Why, in the face of the massive public backlash against Kelo, has there been so much ineffective legislation? Multiple factors are likely at work. But the weakness of much post- Kelo legislation is at least in large part due to widespread public ignorance. Survey data show that the overwhelming majority of citizens know little or nothing about post-Kelo reform laws in their states. The vast majority do not know whether their states have passed post- Kelo reform legislation and even fewer know whether that legislation is likely to be effective.1
This widespread ignorance may well account for the ineffectiveness of many of the new laws. It also helps account for several other aspects of the Kelo backlash, including its timing and the greater effectiveness of laws enacted by referenda relative to those adopted through the legislative process.2 The political ignorance theory accounts for the pattern of reform laws better than the main alternative explanation, which holds that the relative paucity of effective reform laws is primarily the result of interest group lobbying.3
As discussed in chapter 3, voters are “rationally ignorant” of public policy, having little incentive to acquire any substantial knowledge about the details of government actions.4 The publicity surrounding Kelo made the public at least somewhat aware of the problem of economic development takings. But it did not lead most voters to closely scrutinize the details of proposed reform legislation. Few citizens have the time or inclination to delve into such matters, and many are often ignorant of the very existence of even the most important legislative measures. Survey data shows that the vast majority of Americans were indeed ignorant of the content of post- Kelo reform legislation in their states. In an August 2007 Saint Index survey, only 21 percent of respondents could correctly answer whether or not their states had passed eminent domain reform legislation since Kelo, and only 13 percent both knew whether their states had passed legislation and correctly indicated whether that legislation was likely to be effective.5
The political ignorance hypothesis cannot explain every aspect of the Kelo backlash. But it correctly predicts three important events: the sudden emergence of the Kelo backlash, in spite of the fact that economic development takings were already permitted under existing precedent; the passage of “position-taking” laws by both state and federal legislators; and the fact that that post- Kelo laws enacted by popular referendum tended to be much stronger than those enacted by state legislatures. No other theory can easily account for all three of these seeming anomalies.
Public Ignorance of Post- Kelo Reform Laws
As we saw in chapter 3, most citizens are “rationally ignorant” about most aspects of public policy because there is so little chance that an increase in any one voter’s knowledge would have a significant impact on policy outcomes. Survey data compiled at my request by the Saint Consulting Group, a firm that sponsors surveys on land use policy, confirm that most Americans have little or no knowledge of post- Kelo reform. The data compiled in table 6.1 are based on an August 2007 Saint Index national survey.6 It therefore counts as having enacted post- Kelo reform only in those states that had passed their laws before the poll was conducted.
The Saint Index results demonstrate that political ignorance about post- Kelo reform is widespread. Only 13 percent of respondents could both correctly answer whether or not their states had enacted eminent domain reform laws between 2005 and the date of the survey, and correctly answer a follow-up question about whether or not those laws were likely to be effective in preventing condemnations for economic develop-ment.7 Only 21 percent could even correctly answer the first question in the sequence: whether or not their states had enacted eminent domain reform since Kelo was decided in 2005.8 These figures do not change significantly if we drop the very close cases of Idaho and Wisconsin from the sample or classify both effective and ineffective answers as correct for survey respondents in these two states.9
It is also important to recognize that 6 percent of respondents believed that their states had enacted post- Kelo reforms that were likely to
be “effective” in reducing economic development takings even though the state in fact had not. This is not a large number in absolute terms, but it still represents more than one-third of the 17 percent of respondents who expressed any opinion at all about the effectiveness of their states’ reforms.10 An additional 2 percent wrongly believed that their states’ reform laws were ineffective even though the opposite was in fact true. Even among the small minority of Americans who paid close enough attention to post- Kelo reform legislation to have an opinion about its effectiveness, there was a high degree of ignorance.11
Table 6.1 indicates that ignorance about state post- Kelo reform cuts across gender, racial, and political lines. Some 85 percent of men and 90 percent of women were ignorant about the condition of post- Kelo reform, as were 82 percent of African Americans, 89 percent of whites, and similar overwhelming majorities of liberals and conservatives, Democrats and Republicans, and other groups. It is difficult to avoid the conclusion that most Americans are ignorant about the existence, or lack thereof, of post- Kelo reform in their states, and even fewer can tell whether the reform was effective or not.
The Saint Index data may even understate the amount of ignorance about post- Kelo reform. Some respondents may have gotten the right answers by guessing. In order to get a correct answer, respondents living in the eight states that had not passed any post- Kelo reform by 2007 needed only to get one binary question correct and had a 50 percent chance of getting the right answer through random guessing. Residents of the forty-two states that have passed reform laws needed to get two such questions correct and thus had a 25 percent chance of doing so through random guessing.12 Past research shows that many survey respondents will guess in order to avoid admitting ignorance about the subject matter of a poll question, and that may have happened in this case as well.13 An additional factor biasing the knowledge levels found in the Saint Index survey upward is the fact that the pollsters only surveyed Americans over the age of twenty-one. Political knowledge is generally correlated with age,14 and young adults (people aged eighteen to twenty-nine) have the highest incidence of ignorance of any age group.15 The exclusion of eighteen to twenty year olds from the sample reduces the representation of this group in the aggregate data.
The fact that most citizens are ignorant about post- Kelo reform is not surprising. Large majorities know little or nothing about far more important policies. For example, polls conducted around the time of the
Table 6.1 Public Knowledge of State Post- Kelo Reform1
|
Group |
% Unaware of the Condition of Post- Kelo Reform in Their State | |
|
Total |
87 | |
|
Gender |
Male |
85 |
|
Female |
90 | |
|
Racial/Ethnic Group2 |
White |
89 |
|
African American |
82 | |
|
Asian |
75 | |
|
Hispanic/Latino |
100 | |
|
Native American |
75 | |
|
Party Affiliation |
Democrat |
89 |
|
Independent |
83 | |
|
Republican |
89 | |
|
Ideology |
Liberal |
88 |
|
Moderate |
90 | |
|
Conservative |
87 |
1. Saint Index 2007, questions 9, 10. I counted as “correct” those respondents who both (1) knew whether or not their states had passed post- Kelo eminent domain reform laws and (2) correctly answered the question about whether or not those laws were effective. Respondents from the eight states that had not enacted any post- Kelo laws were counted as giving correct answers to both questions, if they correctly answered the first question by stating that their states had not adopted any reforms. Totals have been rounded off to the nearest whole number. The State of Utah presented a difficult methodological dilemma because it had banned economic development takings prior to Kelo. Respondents who stated that it had an effective reform were credited with a “correct” response. Coding the Utah results the other way does not significantly alter the overall results because of the extremely low number of Utah respondents in the sample.
2. The results for Hispanics, Asians, and Native Americans may be unreliable because they are based on very small sample sizes of twenty-four, twelve, and twelve respondents, respectively. Saint Index 2007.
2010 election found that only 34 percent realized that the controversial Troubled Asset Relief Program bank bailout policy had been enacted under President George W. Bush rather than under Barack Obama, and only 33 percent realized that the economy had grown during the previous year, even though the vast majority of voters told pollsters that the economy was the most important issue in the election.16 What may be somewhat surprising—especially to nonexperts—is that public ignorance is so widespread despite the immense outcry that the issue has generated.
Possible Alternative Explanations of the Saint Index Data
There are several possible objections to my theory that the Saint Index data prove the existence of widespread ignorance about post- Kelo reform that undermines the ability of voters to force through the sorts of policies favored by overwhelming majorities. I consider four such potential objections here and tentatively conclude that none of them withstand close scrutiny.
Because post-K elo reforms were enacted over a two-year period between the time Kelo was decided in June 2005 and the time the Saint Index data was collected in August 2007, it is conceivable that voters were well informed of the contents of their states’ legislation at the time but later forgot that knowledge. To test that theory, I checked whether the respondents from Connecticut, Maryland, Montana, Nevada, New Mexico, Ohio, Virginia, and Wyoming—the eight states whose post- Kelo laws were enacted in 2007—had greater knowledge than respondents in states where reform legislation passed in 2005 and 2006.17 Two of these states—Nevada and Ohio—passed their second post- Kelo reform laws during this time period. The eight states in question all enacted eminent domain reform laws between February 28 and July 10, 2007, just a few months or weeks before the Saint Index survey was conducted, from August 1 to August 10, 2007.
The data show that the 122 respondents from those eight states had almost exactly the same knowledge levels as those in the rest of the coun-try.18 Twenty-six percent of respondents in the eight 2007 states knew whether or not their states had passed post- Kelo reform laws, a figure only slightly higher than the 20 percent rate compiled by respondents from the other forty-two states.19 Similarly, 12 percent of respondents in these eight states could correctly answer both the question about the existence of reform laws and the question about their effectiveness; the figure for the other forty-two states was 13 percent.20 While some forgetting could have taken place even in the few weeks between the passage of the 2007 laws and the time of the Saint Index survey, one would still expect that respondents in the eight states would be less likely to forget than those in states that had enacted their reforms earlier. The lack of any statistical difference between the two sets of respondents suggests that forgetting is not a major factor in accounting for the widespread ignorance revealed in the 2007 Saint Index data.
