Public Use in the Dirigiste Tradition: Private and Public Benefit in an Era of Agglomeration

ABSTRACT This Article analyzes the development of eminent domain law, focusing on the U.S. Supreme Court and the New York Court of Appeals' approach to the requirement that takings be for "public use." It asserts that the Supreme Court's public use doctrine is conceptually incomplete. In applying that doctrine and its own precedents, the Court of Appeals acts in the State's tradition of dirigisme, and subordinates constitutional protections for private property to centralized development. Its recent Goldstein and Kaur opinions, uncritically supporting development for economic agglomeration, are the culmination of this approach. The Article also discusses implications for public policy arising from condemnation for transfer for private redevelopment, as hastened by government efforts to stimulate agglomeration. These include a lack of transparency, secondary rent seeking, possibilities of corruption resulting from crony capitalism, and the inefficient use of public and private recourses. TABLE OF CONTENTS Abstract Introduction I. Dirigisme and New York II. Takings and Public Use Law A. Takings Law B. Public Use C. Maximum Deference in Goldstein and Kaur III. Vitiation of Public Use in Theory and Practice A. Kelo Demonstrates the Need for a Limiting Principle B. The Unsatisfactory Adoption of Pretextuality 1. Why Should Motive Matter? 2. The Assumptions Underlying Pretext are Counter factual 3. The Manichean Distinction Between Public and Private Benefit 4. Practical Objections to Pretextuality C. Vitiating the Public Use Clause--Goldstein and Kaur 1. The Court of Appeals Regards "Public Use" as Redundant 2. An Open-Ended View of "Blight" 3. Pretext in Goldstein and Kaur D. Meaningful Scrutiny and Procedural Roadblocks 1. Public Use and "Meaningful" Judicial Scrutiny 2. Pretext Defenses and Discovery 3. The Role of Twombly and Iqbal IV. Goldstein, Kaur, and Public Policy Problems A. Penn Central, Henry George, and Agglomeration Economics 1. Penn Central in the Court of Appeals: A Georgist Turn 2. Penn Central as Precursor to Agglomeration 3. Agglomeration and Public Policy B. Urban "Blight" as a Metaphor for Contagious Illness C. Underutilization D. The Information Problem and Information Paradox 1. Government Disclosure is Cheap and Private Information is Expensive 2. Crony Capitalism and Urban Revitalization E. Government, Property, and Coordination F. Agglomerate Proliferation G. Redevelopment Does Not Embody Superior Knowledge Conclusion INTRODUCTION This Article is about dirigisme, the "policy of state direction and control in economic and social matters," (1) as it relates to state control of land use. It also is about the Public Use Clause, its evasive conceptualization by the U.S. Supreme Court, and the New York Court of Appeals' reflexive application of the Supreme Court's public use cases. As the French proverb would put it, the Court of Appeals' abrogation of its duty, together with an underlying policy that takes us down the path of inefficient land use and crony capitalism, is worse than a crime--it is a blunder. The U.S. Supreme Court's decision in Kelo v. City of New London (2) makes clear that the exercise of eminent domain no longer is constrained by traditional concepts of use by the public and the prevention of harm. The New York Court of Appeals had reached that conclusion over forty years earlier, by Cannata v. City of New York. (3) However, the majority in Kelo expressly assured that courts would confront abuses of eminent domain when and if they arise. In Williamson County Regional Planning Commission v. Hamilton Bank, (4) the Supreme Court implicitly assured that federal courts would review claims that state and local governments took private property in violation of the Fifth Amendment's Takings Clause, although those claims first would have to be "ripened" in state court. …