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Supreme Court delivers blow to property rights; ruling in Conn. case has Toledo implication

Toledo Blade | July 15, 2005


The city of Toledo used eminent domain to force Herman Blankenship and his wife, Kim, to leave their auto repair shop on Stickney Avenue to open the land for the new Jeep plant.

The city of Toledo appears to have been acting within its rights when it seized a privately owned auto and truck repair shop to make way for the new Jeep factory, according to a U.S. Supreme Court decision issued yesterday in a similar case.

In deciding an eminent domain case out of New London, Conn., the court ruled 5-4 that a governmental entity can seize property for the benefit of another private party if it is part of an economic development project.

"Promoting economic development is a traditional and long accepted function of government," Justice John Paul Stevens wrote in the majority decision.

But the decision prompted a terse dissent from Justice Sandra Day O'Connor, who argued that taking land for private development hands more power to those with money and political influence, trampling on the rights of the average American.

The decision "is to wash out any distinction between private and public use of property - and thereby effectively to delete the words 'for public use' from the … Fifth Amendment," she wrote, adding later: "The founders cannot have intended this perverse result."

"It really is a dark day for American homeowners," said attorney Bert Gall of the Institute for Justice, a public interest law firm that represented seven property owners in New London, where the local government eyed their land for development.

Under federal law now "every homeowner, every business owner is vulnerable to having their property taken away," Mr. Gall said.

In a similar case from Toledo, the city used its powers of eminent domain in 1999 to force a North Toledo couple, Kim and Herman Blankenship, to leave their auto and truck repair shop on Stickney Avenue to make way for DaimlerChrysler AG's Toledo North Assembly plant and future plans.

Attorneys for both sides in the local dispute agreed yesterday that it's doubtful that the justices would somehow find differently in the Toledo case, even if they agreed to hear it.

"The court here said they're not going to second-guess local governments about what lands it needs to effectuate economic development projects," said Barb Herring, law director for the city of Toledo.

"The basic holding is that local officials are in the best position to decide what needs to be done in their city," she said.

The Fifth Amendment prohibits the taking of property for public use "without just compensation," and governments long have taken property to build highways, jails, schools, and other "public use" purposes.

But at issue in the New London case - as in the Toledo lawsuit - was whether a local government can seize private property for a private developer.

The New London property owners lived in homes along the Thames River in an area eyed for redevelopment by the city after pharmaceutical giant Pfizer announced plans to build a research facility nearby.

Their homes stood on the same land being considered for a health club, hotel, and offices.

New London officials argued that seizing those properties was in the public's interest because the projects would add new jobs, bring in more taxes, and spark other economic benefits.

The Connecticut Supreme Court had sided with New London's government, and yesterday, the justices affirmed that decision.

Justice Stevens said the New London plan "unquestionably serves a public purpose."

Agreeing with Justice Stevens were Justices David Souter, Anthony Kennedy, Ruth Bader Ginsburg, and Stephen Breyer.

Agreeing with Justice O'Connor were Chief Justice William Rehnquist, and Justices Antonin Scalia and Clarence Thomas.

Terry Lodge, who represented the Blankenships in the case against Toledo, said he was disappointed with the decision: "The underlying issue [is], Should there be a limit to corporate welfare?"


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