Litigating for Liberty
A funny thing happened one day in April 2012. Judge Janice Rogers Brown, an outspoken conservative who sits on the U.S. Court of Appeals for the District of Columbia Circuit, aggressively criticized a federal regulation for harassing entrepreneurs, ripping off consumers, and enriching a small group of politically connected insiders. But then, once she got that out of her system, Judge Brown went ahead and upheld the regulation anyway.
At issue in the case of Hettinga v. United States was a federal regulatory scheme first put in place during the New Deal in order to control the price of milk. Under the terms of the Agricultural Marketing Agreement Act of 1937, minimum milk prices were set throughout various geographical areas around the country. Most of the dairy industry fell under the direct control of this system, and still remains so today, though an exemption was originally granted for what’s known in the trade as “producer-handlers,” who are basically dairy farmers who also bottle and distribute their own milk.
In the early 2000s, Sarah Farms, an Arizona-based producer-handler owned and operated by Dutch immigrant Hein Hettinga and his wife, Ellen, made a splash with consumers throughout Southern California when they started selling their milk for a lower price than the federally fixed minimum on the shelves of Costco and other popular retailers. In response, the Hettingas’ competitors turned to the government for help. As the Washington Post described it, “a coalition of giant milk companies and dairies, along with their congressional allies, decided to crush Hettinga’s initiative. For three years, the milk lobby spent millions of dollars on lobbying and campaign contributions and made deals with lawmakers, including incoming Senate Majority Leader Harry M. Reid (D-Nev.).”1
The final result of that lobbying was the Milk Regulation Equity Act of 2005, which, among other things, imposed minimum milk pricing on all producer-handlers operating out of Arizona that distribute at least 3,000,000 pounds of fluid milk per month. Not coincidentally, Sarah Farms was the only producer-handler in the entire state that fit that description. The 2005 law also imposed new minimum price rules on all handlers selling prepackaged milk in California—a provision that also applied to just one existing business, the Arizona-based bottling facility GH Dairy, which also happened to be owned and operated by the Hettingas.
So the family brought suit in federal court, charging the U.S. government with singling out their businesses for abuse and violating their rights under the Constitution. In response, the government argued that the new law was rationally related to its interest in regulating the dairy industry, and was therefore entitled to significant deference from the courts. When Judge Brown finally reviewed the government’s justifications, however, she rejected them as pure fantasy, likening the 2005 law to forced collectivization and describing it as a naked wealth transfer that came at the expense of both the Hettingas and the milk-drinking public. So what explains Brown’s decision to reaffirm the law despite her obvious distaste for it? “Given the long-standing precedents in this area,” she complained, “no other result is possible.”2
Brown was referring to the rational-basis test, the highly deferential approach to economic regulations the courts have been using since the New Deal. In the 1938 case of United States v. Carolene Products Co., for example, the Supreme Court held that “the existence of facts supporting the legislative judgment is to be presumed” in all cases dealing with “regulatory legislation affecting ordinary commercial transactions.”3 Sixteen years later, in the case of Williamson v. Lee Optical Inc., the Court dug in even further, announcing that when it came to the constitutionality of economic regulations, “It is enough that there is an evil at hand for correction, and that it might be thought that the particular legislative measure was a rational way to correct it.”4 In short, so long as lawmakers might have had a “rational basis” for their actions, the courts are supposed to let those actions stand.
“The practical effect of rational basis review of economic regulation,” Brown complained in her Hettinga opinion, “is the absence of any check on the group interests that all too often control the democratic process. It allows the legislature free rein to subjugate the common good and individual liberty to the electoral calculus of politicians, the whims of majorities, or the self-interest of factions.” But because she was duty-bound as a federal appellate judge to follow Supreme Court precedent, she continued, her hands were tied. “Rational basis review means property is at the mercy of the pillagers,”5 Brown concluded.
Her language was certainly provocative, but Brown’s analysis had merit. The rational-basis test does indeed stack the deck in favor of lawmakers. That’s the whole reason the Supreme Court adopted it in the first place. It evolved directly from the judicial deference long championed by Justice Oliver Wendell Holmes and his Progressive and New Deal allies, best captured by Holmes’s oft-quoted maxim that the judiciary had no business interfering with “the right of a majority to embody their opinions in law.”6 For those plaintiffs unfortunate enough to come up against the rational-basis test in court, the odds are purposefully piled up against them. As the Supreme Court once described it, “the burden is on the one attacking the legislative arrangement to negative every conceivable basis which might conceivably support it.”7 In other words, plaintiffs and their lawyers must not only defeat the government’s stated rationale for the contested regulation, they must also defeat any hypothetical rationale that a government lawyer, or even the presiding judge, might “conceivably” imagine in defense of the statute during trial.
To say the least, that is a rocky road to travel on the quest to invalidate a statute. But it is not an impossible road to travel, as has been proved repeatedly in recent years by a small band of libertarian lawyers employed by the Institute for Justice (IJ), an Arlington, Virginia–based outfit that styles itself as “the nation’s only libertarian, civil liberties, public interest law firm.” Over the past two decades, the Institute for Justice has defeated government regulations in dozens of major cases, including winning the first victory for economic liberty at the federal appellate court level since the New Deal. On top of that, IJ lawyers have won four times at the U.S. Supreme Court, including a 2005 decision invalidating protectionist state laws that banned the direct sale of wine to consumers from out-of-state wineries. And they have triumphed in such cases despite the extraordinary disadvantages they face under the rational-basis test and other widely practiced forms of judicial restraint.
If the libertarian legal movement is waging an insurgency, then the lawyers at the Institute for Justice comprise the elite core of its front-line fighters. Their mission is to defeat the enemy on its own ground and persuade deferential judges to overrule government actions. And while they don’t win every case, they have found more than a few ways to advance the cause.
“A Clarence Darrow Type”
The Institute for Justice was founded in Washington, D.C., in 1991 under the leadership of William H. “Chip” Mellor, a veteran litigator with deep roots in the libertarian and conservative legal movements. Mellor’s interest in politics dates back to his undergraduate years at Ohio State University in the early 1970s, when he was a student protestor raging against the Vietnam War. “During that time,” he later remembered, he had “a bit of an epiphany, and that was that both the left and right were really seeking the same thing, which was to use power in order to force others to do their bidding.” That realization sent him on a quest to find a better approach to politics, one more attuned to the rights of the individual. Eventually he would discover the works of libertarian writers such as Milton Friedman and Ayn Rand. “That convinced me that libertarianism had a lot to offer and that the arena in which I thought that was most potentially effective was the courtroom.”
