Will the process of recovering private property rights in this nation begin in Ohio? 

On January 11, the Ohio Supreme Court heard a case involving the reach of government's eminent domain powers.  The court should rule by the spring.

In June of last year, of course, the U.S. Supreme Court ignited a firestorm with its narrow, deeply divided, 5-to-4 ruling in Kelo v. City of New London.  The decision signed off on government being able to take one private entity's property in order to hand it over to another private entity in the name of "economic development."  The threat to individual homeowners and small businesses - that is, those with less political power - is clear and substantial.

In the meantime, though, the Fifth Amendment to the U.S. Constitution states "nor shall private property be taken for public use, without just compensation."  There was no "public use" in the Kelo case, and even the Court's majority opinion acknowledged that, choosing simply to ignore or redefine "public use" in the Constitution.

In effect, the U.S. Supreme Court abandoned its responsibilities, and gave the green light for politicians and government bureaucrats to do pretty much whatever they choose with their eminent domain powers.

Now in the first court test since Kelo, homeowners Carl and Joy Gamble, and small businessman Joe Horney sued the city of Norwood, a suburb of Cincinnati, Ohio.  The city wants to replace the neighborhood with a private developer's project of stores, condominiums and office space.  The so-called justification was that the neighborhood is "deteriorating."

The homeowners and businessman in the case differ on this assessment.  They are represented by the Institute for Justice (IJ). In a statement, IJ noted: "Under the Ohio Constitution and urban renewal laws, eminent domain can only be used to eliminate actual conditions of slum and blight." But Dana Berliner, an institute senior lawyer, observed: "The City used a broad definition of ‘deteriorating' that could include virtually every neighborhood in Ohio and the nation.  If a city can use a ridiculous definition of ‘deteriorating' to take normal neighborhoods on behalf of wealthy, politically connected developers, your home or small business could be next." 

The concepts of "blight" and "slum" have been grossly abused over the past half-century when government sought to re-shape places by using eminent domain.  Again, the victims have long featured homeowners, and small business owners and their employees, as well as minorities.  Now, the city of Norwood wants to expand governmental abuse by invoking the word "deteriorating."

As reported by the Cincinnati Enquirer, at a morning rally before the Ohio Supreme Court heard arguments, Joy Gamble said: "We're ordinary people.  We're not activists. We're not firebrands and here we are. We knew we were right."  Joe Horney added: "Property rights mean something to me, and they must be interpreted correctly."

IJ senior attorney Scott Bullock got it right when he said: "The U.S. Supreme Court dropped the ball in protecting home and small business owners from eminent domain abuse.  Now is the time for the state supreme court to step in to stop the use of eminent domain for private profit in Ohio."

After the hearing, Gamble observed: "The judges appeared to be very interested in individual property rights as opposed to money."  Let's hope so.

The protection of private property is a fundamental duty of government.  Property rights serve as a bedrock of freedom, civilization and the market economy. 

The Associated Press quoted Joy Gamble summing matters up simply and accurately: "When the municipalities and the people that have lots of money decide they want what you have, you don`t own it.  You bought it, you paid for it, you kept the taxes up, you kept the appearance up, but it wasn`t yours."

In both the Ohio case and the Kelo case, local governments proclaimed that these takings were justified for economic development purposes.  But government economic development schemes are best known for their consistent inability to live up to overblown promises.  Government has never done well at picking winners and losers in the marketplace.  Instead, it performs best when keeping taxes low, regulations light, and protecting life, limb and property.  Indeed, when government undermines private property rights, it undermines the economy. 

The Ohio Supreme Court has the opportunity to begin the process of undoing the damage done in Kelo, to restore government to its legitimate role of protecting, rather than stealing, property.

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This column may be reprinted with appropriate credit.
 

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.