Public ignorance about post- Kelo reform might also be less bleak than the data suggests if those who cared about the issue strongly were mostly well informed about it. This scenario would be consistent with the “issue public” hypothesis advanced by some political scientists, which holds that citizens are likely to be well informed about a small number of issues that they care about intensely, even if they remain ignorant about most others.21 However, survey data show that the percentage of the public who care intensely about eminent domain reform is much greater than the mere 13 percent who know enough about it to be able to determine whether their states have passed effective post- Kelo laws or not.22 As discussed earlier, 63 percent of respondents in a 2005 Saint Index survey said that they “strongly” opposed the Kelo decision.23 A 2006 Saint Index poll question showed that 43 percent “strongly” support reforms intended to ban economic development takings.24 Even the smaller of these two figures is still more than three times greater than the percentage of respondents who knew whether or not their states had passed effective reforms as of the time of the August 2007 Saint Index survey.25
Political ignorance greatly reduces the number of voters who could potentially use the level of post- Kelo reform in their states as a basis for electoral decisions. In other words, it greatly diminishes the size of the potential “issue public.” Even if the 13 percent who gave accurate answers on the survey all feel strongly about the issue and make effective use of that knowledge in deciding which candidates to support in state and local elections, that still leaves several times that number of citizens who also feel strongly about banning economic development takings but lack the necessary knowledge to reward political leaders who support effective reform and punish those who oppose it.
A third potentially benign interpretation of widespread ignorance of post- Kelo reform is the “miracle of aggregation.”26 Even if many or most voters are ignorant about a particular issue, that may be irrelevant to political outcomes if their errors are randomly distributed. In that situation, ignorance-driven votes for candidate or policy A would be offset by a similar number of “mistaken” votes for alternative B, and electoral outcomes would be determined by the (potentially very small) minority of well-informed citizens. With respect to post- Kelo reform, there are two serious problems with this scenario. First, even random error is likely to have an important impact on policy. Second, the errors are not in fact randomly distributed but are skewed toward overestimation of the effectiveness of post- Kelo reform laws.27
Even if errors really are randomly distributed, the existence of widespread ignorance still greatly diminishes the number of voters who can take account of post- Kelo reform in choosing candidates. It likely eliminates at least 70 percent of those voters who “strongly” support a ban on economic development takings.28 This greatly reduces the potential pressure on officeholders to comply with overwhelming popular sentiment.
If, for example, 10 percent of the 43 percent of Americans who say they strongly support effective post- Kelo reform would be willing to vote on the issue if they were informed about it, ignorance will have reduced the number willing to change their vote based on the issue from 4.3 percent of the adult population to a maximum of 1.3 percent.29 And even that figure unrealistically assumes that the 13 percent with accurate knowledge of post- Kelo reform in their states were all drawn from among the 43 percent who care “strongly” about banning economic development takings. It also assumes that none of them got the correct answers on the survey through random guessing.
The miracle of aggregation theory also fails in this case because respondent mistakes about post- Kelo reform are not randomly distributed. It was far more common for voters to believe that their state had passed effective reform, even if it had not, than for them to believe that it had not done so in cases where it actually had. As discussed earlier, some 6 percent of the 2007 Saint Index survey respondents wrongly believed that their states passed effective reform, whereas only 2 percent mistakenly believed that their state had failed to enact effective reform, even though it had. The 6 percent figure constitutes more than one-third of all those respondents (17 percent) who had any opinion on the effectiveness of post- Kelo reform in their states at all.
Unfortunately, it is impossible to use the 2007 Saint Index data to determine whether these 17 percent were disproportionately drawn from the subset of respondents most interested in post- Kelo reform issues. But it is plausible that they were. If so, it is possible that the 6 percent of respondents who mistakenly believed that their states has passed effective post- Kelo reform constitute a substantial percentage of those who would otherwise use the issue as a criterion for voting.
Finally, it is possible that voters could learn about the effectiveness of post- Kelo laws by relying on the statements of interest groups and other “opinion leaders” who have incentives to be better informed than ordinary citizens.30 However, as I have discussed at greater length elsewhere, reliance on opinion leaders itself requires considerable knowledge, including the knowledge needed to select opinion leaders to follow who are both well-informed and trustworthy.31 Moreover, the ways in which the Kelo issue cuts across traditional party and ideological lines makes it more difficult for voters to identify opinion leaders to follow based on traditional political cues such as partisan or ideological affiliation.32 Most important of all, the widespread ignorance revealed in the Saint
Index survey shows that most citizens either did not acquire relevant information from opinion leaders or obtained information that turned out to be misleading.
Political Ignorance as an Explanation for the Anomalies of the Backlash
The political ignorance hypothesis gains traction from the fact that it can account for three otherwise anomalous aspects of the Kelo controversy: the massive backlash against a decision that largely reaffirmed existing case law that had previously excited little public controversy, the paucity of effective reform measures despite widespread public opposition to economic development takings, and the striking divergence between citizen-initiated referendum initiatives and all other types of post- Kelo reform measures.
Explaining the Timing of the Backlash
Some Kelo defenders complain that the backlash against the decision was excessive in light of the fact that the case made little change in existing law. After all, eminent domain was not a prominent national issue before Kelo, even though existing constitutional doctrine permitted economic development takings under the federal Constitution. A spokesman for California redevelopment agencies lamented that Kelo led to “a hue and cry about how bad things are in California, yet Kelo changed nothing.”33 But the reaction is understandable once we recognize that— for most people— Kelo was the first inkling they ever had that private property could be condemned merely to promote economic development by other private parties. This sudden realization led to outrage and a desire for change.
Public ignorance helps explain why economic development takings became common despite the fact that the vast majority of citizens oppose condemnation of private property for such purposes. Before Kelo, most of the public probably did not even realize that economic development condemnations existed. This ignorance accounts for the suddenness of the Kelo backlash. It also helps explain why there was relatively little public pressure to reform eminent domain law before Kelo.
Explaining the Paucity of Effective Reform Laws
Public ignorance is also the best available explanation for the seeming scarcity of effective post- Kelo reform laws. The highly publicized Supreme Court decision apparently increased awareness of eminent domain abuse, perhaps as a result of extensive press coverage. But while the publicity surrounding Kelo made much of the public at least somewhat aware of the issue of economic development takings, it probably did not lead voters to scrutinize the details of proposed reform legislation. The Saint Index survey showed that almost 80 percent of Americans do not even know whether their states had passed a reform law at all.34
Few citizens have the time or inclination to delve into such matters, and many are often ignorant of the very existence of even the most important government policies. Thus, it would not be difficult for state legislators to seek to satisfy voter demands by supporting “position-taking” legislation that purported to curb eminent domain,35 while in reality having little effect. In this way, they can simultaneously cater to public outrage over Kelo and mollify developers and other interest groups that benefit from economic development condemnations.
This strategy seems to have been at the root of the failure of post- Kelo reform efforts in California. In that state, legislative reform efforts were initially sidetracked by the introduction of weak proposals that gave lawmakers “a chance . . . to side with the anti-eminent domain sentiment without doing any real damage to redevelopment agencies.”36 At a later stage in the political battle, the Democratic majority in the state legislature tabled even these modest reforms by claiming that they were being blocked by the Republican minority, despite the fact that “the stalled bills required only simple majority votes and thus needed no Republicans to go along.”37 As one Sacramento reporter put it, the entire process may have been “just a feint to pretend to do something about eminent domain without actually doing anything to upset the apple cart.”38 Eventually, California did enact some reforms but only ones that are almost completely ineffective.39 A leading advocate for eminent domain reform in Nevada believes that, in his state as well, legislators sought to “look good while not upsetting anyone.”40
The California League of Cities, an organization composed of local governments with an interest in preserving their eminent domain authority, also sought to exploit political ignorance about post- Kelo reform. The CLC succeeded in placing an essentially meaningless eminent domain reform referendum initiative—Proposition 99—on the state’s 2008 ballot as a way of preempting a stronger referendum initiative sponsored by property rights advocates.41 Proposition 99 cleverly included a provision stating that it would supersede any other eminent domain referendum enacted on the same day, so long as the latter got fewer votes than the CLC proposal.42
Such maneuvers would be difficult to pull off if the public paid close attention to pending legislation. But they can be quite effective in the presence of widespread political ignorance.
Explaining the Relative Success of Citizen- Initiated
Referendum Initiatives
As we saw in chapter 5, there is a great difference between the effectiveness of citizen-initiated referendum initiatives and all other types of post- Kelo reforms. Five of the six citizen-initiated referenda passed since Kelo provide strong protection for property owners against economic development takings.43 By contrast, only fifteen of thirty-seven state legislative initiatives are comparably effective, as are only three or four of eight legislature-initiated referenda.44 Reforms initiated by Congress and the president at the federal level are also largely cosmetic in nature.45
The likely explanation for this striking pattern is consistent with the political ignorance hypothesis. Citizen-initiated referendum proposals are usually drafted by activists rather than by elected officials and their staffs. This was the case with all four of the post- Kelo citizen-initiated referenda enacted in 2006.46 Unlike state legislators, the property rights activists who wrote the citizen-initiated anti- Kelo ballot initiatives had no need to appease powerful procondemnation interest groups in order to improve reelection chances. They also had little reason to promote reforms that fail to produce real changes in policy. Unlike ordinary citizens, committed activists in a position to draft referendum proposals and get them on the ballot have strong incentives to acquire detailed information about eminent domain law; they have a real chance of influencing policy outcomes through their actions. Property rights activists can and do influence legislatively enacted reforms as well. But anything they propose in that setting must be filtered through the legislative process, where organized interest groups will have a significant say.
