July 17, 2019
By Timothy Sandefur

Supreme Court Justice John Paul Stevens, who died yesterday at the age of 99, will likely be remembered principally for his abysmal decision in the 2005 eminent domain case of Kelo v. New London, but in his earlier years on the Court, his rulings were marked by a healthy skepticism toward the danger of overarching government.

In 1984, for example, Stevens dissented in a case called Hoover v. Ronwin that challenged the power of regulators who exploited licensing laws to protect themselves from competition. The lawsuit was an antitrust case against the Arizona Committee of Bar Examiners, which limited the number of people who could pass the bar, not based on their competence as lawyers, but simply in order to ensure that existing lawyers didn’t face too much competition. The Court dismissed the case, holding that the state government had blessed this monopolistic arrangement, and that was enough. But Stevens disagreed, pointing to the dangers inherent in occupational licensing laws. “Private parties have used licensing to advance their own interests in restraining competition at the expense of the public interest,” he wrote. Thus “whenever government delegates licensing power to private parties whose economic interests may be served by limiting the number of competitors who may engage in a particular trade,” courts should be wary. His opinion would be vindicated to some extent in the 2015 case of North Carolina Dental Board v. FTC.

Even more striking were Stevens’s views on the “rational basis test.” That’s the legal test invented in the 1930s to determine whether a restriction on private property rights or economic freedom is constitutional. (Other kinds of rights, such as free speech, get far stronger protections.) The rational basis test is tilted toward the government, so that a person challenging such a law must prove that it has no reasonable connection to a “legitimate government interest.” The rational basis test embodies the concept of “judicial restraint”—meaning that courts will stand back and allow government officials to do whatever they think will serve some public good.

In the 1993 case of FCC v. Beach Communications, Justice Clarence Thomas—then new to the bench—described the “rational basis test” in perhaps the most extreme terms ever used. Under that test, Thomas wrote, the actual facts of a lawsuit are “constitutionally irrelevant,” and judges must uphold the government’s actions if “any conceivable set of facts” can be imagined that would justify them. In other words, courts should ignore what actually happened and back the bureaucrats if it’s at all possible that their acts were justifiable in some imaginary alternative universe.

Stevens demurred. “This formulation sweeps too broadly,” he wrote, “for it is difficult to imagine a legislative classification that could not be supported by a ‘reasonably conceivable state of facts.’ Judicial review under the ‘conceivable set of facts’ test is tantamount to no review at all.” He cited one of his earlier opinions that made the same point: “if any ‘conceivable basis’…will repel a constitutional attack,” he wrote, “judicial review will constitute a mere tautological recognition of the fact that [lawmakers] did what [they] intended to do…. I believe the Constitution requires something more than merely a ‘conceivable’ or a ‘plausible’ explanation” for its actions.

But as the years went by, Stevens seemed to abandon his skepticism toward the extreme pro-government bias of the “rational basis test,” and in 2005’s Kelo decision, he used that test to conclude that state officials could seize land belonging to several homeowners in a quaint Connecticut neighborhood in order to transfer their property to private developers to build luxury condominiums instead—despite the U.S. Constitution’s requirement that all takings of property serve a “public” instead of a private use.

Since “promoting economic development is a traditional and long-accepted function of government,” he wrote, government officials could condemn the homes of Susette Kelo and her neighbors as part of a construction project that was meant to benefit the local economy. All the “public use” requirement of the Constitution really meant was that officials believed the project might serve some public benefit. That, of course, rendered all property subject to government seizures, since government officials can always be expected to assert that their actions serve the public good. As Justice Sandra Day O’Connor noted in her powerful dissent, Stevens’s ruling meant that “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.”

Kelo led to a nationwide outcry—bipartisan majorities in Congress denounced it, and several states passed new laws to restrict the use of eminent domain. Yet Stevens remained unrepentant. It was “the most unpopular opinion that I wrote,” he admitted in his memoirs, but he insisted that it “adhered to the doctrine of judicial restraint.” (That, of course, is true.) He believed that matters relating to private property rights “should be determined by the people through their democratic participation in enacting state laws”—despite the fact that the purpose of the Constitution was to limit the power of democratic majorities and to protect private property, no less than free speech or freedom of religion, against the tyranny of the majority.

In a career that spanned more than three decades, John Paul Stevens wrote dozens of important decisions, many of which vindicated constitutional rights and protected individual freedoms against the dangers of overweening government. And his early skepticism toward the rational basis case was well aimed. It’s unfortunate that his diligence flagged so notably in the Kelo case—and that his legacy will forever be tied to the homeowners whose injuries he and his colleagues left unredressed.

Timothy Sandefur is the Vice President for Litigation at the Goldwater Institute.

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