A Reappraisal of Kelo: Reexamining the Boundaries of Eminent Domain

Caris Gray

Edited by Keerthi Chalamalasetty, Rayleigh Nam, Judge Baskin, and Sahith Mocharla

Twenty years ago, the City of New London, Connecticut––declared economically distressed—decided to seize 115 properties under the jurisdiction of eminent domain [1]. The city intended to sell the seized properties to a private developer to promote economic development [2]. While a majority of the homeowners accepted payment in return, there was a small subsection who did not. Susette Kelo had spent years at her waterfront real estate, restoring the property [3]. A group of like-minded property owners, led by Kelo, sued the city in return, arguing that the property could only be taken under eminent domain for public use [4]. The case eventually made its way to the Supreme Court where a 5-4 decision ruled in the city’s favor. The decision in Kelo v. City of New London (2005) expanded the definition of “public use,” reshaping how we understand eminent domain and broadening the government’s power to seize private property. 

The City of New London instated the New London Development Corporation, a private non-profit, to help fuel economic development in the area. The NLDC eventually finalized an integrated development plan focused on 90 acres in the surrounding area. The non-profit successfully negotiated the purchase of the majority of the land [5]. Unfortunately, 15 of the 115 parceled-land negotiations failed, leading the NLDC to initiate condemnation proceedings, and Susette Kelo’s party filing suit [6]. The Supreme Court then granted a writ of certiorari (agreeing to review the lower court’s decision) to “determine whether a city’s decision to take property for economic development satisfies the ‘public use’ requirement of the Fifth Amendment” [7].

The Takings Clause of the Fifth Amendment clarifies that the government has an inherent constitutional ability to take private property away for public use, stating 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” [8] [9]. The main point of contention within Kelo was whether the case satisfied the “public use” condition. The petitioners argued against such a broad definition, that the takings would economically benefit the city. The Supreme Court ruled against Kelo, holding that “the city’s proposed disposition of petitioners’ property qualifies as a ‘public use’ within the meaning of the Takings Clause,” citing, among many, Hawaii Housing Authority v. Midkiff (1984) [10].

In Kelo, the majority opinion, written by Justice John Paul Stevens, heavily relied on Midkiff as a foundation for their argument. In the case, the Hawaii Legislature enacted the Land Reform Act of 1967 to address social and economic issues that arose from a concentration of land ownership. This concentrated ownership skewed the state’s residential fee simple market, inflated land prices, and injured public tranquility and welfare [11]. The reform allowed the Hawaii Housing Authority (HHA) to acquire land from lessors and transfer ownership to lessees to minimize the concentration of land ownership. When lessees submitted applications, the HHA determined if those acquisitions served public purposes, and, if beneficial, would negotiate or conduct condemnation proceedings to acquire the land at fair market value [12]. If these negotiations failed, they went through arbitration, with the appellees suing in Federal District Court, where it was eventually appealed to the Supreme Court [13]. In a unanimous decision, the Court held that the Land Reform Act did not violate the public use requirement of the Fifth Amendment because the Act served a legitimate public purpose by addressing the social and economic problems caused by the concentration of land ownership [14]. The case resulted in a multitude of key takings, as follows:

1. Where the exercise of the eminent domain power is rationally related to a conceivable public purpose, a compensated taking is not prohibited by the Public Use Clause [15].

2. It is only the taking’s purpose, and not its mechanics, that must pass scrutiny under the Public Use Clause [16].

3. The constitutional requirement is satisfied if the state Legislature rationally could have believed that the Act would promote its objective [17].

4. The Court long ago rejected any literal requirement that condemned property be put into use for the general public. "It is not essential that the entire community, nor even any considerable portion... directly enjoy or participate in any improvement in order [for it] to constitute a public use" [18].

   
   

The last of these takings was further based on the case Rindge Co. v. Los Angeles (1923), which declared that highways fall under ‘public use,’ citing Fallbrook Irrigation Dist. v. Bradley (1896), which is where the quote originates [19]. This case allowed for public irrigation projects to be a valid “public use.” Notably, the court cited two important arguments: first, the acceptance by the appellees that general tax may provide arid lands with water assumes that water used for irrigation upon lands which are actually arid is a public purpose. Secondly, the tax to pay for it is collected for a public use, and the assessment upon lands benefited is also levied for a public purpose [20]. Additionally, if it is essential for the prosperity of the community, and if the improvement is one in which all the landowners have—to a certain extent—a common interest, then the land may be rendered publicly useful at their joint expense [21]. As one of the key bases on which Rindge Co. v. Los Angeles (and therefore Hawaii Housing Authority v. Midkiff and Kelo v. City of New London) were decided, these statements are essential in discussing Steven’s argumentation in the Kelo.

