Property Owners Win And Lose In Year After Kelo Case Ruling. Many states pass laws to stop 'private' takings, but gov't actions jump

BY BRIAN MITCHELL, INVESTOR'S BUSINESS DAILY
June 22, 2006

One year after the Supreme Court's landmark decision in the Kelo case, the government's power of eminent domain is facing its first major legal challenge — in a much-changed political environment.

The Ohio Supreme Court is expected to rule any day in a case from suburban Cincinnati that could signal whether state courts will follow federal courts in favoring local governments over individual property owners.

"It will be a real indication as to which way the state courts may go," said Scott Bullock, an attorney with the Institute for Justice, a public-interest law firm that defends property owners against eminent domain.

"Even the Supreme Court, in the majority opinion in Kelo, recognized and almost invited state courts to come to different conclusions than what the Supreme Court did," Bullock said.

Governments have long claimed the right to take private property to build roads, dams, parks and other public facilities.

But since the urban renewal efforts of the mid-20th century, cities have claimed the right to take private property in poor condition for redevelopment by other owners.

The U.S. Supreme Court's 5-4 decision in Kelo v. City of New London, Conn., affirmed that right, ruling economic growth can qualify as "public use" under the Takings Clause of the Fifth Amendment.

The decision, issued a year ago Friday, sparked outrage across the nation and moved state and local lawmakers to pass laws curbing eminent domain abuse.

In the past year, 25 states have enacted such laws. Three more states need only the governor's signature for measures to become law.

But local governments also have moved against many more property owners, according to the Institute for Justice.

"The threat of eminent domain has soared in the past year," said IJ attorney Dana Berliner. "Cities feel empowered by the decision, and they are using it to charge ahead, threatening eminent domain for private development and acquiring property throughout the country."

Nationwide, Berliner tallied 5,783 properties either threatened with seizure or condemned for redevelopment since the Kelo decision.

That's two and a half times the average annual rate of 2,056 properties threatened or condemned from 1998 to 2002, according to IJ.

Cities are threatening eminent domain more, but filing to condemn and seize property less.

Berliner says more property owners since Kelo either believe they have no choice but to go along or are seeking legislative relief instead of fighting it out in court.

In Norwood, Ohio, 66 neighborhood property owners accepted buyout offers from a developer wanting to build a $125 million retail, residential and office complex.

But five refused to sell and sued to keep their properties when the city condemned the neighborhood as "deteriorating" and in danger of becoming "blighted."

"Private property rights groups make the argument that it's property owner versus government," said Lora Lucero, attorney for the American Planning Association.

"We think that's a false dichotomy," she said. "It's really the property owner, the neighbors, the community and the government."

Two of the holdouts dropped out when lower courts ruled against them. But three appealed to the state Supreme Court, which heard oral arguments in January. The three holdouts have already been evicted, and the land around their lots have already been leveled.

The Institute for Justice represents the holdouts. Fourteen groups filed amicus briefs on their behalf, representing realtors, farmers, minorities, churches and small businesses.

Seven groups filed on the city's behalf, representing city planners, developers and local governments.

In 1953, the Ohio Supreme Court ruled "the power of eminent domain may not be exercised merely or primarily to take private property for private purposes."

The question today, post Kelo, is whether Ohio justices will see the taking as "merely or primarily ... for private purposes" if the planned project adds the estimated $2 million to city revenue.

According to a new Minneapolis Federal Reserve study, taking private property for other private use is economically "counterproductive." The authors urged the Supreme Court to reconsider Kelo.

(c) Investor's Business Daily

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