So Mellor enrolled in law school at the University of Denver with the express purpose of becoming a crusading libertarian lawyer. “I thought I’d be like a Clarence Darrow type,” he recalled, referring to the famous defense attorney, and “ride into court and advocate on behalf of these wonderful clients and change the world.” He graduated in 1977 and quickly discovered that the pressing requirements of private practice left him little time to fight the good fight. But then a chance encounter changed everything. On a visit to his old law school campus that year, Mellor noticed a job listing for the position of law clerk at an organization called the Mountain States Legal Foundation. That ad featured one phrase in particular that caught Mellor’s eye: “free markets, private property rights, and individual liberty.” “I’d never seen anything remotely like that anywhere,” he remembered with a laugh. “So I came up short and said, ‘Whoa, I’ve got to find out more about this.’” He went by the group’s office the next day to drop off his résumé in the hope that they might someday need another lawyer; when the spot for a new staff attorney soon opened up, he eagerly signed on.
The conservative legal movement was still in its infancy in 1977, and the Denver-based Mountain States Legal Foundation was one of just a handful of organizations then focused on promoting a right-of-center agenda in court. Founded that year thanks to seed money provided by the beer magnate Joseph Coors, a prominent supporter of conservative causes who also sat on the foundation’s original board of directors, Mountain States pursued a now-familiar conservative program, targeting environmental regulations, affirmative action policies, and government infringements on the free enterprise system. Mellor initially found it to be a decent fit for his admittedly non-mainstream views, although by no means a perfect one. “The people who were running it had never heard the term ‘libertarian’ before,” he recalled with a wry smile.
The first signs of real trouble came in the fall of 1982, when Mountain States launched a high-profile lawsuit against the city of Denver over its decision to award a single private company, Mile Hi Cablevision, the exclusive franchise to wire the entire city for cable television. It “sounds very quaint today,” Mellor explained, but cable television was a cutting-edge technology in those days, and the city’s plans were very ambitious. The real problem, as Mellor saw it, was the granting of the exclusive franchise, which violated the rights of “small guys trying to break into the oligopoly or monopoly situation.”
So Mellor and his colleagues filed suit against the city and promptly found themselves on the receiving end of national media attention, a most welcome development. Looking back today, Mellor still thinks it was a great lawsuit, “except for one thing.” It “ran up against, and challenged, the interests of the powers-that-be in Colorado, who happened to be very Republican at that time. And Mountain States was very connected to the Republican Party.” The decision to pursue the case had sparked heated disagreement within the organization, ultimately leading Joseph Coors to resign from the board of directors. In the end, Mountain States dropped the litigation. “We were right on the issue, but we were wrong on the politics,” Mellor said. “And that ultimately led to my leaving Mountain States under less than happy circumstances.”
It was a difficult experience for the idealistic young lawyer, but it turned out to be an invaluable one. For one thing, it impressed upon Mellor the fact that libertarianism was not synonymous with the interests of big business, including businesses being run by Republicans. But perhaps more important, it taught him an organizational lesson he would never forget. “Funding must never drive case selection,” he explained. “You must have a principled, long-term, philosophically and tactically consistent approach to litigation, rather than an ad hoc, reactive, and defensive one.” The Institute for Justice would eventually be founded on those very insights.
The Center for Applied Jurisprudence
In the meantime, Mellor needed a job, so he moved east to Washington in order to take up a post in Ronald Reagan’s Department of Energy, where he would remain until 1986. One day in 1985, Mellor received a surprise phone call from Antony Fisher, a philanthropist and activist heavily involved in the creation of several pioneering free-market think tanks and research outfits, including the Institute of Economic Affairs in London and the Manhattan Institute in New York City. Fisher was calling to gauge Mellor’s interest in running the Pacific Research Institute (PRI) in San Francisco, which specialized in economic analyses of public policy issues, particularly in the areas of monetary and environmental policy. “I said to Antony, ‘I’m very flattered,’” Mellor recalled, but he told him, “‘I’ve got a dream, and what I intend to do is establish a libertarian public interest [legal] organization.’ And he said, ‘OK, thanks for your time.’”
But then Fisher called back a week or so later and repeated the offer, with some added incentives to sweeten the proposal. He told Mellor there was room for growth at the Pacific Research Institute, and as long as he kept everything else on track, there was no reason why Mellor could not also begin to develop his dream legal outfit under the PRI wing. That sealed the deal.
According to Mellor, one of the key lessons he took away from his less-than-happy break with the Mountain States Legal Foundation was that while the potential for libertarian public interest law was there, it would only work if it was done right. “And I swore at that moment I was gonna do it the right way sometime, I just had to figure out how.” Now settled in at the reins of the Pacific Research Institute, Mellor got serious about solving the how problem. Under the rubric of PRI, Mellor established a Center for Applied Jurisprudence, which would serve as the base of operations for his first foray into libertarian legal planning. The next step was a frank assessment of the strengths and weaknesses of the concept to date. “My belief was that there was no single individual who knew exactly what to do when it came to any one issue, much less than when it came to the strategic approach to litigation I was trying to pursue,” he explained. Mellor had his own ideas, of course, “but I believed that there were others out there whose wisdom and expertise we could draw on.”
To capture that dispersed knowledge, the center put together three task forces organized around the subjects of economic liberty, property rights, and the First Amendment, three areas that Mellor and his colleagues had already identified as ripe for potential libertarian legal advocacy. Each task force consisted of a dozen or so experts in the field, mostly law professors and economists, including big names such as Milton Friedman, who participated in seminar-type discussions aimed at gleaning their insights. Also present at those seminars was a designated author, charged with synthesizing and applying that information and producing what Mellor called a “strategic litigation blueprint.” “The idea there,” he explained, “was that it would be best if we had a book, or multiple books, that then could be disseminated to law schools and lawyers and the media and whatnot, to show some substance to this.”8 The final result was three books published by the Pacific Research Institute between 1990 and 1993, each one laying out a proposed line of future legal attack. Those books are Unfinished Business: A Civil Rights Strategy for America’s Third Century,9 Freedom, Technology and the First Amendment,10 and Grand Theft and Petit Larceny: Property Rights in America.11 At last, Mellor and his allies were figuring out how to do libertarian public interest law right.
“The Necessity of Judicial Action”
The most influential of those three litigation blueprints was the book Unfinished Business, written by Clint Bolick, a former colleague of Mellor’s at the Mountain States Legal Foundation and his longtime co-conspirator in the quest to create a libertarian public interest law firm. In 1991, the two men would together found the Institute for Justice. “The judicial nullification of economic liberty stands as one of the most pervasive and debilitating deprivations of civil rights in America today,”12 Bolick announced in Unfinished Business, and it was time to do something about it. Modeling his litigation strategy explicitly on that of the civil rights movement of the 1950s and 1960s, Bolick urged libertarian lawyers to bring a series of test cases, each one matching a sympathetic client with a government regulation that had been pre-selected for destruction. Through painstaking work, the libertarians would then build up a body of favorable legal rulings against government overreach, thereby setting the stage for a future Supreme Court victory in their favor. This systematic approach, Bolick argued, was the best method for grappling with the significant disadvantages they faced under the rational-basis test. On top of that, Bolick counseled, they needed an overarching goal to keep their various efforts on track. “We should establish as our ultimate objective the reversal of The Slaughter-House Cases, much as the NAACP did when it set as its long-range goal the toppling of Plessy v. Ferguson.”13 Why Slaughter-House? Because, he explained, that was the case where the Supreme Court first unmoored the Fourteenth Amendment from its free labor origins. The libertarians would strike at the root of the problem and restore the Fourteenth Amendment as a shield for economic liberty.
