Fifth Circuit Decides Post-Kelo Eminent Domain Case:

The U.S. Court of Appeals for the Fifth Circuit Court has handed down its decision, in Western Seafood Co. v. City of Freeport, a noteworthy post-Kelo eminent domain case that I blogged about back in June (hat tip to Wright Gore, President of the Western Seafood Company). Western Seafood involves the condemnation of part of a property owner's lot for transfer to a neighboring business so that the latter can build a marina for the asserted purpose of promoting "economic development" in the area. As I expected, the court rejected the property owner's claim that this condemnation violates the Takings Clause of federal Constitution.

The Court's opinion on the federal issue is a fairly straightforward application of Kelo. In Kelo, the Supreme Court of course of course held that "economic development" is sufficient justification to allow condemnation of private property for transfer to a new private owner. Moreover, as I explained in detail in my previous post on Western Seafood, Kelo virtually immunizes from challenge any economic development condemnation that is undertaken pursuant to an "integrated redevelopment plan." Virtually all economic development takings - including that in Western Seafood - are undertaken as part of some sort of plan.

The Fifth Circuit did, however, remand the case to the District Court for further consideration of Western Seafood's claim that the taking violates the Texas state constitution. The opinion notes that Texas state courts use state legislation as a guide to interpretation of the state constitution's Takings Clause, and that Texas enacted a post-Kelo reform law after the District Court reached its initial decision rejecting Western Seafood's claim. It will be interesting to see how the District Court resolves the state constitutional issue. However, I am not terribly optimistic about Western Seafood's prospects. To the extent that state constitutional issue turns on the impact of the new Texas post-Kelo statute, it is likely to cut in favor of the government, since that statute does very little to constrain economic development takings (see my analysis of the Texas law in this paper, pp. 73-75).

JT Wenting (mail):
And as the initial taking happened before the ammendment to the state constitution it should (AFAIK) not be judged under that ammendment but under the state constitution as it stood at the time the taking was decided.
10.15.2006 6:38am
liberty (mail) (www):
I know this thread isn't directly about Kelo, and we have all torn our hair about this in many other threads before, but this sentence is just so scary -- do we have property rights at all?

In Kelo, the Supreme Court of course of course held that "economic development" is sufficient justification to allow condemnation of private property for transfer to a new private owner.

Should the government engage in broader economic planning, they could use this power to allocate resources as they see fit. If a certain industry, town or minority group requires more resources, use the "economic development" exception to take property from somewhere else for redistribution.

If the federal government can set wages (as it can in some cases) and own and manage industry (as it has done in several) and redistribute tax money and now the government - federal or local in the end it won't matter - can take and redistribute private property: what is left of private property rights in this country?
10.15.2006 11:22am
The government has always been able to take your land for "economic development" purposes, as long as they pay you just compensation. Kelo may change some of the buzzwords that courts use in analyzing these takings, but it's hard to imagine the substantive result of this case would have been different in a pre-Kelo world.
10.15.2006 2:16pm
Duffy Pratt (mail):
I've always wondered why this issue skews politically the way it does. The conservatives are the ones who are outraged by Kelo, for the most part. But the people being hurt by this sort of thing are typically small property holders and the poor. And the ones getting the advantage are developers big businesses and local politicians looking to increase their tax base.

Also, in other areas (most notably abortion), conservatives argue that the issue should not be taken away by appointed kings in robes, but left to the political process. But for some reason, those same appointed kings in robes should be trouncing on the political process when it comes to property rates.

Very strange.
10.15.2006 2:19pm
Duffy Pratt (mail):
Of course I meant to type "property rights" and not "property rates" at the end of my last post. (Oh! for an edit feature for those of us who are proofreading-challenged.)
10.15.2006 2:21pm
lee (mail):
Edit feature? See "PREVIEW"
10.15.2006 5:05pm
David Maquera (mail) (www):
Duffy, letting the political process deal with abortions means that the abortion issue is addressed on a state-by-state basis. Therefore, at the state level, you have a check and balance system between the governor and a bi-cameral state legislature (except for Nebraska, which has a unicameral legislature). Thus, it is relatively more difficult for any one faction on either side of the abortion debate to monopolize the entire political process that is by its very nature includes a divided form of government. Hence, there is a stronger argument for letting the political process at the state level address the abortion issue versus the courts since the former is more apt to reflect the will of the people.

However, by contrast, letting the political process deal with eminent domain means that the eminent domain issue is addressed at the local government level. At the local government level, there exists less of a check and balance system, if in fact any exists at all. Having served as a former elected local official, I can assure you that it is generally easier for a faction to control the entire local government than at the state government level. Because it is generally easier for a single faction to control the entire local government, the local government is less likely to reflect the will of the people as a whole. Therefore, there is a greater need for courts to be involved in eminent domain issues to ensure that a local government does not overstep its proper bounds.
10.15.2006 5:14pm
But local power is exclusively a creation of state power. If the political process at the state level is healthy, then courts should respect the state's decision to grant more or less eminent domain power to local municipalities, and shouldn't substitute their own judgment for that of the state.

