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making its way through the Connecticut courts, Kelo’s case reached the Supreme Court in
2005.
On June 23, 2005, the Supreme Court ruled, 5–4, in favor of the city, finding that
economic development for a public purpose—in this case, to revitalize the city and
broaden its tax base—met the public-use standard. The court said local governments
should be afforded wide latitude in seizing property because land-use decisions are best
made at the local level by individual communities. Justice John Paul Stevens wrote for the
majority, “The city has carefully formulated a development plan that it believes will provide
appreciable benefits to the community, including, but not limited to, new jobs and
increased tax revenue.”

In a dissent, Justice Sandra Day O’Connor argued that the plain meaning of “public use”
included only uses of land by public entities or for amenities open to the public. She wrote,
“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.”

Immediately after the decision, opinion polls found overwhelming opposition to the use of
eminent domain for private development.34 Representatives of the National Association
for the Advancement of Colored People (NAACP) testified before Congress about the
historical use of eminent domain to evict racial and ethnic minority homeowners from their
property in the name of urban renewal, and predicted that Kelo would have a disparate
impact on African Americans.35
The court’s decision applied only to the rights of property owners under the federal
Constitution and left open the possibility that both state and federal laws could limit the
use of eminent domain. Eight states—Arkansas, Florida, Illinois, Kentucky, Maine, Montana,
South Carolina, and Washington—already prohibited the use of eminent domain for
economic development, except to eliminate blight. Since the decision, 35 state legislatures
have passed laws or constitutional amendments to limit the use of Kelo-style takings. And
in November 2005, the U.S. House of Representatives passed a bill that would prevent the
federal government from using eminent domain for private development as well as deny
federal economic development funds to state and local governments that used eminent
domain for such purposes. However, the bill was placed on hold in the Senate in
December 2006, effectively halting its legislative progress.36
Regulatory Takings. Federal and state governments in the United States may also limit
otherwise lawful uses of private property for zoning, environmental protection, public
accommodation, and other reasons. These limitations can substantially burden landowners
by prohibiting some profitable uses of their land.
For example, the Federal Water Pollution Control Act and the Clean Water Act prohibit the
development of federally designated “wetlands” in ways that would jeopardize animal or
plant habitats. If an entire piece of property is classified as wetland, the law prohibits any
development of it. In 2005 and 2006, the court heard two cases, Carabell v. U.S. Army
Corps of Engineers and Rapanos v. United States, which challenged the extent of federal
power under the Clean Water Act. The cases sought to establish whether tributaries close
to wetlands, but not part of the navigable waters to which the law refers, are under federal
jurisdiction. A divided court found that the water on the property in question needed to

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