California’s Proposition 99, the one citizen-initiated referendum measure that does not provide meaningful protection to property owners, is the exception that proves the rule. Proposition 99 was not drafted by property rights activists, but by local governments seeking to protect broad eminent domain authority by forestalling a rival ballot measure that would have provided stronger protection for property owners.47 Proposition 99 passed easily, getting some 63 percent of the vote.48 Although we do not have any definitive data, it is likely that California voters could not tell the difference between a referendum measure that provided meaningful new protection for property owners and one that did not. The sponsors of Proposition 99 achieved their goal of defeating the rival Proposition 98, though the defeat of the latter was at least in large part the result of its inclusion of a phase out of rent control.49
The Proposition 99 experience supports my conjecture that citizen-initiated referenda provide effective protection because of the identity and purposes of their drafters. When the drafters are property rights activists seeking to ban Kelo-style takings, citizen-initiated referenda result in strong limitations on eminent domain. When initiatives are drafted by procondemnation interest groups, such as the CLC, they will most likely provide only cosmetic reforms. Either way, rationally ignorant voters are likely to support them.
Interest Group Power as an Alternative Explanation
The most obvious alternative explanation for the scarcity of effective reform laws is the political power of developers and other organized interest groups that benefit from the transfer of property condemned as a result of economic development and blight condemnations.50 As a Virginia advocate of eminent domain reform put it, “[o]ne of the biggest obstacles to effectuating eminent domain reform is the disparity in power, funding, and political clout between the well organized, well funded, politically connected takers lobby that opposes reform and the individual owners seeking reform.”51 There is no question that this factor does play a role. Developers, local government planning officials, and other interest groups have indeed spearheaded opposition to post- Kelo reform.52 In Texas, for example, advocates of strong eminent domain reform concluded that lobbying by developers and local governments played a key role in ensuring that that state passed an essentially toothless reform law.53
Quantitative studies of post- Kelo legislation find that strength of reforms was influenced by the relative power of interest groups, with strong reforms more likely to be enacted in states with more valuable home construction and less likely to be enacted in more urbanized states and slow-growing states.54 Increased home construction implies a state where homebuilders have greater influence, and they have an interest in preventing uses of eminent domain that target homes and thereby diminish the value of residential property.55 In slow-growing states, developers and other organized interest groups have fewer alternative investment opportunities and thus greater interest in using eminent domain to acquire property. In more urbanized and densely populated areas, developers and other similar interest groups find it more costly to purchase land through the market and therefore have stronger incentives to lobby for the use of eminent domain to help acquire it.
Still, the interest group explanation has three crucial shortcomings relative to the political ignorance hypothesis. It cannot explain why the Kelo backlash arose when it did; it cannot fully explain how a small coalition of interest groups could overcome overwhelming and strongly felt majority public opinion. Finally, it also cannot explain why states would pass ineffective reform laws, as opposed to simply doing nothing.
The Kelo backlash arose in 2005 despite the fact that Kelo made little change in existing Supreme Court takings doctrine.56 Interest group theory cannot explain this fact. After all, pro-property rights interest groups sought to restrain takings even before Kelo. Supporters of broad eminent domain power were satisfied with the status quo both before and afterward. By contrast, political ignorance can readily account for the timing of the backlash.
Second, the mere existence of interest group opposition does not explain why state legislators would choose to satisfy a few small interest groups while going against the preferences of the vast majority of the electorate.57 It is possible that the procondemnation interest groups simply have more intense preferences about the issue than most of the opponents in the general public and are therefore more likely to cast their votes based on politicians’ stances on the issue. But 63 percent of the respondents in the 2005 Saint Index survey said that they not only opposed Kelo, but felt “strongly” about it; more recent survey data shows that 43 percent of Americans “strongly support” reform legislation banning economic development takings.58 If just a fraction of the 63 percent, or even the 43 percent, were willing to let post- Kelo reform influence their voting decisions, they would probably constitute a much larger voting bloc than all the pro- Kelo developers and government officials put together. For example, if 10 percent of those who felt “strongly” about the issue were willing to switch their votes as a result, they would constitute a voting bloc of about 4 to 6 percent of the electorate—more than enough to change the outcome of a close election. Presumably, that would give candidates strong incentives to support effective bans on economic development takings.
For this reason, it is likely that, to the extent that interest group opposition was able to stymie effective post- Kelo reform and force the passage of merely cosmetic legislation, this occurred only because most voters were unaware of what is happening. Political ignorance is the handmaiden of interest group power in the political process. Interest groups did play a role in the enactment of ineffective post- Kelo reforms. Without them, legislators would have little to lose from the enactment of stronger reform measures. But the legislators were able to satisfy interest group demands only because of public ignorance. Absent widespread ignorance, interest groups at odds with the majority of the general public would find it far more difficult to block eminent domain reform.
Finally, interest group power cannot explain why numerous states passed ineffective post- Kelo reform laws instead of simply doing nothing. After all, procondemnation interest groups would have been satisfied with the continuation of the pre- Kelo status quo, which in these states already allowed the condemnation of property for almost any reason. Why waste valuable legislative time and attention on new laws that merely perpetuate the status quo? Interest group power alone cannot account for this. By contrast, political ignorance theory has a simple and compelling explanation for the enactment of ineffective reform laws: they can be used to persuade rationally ignorant voters that something had been done to solve the problem of economic development takings, even if the new legislation would have little or no real impact.
The political ignorance theory is reinforced by studies finding that the strength of a state’s post- Kelo reform has little or no relationship to the ideology or partisan loyalty of the voters in that state, even though conservative and Republican voters were, on average, more likely to oppose Kelo than liberals and Democrats were.59 This suggests that the strength of public opposition to Kelo had little influence on the effectiveness of the reforms adopted in a given state.
The significance of such quantitative studies should not be overstated, as many of the variables used are necessarily imprecise,60 and the availability of only fifty cases leaves a large margin for statistical error. But the available evidence does provide some additional support to for the political ignorance explanation. Voter ignorance enabled political leaders to significantly discount majority public opinion—despite its great intensity and one-sidedness. This freed them to instead cater to the needs of organized interests. Interest groups did have an impact. But they succeeded in achieving their goals only because legislators were often willing to go against majority public opinion.
The political ignorance theory does not completely explain the pattern of post- Kelo legislation. For example, it does not account for the fact that a few state legislatures that had previously engaged in extensive economic development takings still enacted strong reforms. But it is more consistent with the available evidence than any alternative theory proposed so far.
Conclusion
The Kelo backlash led to important progress for property rights. Many states enacted significantly stronger protections for property rights against takings than existed before. But widespread political ignorance played a major role in reducing the effectiveness of reform efforts. This hypothesis is the only one proposed so far that can account for the conjunction of three anomalies: the sudden and massive public outrage against Kelo, despite the fact that the decision made few changes in existing law; the scarcity of effective reforms, despite deep and broad public opposition to economic development takings; and the striking divergence between citizen-initiated referenda and all post- Kelo laws enacted by other means. It is also supported by survey data documenting widespread public ignorance of post- Kelo reform.
The partial failure of the Kelo backlash also indicates an important limitation of the long-standing conventional wisdom that judicial review is not needed to protect individual rights that enjoy the backing of majority public opinion. As James Madison famously wrote in Federalist 10, “[i]f a faction consists of less than a majority, relief is supplied by the republican principle, which enables the majority to defeat its sinister views by regular vote.”61 Only “[w]hen a majority is included in a faction,” he argued, does “the form of popular government” enable it to threaten “the rights of other citizens.”62 The Kelo experience suggests that Madison was overly optimistic. The majority cannot defeat the “sinister views” of a well-organized minority, if the majority does not know what is going on. Despite broad and strongly felt public opposition to Kelo and economic development takings, both the federal government and the majority of states failed to enact effective reform legislation banning them.
Such effective legislation as was enacted was in large part the result of the publicity generated by the Kelo litigation and the resulting Supreme Court decision. If not for efforts to secure judicial intervention, there would likely have been little if any effective political action at all. As in the case of previous reform efforts, such as the civil rights movement and the gay rights movement, litigation and political activism have been complements, not substitutes.63 Each enhances the likely effectiveness of the other.
