Kelo v. City of New London
The Court ruled that a Connecticut city could take homeowners' properties, including houses that were not blighted, and transfer them to private developers as part of a comprehensive economic redevelopment plan, because creating jobs and tax revenue counted as a constitutionally valid "public use."
The 5-4 decision extended decades of deference to local governments' judgments about what counts as a public benefit, prompting a fierce backlash and a wave of state laws limiting the use of eminent domain for economic development.
“Promoting economic development is a traditional and long accepted function of government.”
The majority's reasoning for why economic development can count as a public use.
How it got here: A Connecticut trial court partly blocked and partly allowed the takings; the Connecticut Supreme Court upheld all of them, and the homeowners asked the U.S. Supreme Court to review the case.
The Case in Depth
What happened
New London, Connecticut, a struggling former Navy town, approved a development plan to revitalize 90 acres near a new Pfizer research facility, including housing, offices, and a marina. The city's development agent bought most of the needed land from willing sellers, but nine homeowners—including a woman born in her house in 1918—refused to sell, so the city moved to take their properties through eminent domain.
The question before the Court
Could a city use its power to take private property in order to hand the land to private developers as part of an economic redevelopment plan?
The Court's answer
Yes — the Court ruled that the city's plan to take the homeowners' properties and redevelop the land, including handing parcels to private companies, satisfied the Fifth Amendment's requirement that takings be for "public use." The Court read "public use" broadly to mean "public purpose," and found that a carefully considered plan to create jobs and increase tax revenue for a distressed city qualifies, even though the land was not blighted and would end up in private hands.
The Court refused to adopt a special rule barring economic-development takings or requiring proof that promised benefits would actually materialize, saying such judgments belong to legislatures, not courts. Because the New London plan was comprehensive, not a one-off transfer between two private parties, and reflected genuine public purposes, the takings were constitutional, though the Court noted that states remain free to impose stricter limits under their own laws.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Homeowners and small businesses in areas targeted for redevelopment gained little extra protection from this ruling, since cities could still condemn well-kept properties to make way for private projects promising jobs or tax revenue. The decision triggered widespread public outcry and led many state legislatures to pass laws restricting eminent domain for economic development beyond what the Constitution requires.
What changes now
The ruling is a final decision on the merits, so the city's takings stand and the homeowners' properties can be condemned. The decision left it open for individual states to pass their own laws imposing stricter limits on economic-development takings than the federal Constitution requires, and many states subsequently did so in response to public backlash against the ruling.
What this does not decide
The Court did not decide that any and all transfers of property between private parties are constitutional — it stressed that a taking designed only to benefit one particular private party, without a genuine public purpose, would still be forbidden. It also left states free to adopt stricter public-use limits than the federal floor it announced.
Concurrences and dissents
Concurrence — Justice Kennedy
Justice Kennedy agreed the takings were valid but stressed that courts must still meaningfully review the record for evidence that a taking was really intended to favor a particular private party with only incidental public benefits. He emphasized case-specific facts here — the plan's careful process, its comprehensiveness, and the fact that most private beneficiaries were unknown when adopted — that persuaded him no impermissible favoritism occurred, while leaving open that a more skeptical standard might apply to more suspicious transfers in future cases.
Dissent — Justice O'Connor
“Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.”The dissent's warning about how far the ruling could extend the government's taking power.
Justice O'Connor argued the Court abandoned a basic limit on government power by letting any private property be taken and handed to another private owner as long as some secondary public benefit, like jobs or taxes, might result. She distinguished this case from Berman and Midkiff, where the condemned property itself caused public harm (blight, land oligopoly); here the homes were well-maintained, so nothing was being remedied. She would have struck down both sets of takings and sent the case back.
Dissent — Justice Thomas
Justice Thomas joined O'Connor's dissent but wrote separately to argue the Court's whole line of "public purpose" precedent, not just this case, misreads the Constitution. He argued the Public Use Clause originally meant the government or the public must actually use the taken property, not merely receive some general benefit, and that the Court should reconsider Berman and Midkiff themselves rather than extend them.
How the Court got there
The legal reasoning, step by step
- The Court first distinguished two settled extremes: government cannot take property from one private owner solely to hand it to another private owner for that owner's private benefit, but it can take property so the public itself can use it, such as for a railroad open to all riders. Neither extreme resolved this case, since New London's plan did neither.
- Because the city was not opening the land to literal public use, the Court asked whether the takings served a broader "public purpose" — the long-accepted, more flexible substitute for requiring that the public physically use condemned land, adopted in cases like Fallbrook Irrigation Dist. v. Bradley (an 1896 case embracing this broader reading).
- Applying its settled practice of deferring to legislative judgments about public needs, the Court found that New London's carefully considered, comprehensive development plan — adopted after years of study to address economic distress — served a valid public purpose of creating jobs and tax revenue, even though most land would end up privately owned.
- The Court rejected the homeowners' proposed bright-line rule excluding economic development from public use, reasoning that promoting economic development is a traditional government function no different in kind from other purposes the Court had already approved, such as clearing blight or breaking up land monopolies.
- The Court also rejected requiring proof that the promised public benefits would actually materialize, explaining that such fact-finding about a plan's wisdom is the kind of policy judgment left to legislatures, not judges, and that requiring certainty in advance would make orderly redevelopment nearly impossible.
- Having found a genuine public purpose behind a comprehensive, non-pretextual plan, the Court concluded the takings satisfied the Fifth Amendment's public use requirement, while making clear that individual states remained free to write stricter public-use rules into their own law.
Doctrinal impact
Cases affected by this decision
Reaffirms Berman v. Parker (348 U. S. 26)
The Court relied on this blight-clearance case as continuing authority for broad deference to legislative public-use judgments.
Reaffirms Hawaii Housing Authority v. Midkiff (467 U. S. 229)
The Court leaned on this land-oligopoly case as still-good law supporting a broad, purpose-based reading of public use.