Bryan Bowers, a local developer, recognized a lucrative business opportunity following the announcement of the Mohawk Valley Health System’s plan to construct a new hospital in downtown Utica, New York. Bowers and his partner swiftly entered into a contract to acquire the former Rome Plumbing and Heating Supply building at 411 Columbia Street, strategically situated across from Wynn Hospital. Their vision was to provide medical office space in this location. This venture, however, would directly compete with Central New York Cardiology, a neighboring medical building that had commenced operations in Utica just three months after the hospital began accepting patients in January 2024.
In October 2021, the cardiologists at Central Utica Building had a different vision for 411 Columbia. They approached the Oneida County Industrial Development Agency (OCIDA) with a request to acquire the property through eminent domain and convert it into a parking lot. Despite Bowers’ objection, OCIDA showed favor towards Central Utica’s proposal, believing that it would contribute to the overall prosperity of the community in Oneida County. After a prolonged legal battle, a New York appeals court ultimately upheld OCIDA’s decision, validating the agency’s intervention with its protectionist measures.
According to the court, the public use of mitigating parking and traffic congestion justifies the acquisition of the property, even though the need for the parking facility is partially due to the construction of a private medical facility. In New York, the definition of public purpose or public use is broad and includes any project that benefits or advantages the public. Bowers argues in a petition to the U.S. Supreme Court that this broad interpretation undermines the Fifth Amendment’s requirement for government takings of private property to serve a public use.
According to Bowers, who is represented by the Institute for Justice, the act of taking their property was not done for the public’s benefit, but rather to benefit their competitors. Bowers firmly believes that New York’s use of eminent domain is abusive and should not be allowed under the U.S. Constitution. They express hope that the Supreme Court rectifies this historic injustice and confirms that the government cannot seize private property to benefit another private party.
The Supreme Court’s infamous ruling in 2005, Kelo v. City of New London, paved the way for potential abuse by endorsing the use of eminent domain to facilitate economic development through the transfer of private property from one owner to another. However, the Institute for Justice argues that even within the framework of Kelo, the Utica land acquisition raises concerns. Regardless, the Institute firmly asserts that Kelo was flawed from the very beginning, and urges the Court to grant certiorari to reassess this decision.
In the case of 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. The plan promised to create over 1,000 jobs, increase tax and other revenues, and revitalize an economically distressed city, although none of these promises were ultimately fulfilled. On the other hand, in Bowers’ case, OCIDA did not have a development plan to implement. Instead, they simply imposed their judgment that a parking lot would be a better use for his property than the medical office space he had intended to offer.
OCIDA’s assessment primarily benefited a private business that aimed to restrict competition. The New York appeals court, however, deemed this inconsequential as long as the project had the potential to provide some benefit to the public. Nevertheless, even Stevens acknowledged that such reasoning may have been taken to an extreme.
“The City would undoubtedly be prohibited from seizing the land of petitioners with the intention of benefiting a specific private party,” stated Stevens. “Moreover, the City would not be permitted to take property under the guise of a public purpose, if its true motive was to grant a private advantage.”
According to Stevens, New London managed to avoid this issue. He mentioned that while the city had plans to transfer certain parcels to a private developer through a long-term lease, the identities of these private parties were not known at the time the plan was adopted. This makes it challenging to accuse the government of taking A’s property to benefit the private interests of B when the identity of B was unknown. However, in Bowers’s case, it is much easier to make such an accusation against the government.
Justice Anthony Kennedy, in his agreement with the decision in Kelo, expressed a heightened concern regarding private benefits being disguised as public use. He emphasized that if a taking is clearly intended to favor a specific private party, with only incidental or pretextual public benefits, it should be struck down. This aligns with the principle that, just as a government classification intended to harm a particular class of private parties should be invalidated under the Equal Protection Clause, a taking with only superficial public justifications should also be rejected under rational-basis review.
The majority opinion did not address how courts should handle cases like this. Stevens acknowledged the argument that if there is no clear rule, cities could transfer citizen A’s property to citizen B solely because citizen B will make better use of the property and pay more taxes. However, he clarified that this case does not involve a direct transfer of property between individuals without an integrated development plan. Although such an uncommon exercise of government power would raise suspicions of a private agenda, Stevens stated that the hypothetical scenarios presented by the petitioners can be addressed if they arise in the future.
