For purposes of the Fifth Amendment's Takings Clause, promoting economic development is a traditional and long accepted function of government. There is, moreover, no principled way of distinguishing economic development from the other public purposes that the United States Supreme Court has recognized.
The City of New London exercised its power of eminent domain and seized private properties pursuant to an economic development plan. Nine property owners contested the expropriation as the properties were going to be sold to private developers which they argued did not constitute public use. During trial, the court prohibited the taking of some properties. The Connecticut Superior Court upheld all takings. The owners petitioned for a writ of certiorari with the United States Supreme Court.
Does the taking of private property by the state for use by another private property for further economic development constitute "public use" under the Fifth Amendment?
The Court found that the development plan served a public purpose and therefore constituted a public use under the Takings Clause of the Fifth Amendment. The plan was not adopted to benefit a particular class of identifiable individuals. Although the owners' properties were not blighted, the city's determination that a program of economic rejuvenation was justified was entitled to deference. There was no basis for exempting economic development from the broad definition of "public purpose."