Kelo v. City of New London

Though we mentioned Kelo v. City of New London in our last class discussion, I wanted to draw some more attention to this landmark Supreme Court Case. Knowing the current state of property rights in our own country is important to the discussion we will have in class on Thursday. As Wolf remarks, "We know there are some things states must do -- protect property rights. This is a 'must have' if there is to be a sophisticated market economy" (67). After studying the Kelo v. City of New London case in a Constitutional Law class last year, I would argue that the Supreme Court's ruling in this case severly dismantles the private property protection that the founders originally established in the Constitution. The following is a paper that I wrote for my Con Law class about this case.

The Destruction of Private Property Rights:

Public Use v. Public Purpose

 

The conflict between the private interest in protecting property rights and the public interest in the general welfare of society is not new or unique to America. In many societies, the interest in the general welfare is so compelling that it has encroached on property rights in the form of socialism or communism. However, because America’s founding fathers believed that private property rights were fundamental to a capitalistic society, they virulently defended them against anything—including personal liberty—that could impinge. The framers of the Constitution, many of whom were philosophically opposed to slavery because of their belief in personal liberty, did not prohibit the institution of slavery in the Constitution because they sought to protect the “property” of slaveholders.[1] The founder’s reverence for private property is communicated in the strict provisions of the Fifth Amendment, stipulating that “private property [shall not] be taken for public use, without just compensation.” By expanding the Fifth Amendment’s Takings Clause to constitutionally justify governmental taking of private property for a public purpose in Kelo v. City of New London, the Supreme Court ultimately eviscerates the public use requirement of the clause; because of its inherent breach of an explicit amendment to the Constitution, the Court should overturn its decision.

The case of Kelo v. City of New London arose when the city’s economic development plan called for the procuring of private land—including that of Susette Kelo and eight other petitioners—for use by new businesses that potentially would revitalize the economy. The catalyst to this development plan was the announcement by the pharmaceutical company Pfizer Inc. that it was planning to build a global research facility in the city. The city, looking to capitalize on economic growth, thought potential new businesses would benefit the public more than the private structures that currently occupied the land.

In upholding the legitimacy and constitutionality of the city’s taking of private property for the use of new businesses, the Court relied on the test of public purpose—that is, any governmental taking of private property has to be shown to serve a public purpose. Whereas the public use requirement of the Fifth Amendment strictly limits governmental takings of private property to situations in which the land will be used by the general public, the public purpose requirement is not so much of a limit; it is an unwarranted grant of power.[2] In his dissenting opinion, Justice Thomas wrote that because government eviscerated the public use requirement “citizens are safe from the government in their homes, [but] the homes themselves are not [safe]” (577).[3] Justice O’Connor elaborated on the consequences resulting from an increased governmental takings power in her concurrence: “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” (574). This danger caused Thomas to call for a limitation on governmental takings to property that “it actually uses or gives the public a legal right to use” (577). Under this strict standard of purely public usage, the government could not take land from Susette Kelo to give to private businesses, regardless of the potential for economic growth.

The belief that government should not take land from a private entity to give to another private entity originates in common law. Thomas’ dissent quotes Blackstone—one of the foremost experts on English common law—on the fundamental belief in the sanctity of private property. Because the law reflects this belief, it will not tolerate governmental usurpations, even if they are a means to the end of ensuring the general welfare of the community. Therefore, any governmental taking of property must imitate the typical private transaction in that government should only take land for its own use. The government is not a real estate broker—it is not justified in “taking property from A and giving it to B” (577). Hence, the framers of the Constitution instituted the public use requirement to prevent governmental takings contrary to the common law tradition.

While the majority contested that property can be taken for the general welfare of society, the wording of the Fifth Amendment suggests otherwise. As Thomas pointed out, “the Constitution’s text … suggests that the Takings Clause authorizes the taking of property only if the public has a right to employ it, not if the public realizes any conceivable benefit from the taking” (576). He claimed that while the framers used the phrase “general welfare” in other sections of the Constitution, they purposely limited governmental taking to property which will be directly used by the public.[4] If they wanted the eminent domain power to be greater, they would have employed wording that would have broadened the power.

