In perhaps the most important change to U.S. eminent domain law in decades, the U.S. Supreme Court ruled in the 2005 case Kelo v. City of New London that government power to seize private property extended to transferring that land to another private party for economic reasons. Before this, the Constitution’s eminent domain power was limited to cases of more obviously public use, such as for roads or public utilities.

You may have read about the case at the time, but if you aren’t an eminent domain attorney, you probably don’t know much about the details of this landmark case. A new film based on Kelo called Little Pink House that recently hit theaters in the Toledo area may provide a good overview.

The plot

As summarized in The Denver Post, the movie centers on a private developer’s attempt to build a for-profit project. As part of the project, the developer convinced the city of New London to condemn several houses in the residential neighborhood of Susette Kelo, a paramedic. As played by Catherine Keener, Susette organized her neighbors to resist the loss of their homes.

The ruling

The case eventually reached the Supreme Court, which ruled 5-4 in favor of the city. The Fifth Amendment to the Constitution states that “private property [shall not] be taken for public use, without just compensation.” [emphasis added]. Courts and lawmakers traditionally interpreted that to mean that the government may seize private property for public use only, and must give fair market value for the land.

In Kelo, the Supreme Court reasoned that economic development by private parties provides an indirect public benefit. Therefore, New London’s actions were protected by the Constitution.

Kelo’s legacy

This controversial decision soon led to new laws limiting eminent domain. Forty-four states now prohibit their governments from using “economic development” as justification for taking people’s real property and giving it to another private party – with the major exception in cases where the area is “blighted.”

Keeping your home in your hands during an eminent domain action may be possible. In other cases, the question may be whether you are getting the money you deserve for your property. An experienced eminent domain lawyer can explain your situation in greater detail.