A self-described “really nerdy kid,” Clint Bolick initially wanted to pursue a career in Republican politics until he “fell in love” with constitutional law after reading about the civil rights movement during his senior year in college. “Seeing cases like Brown v. Board of Education made me realize that one can achieve pretty radical change in the courts without having to compromise on principles,” he later explained. “You either win or you lose, and if you win you can fundamentally change the world.” That led him to law school at the University of California, Davis, where his political views took on an increasingly libertarian cast. After graduating in 1982, Bolick signed on as an attorney at the Mountain States Legal Foundation, where he began working with his future IJ co-founder Chip Mellor.
Like Mellor, Bolick also left Mountain States in the wake of the Denver cable case and moved east to Washington, where he accepted a position in the Reagan administration’s Equal Employment Opportunity Commission (EEOC), the federal agency charged with enforcing federal anti-discrimination laws. Heading up the EEOC at that time was a young and virtually unknown lawyer named Clarence Thomas.
“It really wasn’t until I worked at the EEOC with Clarence Thomas that I began to think of economic liberty as a civil rights issue,” Bolick later remembered. The two men became fast friends, and spent many hours together talking about law and history. A frequent topic in those days was the original meaning of the Fourteenth Amendment. “In Clarence Thomas I found a real kindred spirit on this issue,” Bolick said. “He felt that the whole concept of civil rights had been mis-defined over the years, that when you look at it from a historical standpoint, the Civil Rights Act of 1866 was all about economic liberties. And that was a very exciting concept for me.”14
Another key influence on Bolick’s thinking at that time came from reading the work of George Mason University economist Walter Williams, whose 1982 book The State against Blacks argued that government restrictions on economic liberty were particularly harmful to African Americans and other disadvantaged groups.15 A child of Philadelphia’s Richard Allen housing projects, where his neighbors included a young Bill Cosby, Williams combined scholarly analysis with his own first-hand insights into the economic obstacles facing black Americans. “There are many laws in the United States that systematically discriminate against the employment and advancement of people who are outsiders, latecomers and poor in resources,”16 Williams argued, pointing to various licensing restrictions placed on occupations such as electrician, plumber, and taxi cab driver. Those regulations may not explicitly mention race, Williams observed, but “they are discriminatory in the sense that they deny full opportunity for the most disadvantaged Americans, among whom blacks are disproportionately represented.”17 Williams wanted to see those regulatory obstacles struck from the books, and Bolick became determined to see that result achieved through litigation.
Armed with such ideas, and with Clarence Thomas serving as both boss and mentor at the EEOC, Bolick began putting the whole thing together into a coherent legal philosophy, ultimately writing a book on the subject called Changing Course: Civil Rights at the Crossroads, which appeared in 1988. If Unfinished Business was IJ’s original strategic litigation blueprint for advancing economic liberty, then Changing Course was the first draft of that strategy. “The civil rights movement should seek to reverse The Slaughter-House Cases, which upheld the power of government to create monopolies and impede entrepreneurial opportunities,”18 Bolick wrote in Changing Course. But in order for that to happen, he continued, the doctrine of judicial deference must be rejected. “What the advocates of judicial abstinence overlook is the crucial role assigned by the Constitution to the judiciary in the protection of civil rights, without which the state will be free—as in the Jim Crow era—to subvert civil rights virtually unchecked.”19 In short, Bolick argued, the libertarian legal movement must embrace “the necessity of judicial action.”20
Three years later, with Mellor at the helm and Bolick serving as second-in-command, the Institute for Justice opened its doors and began putting that libertarian strategy into practice.
“Sympathetic Clients, Outrageous Facts, Evil Villains”
You know an IJ case when you see one. “We start with the principle we seek to vindicate,” Chip Mellor explained, “and the issue that enables us to do it. And then we look for sympathetic clients, outrageous facts, evil villains.” Take the principle of economic liberty, which IJ lawyers seek to vindicate by overturning economic regulations in court. The typical IJ client in such cases is a fledgling entrepreneur or small-business owner battling a government agency over some sort of preposterous red-tape requirement. But the real issue at stake, IJ’s lawyers always tell the presiding judge, is the right to earn an honest living, a fundamental civil right that is eminently worthy of judicial respect and protection.
For instance, in the first case IJ filed back in 1991, Taalib-Din Abdul Uqdah v. District of Columbia, the Institute represented the owner of an African hair-braiding salon, Cornrows & Co., who had run afoul of the District’s requirement that he obtain a government-issued cosmetology license. That requirement made no sense, Mr. Uqdah tried explaining to city officials, because the lengthy (and costly) licensing process never once touched on even the rudiments of hair braiding or related techniques, and focused instead on things like chemical treatments and the execution of out-of-date hair styles that had been popular when the regulation first went into effect in the 1930s, such as “finger waves” and “pin curls.” In other words, the regulation had nothing to do with his business and did nothing to protect the health, welfare, or safety of anybody involved in the process of traditional African hair braiding. All it did was interfere with his ability to earn a living and pay his employees.
IJ agreed with that assessment, and on November 1, 1991, the Institute filed suit on Uqdah’s behalf in the U.S. District Court for the District of Columbia. In the meantime, the D.C. City Council, spurred to action by the unwelcome media attention generated by the case, started rethinking its whole approach to cosmetology licensing. A little more than a year after the lawsuit was filed, the City Council voted to repeal the regulation. Thanks to the Institute for Justice, Cornrows & Co. was back in business.
It was a genuine libertarian victory over arbitrary government, and IJ’s lawyers were thrilled to score their first win right out of the gate. But it was a legislative fix, not a judicial one, and IJ’s long-term agenda centered on securing greater judicial protection for economic liberty. So the hunt for the next test case continued. “All along the issue of occupational licensing was at the heart of our economic liberty work,” Mellor explained. “And so we were always looking for different occupations that were suffering from unreasonable licensing laws where there wasn’t a fit between any arguable legitimate public health and safety rationale and the means by which the government is seeking to achieve that.”
That search ultimately led Mellor and his colleagues to the state of Tennessee, where, according to a law called the Funeral Directors and Embalmers Act, only state-licensed funeral directors were permitted to sell coffins to paying customers. And that government license did not come cheap. Would-be license holders had two options: either complete one year of classroom work and a one-year apprenticeship under a licensed funeral director, or forgo the classroom entirely in favor of a two-year apprenticeship. In either case, the training process required many hours of labor and study, including the embalming of twenty-five human bodies. “In order to sell a box, you had to be a fully licensed funeral director,” Mellor recalled, laughing in disbelief. “Once I saw that, it just jumped out.”
