? If your parents smoke, you might as well start smoking yourself; the health effects won't be any worse.

One of Galef's colleagues, Assemblyman Ivan Lafayette (D-Queens), said lighting up around children is worse than physical abuse. "They're both horrible things," Lafayette averred, "but one is going to kill the child."

As those remarks suggest, the next rationale for banning smoking in private residences may be child protection, which will allow the government to go after smokers in detached homes as well as apartments. Already several state and local jurisdictions have banned smoking in cars carrying minors.

Such laws raise the question of why legislators are ignoring the setting in which the vast majority of children's exposure to secondhand smoke occurs. Now that anti-smoking crusaders have crossed the threshold into people's homes, they are not likely to turn back.

Calabasas Has Had It With Belmont's Nosier-Than-Thou Attitude

jsullum@reason.com (Jacob Sullum) — Wed, 03 Oct 2007 12:21:00 EDT

USA Today notes that Clean Air Calabasas, not to be outdone by Belmont's imminent ban on smoking at home, is considering extending its ban, which already covers most outdoor locations, to apartments. Belmont's ordinance, which is expected to receive final approval next week, applies to any residential unit that shares a ceiling or floor with another residential unit. The proposed Calabasas ordinance, by contrast, covers only rental units and new condominiums; it does not apply to existing condominiums. So if you're rich enough to afford a condominium (or a house) in Calabasas, you will still be allowed to smoke at home. But if you're a mere renter, you're out of luck. Even if the landlord doesn't mind if you smoke, the city does.

Waltz Across Texas

jwalker@reason.com (Jesse Walker) — Mon, 24 Sep 2007 10:35:00 EDT

Not all the opposition to the Trans-Texas Corridor is coming from paranoid nationalists. From a Time story on the project:

David Langford, an activist for the Texas Wildlife Association, is organizing farmers and ranchers whose land could be cut in half or condemned by the Trans-Texas Corridor. An early plan for central Texas showed a corridor passing near the homestead Langford's family settled in 1851. With the state's new "quick claim" ability -- granted under TTC legislation -- his family homestead could be gone in 90 days, he says, transferred to private investors operating the corridor. Though he would be compensated financially, he's still steamed. "I can't believe Rick Perry's grandfather would want his house and ranch taken and turned over to Paris Hilton's family to build a hotel on one of these roads," he says.

Opponents argue the roads may require the seizure of "more than half a million acres of private property." Gov. Rick Perry's "Trans Texas Corridor Fact Sheet" doesn't mention a total -- it gets vague whenever the interesting criticisms come up -- but it does claim that the project "will ultimately result in the purchase [sic] of less public land than would otherwise be needed to keep up with growth, and all the needed land will be purchased during one process, instead of on a piecemeal basis as we need to build out infrastructure one project at a time." Apart from the moral issues involved in taking private property, this runs up against the possibility that a process of "piecemeal" evolution is less likely to grab giant chunks of land that aren't actually "needed."

One thing that isn't clear to me, as a fellow who hasn't lived in Texas for years and hasn't been following this story closely: How much is the state planning to spend on the corridor, and how much is coming from private sources? Perry's factsheet says that "The first segment of the corridor...will require no tax dollars up front for construction while ensuring a $7.2 billion private investment in the corridor." The phrases "first" and "up front" imply that Texas taxpayers will be paying money down the road, but somehow a document that can cite the exact amount a private company will be spending doesn't say how much the state plans to kick in.

The Limits of Anti-Kelo Legislation

isomin@gmu.edu (Ilya Somin) — Mon, 06 Aug 2007 05:49:00 EDT

In Kelo v. City of New London (2005), the U.S. Supreme Court allowed the government to condemn property and transfer it to other private owners in the name of "economic development." Upholding the forced transfer of land in New London, Connecticut, to private developers, the Court ruled that virtually any potential public benefit satisfies the Fifth Amendment's requirement that the authorities can take property only for a "public use." Traditionally, a public use had meant a government-owned facility or a public utility with legally mandated access for the general public. With an economic development taking, property is simply transferred from one private party to another, without any public access requirement. Although the traditional definition of public use had already been vastly expanded by previous decisions, Kelo drove the change home to the general public.