In response to the petitioners in Kelo, the majority held that their proposal for the Court to adopt a new bright-line rule that economic development does not qualify as public use is supported by neither precedent nor logic [22]. The Court justifies this stance by claiming the promotion of economic development is a traditional and long-accepted governmental function, with no principled way of distinguishing it from the other public purposes the Court has recognized [23]. This ruling, however, fails to recognize the division between governmental function and which powers that function extends to. Moreover, there is a constitutional need to identify such powers that should not be included. This idea is further developed within the dissenting opinions, which argues that the majority fails to acknowledge there are principled ways to reject ‘economic development’ as a subset of public purpose.

The majority also rejects the argument that takings of this kind should require a ‘reasonable certainty’ that the expected public benefits will actually come into fruition [24]. They argue the disadvantages of such an increased form of review are especially pronounced in this type of case—where “orderly implementation of a comprehensive plan requires all interested parties’ legal rights to be established before new construction can commence” [25]. Dismissing such an argument leaves noticeable gaps in the holding. In cases such as Kelo’s, where their entire livelihood is being uprooted for the unproven promise of economic benefit, a comprehensive plan should be put in place. Without such a plan, the takings of the property may prove to do nothing except transfer private property to another private entity. This outcome completely nullifies the stated purpose of the Takings Clause. Without such a guarantee, a government may, under the guise of eminent domain, forcibly take any property of its choosing and give it up to any private corporation to bring about ‘economic development.’ To arrive at this outcome, the majority opinion’s logic seems flawed at the very least. Justice O’Connor writes that we may effectively delete the words “for public use” from the clause entirely. Not to mention, this completely dismisses, without acknowledgement, the Midkiff taking, which states that the constitutional requirement is satisfied if the state legislature could have rationally believed that the Act would promote its objective [26].

It is after these arguments that the majority highlights two particular propositions. First, that it has long been accepted that the government may not take the property of A solely to transfer it to another private party B, even if A is fairly compensated [27]. Secondly, a State may transfer property from one private party to another if future ‘use by the public’ is the purpose behind the taking [28]. The majority then iterates that while neither of these propositions determines the case at hand, the case disobeys neither. However, it is these principles that lead to the majority’s discussion on whether the case actually satisfies the definition of ‘public use.’ They cited the original aforementioned quote from Fallbrook Irrigation Dist. v. Bradley, that said "it is not essential that the entire community, nor even any considerable portion” directly enjoy or participate in any improvement to constitute a public use [29]. The Court then goes on to say it long ago rejected any literal requirement that condemned property be put into use for the general public [30].

However, there is a stark contrast between Kelo and the previous cases of eminent domain on which it relies. Fallbrook Irrigation Dist. v. Bradley included public irrigation projects and Rindge Co. v. Los Angeles included highways as valid public uses. Hawaii Housing Authority v. Midkiff allowed transfership from lesser to lessee to deflate housing prices. Ruckelshaus v. Monsanto Co. (1984) held that trade secrets are also a form of property subject to eminent domain. None of these cases deal with a public use or public purpose justification as broad as that in Kelo. The case that comes closest is Berman v. Parker (1954).

The case came after a redevelopment project passed in Washington, D.C. to eliminate urban blight—the deterioration of urban areas. Samuel Berman, a department store owner, objected to the fact his non-blighted property was included in the properties to be seized and redeveloped. In the ruling, the court found that once a government determines an area should be redeveloped for the public good, individual property owners cannot exempt themselves from the plan. Furthermore, as quoted by the court, Congress found that these ends could not be attained “by the ordinary operations of private enterprise alone without public participation” [31]. This ruling is a far cry from how it has been used in Kelo. To argue that economic revitalization could not be attained by the ordinary operations of private enterprise, or at least without the seizing of a plethora of properties, is untrue. For instance, the city could have invested in efficient infrastructure, reducing transportation costs and making it easier for businesses to operate [32]. New London also could have invested in supporting programs that provide direct consulting assistance to employers, implemented tax cuts, expanded public services, or encouraged employers to provide on-the-job training—all of which make economically distressed communities more competitive [33].