The majority asserts that the Public Use Clause should not be interpreted so strictly; it should be construed as a loose requirement that the taken land will serve a public purpose. According to the majority, the “Court long ago rejected any literal requirement that condemned property be put into use for the general public” (572). This claim is a result of the Court’s reliance on precedent—Berman v. Parker and Hawaii Housing Authority v. Midkiff. While O’Connor argues that these cases were decided correctly, but do not apply to the current case, Thomas contends that these cases should be overturned because they contradict the Constitution. His contention is based on the belief that “Berman and Midkiff erred by equating the eminent domain power with the police power of States” (577). In other words, the Takings Clause, with its public use and just compensation requirements, should not be confused or combined with the state’s police power, which allows a state to take land without compensation if the land is harmful to the health, morals, safety, and general welfare of the community. Because he believed those cases were decided wrongly, he claimed that the current ruling should not be based on them even if their precedent did apply to this case; basing decisions on unconstitutional precedent is not a valid exercise of jurisprudence.[5] Two rulings contrary to the Constitution, even if in agreement with one another, do not make either constitutional. In Thomas’ dissent, he argues, “When faced with a clash of constitutional principle and a line of unreasoned cases wholly divorced from the text, history, and structure of our founding document, we should not hesitate to resolve the tension in favor of the Constitution’s original meaning” (578).  O’Connor disagreed with Thomas’ view that Berman and Midkiff were decided wrongly. However, she did not believe those cases had any bearing on the current case because their circumstances were different.

            Berman v. Parker and Hawaii Housing Authority v. Midkiff expanded the government’s takings power. In both cases, the “extraordinary, precondemnation use of the targeted property inflicted affirmative harm on society,” whereas the property in Kelo did not (575). Also, each taking in Berman and Midkiff “directly achieved a public benefit,” whereas the taking in Kelo, achieved, if anything, an indirect public benefit (575). In Berman, the court upheld the constitutionality of a revitalization project for a blighted area of Washington, D.C. The project affected the area as a whole, not just random individuals. The majority contended that although the houses of the plaintiffs in the Kelo case were not blighted, the legislature’s determination that “the area was sufficiently distressed to justify a program of economic rejuvenation is entitled to our deference” (572). This logic gives too much power to the legislature to make judgments it is not fit to make. Legislators are not qualified as judges of home value and upkeep and are liable to err, which is evidenced in the fact that it allowed the taking of Susette Kelo’s property even though she had made “extensive improvements to her house” (571). If the legislature relied on facts to conclude that the properties involved in the Berman case were blighted, its determination should be respected. However, in the Kelo case, the legislature clearly did not rely on any such evidence, and therefore, an external judicial check is needed to reign in governmental powers.

In Hawaii Housing Authority v. Midkiff, the court upheld the legislature’s taking of property for the opposite reason of Berman—the properties were not blighted, but instead a few elites owned a majority of the land. The court determined it should defer to the legislature’s determination that in effect eliminated an oligopoly that was a “social and economic evil” (572). Just as the plaintiff’s land was not blighted, it was also not part of an oligopoly. By owning her land, the plaintiff was not negatively impacting society or the economy. While the majority implicitly claimed that the plaintiff was hurting the economy by occupying space that more lucrative businesses could have owned, this reasoning, while logical, is not constitutional. In Kelo, the state had no justification to take the property by its police power because the property did not interfere with the health, safety, morals, or general welfare of society. Government also did not have any justification for seizing it with its takings power, because the land was not going to be directly used for the public. As long as the private property does not directly harm society, government cannot take it and give it to another private entity—even if the entity is a business.[6] Because Midkiff and Berman concerned private property that was harmful to society, their precedents do not have any bearing on Kelo.

Another precedent that the majority employed in their decision in Kelo was that of deferring to legislative determinations of public use. O’Connor and Thomas found fault with this precedent. While O’Connor believed that deference to the legislature in determining whether the land serves a public use is valid, she contended that “an external, judicial check on how the public use requirement is interpreted, however limited, is necessary if this constraint on government power is to retain any meaning” (574). She then cited three categories of takings which the Court previously held to be constitutional: the least controversial—a transfer of private property to public ownership, more controversial—a transfer of private property to private parties who make the property available for public use, and most controversial—a transfer of private property to a private entity who may use the land privately in order to meet “certain exigencies” (575). Note that O’Connor did not believe economic development takings were constitutionally justified by any of the aforementioned categories. O’Connor believed that because the government could abuse the third category of takings, the Court must actively review—and sometimes overturn—legislative decisions in order to protect the sanctity of private property.