The ruling generated more and broader opposition than any other Supreme Court decision of the last several decades. A 2005 survey by the Saint Index, a polling organization specializing in land use issues, showed that 81 percent of Americans opposed Kelo, a backlash that cut across traditional partisan, ideological, and racial lines. Eighty-five percent of Republicans opposed Kelo, but so did 79 percent of Democrats and 83 percent of independents. The decision was likewise opposed by 82 percent of whites, 72 percent of blacks, and 80 percent of Hispanics.

Politicians on both the right and the left hurried to condemn the Court's ruling. Though the decision was supported by all the liberal justices and opposed by most of the conservatives, Democratic National Committee Chairman Howard Dean denounced "a Republican-appointed Supreme Court that decided they can take your house and put a Sheraton hotel in there." California Democratic Rep. Maxine Waters, a prominent African-American liberal, called Kelo-style takings "the most un-American thing that can be done." On the other end of the political spectrum, the conservative talk show host Rush Limbaugh condemned the decision for letting the government "kick the little guy out of his and her homes and sell those home[s] to a big developer."

Many observers expected the backlash to prompt legislation that would make judicial protection against economic development takings unnecessary. In a fall 2005 Harvard Law Review article, federal appeals court judge Richard Posner, arguably the nation's most respected judge and most prominent legal scholar, wrote that the political response to Kelo is "evidence of [the decision's] pragmatic soundness." Judicial action would be unnecessary, Posner suggested, because the political process could take care of the problem. In his confirmation hearing before the Senate, future Supreme Court Chief Justice John Roberts said that the public reaction to Kelo shows that Congress and state legislatures "are protectors of the people's rights as well" and "can protect them in situations where the Court has determined, as it did...in Kelo, that they are not going to draw [the] line."

Although important progress in protecting property rights has been made in some states, such predictions turned out to be seriously overstated. The Kelo backlash has not been as effective as many expected. Too often, cosmetic changes have taken the place of real reform.

Flawed Reforms in the States
Nearly every state legislature has either adopted or considered legislation to curb the use of eminent domain since Kelo, but only 14 have enacted laws that provide significantly increased protections for property rights. Several other states have enacted effective reforms by popular referendum. Seventeen state legislatures have passed laws that purport to restrict eminent domain, but in reality accomplish very little.

Legislators have found many different ways to produce bills that appear to protect property rights without actually doing so. Texas, for example, banned "economic development" takings but continues to permit them under other names, such as "community development." The most common tactic, used in some 16 states' post-Kelo laws, is to allow economic development condemnations to continue under the guise of alleviating "blight." While it may sometimes be desirable to use eminent domain to transform severely dilapidated areas, many states define "blight" so broadly that almost any neighborhood qualifies. A 2003 Nevada Supreme Court decision concluded that downtown Las Vegas was blighted, thus allowing the authorities to condemn some property that local casinos coveted for a new parking lot. A 2001 New York appellate decision held that Times Square was blighted, paving the way for the condemnation of property to build a new headquarters for The New York Times.

Unsurprisingly, the states most in need of reform tended to be the ones least willing to adopt it. Consider the 20 states that have the largest numbers of Kelo-like condemnations, according to data compiled by the Institute for Justice, the public interest law firm that represented the property owners in Kelo. (Full disclosure: I have worked with the Institute for Justice on several cases and authored an amicus brief in Kelo.) Thirteen of them have enacted either ineffective legislation or none at all. Two states with otherwise effective reforms exempted the areas where most condemnations occur. Pennsylvania's reform includes a five-year exemption for Philadelphia and Pittsburgh, and Minnesota's exempts the Twin Cities area, also for five years. By the time these exemptions expire, the political uproar over Kelo likely will have subsided, making it easier to extend them without much public scrutiny.

The same pattern holds in those states with the largest numbers of "threatened" condemnations to transfer property from one private party to another. In these cases, the government used the possibility of condemnation as leverage to force owners to sell but did not actually go through with a taking. Fourteen of the top 20 states on that list have failed to enact reforms that significantly constrain Kelo-like takings. Major states with extensive records of eminent domain abuse that have failed to enact effective reforms include California, New York, New Jersey, and Texas.

Federal Reform Efforts
Similar shortcomings have bedeviled reform efforts at the federal level. An executive order issued by President Bush in June 2006, for example, banned federal agencies from using eminent domain solely for "private development" but allowed takings for private owners who promise to use the land for both private and "public" development. Since the Supreme Court in Kelo upheld the New London project partly because the city claimed its takings would benefit the public by raising tax revenues and stimulating the economy, Bush's order does little to limit the decision's reach. Virtually any economic development taking can be rationalized on the ground that it might benefit the public as well as the new owner. This is the exact argument that the Supreme Court majority endorsed in Kelo itself. Since most takings are initiated by state and local governments rather than by federal officials, even a better-worded presidential order would have had only limited effect.

