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Involuntary Property Transfer Case Study: Condemnation & Eminent Domain

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  • 0:05 Kelo v. City of New London
  • 2:16 Eminent Domain and…
  • 4:51 After Kelo
  • 6:34 Lesson Summary
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Lesson Transcript
Instructor: Ashley Dugger

Ashley has a JD degree and is an attorney. She has taught and written various law courses.

Sometimes title to property transfers from one party to another without one party's consent. This is known as an involuntary property transfer. One type of involuntary property transfer is known as condemnation. The federal government has the power to condemn properties through its power of eminent domain. This lesson looks at a fairly recent Supreme Court case involving condemnation through eminent domain.

Kelo v. City of New London

Once upon a time, there was a little pink house where the Thames River met the Long Island Sound. This was in the neighborhood of Fort Trumbull and in the City of New London. A fair-haired maiden named Susette purchased and restored the cottage with the waterfront views. She loved living in such a vibrant, historical and established area of the city. Her neighbors, the Dery family, for instance, had lived in Fort Trumbull since 1895.

Susette and her neighbors took great care in revitalizing their neighborhood and restoring their houses. Never did they dream that their houses could be taken from them, but that is how this tale turned into the United States Supreme Court case of Kelo v. City of New London.

Sometimes property ownership transfers from one party to another without one party's consent. This is known as an involuntary property transfer. There are many different types of involuntary property transfers, like foreclosures or when property is transferred in divorce proceedings. In general, these types of property transfers aren't unusual, but the Kelo case was.

Susette Kelo bought her home in 1997. Shortly after that, Pfizer pharmaceutical company built a plant next to Fort Trumbull. Pfizer was interested in developing the property around the plant as well. A private corporation, known as the City of New London Development Corporation, or NLDC, was established to help Pfizer develop its plan and to promote new economic development in the Fort Trumbull area.

The NLDC recommended the redevelopment of the entire 70-acre Fort Trumbull neighborhood. The plan included a hotel, restaurant, conference center, athletic center, office park, residences and, of course, the new Pfizer building.

Eminent Domain and Condemnation

So, the NLDC needed a plan to acquire the land. New London, like all cities, has the Fifth Amendment's power of eminent domain. It is the government's ability to take private property for public use after fairly compensating the private property owner. The process of taking through eminent domain is called condemnation and results in an involuntary transfer of property.

When condemnation occurs, the local, state or federal government seizes the private property and justly compensates the owner. The property owner won't be required to approve the sale of the property, though the owner is constitutionally entitled to a fair payment. This is what happened in Kelo's case. New London appraised the Fort Trumbull neighborhood properties and made sound offers to all the residents. Some owners refused the offers.

These owners simply didn't want to move from the homes and the neighbors they loved. Kelo wouldn't voluntarily transfer her property rights. The city then exercised its right of eminent domain and the condemnation process against Kelo's little pink house began. The city had two items to prove:

  1. Its offer to Kelo was reasonable
  2. Her property was being taken for public use

Condemnation hearings are often heated. Many property owners believe their homes are worth more than they've been offered. However, that's not the issue that took Kelo all the way to the Supreme Court. Kelo and her neighbors fought the City of New London over the term 'public use.'

They didn't like it, but they knew the city could take their property if the city felt they needed the property for the benefit of the city. But, this taking seemed to be for private use, or the benefit of Pfizer. This seemed to be unconstitutional under the Fifth Amendment and a private taking.

Unfortunately, the Supreme Court disagreed. In 2005, the Court reached a controversial 5 to 4 decision against Kelo. The Court held that economic development, even when it's recommended to the city by a private entity or corporation and appears to largely favor that particular private entity or corporation, is still a 'public use.'

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