In light of Pfizer's decision to pull out of New London, ending an ugly saga of misguided corporate welfare, several commentators in this New York Times roundtable join any number of others in asserting that this proves that the Supreme Court's Kelo decision upholding New London's use of eminent domain was incorrect.
With the limited exception of Ilya Somin, however, you'll note that the Kelo critics are not making arguments about constitutional law. For example, Paul Bass 's argument that "Clarence Thomas was right" is very convincing about Thomas' arguments that New London was engaged in dumb public policy, but doesn't seem to realize that these arguments are insufficient to show that they were legally impermissible. The Bush administration's tax cuts were economically wasteful and were both influenced by and directly benefited powerful moneyed interests, but that doesn't make them unconstitutional.
There are, of course, serious constitutional arguments to be made on behalf of the unconstitutionality of New London's takings of property. But there were sound reasons for the Court's deference. The core of the takings clause is to ensure that people who have their property taken by eminent domain are compensated, not giving the courts the authority to second-guess decisions about when policies encouraging economic development constitute "public uses" of property and when they don't.
Moreover, the strongest basis for exercises of judicial review in interpreting vague constitutional provisions exists when the court is defending the rights of citizens who are greatly underrepresented in the political process. As the fact that more than 40 states have reformed their eminent domain policies in light of Kelo shows that this isn't the case -- in fact, the Court has been completely vindicated in its assumption that the legislative process could strike reasonable balances. A judicial ruling in favor of Kelo, by contrast, would have applied not just to this case but to future cases, driving up the cost of legitimate uses of eminent domain as well as stupid ones by encouraging more litigation.
At any rate, the final collapse of New London's economic development schemes is neither here nor there in terms of whether its use of eminent domain was constitutional. The fact that it was engaged in a misguided economic development plan doesn't show that it didn't have an economic development plan at all.
--Scott Lemieux