Or so the argument goes, anyway. One point from the Kelo majority opinion that is often ignored in the rush to brand it the worst decision ever is this: Land use is perhaps THE quintessential state/local issue.

Duffy has a point which ought to be taken seriously by people on both sides of the ideological divide: the people who object most strongly to the Supreme Court overturning the will of a political majority, as demonstrated through state enactments, suddenly have no trouble perceiving all the flaws in the political process when it is their ox being gored. And vice versa, of course. When one's own opinion corresponds with the actual law, it's very easy to imagine that the law was the product of a healthy and functional political process, but that doesn't necessarily make it so.
10.15.2006 6:01pm
The difference, Duffy, is that there's a public use restriction in the text of the Constitution. There's nothing granting the right to have an abortion, ink blots aside.
10.15.2006 9:09pm
Duffy Pratt (mail):
The takings clause says "nor shall private property be taken for public use, without just compensation."

One reading, consistent with this text, is that when the government takes property for non-public use, the clause does not apply and no compensation need be paid. I will admit that this interpretation is screwy, but that wouldn't necessarily preclude it.

Another way to read the clause would be to say that it was unthinkable for governments to be taking property for anything other than public use, so the consequences just didn't occur to the founders. Consistent with this idea, would be to read the "public" part of the clause as superflous, im much the same way that McCullogh v. Maryland made the "necessary" part of the necessary and proper clause superflous (sp?). In other words, it would be consistent with the text of the constitution to say that what uses were public or private was a matter primarily left to the legislatures, and the jodiciary would not look behind the decision.

I'm not saying either of these readings is correct. But given these possibilities, both consistent with the text, I think its pretty clear that the public use requirement, in whatever form it takes, comes from a judicial gloss on the text, and not simply from a plain reading.

And yes, there is nothing necessarily inconsistent with thinking that both cases were wrongly decided. I happen to think just that. But alot of the objections I read about Kelso are not based on simple legal grounds, but more on the governments making the takings decisions simply can't be trusted. But the people who make these arguments don't see anything wrong with their newfound faith in the federal judiciary when it comes to an issue that they care about.
10.15.2006 9:41pm
David Maquera (mail) (www):
Steve, just because the political process at the state level (subject to a check and balance system) may be healthy does not automatically mean that the political process at the local level is healthy (which is practically not subject to a check and balance system). Alas, if only the worst that a local government could do was literally gore someone's ox. Unfortunately, pursuant to the Kelo decision, a local government can vote to take your home away from you for FMV, regardless of the invaluable memories your family may have shared in that home, and give it to your neighbor on the mere basis that the local government will derive more tax dollars from the transaction than from you.
10.15.2006 11:02pm
Bored Lawyer:
I have always thought that this kind of issue (state constitutional one) is one where federal courts ought to refrain from treading. The district court certainly has discretion under 28 U.S.C. Sec. 1367 to refrain from addressing state constitutional issues, and IMHO I don't see why a federal court should address it in the first instance. (Maybe if the Texas Supreme Court had recently addressed the issue and there was a detailed opinion, that would be something else. Otherwise, state courts ought to address these kind of questions in the first instance.)
10.15.2006 11:27pm
Duffy Pratt (mail):

I think the point is that if the state political process is healthy, then it could restrain localities from the kind of abuse you fear. So there should not be any need for the Feds to get involved. How many states have local eminent domain authority which can not be restricted by either the state legislature or the state constitution?

Another point I rarely see in this debate. Take a typical forfeiture law in a zero tolerance state. Someone's car is stopped with a joint in it, and the state forfeits the car and then sells it at public auction. How does this satisfy the public use requirement? The state is simply taking the car and then selling it to another private person? It makes no public use of it at all. If there really were two requirements: a) public use and b) just compensation, then wouldn't all these forfeiture statutes be unconstitutional.
(Remember, taking a car with drugs in it may serve a public purpose, but the people who criticize Kelo think that public use is a whole lot narrower than that.)
10.15.2006 11:53pm
David M. Nieporent (www):
Duffy has a point which ought to be taken seriously by people on both sides of the ideological divide: the people who object most strongly to the Supreme Court overturning the will of a political majority, as demonstrated through state enactments, suddenly have no trouble perceiving all the flaws in the political process when it is their ox being gored.
Steve, leaving aside different governing constitutional provisions (or lack thereof), it seems pretty likely that, given the furor over abortion, any law will generally reflect the will of the electorate.

