In Kelo v. City of New London, U.S Supreme Court held in June 2005 that the state government can influence the private parties to sell their property for the object of economic development. Whether a government can control the use of private property for a public purpose or whether the government can take private property was the key question to be answered in the above legal case.
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The key issue, in this case, was as follows: the City of London, Connecticut wanted to develop some area for commercial purposes. Some property owners declined to part in their properties. The City of New London employed its power to acquire those properties through its renowned sphere to denounce the rights of properties. The owners opposed on the footing that alienating their property would infringe their privileges granted under the Fifth Amendment of the U.S Constitution which runs as follows: “nor shall private property be grabbed for public use without paying just and adequate compensation.”
The Supreme Court of the U.S.A made its verdict on the following grounds: A government is authorized to acquire private property only if it is meant for a public purpose and only if it pays just compensation to the owner of the property. Further, the City of New London asserted that its action was rationalized in compulsorily acquiring the properties owned by the private owners as the intended development assured to create new jobs and cash starving city municipal with tax revenues. However, the plaintiff argued that there was no justification present to tantamount a ‘public use’ within the definition provided in the Fifth Amendment. It was held by Supreme Court that the takeover came under a public use concept. (Persily, Citrin & Egan 286).
Legal issue Statement or Ethical Issue Statement
The decision in the Kelo case aggravated a wave of resentment and ended in instant legislative retort. In Berman v.Parker, in 1954, it was held that taking over of two non-blighted stores on the footing that it located in the plagued area. The Court further held that it was not necessary on the part of Congress to initiate a bit-by-bit approach but it had wide powers to condemn the whole area. Due to these rulings, hundreds of black residents were removed from their habitual residence. (Kanner 2006).
Sometimes, the government has to take harsh steps to compulsorily acquire some properties where private owners refuse to sell or by quoting a high price for their property by employing its authority of eminent domain to compel the sale and to move forward with the project.
It is worthwhile to recall the dissenting views made by Justice O’Connor in this case. All the private property is now vulnerable to the acquisition of government under the guise of economic development footage. She cautioned that under the liberal view of the eminent domain employed by the majority, nothing has forbidden the states from acquiring any motel to change the same into a five-star hotel and any residence with a supermarket or any agricultural farm with a production unit. (Bodenhamer & Ely 114).
In actual parlance, state courts are at liberty to interpret their constitutions to offer a larger safeguard for the property rights of their citizens than the Supreme Court has employed under the U.S.A’s constitution. Many state courts have held that the employment of eminent domain for economic development by private parties did not tantamount a convincing ‘public use’ under the state constitution. Thus, depriving of personal property rights without offering alternate sites for those owners is not only an unethical attitude but also against the property rights guaranteed under the U.S.A’s constitution.
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Applicable legal rules or support for Ethical Issues
In Kelo’s case, by inference, the apex court compelled some individuals to get into some automatic exchange with the government. It is to be observed that the involuntary exchange with the government is not coherent with economic efficiency. One of the main ethical issues, in this case, is that Supreme Court has disregarded critical variation between the subjective value of that property to the landlord and the market value of the real estate acquired. Thus, the ethical issue here is that forced exchange not only infringes the concept of economic efficiency based on voluntary exchange but also makes erstwhile owners worse off.
Kelo’s case also poses an important question of whether the mighty private developers, with the help of local and state government, can deprive susceptible groups in the guise of doing good to the public. (Malloy 152).
Kelo, Poletown, and Hathcock cases were all related to the public use requirement defined in the Fifth Amendment. All these three cases have a common thread or knot namely low property tax base, local bodies worsening economic conditions, additional job promises offered by private companies, and augmented revenues in barter for local government employment of eminent domain to purchase the required property for their development activities. In these cases, the Supreme Court of U.S.A granted certiorari to decide whether economic development takings confirmed with the Fifth Amendment’s public use necessities. (Malloy 154).
Observations or Ethical Alternative’s
The decision in Kelo’s case appeared to aggravate an immediate collective acknowledgment of the Supreme Court’s public use concept. Due to Hurricane Katrina, New Orleans witnessed extensive damages in 2005. Due to Katrina, about sixty percent of New Orleans rental housing was shattered and thousands of poor citizens especially blacks were displaced. At that juncture, there was a prominent question of whether the decision in Kelo will be employed by the local and state government to alienate the poor from their property and afford it to the mighty developers in the guise of economic development.
Further, there prevails an ethical question now whether the ruling in Kelo’s case has widened the class segregation and gentrification of the U.S society which has already seriously divided the urban landscape during a natural disaster. (Malloy 151).
Epstein disputes that courts do not appear to be precise in establishing equitable compensation due to limiting valuation techniques that are unfavorable to the individual concerned. He also emphasizes that attributing a monetary value to the land that the government takes over offers an ethical question rather than a legal issue. This connotes by which the government values and takes over the land are frequently harsh to alter before the condemnation of such property. (Brodsky 184).
Legal Conclusion or choosing an Ethical Option
In Kelo’s case, housing is the main issue and there are no disputes between the parties. Further, a prohibition tends to lessen the positive need for government to make certain that its citizens are not being harassed by forcing them to leave their homes. Further, people have the right to know when they are likely to be forced out of the housing. If they possess an independently enforceable right, they will protest and will approach the court and get an appropriate remedy like an injunction against the government for evicting them from their home. In fact, in Kelo’s case, petitioners are not demanding the court to oversee anything: but they are pleading that they could be left alone. (Ryskamp 24).
Thus, the Supreme Court verdict is in clear contradiction with the existing culture in the U.S.A which respects stable and credible private property rights. The obvious evidence of this ethical issue is that majority of states have passed or are in the phase of introducing constitutional amendments or legislation that forbid government land acquisition initiatives through eminent domain to customary purposes. (Pejovich and Colombatto 157).
Supreme Court’s decision in Kelo’s case has been illustrated as an impediment to private property rights and as employing an overreaching and unprecedented use of the eminent domain to the disadvantageous of individual’s property privileges.
Bodenhamer David J & Ely James W. (2008). The Bill of Rights in Modern America. Indiana University Press.
Brodsky Stanley L. Principles and Practice of Trial Constitution. New York: Guilford Press, 2009.
Mallory Jane P, Barnes James, Bowers Thomas & Langvardt Arlen, Business Law Columbus: McCraw-Hill College. 2007.
Malloy Robin Paul& Robert. Property, Community Development, and Eminent Domain. Surrey: Ashgate Publishing Ltd, 2008.
Pejovich Svetozar & Enrico Colombatto Law, Informal Rules and Economic Performance. Las Vegas: Edward Publishing, 2008.
Persily Nathaniel, Citrin Jack & Egan Patrick J. Public Opinion and Constitutional Controversy. Oxford: Oxford University Press, 2008.
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Ryskamp John. The Eminent Domain Revolt. New York: Algora Publishing. 2007.
Velasquez Manuel G. Business Ethics: Concepts and Cases. New Jersey: Prentice-Hall, 1998.