The Kelo Debacle Turns 10

Marking today's 10th anniversary of the Supreme Court's notorious decision in Kelo v. City of New London.

Ten years ago today, the U.S. Supreme Court issued one of the most destructive and appalling decisions of the modern era. In Kelo v. City of New London, a 5-4 majority allowed a local government to bulldoze a working-class neighborhood so that private developers would have a blank slate on which to build a luxury hotel, a conference center, and various other upscale amenities. The city's goal was to erase that existing community and replace it with a new commercial district that would (hopefully) fill the local coffers with more abundant tax dollars. According to the Supreme Court, this unsavory land grab qualified as a legitimate use of the city's eminent domain powers because the city "has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community."

Never mind the fact that the Fifth Amendment to the U.S. Constitution forbids the government from taking private property via eminent domain for anything less than a legitimate "public use." Traditionally, the concept of public use has been understood to apply to things like roads, bridges, or tunnels—not to fancy hotels operated on a for-profit basis by private businesses. But that public-private distinction was lost in the eyes of the Court. "The disposition of this case," declared the majority opinion of Justice John Paul Stevens, "turns on the question whether the City's development plan serves a 'public purpose.' Without exception," Stevens asserted, "our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field."

According to Stevens, what really mattered was that city officials had a plan and that they firmly believed their plan was in the city's best interests. The only task remaining for the Supreme Court, Stevens maintained, was to grant those government officials "broad latitude in determining what public needs justify the use of the takings power." In other words, the city of New London was permitted to define—and to enlarge—the scope of its own eminent domain powers, unencumbered by any pesky interference from the courts.

Writing in dissent, Justice Sandra Day O'Connor observed that under the Court's dangerous rationale, "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."

O'Connor was right to worry. In the aftermath of Kelo, New York officials took a page from New London and proceeded to tear down homes and businesses in order to make way for a professional basketball arena in Brooklyn, and then those same state officials snatched more homes and businesses in Harlem to provide extra campus space for Columbia University, an elite private institution that can surely afford to handle its own real estate deals on the open market.

To make matters worse, New York's highest court followed the deferential Kelo standard and rubber-stamped the state's misdeeds in both cases. "Any such limitation upon the sovereign power of eminent domain as it has come to be defined in the urban renewal context," New York's high court ruled in the Brooklyn arena case, "is a matter for the Legislature, not the courts."

Unsurprisingly, Kelo has sparked outrage and disbelief across the political spectrum. Kelo is "the most un-American thing that can be done," declared Democratic Rep. Maxine Waters of California, an outspoken liberal, a few days after the ruling was announced. Conservative talk radio host Rush Limbaugh, normally one of Waters' ideological opponents, had a similar reaction. "Government can kick the little guy out of his or her homes and sell those [homes] to a big developer," Limbaugh complained. "That's not what the takings clause was about…. It's just been bastardized."

To be sure, the Supreme Court has issued plenty of controversial decisions in recent decades. But those controversies have tended to divide Americans along ideological or partisan lines. For example, conservatives tend to be the ones upset about Roe v. Wade, while liberals tend to be the ones upset about Citizens United. Kelo has the unique distinction of uniting all sorts of different people against the Court's truly abysmal judgment.

Looking back over the past 10 years, it's clear that Kelo was a disaster on virtually every level.

In the wake of the Court's decision, the final holdouts in New London were given the boot and the bulldozers rolled in, leveling the neighborhood. But then nothing else happened. The redevelopment scheme fell apart and the project died. If you visit New London today, you'll find that the razed neighborhood still stands empty, a depressing monument to the folly of "expert" government planning.

As for Justice John Paul Stevens, he remains unrepentant about his central role in the Kelo debacle. In fact, in a 2011 speech, Stevens lashed out at several of his critics (including me), arguing that Kelo remains perfectly justifiable because it "adhered to the doctrine of judicial restraint" and was rooted in "Justice Oliver Wendell Holmes' broad reading of the text of the Constitution—which allows the states the same broad discretion in making takings decisions that they possess when engaging in other forms of economic regulation."

But why should the Supreme Court adhere to Justice Holmes' toxic interpretation? Why not just follow the actual text of the Constitution? After all, Holmes is the same justice who once wrote, "a law should be called good if it reflects the will of the dominant forces of the community, even if it will take us to hell."

In other words, under Holmes' "broad reading," it is acceptable for the majority to run roughshod over the minority—and the judiciary has no business standing in the way. So much for protecting the rights of unpopular groups.

In short, Kelo was wrong the day it was decided 10 years ago today and it has only gotten more rancid with age. If any modern case deserves to be overruled by a future Court, Kelo is it.