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Eminent Domain Ruling: Justices Uphold Taking Property for Private Development

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The Supreme Court ruled 5-4 Thursday that cities may seize and demolish private homes–even in non-blighted areas — to make way for shopping malls and other private development. We host a debate with the attorney who argued the case before the Supreme Court on behalf of the homeowners and a spokesperson for the association of cities and towns in the Connecticut. [includes rush transcript]

We turn now to a major ruling by the Supreme Court on property rights. A split court ruled 5-4 Thursday that cities may seize and demolish private homes–even in non-blighted areas — to make way for shopping malls and other private development.

Writing for the majority Justice John Paul Stevens wrote “Promoting economic development is a traditional and long accepted function of government.”

But Justice Sandra Day O’Connor wrote a scathing dissent saying, “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner. 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.”

Joining O’Connor in opposing the ruling were Chief Justice William Rehnquist, Antonin Scalia and Clarence Thomas.

The decision cleared the way for the city of New London, Connecticut, to proceed with a large-scale plan to replace a faded residential neighborhood with office space for research and development., a conference hotel, new residences and a pedestrian “riverwalk” along the Thames River.

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We are joined now by Scott Bullock, senior attorney at the Institute for Justice in Washington, D.C. He argued the case before the Supreme Court on behalf of New London homeowners. On the phone with us from Connecticut, Kevin Maloney, spokesperson for the Connecticut Conference of Municipalities. Well, let’s go to Scott Bullock first. Your response to the Supreme Court decision?

SCOTT BULLOCK: Well, I thought it was absolutely outrageous. And it is really a sad day for America when a very narrow majority of the Connecticut — of the U.S. Supreme Court allows for this type of condemnation to take place, not just in Connecticut, but now paves the way for this to go on throughout the country. The good news about this, though, is that this has awakened a firestorm of controversy in the United States. People are furious about this, and the anger comes from across the political spectrum. This isn’t a left or right issue or anything like that. A vast majority of Americans are opposed to these types of takings, so we now hope to tap into that energy and that momentum to change the law to do litigation in state supreme courts that have their own state constitutions, and really prevent these types of private takings from going on in the future. That’s the good that can come out of an appalling Supreme Court decision.

AMY GOODMAN: Well, let’s get the response from Kevin Maloney, spokesperson for the Connecticut Conference of Municipalities, who won in this case.

KEVIN MALONEY: Well, I think you have to look at it from the perspective of a poor city. New London is a small city geographically. And back in the 1990s it was designated what is called a distressed municipality in Connecticut, which is another word for saying a very poor town. The notion of trying to use eminent domain to bring about job growth and tax revenue growth to a sort of cash-starved city in southeastern Connecticut was upheld at the local trial court level, was upheld by the Connecticut Supreme Court, and most recently was upheld bit U.S. Supreme Court. The use of eminent domain in New London to renovate the harbor area, such as was described earlier, is estimated to bring about 2,300 jobs to unemployed residents in New London, as well as generate over $1 million in tax revenue.

I think it’s important to note that the ruling by the Supreme Court does not expand the power of eminent domain. It simply affirms the continuation of the current use of the power. And it’s important to note that the ruling does not supersede state laws or constitutions in other states, that Justice Stevens wrote that nothing in the opinion precludes any state from placing further restrictions on the exercise of eminent domain. It was deemed to be a proper use of eminent domain in Connecticut. There’s no doubt that the opinion is going to send a strong signal that eminent domain, when applied properly, is a useful economic development tool. The Connecticut Supreme Court unanimously 15 months ago agreed that enhancing employment and tax revenue in a poor municipality satisfies the (quote/unquote) “public use provision of eminent domain.” I think —

AMY GOODMAN: Let me get Scott Bullock’s response.

SCOTT BULLOCK: Well, the first response is that the Supreme Court in no way limited its ruling to so-called poor or distressed municipalities. And the law that was at issue in Connecticut is not limited to poor and distressed municipalities like that in New London. It can literally apply to every property within the State of Connecticut. And that is why Justice O’Connor’s very powerful dissent is absolutely correct. This does mean that in America, neighborhoods can be taken for lifestyle centers, that farms can be turned into factories, church property can be given to Costco. That was attempted twice in the State of California in the past few years.

This decision is in no way limited to just struggling communities like New London, and that’s why it is such a dangerous precedent. I think that’s why it has really awakened the American people in the idea that, 'hey, my home, my small business, my land, could be next.' And he is right that state supreme courts actually can now limit eminent domain. I think you are going to see a lot of litigation. Thankfully, most state supreme courts have not ruled on this issue. But for the people that have the misfortune now of living in the State of Connecticut, it can be applied to any community within that state. That’s why there are calls within the State of Connecticut to change the eminent domain laws in that state. Hopefully, that will gain momentum, because I think people now realize the danger that they’re living under by the threat of eminent domain.