The likelihood of effective political action to curb eminent domain abuse may well diminish over time as public attention drifts to other issues. A July 2009 survey conducted by scholars at Columbia and Harvard University found that some 81 percent of Americans still oppose the use of eminent domain to transfer property to private parties for economic development.64 This result is similar to that found by polls conducted in the immediate aftermath of Kelo four years earlier.65 But the 2009 study also found that only 42 percent recalled that the Supreme Court had upheld the constitutionality of such takings, while 14 percent believed that it had struck them down, and the rest said they did not know.66
This suggests that public attention to eminent domain issues is beginning to tail off. The public’s focus has understandably moved on to other issues, such as the Affordable Care Act health care legislation, the failing economy, the financial crisis that helped cause it, and the persistent problems of the War on Terror. The political backlash against Kelo has gradually faded. It is probably no accident that the vast majority of post-Kelo reform legislation occurred in the first three years after Kelo, with only five states enacting new reform laws after 2008.67 While praising the public reaction to Kelo, Fort Trumbull plaintiff Richard Beyer laments that “[t]he attention span of the public lasts maybe seven days”—a figure he probably did not mean to be taken literally.68 Beyer is surely right to worry that the public’s necessarily limited attention often wanes quickly.
As eminent domain recedes from the political spotlight, interest groups will once again be able to promote dubious economic development and blight condemnations without fear of the kind of unusual public scrutiny generated by Kelo and its aftermath. As Beyer put it, “[t]he government knows . . . They know that the [public’s] attention span is minimal.”69
For this reason, the need for judicial intervention to restrict takings may well increase over time rather than diminish. In Alabama, Illinois, and Minnesota, post- Kelo eminent domain reforms have already been partially rolled back by state legislatures, as public attention has moved on to other issues and political leaders and interest groups feel able to return to something closer to pre- Kelo business as usual.70 Minnesota has adopted a law allowing the use of condemnation to build privately owned sports stadiums.71 State legislators and interest groups that benefit from broad eminent domain authority have begun to take advantage of the waning of public focus on the issue.
Eminent domain abuse could potentially again become a prominent political issue, particularly if another public use cases reaches the Supreme Court or some particularly dramatic abuse attracts widespread media and public attention. But such events may only occur rarely. For example, over twenty years passed between the 1981 Poletown case, the last eminent domain case to become a national sensation before Kelo,72 and Kelo itself.
Overall, the Kelo story demonstrates that political action can sometimes protect individual rights but also that it has significant limits. If public ignorance can often prevent the political process from providing effective protection for individual rights in such a high-profile case, it might also fall short in other cases where rights supported by majority opinion are at stake. Judicial review is not just a check on the tyranny of the majority. Sometimes, it may also be needed to protect us against the consequences of the majority’s political ignorance.
The political reaction to Kelo was accompanied by a less visible, but almost equally important, judicial reaction, as state and lower federal courts struggled to make sense the Supreme Court’s decision and considered whether its interpretation of the federal Public Use Clause should serve as a model for the interpretation of similar provisions in state constitutions. As we shall see in chapter 7, the judicial reaction to Kelo was far from uniformly supportive. Many state courts greeted Kelo with skepticism and refused to adopt it as a guide to the interpretation of their state constitutions.
The Judicial Reaction
In addition to the better-known legislative reaction, Kelo also had an impact on public use litigation in both federal and state courts. In the aftermath of the federal Supreme Court decision, several state supreme courts addressed the question of whether its deferential approach to economic development takings also applied under their state constitutional public use clauses. Both federal and state courts have sought to interpret Kelo’s statement that “pretextual” takings are an exception to the decision’s generally ultra-deferential approach.1 Finally, several important recent state court decisions considered the implications of Kelo for condemnations of “blighted” property.
Unlike the legislative reaction, which has been extensively studied,2 there has been much less analysis of the judicial reaction to Kelo.3 This is unfortunate because state and federal judges are likely to continue to play an important role in addressing public use issues. Although numerous states have enacted post- Kelo reform laws, many of them leave much to be desired as we saw in chapter 5.
This chapter helps fill the gap. With some important exceptions, it shows that state courts have not reacted to Kelo by adopting similarly permissive approaches to public use issues. Three state supreme courts have explicitly repudiated Kelo as a guide to their state constitutions.4 Other recent state supreme court decisions have imposed constraints on takings that go beyond Kelo, even if they have not completely rejected the Kelo approach. Two state supreme courts—Rhode Island and Maryland—have also restricted so-called quick take condemnations, which governments use to condemn property under streamlined procedures that give owners few procedural rights.5
Two decisions by the New York Court of Appeals are significant exceptions to this trend. New York’s highest court has continued to give wide scope for even the most questionable condemnations, where there are strong indications that property was taken at the behest of influential private interests.6 But overall, the trend of post- Kelo state public use decisions seems to be in the direction of tighter restrictions on the use of eminent domain.
By contrast, federal and state courts have been all over the map in their efforts to apply Kelo’s strictures against “pretextual” takings. There is no consensus in sight on this crucial issue. None seems likely to develop unless and until the Supreme Court decides another case on this issue.
State Public Use Clauses and Kelo
In the wake of Kelo, several state supreme courts considered the issue of whether economic development takings were permissible under their own state constitutions. Other courts considered closely related public use takings involving “blight” and “quick take” condemnations.
Decisions Rejecting Kelo as a Guide to the Interpretation of State Public Use Clauses
Two state supreme courts—Ohio and Oklahoma—have directly addressed the question of whether their state constitutions permit Kelo-style economic development takings. Both explicitly rejected Kelo and ruled that their state constitutions forbid economic development takings.7 The Ohio Supreme Court’s opinion in Norwood v. Horney— a case striking down a taking of property under a definition of “blight” broad enough to encompass almost any area—explicitly criticized Kelo and other decisions upholding economic development takings for adopting “an artificial judicial deference to the state’s determination that there was sufficient public use.”8 The Ohio court favorably cited a passage in Justice Sandra Day O’Connor’s Kelo dissent that rebuked the majority for reducing the public use requirement to “hortatory fluff.”9 It ruled that the views of the “dissenting justices of the United States Supreme Court in Kelo are better models for interpreting Section 19, Article I of Ohio’s Constitution” than those of the majority.10 The Oklahoma Supreme Court similarly rejected Kelo as a guide to its state constitution’s Public Use Clause.11
In Benson v. State, the Supreme Court of South Dakota also refused to adopt Kelo’s interpretation of public use, albeit in a case that did not address the specific issue of economic development takings.12 The court concluded that the view that “public use” requires actual use of the condemned property by the government or the general public “accords” better with the text and original meaning of the phrase than Kelo’s equation of “public use” with “public purpose” or public benefit.13
State decisions adopting stricter public use standards than Kelo are not inherently inconsistent with Kelo itself. Justice Stevens’s majority opinion explicitly “emphasize[d] that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power.”14 Nonetheless, state courts’ refusal to apply the Kelo standard represents at least a partial repudiation of the federal Supreme Court’s approach, insofar as they reject the latter’s view that courts should broadly defer to the government’s determination of what counts as a public use. The Kelo majority’s advocacy of deference was based not just on federalism, but also on the claim that judges should defer to the political process on public use issues more generally.15
Moreover, at least two of these three state court decisions repudiating Kelo did not rely on variations in local conditions or other factors peculiar to their states as justifications for rejecting its approach. The state supreme court justices in these cases repudiated the Kelo approach on general rather than state-specific principles. As discussed above, the Ohio court repudiated Kelo on the general ground that it gives too much deference to the government, specifically endorsing Justice O’Connor’s dissent on this point. South Dakota’s rejected it as a textually implausible reading of the term “public use.”16
The Oklahoma decision did not repudiate Kelo as clearly as the others, because it relied in large part on differences between the wording of the Oklahoma and federal public use clauses: “While the Takings Clause of the U.S. Constitution provides ‘nor shall private property be taken for public use without just compensation,’ the Oklahoma Constitution places further restrictions by expressly stating ‘[n]o private property shall be taken or damaged for private use, with or without compensation.’ ”17
State Supreme Court Cases Invalidating “Quick Take” Condemnations
Two state supreme courts—Maryland and Rhode Island—have substantially constrained “quick take” condemnations in the aftermath of Kelo.18 These cases do not directly address the issue raised in Kelo itself. But all three decisions (including two by the Maryland court) discuss Kelo and place important constraints on the scope of their state public uses clauses that go beyond those imposed in Kelo itself.19
Quick take condemnation laws allow local governments to take property under streamlined procedures that give landowners little time and opportunity to contest the taking of their land, other than to seek compensation after the fact. Under the Rhode Island statute, “the condemning authority obtains title and may take possession of property merely by filing a declaration of condemnation and satisfying the court that its estimate of compensation is just.”20 The Maryland procedure is similar.21
In Rhode Island Economic Development Corp. v. The Parking Co., the Rhode Island Supreme Court ruled that a quick take condemnation was unconstitutional in a case where the condemning authority sought to use the procedure to “gain control of [a garage] at a discounted price” rather than achieve the stated public purpose of increasing parking for the public.22 The court ruled that the claimed public purpose could not be achieved by the taking because it would not actually create any additional parking spaces; nor would it achieve the additional goal of promoting the local economy.23
The Rhode Island court asserted that its decision was consistent with Kelo because the Kelo takings involved a “comprehensive and thorough economic development plan,” while its own case did not.24 But the Rhode Island taking arose as part of an effort to develop and expand parking near a public airport.25 It was therefore also adopted as part of a planning process. Moreover, Kelo emphasized that judges should not “second-guess” condemning authorities’ “considered judgments about the efficacy of [a] development plan” or about whether or not condemnation was needed to achieve the plan’s goals.26 The Rhode Island court’s willingness to question the efficacy of the quick take condemnation is at the very least in tension with the Kelo approach. Finally, Parking Co. emphasized that “[i]f a legislature should say that a certain taking was for a public use, that would not make it so; for such a rule would enable a legislature to conclude the question of constitutionality by its own declaration.”27 In the court’s view, “a legislative declaration of public use is instructive, and entitled to deference, but not conclusive.”28 This contrasts with the U.S. Supreme Court’s statement in Berman v. Parker indicating that the legislature has “well-nigh conclusive” discretion in defining what counts as a public use.29 Kelo relied heavily on the Berman precedent,30 though admittedly it did not explicitly reiterate this particular point.
