http://www.bloomberg.com/apps/news?pid=10000103&sid=aTnwtuUwxyFM&refer=us

Government Power to Take Property Backed by Top Court (Update2)
June 23 (Bloomberg) -- Local governments have broad power to take over
private property to make way for shopping malls, office parks and
sports stadiums, the U.S. Supreme Court ruled.

The court said government agencies can constitutionally take property
in the name of economic development -- and even transfer it to another
private party -- as long as the landowners receive compensation. The
5-4 ruling today came in a case involving land near a Pfizer Inc. plant
in New London, Connecticut.

``Promoting economic development is a traditional and long accepted
function of government,'' Justice John Paul Stevens wrote for the court
in Washington. He said the justices ``decline to second-guess the
city's considered judgments about the efficacy of its development
plan.''

The ruling is a setback for property-rights advocates angered by what
they said is an increasingly common practice, now used thousands of
times a year.

``Any property may now be taken for the benefit of another private
party, but the fallout from this decision will not be random,'' Justice
Sandra Day O'Connor said in dissent. ``The beneficiaries are likely to
be those citizens with disproportionate influence and power in the
political process, including large corporations and development
firms.''

Chief Justice William H. Rehnquist and Justices Antonin Scalia and
Clarence Thomas joined O'Connor's dissenting opinion.

Public Use

The Institute for Justice, a Washington-based group representing seven
property owners in the Connecticut case, had urged the high court to
put new restrictions on government ``eminent domain'' power.

New London is seeking to raze a residential neighborhood to make room
for a five-star hotel, luxury condominiums and office buildings near
the Pfizer research facility. The city says it is trying to reverse
decades of economic decline.

The case centered on the U.S. Constitution's takings clause, which
requires government agencies to pay compensation when they take over
private property ``for public use.'' The property owners argued that
the public-use prong requires more than simply the possibility of
economic revitalization.

The justices ruled in 1954 that government agencies can condemn
blighted property as long as they compensate the owners. Thirty years
later, the court said governments could take over property to break up
an oligopoly on land ownership.

The latest question concerned bids to take over property that isn't
blighted and doesn't involve an oligopoly.

Stevens said the New London plan ``unquestionably serves a public
purpose.''

Pfizer Plant

New London's development plan, enacted in 2000, calls for the takeover
of 115 homes and small businesses in the 90-acre Fort Trumbull
neighborhood adjacent to the Pfizer facility. The city also set up a
private entity, the New London Development Corporation, to manage the
project.

The plan coincided with the decision by Pfizer, the world's largest
drugmaker, to open a new research headquarters in New London. Pfizer
isn't directly involved in the litigation, and its property wasn't at
issue in the high court case.

A handful of property owners refused to sell their property and instead
sued. The Connecticut Supreme Court, in a divided opinion, said the
city and development corporation were acting legally.

The case is Kelo v. City of New London, 04-108.

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Corporate rights once again rules over personal rights in the US.

TC