On the other hand, in purely practical terms it seems unlikely that the public votes for candidates based on eminent domain decisions as a general rule, so it would be unlikely that any particular decision does reflect the views of the public. (Also in that vein, keep in mind that while eminent domain policy is up to elected officials, implementation in a specific case is probably up to unelected bureaucrats.)
10.15.2006 11:56pm
TDPerkins (mail):
Steve wrote:

"The government has always been able to take your land for "economic development" purposes, as long as they pay you just compensation."

And Steve was incorrect. The Kelo decision was incorrect, the decisions leading up to it were incorrect.

The government is empowered to seize your property for public works which were open to and of use to the entire public, and in general operated by government employees and owned by the government. There existed prior to Kelo a correct common understanding of the concept of "public work", incorrect decisions such as Poletown notwithstanding. The fact that Kelo made apparent to the public the degree to which the Supreme Court had permitted interpretation of the takings clause to devolve into the counterfactual is why there was such an outcry over the Kelo decision.

The "Health" of the local or state political apparatus is relevant only in that the superior constitutional principles embodied in the takings clause--were the Supreme Court and the rest of the federal apparauts inclined to enforce them--would restrain an "unhealthy" subordinate polity.

Currently, in the event a local political machine decides to purport to the court system that they can get more tax money out of a different owner, then you don't own your property anymore, you have no rights to it. Compensation at what a court may determine to be fair market value may or may not reflect the value of the property.

Yours, TDP, ml, msl, &pfpp
10.16.2006 2:20pm
David Maquera (mail) (www):

You are comparing apples and oranges. The last time I read the Kelo decision, the homeowners didn't violate some law that required forfeiture of their homes. They were merely "guilty" of owning property waterfront property that some rich developer(s) wanted in order to make a financial windfall.

Also, you are correct that if the state political process is healthy, then it will restrain local municipalities. In fact, that is exactly what is happening in some states now throughout the Union. However, what Kelo illustrated is the danger of a state legislature that defers entirely on an issue to a local municipality that is not subject to the same check and balances that exist at a state level. While Kelo has, or should have been a wake up call for state legislatures, that does little good for the homeowners in Kelo, or any other property owner prior to Kelo whose property was confiscated and handed over to some wealthy developer who probably funneled contributions to the latest re-election campaign for overreaching local officials.
10.17.2006 12:36am
Duffy Pratt (mail):

There is no constitutional basis for an innocent owner defense to forfeiture under the constitution. See Bennis v. Michigan (94-8729), 517 U.S. 1163 (1996). So if someone smokes a joint in your car, without your knowledge, the government can take it and sell it. This result is at least as outrageous and troubling (well, to me at least) as Kelo. So its not apples and oranges, its more like apples and pears.

But my point is: either there is a public use requirement or there isn't. If the public use requirement is what the anti-Kelo folks say, then forfeitures would fail the test, because the end use of the property taken is to sell it to a private party.

I guess it's also possible that what public use means would vary depending on the kind of taking. Eminent domain might have one standard, seizures of personal property for milatary use might have another, capture of prizes in admiralty another, and forfeitures another. But one thing I would like people to see is that the takings clause is not simply an "eminent domain" or "condemnation" clause. There are lots of different ways that the government can take property.

Also, if you really thought that it was a comparison of apples and oranges, what would stop an "unhealthy" state that wanted to take some property from avoiding the takings clause by passing a law making some activity on the property illegal, and then forfeiting it?
10.17.2006 2:19am
William J. Scheil (mail):
"No person shall be . . . deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V.

What happened to interpretating unambiguous language in the plain, commonsense meaning?

Although the Court's jurisprudence normally finds a cohesive, comprehensible rationale, the Court's modern Takings Jurisprudences "withers in the light of objectivity to a heap of conclusory straws." Concord Auto Auction, Inc. v. Rustin, 627 F. Supp. 1526 (D. Mass. 1986) (containing no substantive similarity, merely quoting the artfully powerful prose). The merciless erosion of property rights finds little historical foundation after fuedal times.

Personally, reading these cases creates a confusing turmoil of emotional responses. From somewhere deep insider, I feel outrage -- a sense that I will fight to the death before a few local city councilpersons take my land. The rationale side of my mind, however, fears that property rights faded into the past long ago; why fight for something that does not exist?

The Court clearly considers property the "bastard stepchild" of Fifth Amendment rights. quoting Rehnquist.

One last thought, an anomoly worth noting: Why has the Court stretched this reasoning so far from the modest beginning of Takings Jurisprudence, considering public policy so adamantly opposes any extension of this presupposed government power?
10.17.2006 1:32pm
markm (mail):
David: Forfeiture comes under the first clause of this, not the last clause: "No person shall be . . . deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." U.S. Const. amend. V.

Now, it's beyond me how the heck the courts managed to decide that "due process of law" in the case of property forfeiture does not require proof beyond reasonable doubt or court-appointed attorneys for those who cannot afford one.
10.17.2006 5:20pm