As demonstrated by Bowers’ situation, these cases are more than just theoretical scenarios, and the dissenters in the Kelo case accurately warned about the potential for such abuses. In her dissent, Justice Sandra Day O’Connor, joined by Justices Antonin Scalia and Clarence Thomas, cautioned that the majority’s decision was opening the door to this kind of exploitation. She stated, “Under the guise of economic development, all private property is now at risk of being taken and transferred to another private owner, as long as it can be argued that the new owner will use it in a way that the legislature deems more beneficial to the public. By reasoning, as the Court does, that any incidental public benefits resulting from the subsequent use of private property make economic development takings ‘for public use,’ we effectively eliminate any distinction between private and public use of property, thus erasing the words ‘for public use’ from the Takings Clause of the Fifth Amendment.”
O’Connor didn’t find Stevens’ qualifications or Kennedy’s assurances to be impressive. She pointed out that if legislative predictions about the secondary public benefits of a new use can justify a taking, there is nothing in the Court’s rule or Justice Kennedy’s interpretation of that rule that would prevent property transfers that are less carefully considered, less comprehensive, and less extensively processed. She also mentioned that these transfers may only offer the advantage of higher taxes or aim to transform an already prosperous city into an even more prosperous one.
Bowers’ petition offers the Supreme Court two alternatives. It can bolster Kennedy’s supposed restriction by deciding that “the Public Use Clause demands a higher standard than minimal rational-basis review when the government takes property from one private owner and gives it to a specifically identified private owner outside the scope of a comprehensive economic redevelopment plan.” Alternatively, it can reverse the decision made in Kelo, a possibility that four justices—Thomas, Neil Gorsuch, Brett Kavanaugh, and Samuel Alito—seem to lean towards.
According to Justice Thomas in his dissent in the case of Kelo, the most natural interpretation of the Public Use Clause is that it only permits the government to take property if it already owns it or if the public has a legal right to use it. Bowers’ petition points out that the majority failed to address Justice Thomas’s well-reasoned argument based on the original text and meaning of the clause. This failure, the petition argues, is inconsistent with the modern approach of the Court to the Fifth Amendment, which relies on a careful examination of the text and historical context at every step.
The Institute for Justice argues that the Kelo decision is inconsistent with other modern cases of the Court because it gives complete deference to legislative decisions regarding an enumerated right. They point out that no other right has been so fully disregarded, and in fact, the Court has firmly rejected the notion that enumerated rights can be discarded.
According to the petition, the dissenters of the Kelo decision were correct in their assessment of both its practical implications and its rationale. The Institute for Justice argues that the rule established in Kelo has proven to be unworkable, as demonstrated by the cursory analysis conducted by the lower court in this particular case. They claim that the rule effectively eliminates the requirement for a specific public use and instead allows the government to arbitrarily determine what constitutes a public use.
According to the petition, laws in 47 states have been enacted in response to the Kelo decision to make private-to-private transfers more challenging. However, as George Mason law professor Ilya Somin pointed out on the 15th anniversary of Kelo, much of this new legislation has proven to be largely ineffective. While some state courts have shown skepticism towards condemnations that primarily benefit private parties under the guise of “public use,” other states have been more lenient in their approach.
According to the Institute for Justice, the highest court in New York has consistently approved any taking that is claimed to have a public benefit. The U.S. Court of Appeals for the 2nd Circuit, which encompasses New York, has also shown a similar level of deference. In the Second Circuit’s perspective, private beneficiaries of eminent domain are not just allowed, but they are also considered irrelevant.
Eminent domain cases often highlight a power imbalance between developers and individuals, where those with greater political influence hold an advantage. However, it is important to recognize that such cases frequently involve individuals of modest means who find themselves overwhelmed by the resources of developers eager to acquire their land. The petition highlights that the use of eminent domain for redevelopment purposes often disproportionately affects areas with higher concentrations of poor individuals and racial minorities.
According to the Institute for Justice, the Court may not frequently encounter public-use issues, but this is not surprising. Litigating over public use can be costly and risky for property owners, who often feel pressured to settle. The Court should not interpret the infrequency of cases involving these questions as a lack of eminent-domain abuse. In lower courts, and in homes where homeowners must decide whether to go to court or yield to private businesses, the impact of the Kelo decision is still widespread.
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