At the Intersection of Decentralizations: Privately Funded Courts

Business improvement districts (BIDs) have proliferated as a means of increasing property value in city commercial areas. Property owners in the district opt in to an assessment that provides funds for improved maintenance, beautification, capital improvements, community events, and enhanced security. BIDs allow willing property owners in cash-strapped cities to pursue development goals without increasing costs on citizens outside the BID. Unsurprisingly, they are extremely popular. New York, for instance, currently hosts fifty-six BIDs. Milwaukee, a city of less than a million people, has thirty-one.

Because of their prevalence, BIDs have become a central battleground for the struggle in cities between the public and the private. The objections to BIDs hinge primarily on their exclusionary bent: they are frequently anti-democratic, excluding non-property owners from influence in the BID. Critics point to a number of pernicious effects, such as the erosion of democratic involvement in community development, increased criminalization of minor offenses, and creeping privatization of public space. At worst, BIDs can look like private governance for the wealthiest citizens in the city. At best, they provide businesses with necessary encouragement to join, or rejoin, the city’s economic sphere.

The concerns about BIDs are particularly well-placed when BIDs establish their own justice processes. The issues raised by private policing in BIDs has been well-examined elsewhere. Private judgment, on the other hand, has received comparatively little attention. The rapid decentralization of the justice system from it’s paradigm of centralized, formal justice processes to community-based problem solving courts has been largely lauded by progressive reformers. When funded by BIDs, however, these “community courts” can become the enforcement wing of the private police.

Sudip Kundu, in a prescient article, examines the effects of private justice on the criminalization of homelessness in a BID. BIDs, focused on a “broken-windows” theory of criminality, are driven to crack down on all manner of minor offenses. This approach flows naturally into the criminalization of the homeless, who are frequently targeted for loitering, obstructing the public way, or public intoxication. When funneled by the private police into the private court process, their sentence presents a cruel irony: they are impressed into providing unpaid “community service” in the community from which they are excluded.

These private courts, however, have been drawing legal challenges. As Kundu notes, an early victory for opponents was Bogan v. Bonner, a St. Louis case holding that the funding of the community court by BID assessments improperly compromised judge’s impartiality. The judge’s salary was tied to the BID’s willingness to fund the court, which necessarily sought convictions for quality-of-life offenses. Therefore, the court found, judges had an impermissible incentive to convict. Other avenues for legal challenge include due process violations, either due to ineffective assistance of counsel or inappropriate intrusion into the plea bargaining process by an active community court judge.

As BIDs continue to increase in size and number, policymakers would do well to avoid expanding the specialized governance into the justice process. Community courts are created to replace the alienating, formal justice process that no longer persuasively speaks with the moral authority of the community. Attachment to the BID turns the community court into an even more alien process than the one it sought to replace: rather than purporting to speak for the people, it speaks primarily for business interests. Furthermore, neither the BID nor the city particularly benefit from the arrangement. Most states have already fully criminalized many of the incidents of homelessness, and the BID’s security force is already more than capable of activating that independent judicial process. In short, it would be best not to make it look any worse.


For further reading:

Sudip Kundu, Privately Funded Courts and the Homeless: A Critical Look at Community Courts, 14 J. Affordable Housing & Community Dev. L. 170 (2005)

Gerald E. Frug, The Seductions of Form, 3 Drexel L. Rev. 11 (2010)

David Alan Slansky, Private Police and Democracy, 43 Am. Crim. L. Rev. 89 (2006)

Craig M. Wheeland, Greater Cheltentham Avenue Business District: Fostering Business and Creating Community across City and Suburb, 3 Drexel L. Rev. 357 (2010)


About Matthew Lipka

Matthew Lipka is a 1L at HLS. Before law school, he worked at a transit agency and as a consultant with infrastructure and industrial companies and the public sector.

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