The Kelo Decision: Robbing the Poor to Pay the Rich (1)

In 2002, the Connecticut Supreme Court sided 4-3 with the City of New London and against Susette Kelo and other appellants. The Court upheld the right of New London to use eminent domain to transfer Kelo's and others residents' private land to the New London Development Corporation, whose comprehensive redevelopment plan included the construction of new headquarters by Pfizer Corporation. In 2005, Kelo et al. appealed the decision to the U.S. Supreme Court. The high court also decided in favor of the City of New London, 5-4. Joined by Justices Kennedy, Ginsburg, Souter and Breyer,  Justice Stevens wrote the majority opinion. Joined by Justices Rehnquist, Scalia, and Thomas, Justice Sandra Day O'Connor wrote the principal dissenting opinion.

Justice O'Connor's opinion turns on what is called the "reverse Robin Hood" argument--that the Kelo decision would make it the norm, not the exception, to take from those with fewer resources and give to those with more resources, including large corporations and development firms in particular. The Founders cannot have intended this "perverse result" to the takings clause of the U.S. Constitution. When economic development is construed to be "public use," the "specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory,"  O'Connor famously concluded.

Excerpts from O'Connor's opinion follow.

Over two centuries ago, just after the Bill of Rights was ratified, Justice Chase wrote:

"An act of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority ... . A few instances will suffice to explain what I mean... . [A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with such powers; and, therefore, it cannot be presumed that they have done it." Calder v. Bull, 3 Dall. 386, 388 (1798) (emphasis deleted).

Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded--i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public--in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings "for public use" is to wash out any distinction between private and public use of property--and thereby effectively to delete the words "for public use" from the Takings Clause of the Fifth Amendment. Accordingly I respectfully dissent.

. . . . Today nearly all real property is susceptible to condemnation on the Court's theory. In the prescient words of a dissenter from the infamous decision in Poletown, "[n]ow that we have authorized local legislative bodies to decide that a different commercial or industrial use of property will produce greater public benefits than its present use, no homeowner's, merchant's or manufacturer's property, however productive or valuable to its owner, is immune from condemnation for the benefit of other private interests that will put it to a 'higher' use." . . . . This is why economic development takings "seriously jeopardiz[e] the security of all private property ownership." . . . .

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. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result. "[T]hat alone is a just government," wrote James Madison, "which impartially secures to every man, whatever is his own." . . . (Mar. 29, 1792). . . . [Emphases added.]

(Full text of Kelo opinions and dissents is here.)

42 states subsequently sided with Justice O'Connor's minority opinion and passed reform legislation limiting eminent domain. In New Hampshire, where Justice Souter had a primary residence and Justice Breyer maintained a vacation home, voters passed Constitutional Amendment 12-a by an overwhelming 85% majority with 100% state Senate support: "No part of a person's property shall be taken by eminent domain and transferred, directly or indirectly, to another person if the taking is for the purpose of private development or other private use of the property."

However, the current NH state statute dealing with eminent domain for utilities, RSA 371:1, is in need of updating to reflect the requirements of Article 12-a.

Part 2 of "Robbing the Poor" examines the history of efforts in 2011 to accomplish this update.

Northern Pass’s AG Filing: Just Plain Wrong on the Facts, Law and Policy

This is the second blog in a two-part guest series on Northern Pass's filing with the NH Attorney General's office on December 20, 2011. The first blog is here.


Two days ago Northern Pass made a formal filing with the Attorney General’s office seeking to block the Tillotson trustees’ agreement to conserve the bulk of the Tillotson land.  The Tillotson land would be conserved under a conservation easement with the Society for Protection of New Hampshire Forests. 

If they are approved by the AG’s office and become effective, the conservation easement and related instruments would prevent Northern Pass from routing their proposed transmission lines across the Tillotson land.  The Forest Society is currently conducting an $850,000 fundraising campaign to raise the money needed to pay for the easement.

Northern Pass’s filing is available here.

