Most readers will have to make an effort to recall the Supreme Court’s controversial 2005 decision in Kelo v. City of New London, if they can remember it at all. For a summer, though, it was quite a tempest in the teapot of constitutional law. Now Ilya Somin, a libertarian law professor at George Mason University, wants to raise the storm again. His new book, The Grasping Hand, is a closely argued treatment of Kelo and a window onto the political strategy of a new generation of right-wing legal activists. Their goal is to revive constitutional restrictions on economic regulation, in the name of protecting private property or “economic freedom.” Their opening gambit, the thin edge of their argumentative wedge, is an economic populism that is likely to strike progressives as ironic. This argumentative strategy is focused on cases where economic regulation hurts poor and marginal people. These libertarian activists want to use the Constitution to complete the destruction and burial of the New Deal, all in the name of the little guy.
Kelo is a poster case for the cause. New London is a depressed, post-industrial town on Connecticut’s Long Island Sound coast. The good jobs left the region decades ago. The poverty rate, at 25 percent, is two and a half times that of the state. In 2000, New London used the power of eminent domain to claim several blocks of houses, making room for a comprehensive redevelopment plan that centered on a promised Pfizer pharmaceutical facility. After the town paid the owners, it transferred the land to the developers. This sort of publicly subsidized private development is standard these days, with states and local governments bidding for factories, offices, and stadiums with promises of tax breaks, subsidies, and other giveaways. The New London homeowners, some elderly, some of whom had spent their lives in the houses, declined to sell and resisted the condemnation in court.
The case went all the way to the Supreme Court, where the homeowners lost, five to four. Justice John Paul Stevens wrote the majority opinion, reasoning that New London had followed a public process and condemned the land as part of a comprehensive and “carefully considered” development plan, and, after all, economic development was a legitimate public purpose. From the majority’s perspective, New London was clearly in the right. Four conservatives dissented, led by Sandra Day O’Connor.
Something of an insurrection followed. In hindsight, it seems to presage the Tea Party’s populism. Polls showed that between 81 percent and 95 percent of Americans disapproved of the opinion. Since the court’s decision, 45 states have passed laws restricting or forbidding public condemnation of land for private economic development. The backlash was comparable to that which followed the Supreme Court’s 1972 invalidation of all state death-penalty statutes, which prompted 35 states to adopt new death penalties, and to that of the early stages of the marriage-equality debate, when a majority of states added opposite-sex-only constitutional amendments to their marriage laws between 2003 and 2008. Clearly, plenty of people felt something had gone wrong.
But what? Popular attitudes and professional legal opinion are starkly different on this issue. Most legal experts (I teach both constitutional law and property law, the two areas that met in Kelo) agreed in 2005 that the majority was clearly right on the law. The surprise was that the dissenters had gathered four votes. Looking back, their near-success emerges as part of a broader conservative litigation strategy that, in the years since, has won some astonishing victories (establishing an individual constitutional right to gun ownership in 2008’s District of Columbia v. Heller; invalidating federal supervision of state election laws under the Voting Rights Act in 2013’s Shelby County). That strategy has also consolidated some major gains (deepening and extending the Court’s protection of money in politics in 2010’s Citizens United) and gained ground in some split decisions (weakening the Affordable Care Act’s Medicaid expansion and leaving the individual mandate hanging by a constitutional thread in the 2012 challenge to the law). Although much liberal attention is focused on the marriage-equality revolution and the Supreme Court’s narrow upholding of most of Obamacare (twice now and counting), the creativity and momentum are in these conservative developments.
As usual in constitutional law, the question in Kelo turned on a small scrap of text. The Fifth Amendment, part of the original 1791 Bill of Rights and best known for its guarantee against self-incrimination (“taking the Fifth” means not admitting guilt), also provides, “nor shall private property be taken for public use, without just compensation.” Every term in that clause has been heavily litigated. What counts as private property? (Patents? Escrow accounts? Professional licenses? Water rights?) When has property been “taken”? Is an owner entitled to compensation when he is required to accept a television cable on the roof of his apartment building? (Yes.) When he is forbidden to develop his beachfront property? (Yes.) And what is just compensation? (Generally the market value of the property, though how this is calculated gets debated, inevitably, and owners often remain dissatisfied after cashing their checks.)
The Kelo homeowners hung their argument on the phrase “for public use.” They argued that property condemned for economic development, then transferred to a private corporation, has not been taken “for public use.” Because the Fifth Amendment guarantees compensation only when property is taken for public use, they argued, the Constitution must presuppose that government has no power at all to take property that is not going to “public use.” That is, using government power to transfer property from one private owner to another must be forbidden.
