Town Snubs Wal-Mart, Citing Supreme Court

May 24, 2006 — -- A developing city east of San Francisco is the first place in the country to use the Supreme Court's eminent domain ruling to keep Wal-Mart out of its area.

The retail giant has 3,900 stores across the country -- nearly seven new stores open every week -- but there won't be one coming to Hercules, Calif., at this time.

Tuesday night, during a sometimes raucous meeting, the city council voted unanimously to take Wal-Mart's land by power of eminent domain. It's a power the Supreme Court affirmed for municipalities in a controversial New London, Conn., ruling, in which the city wanted to take private property for a commercial development.

The Hercules, Calif., land in question consists of a 17-acre stretch next to new homes, offering a view of the San Pablo Bay. The city did not want Wal-Mart to be the centerpiece of its planned waterfront.

Instead, city planners have looked for a more historic-looking development, with buildings that include apartments on the second floor and shops and restaurants on the ground floor.

Precedent for Other Towns?

Towns from Virginia to California have fought Wal-Mart in the past, claiming the chain would kill local businesses. But many more have welcomed the chain for its jobs and tax revenue, even using eminent domain to bring the chain in.

No one has ever used eminent domain to stop Wal-Mart, and in an ironic reversal of roles last night, the company's spokesman cried foul at the town meeting where it reclaimed the land.

"It's not right to take private property for political purposes," said Wal-Mart spokesman Kevin Loscotoff.

Still, some legal analysts said this strategy could be used elsewhere.

"I think it's an important precedent for towns across the country that are trying to maintain some control over what their actual physical makeup is going to be," said David Barron, a professor at Harvard Law School.

Wal-Mart has never gone away quietly, so this could be the start of a battle for the California town.