Lies the government told you (5 page)

Your Home Is Your Castle

You may think that once you pay for your house, it is actually yours, and no one can take it away from you. But, guess what? The Takings Clause of the Fifth Amendment to the U.S. Constitution specifies that the government may take private property for “public use,” so long as the government pays the private owner “just compensation” for it, otherwise known as using eminent domain.
The Jeffersonians argued that any use of eminent domain should not be permitted under any circumstance; namely, that only by mutual consent and a fair bargain, but never against your will, could the government end up owning your property. Conversely, the Hamiltonians argued that the government could take any land it wants for free, just like the British kings at one time could and did.

In one New Jersey Supreme Court decision, taking the Hamiltonian position to the extreme, Chief Justice Robert N. Wilentz stated, “The basis for the constitutional obligation is simple: the State controls the use of land,
all
of the land”
⁷
(emphasis in original). This alarming use of state power discussed by the late Chief Justice is exactly the type of action the Constitution was expressly meant to limit. The New Jersey governor who appointed Wilentz as Chief Justice (and who also appointed me to the Superior Court of New Jersey) called this opinion “socialist.”
⁸

Traditionally, a government taking has meant that if someone’s house stood where the government planned a roadway or a post office or a school, the person would be forced to move in order to accommodate the public project, and the government would pay the owner for the market value of the vacated property. The only issues between the government that coveted the private property and the owner of the private property traditionally have been “when” will the government get the property and “how much” will the government pay. Since Jefferson lost the argument in which he asserted that a taking must be fully consensual, the “whether” the government can get the property has rarely been in dispute. Originally, these “public use” and “just compensation” requirements were put in place by the drafters of the Constitution in order to limit governmental power and protect personal property rights. The Fifth Amendment, which addresses government takings, was drafted with the lingering memory of British soldiers taking the colonists’ property and was therefore put in place to ensure that these indiscriminate takings would not continue to occur.
⁹
Let’s take a look at the way the government has perverted this meaning.

Over time, courts have morphed the public
use
requirement into something much broader, called public
benefit
. In fact, the public use requirement has all but been obliterated. While it had previously meant that the use was “in common and not for a particular individual,” cases whittled the requirement down to basically whenever the court thought the public could benefit from the taking.

The drafters’ intention has been almost completely abandoned. As I wrote about in the beginning of this chapter, most recently, the Supreme Court of the United States, in a 5 to 4 opinion in the case of
Kelo v. New London
(2005),
¹⁰
took the limiting term “public use” and expanded it to permit the City of New London, Connecticut, to take over a nine-acre residential neighborhood and give it to a
private
developer.
¹¹
The City created the New London Development Corporation to buy the land and find a developer that would build an “urban village” to attract shoppers and tourists to the City.
¹²
The City used this proposed plan along with financial incentives to entice Pfizer, a giant pharmaceutical company, to build a headquarters in New London.
¹³

The idea that a city government, or any government for that matter, can justify a taking of one’s private property to give to another private entity for the local government’s economic benefit is one that utterly obscures the distinction between takings for private and public use, and one that visits instability on all property owners and omnipotence on any government that has jurisdiction over the real estate. It also suggests that the government can take private property if it believes that the land can be put to
better
use. Justice O’Connor’s dissent in
Kelo
rightfully took a frightened tone toward that possibility. She wrote, “. . . [The Public Use Clause] has no realistic import. For who among us can say she already makes the most productive or attractive possible use of her property? The specter of condemnation hangs over all property. 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.”
¹⁴
If only the “highest and best use” of a particular property is honored, the
Kelo
Court essentially fostered a type of slavery where a landowner is forced to labor over property against his will.

Justice Thomas also dissented in
Kelo
, pointing to both the short and long-term consequences of the Court’s ruling. He discussed the immediate loss that property owners feel when they are displaced from their homes and uprooted from their communities. Furthermore, he stated that this is not something for which the government can realistically provide compensation because a “subjective value” is involved. Thomas then articulated some of the daunting long-term consequences involved when the government allows takings for economic development. Harkening Jefferson, he noted, “Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public
purpose
to encompass any economically
beneficial
goal guarantees that these losses will fall disproportionately on poor communities”
¹⁵
(emphases added). Justice Thomas’s dissent touches upon one of the most sorrowful themes underlying the
Kelo
case: by choosing to hand the land over to the developer, the Court rejected the homeowners’ personal values in favor of the government’s economic value; the choice of personal values is protected by the Natural Law.

The choice of personal values (a book or a TV, a car or a bicycle, early to bed or up all night) is absolutely immune from government interference unless the exercise of that choice substantially and unfairly interferes with another’s natural rights. The use to which one puts one’s real estate (cottage or mansion, grass or Astroturf, indoor or outdoor plumbing) is a personal value. Moreover, the traditional bundle of rights encompassing, and even defining personal ownership of real estate are the right to use, the right to alienate, and the right to exclude; the last of these encompassing even
the right to exclude the government.

In
Kelo
, Uncle Sam is saying that the government can take away your land, simply because it doesn’t value the way you use it.
Kelo
also gives the government an easy target, by allowing the government to infringe unduly upon the rights of poor people. Many of these people worked very hard to buy these homes, to achieve their own version of the American Dream. Who is the government to take it away?