This blog analyzes the key arguments made in NP’s filing to support their claim that the conservation easement should be set aside insofar as it prevents the transmission lines.  We conclude that NP’s arguments are wrong on the facts, law and policy.  We believe it is highly likely the AG’s office will reject NP’s filing and will approve the conservation easement.

NP’s Argument 1:  NP opposes only the prevention of the transmission lines, not the conservation of the remaining land.

The two are inseparable.  There is little point in conserving the Tillotson land if the land will be crossed by Northern Pass’s massive, visually shocking above-ground transmission lines.  Conservation easements are all about the preservation of the landscape, and a landscape ruined by a string of HVDC transmission line towers up to 135’ tall does not have substantial preservation value.  The Tillotson trustees were entirely reasonable in determining that a core element of the conservation easement would be the prevention of Northern Pass’s lines.

NP’s Argument 2:  The conservation easement is unfair because it allows the Tillotson interests to use part of the property for a wind farm and related connector lines.  If this is allowed, Northern Pass should be allowed on the land as well.

The use reserved by the Tillotson interests is fully consistent with a resort property and other conserved land.  You don’t need to look any further than the Mountain View Grand Hotel (powered in substantial part by a new windmill).  Visually, the connector lines that would carry power to the Balsams Hotel or deliver excess power to the grid would be a fraction of the scale of NP’s proposed lines and, unlike NP, could easily co-exist with the natural environment. Northern Pass’s argument compares apples to oranges.

Wind power development on the Tillotson land would represent a local renewable resource with the power generated locally and available locally.  Northern Pass would simply cross over New Hampshire to bring Hydro-Quebec’s non-renewable power to southern New England, while wind development on the Tillotson land would further New Hampshire’s renewables energy policies and have clear local and New Hampshire benefits. More apples to oranges.

NP’s Argument 3:  The Tillotson trust can get another $2.2 million (more money for trust purposes) by selling a transmission line right of way to Northern Pass and conserving the rest of the property, and failing to pursue this additional money is a breach of the trustees’ fiduciary duties

As noted earlier, there is little point in conserving any of the Tillotson land if the conservation value of the land is ruined by Northern Pass’s lines.  Conservation and the transmission lines are simply inconsistent.  The notion of an “additional $2.2 million” (filing, p.2) is patently ridiculous. 

The trustees chose to conserve the land rather than allow the land to be crossed by NP’s transmission lines. This was (and is) an “either/or” decision. What Northern Pass is really arguing – a stunningly arrogant position -- is that their transmission lines are somehow more important than conserving the Tillotson land.
The trustees saw it differently, and their decision to conserve the land rather than grant a crossing to NP is fully within the trustees’ discretion under the suite of principles specified in the trust documents. The decision fully comports with the trustees’ fiduciary obligations.

The overarching purpose of the trust is to benefit the North Country and its residents. Under the trust documents the trustees are directed to give special consideration to, among other things:

§ “conservation and sustainable utilization of the natural resources of the North Country, including Tillotson Corporation’s North Country forest land holdings”;

§ “economic development and enhancement of the North Country economy”;

§ “promotion and support of the health, education, cultural advancement and economic well being of the residents of the North Country.”

Northern Pass’s core argument – that the transmission lines would generate additional money for the trust – fails entirely to account for these key mandatory principles of stewardship of the trust. Nowhere do the trust documents say that these core principles are somehow subordinate to dollar values. Indeed, the better argument is that these principles trump questions of dollars and cents.

When the express trust principles are considered, NP’s position melts away. It is beyond serious argument that Northern Pass’s proposal — to cross the Tillotson land and bisect other beautiful and largely untouched areas of the North Country with visually jarring, environmentally damaging and value-destroying above-ground transmission lines — is flatly inconsistent with the trust’s mandates. The lines would damage the Tillotson land and could impair the prospects for successful revival of the Balsams Hotel. More generally, the North Country’s natural resources would be irrevocably compromised; economic development in the region would be seriously impaired; and the well being and sense of place of North Country residents would be critically damaged.

