I've previously argued that the Constitution does not (and should not) prohibit state takings that violate standards in the Fifth Amendment (see: A Libertarian Defense of 'Kelo' and Limited Federal Power; also More on Kelo and Federalism and related links here.
In today's Cato Daily Dispatch, there's an item entitled "Property Owners Win Big Ohio Ruling":
"In a signal embarrassment for the U.S. Supreme Court, the Ohio Supreme Court ruled unanimously Wednesday that a Cincinnati suburb can't use eminent domain to take private property for a $125 million multiuse redevelopment, Investor's Business Daily reports.
"It was the first challenge of a city's right of eminent domain to be decided by a state high court since the U.S. Supreme Court ruled last summer that economic benefit constitutes 'public use' under the Constitution."
In "Eminent Domain Blinds Bureaucrats to Their Duty," [libertarian centralist/Lincoln idolator] Timothy Sandefur ... writes: "Nobody's going to invest in a place where property can be stolen, or condemned, at any moment. In fact, experience shows that redevelopment doesn't require the use of eminent domain. Seattle recently completed a major redevelopment project without it. Even the Disney theme parks were built without using eminent domain. Unfortunately, eminent domain abuse not only blinds officials to the possibilities of free-market development; it also distracts them from their legal and ethical duties."
Was the ruling an "embarrassment" for the feds? Well, in a way, I would argue Cato is partly right here: the state court "got it right" in construing the "public use" standard of its own constitution in a narrower and more common sense way (I assume; I have not read the decision); whereas the Supreme Court stretched a similar standard in the federal Constitution beyond all recognition to include certain private uses. Of course, it is not considered unconstitutional for a state to give citizens more rights than the federal Constitution requires; only if it denies those baseline rights. And a state may construe its own constitutional rights grants more broadly than the same language in the federal Constitution. So it is really not an "embarrassment" for the states to rule differently than the feds; or to grant greater rights protection. This is an expected result of our federalist scheme. But you wouldn't expect centralists to recognize this.
In fact, this case undercuts the hysteria over the Kelo case, which argued that because the feds will not stop states from allowing private-use-takings, this endangers property rights. Under this view, held by Sandefur and other centralists, the central must state to have power to strike down state laws it dislikes, on the grounds that property is not secure otherwise. You don't want a situation "where property can be stolen, or condemned, at any moment," after all. But this was the attitude of various libertarian Constitution- and federal government-worshipping centralists, including many Objectivists: Kelo spells the "end of property rights," breathlessly said many a centralist.
This central-state-worshipping view rests on the notion that our only real protection from state or even federal action lies in the paper federal Constitution-as-construed-by-the-federal-courts. It is a view that ignores the many other structures and limits on state action: there are horizontal separation of powers (the tripartite division of government, at both the state, and federal, level); bicameralism; supermajority requirements; written constitutions; bills of rights; democractically elected legislators; and, as this case shows, federalism, or vertical separation of powers. It is a view that wants to empower the federal courts to oversee the states, and thus a view that iimplicitly views the feds as being "better" and federal judges as being of "higher quality" and more trustworthy than state courts.
Of course, this case belies that notion, since the state courts were here better than the federal courts. The result here shows that there are structures and institutions that help to limit state power other than the federal courts--so even if the Supreme court rules that states "may" constitutionally take private property for "private" use, it is still not the case that "property can be stolen, or condemned, at any moment." After all, a state court might stop it. And if they don't, maybe the legislature will. And if they don't, maybe the people will vote them out. And if they don't, maybe certain productive people will tend not to move there, or emigrate, thus impoverishing that state and putting more pressure on it to adopt better policies. And so on.
