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Greetings, Court Fans!

Today was another six-opinion day at the Court, with the biggest ruling by far coming in Kelo v. City of New London (04-108). In the interest of getting that summary out quickly, this Update covers Kelo and two other decisions handed down today. We’ll do the other three cases in a separate Update.

In Kelo, a deeply divided Court upheld the City of New London’s taking of private property for the purpose of economic development. New London, which was designated a distressed municipality by the State of Connecticut, undertook a major redevelopment plan for the waterfront area in and around the closed Fort Trumbull naval center. Pfizer’s decision to construct a $300M research facility adjacent to Fort Trumbull was a motivating force behind the plan, as the City hoped to capitalize on the Pfizer project to attract other businesses. The City’s comprehensive development plan included a conference hotel, retail and restaurant area, a marina, research space, 80 new residential homes and a parking area. The City purchased many of the homes in the area, but the plaintiffs refused to sell, arguing that the City’s plan constituted a “private use,” not a “public use” as required for a government taking under the Fifth Amendment, which provides that “private property [shall not] be taken for public use, without just compensation.”

Led by Justice Stevens, the Court upheld the taking, finding that it was a rational means to achieve a legitimate “public purpose.” The majority’s holding hinged on the following: First, the Court has long eschewed a rigid test requiring actual use by the public, favoring instead a broader “public purpose” test. Second, the City’s taking was part of a “carefully considered” comprehensive development plan aimed at creating jobs, increasing tax revenues and spurring economic development throughout the City and was undertaken pursuant to a state statute finding that economic development served a public purpose. The City’s determination that the area was distressed and required redevelopment was entitled to deference. Finally, there was no evidence that the development plan was undertaken with an improper motive to benefit particular private individuals or entities. The fact that private parties (such as the developer, new home owners and Pfizer) incidentally benefit is irrelevant. In conclusion, the Court noted that states are free to impose further restrictions on their taking of property and, in fact, some states have done so. [As Kelo was pending before the Supreme Court, a bill was introduced in Connecticut to do just that, and may well be reinvigorated with the release of the Court’s opinion.] Kennedy concurred separately to note that courts should take seriously any claim that a taking is motivated by the improper desire to confer benefits on a private individual and should strike down any “pretextual” taking. But the government would enjoy a presumption that the taking was reasonable and intended to serve a public purpose, imposing a pretty heavy burden on the opponent of the taking.

Justice O’Connor, joined by the Chief, Scalia, and Thomas, passionately dissented (not exactly the cadre you’d expect to be arguing against states’ rights). O’Connor’s words say it best: The Court’s decision threatens to “wash out any distinction between private and public use of property — and thereby effectively to delete the words ‘for public use’ from the Takings Clause.” “Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded.” Historically, land has been taken to be owned by the government (such as a highway or park) or by private entities who make the property available to the public (such as a railway or stadium). This “public use” requirement is fundamental to fairness. Here, the land is being taken from one set of private property owners and given to another, with no requirement that the land be open to or benefit the public. The majority’s holding threatens to remove all constraints on the power of eminent domain so long as the plan is rationally related to increasing the tax base. Moreover, the subject purpose/motivation test is wholly flawed: It will be nearly impossible to prove improper motive, and, more fundamentally, the government’s “motive” has no impact on whether the taking will actually benefit the public. Moreover, in other instances where the Court approved transfers from one private party to another, the current use (i.e., blighted/uninhabitable housing) affirmatively damaged the public and its removal conferred a public benefit. These cases don’t support the outcome sanctioned here. Finally, there is no basis for deferring to the government’s judgment about what constitutes a public use under the Fifth Amendment. “States play many important functions in our system of dual sovereignty, but compensating for our refusal to enforce properly the Federal Constitution (and a provision meant to curtail state action, no less) is not among them.” Justice Thomas wrote a separate dissent to argue for abolishing the “public purpose” test altogether and returning to the plain language of the Constitution. Thomas would overturn all prior precedent permitting the government to transfer property from one private party to another unless the transferee was required to open the property to the public. Moreover, allowing governments to take property for economic development (a/k/a gentrification), will disproportionately harm the poor, often minorities, who lack political power and economic clout. Thus, Thomas finds “the deferential standard” adopted by the Court “deeply perverse.”