It is not hard to see where this line of argument might lead. It tends to become a general claim that redistribution is constitutionally prohibited. Some conservatives make versions of this case. But Somin’s case is narrower. He simply wants to argue that eminent-domain power creates too much risk of abuse when it is used for economic development or to condemn blighted properties (the latter because the “blight” designation is easy for officials to manipulate), and that these uses of eminent domain should be constitutionally prohibited.
Before Kelo, the Supreme Court decided two big public-use cases that seemed to put the matter to rest. In 1954’s Berman v. Parker, Justice William O. Douglas rejected a challenge to a sweeping redevelopment condemnation in Washington, D.C. Douglas ruled in a unanimous opinion that “public use” meant, in effect, that property must be taken for a public purpose, and that nearly any purpose asserted by the government could qualify, including economic development or aesthetic improvement. Then, in 1984, Sandra Day O’Connor (who would dissent 21 years later in Kelo) wrote a unanimous opinion in Hawaii Housing Authority v. Midkiff upholding a Hawaii policy of condemning large estates, compensating their owners, and reselling the land to present tenants. This was a pure example of government taking land to transfer it from one private owner to another, with no other goal besides redistribution. There seemed to be little left to say about “public use” as a limit on the government’s power to take property.
That was the state of play when Kelo came to the high court, and Justice Stevens’s majority opinion took the conventional view that New London clearly had the power to take the property. Over the two decades since Midkiff, however, Justice O’Connor had become alarmed by the breadth of the economic development rationale. Surely, she argued, it allowed too much. Could any home be taken and transferred to a corporate owner because it would produce more GDP and tax revenue as a Motel 6? What, then, did private property mean under the Constitution? Berman and Midkiff, which had widely been taken to announce a broad conception of “public purpose,” now struck her as meaning something narrower: that government could take blighted property, or redistribute oligarchic holdings. But the rationale for the New London taking was pure economic development. O’Connor proposed that economic development should be eliminated from the list of constitutionally approved public purposes for taking property. Justice Clarence Thomas went further, launching an originalist argument that “public use” meant use by members of the public. Thus, property could be condemned for public roads, parks, post offices, and so forth, but not for any purpose that did not involve making it, in effect, into public space.
The dissenting justices were challenging a major premise of the (then) seven decades of constitutional law following the New Deal. The Constitution itself makes scant reference to private property, and the closest it comes to protecting it, besides the Fifth Amendment’s takings clause, is that amendment’s guarantee that no person shall “be deprived of life, liberty, or property without due process of law.” This is not nothing, but it is a far cry from the First Amendment’s “Congress shall make no law…abridging the freedom of speech, or of the press.” This is the case despite the fact that, as Somin and other property-rights advocates emphasize, the Constitution’s framers and advocates (notably James Madison in The Federalist Papers) were intensely attached to protecting property ownership. Indeed, there is a good case to be made that the Constitution was substantially prompted by a desire to protect creditors from debt-relief measures, and Madison warned grimly against schemes for “abolition of debts, for an equal division of property, or for any other improper or wicked project” in his famous defense of divided government, the discussion of “factions” in Federalist No. 10. The document’s design follows Madison’s argument in trusting the defense of private property mainly to the political process.
Nonetheless, for four decades before the New Deal, the courts (including but by no means limited to the Supreme Court) crafted constitutional doctrines to limit government involvement in economic life. Some of these turned on limits to the federal government’s power to regulate state economies, others on protections of the individual “liberty” of employers to pay low wages and employees to work long hours. Private property itself was less important in the conception of these doctrines than a libertarian idea of freedom to participate in a laissez-faire economy. This Ayn Rand-style constitutional posture is often termed Lochnerism, after the 1905 case in which the Supreme Court invalidated a New York law that forbade bakers to work more than 60 hours a week, a limitation that the justices concluded violated the economic liberty of both the dough-slingers and their bosses to enter into whatever contracts they liked. [See “The Roberts Court v. America,” Issue #23.]
When the Supreme Court accepted the New Deal’s vast increase in economic regulation and set aside Lochner-style reasoning, between 1937 and 1942, it returned to Madison’s emphasis on the political process. This time, however, the moral was different from Madison’s. The point of judicial review, judges and scholars now argued, was to backstop the political process in cases where unpopular or powerless minorities would predictably and repeatedly lose in the hurly-burly of politics. Laws disadvantaging African Americans, the paradigmatic case, were laws made for a minority by a majority that could usually get away with ignoring them, and therefore there was reason to take a hard look at such laws. By contrast, in economic regulation, the majority adopted laws affecting the majority. Property owners are not a weak, small, or disfavored group. They can look out for themselves without running to the courts for help.
