Kelo V New London

MPA @ UNC
PUBA 760: LAW FOR PUBLIC ADMINISTRATION
NEW JERSEY STATE LAW IN
RESPONSE TO KELO V. NEW
LONDON
Presented by: Charles J. Stevens

On September 6, 2013, the New Jersey State Legislature passed a statute titled Local
Redevelopment and Housing Law, P.L.2013, c.159 (2013). In doing so, New Jersey became the 45th
state
to pass eminent domain reform in the wake of the US Supreme Court’s 2005 ruling in Kelo et al. v. City
of New London et al., 545 U.S. 469 (2005). It is also a response to Harrison Redevelopment
Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), in which the State appellate court addressed
concerns with the notice provision under the Local Redevelopment and Housing Law.
To understand the intent of this statute, we must first look at the case it (and many other statutes
like it) is a response to. This case arose from a redevelopment plan authorized by the city council of New
London, CT. Following the closure of a nearby Naval Undersea Warfare Center, which had employed
over 1,500 people, New London experienced a sharp economic downturn, resulting in an unemployment
rate double that of the State, and a population count at its lowest point since 1920.
In an effort to revitalize New London, the city council reactivated the New London Development
Corporation (NLDC), a private non-profit body given condemnation and eminent domain powers. After
the pharmaceutical company Pfizer Inc. announced it planned to build a $300 million research facility in
New London, the NLDC created an economic redevelopment plan based on the new jobs and commerce
the Pfizer facility would generate. Part of this plan included buying property from current owners and
giving it to Pfizer for facility buildings, parking lots, etc. Although the NLDC negotiated the purchase of
most of the land necessary for the redevelopment proposal, not all of the townspeople were willing to
relocate due to the development planned.
Susette Kelo, along with 8 other petitioners, claimed that the taking of their property did not
satisfy the public use restriction in the Fifth Amendment. One of the key points of contention was that the
government did not plan to use the land for general public use, such as a railway, road, or other tangible
use available to the public. Instead, the argument arose over whether or not the transfer of land from one
private owner to another private owner for economic development and the hopes of increased public good
as a byproduct of that transaction violates the Takings Clause in the Fifth Amendment.

In December 2000, the New London Superior Court granted a permanent restraining order
stopping the taking of some (but not all) of the properties. After this ruling, both sides appealed to the
Supreme Court of Connecticut, which decided that the takings were legal under Conn. Gen Stat. § 8-186
(2005). The court determined that the takings of the properties were reasonably necessary to achieve the
intended public use, while also determining that the planned use of the land had been given reasonable
attention during the planning process. After this ruling, the case was appealed to the Supreme Court of the
United States.
In a 5-4 decision, the Supreme Court determined that the potential economic and non-economic
benefits a community enjoyed from economic growth qualified private redevelopment plans as a
permissible public use. Writing for the Court, Justice Stevens expressed that there was not enough
evidence to determine that the resulting benefits of bestowing the privately-owned land to a private entity
(Pfizer Inc.) were the main driving forces behind the condemnations. Additionally, Justice Stevens points
to cases such as Fallbrook Irrigation Dist. V. Bradley, 164 U S. 112, 158-164 (1896) to show precedence
that since the turn of the 20th
century, courts have expanded the limited view of “public use” to the
broader term of “public purpose”. Even though Pfizer’s facility would not be open to the general public as
a whole, New London’s economic redevelopment plan serves a public purpose, thus making the takings
legal.
He also cites more recent cases, such as Berman v. Parker, 348 U. S. 26 (1954), when the Court
upheld another economic redevelopment plan, this time targeting a blighted area of Washington, D.C. In
that case, a department store owner in the blighted area argued that the redevelopment plan was not a
valid public use. Ultimately, the Court affirmed the taking and the plan as valid public use.
Justice O’Conner, (and many other legal and political scholars), vehemently disagrees with the
Court’s decision. In her dissent, she points out that although the Court has ruled under the broad view of
public purpose in the past, Kelo et al. v. City of New London et al. is different in multiple ways. First,
unlike in Berman v. Parker the properties in question here are not blighted, nor are they causing social
harm (aesthetic or otherwise). Justice O’Conner argues that the decision of the Court effectively approves

takings of non-blighted private property used for ordinary means and turning it over to another entity
(whether public or private) solely in the hopes that the new use will create an undefined secondary public
benefit such as higher employment, increased commerce, etc. Therefore, if anticipated positive effects on
the public are enough to approve property transfer through eminent domain from one party to another, the
term “public use” and the Takings Clause become impotent, rendering no constraints on eminent domain
authority.
The obvious concern that one must consider is that, based on the Court’s ruling, no property
(however productive) is safe from condemnation for the purpose of putting it to “better” use. Private
property can now be taken and given to another private owner without proof of concrete public purpose.
Ultimately, this will only serve to hurt those without the ability or monetary means to fight takings being
driven by economic development of larger, more powerful bodies such as manufacturers and
corporations. It is this concern, as well as those mentioned in the previous paragraphs, that prompted New
Jersey to amend their legislation concerning eminent domain.
This statute is an amendment to Section 5 of P.L.1992, c.79 (40A:12A-5), which was an earlier
version of the Local Redevelopment and Housing Law. This amendment aims to build upon a decision
rendered by the New Jersey Supreme Court in Gallenthin Realty Development, Inc. v. Borough of
Paulsboro, 191 N.J. 344 (2007). In this case, the court clarified one of the requirements when designating
redevelopment areas in New Jersey and using eminent domain to acquire property. The court stated that
the land being taken in order to be given to a private entity must be proven to blighted, instead of simply
not being put to its optimal use. Hoping to capitalize on this decision, New Jersey Legislature outlined the
steps required for a municipality to exercise eminent domain, referred to in the statute as Condemnation
Redevelopment Areas (CRA).
The bill expressly states that “No area of a municipality shall be determined a redevelopment area
unless the governing body of the municipality shall, by resolution, authorize the planning board to
undertake a preliminary investigation to determine whether the proposed area is a redevelopment
area…Such determination shall be made after public notice and public hearing…The governing body of a

