Bert Gall of the Institute for Justice Presents an Optimistic Take on Post-Kelo Eminent Domain Reform:

The Institute for Justice, the outstanding libertarian public interest law firm that litigated the Kelo case, has a more optimistic view of post-Kelo eminent reform than I do. They have sent me this analysis by IJ attorney Bert Gall, which criticizes my paper on post-Kelo reform for being too pessimistic. In the interest of promoting debate on this important issue, I have agreed to post Bert's piece. I will reply in my next post, and allow Bert to post a rejoinder, if he so chooses. Here it is:

The Kelo Backlash: A Strong, and Continuing, Response to a Terrible Decision

The Institute for Justice represented Susette Kelo and her neighbors in Kelo v. City of New London. Since the Supreme Court handed down its now-infamous decision in that case, the Institute has, in addition to litigating several new eminent domain challenges, worked with legislators on eminent domain reform, and has monitored closely and analyzed legislative developments. What is absolutely clear is that the Kelo backlash has, in a very short period, achieved significant and substantive results in the political arena. Unfortunately, Ilya's overly pessimistic assessment of those results lacks both completeness and a sense of perspective; as a result, it is skewed in such a way that conforms to, rather than tests, his hypothesis about "political ignorance."

With this post, I want to highlight the real-world legislative results of the Kelo backlash. A complete, up-to-date, tally of reforms shows that, since Kelo, eminent domain reform has been passed in 34 states. Of the reforms that have passed, most have made substantive improvements in state law that will provide a real benefit to home and business owners. (While citizen-sponsored initiatives have been very important, the vast majority of good reforms originated with legislatures.) For example, 17 reforms narrow the definition of "blight," or in the cases of Florida and South Dakota, eliminate “blight” condemnations for private development – an important change since, in most states, Kelo-style takings occur through the use of "blight” designations. Also, 17 reforms require “blight” to be designated on a property-by-property basis rather than an area-wide one. (Since the condemnations in Kelo were not for “blight,” it’s not clear what effect a favorable decision in the case would have had on those laws.) Moreover, several reforms shift the burden of proof in condemnation actions from owners to condemning authorities. Anyone who has litigated an eminent domain case knows that all these kinds of changes represent dramatic improvements for home and small business owners facing the threat of condemnation. Ilya, who has written several excellent amicus briefs opposing the use of eminent domain for private development, surely appreciates the difference that these changes make in the kinds of arguments governments and property owners can make.

Any judgment on the effectiveness of legislative reform in Kelo's wake must be tempered by perspective. That is, one must ask, "What was state law like before Kelo, where is it now, and where is it going?” Before the Kelo backlash, the legal environment in most states was extremely hostile to property owners facing eminent domain for private development. The Kelo decision – in which the Supreme Court held for the first time that economic development is a public use, thereby eviscerating the public use clause of the Fifth Amendment – threatened to make things even worse. Indeed, the practical effect of Kelo for many local governments was for them to accelerate, successfully, the pace of eminent domain abuse before reforms were passed. (That fact doesn’t square with Ilya’s remarkable assertion that Kelo “may have represented a slight tightening of judicial scrutiny of public use issues . . . .”) But, now, the legal environment is much better for property owners in most states. Even “weak” reforms have helped hold the line against a Kelo-driven worsening of state laws. And more strong reforms appear to be on the way. For example, although they failed to pass good reforms last year, Virginia and New Mexico appear on the verge of enacting strong reform legislation, and good legislation is making its way through the state legislatures of Ohio and Texas. All four of these states, along with other states like Alabama – which initially passed weak reform, but then strengthened it – illustrate that there can be more than one bite at the legislative apple for proponents of reform. If the aforementioned reforms go through, 6 of the 8 states with the most private-to-private condemnations from 1998 through 2002 will have good eminent domain reforms; as it stands, 3 of the top 4 already do.

Applying a sense of perspective, and a closer look, makes Ilya's conclusions about several pieces of legislation questionable. Time and space constraints prevent a state-by-state critique, so two examples will have to suffice here. First, South Carolina's constitutional amendment, which was approved by the voters after being sent to them by the legislature, provides some of the strongest defenses against eminent domain abuse in the country. Yet Ilya labels it "ineffective," even though the amendment states that eminent domain may not be used for the purpose or benefit of economic development. More importantly, it requires that “blight” designations must be on a property-by-property basis, and very narrowly defines "blight" as property that both (1) meets certain conditions and (2) as a result of those conditions, poses a threat to the safety and health of the community. Even if there is wiggle room in the first prong of the requirement, there is none in the second. (Notably, Ilya does not argue that “safety” could be interpreted broadly.) Thus, South Carolina voters and the legislature have passed a strong constitutional amendment. Ilya also labels the Wisconsin legislation "ineffective," but it is certainly a vast improvement over where the law stood before because it does protect the owners of single-family homes from bogus "blight" condemnations. Of course, it would have been better for all multi-family homes and businesses to be included, but the protection the legislation provides for the owners of single-family homes is, as Ilya concedes, considerable. And that protection, now that it has been established for single-family residential properties, may very well be extended to all multi-family residences and businesses in the future. Thus, an "ineffective" label is unfair.

In sum, post-Kelo reform efforts have been far more successful than Ilya recognizes. When Kelo was handed down, many people's initial reaction was despair. After all, as Justice O’Connor wrote in her dissent, “The specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” But despair gave way to a powerful backlash that has, in less than two years, improved legislative protections against eminent domain abuse in most states. (It has also led to widespread public revulsion at private takings, as well as two state supreme court decisions that have explicitly rejected the Kelo holding – plus two more that question it). To be sure, more must be done so that every American is protected. States without reform need to act, and many states need to improve their reforms. In states, like New Jersey, where governments remain on an eminent domain binge and reform is a long-term proposition, litigation must continue. But the large amount that's been accomplished so far, as well as the good work that's being done right now, should not be obscured by an analysis that is informed more by theory and pessimism than reality.

Bert Gall is a senior attorney at the Institute for Justice, where he litigates eminent domain abuse cases on behalf of home and small business owners.

NOTE: For the benefit of conflict of interest mavens, I have documented my own connections to the Institute for Justice in previous posts. See, e.g., here.