Wednesday, February 23, 2005

Top court hears eminent plea: Leave us our homes

With defiant homeowners looking on, Supreme Court justices grappled Tuesday with whether a local government can condemn a person's home or business so the land can be redeveloped for more lucrative uses.

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The controversial case pits the rights of property owners against the efforts of government officials to revitalize depressed communities, and the justices in hourlong arguments appeared divided on which side of the issue they fall.

Their decision could have far-ranging implications and, reflecting the high stakes, the courtroom was packed with lawyers and government officials, as well as the group of homeowners from New London, Conn., who are at the heart of the case.

Lawyers for the homeowners say the case is the most important property rights dispute to reach the court in 50 years, because it could limit the government's ability to condemn property for economic redevelopment under its power of eminent domain.

Governments have relied on that power to condemn land for traditional public uses, such as railways, roads, public utilities, schools, waste treatment plants and the like. But they also have used condemnation powers to assemble large parcels of land for redevelopment--be it for an automobile manufacturing plant or a speedway or a baseball stadium.

A lawyer for New London argued that state and local governments should be able to condemn property if its redevelopment would substantially enrich the public coffers, even if the property were not blighted or neglected.

The justices quickly jumped in with questions.

Justice Sandra Day O'Connor (news - web sites) asked a lawyer for New London, "For example, a Motel 6. The city thinks it should have a Ritz-Carlton, [to] have higher taxes. Is that OK?"

"Yes, Justice O'Connor, that's OK," attorney Wesley Horton said.

"You can take from A and give it to B, if B pays more in taxes?" a dubious Justice Antonin Scalia (news - web sites) asked.

"If it's a significant amount," Horton said.

But a lawyer for the homeowners argued that state and local governments need a better reason than that. He said the governments have gone too far under the Constitution's 5th Amendment.

The 5th Amendment provides that no private property shall be "taken for public use, without just compensation." At issue is whether New London's proposed private economic redevelopment, designed to add jobs and increase tax revenue, amounts to a "public use" that would permit government officials to take a person's property after paying its fair value.

The case came about in 1998 when the city of New London approved a redevelopment plan for 90 acres of land next to a new Pfizer Inc. pharmaceutical research facility. The city, looking to create jobs and expand its tax base, planned for hotel, housing and office developments, as well as open space, on the land.

To put its plan in motion, the city created a development corporation to buy the necessary plots from homeowners and gave the corporation the power to condemn land and force homeowners to sell. The corporation then was to lease the land to a private developer for $1 a year for 99 years.

But some homeowners, including one woman who has lived in her home since her birth in 1918, put up a fight and challenged the city's right to acquire their land. They argued that governments could condemn land only for more obvious public uses--such as for utilities, new roads, schools or firehouses--not for private redevelopment.

"Eminent domain power is broad, but there are limits," attorney Scott Bullock, representing the homeowners, told the justices.

He said that if New London prevails in its efforts to condemn the houses and turn the neighborhood into an office park, government officials could take a person's property whenever they identified a more lucrative use that would expand the tax base.

"Every home, church or corner store would produce more tax revenue and jobs if it were a Costco or a shopping mall," said Bullock, a senior lawyer at the Washington-based Institute for Justice, the libertarian group that has led the fight against the use of eminent domain.

Several justices appeared skeptical of that argument, although the ultimate decision was difficult to gauge. Chief Justice William Rehnquist (news - web sites), who is suffering from thyroid cancer, was absent, as was Justice John Paul Stevens (news - web sites).

O'Connor, as the most senior justice on the bench, took the helm Tuesday. She said Stevens, who divides his time between Washington and Florida, was stranded by a canceled flight back to Washington, but that he and Rehnquist would read transcripts and participate in the decision in the case.

Of the justices who asked questions, Justices Ruth Bader Ginsburg (news - web sites) and David Souter (news - web sites) appeared most sympathetic to New London's position.

"You're leaving out that New London was in a depressed economic condition," Ginsburg told Bullock. "The critical fact, on the city's side, at least, is this was a depressed community, and it wanted to build it up to get more jobs."

Souter also pressed Bullock throughout his argument, suggesting that the redevelopment amounted to a legitimate public purpose because it would boost the struggling city's future.

But Scalia provided a strong counter argument to Souter. He made clear he agreed with Bullock and believed that New London had gone too far.

"What this lady wants is not more money. No amount of money could satisfy her. She lived in this house her whole life," said Scalia, speaking about 86-year-old Wilhelmina Dery, one of the residents.

She and the other homeowners, including Susette Kelo, see no reason they should sell simply for private redevelopment, Scalia said.

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