Small business owner fights to keep his livelihood and home


Author: Luke A. Wake

The Fifth Amendment provides that private property shall not be taken except for a public purpose. Yet, in the infamous Kelo v. New London decision, the U.S. Supreme Court held that the Fifth Amendment does not preclude the government from taking private property for the benefit of private interests. This opened the door for the government to take private property from one citizen, to give to another (more favored) private party. The Court concluded that the democratic process could determine whether a proposed taking serves a public purpose, because elected officials are presumed to act in the public interest. The Court went on to find that the City of New London, Connecticut had reasonably concluded that the taking of Susette Kelo’s home served a public benefit – even though it was benefitting a private corporation – because the development project, for which her home was taken, was expected to bring jobs to the community and increase the city’s tax base.

This decision stirred uproar across the country and opened the eyes of many Americans who were oblivious to the fact that property rights have been degraded through nearly a century of progressive jurisprudence. Even liberals, who are not usually friends of property rights, criticized the decision; I recall being in Washington during the summer of 2005 after the Court issued its opinion and meeting Congressman Dennis Kucinich. The Congressman aptly pointed out that the Kelo decision opens the door for corruption because the government can now play favorites between citizens, robbing Peter to give to Paul.

Not surprisingly, in the wake of Kelo, many states enacted legislation to protect property owners from Kelo-like takings, and property rights advocates have had some success opposing such takings in state courts, arguing that their state Constitutions provide for greater protections than does the federal constitution. Yet, California – being a bastion of progressivist statism – took the opposite approach. With Proposition 99, California amended its Constitution to expand municipalities' power of eminent domain by allowing Kelo-like takings, except in cases where the owner resides on the property to be taken.

Now landowners like Pankaj Desai, a Vista, California resident, face an incredible uphill battle in fighting to protect their property from government bureaucrats who think their land would be better utilized in the hands of another private party. The city of Vista is threatening to take Desai’s property upon which he runs a small business, so that it can move forward with its plans to help a Ford dealership expand its operations. The city apparently believes that by helping Ford expand it will be helping raise revenue for the city, but there is no guarantee that this arrangement will in fact benefit the public. Of course, if Vista goes through with its plans to take Desai’s property for the expansion of the Ford dealership, Vista will be closing down a successful small business, which represents both Desai’s home and livelihood.

Desai is rightly crying fowl, and calling attention to the social justice aspect of this issue: "They have the power and they want to utilize it against the small guy."

Indeed he is right, and Justice Sandra Day O’Connor warned us that this would happen. In her fiery dissent, in Kelo, O’Connor said: "Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms… 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. Those communities are not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful."