As noted in this earlier post, the U.S. Supreme Court’s recent decision in Kelo v. City of New London inevitably will have ripples, including the use of government’s eminent domain power to increase the value of privately-owned professional sports franchises at the expense of private property owners.
Thus, it is not surprising that Arlington landowners have filed the first lawsuit over the City of Arlington’s use of its eminent domain power to seize the landowners’ land for the benefit of Jerry Jones and his Dallas Cowboys stadium project. The landowners contend that the stadium project — although tacitly owned by the City — is beneficially owned and certainly controlled by Mr. Jones through a long-term ground lease, and that using the government’s eminent domain power to take private property from one person and give it to another is unconstitutional. Sounds like Kelo II, doesn’t it?
In essence, this litigation is over who should be negotiating the sales price of the landowners’ property — Mr. Jones, who does not have the threat of eminent domain power, or the City of Arlington, which does? Inasmuch as Mr. Jones does not have as good a bargaining position as the City, the lawsuit brings into focus the key defect in the Kelo decision — the shifting of leverage in negotiation over land prices in favor of the private developer and away from the landowner.
My sense is that this lawsuit and others similar to it will likely settle long before the legal issue ever gets to trial or an appellate court because the cost of such settlements is a fraction of the overall cost of the project. But that does not change the fact that the Supreme Court made a serious error in Kelo by holding that a “reasonably well thought out plan of [private] economic development” that may generate jobs and taxes for a local government is enough to trigger the government’s use of eminent domain to hand over private land to a developer. In so doing, the Supreme Court has replaced the efficiency of market forces with the expediency of government fiat, which is why we have economic boondoggles such as those described in this post.
Craig Depken — who has the best compendium of posts regarding the Cowboys stadium project — has further astute thoughts here.
A day after the Kelo decision was delivered, Freestar Media LLC submitted a proposal in the town of Weare, New Hampshire where majority opinion writer, Justice Souter, owns a farm house. They requested that the town board condemn the land and give it to them, as private developers, who promise to construct the Lost Liberty Hotel in its place. Their tax revenue would no doubt be higher than the reported $2,500 that Justice Souter paid in property taxes last year. It would create employment and attract tourism. The town has a website, and an economic development committee, which has identified its two main goals: 1) Encourage the formation of new businesses, and 2) Promote tourism. However, contrary to its stated goals and the legally sanctioned purpose of economic development, the town?s board turned down the proposal.
So much for poetic justice. Justice Souter?s influence in his community shielded him from his own ruling. No other rational justification can be found.
Thankfully, the legislative branch is now busy at work attempting to shield private property rights from the Supreme Court ruling. It seems that the two may have switched roles, with the House defending the Constitution, and the Supreme Court writing new laws.
I thought I saw Alice the other day! Or maybe it was Justice Souter ?skipping in Wonderland, immune to and above the laws he passes.