From Direct "Public Use" to Indirect "Public Benefit": Kelo V. New London's Bridge from Rational Basis to Heightened Scrutiny for Eminent Domain Takings

I. INTRODUCTION The Fifth Amendment to the Constitution, made applicable to the states by the Fourteenth Amendment, provides that "private property [shall not] be taken for public use, without just compensation."1 Implied in these words is the sovereign's eminent domain power: the federal, state, or local government's power to take private property for public use. Since the Supreme Court's decision extending the scope of the federal and state governments' eminent domain power in Kelo v. City of New London,2 the most commonly-asked question has been, "So, could Wal-Mart really take my house now?"3 Such concern might be justifiable. Within hours of the Court's decision in Kelo, the city of Freeport, Texas moved to seize several "waterfront properties from shrimp processing companies to build a marina development."4 Two days after the decision, city officials in Boston began like proceedings to seize similar waterfront properties.5 Nationwide reaction to stem the public outcry since the Court's landmark decision has been quick and decisive. During the time between the Court's decision on June 23, 2005, and publication of this Note, at least twenty-five state legislatures have introduced, or pledged to introduce, legislation to clarify and/or restrict the power of eminent domain.6 Contending that the "Supreme Court has undermined a pillar of American society-the sanctity of the home," the United States House of Representatives overwhelmingly approved a bill to block future seizures of private property for use by developers.7 The 5-4 decision in Kelo was so contentious that the CEO of Freestar Media, LLC faxed an apparently serious request to the town of Weare, Connecticut to begin the application process to condemn the land and build a hotel on the present location of Justice David Souter's home, reasoning that the hotel would obviously create a substantially larger tax base for the community.8 Others targeted Justice Breyer's vacation home in Connecticut for condemnation and use as a state park.9 Both justices voted with the Kelo majority.10 The Takings Clause of the Fifth Amendment prohibits the government from taking private property except for "public use."11 The Public Use Clause of the Fifth Amendment has traditionally limited the reach of eminent domain to takings with a "justifying public purpose."12 However, Kelo was not a case concerning the use of eminent domain for a traditional use such as a road or public building; nor did it concern the use of eminent domain to transfer property to common carriers, such as railroads and hospitals, that make the property available to the public. Although closer, Kelo was also not concerned with the public benefits resulting from removal of blight or the opening of market forces.13 Rather, Kelo presented a vital constitutional question the Supreme Court had never before addressed: whether the Public Use Clause of the Fifth Amendment authorizes the exercise of eminent domain solely for economic development.14 The Court held that it does.15 Because the economic development was intended to provide a larger tax base and create additional jobs in an area burdened with a severe economic depression, the Court ruled that these public benefits, although indirect, were correctly categorized by the legislature as a public use.16 Courts have traditionally given deference to legislative judgments of what public needs justify the use of the takings power when the public benefit is clearly discernible from the taking.17 The confusion in the lower courts arises from takings that do not directly achieve the government's purpose-takings that involve a separate, unregulated private party to whom the property flows. In such a taking, the public benefit is realized only if and after the separate private party benefits from the property.18 When a taking cannot be said to directly achieve the government's objective, it thus becomes more problematic for the judiciary to rely on and defer to the legislature's judgment about whether the benefit could rationally accrue; there must be deeper analysis into the government's design, plan, and implementation to ensure that the property of the private owner on the losing end of the taking is not taken in vain. …