Supreme Court Expands Power of Eminent Domain

The United States Supreme Court rendered its decision in the case of Kelo v. New London today, holding that a state political subdivision may use the power of eminent domain to condemn residential real property for the purpose of executing a "program of economic rejuvenation." The opinion essentially allows a political subdivision to claim that an economic development plan serves a "public use," allowing that subdivision to exercise the power of eminent domain over private real property consistent with the Takings Clause of the Fifth Amendment. The slip opinion is available here. The case arises out of an economic development plan involving a Pfizer research development facility, though there is speculation that it could be used by "big box" retailers to obtain real estate in densely populated areas (see article from CNN Money).

For an interesting analysis of whether or not these types of development programs are efficacious, see Wassmer & Anderson, Are Local Economic Development Incentives Effective in an Urban Area? available here.