Closing Pandora's Box: Proposing a Statutory Solution to the Supreme Court's Failure to Adequately Protect Property

I. INTRODUCTIONIt is by no means an exaggeration to characterize the Supreme Court's 2005 Kelo v. City of New London decision as its most unpopular ruling in more than a century. Justice Scalia, one of four Kelo dissenters, went so far as to put Kelo in the company of Dred Scott and Roe v. Wade - decisions he claimed represented the Court's most severe lapses in judgment.1 In Kelo, the Supreme Court upheld a municipal redevelopment plan that resulted in the forced transfer of nine residents' homes to a private development corporation. The Court held that the increased tax revenue and other secondary benefits to the city constituted a "public use" under the Fifth Amendment, justifying the condemnation and forced transfer of the residents' homes.2 However, it noted that "nothing in our opinion precludes any State from placing further restrictions on its exercise of takings power."3The subsequent response from state legislatures was unprecedented. In direct response to Kelo, forty-three states enacted legislation curbing the use of eminent domain for economic redevelopment.4 On November 8, 2011, Mississippi became the forty-fourth, passing a referendum by an overwhelming seventythree to twenty-seven percent majority that placed restrictions on the transfer of condemned property to private parties.5 On the federal level, politicians as ideologically diverse as Rep. Maxine Waters (DCA) on the left and Sen. John Cornyn (R-TX) on the right sponsored bills aimed at enacting similar reforms on a national level.6While property-rights advocates generally find this barrage of legislation encouraging, there is some concern that many states' efforts are merely cosmetic. That is, although the statutes purport to limit the type of taking at issue in Kelo, they are riddled with exceptions that eviscerate any substantive protections against forced transfers to private developers. Other scholars argue that many states have gone too far, limiting municipalities' ability to deal with blight and urban sprawl.7 This Comment surveys enacted state legislation and proposed federal legislation to evaluate the validity of these claims. Ultimately, it finds the vast majority of these efforts wanting and proposes the creation of a federal cause of action modeled loosely on shareholder derivative suits. Unlike proposed federal legislation and many state statutes, this approach avoids burdening federal and local law enforcement, makes economic-development takings infeasible in most instances, and also allows states the flexibility they need to deal with actual blight.This Comment proceeds as follows. Part II demonstrates the need for a statutory approach to takings reform by showing that Kelo was simply a logical extension of the preceding 100 years of Supreme Court precedent. Part III discusses the leading arguments for and against the use of eminent domain for economic development, providing context for Part IV's survey of the many legislative responses to Kelo. Part V proposes creating a federal cause of action for property owners involved in improper takings and concludes.II. WHY A STATUTORY SOLUTION? A BRIEF HISTORY OF THE SUPREME COURT'S TAKINGS JURISPRUDENCEDespite the unprecedented outrage to Kelo among politicians, commentators, and the general public,8 the majority's reasoning was largely consistent with more than 100 years of the Supreme Court's public-use jurisprudence. This Part traces the genesis of the ultimate result in Kelo back to the Court's first public- use holdings in the latter nineteenth century. Broadly, two lines of cases emerged, with some overlap. The first defined public use as "public power" - a seizure of private property constituted a public use so long as it furthered the government's exercise of a constitutional power. The second defined public use as any action that tended to produce a "public benefit" or carried out a "public purpose." Early on, the Court afforded state governments substantial deference in categorizing their legislative goals as "public purposes. …