The question before the Supreme Court in Kelo v. City of New London was whether New London acted constitutionally when it permitted a private development corporation to use eminent domain to condemn petitioners’ homes as part of a large-scale, largely private development. New London asserted on the basis of vague projections that the development would increase jobs and tax revenues. On this basis, New London had prevailed in the Connecticut Supreme Court. In the U.S. Supreme Court, petitioners argued that New London’s taking of their homes for the purpose of private development violated the Fifth Amendment’s requirement that private property may only be taken for a “public use.”
NELF filed an amicus brief supporting petitioners on behalf of itself and two New London citizens’ groups that had proposed alternative development plans which didn’t require destruction of petitioners’ homes. NELF argued, first, that the taking was not for a “public use” under the Fifth Amendment, since the property was going to be privately developed, principally for private or undetermined uses. NELF noted that the Supreme Court had only permitted the taking of property for private development under exigent circumstances not present in this case (such as the redevelopment of a blighted urban area that was a threat to public health and safety). For these reasons NELF argued that the Fifth Amendment’s requirements were not satisfied and the development corporation could not take petitioners’ homes.
In a 5-4 decision issued on June 23, 2005, the Supreme Court majority disagreed, holding that New London’s justification satisfied the “public use” requirement because it was part of a comprehensive economic development plan adopted by the city government to benefit the community as a whole, which the Supreme Court would not second-guess. In so deciding, as Justice Kennedy states in his concurring opinion, the majority has established a rational basis test for “public use” under the Fifth Amendment: if the taking is rationally related to a duly adopted plan for beneficial economic development, it will satisfy the Fifth Amendment. Justice O’Connor’s vigorous dissent (joined by Justices Rehnquist, Scalia and Thomas) echoed each of NELF’s concerns in pointing out the errors of the majority’s approach, which in effect reads the “public use” requirement out of the Fifth Amendment. She predicted (as did Justice Thomas in a separate dissent) that property owners without political influence (as in this case) or in economically disadvantaged communities would suffer most from the Court’s ruling, which arguably removes any constitutional obstacle to redevelopment of such areas so long as the government asserts a plausible common good. A public outcry followed the Court’s ruling and NELF submitted a motion in support of Kelo’s petition for rehearing. The Supreme Court denied the petition for rehearing, but adverse public reaction to the decision has resulted in proposals for legislative nullification in many jurisdictions on the state and local level. Absent such measures, the Court’s decision means that small businesses and individuals will have a harder time challenging municipalities and developers that push for a free hand in remaking existing communities. The focus of any future constitutional challenge to such activities will now be limited to the second requirement of the Fifth Amendment’s Takings Clause, whether the property owner has received “just compensation.”