Supreme Court Considers Hearing Challenge to Eminent Domain Decision

The U.S. Supreme Court is set to review on February 21 whether to take up a challenge to its contentious 20-year-old decision that affirmed eminent domain authority to appropriate private property for private economic purposes.

This new case was initiated by a development company that had its property taken by a local development agency and handed over to a competitor planning to convert the land into a parking facility. Eminent domain refers to the government’s power to seize private property for public use, with the stipulation that the owner receives just compensation.

Historically, “public use” referred to projects that the community directly utilizes, such as schools or roads, but the court broadened the definition to permit local governments to seize private property for economic development and transfer it to private entities if such actions were believed to serve the public interest.

In the 2005 decision, the Supreme Court declined to question the city of New London, Connecticut’s decision to appropriate 15 properties, including the residence of lead petitioner Susette Kelo, and transfer them to a private developer whose projected plans for the site were expected to generate jobs and increase tax revenue.

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Justice John Paul Stevens, writing for the majority, dismissed the suggestion from property owners that the court should “adopt a new bright-line rule that economic development does not qualify as a public use.”

“Enhancing economic development is a longstanding and widely accepted responsibility of government. … There is clearly no rationale for excluding economic development from our traditionally expansive definition of public purpose.”

Justice Sandra Day O’Connor addressed the dissent, asserting that the ruling effectively grants “the government the freedom to transfer property from individuals with fewer resources to those with more.”

“The beneficiaries are likely to be those individuals with disproportionate sway and authority in the political arena, including large corporations and development firms.”

Co-respondent Central Utica Building LLC was building a different medical office nearby and sought to use the contested land as a parking lot adjacent to its planned facility. In October 2021, Central Utica requested the Oneida County Industrial Development Agency to take the property.

The agency believed that Central Utica’s proposed use of the land would economically benefit the locality and consented to appropriate the property to transfer it to Central Utica, according to the petition.

The Appellate Division of the Supreme Court of New York determined that the appropriation for a health care-related purpose fell outside the agency’s statutory powers to take property for commercial ends. Condemnation is the procedure by which a government appropriates private property for public benefit.

The New York Court of Appeals reversed this ruling, declaring the appropriation valid because “a parking facility utilized by clients of a for-profit enterprise evidently serves a ‘commercial’ objective.”

The court returned the matter to the Appellate Division to address the petitioner’s further arguments, including whether constructing “a parking facility utilized by patrons of a profit-making entity” qualifies as public use under the … Public Use Clause, the petition stated.

Building a parking facility for a private office was “rationally connected to a conceivable public purpose” like “alleviating parking and traffic issues.”

Have Courts Misinterpreted Kelo?

Bowers Development asserted in its petition that the Supreme Court ought to reverse Kelo, a decision that numerous states have repudiated by changing their constitutions while several state supreme courts have ruled it “both unjust and unadministrable, erasing an enumerated right from the Constitution.”

Furthermore, the Kelo ruling did not sanction “pretextual private-to-private takings,” according to the petition. The term pretextual refers to the use of dubious reasoning to rationalize an action or decision.

The petition contends that Kelo emphasized the necessity for “meticulous public planning and the absence of a specified private beneficiary,” yet New York’s courts “neglect Kelo’s prerequisites, asserting that any private-to-private transfer meets constitutional standards as long as the condemnor can propose some theoretical public advantage.”

In both federal and state courts in New York, “it is of no consequence that a taking was prompted by a single private beneficiary or that it occurs outside a comprehensive, government-directed development initiative.”

The agency contended that its utilization of eminent domain to claim land for a public parking facility constituted a legitimate public purpose, according to the brief.

The parking lot is integral to the development plan for the Integrated Health Campus (IHC) located in downtown Utica, New York.

Since the lot is “accessible to the public because it is used by patients and staff of the IHC during operational hours, along with being available to the wider community on evenings and weekends,” the situation “does not pose the same issue that was before the Court in Kelo.”

Additionally, Bowers Development lacks standing, as it is “a speculator that never owned the condemned property,” the brief stated.

“Standing” refers to the legal right of an individual to initiate a lawsuit. It requires that the parties demonstrate a sufficiently strong connection to the claim to warrant their involvement in the case.

The agency’s attorney, Paul Goldman of Goldman Attorneys in Albany, New York, opted not to comment, stating to The Epoch Times that the joint brief is self-explanatory.

Central Utica’s attorney, Amy Habib Rittling of Lippes Mathias in Buffalo, New York, also refrained from commenting.

The Epoch Times reached out for commentary from Bowers Development’s legal representatives, Robert McNamara and Andrew Ward at the Institute for Justice in Arlington, Virginia, but did not receive a response by the time of publication.