Although it addressed a “quick take” condemnation, Parking Co. ultimately relied on reasoning that applies more broadly to any takings where the claimed public use is unlikely to be achieved and may be a pretext for other motives.31 These sorts of problems, however, are likely to be especially common with quick take condemnations, where there is less time for careful planning.
The Maryland decision in Mayor of Baltimore v. Valsamaki, also constrains quick take condemnations in a way that is less deferential than Kelo. It invalidated the quick take condemnation in question because “the City failed to provide sufficient reasons for its immediate possession of and title to the subject Property.”32 Proof of the need for “immediate” possession of the land in question was, the court concluded, required under Maryland’s state constitution and statutory law.33 The Maryland Court of Appeals reiterated this requirement in a very similar case decided one year later.34 Like the Rhode Island decision, the Maryland court claimed that its ruling was consistent with Kelo because the taking in question was not the result of “comprehensive” planning.35
However, the Valsamaki condemnation, like that in Kelo, was in fact part of a redevelopment plan, even if the connection between the taking and the plan was somewhat vague given that the City of Baltimore claimed only that the taking would advance the goals of the plan by facilitating “business expansion.”36 And, as we have seen,37 Kelo forbade courts from second-guessing the efficacy of the proposed plan or the need for the condemnation of individual properties to achieve its goals. The Maryland court’s willingness to closely scrutinize the necessity for the quick take condemnation under the plan represents a degree of “second-guessing” that Kelo would not permit.
State Decisions Constraining the Scope of Blight Condemnations
State court decisions on blight takings are a significant part of the judicial reaction to Kelo. Blight condemnations are a particularly prevalent type of private-to-private condemnation, more common than pure economic development takings. As discussed in chapter 3, blight takings are problematic in two ways. Many states define blight so broadly as to allow almost any property to be declared blighted and condemned. In addition, even blight takings in genuinely dilapidated areas often cause great harm by forcibly displacing poor and politically weak people who are left worse off than they were before.
Since Kelo, little, if anything, has been done by state courts to constrain takings in areas that are genuinely “blighted.” But several post-Kelo state blight decisions addressed the issue of overbroad definitions of what counts as blight. In the Norwood case, discussed earlier, the Supreme Court of Ohio made clear that its ban on economic development takings also applies to overbroad blight condemnations.38 Norwood invalidated an effort to condemn property that had been declared blighted because it was located in a “deteriorating area,” a standard that the Ohio court rejected because it would enable virtually any area to be declared blighted: “[t]o permit a taking of private property based solely on a finding that the property is deteriorating or in danger of deteriorating would grant an impermissible, unfettered power to the government to appropriate.”39
In Gallenthin Realty Development, Inc. v. Borough of Paulsboro, the New Jersey Supreme Court invalidated a taking where open land had been defined as “blighted” because it was not “fully productive.”40 The court ruled that, under New Jersey’s state constitution, a blight taking required evidence of “deterioration or stagnation that has a decadent effect on surrounding property.”41 Gallenthin is significant because it curtails one of the less appreciated dangers of allowing economic development takings: the possibility that developers and other interest groups might use them to take over property devoted to natural amenities such as parks or privately managed wildlife refuges.42
A Pennsylvania appellate court likewise interpreted its state’s blight law, which at the time allowed condemnation of “economically undesirable” land uses as “blighted,” to permit only condemnation of property that had been put to “an actual, objectively negative use . . . rather than merely a use relatively less profitable than another.”43 It repudiated the idea that Pennsylvania law allows the use of “blight” designations to authorize takings that are “purely [for] ‘economic development.’ ”44 Unlike Norwood and Gallenthin, the Pennsylvania decision was purely statutory in nature and did not hold that overbroad blight takings violate the state constitution. At the same time, it does use the takings upheld in Kelo as an example of the kind that are not permitted under Pennsylvania state law.45
New York Decisions Upholding a Virtually Unlimited
Defi nition of Blight
The two most high-profile post- Kelo blight cases are Kaur v. New York State Urban Development Corp. and Goldstein v. New York State Urban Development Corp.,46 both decided by the New York Court of Appeals, that state’s highest court. Both decisions upheld the constitutional validity of extremely broad definitions of blight and also endorsed Kelo’s highly deferential approach to public use issues. More problematically, both also upheld blight condemnations despite considerable evidence of political corruption in the blight designation process.47
In Goldstein, the court upheld a major condemnation as part of the Atlantic Yards development project. The Empire State Development Corporation, a state government agency, took a large area for the purpose of transferring it to a firm controlled by politically influential developer Bruce Ratner, who sought to use it primarily to build high-income housing and a new stadium for the New Jersey Nets professional basketball team, which he at the time owned.48 The court concluded that the property in question could be condemned as “blighted” and that blight alleviation is a “public use” recognized by the New York Constitution, thanks to a constitutional amendment allowing the condemnation of slum areas.49 The property, however, was very far from being a slum, and much of it was in good shape.50
The property owners conceded that some property in the area was blighted but not any that was to be condemned.51 The court itself noted that the Atlantic Yards area “do[es] not begin to approach in severity the dire circumstances of urban slum dwelling” that led to the enactment of the blight amendment in 1938.52 To get around this problem, the court held that “blight” alleviation is “not limited to ‘slums’ as that term was formerly applied, and that, among other things, economic underdevelopment and stagnation are also threats to the public sufficient to make their removal cognizable as a public purpose.”53
Virtually any area occasionally suffers from “economic underdevelopment” or “stagnation” and therefore could potentially be condemned under this rationale. Moreover, even under this expansive definition of blight, the decision states that courts can only strike down a condemnation if “there is no room for reasonable difference of opinion as to whether an area is blighted.”54 With respect to any neighborhood, there is nearly always “room for reasonable difference of opinion” as to whether the area is “underdeveloped” relative to some possible alternative uses of the land in question.
Defining blight this broadly and then deferring to the government’s determination of whether such “blight” actually exists comes close to reading the public use restriction out of the state constitution. It is unlikely that the New York State constitutional amendment allowing condemnation of “substandard and insanitary areas” was originally understood to mean that virtually any area could be declared blighted and condemned.55
Goldstein went beyond merely adopting an extremely broad definition of blight. It also chose to overlook extensive evidence indicating that the blight study commissioned by the ESDC was heavily biased and deliberately rigged to reach a predetermined conclusion. As Judge Robert Smith pointed out in his dissenting opinion, the original rationale for the condemnation was “economic development—job creation and the bringing of a professional basketball team to Brooklyn.”56 Apparently, “nothing was said about ‘blight’ by the sponsors of the project until 2005” when the ESDC realized that a blight determination might be needed for legal reasons.57
Moreover, the decision to condemn the property had already been made, and the firm conducting the blight study knew what outcome the condemning authorities sought. The firm was also hired and paid by Ratner himself.58 Perhaps for that reason, the firm’s report strained to find evidence of blight, counting minor flaws such as “weeds,” “graffiti,” and “underutilization.”59
The majority also failed to consider the relevance of evidence showing that Ratner himself had created much of the “blight” used to justify the condemnation.60 By the time the study was conducted in 2005, “Ratner had already acquired many of the properties he wanted (thanks to eminent domain) and left them empty, thus creating much of the unsightly neglect he now cites in support of his project.”61 Other parts of the area may have fallen into disrepair in part because “Ratner’s plan to acquire the properties and demolish the buildings had been public knowledge for years when the blight study was conducted,” and owners therefore had no reason to invest in their upkeep.62
Ratner and the ESDC disputed some of these claims.63 The key point, however, is that the majority refused to even consider their possible relevance and concluded that the takings were permissible even if the allegations against the developer and the condemning authority were correct, so long as there was room for “reasonable difference of opinion” over the presence or absence of blight.64 As the majority explained,
It may be that the bar has now been set too low—that what will now pass as “blight,” as that expression has come to be understood and used by political appointees to public corporations relying upon studies paid for by developers, should not be permitted to constitute a predicate for the invasion of property rights and the razing of homes and businesses. But any such limitation upon the sovereign power of eminent domain as it has come to be defined in the urban renewal context is a matter for the Legislature, not the courts.65
Kaur featured a combination of the same three elements as Goldstein: a broad definition of blight, a possibly rigged blight study, and the likelihood that much of the “blight” used to justify the condemnations in question was actually caused by the beneficiaries of the proposed taking. The Kaur takings arose from an effort by Columbia University to acquire property for expansion in the Manhattanville neighborhood in Harlem in New York City.66
Unusually, the Kaur taking had been invalidated in a close 3-2 decision by one of New York’s intermediate appellate courts, the Appellate Division, First Department.67 In Kaur, as in Goldstein, there was little evidence of actual blight. Indeed, the Appellate Division concluded that there was “no evidence whatsoever that Manhattanville was blighted prior to Columbia gaining control over the vast majority of property therein.”68
The ESDC only ordered a blight study after Columbia had already acquired most of the property in the area and therefore “gained control over the very properties that would form the basis for a subsequent blight study.”69 When Columbia presented the agency with a plan to use eminent domain to acquire the remaining property and use it for Columbia’s “sole benefit,” a blight study was commissioned from Allee King Rosen & Fleming, Inc., a firm employed by Columbia on an earlier phase of the same project.70 AKRF was also the firm employed by Ratner in the Atlantic Yards case.71
AKRF was instructed by the ESDC to use a methodology “biased in Columbia’s favor,” that allowed blight to be proven by the presence of minor defects such as “unpainted block walls or loose awning supports.”72 As the Appellate Division concluded, “[v]irtually every neighborhood in the five boroughs will yield similar instances of disrepair that can be captured in close-up technicolor.”73 Moreover, most of the alleged blight that was found by AKRF was located on property owned by Columbia itself and possibly allowed to develop in order to justify a blight finding.74
The Appellate Division thereby concluded that the area could not be considered blighted and also ruled that the blight findings were an unconstitutional “pretextual” taking, since the allegedly rigged blight study showed that the blight rationale was a mere pretext for a scheme to benefit Columbia.75
The New York Court of Appeals unanimously reversed the Appellate Division’s decision, relying primarily on the extremely broad definition of blight upheld in Goldstein just a few months earlier.76 It refused to consider most of the evidence that the AKRF study deliberately used biased methodology, noting only that AKRF’s objectivity was not compromised merely “because Columbia had previously engaged AKRF” to produce its development plan for the area.77 The court also noted that AKRF’s findings were confirmed by a study conducted by a different firm, Earth Tech,78 but did not consider the relevance of the fact that that firm was also required to use the same biased methodology as AKRF.
