The Journal of The DuPage County Bar Association

Back Issues > Vol. 18 (2005-06)

Northern’s Exposure
From Berman v. Parker to Kelo v. New London, an Illustration of the U.S. Supreme Court’s Unwavering Private Application of the Public Use Clause of the Fifth Amendment.
By Chad J. Lersch

I. Introduction

It was not the holding of Kelo v. New London that was unusual, but rather the U.S. Supreme Court’s decision to hear the case. It has long been settled that the Public Use Clause of the Fifth Amendment permits the use of eminent domain to take private property for private use, provided two conditions are met: just compensation is given and the use of the private property can be broadly characterized as public use.1 While the use of eminent domain in this context is settled, the Supreme Court has been asked on several occasions to accurately define public use.2 Despite the Court’s reluctance to offer an exact definition of public use, the Court has consistently held that public use does not require the condemned property to subsequently be held by, or open to the public. The Court has historically required only that the result of a taking involve a legitimate public interest; otherwise, the Court has largely deferred to the legislature in determining a rational means in achieving such ends.3 Kelo v. New London was no exception to this tradition. However, Kelo v. New London stands on the shoulders of substantial prior precedent; namely Berman v. Parker and Hawaii v. Midkiff. This article will provide a brief overview of the past precedent to illustrate that Kelo did nothing to change the rules, but simply reaffirmed what the Court has historically held.

II. Berman v. Parker

Berman v. Parker was the first case to take a good look at the meaning of public use with regard to the government’s exercise of eminent domain to take private property for a subsequent private use.4 In Berman, the Congress, acting as the local legislature for the District of Columbia, passed legislation enabling the local planning commission to develop a comprehensive redevelopment plan.5 The redevelopment plan’s primary purpose was to rid the District of Columbia of blighted property and slums.6 To achieve such ends, the act allowed for the acquisition and assembly of property in the area using eminent domain.7 Once the property was acquired, the land was then authorized to be transferred to both public and private agencies.

Berman involved a landowner that owned land in the redevelopment area. Despite facts indicating that the parcel in question was neither blighted nor slums, the land was condemned and slated for private redevelopment.8 The landowner challenged the act, arguing the condemnation of his property and the subsequent redistribution to a private entity for private use violated the Public Use Clause of the Fifth Amendment. 9

The Court first noted that the determination of whether power is being exercised for public purpose is an extremely narrow question.10 The Court concluded that once the question had been answered it was essential that the judiciary refrain from second-guessing the means by which the legislature achieved its public purpose ends.11 The Court showed a great amount of deference to the legislature in its determination of the "public use" for the condemned property. Upon a determination of an appropriate "public use", a greater deference was extended to the legislature in determining the best way to achieve the desired "public use".

The Berman Court determined the power of the legislature is to ensure beauty as well as health, spacious living as well as clean living, and a well-balanced neighbor as well as a well patrolled neighborhood; in other words, public welfare is both broad and inclusive.12 In its determination that slum conditions are injurious to public health, safety, welfare, and morals, the Court found redevelopment plans targeting slums and severely blighted areas to fall squarely within the police power of the legislature.13

The Court concluded the designated agency may acquire full title and dispense with the property as it wished, recognizing the rights afforded to a citizen through the Fifth Amendment are satisfied upon receipt of just compensation.14 The Berman decision resulted in a broad determination of the legislature’s police power and a clear indication the Court would not tolerate Federal Courts replacing the wisdom of the legislature with that of its own regarding the manner in which the public interest would be accomplished.15

III. Hawaii v. Midkiff

The Berman Court’s deference to legislative determination involving a proper interpretation of the Public Use Clause was followed by an expanded application of the Public Use Clause in Hawaii v. Midkiff.16 By the mid 1960’s, the Hawaii state legislature discovered that only twenty-two individuals owned over seventy percent of the private land in Hawaii.17 Believing skewed land prices resulting from concentrated land ownership to be injurious to the public, the Hawaiian legislature instituted a plan to compel large landowners to break up their estates.18 To minimize the tax consequences for the landowners, the legislature created a mechanism in which they would condemn property followed by a transfer of ownership to the tenants of the property provided the tenant compensated the landowner.19

The legislature devised a three-part process to implement the plan. Once a hearing was held, and it was determined that the use of eminent domain would actually achieve a legitimate "public purpose", the land was acquired through either condemnation hearings or negotiations between lesser and lessee.20 In April of 1977, negotiations between the tenant and Midkiff failed, resulting in the initiation of condemnation proceedings upon Midkiff’s property.21 The initiation of the condemnation proceedings resulted in Midkiff challenging the Hawaiian Legislature’s plan, arguing the plan established by the legislature violated the Public Use Clause of the Fifth Amendment. The District Court determined that the purpose of the legislation was within the scope of the State’s police power and the means to accomplish the ends was not arbitrary or capricious.22 The Ninth Circuit reversed the decision of the District Court, holding the State’s legislation was "a naked attempt on the part of Hawaii to take the private property of A and transfer it to B solely for B’s private use and benefit."23