(We) Give, and (They) Take

Although the
Kelo
case signaled the most drastic expansion of government power under the Takings Clause, the government had been testing the water for decades. In the 1954 U.S. Supreme Court case
Berman v. Parker
, the federal government razed a local store so that a private company could build a redevelopment project. In that case, the Court paid little attention to the “public use” requirement, and instead decided that the Washington, D.C., area where the store was located was blighted, even though the store itself was not blighted.
Kelo
took a further leap because there was no accusation that the Connecticut neighborhood was blighted; the city merely felt that government-approved developers could improve the area economically.

In
Poletown Neighborhood Council v. City of Detroit
(1981), the Supreme Court of Michigan permitted the government of the City of Detroit to wipe out a community in order to let General Motors build an assembly plant. (
Wow
, the government helping out GM? Who would’ve thought!? But more on this later . . . ) As a result of this massive taking, 3,468 people were ousted from their homes. In that case, the Court justified the taking based on the number of jobs that would be created by the plant (6,000) and the assurances that it would be for “public use.”
¹⁶
The City of New London did not even bother to make this type of assurance. It just asked the Court to take its word for it, and five justices listened.

You Can’t Make This Stuff Up!

On November 9, 2009, to add insult to injury, Pfizer announced that it would
leave
New London in 2011, moving most of its New London employees to nearby Groton, Connecticut.
¹⁷
Pfizer’s exit proves that the New London City Council, shockingly, is not as intelligent as it originally thought. The “urban
village” was never built, and the land that the City took remains barren.
¹⁸
According to Scott G. Bullock, senior attorney at the Institute for Justice, the New London debacle “really shows the folly of these plans that use massive corporate welfare and abuse eminent domain for private development. They oftentimes fail to live up to expectations.”
¹⁹
Tell me about it.

Thankfully, the
Kelo
saga wasn’t a total loss. Legislators in forty-three states, in response to New London’s abuse of power, passed statutes prohibiting similar exercises of the eminent domain power.
²⁰
Regardless, governments should not have to pass laws requiring themselves to operate within the Fifth Amendment. Americans are under the impression that obeying the Constitution is part of the government’s job.

A Man’s Word Is His Bond

The freedom to contract is another right derived from Natural Law. One law review article noted:

Freedom of contract, together with the right to own property, were core elements in the American vision of personal liberty . . . The American constitutional scheme places contract liberty well above common law status; it is a guaranteed personal right. Liberty of contract is recognized not as power delegated by the sovereign, but as power originating in and guaranteed to the people.
²¹

In other words, it is a natural right. You agree to pay me X dollars for this book, and I agree upon receipt of the X dollars to deliver you the book. The right to enter into that agreement is a natural right; the right to have that agreement enforced is one of the aspects of human freedom that governments exist in order to protect. At one time in our history, these rights—to enter into a binding contract and to use the government to enforce the contract—were
guaranteed
. Sadly, now that is no longer the case.

In a way, people who enter into contracts with each other make law for themselves because the government is constitutionally restrained from interfering unless there is a breach of the contract or the essence of the contract is unlawful. Yet, like our right to private property, our natural right to contract, as well as the rights defined in the Contracts Clause of the Constitution (Article I, Section 10, Clause 1), have repeatedly been violated
by the government.

One of the greatest cases of government assaults on the right to contract was in
Home Building & Loan Association v. Blaisdell
(1934), where the U.S. Supreme Court upheld as constitutional a Minnesota law prohibiting banks from foreclosing upon mortgages that were in default. John and Rosella Blaisdell had borrowed money from Home Building & Loan to buy a house. The agreement, which was freely made between the Blaisdells and the bank, specified that if the Blaisdells defaulted on the loan, the bank could foreclose on the house, sell it, pay itself back the unpaid loan, and then turn over any remaining amount, what lawyers and economists call equity, to the Blaisdells. But the “government-knows-best” attitude in the State of Minnesota would have none of this freedom. It chose the value of people living for free over the value of enforcing freely entered contracts. It imposed a moratorium on home foreclosures, and the Blaisdells, preferring to live for free, took advantage of that.

Yet, the U.S. Supreme Court held that it was constitutional if Minnesota stopped the banks from foreclosing on mortgages when the borrower defaulted. So, what was the Court’s justification for this blatant disregard of both our natural rights and the Contracts Clause? Was there a justification? In
Blaisdell
, the Supreme Court tore the Constitution’s Contracts Clause to shreds by allowing state interference with private contracts (those as to which the government is not a contracting party) whenever state legislatures found a “valid police purpose”
²²
that interfered with the remedy (foreclosure), not the contract (the promise to repay a loan). So, in truth, the State can butt into our personal right to contract, whenever it feels like it,
²³
so long as it doesn’t blatantly outlaw contracts, just their remedies. The Blaisdells still owed the bank the money they borrowed; the bank just couldn’t get the money back until the State of Minnesota said it could.

Justice Sutherland wrote in his dissent:

[W]hether the legislation under review is wise or unwise is a matter with which we have nothing to do. Whether it is likely to work well or work ill presents a question entirely irrelevant to the issue. The only legitimate inquiry we can make is whether it is constitutional. If it is not, its virtues, if it has any, cannot save it; if it is, its faults cannot be invoked to accomplish its destruction.
If the provisions of the Constitution be not upheld when they pinch as well as when they comfort, they may as well be abandoned.
²⁴
(emphases added)

Obviously Justice Sutherland understood not only the nature of the Contracts Clause, but the natural right to contract and the spirit of the entire Constitution. The Constitution is the supreme law of the land. The oath to enforce and uphold it is taken by everyone in the government. They are charged with enforcing its terms—upholding the liberty
it guarantees
—whether that liberty pinches or comforts. The
Blaisdell
result is not the way the Framers intended the Constitution to be used.