KEVIN MALONEY: Let me just respond a little bit.

AMY GOODMAN: Kevin Maloney.

KEVIN MALONEY: I would agree in a sense that cities are now under the spotlight when it comes to eminent domain with the notion that, you know, they better do it right or it won’t be allowed to be put in place. I think the notion that, you know, every homeowner across Connecticut and across the nation should now fear of their —- potentially their home being taken is, you know, obviously, a great exaggeration and doesn’t really reflect the reality -—

SCOTT BULLOCK: Not according to Justice O’Connor.

KEVIN MALONEY: The University of Connecticut Law Professor who has expertise in this area, Jeremy Paul, sort of scoffed at these predictions of dire consequences, saying the average homeowner has about as much chance of a home being taken by eminent domain as you do being struck by lightning on a golf course. And those are his words.

SCOTT BULLOCK: Well, that’s nice for the professor to say that. I hope home and small business owners take comfort knowing that. I’m sure the professor’s neighborhood will never be targeted. There’s a reason why the wealthiest neighborhoods in a particular community are never targeted for eminent domain, because there would be huge political consequences as a result of that decision.

Any home or small business would create more tax revenue if it were a Wal-Mart or if it were a shopping plaza. Any larger business could potentially create more tax revenue than a smaller business. And the government would be very — it would be very easy for the government to come up with a plan that said that these new projects would create more tax revenue. That’s the danger of this decision. It does clear the way for doing these types of projects. And the response to this is that people have to unite. People have to fight back against this decision, and I think the extreme nature of the decision and the opening up of the doors to the potential for this abuse and, as a matter of fact, the abuse is already happening throughout the country. A number of cities were looking at the Supreme Court decision to see whether or not they can go forward with their development projects, have now been essentially given a green light by the Supreme Court to do so.

AMY GOODMAN: Like which ones?

SCOTT BULLOCK: You’re going to see a number — Well, for instance, a city within Texas now is going to go after some properties along the coast in Freeport in order to build an upscale marina as a result of this decision. There’s a community in Long Branch, New Jersey, that — it’s a community of small beachfront bungalows that people have been living there a long time. They want to use eminent domain to take these working class people that have worked so hard — homes — worked so hard to have them in order to give to a private developer to put in million dollar condominiums along the shore. Just a blatant example of taking from poor residents to give to wealthier residents in the hope that these wealthier residents will produce more tax revenue for the community. So this has the potential to really change things within the country, but again, I think because people have been awakened by this decision, people can’t believe that this can actually happen in America, hopefully you will see enough activism, enough outrage about this to change the laws to hopefully fight for this in state courts. And we plan on mobilizing this energy now in doing litigation, doing outreach efforts to try to put a stop to this in New Jersey, Texas, Connecticut, and throughout the country.

AMY GOODMAN: Kevin Maloney, final word.

KEVIN MALONEY: Okay. I appreciate that. Eminent domain is indispensable and is most often used only as a last resort for revitalizing local economies, creating jobs, generating revenue that enables cities to provide essential services. And I have to reinforce, in spite of statements to the contrary, that the law of eminent domain is particular to each state. Again, Justice Stevens wrote that nothing in the opinion precludes any state from placing further restrictions on the exercise of eminent domain.

Trying to whip up people with false statements and exaggerated statements is really not contributing to the public policy debate. Eminent domain is used very carefully. It will continue to be used carefully. It is debated among the citizenry within a community, and if it goes through the legislative process with proper public input, it’s brought about such things as the Inner development Harbor in Baltimore. It’s brought about key developments in Kansas City and in Mississippi. It has been used effectively. It has been used cautiously. It was upheld at the trial courts, the State Supreme Court in Connecticut and now the U.S. Supreme Court, but no one is giving it a full license just to run roughshod over people and properties. That is simply a wild exaggeration

AMY GOODMAN: Ten seconds: Scott Bullock, do all your clients have to move out now?

SCOTT BULLOCK: We are going to fight very hard to keep them there. We’re going to have a rally in New London on July 5 before the City Council meeting to keep these American heroes in their homes, and we’re going to do everything in our power to make sure they stay there.

AMY GOODMAN: Scott Bullock, senior attorney at the Institute for Justice in Washington, and Kevin Maloney, spokesperson for the Connecticut Conference of Municipalities.

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