U.S. Supreme Court to Hear Kelo v. New London

The United States Supreme Court granted certification in the case of Kelo v. City of New London, Docket No. 04-108, on September 28. The case, an appeal by property owners in Connecticut, deals with a very hot topic: The issue of what constitutes a valid public use as contained in the takings clause of the Fifth Amendment of the United States Constitution. The Constitution provides that:

"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."
The issue of property taken for public use and the development of that property has been addressed by many state courts, including New Jersey. The New Jersey Constitution, Article 1 Section 20, similarly states: "Private property shall not be taken for public use without just compensation. Individuals or private corporations shall not be authorized to take private property for public use without just compensation first made to the owners."

Public use has always been given a very broad interpretation in New Jersey. The New Jersey Supreme Court, in the cases of Lyons v. Camden and Wilson v. City of Long Branch, have upheld property takings by redevelopment agencies for private redevelopers. In the majority of redevelopment cases, the city or municipality takes on the role of the condemning authority, but the private redeveloper, who has contracted with the municipality for the project, actually compensates the property owner.

When most citizens hear the term "public use," what comes to mind are the highways, sidewalks, airports, bridges, railroads, and schools that are clearly shared by all people. In the 1960s the concept of "blight" enabled many housing authorities and redevelopment agencies to condemn land for interstate highways and transit, as well as open space, parks and playgrounds. Municipalities took advantage of the redevelopment statutes, not only to redevelop what were deemed blighted inner-city areas, but to convert previously viable properties to a higher and better use. The "higher and better use" would generate greater tax revenues for the municipality.

Acquisition for a valid public use is at the heart of the disputes in the New London, Connecticut case, as well as a related case in Michigan. The New London, Connecticut case concerns takings in the City of New London for the redevelopment of a 90-acre parcel for new residential hotel, conference center, offices, and retail space. The case is expected to draw wide attention and will pit the interest of cities such as New London engaged in economic revitalization of inner city areas versus the private property owner. The owner whose property is being taken objects to another private entity assuming title to the property in order to make a profit from a use which is not traditionally a public purpose.
This issue and the definition of what constitutes public use potentially impacts every redevelopment project in the State of New Jersey in cities such as Long Branch, Asbury Park, Newark, Jersey City, and Hoboken.

In a similar vein, the Michigan Supreme Court in the case of County of Wayne v. Hathcock, et al., Download Wayne v. Hathcock opinion
reversed 1981 holding of the Michigan Supreme Court in Poletown Neighborhood Counsel v. City of Detroit, 410 Mich. 616 (1981) and held that the takings proposed in the City of Wayne cases did not meet the public proposed test as set forth in the Michigan Constitution 1963, Article 10, Paragraph 2. In the County of Wayne case, the county proposed to condemn property for the construction of a 1,300 acre business and technology park. The commercial center is intended to reinvigorate the struggling economy of South Eastern Michigan by tracking business, particularly those involved in developing new technologies, to the area. The Court concluded that the proposed taking did.

Article 10, paragraph 2 of the 1963 Constitution stated that the proposed transfer of the condemned property to private parties was wholly and consistent with the common understanding of the term "public use" at the time the Michigan Constitution was ratified. It is expected the Court will have oral argument on the Connecticut case some time in January, and we will certainly keep our attention riveted on this very important decision.