Justice O’Connor, joined by Chief Justice Rehnquist, Justice Scalia, and Justice Thomas, voiced her dissent. The opinion begins with a quote from the case Calder v. Bull (1798), stating: “[A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with such powers,” followed by accusing the Court of abandoning this basic limitation on government power [34]. The dissent argues that in granting the legislature this power, there is no differentiation between seizing property for public use and seizing property for private use with incidental economic benefit. O’Connor states that to reason that the incidental public benefits resulting from the otherwise ordinary use of private property result in economic development takings being ‘for public use’ removes any distinction between private and public use of property—thereby effectively deleting the words ‘for public use’ from the Takings Clause entirely [35].

Such a distinction is, as they argue, necessary when interpreting the Constitution. As a foundation for their argument, they quote Marbury v. Madison (1803) in declaring that "it cannot be presumed that any clause in the Constitution is intended to be without effect” [36]. This precedent is strengthened in Myers v. United States (1926), where it says that “it cannot be presumed that any clause in the constitution is intended to be without effect; and therefore such construction is inadmissible, unless the words require it” [37]. Under this lens, there are two key terms as stated in the Takings Clause, only one of which is relevant here: “[T]he taking must be for a “public use” [38]. Justice O’Connor concludes that an external, judicial check on how the public use requirement is interpreted, however limited, is then necessary if this constraint on government power is to retain any meaning [39]. Justice Thomas’ dissent follows this line of reasoning. He states the Constitution twice employs the word ‘use’ elsewhere, both times in its narrower sense, being that either the government or its citizens as a whole must actually ‘employ’ the taken property [40]. He goes on to contrast public use and general Welfare, which was used elsewhere in the Constitution in a broader meaning. Justice Thomas states that “the Framers would have used some such broader term if they had meant the Public Use Clause to have a similarly sweeping scope” [41]. These arguments provide a strong foundation for the advocacy of a stricter definition, which will be crucial to the following arguments. It is necessary that we recognize the significance of each word and clause in the Constitution as ostensibly intentional and precise.

 Led by Justice O’Connor, the dissent then acknowledges two of the primary cases acting as precedent: Midkiff and Berman. In both of these decisions, the Court emphasized the importance of deferring to legislative judgments about public purpose. This rejects both the idea that the courts may decide what is and is not a governmental function and that they may evaluate whether eminent domain is necessary for the legislature’s goals [42]. Less realized, however, is the reserved role for courts to play in reviewing a legislature’s judgment of what constitutes a public use, however narrow [43]. Justice O’Connor then makes note that in both Midkiff and Berman, a public purpose was realized when the harmful use was eliminated. In Midkiff, this was the oligopoly resulting from extreme wealth, and in Berman, the blight resulting from extreme poverty [44]. In both of these cases, governments used eminent domain explicitly to get rid of a problem caused by the ownership of the properties. The same cannot be said in the case of the residents represented by Kelo. These homes are not the source of any social, economic, or public harm, marking a clear differentiation of Kelo from the precedent.

Justice O’Connor’s dissent follows by stating that even if, under the majority’s reasoning, the city took petitioners’ land simply to confer a private benefit on a particular private party, it would have no bearing on whether an economic development taking would or would not generate secondary benefit for the public [45]. Under this reasoning, whatever reason given for a condemnation may still result in only possible secondary benefits, and may still be filed under public purpose. Justice Thomas’ dissent highlights the majority stating they are not to “second-guess the City’s considered judgments” [46] He contrasts the fact that the Court has previously recognized the respect for the sanctity of the home in regards to searches, to the now massively lenient lack of sanctity when the government intends to tear down said homes. While citizens may be safe from the government in their homes, the homes themselves are not, and Thomas argues that there is no justification for the near-absolute deference it grants to legislatures as to what satisfies it [47].

As the petitioners argued, “[the government] cannot take their property for the private use of other owners simply because the new owners may make more productive use of the property” [48]. As Justice O’Connor states in her dissent, under the guise of economic development, any and all private property now becomes vulnerable to being taken and transferred to another private entity, “so long as it might be upgraded—i. e., given to an owner who will use it in a way that the legislature deems more beneficial to the public” [49]. In the world held by the majority, nearly any lawful use of real private property can be claimed to generate some incidental benefit to the public. Therefore, the words ‘for public use’ do not realistically exclude any takings, and thus do not exert any constraint on the power of eminent domain [50]. A world where the government holds unlimited power to seize private property on the whim of ‘economic development’ is one in which no property is safe from the looming threat of a potential ‘better purpose.

