Sotomayor Testifies Regarding Eminent Domain

Judge Sonia Sotomayor was asked for her opinion regarding Kelo v. City of New London during her confirmation hearing. Sen. Herb Kohl questioned her about the controversial Supreme Court 2005 ruling that a taking for economic development satisfied the “public use” requirement of the Fifth Amendment even if the property would be sold or leased to private entities.

Judge Sotomayor was asked, “What is your opinion of the Kelo decision, Judge Sotomayor? What is an appropriate, quote, “public use” for condemning private property? She responded:

Kelo is now a precedent of the court. I must follow it. I am bound by a circuit -- a Supreme Court decision, as a 2nd Circuit judge. As a Supreme Court judge, I must give it the deference that the doctrine of stare decisis would suggest.

The question of the reach of Kelo has to be examined in the context of each situation. And the court did in Kelo note that there was a role for the courts to play in ensuring that takings by a state did in fact intend to serve the public -- a public purpose and public use.

I understand the concern that many citizens have expressed about whether Kelo did or did not honor the importance of property rights. But the question in Kelo was a complicated one about what constituted public use, and there the court held that a taking to develop an economically blighted area was appropriate.

 

Dodd And Frank Ask Regulators To Address 2nd Mortgage Valuation Issues

Senate Banking Committee Chairman Chris Dodd and House Financial Services Chairman Barney Frank sent a letter to the heads of the bank regulatory agencies asking them to address whether banks are inflating the value of 2nd mortgages on their balance sheets. They stated in the letter that these inflated values discouraged proactive efforts to modify and restructure mortgage loans and “crippled” programs designed to prevent foreclosures. The letter further states, “Across the country housing prices have dropped and many Americans owe far more on their mortgages than their homes are worth.” The Appraisal Institute commented on the letter by stating, “The letter was generated in an effort to make available refinancing opportunities for struggling homeowners who are currently not eligible for mortgage modifications because their loans do not reflect current market values.”