Kelo Decision Provokes "Firestorm of Outrage"

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Kelo Decision Provokes "Firestorm of Outrage"

by Ari Armstrong, October 14, 2005

The Supreme Court's Kelo decision, which gave approval for private developers to bulldoze people's homes and replace them with a hotel and more expensive housing, has provoked a "firestorm of outrage," attorney Clark Neily said during an October 11 debate. IJ represented Susette Kelo and other property owners. Neily, a senior attorney with the nonprofit Institute for Justice (IJ), squared off against Malcolm Murray, a Colorado lawyer who works in eminent domain, at the University of Denver law school. The Federalist Society sponsored the debate. (Neily is shown at left; Murray below.)

IJ reports that local officials backed down regarding the property involving Kelo, yet the Court's ruling and practices in states around the nation cut at the heart of what it means to be an American citizen, Neily argued.

Kelo "is an outrageous decision" for three main reasons, Neily argued. First, it violates the Constitution. The Fifth Amendment of the Bill of Rights states, "...nor shall private property be taken for public use without just compensation." Second, the decision is "disrespectful to basic American values." Neily speculated that, if King George had practiced the sort of eminent domain currently practiced by local governments across the nation, Thomas Jefferson would have counted it among the "long train of abuses" detailed in the Declaration of Independence. Third, the factual premise behind the decision is false. The granting of broad powers of eminent domain "presumes that local governments will be responsible." However, Neily said, that presumption "could not be more wrong as an empirical matter."

Neily offered additional details about the affected property in New London, Connecticut. He said Pfizer, Inc. played a "extensive" role in promoting eminent domain there. One advocate of the property transfer explicitly said the goal was to get a "higher class of people" in the area. Neily said, "They wanted our clients out, wealthier people in."

"Of course it's not a public use," Neily added. He said that the strict interpretation of "public use" has been replaced with a much broader notion of "public benefit," resulting in a system that is "antithetical to our values as Americans."

Murray, who has represented the state highway department and various cities in eminent-domain cases, offered a different perspective. He said most of his work is from an "urban renewal standpoint."

Murray said that, had Kelo been decided the other way, it probably wouldn't have changed practices in Colorado. Neily granted that Colorado is one of the better states when it comes to protecting property rights, but he said instances of abuse have still occurred. State legislators are already looking at ways to limit eminent domain.

Murray pointed out that the state Supreme Court ruled against Arvada when the city tried to re-designate a plot of land as "blighted" in order to forcibly transfer the land.

Murray also cautioned against making policy based on non-representative, sympathetic clients. We "need to look at the principles involved" and "take some of the emotion out of this argument," he said. He granted that some abuses have taken place, but they are "few and far between."

Then Neily and Murray got into a debate over fundamental theories of Constitutional interpretation and good governance, a debate that extended into the question period.

Murray said, "The Constitution needs to be a living document... things have changed," and today we face different issues. We "have to look at it in terms of current needs, current demands in our society," he said. By way of analogy, he noted that Islam is struggling to take laws that are hundreds of years old and "adapt the strictures of the Koran to modern life." The Constitution is a document "written for a different time," Murray argued.

A member of the audience asked Murray whether the Founders would have agreed with his position. He responded bluntly: "I don't care whether the founders would have agreed with me or not." While we have to start with the Constitution, we also need to adapt it to modern life, he added.

Furthermore, we should have "faith in the political process and democracy," Murray said. "We should trust in democracy" and defer to it. The decisions in New London, for instance, involved an "extensive community process." Murray said that, unlike China, "we have a functioning democracy in this country... put some faith in this process."

Murray also questioned Neily's interpretation of the Fifth Amendment. He said that, for instance, transferring land for railroads already moves beyond a strict "use by the public." Thus, public use means more than simply government ownership of land.

Neily pointed out that the First Amendment receives much more robust protection by the courts. He granted that there's no bright line and that the Constitution must be interpreted pragmatically, but replacing private homes with hotels and higher-end homes clearly crosses the line. Interpreting the Constitution doesn't mean un-writing it, he said.

While I regard Murray's Constitutional theory as completely wrong, I was not entirely satisfied with Neily's arguments, either. Obviously, rights are not always easy to define and enforce. However, I fear Neily is straying from the very concept of legal principles with his explicitly pragmatic approach. By way of pointing out the non-absolutism of the First Amendment, Neily invoked the classic "you can't yell fire in a crowded theater" line. However, as I have argued, I don't think the fact that rights are nuanced implies that rights must be subjected to pragmatic, unprincipled interpretation.

As I had recently read Judge Posner's comments about eminent domain, I challenged Murray on his notion of "just compensation." Murray argued that the sole issue is a property's market value, and emotional attachments to a property are supposed to be disregarded.

However, Posner writes, "If I refuse to sell for less than $250,000 a house that no one else would pay more than $100,000 for, it does not follow that I am irrational... It follows only that I value the house more than other people. This extra value has the same status in economic analysis as any other value."

In other words, the actual market value is represented by the price at which the owner agrees to sell the property.

I noted that Allan Hale, another local attorney, suggested removing the power of eminent domain from urban renewal altogether. I argued that, if a property truly is blighted, then it is by definition of lower value than some alternative value. So why not simply allow developers to buy property on the open market?

Murray responded that, on the open market, the price would exceed what developers would pay. But if developers are not willing to pay for blighted property, then obviously the development is not of sufficiently high economic value to proceed. (This point is less obvious when very large tracts of property and continuous structures like railroads are involved.) In addition, so long as the power of eminent development is available, developers will posture and pretend that they can only afford a property if the local government helps steal it for them. That such posturing is taken by city officials as a legitimate pretext to violate fundamental human rights is quite contemptible.

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