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Bert Gall Responds to my Critique of Post-Kelo Reform:

Last week, Bert Gall of the Institute for Justice engaged in a debate on post-Kelo eminent domain reform triggered by my paper arguing that most of the reform laws enacted since Kelo have been largely ineffective. For the earlier posts, see here and here. Bert has submitted the following reply to my arguments, and I have agreed to post it. I will be writing a brief rejoinder:

I thank Ilya for the opportunity to participate in this friendly debate about the status of Kelo reform legislation. For the sake of brevity, I will not comment on his take on Kelo's holding and its real-world impact on eminent domain abuse, although, for the reasons discussed here and here, he's wrong on both counts. Instead, I'll focus on my main concern: Ilya's overly pessimistic take on the status of Kelo-reform legislation. His statement that most eminent domain reforms are "ineffective" is simply incorrect. That was true at the beginning of last week, when the number of eminent domain reforms was 34. And it is true now that the number of reforms has grown to 37, thanks to the legislatures in Virginia, New Mexico, and Wyoming. (If we add the Nevada citizen's initiative, which Ilya counts, but I do not since the voters must approve it again in November of 2008 before it takes effect, the number is 38.) And still more good reforms are making their way through state legislatures (e.g., Texas and Ohio) this year.

Most state reforms that have passed so far are strong. For example, 20 states have either significantly narrowed the definition of "blight" or eliminated the ability of local governments to condemn for "blight." Because bogus "blight" is the principal vehicle for private-use condemnations, these reforms are anything but "ineffective." The states that have enacted these reforms are Alabama, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Michigan, Minnesota, New Hampshire, New Mexico, North Dakota, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, Virginia, Wisconsin, and Wyoming. There's not adequate space here to discuss each of these state's reforms; for a full explanation and analysis of the reforms in these and other states, check out "Legislative Action Since Kelo," by the Institute for Justice. (It will soon be updated to reflect the new laws that just passed, and IJ is releasing a report card on all passed legislation.) The reason that I critiqued Ilya's analysis of the the South Carolina and Wisconsin legislation in my last post -- something that, tellingly, he does not respond to -- was to demonstrate that his analysis incorrectly counted some good reforms as "ineffective" ones. Moreover, even so-called "ineffective" reforms may prove themselves to be good protections against eminent domain abuse in future legal battles. For example, Colorado's legislation may not be perfect, but it does eliminate the most significant problem with the state's case law: judicial deference toward municipalities' findings of blight. Add in the other positive changes in other state laws described in my previous post (also discussed in "Legislative Action Since Kelo") and it's hard not to conclude that legislative reform efforts -- which, it should be emphasized, have taken place in the short span of less than two years -- have been very successful.

Ilya's paper starts with the premise that "political ignorance" makes getting good reform hard, and ends with the conclusion that most reforms that have passed are weak. The vital middle step between premise and conclusion -- a careful analysis of each reform that has passed, and the improvement it represents -- is where the paper runs into serious trouble. Believe me: we at IJ do not view the legislative process with an unjaundiced eye. And, of course, proponents of reform shouldn't declare victory and go home. But Ilya and others have gone much too far in the opposite direction. I invite him to take a fresh, complete, and up-to-date look at a battle that, in reality, is going far better than his theory predicts.

Gideon Kanner (mail):
I though I had a monopoly on being pessimistic in this field but Prof. Somin has topped me. I think that the correct assessment of the situation lies somewhere between Gall and Somin.

First of all, any improvement in this "dark corner of the law," as textwriter Lewis Orgel put it in 1953, is a cause for celebration, even a small one. On the other hand, Mr. Gall must not underestimate the persistent lobbying powers of the redevelopment/highway lobby/league of cities types. And let us not forget the bond peddlers who are lobbying like crazy against reform. Last but not least, there are the ultimate villains in this drama: judges who (with some geographic variations) bend every effort to interpret and misinterpret any legislative reform to favor the condemning agencies which have enjoyed unwarranted judicial favor ever since the 19th century railroad condemnations.

And speaking of bonds, it turns out that for all its poor-mouth lamentations in the Kelo case about its decline, New London's GO bonds have been rated by Fitch as AA- and the city is said by the bond raters to enjoy good tax revenues and a stable ooutlook. And BTW, nothing is happening on the Kelo site. Nada. Zip. No redevelopment contracts have been entered into and none are in sight. Your tax money ($70+ mil to be exact) at work.
4.15.2007 4:15pm