Supreme Court Strikes Major Blow to Property Rights

by on June 23, 2005 · 12 comments

I know everyone in the high-tech world is waiting for the Grokster and Brand X decisions to be handed down but, in my opinion, the most important decision of this Supreme Court term was handed down today in the property rights / eminent domain case of Kelo v. New London. The result was an unmitigated disaster for property rights.

The 5-4 decision (which went the wrong way thanks to Justice Kennedy) basically said that under the banner of “economic development,” the State may take private property whenever it wishes. This is a disastrous result for small land owners in particular since they will no longer have any reasonable protection from local governments who seek to re-zone certain communities to appease various special interests. But I should also point out that this decision, the third bad decision for property rights this term, could also come back to haunt communications and media companies, and others in the high-tech sector. That’s because this Court has just made it infinitely easier for the State to use various “public use” rationales for taking property of any variety. We’ve spent that last decade fighting about the rights of telecom and cable companies in the battle over forced access, and decisions like Kelo won’t make it any easier for those companies to defend the property right they are entitled to in the networks they develop.

Anyway, I could go on at length about what a disaster this decision is, but I will instead just cut-and-paste some of the remarkably powerful wording that Justice O’Connor used in her dissent, which was joined by Chief Justice Rehnquist, Justice Scalia, and Justice Thomas. At least these four justices still appreciate the importance of the Constitution, the Fifth Amendment, and property rights.


From O’Connor dissenting statement in Kelo:
> “Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded, i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public in the process.” (p. 1, dissenting statement)

> “In moving away from our decisions sanctioning the condemnation of harmful property use, the Court today significantly expands the meaning of public use. It holds that the sovereign may take private property currently put to ordinary private use, and give it over for new, ordinary private use, so long as the new use is predicted to generate some secondary benefit for the public, such as increased tax revenue, more jobs, maybe even aesthetic pleasure. But nearly any lawful use of real private property can be said to generate some incidental benefit to the public. Thus, if predicted (or even guaranteed) positive side-effects are enough to render transfer from one private party to another constitutional, then the words for public use do not realistically exclude any takings, and thus do not exert any constraint on the eminent domain power.” (p. 8-9, dissenting statement)

“The specter of condemnation 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.”
(p. 10-11, dissenting statement)

  • trumpit

    The majority apparently was concerned with a bunch of stick-in-the-mud old fogey homeowners holding up COMMUNITY development/improvements. I say chase them out of their cruddy abodes with a blowtorch if necessary. How can someone with blog named ‘Technology Liberation Front’ be so in favor of blocking progress. Or are your views so narrow that only private interests can promote “progress” and government never should? But then you argue that special interests will rule the roost by exerting control over government to do its bidding. Since when don’t you like that? In another comment you argue in favor of a monopolistic company like Microsoft over free and fair competitions. Your arguments are so full of paradoxes and contradictions and personal attacks on the jurists involved in the decisions that you make little sense. I don’t blame you for quoting Justice O’Connor; I doubt you’ve ever had an original thought in your entire life.

  • trumpit

    The majority apparently was concerned with a bunch of stick-in-the-mud old fogey homeowners holding up COMMUNITY development/improvements. I say chase them out of their cruddy abodes with a blowtorch if necessary. How can someone with blog named ‘Technology Liberation Front’ be so in favor of blocking progress. Or are your views so narrow that only private interests can promote “progress” and government never should? But then you argue that special interests will rule the roost by exerting control over government to do its bidding. Since when don’t you like that? In another comment you argue in favor of a monopolistic company like Microsoft over free and fair competitions. Your arguments are so full of paradoxes and contradictions and personal attacks on the jurists involved in the decisions that you make little sense. I don’t blame you for quoting Justice O’Connor; I doubt you’ve ever had an original thought in your entire life.

  • Walter E. Wallis

    Pay them off at the new value that justified taking their property, not the old value if they were let alone.

  • Walter E. Wallis

    Pay them off at the new value that justified taking their property, not the old value if they were let alone.

  • http://wanderjahrmusic.com Sam Rose

    Aw, come on, trumpit. You must to be smarter than that. This isn’t about blocking “COMMUNITY progress”. It is about making it easier for people with huge amounts of money to do whatver they want.

    The constitution was made by people trying to escape the hegemony of others with more power and money than themselves. They set up property rights so that people could not be slowly backed into surfdom due to human greed. Property rights of individuals is “COMMUNITY progress” over tyranny. The supreme court ruling opens the door to destroy progress that was made over 200 years ago. The supreme court ruling is regression, NOT progress. End of story.

    Thankfully, in my own state of Michigan, our constitution specifically bans what the supreme court just ruled if allowed. And, the supreme court ruling says that State laws still trump their ruling. Other states and city governments would do well to totally ban the practive of allowing state and municipal governments to seize property on behalf of commercial developers.

  • http://wanderjahrmusic.com Sam Rose

    Aw, come on, trumpit. You must to be smarter than that. This isn’t about blocking “COMMUNITY progress”. It is about making it easier for people with huge amounts of money to do whatver they want.

    The constitution was made by people trying to escape the hegemony of others with more power and money than themselves. They set up property rights so that people could not be slowly backed into surfdom due to human greed. Property rights of individuals is “COMMUNITY progress” over tyranny. The supreme court ruling opens the door to destroy progress that was made over 200 years ago. The supreme court ruling is regression, NOT progress. End of story.

    Thankfully, in my own state of Michigan, our constitution specifically bans what the supreme court just ruled if allowed. And, the supreme court ruling says that State laws still trump their ruling. Other states and city governments would do well to totally ban the practive of allowing state and municipal governments to seize property on behalf of commercial developers.

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