Yellin on the Case for a Reliance Interest in Economic Development Takings

David S. Yellin (JD candidate, Georgetown) has posted Masters of Their Own Eminent Domain: The Case for a Reliance Interest Associated with Economic Development Takings, forthcoming in the Georgetown Law Journal, Vol. 99 (2011).  The abstract:

When the Supreme Court, in Kelo v. City of New London, held that economic development was a valid justification for the use of eminent domain, there was a massive public outcry. In the resulting backlash, many communities enacted legislation aimed at restricting economic development takings, but most of these reforms were largely symbolic and had little or no actual effect on such takings. This Note accepts the reality that economic development takings will inevitably occur, and identifies the greatest threat associated with such takings as the risk that when they do they may cause more harm than good. For example, after the failure of the development project at issue in Kelo, Pfizer has recently announced that they will be shutting down their facility in New London, Connecticut, taking 1,400 jobs with them. As a result, the price New London paid by condemning the homes of its residents has been for nothing and the city is left even worse off than before.

This Note analogizes the failures of eminent domain takings to some of the harms that arose during the rash of plant shut-downs in the 1980s and early 1990s. Faced with the loss of the foundations of local economies, municipalities and scholars alike tried to come up with ways to protect the reliance that communities place in economic actors. This Note argues that although many of these proposals were not suitable for responding to the problems of plant closings, they are well-suited to use in the takings context. To that end, I discuss key differences between the two scenarios that justify applying some of the most progressive of these proposals in the takings context. Specifically, I propose that courts recognize a reliance interest, similar to an easement, which gives a municipality a legally enforceable right against corporate entities that benefit from economic development takings.

Matt Festa