The court further emphasized that a third firm, Urbitran, had conducted a study finding blight in the area prior to AKRF’s, thereby calling into question the Appellate Division’s finding that there was no evidence of blight prior to the acquisition of most of the area by Columbia.79 However, the court did not dispute the Appellate Division’s finding that the ESDC had not in fact relied on the Urbitran study in making its decision to condemn the property and had commissioned the AKRF study because ESDC staff doubted the adequacy of the Urbitran findings.80
Both Goldstein and Kaur upheld takings under an extremely broad definition of blight. More unusually, both decisions refused to give more than perfunctory consideration to the strong evidence that the new private owners of the condemned property had rigged “blight” studies in their favor and were themselves responsible for a substantial proportion of the alleged blight those studies found.
Taken together, Goldstein and Kelo make it virtually impossible to challenge blight condemnations in New York. As Justice Catterson of the Appellate Division explained, “Unfortunately for the rights of citizens . . . the recent rulings of the Court of Appeals . . . have made plain that there is no longer any judicial oversight of eminent domain proceedings.”81 This may be a slight exaggeration,82 but not by much. The two cases are striking exceptions to the general post- Kelo pattern of stronger judicial scrutiny of public use issues.
Was the Judicial Reaction Caused by the Political
Backlash Against Kelo?
The generally negative nature of the state judicial reaction to Kelo leads one to ask whether state courts acted as they did because of the strong political backlash against Kelo. Historically, court decisions have often been influenced by public opinion and the political climate.83 Some leading scholars believe that state courts may have been “chastened by the backlash against Kelo” and therefore “become more vigilant in policing proposed takings.”84 It may well be, however, that the post- Kelo state court decisions were largely continuations of a preexisting trend toward stronger judicial scrutiny of public use issues. In the decade before Kelo, four state supreme courts ruled that economic development takings violate their state constitutions, while only one created a new precedent going the other way.85
It is difficult to say whether the Kelo backlash accelerated the preexisting judicial trend or merely continued it. Because we only have a small sample size of cases (four state supreme court decisions striking down economic development takings in the decade prior to Kelo and three since then), it is impossible to tell the difference between a flat trend line and a slight acceleration. What can reasonably be said is that state judicial decisions have not seen the same sudden upsurge of restrictions on takings that occurred in the political arena. There, over forty states passed new laws in less than five years, after a decade in which most saw few or no comparable reforms. By contrast, recent judicial developments seem to be a continuation or, at most, a modest acceleration of a preexisting trend.
There are two key factors in the difference between the legislative and judicial reactions. Unlike state legislatures and public opinion, state courts had been on a path toward gradually stronger enforcement of public use restrictions on takings for years prior to Kelo. They therefore did not need to make a radical change of course in order to move in a more restrictive direction. On the other hand, the greater insulation of state courts from public opinion also reduced their incentive to make major symbolic gestures toward appeasing public opinion. Even in states where judges are chosen by electoral processes, judicial elections are less competitive and less visible to voters than those for the state legislature and the governorship.86
While the judicial reaction to Kelo was less dramatic and sweeping than the political reaction, it may turn out to have greater long-term staying power. The political backlash against Kelo has gradually diminished in intensity, as public attention moves on to other issues.87 By contrast, the trend toward greater judicial skepticism of eminent domain may well continue.
The Problem of Pretext
The one area where Kelo leaves room for potentially significant judicial scrutiny of public use issues is that of “pretextual takings” where the official rationale for the taking is a pretext “for the purpose of conferring a private benefit on a particular private party.”88 Unfortunately, Kelo says very little about the question of how to determine whether or not a taking that transfer property to a private party is in fact pretextual. As one federal district court decision notes, “[a]lthough Kelo held that merely pretextual purposes do not satisfy the public use requirement, the Kelo majority did not define the term ‘mere pretext.’ ”89
To add to the confusion, the Kelo majority noted that one possible indication of a pretextual taking is the presence of a “one-to-one transfer of property, executed outside the confines of an integrated development plan.”90 But the case Justice Stevens cited as an example actually involved a redevelopment plan.91 Justice Kennedy’s concurring opinion also suggested that a taking may be invalidated if it showed “impermissible favoritism” to a private party.92 But like the majority opinion, which Kennedy joined, he was extremely unclear as to how to determine what counts as a taking “intended to favor a particular private party.”93
In what is probably the most thorough analysis of Kelo’s pretext standard, Notre Dame law professor Daniel Kelly identifies four criteria that courts use to determine whether a private-to-private taking is pretextual:
1. The magnitude of the public benefit created by the condemnation. If the benefits are large, it seems less likely that they are merely pretextual.
2. The extent of the planning process that led to the taking.
3. Whether or not the identity of the private beneficiary of the taking was known in advance. If the new owner’s identity was unknown to officials at the time they decided to use eminent domain, it is hard to conclude that government undertook the condemnation in order to advance his or her interests.
4. The subjective intent of the condemning authorities. Under this approach, courts would investigate the motives of government decision makers to determine what the true purpose of a taking was.94
Since Kelo, many state and federal courts have struggled with the problem of how to decide whether a taking is pretextual. All four factors identified by Kelly have played a role.
The Government’s Intentions
In Middletown Township v. Lands of Stone, the Pennsylvania Supreme Court emphasized the subjective intent standard, concluding that courts must look for “the real or fundamental purpose behind a taking . . . the true purpose must primarily benefit the public.”95 A more recent decision by the same court reiterated this standard but also noted that the crucial factor in determining purpose is that “the public must be the primary and paramount beneficiary of the taking.”96
Similarly, the Hawaii Supreme Court’s decision in County of Hawai’i v. C&J Coupe Family Ltd. Partnership states that Kelo and Hawaii state constitutional law require courts to look for “the actual purpose” of a taking to determine whether the official rationale was a “mere pretext.”97 A later follow-up decision in the same litigation reiterated the purposebased approach but also ruled that “the burden of proof” in establishing pretext falls on the property owner; the court refused to adopt a categorical rule forbidding pretextual condemnations where the power of eminent domain is delegated to a private organization.98 Although it ultimately concluded that the challenged taking was not pretextual, the court did engage in detailed scrutiny of the condemning authorities’ purpose and planning.99 The Hawaii and Pennsylvania courts differ somewhat insofar as Hawaii does not share Pennsylvania’s emphasis on using the distribution of benefits from the taking as an indication of intent.
In a 2010 case, the Connecticut Supreme Court also suggested that a focus on motive may be appropriate under Kelo, noting that the case does not authorize “bad faith” takings.100 It thereby became the third state supreme court to stress the relevance of this factor.
Subjective motive was also emphasized by the New York Appellate Division in the Kaur case, which held that condemnations benefiting
Columbia University were pretextual under Kelo in large part because of evidence that the condemning authority had deliberately rigged a blight study in Columbia’s favor.101 Strangely, the New York Court of Appeals failed to consider the Appellate Division’s application of Kelo when it overruled the lower court and upheld the taking.
