The U.S. Supreme Court has been asked to review a Colorado property rights case for abuse of eminent domain.
Colorado law allows property owners and residents to form “special municipal districts” that can use eminent domain to take private property. In this case, Century Communities, a private developer in Parker, Colorado, purchased land adjacent to a competing developer, Woodcrest Homes. Employees of Century then formed a special municipal district called the Carousel Farms Metropolitan District, and condemned Woodcrest Homes’ land to use for roads and utilities.
Woodcrest Homes argues this process violated the Fifth Amendment by using eminent domain to seize the land for the benefit of a private developer. The Colorado Supreme Court sided with Century Communities, and the Institute for Justice (IJ), a public interest law firm, appealed the case to the U.S. Supreme Court.
This is an “old-fashioned land grab,” stated IJ attorney Jeff Redfern, in a press release on November 7, the day IJ petitioned the Court.
Justice Thomas’s Dissent
The U.S. Supreme Court decided Kelo v. City of New London, a 2005 eminent domain case, by a five-to-four vote. The majority opinion found the government taking property from one private owner in order to transfer it to another party in furtherance of economic development is a permissible “public use” under the Fifth Amendment. The other four justices filed a dissenting opinion written by Justice Sandra Day O’Connor.
In addition, Justice Clarence Thomas filed a separate dissenting opinion challenging the constitutional basis of the majority opinion. Thomas was right, says Warren Norred, a Texas attorney who has successfully litigated public interest cases.
“The Supreme Court in Kelo made a grievous error when, as Justice Thomas pointed out, it effectively redefined the Fifth Amendment’s ‘public use’ clause to mean ‘public purpose,'” Norred said.
Pretext for Taking Property
The Colorado case is an opportunity for the high court to limit eminent domain as the authors of the Fifth Amendment intended, Norred says.
“The Court should correct this error by recognizing that a taking which primarily benefits a private development project is not a public use as understood by the Framers, but an actual pretext to take property from one person and give it to another person who is better connected to those in power,” Norred said.
For most of the history of the United States, eminent domain was limited to truly public uses, says Jeffrey Redfern, attorney of record for Woodcrest’s petition to the U.S. Supreme Court. That changed with Kelo, Redfern says.
“In Kelo, the Supreme Court held that ‘economic development’ was a valid public use and that the government could take property from one person and give it to another for no better reason than that the new owner would generate more tax revenue,” Redfern said.
Limits in Kelo
The Kelo decision placed some restrictions on the use of eminent domain, Redfern says.
“The Court held that it is unconstitutional to take property when the purpose is to help a particular private party,” Redfern said. “The reason the Court said that wasn’t happening in Kelo is that the government came up with its economic development plan before even knowing who the private developers were going to be. But the Court, and Justice [Anthony] Kennedy, noted that there may be circumstances where the connection between a private party and the government is such that a taking may be presumptively unconstitutional.”
By the Supreme Court’s own standards, the Colorado case was absolutely an abuse of eminent domain, Redfern says.
“What’s happening in Colorado is actually worse than Justice Kennedy’s hypothetical,” Redfern said. “It’s not just a private developer that has a cozy relationship with the government. Here, the private developer essentially is the government. The Colorado court of appeals recognized that the municipal district was functioning as the private developer’s alter ego. The developer’s employees are the voting members of the district, and they did what their employer told them to do.”
‘Simply Inconsistent with Kelo‘
The Colorado Supreme Court’s ruling ignored the limits set by the Kelo ruling in upholding Century’s development plan, which was approved by Parker officials, Redfern says.
“Even after Kelo, a condemnation is unconstitutional if the purpose is to advance a private party’s interests,” Redfern said. “The Colorado Supreme Court acknowledged that one of the purposes of this taking was private: satisfying the agreement between the developer and the Town of Parker. The Colorado Supreme Court said that doesn’t matter, though, so long as the public eventually gets to use the land seized.
“That’s simply inconsistent with Kelo and with cases around the country that recognize that when it comes to eminent domain, purpose matters,” Redfern said.
Courts have interpreted Kelo differently in various jurisdictions, making eminent domain abuse an issue requiring a national resolution, Redfern says.
“We think this is a good candidate for Supreme Court review,” Redfern said. “Courts around the country are increasingly confused about the role of purpose in takings analysis, and two other courts just this year have issued rulings similar to Colorado’s, which deepens the split of authority.”
The high court could decide to hear the Colorado case in the next few months, Redfern says.
“The Supreme Court is going to have to take this issue up sooner or later, and this case presents the issue very cleanly,” Redfern said. “We are confident that if the court takes the case, it will reaffirm what it held in Kelo and reverse.”
Ashley Herzog ([email protected]) writes from Avon Lake, Ohio.
Jeffrey H. Redfern et al., “Petition to the U.S. Supreme Court, Woodcrest Homes, Inc. v. Carousel Farms Metropolitan District,” Institute for Justice, November 7, 2019: https://heartland.org/publications-resources/publications/institute-for-justice-woodCcrest-homes-petition-to-the-us-supreme-court