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Supreme Court Rules 5-4 For Eminent Domain

Magic8ballIn a victory for city planners, the Supreme Court ruled 5-4 on Thursday to give local governments the discretion to take private property for economic development. They ruled that the transfer of land to private investors for projects promising to bring jobs or commerce was a public use, just like building a park or paving a road. This decision upholds an earlier 4-3 decision by the Connecticut Supreme Court. 

Most stories focus on the human interest side of the story - people like Susette Kelo and her neighbors, some of whom have lived in the tony New London for decades. It is tougher to accurately describe the looming challenges facing the city, which like other cities is facing the cumulative weight of decisions made over decades.

There are indications that not all is being handled fairly in New London: a notable exception to the plan to clear-cut the neighborhood is the Italian Dramatic Club, a politically connected "social club" of Connecticut's political establishment, which is located in the very same neighborhood as all the homes targeted for destruction.

There are an estimated 10,000 cases of condemnation or threatened condemnation for the benefit of private parties occurred between 1998 and 2003, according to a study for the libertarian Institute for Justice. Shopping center industry group ICSC has taken no side on this issue, noting that while it “...is a strong advocate of private property owners' rights, (they) recognize that eminent domain is an important economic development tool. However, it should be used only when all standards and safeguards for property owners have been applied.”

In the medium term, expect to see a tough fight between telecoms and municipalities over the municipalities ability to override state and federal regulatory bodies like NARUC to overbuild local broadband networks. Cities may now have the authority to overbuild marginally useful networks that the local exchange carriers have neglected to maintain, in favor of deals with newer companies like ill-fated Richochet Networks, which promised to build 21st century broadband networks that were free of the mistakes of the past, only to fall under the weight of the empty promises of its executives.

In an era of shortages, there will be no easy answers.

Link: Kelo v. City of New London (Adobe Acrobat required)

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