While O’Connor’s view on deference to the legislature was moderate, Thomas’ view was extreme. He attacked deference to the legislature, declaring that “there is no justification … for affording almost insurmountable deference to legislative conclusions that a use serves a “public use” (577). He claimed that because the public use determination is at its heart a legal question, the Court should review legislative acts just as it would review acts dealing with other provisions of the Bill of Rights—such as search and seizure. He brought this argument to life, claiming that because studies have shown that minorities are most often the victims of urban renewal plans, the Court, in accordance with the famous footnote in United States v. Carolene Products Co., has an even greater responsibility to review these plans.[7] Both O’Connor and Thomas criticized the majority’s insistence that the legislature’s judgment on situations dealing with the Public Use Clause is paramount. The Court needs to fulfill its responsibility to protect private property.

Not only did the Court shirk its responsibility by deferring to the legislature, it further deviated from its purpose by putting the burden on the each state to protect private property by reminding each state that it has the power to place “further restrictions on its exercise of the takings power” (574). O’Connor condemned the majority’s suggestion, calling it “an abdication of our responsibility,” because though the government is federal, the enforcement of private property rights against (primarily) state intrusions is the job of the federal government (576). Power is addicting and ever-expanding;[8] the Court must not rely on state governments to limit their own power.

In order to protect private property rights, the framers created strict requirements for governmental taking—the most important of which is the Public Use Clause. This strict requirement is a reflection of their reverence for private property. Thomas Jefferson, a Lockean scholar, thought property should be defined as that which is developed by a man’s “own industry or that of his fathers,” and should only be limited when he owns an excess of property resulting in “uncultivated land.”[9] Susette Kelo adhered to Jefferson’s conception of property. She did not have more land than she could feasibly improve—in fact, she made several improvements to her land. She was causing no direct harm to society; nevertheless, government took her land and gave it to another private entity. The majority decision in Kelo emasculates the main limit on the takings power of the federal government, and therefore conceivably puts all private property in jeopardy. Because of this decision, no longer are people protected from being deprived of their right to property, as the framers first established. This decision is an unconstitutional precedent that constitutes a slippery slope for possible future governmental encroachments on private property.

            

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[1] Richard Beeman, Plain, Honest Men: The Making of the American Constitution (New York: Random House, 2009), 311-312.

[2] Justice Thomas’ dissent recognizes the increase of governmental power inherent in the public purpose precedent: “Once one permits takings for public purposes in addition to public uses, no coherent principle limits what could constitute a valid public use” (Rossom and Tarr, American Constitutional Law, Volume I, 577).

[3] In-text parenthetical citations are taken from Rossom and Tarr, American Constitutional Law, Volume I.

[4] Examples of sections of the Constitution that use the phrase “general welfare” are the Preamble and Article 1, Section 8.

[5] In his concurrence to Hein v. Freedom from Religion Foundation, Justice Antonin Scalia attacks the use of judicial minimalism, or stare decisis, when he declares, “Minimalism is an admirable judicial trait, but not when it comes at the cost of meaningless and disingenuous distinctions that hold the sure promise of engendering further meaningless and disingenuous distinctions in the future. The rule of law is ill served by forcing lawyers and judges to make arguments that deaden the soul of the law, which is logic and reason.”

[6] Justice Thomas would take issue with this argument. He would say that the government cannot seize private property with its police power at all. In his view, the Takings Clause is the only means by which government can take private property, and therefore it must satisfy both the requirements—public use and just compensation. According to Thomas, the fact that a certain piece of private property harms the health, safety, morals, or general welfare of society has no bearing on whether government can take it.

[7] The United States v. Carolene Products Co. footnote stated, “There may be narrower scope for operation of the presumption of constitutionality when legislation appears on its face to be within a specific prohibition of the Constitution.” The Court further decided that it should pay special attention to statutes “directed at particular religious … or national … or racial minorities” (571).

[8] Bernard Bailyn, The Ideological Origins of the American Revolution (Cambridge: Harvard University Press, 1992), 56-59.

