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WASHINGTON - Champions of property rights took cheer in 1986
when William H. Rehnquist became the chief justice of the
United States.
Rehnquist argued that property rights had been "relegated
to the status of a poor relation" compared to the 1st
Amendment's rights to free speech or freedom of religion.
And twice under his leadership, the Supreme Court ruled to
strengthen the rights of property owners.
Since the early 1990s, however, the property rights movement's
progress in the courts has stalled.
Today, in what is likely to be the last term of the Rehnquist
Court, the justices take up two disputes that could change
that.
One will decide whether cities can condemn homes and small
businesses to clear the way for business development. The
other tests the government's power to regulate economic transactions,
such as imposing rent controls.
In his first year as chief justice, Rehnquist put together
a 5 4 majority in favor of a California homeowner and ruled
that the state's Coastal Commission could not force the homeowner
to open his private beachfront to public foot traffic. A few
years later, the court said the government must pay a landowner
if it bars him from building anything on his property.
"At the beginning [of the Rehnquist Court], it looked
tremendously hopeful from a property rights point of view.
But after 1992, it's been downhill," said R.S. Radford,
an attorney for the Pacific Legal Foundation in Sacramento,
a conservative property rights group.
Property rights advocates are challenging a 50 year trend
in which redevelopment authorities have claimed ever greater
powers under the doctrine of eminent domain.
Though 1954 is best remembered in legal circles as the year
of a landmark school desegregation case, the Supreme Court
issued another far reaching ruling that year. While government
has long had the power to seize private land for such public
uses as highways, the justices declared that cities could
also condemn entire blocks as "blighted" and clear
the land for redevelopment even if it meant knocking down
small businesses that were thriving.
After the ruling, "all hell broke loose," says
Gideon Kanner, professor emeritus at the Loyola Law School
in Los Angeles and a longtime advocate of property rights.
The 1960s became an era of urban renewal as redevelopment
agencies cleared many downtown areas, hoping to spur a revival
in the nation's cities. Sometimes, critics say, they succeeded
only in emptying the life from cities.
More recently, redevelopment agencies have used eminent domain
to clear away small businesses to make way for big box retailers
such as Wal Mart or Costco.
In response, some conservative theorists began urging the
federal courts to aggressively limit the government's power
to regulate property.
The case attracting the most attention was brought on behalf
of Susette Kelo, a registered nurse in New London, Conn.,
whose house looks out to the waters of Long Island Sound.
The city wants to redevelop her neighborhood with a waterfront
hotel, an office park and "urban style" townhouses.
All that stands in the way are Kelo and six other neighbors
who refuse to sell their small wood frame homes.
"If the taking of our property were for a bridge, a
road or a firehouse, I would be prepared to sell without a
fight," Kelo said. "This is for private profit,
not public use."
One of her neighbors, Matt Dery, a circulation manager for
the local newspaper, said, "We didn't want to leave,
and our house wasn't for sale." The same was true for
his parents, who live across the street in the house where
his mother was born in 1918.
City officials say these redevelopment projects produce public
benefits, such as more jobs and tax revenue. And New London's
lawyers say the entire notion of redevelopment is in danger
if a few holdouts can block a project.
"This is a small group of hold outs. No one doubts their
sincerity. They want to stay in their homes. But it will have
a devastating effect on a lot of cities if the court rules
for them," said Daniel J. Krisch, a Hartford lawyer.
The homeowners say it would be even more devastating if cities
were allowed to drive out homeowners as a favor to big developers.
"Then no property in America is safe because anyone's
home can create more jobs if it is replaced by a business,
and any small business can generate greater taxes if replaced
by a bigger one," said Dana Berliner, a lawyer for the
libertarian Institute for Justice, which represents Kelo and
her neighbors.
Says Kanner, "Kelo is a blockbuster."
The other case to be heard this week tests whether the court
will go further than before to knock down laws that regulate
rents or other economic transactions.
The U.S. 9th Circuit Court of Appeals in San Francisco, though
viewed as a liberal court, has handed down several recent
rulings saying that rent control amounts to the taking of
private property.
The test case arose in Hawaii, where lawmakers were trying
to control the nation's highest prices for gasoline by fostering
competition.
In hopes of preserving its remaining independent service
stations, the Hawaii Legislature limited the rents that could
be charged them. Chevron, which owned stations and rented
them to independent operators, sued on grounds that limiting
the rent it could charge had the effect of taking its property.
Last year, the 9th Circuit agreed with Chevron. The Hawaii
rent control law is unconstitutional, its judges said, because
the limit on fees paid by the service stations did not "substantially
advance" the state's goal of protecting consumers from
higher gas prices.
Hawaii Gov. Linda Lingle appealed, arguing that judges were
not empowered to "second guess the reasonableness of
legislative policy judgments." If the high court were
to agree with Chevron's argument, it could trigger a new wave
of legal challenges to regulatory laws.
"Since the late 1930s, the Supreme Court has generally
refrained from second guessing decisions by elected officials
to enact business regulations, health and safety laws [or]
land use controls," said Timothy Dowling, a lawyer for
the Community Rights Counsel in Washington. A victory for
Chevron may signal "a significant change in this constitutional
landscape," he said.
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