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REVIEW & OUTLOOK

No one disputes that this power of "eminent domain" makes sense in limited circumstances; the Constitution's Fifth Amendment explicitly provides for it. But the plain reading of that Amendment's "takings clause" also appears to require that eminent domain be invoked only when land is required for genuine "public use" such as roads. It further requires that the government pay owners "just compensation" in such cases.

The founding fathers added this clause to the Fifth Amendment--which also guarantees "due process" and protects against double jeopardy and self-incrimination--because they understood that there could be no meaningful liberty in a country where the fruits of one's labor are subject to arbitrary government seizure.

That protection was immensely diminished by yesterday's 5-4 decision, which effectively erased the requirement that eminent domain be invoked for "public use." The Court said that the city of New London, Connecticut, was justified in evicting a group of plaintiffs led by homeowner Susette Kelo from their properties to make way for private development including a hotel and a Pfizer Corp. office. (Yes, the pharmaceutical Pfizer.) The properties to be seized and destroyed include Victorian homes and small businesses that have been in families for generations.

"The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue," Justice John Paul Stevens wrote for the majority. Justice Kennedy wrote in concurrence that this could be considered public use because the development plan was "comprehensive" and "meant to address a serious city-wide depression." In other words, local governments can do what they want as long as they can plausibly argue that any kind of public interest will be served.

In his clarifying dissent, Justice Clarence Thomas exposes this logic for the government land grab that it is. He accuses the majority of replacing the Fifth Amendment's "Public Use Clause" with a very different "public purpose" test: "This deferential shift in phraseology enables the Court to hold, against all common sense, that a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation, is for a 'public use.'"

And in a separate dissent, Justice Sandra Day O'Connor suggested that the use of this power in a reverse Robin Hood fashion--take from the poor, give to the rich--would become the norm, not the exception: "Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms."

That prospect helps explain the unusual coalition supporting the property owners in the case, ranging from the libertarian Institute for Justice (the lead lawyers) to the NAACP, AARP and the late Martin Luther King's Southern Christian Leadership Conference. The latter three groups signed an amicus brief arguing that eminent domain has often been used against politically weak communities with high concentrations of minorities and elderly. Justice Thomas's opinion cites a wealth of data to that effect.

And it's not just the "public use" requirement of the Fifth Amendment that's undermined by Kelo. So too is the guarantee of "just compensation." Why? Because there is no need to invoke eminent domain if developers are willing to pay what owners themselves consider just compensation.

Just compensation may differ substantially from so-called fair market value given the sentimental and other values many of us attach to our homes and other property. Even eager sellers will be hurt by Kelo, since developers will have every incentive to lowball their bids now that they can freely threaten to invoke eminent domain.