The Appellate Division adopted a similar approach in an earlier 2007 case where it struck down as pretextual a taking for the supposed purpose of creating office space and affordable housing. The court concluded that the taking was impermissible because the government’s “true purpose for condemnation” was to assist a private developer, a conclusion it reached based on the timing of the decision to condemn and the fact that the taking would not actually result in a net increase in affordable housing in the area.102 The precedential status of this decision may be in question after Kaur.103
Legal scholars Lior Strahilevitz and Eduardo Penalver have similarly interpreted Kelo as focusing on subjective intentions, concluding that the majority opinion imposes a requirement that “the condemnor’s actual intent must be to foster a “public use.”104 Intent was also the focus of several pre- Kelo federal cases that invalidated takings on pretext grounds, including the 99 Cents case favorably cited by the Kelo Court itself.105
The Magnitude of Expected Public Benefi ts
The Court of Appeals of the District of Columbia emphasized the magnitude of the public benefits of the taking relative to the private ones that “[i]f the property is being transferred to another private party, and the benefits to the public are only ‘incidental’ or ‘pretextual,’ a ‘pretext’ defense may well succeed.”106 This court is the highest court of the District of Columbia and is the equivalent of a state supreme court.107
The court remanded a takings case to the trial court and instructed lower courts to “focus primarily on [the] benefits the public hopes to realize from the proposed taking.”108 This approach mirrors an element of Justice Anthony Kennedy’s concurring opinion in Kelo itself, where Kennedy suggested that a taking might be invalidated if it has “only incidental or pretextual public benefits.”109 Somewhat inconsistently, the Court of Appeals later ruled—in an appeal arising from the same case— that “the District need only show that the D.C. Council approved the Skyland legislation for the purpose of economic development in order to defeat the allegation of pretext.”110
In MHC Financing Ltd. Partnership v. City of San Rafael, the federal district for the Northern District of California interpreted Kelo as requiring ‘ “careful and extensive inquiry into whether, in fact, the development plan is of primary benefit to the developer . . . [and] only incidental benefit to the City.’ ”111 This language is taken from Justice Kennedy’s description of the trial court’s efforts in Kelo itself. But Kennedy did not make clear whether such a “careful and extensive inquiry” is actually required. The district court may also have erred in relying on Kennedy’s opinion rather than that of the majority, since Kennedy also signed on to the latter, thereby ensuring that it had five votes.112 The MHC district court opinion was later reversed by the Ninth Circuit Court of Appeals, in a decision that gives extremely broad deference to the political process.113
The Planning Process
The Maryland, Pennsylvania, and Rhode Island courts have also relied on the absence of extensive planning as an indication of a pretextual tak-ing.114 This builds on Kelo’s emphasis on the presence of an “integrated development plan” in New London.115
Whether the Identity of the Main Benefi ciary of the Taking Was Known in Advance
Only one post- Kelo pretext decision seems to have turned on the fact that the identity of the new private owner was not known in advance by condemning authorities. In Carole Media v. New Jersey Transit Corp., the United States Court of Appeals for the Third Circuit upheld a taking of a firm’s license to post advertisements on public billboards owned by the New Jersey Transit Corporation.116 The New Jersey state legislature adopted a policy under which the billboard licenses would be allocated by a competitive bidding process.117 Although there was some evidence that the new policy was adopted in part because it was likely to favor the interests of a rival firm, All Vision, the court upheld the condemnations because “there is no allegation that NJ Transit, at the time it terminated Carole Media’s existing licenses, knew the identity of the successful bidder for the long-term licenses at those locations.”118 As a result of this ignorance, the court ruled that “this case cannot be the textbook private taking involving a naked transfer of property from private party A to B solely for B’s private use.”119
This analysis sidestepped the problem that a taking can be intended to benefit a known private party even if the benefit to that party comes in a form other than receiving ownership of the condemned property. In this case, the benefit to All Vision was that it would receive extensive management fees for organizing the bidding process and managing the billboards until the rights to them were sold to new bidders.120
This problem highlights an important shortcoming of focusing solely on the benefits to the new private owner in determining whether a taking is pretextual. Other narrow private interests might also benefit and play a decisive role in pushing through the condemnations. This is an important part of the story in the Kelo case itself, where Pfizer expected to benefit from the condemnation, even though it was not slated to become the owner of the condemned property.121
In all of the federal and state post- Kelo pretext cases discussed so far except for Carole Media, the court either invalidated a taking as pret-extual or remanded the case for detailed inquiry into that possibility by the trial court. This suggests an effort to give the pretext standard some real bite. Most courts applying Kelo have left open at least some substantial possibility that a taking could be ruled pretextual.
The major exceptions to this pattern are several decisions that mandate such extreme deference as to make it virtually impossible to prove pretext.
Extreme Deference
In two of its decisions, the Second Circuit Court of Appeals has taken an extremely deferential approach to pretext issues, falling just short of defining the pretext cause of action out of existence. A recent Ninth Circuit decision adopted a similar approach, as did a 2011 ruling by the Supreme Court of Guam.
In Goldstein v. Pataki, the Second Circuit considered a challenge to the same Atlantic Yards takings that were later upheld in state court by the New York Court of Appeals.122 Despite the considerable evidence that the taking was intended to benefit developer Bruce Ratner, who had initiated the project and lobbied for its adoption by the government, the Second Circuit refused to consider either evidence of improper motive or evidence concerning the distribution of benefits from the condemnation.123 So long as a taking is “rationally related to a classic public use,” the court ruled that it is impermissible to “give close scrutiny to the mechanics of a taking . . . as a means to gauge the purity of the motives of various government officials who approved it.”124 The Second Circuit also rejected claims that the takings should be invalidated because most of the benefits would flow to Ratner or because any benefits to the community might be “dwarf[ed]” by the project’s costs.125 Similarly, the court rejected the idea that any significant scrutiny was required because they “acknowledged [the] fact that Ratner was the impetus behind the project, i.e., that he, not a state agency, first conceived of developing Atlantic Yards . . . and that it was his plan for the Project that the Empire State Development Corporation eventually adopted without significant modification.”126
The court did note that their decision “preserve[es] the possibility that a fact pattern may one day arise in which the circumstances of the approval process so greatly undermine the basic legitimacy of the outcome reached that a closer objective scrutiny of the justification being offered is required.”127 But it is difficult to see what those circumstances might be if neither subjective intent, nor the distribution of the projects costs and benefits, nor the presence of an identifiable private beneficiary who played a key role in initiating the taking are enough to trigger such “objective scrutiny.” One possible answer is that heightened scrutiny might be required by the absence of a sufficiently rigorous planning process. But the Second Circuit seems to reject that option by suggesting that inquiry into “the mechanics of a taking rationally related to a classic public use” is inappropriate.128
Even more deferential to the government than Goldstein v. Pataki was the Second Circuit’s 2006 decision in Didden v. Village of Port Chester,129 decided two years before Goldstein. In 1999, the village of Port Chester, New York, established a “redevelopment area,” giving designated developer Gregg Wasser a virtual blank check to condemn property within it.130 When local property owners Bart Didden and Dominick Bologna sought a permit to build a CVS pharmacy in the area, Wasser demanded that they must either pay him $800,000 or give him a 50 percent partnership interest in the store, threatening to have their land condemned if they refused.131 They, indeed, refused, and a day later the village condemned their property.
In an unsigned opinion joined and probably written by future Supreme Court Justice Sonia Sotomayor,132 the Second Circuit panel upheld this taking:
[T]o the extent that [the property owners] assert that the Takings Clause prevents the State from condemning their property for a private use within a redevelopment district, regardless of whether they have been provided with just compensation, the recent Supreme Court decision in Kelo v. City of New London, obliges us to conclude that they have articulated no basis upon which relief can be granted.133
The opinion does not even consider the possibility that a pretextual taking might have occurred, despite the fact that the taking likely would not have happened at all but for Didden and Bologna’s refusal to give in to Wasser’s financial demands. It is difficult to find a more blatant example of pretextual intent.
Even if the relevant standard is the distribution of benefits from the taking rather than subjective intent, Didden is still an extremely dubious ruling. There was little if any plausible public benefit in this case because Wasser’s plan for the condemned land was to build a Walgreens pharmacy—virtually identical to Didden and Bologna’s plan to build a CVS pharmacy.134 Even if the Walgreens pharmacy was in some way better for the community than a CVS would have been, the lion’s share of the benefits clearly went to Wasser.
The other potentially relevant factors also cut in favor of a finding of pretext. The taking only occurred due to the property owners’ rejection of Wasser’s financial demands. It is difficult to argue that it was the result of any “comprehensive” or systematic planning process. And an identifiable private beneficiary was clearly present before the decision to use eminent domain was taken; indeed, he instigated that decision.
In sum, all four conceivably relevant factors militated in favor of a ruling that a pretextual taking had occurred. Yet, the court completely dismissed that possibility in a short, cursory opinion. The Didden case also involved some complex factual and procedural issues. But none of them ultimately diminish its highly deferential nature.135
In the post- Kelo jurisprudence on pretextual takings, Didden is an extreme outlier because it seems to define the possibility of a pretextual taking out of existence. It ruled that a pretextual taking did not occur despite the fact that almost every relevant fact cuts the other way. Because it was an unpublished opinion, Didden has no precedential value. Second Circuit rules forbid citation of unpublished summary orders filed before 2007.136 It is nonetheless noteworthy as the most extreme post- Kelo example of judicial endorsement of a blatantly pretextual taking. It is also significant as a possible window into the thinking of Justice Sotomayor, who now has more influence over constitutional property rights jurisprudence since her appointment to the Supreme Court in 2009.