municipality shall assign the conduct of the investigation and hearing to the planning board of the
municipality.” This is meant to provide citizens transparency during the redevelopment process, while at
the same time ensuring the planning board (and not an outside private organization) conducts the
investigation. The bill goes on to state that a public hearing must be held if the board determines that the
redevelopment area is a CRA, and thus subject to eminent domain. In addition, the area must be deemed a
blighted area if it is deemed to be a CRA.
Another key addition presented by this statute is the 45-day stoppage of municipality actions once
an area is deemed to be a CRA. During this time, the municipality cannot move to acquire any property
within the CRA, whether it be through eminent domain actions or other means. This 45-day stoppage is
meant to allow property owners in the CRA an opportunity to file legal action challenging the
determination. The owner can apply to the Superior Court, after which the court may permit further
review of the municipality’s discernment by procedure in lieu of prerogative writ.
With this statute, New Jersey attempts to curtail the perceived negative effects on lower and
middle-class private owners. The question we must ask is whether or not New Jersey has succeeded in
this endeavor. Sadly, the answer is no.
First is the issue of the term “blight” as it is written in P.L.2013, c.159. A clear definition of what
parameters determine when and if an area is blighted is not provided, which means municipalities will not
have to clearly define the measures used to determine an area fit to be deemed a CRA. This leaves a lot to
individual interpretation, and invites ethical (and possibly legal) violations of blight determination if there
is the potential for private gain. If New Jersey legislators wanted to ensure municipalities were properly
making blight determinations (and subsequently enacting eminent domain), they should have written
clearly-defined limits to establish what can and cannot be labeled a blighted area.
Of course, the entire issue of whether or not an area is blighted or not is irrelevant due to the
ruling in Kelo et al. v. City of New London et al. Whether or not an area is deemed blighted was a non-
issue in the decision of the U.S. Supreme Court, meaning any municipality denied a taking based on their
inability to prove the land is blighted will be able to appeal and successfully have that decision

overturned. This effectively means the decision in Gallenthin Realty Development, Inc. v. Borough of
Paulsboro has no real weight behind it if challenged. In turn, this also means that the designations of
Non-Condemnation Redevelopment Areas and CRAs borders on pointless. If municipalities already have
free reign to determine their own definition of blight, coupled with the inability of the state legal system
to enact blight requirements for use of eminent domain (if properly challenged), then why would they not
deem every area they want for economic development to be a CRA?
The second issue with the statute is the 45-day limitation on challenges to the CRA
determination. While the statute is written to convey that this 45-day timeline helps prevent municipalities
from enacting eminent domain before citizens can react, it also has the side effect of stopping future
challenges to condemnation. Property development plans can take years to come to fruition. This means
land can be designated a CRA, but the municipality would not have to begin condemnation until months
or years later. Based on how the law is written, if property owners do not file within the first 45 days, a
municipality could come back years later and claim eminent domain. This seems like a horrendous error,
with lower and middle-class property owners being the victims of this oversight.
Finally, based on the above observations, the statute lacks a clause addressing what would occur
if, after being designated a CRA, a property owner elects to sell directly to another property owner.
Would the new property owner now have 45-days to file with the courts challenging the determination?
Or would they be bound by the action (or inaction) of the previous owner, which may have occurred
months or years prior? While this is an unlikely scenario, a hypothetical such as this highlights the flaws
of P.L.2013, c.159.
New Jersey waited 8 years after the Kelo et al. v. City of New London et al. verdict to enact
change to their eminent domain laws. Unfortunately, the change does little to offer additional protection
and peace of mind to private property home owners fearful of their property being taken for another
private entity’s promise of better “public purpose”.

References
Gallenthin Realty Development, Inc., a New Jersey Corporation and/or George A. and Cynthia L.
Gallenthin III, h/w, both jointly and severally, Plaintiffs-Appellants v. Borough of Paulsboro, a New
Jersey Municipality and/or Planning Board of Borough of Paulsboro and/or Paulsboro Redevelopment
Agency, jointly and severally, Defendants-Respondents, 191 N.J. 344 (2007). Accessed August 1, 2015.
http://www.heinonline.org.libproxy.lib.unc.edu/HOL/CaseLaw?cid=5441625&%20cop=&native
_id=5441625&rest=1&collection=journals.
Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008). Accessed July 29,
2015.
Kelo et al. v. City of New London et al., 545 U.S. 469 (2005). Accessed July 28, 2015.
Local Redevelopment and Housing Law, P.L.2013, c.159 (2013). Accessed July 31, 2015.
http://www.njleg.state.nj.us/bills/BillView.asp.
Samuel Berman and Solomon H. Feldman, Executors of the State of Max R. Morris, Deceased,
Appellants v. Andrew Parker, John A. Remon, James E. Colliflower, et al., 348 U.S. 26 (1954). Accessed
July 31, 2015.
http://www.heinonline.org.libproxy.lib.unc.edu/HOL/CaseLaw?cid=360406&%20cop=&native_i
d=360406&rest=1&collection=journals.

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