Can a city use its eminent domain power to take private property for economic development purposes without violating the "public use" requirement of the Fifth Amendment's Takings Clause?

In 2000, the city of New London, Connecticut approved a development plan to revitalize its economically struggling downtown and waterfront areas. The plan, projected to create over 1,000 jobs and increase tax revenues, was partly motivated by Pfizer Inc.'s announcement to build a $300 million research facility nearby. To implement the plan, the city's development agent purchased properties from willing sellers and sought to use eminent domain to acquire remaining properties from unwilling owners.

Nine petitioners, owning 15 properties in the development area, challenged the use of eminent domain. Among them were Susette Kelo, who had lived in her house since 1997 and made significant improvements, and Wilhelmina Dery, who was born in her Fort Trumbull house in 1918 and had lived there her entire life with her husband Charles. The properties in question were not blighted or in poor condition but were condemned solely due to their location within the development area.

Petitioners filed an action in New London Superior Court in December 2000, challenging the taking of their properties as a violation of the Fifth Amendment's "public use" restriction. The Superior Court conducted a 7-day bench trial, after which it granted a restraining order for properties in parcel 4A but denied relief for those in parcel 3. Both parties appealed this decision to the Supreme Court of Connecticut, which affirmed all of the proposed takings as valid. Subsequently, the U.S. Supreme Court granted certiorari to address whether the city's economic development plan constituted a "public use" under the Fifth Amendment.

(Stevens, J.)

Yes. A city can use its eminent domain power to take private property for economic development purposes without violating the "public use" requirement of the Fifth Amendment's Takings Clause. The concept of "public use" is coterminous with the scope of a sovereign's police powers, encompassing a broad range of governmental functions including economic development. Promoting economic development is a traditional and long-accepted function of government, indistinguishable from other public purposes previously recognized. Legislative judgments about what constitutes a valid public need justifying the use of eminent domain warrant substantial deference. Imposing a bright-line rule or heightened scrutiny for economic development takings would unduly constrain governmental ability to address evolving societal needs and would prove difficult to administer in practice. This interpretation aligns with established precedents, including Berman v. Parker and Hawaii Housing Authority v. Midkiff, which affirm a expansive understanding of "public use." The taking of private property for economic development serves a public purpose by potentially increasing tax revenues, creating jobs, and revitalizing distressed areas. These benefits extend beyond the private parties involved, contributing to the broader public good. The constitutional requirement of "just compensation" ensures that property owners are not unduly burdened by such takings. This interpretation maintains the necessary flexibility for governments to pursue comprehensive redevelopment plans aimed at economic growth and community improvement.

Concurrence (Kennedy, J.) While there may be cases where a more stringent standard of review is appropriate for economic development takings, this is not such a case. The comprehensive character of the plan, the thorough deliberation preceding its adoption, and the limited scope of our review justify deference to the legislative judgment. Future cases may require us to revisit the boundaries of the public use requirement, but the plan before us satisfies that standard.

Dissent (O'Connor, J.) Today's decision effectively deletes the words "for public use" from the Takings Clause of the Fifth Amendment. We abandon a long-held, basic limitation on government power, allowing private property to be taken for the benefit of other private parties. This decision eliminates any distinction between private and public use of property, and thereby refuses to enforce properly the Federal Constitution's constraints on government. The specter of condemnation now hangs over all property. 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.

Dissent (Thomas, J.) We must return to the original meaning of the Public Use Clause. The Clause allows the government to take property only if the government owns, or the public has a legal right to use, the property. The Court has strayed from the Clause's original meaning, and today's decision only exacerbates this error. This decision is a far cry from the Constitution's limitations on government power. If such economic development takings are for a "public use," any taking is, and the Public Use Clause imposes no constraint on government at all.