By 2007, 34 states had expanded protections for property owners and curbed governmental power to condemn private land for economic development following Kelo [51]. Furthermore, 27 state legislatures enacted laws that either prohibit or make it harder for local governments to use eminent domain to take land for private development [52]. Needless to say, the decision was not popular. The U.S. House of Representatives passed a resolution denouncing the Court and a separate bill that would withhold federal development funds from states and political subdivisions that use eminent domain in certain ways [53]. Two national surveys conducted on public opinion in the fall of 2005 found that 81% and 95% of respondents opposed Kelo [54]. Moreover, according to a Quinnipiac University poll, 89% of Connecticut voters called for restrictions on eminent domain [55].

While the future of limiting eminent domain abuse seemed to be looking up, a myriad of cases resulted from the allowance granted by the Court’s holding. Multiple cases were cited in a September 2005 house hearing. One example took place in Hollywood, Florida, where Hollywood officials twice used eminent domain to take private property and give it to a developer for private gain. First, city commissioners took a bank parking lot to build an exclusive condo tower. When asked what the public purpose of the taking was, “City Attorney Dan Abbott didn't hesitate before answering, ‘Economic development, which is a legitimate public purpose according to the United States Supreme Court’” [56]. Another, from Ridgefield, Connecticut, cited that the city was proceeding to take 154 acres of vacant land through eminent domain. The property owner planned to build apartments on the land, but the city decided it preferred corporate office space. Ridgefield officials “directly cite the Kelo decision in support of their actions” [57]. Despite the safeguards put in place by numerous states, the ramifications of Kelo have undeniably been felt across the country, with little legal guidance from the Court itself.

In the over two decades since Kelo, there has been little change. Recently, the Supreme Court decided on Eychaner v. City of Chicago (2021), which upheld Chicago’s authority to take private property and transfer it to a private developer to build projects in the area. Chicago officials intended to take defendant Fred Eychaner’s land in a well-developed neighborhood and transfer it to the Blommer Chocolate Company. The claim was to “prevent future blight,” but speculation posits the real purpose was to create favor with Blommer so that it did not move its factory out of Chicago [58]. Eychaner filed suit and argued the taking of his property did not fall under public use, yet the Supreme Court denied hearing the challenge to the Kelo precedent [59]. Justice Thomas once again voiced his dissent, noting that a failure to step in today disserves both the Constitution and precedent, but also “leaves in place a legal regime that benefits “those citizens with disproportionate influence and power in the political process, including large corporations and development firms” [60].

Cases such as these highlight the ongoing importance of the Kelo decision. Since the 2005 outcome, cities have grossly misused and abused the vast power granted to them through the majority’s decision, as evident in the cases of Hollywood, Ridgefield, and Chicago. That the Court did not grant certiorari in the case of Eychaner to remedy the grave mistake that has resulted in over two decades of forced private property seizures in the name of economic development is shocking.

No clauses or phrases used within the Constitution should be taken as superfluous, nor should it be assumed that the Framers intended to vest the government with such broad and nearly unrestrained authority to appropriate private property under the ambiguous notion of serving a ‘public purpose’ as the Court has determined it. It is difficult to accept that municipalities such as New London or Chicago had no alternatives to promote economic growth other than through the exercise of eminent domain. Similarly, it would be unreasonable to expect citizens to live under the constant uncertainty that their privately owned property may be subject to seizure in order to fulfill a potential better purpose.

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[1] Rappa, John. “KELO V. CITY OF NEW LONDON.” July 26, 2005, https://www.cga.ct.gov/2005/rpt/2005-r-0560.htm

[2] Kauffman, Chloe. “Why Kelo v. New London Is One of the Worst Supreme Court Decisions.” James Madison Institute, 28 Oct. 2022, https://jamesmadison.org/why-kelo-v-new-london-is-one-of-the-worst-supreme-court-decisions/

[3] “Kelo Eminent Domain, Institute for Justice, https://ij.org/case/kelo/.