The Bond Amendment, introduced by Sen. Kit Bond (R-Mo.) and enacted by Congress in 2005, has been similarly ineffective. While the Amendment purports to withhold federal funds from state and local development projects that use Kelo-style condemnations, it applies only to takings that "primarily benefit...private entities." Like Bush's executive order, it can be easily circumvented simply by claiming the project in question benefits the general public. It also specifically exempts condemnations intended to alleviate "blight." As already noted, broad blight designations are often used to legitimate what are in reality economic development takings.

In November 2005, the House of Representatives overwhelmingly approved the Private Property Rights Protection Act, a measure that would deny federal "economic development" funds to state and local governments that engage in Kelo-like takings. The bill might have been at least somewhat effective if enacted. Although its coverage extended to less than 2 percent of federal funds flowing to state and local authorities, it might have had a significant impact on jurisdictions with an unusually heavy dependence on federal economic development funds.

Unfortunately, the measure was bottled up in the Senate by Judiciary Committee Chairman Arlen Specter (R-Pa.) and eventually died there. In May of this year, the House Agriculture Committee of the new Democratic-controlled Congress approved a similar bill. Even if it passes the House, which at press time had not yet voted on the bill, its fate in the Senate is uncertain at best, since most Democratic senators had acquiesced in tabling the earlier legislation.

The Impact of Political Ignorance
Why has the Kelo backlash fallen short in so many legislatures? Some blame the developers and local politicians who benefit from condemnations. Those groups have indeed spearheaded opposition to reform. But their efforts do not by themselves explain how narrow interest groups could overcome the opposition of the vast majority of the electorate. According to the 2005 Saint Index poll, 63 percent of Americans not only opposed economic development takings but opposed them "strongly." In a 2006 Saint Index survey, 71 percent of respondents supported laws banning condemnations for "private development," and 43 percent "strongly" supported such reforms. If even 10 or 15 percent of those voters who say they "strongly" support banning economic development takings would be willing to change their votes based on the issue, they would be a voting bloc constituting about 4 percent to 7 percent of the electorate. That is more than enough to swing many close races, and is probably enough to outweigh the political influence of those developers and local officials who support sweeping eminent domain authority.

The main reason public opposition to Kelo has not had more impact on policy is probably public ignorance. It takes specialized knowledge to distinguish an effective "anti-Kelo" bill from one that is mostly for show. Most voters lack both the ability and the incentive to scrutinize such details closely. Surveys consistently show that most citizens are ignorant of even basic facts about politics and public policy, and eminent domain is unlikely to be an exception to this rule. To take one of many examples, a poll taken not long before the 2004 elections found that 70 percent of the public was unaware of the recently approved Medicare prescription drug benefit, the largest new domestic program in almost 40 years.

Developers and other interest groups, by contrast, have much greater incentive to inform themselves about the details of pending legislation. Thus, politicians can appease voters angry about Kelo by passing laws to "reverse" it, while simultaneously avoiding the ire of development interests by not giving those laws teeth. This dynamic may get stronger as the anger generated by Kelo wanes and public attention shifts to other issues.

The Referendum Exception
Political ignorance helps explain why post-Kelo reforms enacted by referendum generally have been more effective than those enacted through the legislative process. In 2006 voters in 12 states considered ballot initiatives to ban or curtail the condemnation of private property for economic development. Ten of the 12 passed, all by lopsided margins, with support ranging from 55 percent to 86 percent. The only two that failed were proposals in California and Idaho that were tied to complex and controversial "regulatory takings" reforms that might have curtailed a wide range of government actions. Even so, the California reform proposal nearly passed, losing by a narrow margin of 52 percent to 48 percent. Of the 10 initiatives that did pass, at least six (in Arizona, Florida, Louisiana, Nevada, North Dakota, and Oregon) and probably a seventh (in Michigan) are worded strongly enough to provide real protection for property owners beyond that provided by pre-existing law.