The U.S. Supreme Court, disagreeing with the Ninth Circuit, reversed the decision. The Court again required the purpose to be within the "police power" of the state.24 The Court applied the holding of Berman, declaring the question of the proper scope of "public use" to be a narrow question.25 However, the Court seemed to expand the holding of Berman by declaring, "the ‘public use’ requirement is coterminous with the scope of a sovereign’s police power."26

Recognizing the traditional role of the state to provide relief from the social and economic woes of a monopoly, the Court concluded that an effort to regulate land monopolies was within the bounds of the states’ police power.27 Therefore, despite the reality that eminent domain was being utilized to transfer land ownership from one private citizen to another, the Fifth Amendment was not being violated. The Court reasoned that a question of whether an act actually accomplished the state’s objective is not important, but instead the important question is whether the State could have rationally believed that the act would promote its legitimate state interest.28 Following Berman, the Court held that if the state’s purpose is legitimate, and the means are not irrational, the Court should not replace the legislature’s judgment for that of the Federal Courts.29

The Court found the plan implemented by the Hawaiian legislature addressed a legitimate public purpose in light of the facts that the act would not be benefiting an identifiable person or persons and the act would be addressing the social problems that accompany a monopoly.30 The Court then determined that the utilization of eminent domain to diffuse land ownership was not an irrational way to address the legitimate public purpose asserted by the Hawaiian Legislature.31 Therefore, the plan did not violate the Public Use Clause of the Fifth Amendment. 32

IV. Kelo v. New London

The most recent case to interpret the Public Use Clause of the Fifth Amendment is Kelo v. New London.33 The facts are as such. The city of New London, Connecticut embarked on a significant redevelopment plan for a ninety-acre area along the waterfront. 34 The city desired to capitalize on the arrival of a new Pfizer facility by rehabilitating the area with new commercial, retail, and residential space. 35 New London’s purported goal for the redevelopment was "creating new jobs, generating tax revenue, and ‘helping to build momentum for the revitalization of downtown New London’."36 To achieve the above goals, the city, in accordance with a Connecticut state statute, designated a private non-profit entity to purchase or acquire the necessary property for the redevelopment.37

Analogous to Midkiff, after negotiations over the acquisition of the Petitioner’s property failed, condemnation proceedings were initiated against the Petitioner’s property.38 The question presented to the Court was whether the city’s subsequent plans for the Petitioner’s property satisfied the requirement of the Public Use Clause of the Fifth Amendment.39 In a close decision, the Court decided as it had in both Berman and Midkiff. Despite the lack of real blight or slum conditions on the condemned property, the Court recognized the need for rejuvenation of a city suffering from distressed conditions to be a legitimate public purpose.40 The Court, maintaining the deference historically granted to legislatures utilizing eminent domain, concluded that economic development is a long accepted purpose of government and within the bounds of what is traditional understood to be a "public purpose."41 Once the Court concluded that the economic development and/or redevelopment of the depressed city was a legitimate ends, the Court maintained that long standing belief that the Federal Courts should refrain from questioning the means chosen by the legislature in achieving such rational ends.42

However, unlike the earlier decisions of Berman and Midkiff, the Kelo decision was far from unanimous. The majority consisted of five justices, with Justice Kennedy concurring. In his concurrence, Justice Kennedy negated the Petitioner’s concerns regarding the potential for a blurred boundary between public and private takings.43 Referencing the Ninth Circuit in Midkiff, the court noted that because the identity of specific private entities to whom the condemned property would go was unknown, the actions of New London were far from an attempt to take A’s property to bestow a benefit upon the interest of B.44 Clarifying the position of the Court, Justice Kennedy explained that the legitimate purpose of economic development cannot be found to be incidental to the benefits that would be bestowed upon a private party.45 He then noted that the meaningful rational basis review required that if the Plaintiff could show that the economic advantages to a city were merely incidental to the benefits bestowed upon private developers, the taking could never hold up under the Public Use Clause.46 Based on the facts, Kennedy concluded the benefits bestowed upon the private entity in Kelo are incidental to the greater objective of economic development; therefore, the taking is constitutional.47