[4] “On This Day, the Supreme Court Redefines Eminent Domain | Constitution Center.” National Constitution Center – Constitutioncenter.Org, https://constitutioncenter.org/blog/on-this-day-the-supreme-court-redefines-eminent-domain

[5] See [4]

[6] See [1]

[7] U.S. Reports: Kelo v. New London, 545 U.S. 469 (2005).

https://tile.loc.gov/storage-services/service/ll/usrep/usrep545/usrep545469/usrep545469.pdf

[8] “Amendment 5.10.1 Overview of Takings Clause.” Constitution Annotated, https://constitution.congress.gov/browse/essay/amdt5-9-1/ALDE_00013280/

[9] See [7]

[10]“Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984).” Justia Law, https://supreme.justia.com/cases/federal/us/467/229/

[11] See [10]

[12] Hawaii Housing Authority v. Midkiff – Case Brief Summary – Facts, Issue, Holding & Reasoning – Studicata. https://www.studicata.com/case-briefs/case/hawaii-housing-authority-v-midkiff

[13] See [12]

[14] See [7]

[15] See [7]

[16] See [7]

[17] See [7]

[18] See [7]

[19] “Fallbrook Irrigation Dist. v. Bradley, 164 U.S. 112 (1896).” Justia Law, https://supreme.justia.com/cases/federal/us/164/112/

[20] See [19]

[21] See [19]

[22] See [7]

[23] See [7]

[24] See [7]

[25] See [7]

[26] See [7]

[27] See [7]

[28] See [7]

[29] See [19]

[30] See [7]

[31] “Berman v. Parker, 348 U.S. 26 (1954).” Justia Law, https://supreme.justia.com/cases/federal/us/348/26/

[32] Entrepreneur, Ricardo Álvarez-Díaz, FAIA, Licensed Architect &. “[OPINION] How Urban Planning Can Foster Economic Development.” The Weekly Journal, 25 Mar. 2024, https://www.wjournalpr.com/opinion/opinion-how-urban-planning-can-foster-economic-development/article_b1ee0742-eaa9-11ee-8602-7f25d9fe7121.html

[33] Issues. “Renewing Economically Distressed American Communities.” Issues in Science and Technology, 1 Jan. 2011, https://issues.org/greenstone/

[34] U.S. Reports: Calder v. Bull, 3 U.S. (3 Dall.) 386 (1798).https://tile.loc.gov/storage-services/service/ll/usrep/usrep003/usrep003386/usrep003386.pdf

[35] See [7]

[36] WILLIAM MARBURY v. JAMES MADISON, Secretary of State of the United States., LII / Legal Information Institute, https://www.law.cornell.edu/supremecourt/text/5/137 (last visited Oct. 29, 2025).

[37] See [36]

[38] See [7]

[39] See [7]

[40] See [7]

[41] See [7]

[42] See [7]

[43] See [7]

[44] See [7]

[45] See [7]

[46] See [7]

[47] See [7]

[48] See [7]

[49] See [7]

[50] See [7]

[51] Heimlich, Russell. “States Expanding Protections for Property Owners.” Pew Research Center, 2 Apr. 2007, https://www.pewresearch.org/short-reads/2007/04/02/states-expanding-protections-for-property-owners/

[52] See [51]

[53] Somin, Ilya. “THE LIMITS OF BACKLASH: ASSESSING THE POLITICAL RESPONSE TO KELO.” Mar. 2007, https://www.law.gmu.edu/assets/files/publications/working_papers/07-14.pdf

[54] See [53]

[55] “Protecting Private Property from Eminent Domain Abuse.” Commonwealth Foundation, 9 Aug. 2005, https://commonwealthfoundation.org/commentary/2005/08/09/protecting-private-property-from-eminent-domain-abuse/

[56] SUPREME COURT’S KELO DECISION AND POTENTIAL CONGRESSIONAL RESPONSES. https://www.govinfo.gov/content/pkg/CHRG-109hhrg23573/html/CHRG-109hhrg23573.htm

[57] See [56]

[58] Shapiro, Ilya. “Eychaner v. Chicago.” Cato Institute. 14 Apr. 2021, https://www.cato.org/legal-briefs/eychaner-v-chicago

[59] Shapiro, Ilya. “Eychaner v. Chicago.” Cato Institute. 14 Apr. 2021, https://www.cato.org/legal-briefs/eychaner-v-chicago

[60] 20-1214 Eychaner v. Chicago. 2 Jul. 2021, https://www.supremecourt.gov/opinions/20pdf/20-1214_7lh8.pdf