[9] The first phrase is taken from Jefferson’s Second Inaugural Address in 1805. The second phrase is taken from Jefferson’s letter to James Madison on October 28, 1785. See Barbara Arniel, John Locke and America (Oxford: Clarendon Press, 1996). The chapter entitled “Locke, Jefferson and the Amerindian” is especially relevant to a discussion of Locke’s influence on Jefferson’s conception of property.



Unleashing African Ingenuity

5 observations I made while in Africa related to I.P.E.:

1. There are many intelligent people with many ideas for business startups.
2. There is a lack of know-how in terms of actually starting a business.
3. There is a lack of capital and credit availability, making it next to impossible to put a plan into action.
4. The access to Internet is very limited, especially in the villages.
5. In the rural areas, a "business" typically is little more than a glorified lemonade stand.

According to the BBC, the workplace of Africa's future might consist of technology hubs with wifi connection and meeting rooms, where many entrepreneurs can sit side-by-side and develop a business plan or continue their business in a more legitimate setting. Not only does having an "office space" give a business legitimacy, causing investors from around the world to be more likely to divulge their funds, it also gives entrepreneurs a system of support. Some of these tech hubs that have already successfully taken root, such as Hive CoLab, coach business people on how to protect their intellectual property. They also offer entrepreuners a chance to collaborate.

I think these cooperative tech hubs are a great way to encourage innovation and economic growth in Africa. Having a community of support is crucial for an entrepreneur. Another crucial component to starting a business: soliciting and maintaining investors, which is possible through reliable access to the Internet.

In my village in Ghana, Vodaphone, a major African telecommunications company had already built a relatively elaborate compound containing hundreds of computers, wifi, and the only airconditioning for miles. Though it seemed that many of the locals were simply using the wifi for Facebook, chatting, and YouTube, an ambitious Ghanaian may seize the opportunity to connect with investors from around the world. Nevertheless, Vodaphone's purpose for building the compound was not explicitly related to supporting entrepreneurs, and I think that having a tech hub with this explicit purpose would improve the success rate for startup businesses, simply due to the community of support.

Trade War?

The trade disputes between the U.S. and the E.U. over illegal subsidies to the aircraft-making industry continued today with the E.U. appealing to the W.T.O. for permission to impose $12 billion in annual trade sanctions against the U.S. for illegal Boeing subsidies. They claim that this steep punishment would make up for the unfair advantage that the U.S. has enjoyed the past several years. This latest step in the seven-year dispute leaves many, including the NY Times, wondering if we are headed for "an open trans-Atlantic trade war." In fact, the U.S. has said that it could impose up to $10 billion in trade sanctions against the E.U. for their (illegal) subsidies to Airbus. While the individual governments are ready to impose heavy sanctions, it seems that both Boeing and Airbus would like to negotiate. Hopefully this sentiment will prevail. We will have to continue to watch this story... The E.U.'s request is expected to be formally submitted to the W.T.O. on October 23.

Creativity Conference

I found this blog on the NY Times website about a technological creativity festival that recently took place in Oregon. At the conference, many developers of new technology--technology that will serve to connect people all over the world--spoke. However, the emphasis of the conference was NOT on the technology itself, but rather on the people that have used their creative abilities in developing and/or using new technology. According to the article, the festival was meant to "emphasize a new economy that is being reshaped."

I think this directly relates back to Friedman's flat world argument. The Internet connects people from all over the world, and allows people to fully explore and utilize their creativity, regardless of location. In this sense, the economy indeed is being reshaped. The article goes on to describe the new economy: "It defies tradition and prizes creativity, seeks direct contact with customers and an audience, and formalizes that process and scales it, so that instead of asking your relatives to finance your next film, people can make use of the network effect and generate support, social and financial, from a large network of people online." Indeed, the Internet not only cuts out the middle man, it exponentially expands the market.

The market can only be expanded to the point that people know about, have access to, and understand the new technology. Though the conference provided entertainment and a forum to celebrate creativity, it also posed these issues to conference-goers. Ensuring that people from all over the world are able to use new technology may undermine the relative dominance of the U.S. and other world powers, but more importantly, in the long-term all will benefit from a free flow of ideas and creativity.