Northern Pass erroneously argues that this is all about money and nothing else.  But even on the narrow money front, NP’s position leaves out most of the important stuff.  NP’s argument looks only at purchase price of the transmission line easement.  NP fails to quantify, or even recognize, the many quantifiable “negative externalities” from the lines.  Property value declines, damage to the prospects of the Balsams Hotel, harm to tourist businesses and related activities, and measurable declines in the sense of place and well being of North County residents would almost certainly, in combination, exceed the $2.2 million purchase price offered by NP. 

It gets worse for Northern Pass’s narrow money position.  We believe that even after considering the quantifiable positive effects of Northern Pass’s proposal (tax revenue, some temporary jobs, etc.), it is highly likely that the net financial impact of an easement sale to Northern Pass would be negative.

The bottom line is that even if it were all about the money (which it is not!), NP’s argument would fail.

NP’s Argument 4:  The trustees bowed to “what we know to be focused political and personal pressure in opposition to Northern Pass.”

The trustees did an exceptional job of coming to a decision that carries out the purposes and intents of the trust and benefits the North Country.  And three cheers for the opposition for supporting the trustees with principles-based commentary. 

Unlike Northern Pass, which plays politics (via its affiliates) with money and favors, the opposition doesn’t try to buy political decisions.  The opposition’s tools are limited to sound ideas, proposals and discussion.

NP’s Argument 5:  The trustees carried on parallel negotiations with Northern Pass and also on the conservation easement and chose the conservation easement without any detailed explanation to Northern Pass of why its offer was rejected.  The trustees never told Northern Pass that the transmission lines may be inconsistent with the trust principles

So what?  It’s standard practice in business and in real estate transactions to negotiate with multiple parties, bring all parties to their best deal, and then make a decision.  Sellers don’t have to share any of their thoughts or considerations. 

Northern Pass seems to be asking the AG’s office to “feel their pain” from being left at the altar, but this is simply not a relevant argument.  The Tillotson trustees have no obligation whatsoever to explain their considerations to Northern Pass either before, during or after negotiations.

NP’s Argument 6:  If you don’t go along with us, we’ll sue everyone in sight.  “We hope that this will be resolved appropriately through the exercise of the Attorney General’s supervisory authority over the Tillotson Trust and that litigation over this important issue can be avoided” (filing, p. 6).

Litigation threats roll so smoothly off the tongues of Northern Pass’s hired guns.  This one is a doozy.  As best we can tell, Northern Pass is threatening to sue the Tillotson trustees and the Attorney General’s office if they won’t agree to crumble and go along with what NP wants.  Maybe even the Forest Society. 

But just imagine. Northern Pass, a front for a Connecticut investor owned utility corporation, sues two New Hampshire charitable organizations, the Tillotson trust and the Forest Society, and the NH Attorney General’s office! Does Northern Pass seriously believe that if it tied up the project in protracted litigation, wasted NH taxpayer dollars for defense, attacked two charitable institutions, and burned whatever bridges it may have left in NH that it would ever be able even to bury a transmission line in this state?

Northern Pass Tries to Torpedo Tillotson Conservation Easement

Yesterday Northern Pass made an emergency filing with the New Hampshire Attorney General’s office seeking to overturn the Tillotson trustees’ decision to conserve the bulk of the Tillotson land. The filing is available here. This guest blog presents an overview of the filing and looks at the larger implications of this extraordinary document. The second blog in this two-part series analyzes more specifically the six reasons why Northern Pass's filing will fail.

Northern Pass's emergency filing lays bare its arrogance, corporate greed and disregard for the common good.  It also shows that the entire Northern Pass proposal is hanging by a thread.

As an overview, Northern Pass makes the patently absurd argument (based on a fundamental misunderstanding of the principles of the Tillotson trust) that its proposed transmission lines provide more benefits to the North Country than conserving the Tillotson land.  Northern Pass attacks the Tillotson trustees by claiming they have breached their fiduciary duties.  Finally, Northern Pass makes broad threats of litigation, apparently against all parties including the Attorney General’s office itself.

