In 2005, however, in a 5-4 decision, the court radically attenuated the "public use" restriction on takings, saying that promoting "economic development" is a sufficient public use. The court upheld the New London, Conn., city government's decision to seize an unblighted middle-class neighborhood for the purpose of turning the land over to private businesses which, being wealthier than the previous owners, would be a richer source of tax revenues. So now government takings need have only some anticipated public benefit, however indirect and derivative, at the end of some chain of causation hypothesized by the government doing the taking and benefiting from it.
In a brief opposing the Illinois Legislature, the American Legislative Exchange Council, an organization of state legislators, makes this argument against "predatory taxation": Suppose Congress, eager to aid newspapers hurt by competition from new information technologies, decides to take a percentage of the assets of Bill Gates and half a dozen other beneficiaries of those technologies, and give the money to newspapers. Would not this "take and transfer" scheme be unconstitutional? Targeting specific, identifiable persons or entities for unfavorable treatment, and transferring their assets to equally identifiable persons or entities, surely also raises equal protection issues.
Unquestionably a legislature can impose a levy on casinos if the revenues become subject to what the state legislators' brief calls "allocation via the familiar push and pull of political decision-making." But Illinois' confiscation of riverboat revenues is a private-pockets-to-private-pockets transfer, without even laundering the money through the state treasury.
The Supreme Court has held that "one person's property may not be taken for the benefit of another private person without a justifying public purpose." But in the aftermath of the court's ruling in the New London case, the Illinois Legislature merely seeks judicial deference toward its judgment that transferring wealth from casinos to racetracks serves the public purpose of benefiting "farmers, breeders, and fans of horse racing."
The court's virtual nullification of the "public use" requirement encourages lawlessness, which will proliferate until the court enunciates the constitutional principle that the takings clause protects money, like other forms of property, against egregious seizures. Enunciating such a principle would be a step toward restoring meaning to the "public purpose" clause.
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