Current State of the International Economy

As we pointed out in class the other day, it is important to pay attention to the date on which the author wrote the article/book we are studying. Because the two main texts we have been reading (Wolf and Stiglitz) were written 7 and 5 years ago, respectively, I wanted to see if there have been any reports published recently about whether the international community is tending toward protectionism or open trade. Unfortunately, according to the WTO, protectionist policies are on the rise.

This summer, The Economist published an article entitled "Protectionism Alert." (http://www.economist.com/node/21557766).  The article explained that though many policy makers understand that protectionism contributed to the 1930s Depression, they continue to enact "short-term" trade barriers that they think will not have a major impact on the global economy. But the aggregate of all of these "inconsequential" barriers does impact the overall international economy negatively. According to a more recent article in The Economist, world trade declined sharply in 2011 (http://www.economist.com/node/21562221). And no doubt due, at least in part, to protectionist policies, "the outlook is pretty bleak." The WTO is concerned, and we should be too.

Though the members of the G20, who together make up for 85% of world GDP, claim to support an open market, their actions often do not reflect their words. Nevertheless, According to the article, the "HSBC predicts that world trade will grow by close to 90% over the next 15 years—advancing modestly at first, because of the euro crisis, then vigorously." Let's hope that policy makers heed this warning from the WTO so that this prediction can come true.

Right Does NOT Make Might

Though some of Wolf’s passages seem overly biased toward western values and culture, (i.e. “Dynamism was the product of institutions, practices, and attitudes the emerged in western Europe over an extended period” (Wolf, 44)), I tend to agree with his implied view that American capitalism, somewhat moderated by features of a developed country, such as the welfare system, is the best, or at least “least worst” of the potential economic systems. I guess my public education, at one time promulgated by Thomas Jefferson as the way to perpetuate American democracy, has done its job. I am sufficiently patriotic. Nevertheless, I realize that America is far from having a completely liberalized economy. As I talked about in my previous post, I believe that a laissez-faire economy is ideal, but there are many complications in our imperfect world that make economic regulations necessary. America has a long ways to go to try to find the perfect balance between too much economic freedom and too much regulation, but I believe that America is ultimately on the right track.

After reading Friedman’s article “It’s a Flat World After All”, it struck me that we, as American citizens, have generally become too content in our assumption that America will remain a world leader. I think most Americans take for granted that liberty and equality, in the form of a democratic political system—or what we typically consider the American way— will continue to spread throughout the world, and as a result other countries will continue to bow to us, forever grateful to us for our contributions to humanity. As Friedman acknowledges, this is far from reality. The Internet and other communication technology allows ideas to disseminate throughout the world, in essence opening up the “marketplace of ideas” virtually everywhere. The playing field is being leveled, and being born in a developing country no longer excludes you from the possibility of contributing to innovation and technology.

The leveling of the playing field began many years ago. In fact, in my class on “Lincoln’s Statesmanship,” we have already read a speech from Frederick Douglass this term in which he describes the effects of globalization in 1857! : “Walled cities and empires have become unfashionable. The arm of commerce has borne away the gates of the strong city. Intelligence is penetrating the darkest corners of the globe. It makes its pathway over and under the sea, as well as on the earth. Wind, stream, and lightning are its chartered agents. Oceans no longer divide, but link nations together. From Boston to London is now a holiday excursion. Space is comparatively annihilated. Thoughts expressed on one side of the Atlantic are distinctly heard on the other.”

Though globalization was very pronounced during this period, as it is now, the sentiments of many Americans were different.  Instead of believing that the United States should be a leader in the global market economy, as many do now, there was a sizeable minority during that period that did not believe that there should even be a union of states. Many abolitionists believed, and reasonably so, that the slavery—a practice made possible through globalization—was such a gross atrocity that it would be better for the world if America did not exist, let alone lead. In fact, William Lloyd Garrison was one of the abolitionists who promulgated the idea that might, in this case American preeminence on the world stage, does not always make right.

The idea that might makes right—but only in the state of nature—was championed by political philosopher John Locke. He believed that without a system of government, if men are left to their own devices, might would determine what was right. However, he did not believe that this was a practical or desirable way to establish what is right, so he theorized that men could, and did, give up some individual rights in order to form a social contract to protect them against each other and foreign entities. When law ruled, instead of men, the minority could theoretically prevent the majority from encroaching on their rights. Under the rule of law, right could, theoretically, make might.

