On June 23, 2005, the Supreme Court of the United States decided the case of Kalo v. City of New London, in which a majority of the Court determined, among other things, that the "public use" provision of the United States Constitution should be broadly interpreted to effectuate legislative judgments as to what particular needs justify the use of the power of eminent domain.

The result in Kalo as a plurality decision, reflecting the Court's deep division on the question presented, namely, whether private residential real property may be the subject of eminent domain in order to satisfy a public purpose such as a planned development.

The result of the Kalo decision was that, where there existed a comprehensive plan of development that is deemed to satisfy the public purpose provision of the Constitution, even though the "motivation" for the plan might be economic development, municipalities could use the eminent domain power to achieve the desired end as long as all parties' legal rights were established in the process.

The Kalo majority opinion specifically emphasized that nothing in the decision should preclude a state from placing further restrictions on the takings power.

One of the issues faced by the Court was the appropriate line between public and private property use. Under the settled law of the State of New Jersey, the limitless sovereign power of the State may be employed to take real property as may be required for public safety, necessity, convenience or welfare so long as just compensation is paid the owner, but it is for the legislative branch of government to determine what constitutes a public use to limit that broad power, with the result that the power is to be used in a reasonable, non-arbitrary manner, and not greater than necessary to effectuate the public use.

The Borough of Englewood Cliffs believes that one of the primary purposes of government is to protect the rights of owners or occupants of residential real properties and commercial properties within the Borough against governmental takings that do not have, as their goal, either (a) the transfer of private property to public ownership for the creation of, for example, a road, hospital, military base or public housing or (b) the transfer of private property to private owners for the specific purpose of making the same available for public use (e.g., railroad, public utility, stadium or public housing).