Somin wants to discredit this view of economic regulation as automatically disciplined by the majority-on-majority dynamics of the political process, and instead revive judicial review of economic regulation. He treats the Kelo case as a model of the problems with the standard New Deal story. He makes two basic claims. First, the fact that property holders are a majority offers no excuse for not affording them protection: Owners are a majority in general, but the targets of eminent domain are almost always a small minority. As long as someone else’s ox is being roasted, most people are willing to let the roast proceed. Second, democratic processes do not guarantee informed and disciplined decisions. Most voters are ignorant (rationally so, considering how little concrete personal benefit they get from staying informed) and unlikely to hold local or state government to account. This means it is much too easy for powerful actors like Pfizer to get cozy with public officials and offload some of their capital expenses onto taxpayers and displaced property holders. As Somin puts it, “Political ignorance is the handmaiden of interest group power in the political process.” Therefore, “Judicial review is not just a check on the tyranny of the majority,” as jurists thought after the New Deal, but it “may also be needed to protect us against the consequences of the majority’s political ignorance.”
This argument is ideological switch-hitting, and Somin knows it. Reading his account casually, you might mistake him for a Bernie Sanders populist. He cites Sanders, James Baldwin, President Obama, and the NAACP as critics of the abuse of eminent domain. He hammers on the special vulnerability of poor and minority populations to opportunistic expropriation. And Somin is quite right. Reversing Kelo and adopting Justice O’Connor’s proposed constitutional ban on economic-development takings, as he urges, might be a sound move overall. It would certainly prevent some abuses.
It must be said, though, that Somin gives short shrift to the standard reasons for eminent domain. Sometimes economic development really does benefit from public coordination, and when government cannot condemn property, conveniently located owners can hold out for prices well above the market rate, or block development altogether. Somin isn’t enough of a property-rights absolutist to say that such obstruction is a good thing, and his proposed ways around it (government agents could secretly buy up property without announcing their development plans) are unconvincing and at odds with his otherwise principled argumentation. In other words, it’s a hard question, and Somin makes a fair case that liberals shouldn’t automatically side with “their” justices on it.
To answer the key question, whether economic-development takings are mainly used for corrupt purposes or for public-minded ones, we would need to know a lot more than Somin’s closely argued New London story tells us. Unfortunately, that information does not seem to exist, and so constitutional doctrine continues to spar in ideological darkness, lit up only by the clashing light sabers of anecdote.
To see the bigger picture, though, just ask what it would mean to take seriously the idea that the Constitution justifies special concern for the economically vulnerable—to extend that concern to other disadvantaged groups besides Somin’s local property holders. It might indeed mean a revival—not of Lochner-era protections of economic liberties, but of the impulse in the 1950s and 1960s to apply careful constitutional scrutiny to laws that systematically disadvantage the poor, for example school-funding schemes that depend on local property taxes. It might mean revisiting a line of Supreme Court cases, cut off abruptly in the early 1970s, that suggested some constitutional protection for welfare recipients’ eligibility for benefits, partly on the basis of the importance of the human need for food and shelter. It might mean invalidating voter-identification laws that weigh heavily on the poor, and even upholding campaign-finance restrictions (such as the ones invalidated in Citizens United, the 1976 watershed Buckley v. Valeo, and a raft of other decisions protecting money in politics) that try to prevent the wealthy from turning unequal economic power into unequal political power. It would, at the very least, be solicitous of organized labor as an essential counterweight to the power of capital, as mid-century justices sometimes were.
But Somin and the other libertarian lawyers who litigated Kelo on behalf of the homeowners will not sign up for any of this. Their concern for the little guy is either disingenuous or naive; it isn’t clear which is worse. If you want to make the case against economic regulation, you can nearly always find a sympathetic poster person: the non-union worker who just wants to support his family, the immigrant who wants to run a taxi without a license, the farmer whose property value is reduced by an environmental law. Such individuals really are sympathetic. But stripping away the laws that they find burdensome would end up making everyone more vulnerable and unequal. Conservatives have long pointed out to liberals that making economic policy on the basis of sympathetic stories can be an intellectual mistake. The same is true for the other side, and at least as powerful, since liberals tend to use such cases to argue for general social protections, and conservatives to argue for stripping such protections.
Somin is right that we shouldn’t be complacent about an opaque, corporate-friendly, not entirely scrupulous government—the government that the economist James K. Galbraith memorably called “the predator state.” Somin’s argument, however, is a brief against democracy generally as the rule of special interests and the ignorant—the greedy leading the blind—and his solution is that libertarian judges should do more to protect property rights. As a doctrinal switch in the law of takings, this is a plausible idea. As a general response to a government that has become less of a help to its people even as the economy grows more insecure, it is the last thing we need.