In the Goldstein and Kaur cases discussed earlier, the New York Court of Appeals treated pretext claims much the same way as the Second Circuit did in Goldstein and Didden. In both cases, the court ignored strong evidence that all four pretext factors cut against the government. Both featured considerable evidence of improper intent, a distribution of benefits strongly favoring the new private owner of the condemned area, a private beneficiary whose identity was known in advance, and a planning process that was often perfunctory and biased in favor of a preconceived decision in favor of condemnation.137
The Goldstein majority ignored Kelo’s pretext standard and the lower court cases interpreting it, probably because the property owners’ federal constitutional claims had already been rejected in federal court in Goldstein v. Pataki. Less defensibly, the New York Court of Appeals also completely ignored Kelo and related pretext cases in Kaur, despite the fact that the lower court decision striking down the Columbia takings relied heavily on Kelo’s pretext analysis.138 Unlike in Goldstein, no federal court had already decided the property owners’ Fifth Amendment pretext claims, and the property owners continued to press those arguments in the Court of Appeals. Thus, it is difficult to understand why the Kaur court failed to even cite Kelo, much less discuss the relevant federal precedents interpreting pretextual takings. At the same time, the state court would likely have had to follow the Second Circuit’s extremely deferential approach to Kelo’s pretext standard, since New York falls within the jurisdiction of that federal court of appeals, and state courts must follow federal court interpretations of Supreme Court opinions interpreting the federal constitution.
A similarly ultradeferential approach was adopted by the Ninth Circuit in a decision in 2013, overruling a district court ruling that had focused on the distribution of benefits as an indication of pretext.139 The Ninth Circuit ruled that “extreme deference is due to the legislature” and indicated that a taking must be upheld under the Public Use Clause so long as it is “ ‘rationally related to a conceivable public purpose.’ ”140 It did not even consider the possibility that tighter judicial scrutiny is warranted in cases where there is evidence that the official rationale for a condemnation is pretextual.
Finally, mention should be made of Ilagan v. Ungacta, a 2011 decision by the Supreme Court of Guam that adopted a highly deferential approach similar to that of the Ninth Circuit.141 The Ilagan decision— issued by the highest court of a U.S. island territory in the Pacific—also ignored multiple indications of pretext in a case where the city of Agana used a largely moribund “economic development” plan to condemn a parking lot and transfer it to relatives of the then-mayor of Agana.142
The Future of Pretextual Takings Claims
As should by now be clear, there is no consensus among either state or federal judges on the criteria for determining what counts as a pretextual takings claim after Kelo. Some decisions emphasize the subjective intentions of condemning authorities, some focus on the magnitude of the expected public benefits of a taking, some on the extent of the planning process, and some on a combination of factors. Each of these approaches to pretextual takings has potential flaws. Focusing on the projected benefits seems to conflict with Kelo’s insistence that courts must not “second-guess” the government’s weighing of the costs and benefits of a project.143 Requiring the government to prove that the claimed benefits will actually materialize could undercut Kelo even further. If courts instead focus only on projected benefits without considering the likelihood of achieving them, then officials can justify pretextual takings simply by presenting exaggerated claims of public benefit that they know they will not be required to live up to.144
Inquiry into subjective intentions runs into the well-known difficulties of ascertaining motivations. It is often hard to discern another person’s true motives, or even one’s own. Moreover, it is difficult to decide what to do when the governments’ motives are mixed, as is often the case. In practice, public officials can usually persuade themselves that any taking that advances their political interests and helps an influential constituency that benefits from a taking also advances the public interest.145
Finally, relying on a detailed planning process to prevent pretextual takings ignores the possibility that politically influential private interests can “capture” the planning process and bend it to their own purposes. A more extensive planning process is not necessarily less prone to favoritism than one that is less elaborate.146
For these reasons, even a relatively robust effort to enforce Kelo’s pretext doctrine by state and lower federal courts is likely to result in only modest protection for property owners. It does not follow, however, that courts should simply adopt the ultradeferential approach to pretext questions favored by the Second and Ninth Circuits. At least three of the four factors identified by lower courts that have avoided the path of extreme deference are all potential indications of pretext even if imperfect ones.
A taking is more likely to be pretextual if there is extensive evidence that key government decision makers were motivated by a desire to advance the interests of influential private parties. While official motives are often difficult to assess, courts routinely do address such issues in other cases such as seeking to determine whether an ostensibly neutral government policy was actually motivated by racial or religious discrimination.147
Heightened judicial suspicion is also warranted if a single private party captures the lion’s share of the gains from a taking. That is at least some indication that the true purpose the taking was not to benefit the general public, even if not completely definitive proof.
In assessing both motives and benefits, it is important for judges to recognize that the pretextual beneficiary need not always be the new owner of the condemned property. Sometimes, it could be a politically influential third party such as Pfizer in the Kelo case itself.
Justice Kennedy, in his Kelo concurring opinion, was probably right to suppose that a pretextual taking is less likely in cases where the “identities of most of the private beneficiaries were unknown at the time that the [government] formulated its plans” for condemnation.148 It is reasonable to apply a higher degree of judicial scrutiny in cases where beneficiaries’ identities are known in advance. As discussed earlier, such beneficiaries might include third parties, such as Pfizer, as well as the projected new owners of the condemned property.
None of these three factors is definitive proof of pretext by itself. Each can sometimes be explained away as ultimately innocent. But the presence of any of them—and especially the presence of more than one—should lead courts to adopt a less deferential approach, shifting at least some of the burden of proof to the government.149
Whether the presence or absence of extensive planning is relevant to pretext claims is more debatable. Extensive planning does not necessarily indicate the absence of a scheme to benefit a private party at the expense of the public; the planning could itself be part of an effort to benefit the private interest. Similarly, a condemnation undertaken with little or no planning might have no untoward motive. Courts might, however, investigate the planning process as part of an inquiry into government motives. If the record shows that planners primarily sought to benefit a specific private party, that would be additional evidence of an illicit motive. If, conversely, it looks like they sought to benefit the public more generally, that would be evidence in support of the government.
Ultimately, it is difficult for courts to establish the presence or absence of illicit favoritism in the many cases where government officials simultaneously seek to benefit an influential private interest and also sincerely believe that they are acting in the public interest. Few people see themselves as cackling villains deliberately sacrificing the public good out of narrow self-interest. Even when that is indeed what they are doing, they are often able to convince themselves that what is good for them is also good for the public.150 For this and other reasons, it is unlikely that even an aggressively applied pretextual takings doctrine will impose more than minor constraints on harmful uses of eminent domain.
So far, nonetheless, most courts that have addressed the matter have at least attempted to enforce a meaningful pretext constraint on takings. Their efforts to do so have utilized a variety of contradictory approaches to defining pretext. It seems unlikely that any consensus will emerge in this area any time soon, unless the Supreme Court decides to review a case that settles the dispute. Sooner or later, the Court is likely to do just that, rather than allow a five-way split to continue in the lower courts indefinitely.
When and if a pretext case does reach the Supreme Court, it could potentially serve as a vehicle not only for clarifying the pretext doctrine, but for reconsidering Kelo more generally. Kelo remains one of the Supreme Court’s most controversial decisions, and many have called for it to be overruled.151 A pretext case, perhaps one with unusually egregious facts, could give the Court an opportunity to either narrow Kelo or overrule it entirely.
Conclusion
In the aftermath of Kelo, several important state court decisions have considered whether Kelo’s deferential approach to public use will also be the rule under their state constitutions. With the notable exception of the New York Court of Appeals, the courts have generally given property owners greater protection than would be allowed under Kelo, and several state supreme courts have explicitly repudiated it as a guide to the interpretation of their state constitutions.
Both state and federal courts have tried to interpret the meaning of Kelo’s statement that pretextual takings are still forbidden by the Constitution. No clear consensus on the meaning of pretext has emerged. It is quite possible that the pretext question will be the next public use issue that comes before the Supreme Court. It could even lead the Court to reconsider Kelo itself.
Whatever else can be said about the judicial reaction to Kelo, its fragmented and often skeptical nature underscores the extent to which the Supreme Court’s decision remains controversial. There is no longer anything resembling a consensus on public use issues among the nation’s judicial elite. The situation is in sharp contrast to the reaction to Berman v. Parker, the 1954 decision where the Supreme Court ruled that blight condemnations are permissible and first endorsed a highly deferential approach to the Public Use Clause. Berman was quickly adopted by many state supreme courts as a guide to the interpretation of their state constitutions.152 Where an earlier generation of jurists largely embraced the post-New Deal orthodoxy on public use, today’s judiciary is deeply divided.
Just as Kelo and its legacy continue to divide judges, it is also the focus of widespread disagreement about strategies for limiting the abuse of eminent domain. Many argue that those abuses can be constrained by reforming blight and economic development takings rather than banning them. The next chapter assesses several proposals along these lines.