Mellor had no problem with the idea of requiring actual funeral directors to carry a license—after all, their work did involve legitimate public health issues such as handling human remains and embalming dead bodies. But this statute went far beyond that and applied to any retail entrepreneur who simply wanted to sell caskets for a living, and who never once came in contact with a dead body as part of her job. Meanwhile, as Mellor discovered, established funeral directors throughout the state were marking up the price of coffins by as much as 600 percent, yet thanks to the burdensome licensing requirements, upstart competitors were effectively barred from coming in to offer a better price. And while state officials claimed the law was there to protect the health and safety of the public, Mellor learned that Tennessee placed no regulations of any kind on the design or manufacture of caskets. Indeed, it was perfectly legal in Tennessee to build your own casket for burial (with or without a sealed lid) or to be buried without a casket. “You start looking into it,” he said, and “it was just the perfect no-fit between any legitimate health and safety reason and all these burdens they are putting on.”21
So in September 1999 IJ filed suit in federal district court on behalf of several local entrepreneurs looking to break into the coffin business, including the case’s lead client, the Reverend Nathaniel Craigmiles of Chattanooga, who had cofounded an operation called Craigmiles Wilson Casket Supply in order to offer his parishioners and their families a more affordable alternative. Eleven months later, IJ won the first round in the case. Despite the pro-government deference mandated by the rational-basis test, the federal district court struck down the regulation.
Tennessee promptly appealed the loss, and on December 6, 2002, the U.S. Court of Appeals for the Sixth Circuit came down with its decision on the matter in Craigmiles v. Giles. Once again, IJ was victorious. Having reviewed the evidence before him, wrote Judge Danny Boggs for a unanimous three-judge panel of the Sixth Circuit, he saw no reason to defer to the state’s assertion that it had a rational basis for enacting the licensing law. “Tennessee’s justifications,” Boggs declared, “come close to striking us with the force of a five-week-old, unrefrigerated dead fish.”22
Not since the New Deal had a federal appellate court (the highest level short of the U.S. Supreme Court) struck down an economic regulation for violating the economic liberties secured by the Fourteenth Amendment. And it had done so in spite of the extraordinary judicial deference it was required to extend to lawmakers under the rational-basis test. “This measure,” the Sixth Circuit announced, “is not animated by a legitimate governmental purpose and cannot survive even rational basis review.”23
IJ had just scored a landmark victory, but there was no time to rest on its laurels. Indeed, the game was now afoot. In Oklahoma, a similar IJ lawsuit was then underway against that state’s nearly identical casket-sale licensing regulation. But in an unwelcome twist, the U.S. Court of Appeals for the Tenth Circuit voted in August 2004 to uphold the Oklahoma statute in the case of Powers v. Harris. To add insult to injury, Mellor was blindsided by that outcome. “During the oral argument it went so well in our favor, in terms of just the dynamic in the courtroom and everything,” he recalled, “that the attorney for the state of Oklahoma came up afterwards and all but admitted defeat.” As Mellor later acknowledged, he felt great when he stepped out of the courtroom that day. “And then not only did we lose, we lost three-zip.”24
In retrospect, that feeling of optimism makes sense. In its ruling, the Tenth Circuit essentially agreed with IJ’s main argument and conceded the state’s failure to provide any sort of rational public health or safety justification for its licensing law. But then the Tenth Circuit turned the tables and said the government had yet another arrow in its quiver of conceivable justifications: the economic protection of the state’s funeral industry from unwelcome competition. “While baseball may be the national pastime of the citizenry, dishing out special economic benefits to certain in-state industries remains the favored pastime of state and local governments,”25 the Tenth Circuit observed. And under the judicial deference demanded by the rational-basis test, the court held, those lawmakers are fully entitled to dish out the goods. “As a creature of politics, the definition of the public good changes with the political winds,” the Tenth Circuit wrote. “There simply is no constitutional or Platonic form against which we can (or could) judge the wisdom of economic regulation.”26 Put differently, it remained illegal in Oklahoma to sell a box without a government-issued license.
No lawyer likes to lose a big case, and this was no exception. But Mellor and his colleagues did identify one potential upside to the Tenth Circuit’s ruling. As Clint Bolick had argued in Unfinished Business, from the perspective of a public-interest litigator, every losing case is also a potential winner, since that loss may still be appealed to a higher court, and perhaps even reach the U.S. Supreme Court. So the loss in Powers v. Harris still fit within the organization’s long-term litigation strategy. What’s more, IJ’s loss at the Tenth Circuit had created what’s known as a “circuit split,” meaning the Tenth Circuit and the Sixth Circuit had now issued clashing opinions on the same legal issue, a fractured state of affairs that normally prompts the Supreme Court to step in to settle the controversy.
Thanks to IJ’s litigation, the stage was now at least partially set for a showdown before the highest court in the land. The Tenth Circuit’s ruling “creates a split on the basic question of whether pure economic protectionism is a legitimate state interest under the rational basis test,” IJ told the Supreme Court in a November 2004 petition seeking review of the case. “If permitted to stand, the Tenth Circuit’s decision would drain rational basis review of all content and would convert the right to earn a living—which this Court has consistently recognized since its earliest days—into a mere privilege.”27
Unhappily for IJ, however, the justices declined to take the case. As is customary, the Court gave no explanation for its rejection of the appeal, though the most likely reason is the Court’s deeply ingrained habit of judicial restraint. The justices did not wish to enter the thicket.
The Institute for Justice lost that battle, but the larger campaign is far from over. In a span of just five years, IJ’s lawyers secured not only a landmark victory for economic liberty at the Sixth Circuit, they presented the Supreme Court with a clear circuit split on the same issue. Those libertarian precedents remain on the books, ready to be used by a future Supreme Court that is willing to grapple with the issue of economic liberty and the Fourteenth Amendment.
“Taken for a Public Use”
The rational-basis test has been a thorn in the libertarian side since the New Deal. It has been a pain in property-rights cases for nearly as long.
According to Footnote Four of the famous 1938 Carolene Products decision, while the Supreme Court would henceforth presume the constitutionality of economic regulations and grant significant deference to the lawmaking bodies that passed them, “more exacting judicial scrutiny” would still be appropriate in other types of cases. For instance, “when legislation appears on its face to be within a specific prohibition of the Constitution, such as those of the first ten amendments,”28 the Court would carefully examine the government’s actions to make sure no part of the Bill of Rights had been violated.
Or at least that’s what the Supreme Court said. What the Court has done is something different. Consider the issue of eminent domain. According to the Fifth Amendment, “private property [shall not] be taken for public use without just compensation.” Also known as the Takings Clause, this provision authorizes the government to wield the power of eminent domain in limited circumstances. In the classic example, the government turns to eminent domain when it needs to acquire privately owned land in order to build a road or a bridge—two undeniable instances of use by the public—and then compensates the former landowner at fair market value from the public treasury.
