Thursday, November 10, 2005

Kelo Gone Wrong

When the Supreme Court ruled in favor of the state's police power in Kelo v. New London, proponents of property rights and freedom of contract were outraged, and rightly so.

In the case, the court essentially held that the government could seize the private property of one individual and give it to another private party, as long as the new owner of the property would use it for the "public benefit." Now, the Takings Clause of the Fifth Amendment allows the government to use its power of eminent domain to seize land for public use, but the court stretched this way beyond its meaning in Kelo.

Justice John Paul Stevens reasoned in the majority opinion that when the framers used the term "public use" they did not necessarily mean "literal" public use. Thus the court found it reasonable to allow the seizure of private property in order to increase the tax revenue that could be extracted from that property, as this constituted a non-literal "public use."

Justice Sandra Day O'Connor, in her dissent, showed the problem with this logic. She observed that based on the the court's reasoning in the case, the government could condemn a Motel 6 in order for someone else to build a Ritz-Carlton, for no other reason than the fact that the Ritz-Carlton would generate more tax revenue.

Well, the horrible precedent set by the Kelo decision is being applied in Oakland, California, where a tire store is being condemned in order to build... you guessed it, another tire store:
Revelli Tire has been a family-owned business in Oakland, Calif., for 56 years. But if action by the city council remains on course, the tire store will have to find a new home or go the way of the dinosaur...

Revelli's property is located in a block targeted for redevelopment. Not only the tire store but dozens of other parcels have been seized so a private developer can put in condominiums and apartments.

The city also used its power of eminent domain to obtain the parcel for a commercial retailer, Sears, which wants to put in its tire store.
Another fact worth knowing: the place in which Revelli Tire resides is not a "blighted" neighborhood. Thus, it does not meet the criteria laid out in Hawaii Housing Authority v. Midkiff, which says that if a situation is in such a "blighted" condition, the government can step outside the bounds of "public use" and pursue action for the "public benefit." But even so, Kelo erases this precedent and does not require any such distinctions.

The situation in Oakland illustrates this, and marks a sad day for those who value property rights. We can only hope that the new Supreme Court gets presented with an eminent domain case such as this, and reverses the decision of Kelo.