The Supreme Court and the End of Limited Government

The Foundation for Economic Education — www.fee.org
6/24/05: Sheldon Richman is the editor of The Freeman.

Yesterday’s Supreme Court ruling permitting governments forcibly to transfer property through eminent domain from one private party to another for the sake of economic development did not come out of the blue. Although the “takings� clause in the Fifth Amendment to the U.S. Constitution specifies “nor shall private property be taken for public use without just compensation,� the “Court long ago rejected any literal requirement that condemned property be put into use for the general public� (Hawaii Housing Authority v. Midkiff, 1984, cited in the current case, Kelo et al. v. City of New London et al.). In 1954 the Court unanimously upheld Washington, D.C.’s taking of a department store as part of a plan to replace a blighted neighborhood, although some of the land would be turned over to private parties (Berman v. Parker). In 1984 the Court upheld a Hawaii statute that gave tenants ownership of their apartments against the will of the owner (Midkiff). The objective of the statute was to diffuse the ownership of land, and the Court deferred to the legislature’s belief that this was a proper public objective. What counted, the Court wrote, is “the taking’s purpose, and not its mechanics.� Other cases could be cited. In the current case Justice John Paul Stevens, writing for the 5-4 majority, invoked deference to the people’s representatives in explaining why the taking of homes and businesses in New London, Connecticut, for economic development is something the court should countenance. “Because that [development] plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.� In other words, public use includes any valid “public purpose,� and legislative bodies have wide latitude in acting on behalf of the public. It is of no consequence that a private party will benefit in the process. “Quite simply,� Stevens writes, “the government’s pursuit of a public purpose will often benefit individual private parties.� In a concurring opinion Justice Anthony Kennedy opined against the petitioners’ plea for a rule making economic-development takings per se or at least presumptively invalid. “A broad per se rule or a strong presumption of invalidity, furthermore, would prohibit a large number of government takings that have the purpose and expected effect of conferring substantial benefits on the public at large and so do not offend the Public Use Clause.� That the majority followed the Court’s precedent hardly makes the decision easier to swallow. Today it is clearer than ever that government can take property and transfer it to private individuals so long as it claims that its overriding purpose is the betterment of the public. The only limit set out by the Court is that the taking not be solely for private benefit. But that is no real limit at all. There is a word for a system in which private owners are permitted to retain their property so long as they use it for the public good—as understood by the political authorities. The Dissenters This is scary. As Justice Sandra Day O’Connor writes in her dissenting opinion, “For who among us can say she already makes the most productive or attractive possible use of her property? The specter of condemnation hangs over all property.� Then she adds perceptively, “[T]he 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. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result.� O’Connor’s words are to be savored, although she largely accepts the precedents, striving only to distinguish them from the current case. But it is to Justice Clarence Thomas we must turn for a model of proper constitutional interpretation and reasoning. His dissenting opinion goes further than O’Connor’s by calling the precedents into question. It is refreshing indeed. Thomas writes: “Today's decision is simply the latest in a string of our cases construing the Public Use Clause to be a virtual nullity, without the slightest nod to its original meaning. In my view, the Public Use Clause, originally understood, is a meaningful limit on the government's eminent domain power. Our cases have strayed from the Clause's original meaning, and I would reconsider them.� (Emphasis added.) Thomas proceeds to show, first, that it is sound constitutional principle to regard every word in the Constitution as meaningful and purposeful; second, that use at the time of the framing meant the “act of employing�; third, that to construe use more broadly would make the takings clause duplicative of powers already expressly delegated; and fourth, that the common law and great legal authorities such as Blackstone support this narrow reading of the word. Thus, “The Constitution's text, in short, suggests that the Takings Clause authorizes the taking of property only if the public has a right to employ it, not if the public realizes any conceivable benefit from the taking…. The Takings Clause is a prohibition, not a grant of power.… The Clause is thus most naturally read to concern whether the property is used by the public or the government, not whether the purpose of the taking is legitimately public.� Since that is the case, the issue of deference to the legislature is put into perspective: “[I]t is most implausible that the Framers intended to defer to legislatures as to what satisfies the Public Use Clause, uniquely among all the express provisions of the Bill of Rights.� He concludes: “When faced with a clash of constitutional principle and a line of unreasoned cases wholly divorced from the text, history, and structure of our founding document, we should not hesitate to resolve the tension in favor of the Constitution's original meaning.� (Emphasis added.) Dissenting opinions are, alas, just that. As things stand, the majority rules. Governments may take private property and give it to anyone they like; all they must do is proclaim that this serves a public purpose. How in principle can one show otherwise? The Court has spoken: it will not second-guess such decrees. A final note: It should go without saying that even the most narrowly construed eminent-domain power would violate individual rights. That taken property is to be literally used by members of the public or by the government itself provides no valid justification for the taking. Either a person owns his legitimately acquired property or he does not. The requirement of “just compensation� cannot turn theft into something else. There is no just compensation possible in a forced sale. What makes a transaction legitimate is not compensation but consent. That said, the framers at least sought to limit the government’s eminent-domain power. Yesterday, the Supreme Court erased the final traces of that limit.