Yet in the 1954 case of Berman v. Parker, the Supreme Court ignored its own Carolene Products framework and quietly introduced rational-basis-style deference into its treatment of the Takings Clause, despite the fact that the clause is clearly a part of the Bill of Rights. At issue in Berman was a so-called slum clearance measure from Washington, D.C. Essentially, government officials had determined that a poor neighborhood in southwest Washington was beyond repair, and they therefore wanted to seize all privately held property in the area, raze it, and start over from scratch—an approach also known as “urban renewal.” Among the properties targeted for condemnation was a department store, whose owner loudly objected to the government’s plans to bulldoze his non-blighted, non-slum property.
Writing for a unanimous Supreme Court, Justice William O. Douglas took the government’s side. According to Douglas, the judiciary had no business second-guessing whether or not a particular exercise of the eminent domain power counted as a valid public use. That determination rested solely with the legislature. “When the legislature has spoken,” Douglas wrote, “the public interest has been declared in terms well nigh conclusive.”29 Indeed, he declared, so long as just compensation has been paid, “the rights of these property owners are satisfied.”30 Although the public use requirement is a “specific prohibition of the Constitution,” the Berman Court ignored Footnote Four and failed to provide “more exacting judicial scrutiny” on its behalf.
Unsurprisingly, the lawyers at the Institute for Justice have a fundamental disagreement with this deferential approach, and from day one they were on the lookout for a property rights case strong enough to challenge the status quo. They hit the jackpot in 1994 when they took on the matter of Casino Reinvestment Development Authority v. Coking. The case originated in Atlantic City, New Jersey, where local authorities sought to condemn the home of an elderly widow named Vera Coking, who lived just off the city’s famous beachfront boardwalk, in order to turn her land into a limousine parking lot for the neighboring Trump Plaza, the high-rise hotel and casino owned by real estate tycoon Donald Trump. As Coking saw it, there was nothing remotely public-minded about the government’s demolishing her home of more than thirty years in order to provide extra parking spots for Trump’s customers. The lawyers at the Institute for Justice could not have agreed more, so they took up Coking’s case, fought it out in court, and ultimately prevailed, allowing her to remain in her home.
It was a flagrant example of eminent domain abuse, and it was also precisely the sort of David against Goliath story that journalists love to cover. As a result, IJ also won a resounding victory in the court of public opinion, earning sympathetic coverage from outlets ranging from The Economist, which called it a battle between those who value “thrusting, self-promoting moguls” and those who value “small businesses, families and property rights,”31 to the New York Times, which described IJ’s courtroom triumph with the words “today, the little guys won.”32
But that publicity also had far-reaching consequences that extended well beyond the Atlantic City boardwalk. Some 250 miles to the north, in the modest city of New London, Connecticut, a small band of property owners were fighting their own uphill battle to save their homes and neighborhood from the forces of eminent domain. Once those folks learned about IJ’s victory over Trump, they knew right where to turn for the legal help they so desperately needed.
The Little Pink House
The saga officially began on February 3, 1998, when the pharmaceutical company Pfizer announced its plans to build a giant new research and development facility in New London, Connecticut. As part of the deal, city officials agreed to refurbish the surrounding area, including the adjacent neighborhood of Fort Trumbull, a ninety-acre working-class enclave. The idea was for New London to buy out existing property owners and then turn their land over to a private developer who would construct a new luxury hotel, apartment buildings, office towers, and other upscale amenities to complement the new Pfizer facility. This redevelopment scheme was supposed to lure new businesses to the area, create new jobs, and broaden the tax base.
The driving force behind this massive project was the New London Development Corporation (NLDC), a quasi-public entity endowed by the city with tremendous governmental powers, ultimately including the authority to seize private property on the city’s behalf via eminent domain. Heading up the NLDC at this time was a woman named Claire Gaudiani, who also served as the president of nearby Connecticut College. As it happened, Gaudiani had a number of close ties to Pfizer’s local power brokers, a friendly arrangement that helped smooth the eventual real estate deal. For one thing, her husband was a Pfizer employee who worked under company executive George Milne Jr., president of Pfizer’s central research division. For another, Milne sat on the board of trustees at Connecticut College. Based on that relationship, Milne accepted Gaudiani’s offer to join the NLDC board in 1997. Within a year, Milne was pushing Pfizer to partner with the NLDC and build its new research and development facility in New London.
Among the local residents who took a dimmer view of the city’s plans was Susette Kelo, a registered nurse and divorced mother of three. In August 1997, Kelo had purchased a run-down house in Fort Trumbull, which she picked for its stunning views of the nearby Thames River, and had immediately gone to work fixing it up. As she would tell the press time and again as the conflict unfolded, she loved her “little pink house” and did not want to see it bulldozed by the city for the benefit of Pfizer and other private interests. Her principled opposition would eventually form the backbone of a local property rights movement that in turn sparked the high-profile lawsuit against the redevelopment scheme.33
Senior Attorney Scott Bullock has been a fixture at the Institute for Justice from day one. A self-described libertarian since high school, as an undergraduate at Grove City College in western Pennsylvania Bullock studied Austrian economics, a branch of the field closely associated with such free-market thinkers as Friedrich Hayek and Ludwig von Mises. At the same time, he later explained, “I always had an interest in legal issues and in particular in the Constitution, and I saw constitutional law as a way of combining the principles of liberty with the ability to do something about it.”34 That growing interest led him to enroll in law school at the University of Pittsburgh in 1988, though it was during his summer breaks that he really laid the foundation for his future legal career. During his first summer off from law school, Bullock served as the inaugural intern at the Cato Institute’s new Center for Constitutional Studies. The next year, Bullock spent the summer working for Clint Bolick, who had since left the Reagan administration in order to practice law at the Landmark Legal Foundation’s Center for Civil Rights. One day over lunch, Bolick told him about his and Chip Mellor’s plans to open an explicitly libertarian public interest law firm and said Bullock should come work for them once he had his law degree in hand. On the spot, Bullock made up his mind to do precisely that.
Now fast-forward to May 2000. Bullock was working at his desk one day when he came upon a letter mailed to the Institute for Justice by a man named Peter Kreckovic of New London, Connecticut. Kreckovic turned out to be a local artist working with Susette Kelo and several of her neighbors in their fight against New London’s proposed use of eminent domain against their properties. After that group learned about IJ’s role in the Trump fight, Kreckovic was deputized to draft a letter to the organization asking for its help.
“I read the letter and saw that it was exactly the type of situation we were working against,” Bullock later recalled. So he got on the telephone to Kreckovic to get more information. “That led to me traveling to New London and going to the little pink house and meeting Susette and the other property owners and some of the local activists and going on from there.”
