Why Kelo is not a blank check

Last week marked the third anniversary of the Supreme Court's ruling in Kelo v. New London. The first time I read Kelo, I thought what many Americans probably thought: that any government could seize property for any reason, so long as it compensated prior owners.

But after having taught Kelo to law students several times over the past few years, I now realize that Kelo is much more complex. Kelo was a 5-4 decision, and Justice Anthony Kennedy wrote a separate concurrence. Because Justice Kennedy was the "swing vote", his decision predicts future Court decisionmaking more accurately than the Court's primary opinion, because a taking which fails to satisfy Kennedy might not be able to get five votes in the Supreme Court.

Justice Kennedy wrote:

This taking occurred in the context of a comprehensive development plan meant to address a serious city-wide depression, and the projected economic benefits of the project cannot be characterized as de minimis. The identity of most of the private beneficiaries were unknown at the time the city formulated its plans. The city complied with elaborate procedural requirements that facilitate review of the record and inquiry into the city's purposes.

Thus, the taking in Kelo was valid only because:

1. The city jumped through the appropriate procedural hoops, such as creating "a comprehensive development plan" and other "elaborate procedural requirements";

2. The city of New London was in a "serious city-wide depression";

3. The economic benefits of the taking were more than "de minimis"; and

4. The ultimate beneficiaries of the taking were "unknown at the time the city formulated its plans."

If any of these requirements are not met, the validity of a taking becomes a close call. For example, suppose the city wants to bulldoze a subdivision in a reasonably prosperous suburb to build a Wal-Mart. Even if appropriate procedures are followed, factors 2 and 4 (city-wide depression and "unknown" beneficiaries) are not met. Thus, Kelo is not on point and does not require lower courts to uphold the city's decision. Does this mean the city automatically loses? No, but it does mean that a plaintiff who wishes to challenge the taking may have a plausible claim.