Bryan Bowers and his business partner, Mike Licata, planned to build medical office space across from a new hospital in downtown Utica, New York. The Oneida County Industrial Development Agency (OCIDA) nixed that plan by agreeing to take the property so a competing business next door could use it for a parking lot—a land grab that a state appeals court approved last February.
The U.S. Supreme Court invited such abuses with its 2005 ruling in Kelo v. City of New London, which blessed the use of eminent domain to promote economic development by transferring property from one private owner to another. Bowers' case offers the justices another chance to revisit that widely criticized decision, which endangered property rights by letting government officials reassign them to politically favored businesses.
The Institute for Justice, which represents Bowers, is asking the Supreme Court to clarify the limits of that license. Alternatively, it says, the Court should overturn Kelo, which was "wrong the day it was decided."
The Fifth Amendment imposes two restrictions on government takings of private property: They must be accompanied by "just compensation," and they must be for "public use." But in New York, the state appeals court noted, "what qualifies as a public purpose or public use is broadly defined as encompassing virtually any project that may confer upon the public a benefit, utility, or advantage."
In this case, the court said, "the acquisition of the property will serve the public use of mitigating parking and traffic congestion." That sort of reasoning, Bowers argues, is suspect even under Kelo.
Writing for the majority in Kelo, Justice John Paul Stevens emphasized that the condemnation of homes in the Fort Trumbull neighborhood of New London, Connecticut, was based on "a 'carefully considered' development plan" that supposedly would "create in excess of 1,000 jobs," "increase tax and other revenues," and "revitalize an economically distressed city" (none of which actually happened). In Bowers' case, by contrast, OCIDA was not implementing a "development plan"; it was simply imposing its judgment that a parking lot was a better use for his property than the office building he planned to open.
Stevens said New London would not be "allowed to take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit." But he noted that the city adopted its plan without knowing exactly which new owners would benefit from it.
"It is, of course, difficult to accuse the government of having taken A's property to benefit the private interests of B when the identity of B was unknown," Stevens wrote. In Bowers' case, by contrast, it is easy to accuse the government of doing precisely that, since the main beneficiary of its seizure, Central New York Cardiology, is a private business that stood to profit by restricting the supply of medical office space.
"Taking our property wasn't for the public," Bowers says. "It was to benefit our competitors."
Dissenting in Kelo, Justice Sandra Day O'Connor warned that "all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded—i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public—in the process." That hazard could have been avoided, Justice Clarence Thomas said in a separate dissent, if the Court had hewed to "the most natural reading" of "public use"—that "it allows the government to take property only if the government owns, or the public has the legal right to use, the property, as opposed to taking it for any public purpose or necessity whatsoever."
In addition to Thomas, three other current members of the Court—Neil Gorsuch, Samuel Alito, and Brett Kavanaugh—have indicated they favor curtailing Kelo or overturning it altogether. Given the nakedly protectionist nature of the Utica land grab, Bowers' case seems like a good opportunity to do so.
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