At that point, Kelo and her neighbors had already been fighting New London and the NLDC for more than two years, but a major new battlefront was about to open up. Although nobody realized it at the time, Kreckovic’s letter had just launched a five-year courtroom odyssey that ultimately took Kelo, Bullock, and their allies from the Superior Court of New London, where they won a partial victory after a seven-day bench trial in 2002, to the Connecticut Supreme Court, where the property owners lost on all counts in 2004, and finally to the highest court in the land in 2005, where the justices of the U.S. Supreme Court would consider the following question: “What protection does the Fifth Amendment’s public use requirement provide for individuals whose property is being condemned, not to eliminate slums or blight, but for the sole purpose of ‘economic development’ that will perhaps increase tax revenues and improve the local economy?”35
The “Theme of Judicial Deference”
According to city officials in New London, they needed to seize the properties owned by Susette Kelo and her neighbors in order to bring about a sweeping plan for the “revitalization” of the ninety-acre Fort Trumbull neighborhood that was designed to piggyback on the new Pfizer facility. That redevelopment would ultimately benefit the rest of the city, those officials claimed, through the creation of new jobs and increased tax revenues. As the city saw it, those results obviously qualified this taking of private property as a legitimate public use.
The Connecticut Supreme Court agreed. Pointing to what it called the U.S. Supreme Court’s “theme of judicial deference to the legislative public use determination,” the Connecticut high court’s March 2004 decision applied that same approving standard to New London’s planned condemnations in Fort Trumbull. According to the Connecticut Supreme Court, so long as “the appropriate legislative authority rationally has determined” that a proposed economic development project will create jobs, increase taxes, or otherwise benefit the city, it constitutes “a valid public use for the exercise of the eminent domain power under either the state or federal constitution.”36
That “theme of judicial deference” included not only the Supreme Court’s 1954 ruling in Berman v. Parker, it also included a more recent opinion, the Court’s 1984 ruling in Hawaii Housing Authority v. Midkiff. In that case, the Court had cited Berman extensively while upholding Hawaii’s seizure of private property for the purposes of breaking up what it called a land oligopoly, a situation where nearly half of the island’s lands were in the possession of seventy-two private owners. “When the legislature’s purpose is legitimate and its means are not irrational,” the Court declared in Midkiff, borrowing language from the rational-basis test, “our cases make clear that empirical debates over the wisdom of takings—no less than debates over the wisdom of other kinds of socioeconomic legislation—are not to be carried out in the federal courts.”37 Translation: The Supreme Court would practice judicial deference in public use cases.
Bullock and his IJ colleagues had no illusions about the difficult task they faced under those two sweeping precedents. Indeed, as a law student, Bullock had been taught that the public use provision of the Takings Clause was effectively meaningless thanks to the Supreme Court. “The professor’s attitude was, ‘this used to be a controversy but now basically anything goes. Let’s turn to other issues,’” he recalled with a grim laugh. On top of that, the author of the majority opinion in Midkiff was none other than Justice Sandra Day O’Connor, a moderate conservative who was still sitting on the Court. To say the least, O’Connor was not going to be interested in overruling her own previous decision. Yet in order to win the case, the Bullock team was going to need her support.
“We knew it was going to be hard to cobble together five votes” to overturn Berman and Midkiff, Bullock explained. So IJ decided not to ask. “That was something that we said was an option,”38 but they basically left it at that in their briefing. Instead, IJ argued that Kelo was distinguishable from Berman and Midkiff because in those earlier cases the government had used eminent domain to remove two immediate public problems: namely, blight and oligopoly. In Kelo, on the other hand, no comparable social ills were in need of correction. In fact, far from being blighted, Fort Trumbull was a respectable working-class neighborhood full of residents who loved their well-tended homes and had no desire to move out. One of IJ’s clients in the case, a woman named Wilhelmina Dery, still lived in the very same Fort Trumbull house where she was born in 1918. She had never lived anywhere else.
“To petitioners, like most Americans, their homes are their castles,” IJ told the Supreme Court in its main brief. “In this case, they face the loss of the homes and neighbors they cherish through the use of eminent domain not for a traditional public use, such as a road or public building, nor even for the removal of blight.” Instead, the city of New London seeks “to take Petitioners’ 15 homes to turn them over to other private parties in the hope that the City may benefit from whatever trickle-down effects those new businesses produce.”39 Yes, Berman and Midkiff granted the government broad powers to take private property, IJ acknowledged. But those precedents did not authorize anything as far reaching as what New London wanted to do here. To uphold the city’s actions, IJ maintained, would require “a dramatic departure from this Court’s jurisprudence.”40
Meanwhile, as Bullock and his colleagues were putting the finishing touches on their legal arguments, IJ was assembling an impressive cast of bipartisan allies to lobby the Supreme Court with friend-of-the-court briefs filed on Susette Kelo’s behalf. Among those who joined the property rights side were parties ranging from the libertarian Cato Institute to the famous urban theorist Jane Jacobs, author of The Death and Life of Great American Cities. But perhaps the most notable support of all came from the NAACP, which told the Supreme Court that “Elimination of the requirement that any taking be for a true public use will disproportionately harm racial and ethnic minorities, the elderly, and the economically underprivileged.” To rule in New London’s favor, the NAACP said in its brief, “would virtually eliminate judicial review and fail to protect the rights of already disadvantaged groups from majoritarian pressures.”41 With the NAACP now officially allied with the libertarians, IJ co-founder Clint Bolick’s original civil rights strategy had come full circle.
Eminent Domain on Trial
When the Supreme Court assembled to hear oral argument in Kelo v. City of New London on the morning of February 22, 2005, it did so with two empty seats on the bench. Chief Justice William Rehnquist was at home that day, battling the thyroid cancer that would claim his life seven months later. Justice John Paul Stevens, meanwhile, was stranded at the airport in Florida, his flight back to Washington delayed due to bad weather. That left Justice Sandra Day O’Connor, the most senior justice in attendance, to call the proceedings to order.
“We will now hear argument in the case of Kelo v. City of New London,” she announced at 10:12 a.m. “Mr. Bullock.”
“Justice O’Connor, and may it please the Court,” Bullock began, employing the traditional opening used by all parties who appear before the Supreme Court. “This case is about whether there are any limits on government’s eminent domain power under the public use requirement of the Fifth Amendment. Every home, church or corner store would produce more tax revenue and jobs if it were a Costco, a shopping mall or a private office. But if that’s the justification for the use of eminent domain,” he stressed, “then any city can take property anywhere within its borders for any private use that might make more money than what is there now.”42
It was IJ’s entire case in miniature. New London wanted to bulldoze a working-class neighborhood and replace it with various upscale businesses operated on a for-profit basis. That was not a legitimate public use under the Constitution, IJ said; it was public power unleashed on behalf of private gain.
But the Court’s liberal justices did not quite see it that way. “Mr. Bullock, you are leaving out that New London was in a depressed economic condition,” interjected Justice Ruth Bader Ginsburg as Bullock was wrapping up his opening statement. “The critical fact on the city side, at least, is that this was a depressed community and they wanted to build it up, get more jobs.” Bullock responded that while New London may have been experiencing some economic troubles, the Connecticut law at issue actually allowed any city in the state to employ eminent domain for any economic development purposes at any time, not just in those cases where the municipality was facing some specific financial hardship. “Every city has problems. Every city would like to have more revenue,” he argued. “But that cannot be a justification for the use of eminent domain.”43
Meanwhile, Justice Stephen Breyer was wondering whether the Supreme Court had any business reviewing the city’s determination of what counted as a legitimate public use in the first place. “There is no taking for private use that you could imagine in reality that wouldn’t also have a public benefit of some kind, whether it’s increasing jobs or increasing taxes, et cetera. That’s a fact of the world. And so given that fact of the world,” Breyer said, “virtually every taking is alright, as long as there is some public benefit, which there always is, and it’s up to the legislature.”
