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January 13, 2005

REVIEW & OUTLOOK: Ownership Society

Wall Street Journal Editorial:

On the campaign trail last year, President Bush said a priority of his second term would be to "build an ownership society, because ownership brings security, and dignity, and independence." Sounds good to us. But the rhetoric doesn't square with news that the Administration may file an amicus brief against property owners in an upcoming Supreme Court case concerning eminent domain.

Never mind that there's no pressing reason for the federal government to weigh in at all on the case, Kelo v. New London, since the issue before the court is a matter of state and local authority. What's more strange, given the President's ownership agenda and stated affinity for strict constructionism, is that the Bush Justice Department would consider siding with opponents of property rights.

Eminent domain stems from the takings clause of the Fifth Amendment to the Constitution, which allows the government seizure of private property for "public use" with "just compensation." Historically, courts and local governments have understood "public use" to mean roads, bridges, schools and the like.

But in a 1954 decision, the Supreme Court allowed Washington, D.C., to use eminent domain to appropriate land in a slum neighborhood and sell it to private developers. In time other cities, seeking higher revenues from richer taxpayers, followed course and cited urban renewal as a "public use" justification for taking a citizen's private property.

Matters worsened in 1981 with the Michigan Supreme Court's infamous Poletown ruling, which stretched the definition of "public use" further by blessing the city of Detroit's decision to seize an entire community on the grounds that expansion of a nearby General Motors assembly plant would create more economic benefits.

The GM plant was never built, but the floodgates were opened. One analysis of cases between 1998 and 2002 found more than 10,000 instances where local governments -- often citing the Michigan precedent -- had attempted to use eminent domain to obtain properties not for "public use" but for private development. And nothing is sacred. In 1999, two Atlantic City churches were bulldozed for an MGM casino.

Last year, the Michigan Supreme Court overturned Poletown, calling it a "radical departure from fundamental constitutional principles." In a unanimous ruling, the Court said reversal was necessary "to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law."

Elsewhere, however, eminent domain abuses continue. Just last week a federal judge in New York upheld a Village of Port Chester decision to condemn well-maintained rental properties belonging to William Boyd, a small-business owner, and transfer them to a developer with plans for a Stop & Shop parking lot. And in Norwood, Ohio, a judge has ordered Carl and Joy Gamble out of their home of 35 years to make way for office and retail construction.

The Kelo case, which is scheduled to be argued before the Supreme Court on February 22, also involves developer-driven encroachment. A Connecticut developer in cahoots with local officials and Pfizer is seeking to raze more than a dozen homes and small businesses. This will be the High Court's first chance in 50 years to provide some guidance on eminent domain, and property rights advocates nationwide are hoping the Justices will use the opportunity to remind states and lower courts of what the Founders intended.

Worried that a Bush Administration brief against land owners is in the works, the National Taxpayers Union, the Competitive Enterprise Institute and other free-market groups signed a missive sent to the White House in October. No doubt, Business Roundtable-types are pressuring Mr. Bush on the other side, along with states and localities that feel that private property can be taken and then parceled out to maximize tax revenues. The letter urges the Administration to "affirm its support for property rights and refrain from filing a brief in Kelo." So far, the response has been a troubling silence.


Posted by lumi at January 13, 2005 9:41 AM