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The City of New London, Connecticut (defendant) hoped to create jobs and increase property tax revenues by revitalizing the area surrounding the newly built research facility of pharmaceutical giant Pfizer, Inc. The city approved a development plan that required it to seize private property to be sold to developers, who would construct new commercial and residential complexes.
Kelo and other property owners (plaintiffs) in the areas subject to condemnation sued, arguing that the city using its eminent domain authority to take property for private development violated the public use requirement of the Fifth Amendment.
The case made it to the U.S. Supreme Court. The majority upheld the taking, concluding that public use was a broad enough concept to encompass takings of property for private development meant to confer economic benefits on the public.
Two dissents countered that Kelo v. City of New London, 545 U.S. 469, had effectively gutted the public-use requirement and paved the way for the government to seize property from the poor and give it to the rich, who could make more economically beneficial use.
The sad epilogue to the case is that the private development never came to fruition, Pfizer closed the New London facility, and the property seized has lain vacant since.