Somewhat less seismically, in Orff v. United States (03-1566) the Court ruled 9-0 that the Reclamation Reform Act of 1982 did not waive sovereign immunity to direct suits against the United States (actually, this is the second straight week that the Court unanimously affirmed the Ninth Circuit, so perhaps it is momentous . . . .). Orff and other farmers got their water from California’s Wetlands Water District, which in turn contracted for water from the U.S. Bureau of Reclamation. In 1993-94, the Bureau cut the District’s deliveries in half to comply with endangered-species regulations (apparently its pumps threatened Sacramento River salmon and a tiny fish called the delta smelt). The Water District challenged that cut in court, and the farmers intervened as plaintiffs, claiming that they were third-party beneficiaries of the District’s contract with the Bureau. They also argued that the United States had waived sovereign immunity in the Reclamation Reform Act, which gives consent “to join the United States as a necessary party defendant” in suits dealing with reclamation-related contracts. The Thomas-led Court disagreed, in a straightforward application of textualism and strict construction of sovereign immunity waivers. By its terms, the Act consents to joinder — that is, to bringing the United States into an existing case between two private parties where necessary. It did not consent to direct suits against the government. So the farmers lose, and the smelt can breathe (so to speak) more easily.

In Gonzalez v. Crosby (04-6432), the Court unanimously agreed that a habeas petitioner can use FRCP 60(b) to seek relief from a federal judgment denying his petition, so long as his 60(b) motion does not raise substantive arguments regarding his underlying conviction but challenges only procedural defects in the federal judgment. By a vote of 7-2, however, it rejected Gonzalez’s attempt to use the rule. Like all the habeas cases this term, Gonzalez is hard to summarize succinctly, but we’ll try. Twelve years into his sentence for armed robbery, Gonzalez challenged his conviction in Florida court. After losing there, he filed a federal habeas petition, which the District Court dismissed as untimely because Gonzalez’s state court petitions were not “properly filed” and therefore did not toll the federal habeas limitations period. The Eleventh Circuit denied review. Subsequently, the Supreme Court’s ruling in Artuz v. Bennett adopted a different reading of “properly filed,” and Gonzalez sought relief from the District Court judgment under Rule 60(b)(6), which allows the reopening of a case for “any . . . reason justifying relief from the operation of the judgment.” The District Court denied his motion, and the Eleventh Circuit affirmed, holding that the motion was in effect a “second or successive” habeas petition barred by 28 U.S.C. 2244.

The Court (Scalia, J.) affirmed, but on different grounds. The Court agreed that section 2244 barred 60(b) motions that pressed “claims,” or substantive federal grounds for relief from the state conviction. But where the 60(b) motion and the federal judgment challenged do not go to substance, the motion should go forward because Rule 60(b) safeguards procedural integrity. Gonzalez argued only that the District Court misapplied the federal statute of limitations, so his was a valid habeas 60(b) motion. Gonzalez’s victory was short-lived, however, because the Court also held that his motion failed on the merits. Rule 60(b)(6) requires “extraordinary circumstances” to obtain relief, but it is not unusual for the Court to adopt a new interpretation of law, and that event does not warrant reopening cases “long since final.” Moreover, Gonzalez was not diligent in pursuing his statute of limitations argument, as he did not seek rehearing in the Eleventh Circuit or petition for cert (in which case he certainly would have been remanded for reconsideration in light of Artuz). Justice Breyer concurred, agreeing with the majority’s approach but expressing discomfort with its fixation on the word “claim.” Justice Stevens dissented (joined by Souter); he also agreed with the basic approach but would have remanded the merits of Gonzalez’s 60(b) motion to the District Court for review on a full record (he also thought the Court wrongly minimized Gonzalez’s getting shut out of court because of a “flatly mistaken” procedural ruling).

Three more cases will follow separately. Until then, thanks for reading!

Kim & Ken

From the Appellate Practice Group at Wiggin and Dana. For more information, contact Kim Rinehart, Ken Heath, Aaron Bayer, or Jeff Babbin at 203-498-4400