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Private property creates for the individual a sphere in which he is free of the state. It sets limits to the operation of the authoritarian will. It allows other forces to arise side by side with and in opposition to political power. It thus becomes the basis of all those activities that are free from the violent interference on the part of the state. It is the soil in which the seeds of freedom are nurtured and in which the autonomy of the individual and ultimately all intellectual and material progress are rooted.

Ludwig von Mises
The Free and Prosperous Commonwealth

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June 24, 2005


WASHINGTON -- The country is bracing for a bruising battle over filling a Supreme Court vacancy, a battle in which conservatives will praise ``judicial restraint'' and ``deference'' to popularly elected branches of government and liberals will praise judicial activism in defense of individual rights. But consider what the court did Thursday.

Most conservatives hoped that, in the most important case the court would decide this term, judicial activism would put a leash on popularly elected local governments and would pull courts more deeply into American governance in order to protect the rights of individuals. On Thursday, conservatives were disappointed.

The case came from New London, Conn., where the city government, like all governments, wants more revenues and has empowered a private entity, the New London Development Corporation, to exercise the awesome power of eminent domain. It has done so to condemn an unblighted working-class neighborhood in order to give the space to private developers whose condominiums, luxury hotel and private offices would pay more taxes than do the owners of the condemned homes and businesses.

The question answered Thursday was: Can government profit by seizing the property of people of modest means and giving it to wealthy people who can pay more taxes than can be extracted from the original owners? The court answered yes.

The Fifth Amendment says, among other things, ``nor shall private property be taken for public use, without just compensation'' (emphasis added). All state constitutions echo the Constitution's Framers by stipulating that takings must be for ``public use.'' The Framers, who weighed their words, clearly intended the adjective ``public'' to circumscribe government's power: Government should take private property only to create things -- roads, bridges, parks, public buildings -- directly owned or primarily used by the general public.

Fighting eviction from homes some of them had lived in all their lives, the New London owners appealed to Connecticut's Supreme Court, which ruled 4-3 against them. On Thursday they lost again. The U.S. Supreme Court issued a 5-4 ruling that drains the phrase ``public use'' of its clearly intended function of denying to government an untrammeled power to dispossess individuals of their most precious property -- their homes and businesses.

During oral arguments in February, Justice Antonin Scalia distilled the essence of New London's brazen claim: ``You can take from A and give to B if B pays more taxes?'' On Thursday the court said that the modifier ``public'' in the phrase ``public use'' does not modify government power at all. That is the logic of the opinion written by Justice John Paul Stevens and joined by justices Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer.

In a tart dissent, Justice Sandra Day O'Connor, joined by Chief Justice William Rehnquist, Justice Scalia and Justice Clarence Thomas, noted that the consequences of this decision ``will not be random.'' She says it is ``likely'' -- a considerable understatement -- that the beneficiaries of the decision will be people ``with disproportionate influence and power in the political process, including large corporations and development firms.''

Those on the receiving end of the life-shattering power that the court has validated will almost always be individuals of modest means. So this liberal decision -- it augments government power to aggrandize itself by bulldozing individuals' interests -- favors muscular economic battalions at the expense of society's little platoons, such as homeowners and the neighborhoods they comprise.

Dissenting separately, Justice Thomas noted the common law origins and clearly restrictive purpose of the Framers' ``public use'' requirement. And responding to the majority's dictum that the court should not ``second guess'' the New London city government's ``considered judgment'' about what constitutes seizing property for ``public use,'' he said: A court owes ``no deference'' to a legislature's or city government's self-interested reinterpretation of the phrase ``public use,'' a notably explicit clause of the Bill of Rights, any more than a court owes deference to a legislature's determination of what constitutes a ``reasonable'' search of a home.

Liberalism triumphed Thursday. Government became radically unlimited in seizing the very kinds of private property that should guarantee individuals a sphere of autonomy against government.

Conservatives should be reminded to be careful what they wish for. Their often-reflexive rhetoric praises ``judicial restraint'' and deference to -- it sometimes seems -- almost unleashable powers of the elected branches of governments. However, in the debate about the proper role of the judiciary in American democracy, conservatives who dogmatically preach a populist creed of deference to majoritarianism will thereby abandon, or at least radically restrict, the judiciary's indispensable role in limiting government.

--George Will

©2005 Washington Post Writers Group