Supremely Bad Decision

The Supreme Corpse has today moved the country another step toward communism.

The Supreme Court ruled today, in a deeply emotional case weighing the rights of property owners and the good of the community, that local governments can sometimes seize homes and businesses and turn them over to private developers.
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Writing for the majority, Justice John Paul Stevens said, "Promoting economic development is a traditional and long accepted governmental function, and there is no principled way of distinguishing it from the other public purposes the court has recognized."

The decision totally baffles me. The dissent by O'Connor states what I can't. Mainly, because she's at least polite about this travesty.

In a bitter dissent, Justice Sandra Day O'Connor said the majority had created an ominous precedent. "The specter of condemnation hangs over all property," she wrote. "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."

"Any property may now be taken for the benefit of another private property, but the fallout from this decision will not be random," she wrote. "The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.

"As for the victims," Justice O'Connor went on, "the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result."

I suppose I should calm down a bit and find/read the full decision. Though from this article, I don't see that they have set any bounds on when it is justifiable to seize private property for an alleged good for the public. Just who will make that decision?

I suppose this really forces everyone who is appalled by this to go to the extreme in politics to solve such problems. If local politicians try this stunt, then it will be required that the public make an extreme response assuring them that they will lose their office and any further prospect of being in politics.

UPDATE:
Here is a link to How Appealing that links all of the relevant documents including all of the opinions.

Here are the opinions of Volokh, Captain's Quarters, Will Collier, and Bainbridge on topic.

Volokh:

The funny thing is that, in Kelo v. City of New London, it is the (mostly liberal) majority's test that would give the government flexibility to serve public goals by taking property and selling it to private parties, when the government thinks the private parties will be better positioned to provide the public benefit. And it is the conservative dissenters' test that would give the government a strong incentive to own and operate various enterprises itself, or insist that whoever owns and operates them labor under the burdens of being a "common carrier."

Under the dissenters' view, if the City of New London wants to take property to run a shopping mall, which would presumably provide more jobs and government revenue, it's free to do so. But if it wants to take property and resell it to a private shopping mall owner, it may not. True, the latter solution isn't the pure free market: The mall owner would be getting a government benefit in the form of property taken from the original owners (albeit with compensation), just as school choice programs get a government benefit in the form of money taken from taxpayers. Still, it seems better than the City running retail stores -- yet the dissenters' approach would give the City an incentive to do that, rather than lining up more efficient private businesses to do it.

Captain's Quarters: (Make sure you read the Mark Twain letter that he quotes, bloody brilliant.)

Unsurprisingly, Justice John Paul Stevens wrote for the majority that they had deferred to legislative action in this case, a position with which Kennedy, Souter, Ginsburg, and Breyer agreed. However, the other four justices argued -- correctly, in my opinion -- that eminent domain should not be used to transfer property from one private owner to another. The power of the government should not overrule the private marketplace unless the land goes for a specific public -- i.e., not private -- use. Not surprisingly, the court relied on a 1954 Warren Court decision which broadened the term "public use" to include blighted areas that required public funds for urban renewal.

This does a tremendous injustice to the property owners of New London and everywhere in the United States. This puts the entire notion of property rights into jeopardy. Now cities can literally force people off their land in order to simply increase their tax base, which is all that New London accomplished in this smelly manuever.

And Bainbridge:

... the requirement to pay fair market value is a grossly inadequate safeguard on government power for two reasons in Kelo. First, it fails to take into account the subjective valuations placed on the property by people whose families have lived on the land, in at least one case, for a 100 years. In other words, if the Supreme Court rules for the city, the government will be able to seize land at a price considerably below the reservation price of the owners. Second, unlike the prototypical eminent domain case, in which the land is seized to build, say, a school or road, in this case the city is using eminent domain to seize property that will then be turned over to a private developer. If this new development increases the value of the property, all of that value will be captured by the new owner, rather than the forced sellers. As a result, the city will have made itself richer (through higher taxes), and the developer richer, while leaving the forced sellers poorer in both subjective and objective senses.

Will Collier:

This is a dreadful decision. If politicians have the right to take your private property and give it to somebody else just because the other guy claims that he can generate more taxes from it, then property rights have ceased to exist in the US.

The localities are still required to pay "a just price" when one of these takings occurs, but the price even a willing seller would be able to get from his property just took a huge hit. All a developer has to do now is make a lowball offer and threaten to involve a bought-and-paid-for politician to take the property away if the owner doesn't acquiesce.

I think the common theme is that the finding permits for seizure of one's property to give to another private party. Just compensation, not being defined, is a scary bit here. Especially in that the loser of the property not only loses their homes but any potential profit that could have been available from the property. I also fail to see any protections from abuse of this. I know, I know that isn't what they're there for. That said, who will provide those protections from those that can't afford to drag these suits for years and years through the courts?

UPDATE AGAIN

I've been giving this some thought relating to the relationship to taxes. With this ruling, wouldn't this open up the door for companies to push the seizure of properties they desire because they would pay more taxes? Say you own a farm or a timber lot that is in "current use" (property that isn't in use and thus taxed at a lower price to benefit open space or green spaces). Wouldn't the City gain more taxes by seizing those lots? Wouldn't they have the incentive to grab that property from a select few and give it to a private company who will be a bigger tax provider?

I think this thought should really knock the priority of taxes in the argument completely off the table.

In the New London case they state that the seizure would allow for the creation of 1000 jobs. Couldn't these jobs been created with out taking these peoples homes? Did they even try to modify the plans to address this? What of those 80 residential spaces that are to be created? Why do these residences have priority over the pre-existing ones?

This smells worse all the more I read about it.

UPDATE YET AGAIN

Grumbles has a listing of various takes on the topic.

QandO has a good write up on the topic as well.