New London, Connecticut approved a comprehensive economic development plan to revitalize a distressed area around the Fort Trumbull neighborhood. The city, acting through the New London Development Corporation, sought to acquire private homes, including Susette Kelo’s, and transfer the land to private developers as part of that plan. The owners were not accused of causing blight, and their properties were to be taken not for roads or public buildings but for redevelopment expected to create jobs, increase tax revenue, and stimulate the local economy. The owners challenged the takings under the Fifth Amendment’s Public Use Clause.
Does the Fifth Amendment permit a city to take nonblighted private property and transfer it to private parties as part of a comprehensive economic development plan on the ground that the plan serves a public purpose?
Under the Fifth Amendment, "public use" is interpreted broadly to mean public purpose. A taking may satisfy the Public Use Clause when it is part of a carefully considered comprehensive development plan intended to provide appreciable public benefits, and courts generally defer to legislative judgments about what public needs justify the use of the takings power.
Yes. The Court held that the city’s takings were constitutional because they were executed pursuant to a comprehensive economic development plan that served a public purpose, which falls within the meaning of "public use" under the Fifth Amendment.
The Court relied on its precedents treating the Public Use Clause as coterminous with public purpose, especially where the government acts pursuant to an integrated development plan rather than to confer a private benefit on a particular party. It distinguished impermissible favoritism from a broadly formulated plan designed to promote economic rejuvenation through job creation, higher tax revenues, and related public benefits. The Court emphasized judicial deference to legislative determinations in this area and declined to adopt a rule that economic development can never qualify as a public use. Because the plan was comprehensive and not intended to benefit a known private party alone, the takings were upheld.
Justice O’Connor, joined by Chief Justice Rehnquist and Justices Scalia and Thomas, argued that the decision erased any meaningful limit on public use because nearly any property could be taken for a more profitable private use. Justice Thomas separately dissented, contending that the Court had departed from the original meaning of "public use," which should require actual use by the public, not merely a public purpose.
Kelo is a major Takings Clause decision because it confirmed that economic development can qualify as a public use under the federal Constitution and reaffirmed broad judicial deference to legislative judgments in eminent domain. The decision built on Berman v. Parker, 348 U.S. 26 (1954), and Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), both of which broadly construed public use. The public backlash to Kelo prompted many states to enact stricter limits on eminent domain under state law, even though the federal baseline remained permissive.
Berman v. Parker, 348 U.S. 26 (1954) |
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Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984) |
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