The Kelo decision yielded a split Court, with Justice O’Connor writing the dissenting opinion. Justice O’Connor attempted to limit the power of the legislature to use eminent domain to acquire property for subsequent private use.48 Justice O’Connor, in an attempt to shift the burden, argued that a positive finding of a "justifying public purpose" must be present.49 Attempting to distinguish Berman and Midkiff, Justice O’Connor argued the past decisions involved a taking that "directly achieved a public benefit." while Kelo involved a situation in which the public benefit would be secondary to the private benefit bestowed upon Pfizer and other private entities.50 Justice O’Connor, further distinguishing the present case from the ruling precedent, noted the past cases involved the harmful use of property, while there were no facts to suggest the Petitioner’s current use of the property was harmful.51 Instead Justice O’Connor suggested that a slippery slope was being created in which any secondary benefit, from increased tax revenue to aesthetic pleasure, could stand as legitimate justification for the government taking private property being put to ordinary use, and giving it to another private individual to be put to ordinary use.52 Justice O’Connor, despite authoring the Midkiff decision, feared that the Public Use Clause was evolving into a mechanism in which the taking of private property could be justified as long as subsequent use of the said property would be considered an "upgrade" to the property.53 Furthermore, Justice O’Connor believed that the beneficiaries of such a condition would likely be those who hold political power and influence, leaving the ordinary property owner at the mercy of such an entity with no real protection by the Fifth Amendment.54

V. Conclusion

Despite the dissent in Kelo v. New London, the decision did very little to limit the use of eminent domain as it applies to the Fifth Amendment. In Kelo, the majority recognized the expanded police power of the state, holding that as long as the state could show that the eminent domain power was being used in an effort to protect the public health, safety, and welfare, the Court would continue its refusal to question the wisdom of the legislature regarding the means chosen to accomplish such ends. The Kelo decision, like Berman and Midkiff, illustrated that while the Court may offer a cursory look into the purpose behind a legislature’s use of eminent domain, it will refrain from any real scrutiny regarding the legislature’s purpose or the mechanism by which the legislature has chosen to achieve such purpose.

The primary divergence from past precedent is the growing dissent of the Court. While both Berman and Midkiff were unanimous decisions, the Kelo case resulted in a split Court, with the author of the Midkiff decision leading the charge of the dissent. However, the dissent did not question the means by which the legislature was attempting to achieve its ends; but rather, Justice O’Connor questioned the ultimate purpose or ends desired by the legislature. While Kelo upheld Berman and Midkiff, Kelo’s dissent signals a future in which the state will likely experience an increased burden in showing its use of eminent domain to acquire private land for subsequent private use satisfies the Public Use Clause of the Fifth Amendment.

1 Berman v. Parker, 348 U.S. 26, 36 (1954).

2 Berman, 348 U.S. 26 (1954); Hawaii v. Midkiff, 467 U.S. 229 (1984); Kelo v. New London, 125 S. Ct. 2655, 2669 (2005).

3 Berman, 348 U.S. 26 (1954); Midkiff, 467 U.S. 229 (1984)

4 See generally Berman, 348 U.S. 26 (1954).

5 Id. at 36.

6 Id. at 28

7 Id. at 30.

8 Id. at 37

9 Id. at 37.

10 Berman, 348 U.S. at 32.

11 Id. at 33.

12 Id. at 33.

13 Id.

14 Id. at 36.

15 Id. at 35-36.

16 Hawaii v. Midkiff, 467 U.S. 229 (1984).

17 Id. at 232.

18 Id.

19 Id. at 233.

20 Id. at 234.

21 Id.

22 Midkiff, 467 U.S. at 235.

23 Id.

24 Id. at 239-240.

25 Id.

26 Id.

27 Id. at 242.

28 Midkiff, 467 U.S. at 242.

29 Id. at 243.

30 Id. at 245.

31 Id.

32 Id.

33 125 S. Ct. 2655 (2005).

34 Id. at 2660.

35 Id. at 2569.

36 Id.

37 Id.

38 Id. at 2660.

39 Kelo, 125 S. Ct. at 2658.

40 Id. at 2664-65.

41 Id. at 2660.

42 Id. at 2667.

43 Id. at 2666.

44 Id. at 2662; see Midkiff, 467 U.S. at 235.

45 Kelo, 125 S. Ct. at 2669.

46 Id. at 2670.

47 Id.

48 Id. at 2673.

49 Id. at 2674.

50 Id.

51 Kelo, 125 S. Ct. at 2674.

52 Id. at 2675.

53 Id. at 2676.

54 Id. at 2677.

Chad J. Lersch is a third year law student at Northern Illinois University College of Law. He is an assistant editor on the Northern Illinois University Law Review

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