Referendum initiatives tend to be more effective than legislative reforms because they usually are drafted by activists instead of politicians. That is a tendency, not an absolute rule: Some state legislatures have enacted strong reforms. Several of these states had made little or no use of economic development takings-New Mexico, South Dakota, and Wyoming enacted very strong post-Kelo reforms despite (or perhaps because of) the fact that they had not recorded a single Kelo-like condemnation in recent years. Still, several state legislatures that passed effective reforms had made fairly extensive use of economic development takings. Notable examples include Florida (which enacted the strongest reform legislation of any state), Indiana, and Virginia.

Unlike state legislators, property rights activists do not need to appease powerful pro-condemnation interest groups. They therefore have little incentive to exploit political ignorance by passing off cosmetic legislation as meaningful reform. Of the six post-Kelo initiatives that will probably prove effective, four were drafted by property rights advocates in states where referendum questions can be put on the ballot without first being approved by the state legislature. By contrast, the three relatively ineffective new laws approved by referendum were submitted to voters by state legislatures and suffered from the same flaws as other legislative reforms. The truly meaningful difference is not so much that between referenda and ordinary legislation as that between citizen-initiated referenda and all types of reform that require legislative approval.

Political ignorance also helps explain why the backlash against eminent domain occurred when it did. Many Kelo defenders complain that the backlash is grossly excessive because the case made little change in existing precedent. In two previous decisions, Berman v. Parker (1954) and Hawaii Housing Authority v. Midkiff (1984), the Supreme Court already had ruled that the government could condemn property for almost any reason, even if the land taken was to be transferred to private parties. In the years since Berman upheld "blight" condemnations, hundreds of thousands of people have been forcibly expelled from their homes as a result of economic development and "urban renewal" takings. And in Midkiff, a unanimous Court held that the government could take property for any reason that is "rationally related to a conceivable public purpose," which can mean almost anything.

While policy makers and other experts were well aware of these facts, ordinary citizens probably were not. For most, the extensive publicity surrounding Kelo was probably the first time they realized that private property, including homes, could be condemned and transferred to other private entities just to promote "economic development."

Even if they had been aware of Berman and Midkiff, voters might not have realized that those earlier decisions gave the government a blank check to condemn virtually any property for virtually any reason. Berman upheld the condemnation of property in Washington, D.C., that was "blighted" in the layperson's sense of the word: dilapidated, dangerous, and disease-ridden. Midkiff approved a complex Hawaii land reform scheme that sought to condemn the property of a small number of wealthy landowners so it could be transferred to tenant farmers. Few ordinary citizens, even among those who remembered these cases, were likely to understand that the reasoning behind them was broad enough to justify condemnation of property for reasons that went far beyond the specific facts of the two decisions. Kelo defenders were right to claim that the decision made little change in existing precedent. But they were wrong to assume that the general public knew about and approved of the pre-Kelo status quo.

Prospects for the Future
Referenda may often be preferable to legislative reforms, but they are far from a panacea. Several of the initiatives enacted last fall are flawed, and 26 states do not permit lawmaking by referendum at all. There is also the danger that pro-condemnation forces will use the referendum process for their own purposes. The California League of Cities (CLC), a coalition of local governments seeking to preserve their power to condemn property, is trying to place an essentially meaningless eminent domain "reform" on the state's November ballot as a way of pre-empting a stronger referendum initiative sponsored by property rights advocates. The CLC initiative cleverly includes a provision stating that it would supersede any other eminent domain referendum enacted on the same day, so long as the latter gets fewer votes than the CLC proposal.

The cities' effort may well succeed, since few voters are likely to oppose the CLC-sponsored initiative; after all, on its surface it seems to provide at least some protection for property rights, a goal most voters favor. Even if that protection is insufficient, voters are unlikely to realize that the initiative will actually harm property owners rather than help them. The CLC effort offers additional evidence that at least some opponents of meaningful eminent domain reform are trying to exploit political ignorance for their advantage.

The political response to Kelo has led to some important reforms. But it has also produced many ineffective or meaningless laws. The reaction to Kelo is a striking example of a public backlash against an unpopular judicial decision. But it also shows that backlash politics has its limits.

Ilya Somin, an assistant professor of law at George Mason University, has written several pro bono amicus briefs in takings cases for the Institute for Justice, the public interest law firm that litigated the Kelo case. He also wrote an amicus brief in Kelo itself, on behalf of the late urban policy theorist Jane Jacobs. He blogs at volokh.com.