Update: Professor Ilya Somin, a leading eminent domain scholar and author of the definitive articles on post-Kelo reforms, adds his thoughts on the decision here. Here's a report from the local paper.
In the wake of Kelo v. New London, 545 U.S. 469 (2005), a majority of states adopted rules about what constitutes a "public use" in eminent domain. Missouri is one of the states that, by statute, now prohibits takings "solely" for "economic development" purposes:
1. No condemning authority shall acquire private property through the process of eminent domain for solely economic development purposes.2. For the purposes of this section, "economic development" shall mean a use of a specific piece of property or properties which would provide an increase in the tax base, tax revenues, employment, and general economic health, and does not include the elimination of blighted, substandard, or unsanitary conditions, or conditions rendering the property or its surrounding area a conservation area as defined in section 99.805.
Rev. Stat. Mo. § 523.271 (Supp. 2012). Whether these statutes have any teeth, however, is another question, due to the modifier (in the case of the Missouri statute, "solely"). For example, the Nebraska Court of Appeals held that a taking that would benefit a "well-known national retailer of consumer goods" was not "primarily" for economic development because it would also "promote traffic safety and the efficient flow of traffic on the City’s streets." Missouri's statute is narrower, since it prohibits only those takings that are "solely" for economic development. Thus, it would seem that all a condemnor need do is throw in another reason -- in addition to economic development -- and it would be off the hook.
Yet, in Missouri ex rel. Jackson v. Dolan, No. SC92717 (May. 28, 2013), the MIssouri Supreme Court invalidated a taking even though the condemning authority did just that. In addition to arguing that the taking promoted economic development, the Port Authority asserted that the taking would "greatly expand and enhance" its facilities and would improve river commerce. See slip op. at 13. Thus, it argued, the taking was not "solely" for economic development because it had other reasons.
The court, however, did not just take the condemnor's word. It viewed each of the two additional reasons as included within the statutory defintion of economic development: (1) witnesses testified that enhancing the Port's facilities was designed to "encourag[e] new business and additional commerce in the port district," and (2) "[t]he record demonstrates that the only manner in which the taking will 'improve river commerce' is by drawing more economic development into the area." Slip op. at 16. Thus, these were not additional reasons supporting the taking, but merely economic development recast as separate reasons.
To conclude otherwise would allow any integral part of an economic development plan or project to be considered as a purpose that is separate and distinct from economic development.
Id. The court acknowledged that its ruling would make certain takings more difficult, but pointed out that this was the result intended by the legislature:
The record demonstrates that the Port Authority's desire to promote economic development undergirds all of its actions in this condemnation. The Port Authority expressed concerns at oral argument that the interpretation of § 523.271 required by the Court today will render almost any taking "solely" for economic development purposes. Though § 523.271 may make a taking more difficult to effectuate, that difficulty is the intended result of the statute, the primary purpose of which was to limit the opportunities for which a condemning authority may use the power of eminent domain.
Slip op. at 17.
The court also noted that this would make life especially difficult for Missouri port authorites, since by statute their primary purpose is the promote economic development. Slip op. at 17-18. "The legislature, by enacting § 523.271, made it difficult -- if not impossible -- for the Port Authority to advance its purposes through the use of eminent domain." Whether this was the court hinting to the port authority to gear up its lobbying team to try and convince the legislature to limit or repeal the statute, we leave to you.
Interestingly, the court held that the taking did not violate the Missouri Constitution's takings clause, which is "nearly identical to the federal takings clause embodied in the Fifth Amendment," and is interpreted in the same broad manner in favor of condemnors. Slip op. at 9.
Here are the briefs of the parties:
The oral argument recording is available here.