That statement frustrated Bullock, and he did his best not to show it. Under Breyer’s logic, he thought, the public use requirement might as well be erased from the Constitution. “Your Honor, we think that cuts way too broadly,” he responded. “Because then every property, every home, every business can then be taken for any private use.”
But Breyer refused to budge. “No,” he snapped back in response. “It could only be taken if there is a public use and there almost always is.”44
The next line of attack came from Justice David Souter, who wanted to know what was wrong with a city’s acquiring private property for the purposes of redevelopment. Assume that instead of using eminent domain, Souter said, the city just used money from its tax coffers to buy up the land and then sold it to a developer. “Would you say just within the general understanding of proper governmental purposes that the city was acting in a way that had no legitimate public purpose?”
Bullock agreed that Souter’s hypothetical would be legitimate. So then “why isn’t there a public purpose here?”45 Souter asked. Because the Takings Clause of the Fifth Amendment imposed additional restrictions on government power, Bullock answered.
Justice Antonin Scalia then entered the fray with a question that reshuffled the entire debate. “Mr. Bullock, do you equate purpose with use?” he asked. “Does the public use requirement mean nothing more than that it have a public purpose?”
“No, Your Honor,” Bullock replied.
“But if that is your answer,” Souter promptly piped back up, “then the slum clearance cases have got to go the other way.”46
Bullock had just entered a minefield, and he knew it. In its 1954 decision in Berman v. Parker, the so-called slum clearance case from Washington, D.C., the Supreme Court had granted Congress wide latitude in determining what counted as a public use under the Fifth Amendment, and in the course of doing so, the Court had used the phrase “public purpose” as if it were synonymous with the phrase “public use.” “The legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation,” Justice William O. Douglas had written in Berman. “The role of the judiciary in determining whether that power is being exercised for a public purpose is an extremely narrow one.”47
To make matters worse for Bullock, in its 1984 opinion in Hawaii Housing Authority v. Midkiff, the Supreme Court had quoted extensively from Berman and also adopted that case’s “public purpose” formulation in an opinion written by Justice Sandra Day O’Connor, who was now sitting just a few feet in front of him. Bullock therefore needed to distinguish Kelo from Berman and explain why the slum clearance case could stay on the books even if his clients won the case.
The difference, Bullock explained, hewing closely to the arguments laid out in IJ’s brief, is that in Berman, “the public purpose, if you want to call it that, was served once the blight was removed.” By the same token, in Midkiff, “the public purpose was served once the oligopoly was broken up.”48 In both cases, “the public purpose was direct and immediate.”
By contrast, he told the justices, in this case “the only public benefits that come about, if they come about at all, are completely dependent upon private parties actually making a profit.”49 It was trickle-down economics, he said. There was nothing direct or immediate about it.
At this point, Justice Anthony Kennedy began signaling his own thinking on the matter—and it did not look good to the Bullock team. “Precisely the description you gave applied to the railroads in the west,” Kennedy told Bullock.
But that’s a different issue, Bullock tried to explain before Kennedy cut him off. “The argument is, and I don’t know of any reason to doubt it,” Kennedy said, that buying up needed land “by voluntary acquisition and sale doesn’t work. . . . There isn’t another practical way to do it.”
That proved to be almost too much for Bullock to swallow. “Your Honor,” he carefully responded, “there are many ways to do economic development without condemnation. It happens every single day in this country.”50
Unfortunately for Bullock, the die appeared to be cast. “The most frustrating justice for us was Kennedy,” he later acknowledged. “I felt like I was just not making any progress with him during the argument, and he just did not seem to be really troubled by this.”51 That lack of progress was especially notable in light of Kennedy’s previous jurisprudence. In a 1993 opinion, for instance, Kennedy had declared, “individual freedom finds tangible expression in property rights.”52 Yet during the Kelo arguments, Kennedy appeared totally unmoved by any such libertarian concerns. It was a distressing omen for the Bullock team.
“I Would Not Draw a Line”
Next up at the lectern was Wesley W. Horton, a veteran Connecticut litigator hired by the city to argue on its behalf. He came out swinging in favor of judicial restraint. “Justice O’Connor, and may it please the Court,” Horton began. “The principal purpose of the takings clause is to provide for just compensation.”
“But it has to be for a valid public use,” O’Connor immediately shot back.
“I completely agree with that,” Horton rallied. “But the primary purpose of the takings clause is not to regulate legislative determinations of that.”53
Horton had opened his remarks by paraphrasing the conclusion of Berman, in which Justice Douglas maintained that so long as just compensation was paid, the rights of the department store owner under the Takings Clause were fully vindicated. Yet O’Connor refused to let Horton’s gloss on Berman go unchallenged. Was she now having second thoughts about the sweeping judicial deference she had endorsed in her Midkiff opinion? The packed courtroom was about to find out.
But first Justice Scalia wanted to know just how much power the government was claiming for itself in this case. “What difference does it make, that New London was in an economic depression?” Scalia asked. “Would it not be fully as much, under your theory of a public use, for a city to say, yes, we are not doing badly, but we could do better. Let’s attract some high-tech industry here. You can’t possibly draw a line between depressed cities and undepressed cities, can you?”
Horton conceded, “I would not draw a line.”
Scalia kept at it. “You wouldn’t. And you wouldn’t ask us to do it either.” Then Scalia moved in for the kill. Under your theory of the case, he asked Horton, “you could take [private property] from A and give it to B if B is richer, and would pay higher municipal taxes, couldn’t you?”
“Yes, Your Honor,”54 Horton replied calmly. The city could do that under New London’s theory. Bullock was shocked by Horton’s admission. “That’s what we were saying,”55 he later recalled. New London had just admitted the principal theme of IJ’s case.
Nor was Bullock the only person in the courtroom to be surprised by Horton’s answer. “For example,” O’Connor quickly interjected on top of Scalia’s questioning, “Motel 6 and the city thinks, well, if we had a Ritz-Carlton, we would have higher taxes. Now, is that okay?”
“Yes, Your Honor, that would be okay,”56 Horton promptly responded.
Once again, Bullock was shocked. And this time so was O’Connor. “When you’re that close to them you can really see the looks on their faces,” Bullock recalled. And from where he was sitting, he watched a visibly flabbergasted O’Connor take a moment to digest Horton’s answer. “I could tell that she was shocked that he would just concede that up front and go on with it. That was really encouraging for having her vote, especially given the fact that she had written the Midkiff opinion.”57
Horton’s frank endorsement of government power appeared to trouble even some of the Court’s more liberal justices, who up until that point had seemed fully in favor of the city’s position. “Could the courts, under this clause, at least review what you’ve said for reasonableness?” Breyer asked him several minutes later. “I mean, look at the reasonableness of a claim that this is for—basically for a public use. . . . Is that a possible kind of review that you might find appropriate here?”