This principle was the basis for Abraham Lincoln’s proclamation in 1860: “Let us have faith that right makes might, and in that faith, let us, to the end, dare to do our duty as we understand it.” This statement clearly shows Lincoln’s opposition to a popular ideology of the time—popular sovereignty, or unfettered majority rule. People who advocated popular sovereignty during that time period wanted each of the states to have the power to decide whether there would be slavery in that particular state. Lincoln believed that there were some things—such as human captivity—there were inherently wrong and diametrically opposed to the principle of equality set forth in our nation’s Declaration of Independence. In other words, there are some things that were so wrong that might—or the majority—could never make right.  In cases like these, Lincoln hoped that right would make might—the wickedness of slavery would cause a majority to unite in support of an end to slavery, because he realized that the current majority--or might--was not making right.

To go even further with the notion that might doesn’t necessarily make right, William Lloyd Garrison, a leading abolitionist, went so far as to say, “Might is never right, excepting when it sees in every human being, ‘a man and a brother,’ and protects him with a divine fidelity.”

Though globalization was quickly growing in 1860 as it is now, I think our debate needs to change, and Friedman’s article addresses the contemporary issue that many have overlooked: It is no longer a debate about whether might makes right, it is a matter of whether what many Americans consider right—the principles of liberty, equality, democracy, capitalism, etc.—makes might. America is quickly losing its dominant position in the world, and I believe, as does Friedman, that we are not responding to the changing times. The fact that many Americans likely believe that the American Way is the best way, does not ensure that America will continue to lead on the world stage. Though right made might in Lincoln’s day, we need to recognize that on the modern-day world stage, right does not, it itself, make might, and move forward with provisions—such as measures to increase educational effectiveness (like I talked about in the previous post)—that will ensure that America remains a world leader.

Combating the Effects of Offshoring through Education

In his article "Offshoring: The Next Industrial Revolution," Alan S. Blinder posits that it is not necessarily the low-skilled jobs that will be offshored in the future. He predicts that jobs that can be done by means of communication technology anywhere in the world are more likely to be offshored from the developed countries to the developing countries than service-sector jobs that must be (or preferably are) done face-to-face. He does not think that the exponential increase in offshoring is, in and of itself, a problem for developed countries, such as the U.S., rather he thinks that how developing countries choose to manage it (or not manage/ignore it) will cause problems for their domestic economies, and the international economy as a whole.

Blinder emphasizes the importance of reforming the American educational system to proactively prepare for future offshoring. He believes the solution is not necessarily more education; some of the face-to-face jobs that he predicts will stay in the U.S. are low-skilled jobs, such as taxi driving, cleaning, and crane operating. He states, "In the future, how children are educated may prove to be more important than how much" (Blinder 125). I think this intriguing statement requires further discussion.

As a student at a liberal arts college, I have at times questioned the practical application of some of more theoretical classes that I have taken. When I talk with some of my friends from high school who have already completed technical/vocational school for their area of interest and have started working full time at jobs that they love, I sometimes wonder whether a significant number of students at 4-year universities are wrongly advised to get their Bachelor's Degree.

This idea is the premise behind the "UnCollege" movement: http://www.uncollege.org/manifesto/. The members of this group argue that many self-motivated individuals are actually held back from truly furthering their education when they enter the university setting. Instead, they believe that many young people would be better off using the money that they would spend getting a degree to start their own businesses. This entrepreneurial spirit would no doubt help America's economy.

More education is not necessarily better. Not only is the cost of education in America inflated, (one of my friends is considering the possibility of attending graduate school in Zurich, Switzerland because it is approximately $1000 per year... Though education in Switzerland is highly subsidized, there has to be some middle ground between highly inflated and highly subsidized education...) it is sometimes wasted. Because the American joblessness rate is so high, many college graduates simply enroll in graduate school or law school to bide their time before entering the job market. This phenomenon is no doubt contributing to the high job dissatisfaction rate among lawyers.

I think Blinder would agree that their should be more than one "conventional" track for education. People have different skills and abilities, and as such, their should be different educational programs with varying curricula and durations. If this more practical educational atmosphere is actualized, America will have a more efficient transition into the third Industrial Revolution--that involving information technology and offshoring--that Blinder predicts will happen.