Legislatively Revising Kelo v. City of New London: Eminent Domain, Federalism, and Congressional Powers

This paper explores Congress' power to limit state and local authorities' use of eminent domain to further economic revitalization. More particularly, it examines whether Congress can constrain the discretion to invoke eminent domain which state and local officials appear entitled to under the Supreme Court's recent decision in Kelo v. City of New London, U.S., 125 S.Ct. 2655 (2005). The question involves and exploration and assessment of the Supreme Court's recent jurisprudence regarding federalism and judicial supremacy. In providing that private property may not be taken for public use without just compensation, the Fifth Amendment implicitly precludes government officials from compelling citizens to relinquish their property for something other than a public use. However, the United States Supreme Court has long defined public use expansively, so expansively that the federal courts do not meaningfully review government officials' justifications for invoking eminent domain. In Kelo, the Court revisited its deferential approach. Kelo involved a claim that a municipality's attempt to take land by eminent domain and transfer it to a private entity, as a part of an economic revitalization plan, did not qualify as a taking for a public use, and thus was constitutionally prohibited. The Court ultimately reaffirmed its expansive definition of public use. The decision not only sparked public outrage and state legislative initiatives to restrict the use of eminent domain for economic redevelopment, but attracted congressional attention. The House enacted a resolution disapproving the decision and an appropriations rider barring funding to enforce the ruling. At least three bills have been introduced in the House and Senate to withhold federal funds to economic revitalization projects sited in whole or in part on land acquired by local authorities using eminent domain. This paper concludes that Congress has power to constrain state and local use of eminent domain under the Enforcement Clause of the Fourteenth Amendment and the Commerce Clause, and that Congress' power to proceed under the Spending Clause may not be as expansive as it appears. The Enforcement Clause of the Fourteenth Amendment allows Congress to limit state and local authorities use of eminent domain to protect property owner's Fifth Amendment rights. Because the Court recognizes citizens rights to prevent the taking of their property for private use by another, but faces problems in enforcing that right, Congress may take some precisely-tailored actions that will give the right practical protection. Such measures might include: 1) altering the measure of just compensation due when property is taken for economic development, 2) specifying minimal procedures to assure that state and local officials make eminent domain decisions in a transparent and politically-accountable manner, 3) establishing rebuttable presumptions that in certain circumstances a taking is for a private, not a public, use, or 4) prohibiting the use of eminent domain altogether in certain situations. The Commerce Clause also gives Congress some leeway to legislate with regard to state and local reliance upon eminent domain. Congress may take steps to ensure that eminent domain, which serves as an alternative to the market for real estate, does not operate in an economically wasteful manner or harm involuntary participants in the process. Congress may also take steps to address the consequences of any undue influence interstate commercial enterprises gain over local governments by their ability to play one tax-strapped locality off against another, and one of those consequences may be the excessive or oppressive use of eminent domain. However, the Court may more vigorously police congressional limitations on state use of eminent domain than congressional legislation conflicting with states' assertions of their regulatory powers. The Court may conclude that the power of eminent domain, like the privilege of sovereign immunity, is such an inherent and essential aspect of sovereignty that the constitutionally-mandated respect for the states as independent sovereigns imposes special constraints on congressional authority. See, e.g., Alden v. Maine, 527 U.S. 706, 715, 748-49 (1999)(discussing sovereign immunity). Congress' spending clause powers appear virtually unlimited - the Court has not found Congress to have exceeded its Spending Clause authority since the Lochner Era. Not surprisingly, then, Congress' initial response to Kelo focuses on denying federal funding to states and localities that exercise the eminent domain powers recognized in Kelo. The limits on Congress' power to condition federal funding on waiver of certain individual rights and sovereign prerogatives have bedeviled courts and commentators in a variety of contexts. The issue is most often discussed in terms of unconstitutional conditions. The paper categorizes the federal government's interest in imposing grant limitations as: 1) program defining, 2) symbolic or dissociative, 3) functional, or 4) protective. Congress should have more leeway in imposing grant conditions that serve functional purposes as opposed to symbolic or dissociative purposes. Ultimately, Congress' interest in limiting support for state and local projects sited in whole or in part on land acquired by eminent domain, is really a symbolic or dissociative one, which merely permits Congress to ensure state and local authorities do not use federal funds to acquire property taken by eminent domain. The symbolic interest does not support the scope of the grant conditions currently contemplated by Congress, prohibiting all funding in connection with a redevelopment project sited in whole or in part on land acquired by eminent domain. While the paper's analysis focuses on grant conditions regarding eminent domain, the general analysis of government grant conditions has a much wider application.