But Horton refused to give an inch. “No, Your Honor, if what you’re defining as reasonableness is being higher than rational basis.”58 This case called for judicial deference to lawmakers, Horton maintained. End of story.
As Horton’s time at the lectern began winding down, Bullock started gathering his own thoughts in preparation for his final rebuttal, which would last approximately three minutes. He knew immediately that he should refocus the Court’s attention on O’Connor’s troubling exchange with the Connecticut lawyer. “I think the key to understanding their argument,” Bullock told the justices in summary, “is the answer to the question of, can you take a Motel 6 and give it to a fancier hotel? Their answer is yes. And that’s what’s really at stake here.”59
“Our Longstanding Policy of Deference”
The Supreme Court normally takes at least several months to issue a ruling in a big case, particularly when the outcome is closely divided. The Bullock team waited a full three months for the opinion in Kelo, and when it finally arrived on the morning of June 23, 2005, the second-to-last day of the 2004–2005 term, it came as a supreme disappointment to the libertarians. “We were hopeful but we knew it was going to be very close,”60 Bullock recalled. Close it was. By a vote of five to four, the Supreme Court upheld New London’s use of eminent domain for the purposes of economic development. And just as Bullock had feared, Kennedy joined the Court’s liberals—Stevens, Breyer, Ginsburg, and Souter—in voting to allow the forced condemnations to proceed.
Ironically, Stevens, who had missed the oral argument due to his weather-delayed flight, wrote the majority opinion. “The disposition of this case,” he declared, “turns on the question of whether the City’s development plan serves a ‘public purpose.’ Without exception, our cases have defined that concept broadly, reflecting our longstanding policy of deference to legislative judgments in this field.”61 Referring repeatedly to the Court’s unwillingness to “second-guess” the city’s determinations, Stevens maintained that it was up to the legislature, not the judiciary, to decide, “what public needs justify the use of the takings power.”62
Bullock had also been right about O’Connor. Writing in dissent, she accused her colleagues in the majority of abdicating their constitutional responsibility to safeguard every word of the Constitution. The result of today’s decision, she wrote, in an opinion joined by Chief Justice Rehnquist and Justices Scalia and Clarence Thomas, “is to wash out any distinction between private and public use of property—and thereby effectively delete the words ‘for public use’ from the Takings Clause of the Fifth Amendment.”63
As he often does, Justice Thomas also filed a solo dissent in which he laid out an even stronger critique of the majority opinion than the one offered by his fellow dissenters. He pulled no punches here. Poor and minority neighborhoods will bear the brunt of this decision, Thomas declared, echoing the arguments made in the NAACP brief, both because those neighborhoods are the most likely to be targeted by the government for “renewal” and because the people who live in them lack the political clout to stop it. “If ever there were justification for intrusive judicial review of constitutional provisions that protect ‘discrete and insular minorities,’” Thomas wrote, quoting from Footnote Four of the Carolene Products opinion, “surely that principle would apply with great force to the powerless groups and individuals the Public Use Clause protects. The deferential standard this Court has adopted for the Public Use Clause is therefore deeply perverse.”64 Thomas left no doubt that if it were up to him, both Kelo and Berman would have come out the other way.
“I’m Sorry”
As news of the opinion spread, the outcry against the Court’s ruling was fast and furious. Democratic Representative Maxine Waters of California, for instance, an outspoken liberal, called Kelo “the most un-American thing that can be done.” Her Republican colleague Tom DeLay of Texas, normally an ideological opponent, offered a similar critique. “The Supreme Court voted last week to undo private property rights and to empower governments to kick people out of their homes and give them to someone else because they feel like it,”65 DeLay fumed. National polls would later echo that initial negative reaction. According to a 2008 Associated Press/National Constitution Center poll, for instance, 87 percent of Americans said they were opposed to the government’s having “the power to take people’s private property in the interests of redeveloping an area.”66
“It really was devastating to come that close and to not prevail,” IJ president Chip Mellor later said, but he was also determined to capitalize on the public outrage. “So I came in the next day and said we are going to get space at the National Press Club and we are going to hold a news conference launching a national initiative to secure greater constitutional protection in all fifty states. And we did.”67 To date, that post-Kelo campaign has helped spark legislative reform in more than forty states. At the same time, IJ has continued to press its property rights arguments in state courts under the respective state constitutions. Among the fruits of that litigation strategy was a unanimous 2006 ruling by the Ohio Supreme Court that explicitly repudiated Kelo and declared the seizure of private property for the purpose of economic development to be unconstitutional in the Buckeye State.68
On the national level, meanwhile, Kelo quickly became a new talking point in the debate over the courts, even emerging as a new litmus test for judicial candidates. Since 2005, every Supreme Court nominee has faced sharp questioning about the case from Senate Republicans, who also typically use the opportunity to call for Kelo’s reversal. During Sonia Sotomayor’s 2009 confirmation hearings, for instance, Republican Charles Grassley of Iowa asked her repeatedly if she agreed with the outcome in Kelo, causing the future justice to visibly wilt under the pressure. “I can only talk about what the—the Court said in the context of that particular case and to explain that it is the context of the Court’s holding,” Sotomayor told him in frustration. The best she could manage, she said, was that as a legal precedent “it’s entitled to stare decisis effect and deference.”69 Not exactly reassuring to Kelo’s many critics.
Back in New London, meanwhile, the situation went from bad to worse. Despite prevailing at the Supreme Court, the development project that was supposed to entice Pfizer and provide “appreciable benefits to the community”70 (in the approving words of Justice Stevens’s majority opinion) was never built, and in November 2009 Pfizer announced that it was closing shop and pulling out of New London entirely. As for Fort Trumbull, the razed neighborhood was never redeveloped and continues to stand empty today. In fact, in the aftermath of Hurricane Irene in 2011, New London officials encouraged city residents to use Fort Trumbull as a dumpsite for storm debris.
But that’s not the worst of it. As Hartford Courant reporter Jeff Benedict revealed in September 2011, Connecticut Supreme Court Justice Richard N. Palmer, one of the four justices who voted against the property owners and thus directly precipitated their appeal to the U.S. Supreme Court, personally apologized to Susette Kelo at a May 2010 event at the New Haven Lawn Club. “Justice Palmer turned to Susette, took her hand and offered a heartfelt apology,” Benedict reported. “Tears trickled down her red cheeks. It was the first time in the 12-year saga that anyone had uttered the words ‘I’m sorry.’”71
A Libertarian Lesson
Today, Kelo serves as a rallying cry for the libertarian legal movement, an object lesson for judges, lawyers, and politicians about the dangers of judicial deference. And that lesson has not been lost on the American right. Indeed, conservatives now overwhelmingly oppose Kelo and favor its repeal in a future case. When it comes to the judicial protection of property rights, the conservative legal movement has gone libertarian.