Following the closure of a federal naval center in New London, Connecticut, the City faced
significant economic challenges and eventually was designated a “distressed municipality”
by the state. The City had been hoping to entice a large pharmaceutical company (Pfizer)
to build a global research and development headquarters there. The state’s municipal
development statute authorized taking private property for economic development projects,
and the City promised to use its eminent domain power to acquire the land that would become
part of the redevelopment area to benefit Pfizer. Officials claimed the project would
benefit New London in the form of jobs, increased tax revenues, and the revitalization of economically
depressed areas.
In Kelo v. City of New London, Susette Kelo and nine other property owners (plaintiffs)
sued the city in state court, challenging the use of eminent domain for the project.
The plaintiffs argued that, because their properties were being taken for sale to private
entities, the takings were not “for public use” as required by the Fifth Amendment.
The trial court partially granted the plaintiffs’ request for an injunction. Where the City
had planned to put office space, the court found that the taking was not a valid exercise
of eminent domain; by contrast, the takings were held valid for the parcels where a park
and marina would be built. The Connecticut state court of appeals affirmed in part and
reversed in part, finding all of the takings valid. The plaintiffs appealed to the United
States Supreme Court.
This was a particularly controversial case, resulting in a highly divided Court.
Writing for the majority, Justice Stevens held that the City’s exercise of eminent
domain was proper, because it furthered a public purpose by providing new jobs and tax
revenue. While takings conferring solely private benefits for private parties are unconstitutional,
the Court had long ago rejected a narrow view of “public use.” In Berman v. Parker and
Hawaii Housing Authority v. Midkiff, the Court upheld takings of private property for transfer
to other private parties to remedy blight and avoid the dangers of “land oligopoly.”
The Court held that a state’s determinations about the benefits of a proposed redevelopment
program are entitled to great deference; courts should not scrutinize each parcel, but should
consider the redevelopment program as a whole. In the majority’s view, potential economic
benefits conferred on the public, even if not “reasonably certain,” were sufficient
to satisfy the Fifth Amendment’s public use requirement.
Justice Kennedy agreed that rational basis review was appropriate and the legislature
was entitled to deference. However, Kennedy wrote separately to say the Court should make
findings of fact to ensure that certain private entities were not unfairly benefitting from
the takings over others.
Justice O’Connor dissented, because she was troubled by the notion of property being
taken and sold to private developers. O’Connor concluded that where economic development
is the only “public use” that is offered as justification, eminent domain is unconstitutional.
Justice Thomas also dissented, finding that the majority’s ruling conflicted with the
respect that the Framers had accorded to private property rights.
The unfortunate epilogue to this case is that, even though the City won the court battle,
the Pfizer redevelopment project–along with the new jobs and tax revenues–never came
to pass. A few years after the Kelo decision, Pfizer merged with Wyeth and left its New
London facility, taking with it over a thousand jobs. The neighborhoods slated for redevelopment
are now largely vacant.
In fact, the property has been used primarily as a feral cat colony.
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