We’re fully confident the Attorney General will summarily reject Northern Pass’s filing and will approve the trustees’ sound decision to conserve the Tillotson land.  But to be sure the voice of the people is heard, please email your comments to Mr. Blenkinsop at the Attorney General’s office at anthony.blenkinsop@doj.nh.gov.  Mr. Blenkinsop is in charge of this matter.  Please ask him to approve the conservation of the Tillotson land.

After you email Mr. Blenkinsop, take a step back and think about this situation.  Things are not looking good for Northern Pass.

First, Northern Pass has now lost any remaining credibility in the eminent domain debate.  Northern Pass’s original proposal in October 2010 would have relied on massive use of eminent domain to ram the transmission lines over the property of non-consenting landowners and through the very heart of the North Country.  After a huge public uproar, Northern Pass supposedly saw the light and said it would find a new route through the North Country based on “consensual” transactions – that is, willing sales by landowners.

Now, an important landowner – the Tillotson trust – has decided it does not want to sell to Northern Pass.  The trustees instead made a sound decision under the principles of the trust documents to conserve the land and prevent Northern Pass’s transmission lines from crossing the land.  That should be the end of the story for this piece of land.  A landowner decision should be respected, and Northern Pass should move on and look for a different route.

But Northern Pass doesn’t respect landowners and doesn't have the integrity of its word.  “Consensual” is no longer part of Northern Pass’s dialog.  Instead, with the filing made yesterday, Northern Pass is seeking to use the force of government (here, the Attorney General’s office) to compel the Tillotson trustees to sell an easement for the transmission lines.

Down in Concord, our legislators should be saying “fool me once, shame on you, fool me twice, shame on me.”

If this is what a “consensual” transaction with a landowner looks like to Northern Pass, you can’t have any doubt that Northern Pass will seek to use eminent domain against non-consenting landowners up and down the proposed route.  Northern Pass simply has no credibility left when it talks about consensual transactions or commits to seek alternatives to eminent domain.

Second, yesterday’s filing shows that Northern Pass has been blocked in finding an alternative route in Coos County.  Northern Pass or its affiliates have now spent more than $7 million buying up properties in an attempt to cobble together a new route for the transmission lines.  They have been fully blocked at the Tillotson land, and there is no apparent way around this block.

With massive use of eminent domain politically impossible in New Hampshire (and any use of eminent domain almost certainly legally prohibited), what options does Northern Pass have left?  We believe they have no viable alternatives in Coos County.

Third, PSNH and Northeast Utilities are rapidly losing any remaining credibility in the political halls in Concord and, more importantly, with the paymasters at Hydro-Quebec.  PSNH promised it could deliver HQ a route for the lines through New Hampshire.  PSNH promised a “cheap” route using above-ground transmission lines.  PSNH thought it had the political muscle in Concord to push through the environmental injustice of yesterday’s technology of above-ground lines. 

With no route through Coos County, this vision is now falling away.  Concord’s politicians (and HQ) are undoubtedly wondering about the end game and their own credibility for going so far out on the limb to support PSNH.

We expect even long-time PSNH acolytes like Jeb Bradley to see the writing on the wall.  They’ll quietly begin to distance themselves from the PSNH/Northern Pass Titanic before it goes down.

And Hydro-Quebec must at this point realize they were sold a bill of goods.  PSNH can’t deliver what it promised.  Indeed, PSNH’s huge missteps have damaged HQ’s reputation and put into doubt whether any HQ transmission lines will be able to cross New Hampshire.  We expect HQ will soon put a freeze on further spending on Northern Pass and will start to look seriously at alternatives such as buried lines on state-owned rights of way or transactions in other states.

The blog continues here.

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Please email your comments to Mr. Anthony Blenkinsop at anthony.blenkinsop@doj.nh.gov