By:  Mary J. Drury, Esq.

After approving an integrated development plan designed to revitalize its ailing economy, the City of New London, Connecticut, through its development agent, purchased most of the property earmarked for the project from willing sellers, but initiated condemnation proceedings against those land owners who refused to sell.

The nine petitioning landowners brought an action against the city claiming that the taking of their properties violated the “public use” restriction in the Fifth Amendment’s Takings Clause (which reads, in part, “nor shall private property be taken for public use, without just compensation”).  There is no allegation that any of the properties is in poor condition; rather, they were condemned only because they happen to be located in the development area.  The trial court restrained the use, while the Connecticut Supreme Court reversed and upheld the takings.  The United States Supreme Court agreed, further upholding the takings.

The Supreme Court reasons that although the city could not take petitioners’ land simply to confer a private benefit on a particular private party, the takings at issue here would be executed pursuant to a carefully considered development plan, which was not adopted “to benefit a particular class of identifiable individuals”.  Moreover, while the city is not planning to open the condemned land–at least not in its entirety—to use by the general public, this “Court long ago rejected any literal requirement that condemned property be put into use for the … public.”  Rather, it has embraced the broader and more natural interpretation of public use as “public purpose.”  Without exception, the Court has defined that concept broadly, reflecting its longstanding policy of deference, that is, they will allow the city the right to know what is best for the city, without national interference.

The city had carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, 1,000 new jobs and increased tax revenue. As with other exercises in urban planning and development, the city is trying to coordinate a variety of commercial, residential, and recreational land uses, with the hope that they will form a whole greater than the sum of its parts.  To effectuate this plan, the city has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development.

The disposition of the case turned on the question of whether the development plans served a public purpose.  In this case, the public purpose was to create additional jobs and additional tax revenue, as compared to the more traditional bases for condemnation, such as creating parks or right-of-way for general use by the public. This court opinion was affirmed by five of the justices, with four justices dissenting.

Despite this holding by the U.S. Supreme Court, over a dozen state supreme courts have declined to follow this ruling.  Additionally, as of the date of writing, Nevada State Question No. 2 is pending, proposing an amendment to the Nevada Constitution to permit takings for redistribution and to value land at the “highest price the property would bring on the open market.”

As Las Vegas improvements become aged and the valley becomes more congested, it is hard to foresee how and if takings will be used for economic redevelopment or redistribution.






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