The New York Court of Appeals has issued its opinion in Goldstein v. New York State Urban Development Corporation, an important property rights case. The 6–1 decision upholds the condemnation of numerous properties in Atlantic Yards project area in Brooklyn for the purpose of transferring them to powerful developer Bruce Ratner, who plans to use most of the land to build a new stadium for the New Jersey Nets and to construct “luxury” housing. This outcome is not surprising. As I explained in this post, where I predicted the result, New York courts are among the most hostile to property rights of any in the country. New York is also one of only seven states that hasn’t enacted eminent domain reform of any kind since the federal Supreme Court’s controversial 2005 decision upholding “economic development” condemnations in Kelo v. City of New London.
Significantly the Court concluded that the property in question could be condemned because it is “blighted” and blight alleviation is a “public use” recognized by the New York Constitution, thanks to a constitutional amendment allowing the condemnation of slum areas. This despite the fact that it is very far from being a slum of any kind, and much of it is actually middle or lower middle class housing. Indeed, the opinion itself notes (pg. 14) that the Atlantic Yards area “do[e]s not begin to approach in severity the dire circumstances of urban slum dwelling” that led to the enactment of the blight amendment. To get around this problem, the Court held that “blight” alleviation is not limited to “‘slums’ as that term was formerly applied, and that, among other things, economic underdevelopment and stagnation are also threats to the public sufficient to make their removal cognizable as a public purpose” (pp. 15–16, quoting a 1975 decision).
Obviously, virtually any area occasionally suffers from “economic underdevelopment” or “stagnation” and therefore could potentially be condemned under this rationale. Moreover, even under this expansive definition of blight, the decision states that courts can only strike down a condemnation if “there is no room for reasonable difference of opinion as to whether an area is blighted.” With respect to any neighborhood, there is nearly always “room for reasonable difference of opinion” as to whether the area is “underdeveloped” relative to some possible alternative uses of the land in question. Defining blight this broadly and then deferring to the government’s determination of whether such “blight” actually exists effectively reads the public use restriction out of the state constitution. I highly doubt that New York state constitutional amendment allowing condemnation of “substandard and insanitary areas” (Article XVIII, Section 1 here) would have passed had it been understood to mean that virtually any area could be declared blighted and condemned. As with most other blight condemnation laws, the amendment was sold to the public as a tool for eliminating “slums” (a point the majority concedes).
Allowing government agencies to declare virtually any area “blighted” and then condemn it at will is an abdication of judicial responsibility to protect constitutional property rights. As Judge Smith points out in his dissent:
The whole point of the public use limitation is to prevent takings even when a state agency deems them desirable. To let the agency itself determine when the public use requirement is satisfied is to make the agency a judge in its own cause. I think that it is we who should perform the role of judges, and that we should do so by deciding that the proposed taking in this case is not for public use.
Unfortunately, New York is not the only state that has come to define “blight” so broadly that virtually property could be condemned. The same pattern is evident in numerous other states, including many that claim to have banned “economic development” takings since Kelo.
The case is also significant because it is the first major state supreme court defeat for property rights on a public use issue since Kelo. Over the last 10 years, the tide had been going the other way, with more and more state high courts applying restrictive definitions of “public use” and forbidding economic development takings of the kind upheld in Kelo, including important decisions in Ohio, Oklahoma, and Michigan, among others. Hopefully, Goldstein will not be the start of a counterrevolution.
UPDATE: I addressed the earlier federal litigation on this taking in this 2008 post, where I noted that the Second Circuit’s decision upholding the condemnation under the federal Constitution was probably required by Kelo, and also discussed some of the policy flaws with the Atlantic Yards project.
UPDATE #2: I have corrected a mistake in Judge Smith’s title (which is indeed, “Judge” and not “Justice,” as I originally stated). Just as New York confusingly refers to its supreme court as the Court of Appeals, while using the term “supreme court” for its trial courts, it also denies its high court judges the title used in most other states. In addition to issuing dubious property rights decisions, New York courts also have terrible nomenclature.
Martinned says:
Hang on, are they going to have the Nets play in New York while the Giants play in New Jersey?
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November 24, 2009, 4:18 pmIlya Somin says:
Hang on, are they going to have the Nets play in New York while the Giants play in New Jersey?
It would seem so. Perhaps the Nets should go back to calling themselves the New York Nets, as they did for a time when they played in the ABA.
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November 24, 2009, 4:27 pmMartinned says:
... American sports will never cease to amaze me.
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November 24, 2009, 4:54 pmAJK says:
A minor correction: the title for a person serving on the Court of Appeals is Judge, not Justice.
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November 24, 2009, 4:59 pmDan says:
Professor Somin: are you saying the opinion completely abdicated judicial review of state agency determinations of blight? From my (albeit brief) review of the majority opinion, it appeared the majority held that reasonable minds could disagree whether it was blighted, so they would defer to the administrative determination. It also appeared that they reserved the question of when a state agency determination of blight would be so irrational/arbitrary as to warrant judicial repudiation. I may be wrong on this.
Also, I found suprising, as a watcher of the New York Court of Appeals, that Judge Graffeo sided with the majority opinion. She was appointed by Governor Pataki, and generally she sides with Judge Smith, Judge Piggott, and Judge Read (fellow Pataki appointees.) Not only did she not join Judge Smith’s dissent, she didn’t join Judge Read’s concurrence deciding for the developers on procedural grounds. My thought is that the appeal to separation of powers in the majority opinion may have been what persuaded her to join the majority, or it results from her stint as assistant counsel in the New York Division of Alcoholism and Alcohol Abuse (respect for administrative determinations primarily comes to mind)
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November 24, 2009, 5:01 pmIlya Somin says:
Professor Somin: are you saying the opinion completely abdicated judicial review of state agency determinations of blight? From my (albeit brief) review of the majority opinion, it appeared the majority held that reasonable minds could disagree whether it was blighted, so they would defer to the administrative determination.
As I noted in the post, given the broad definition of what counts as “blight” (any “underdevelopment” or “stagnation”), reasonable minds can pretty much always disagree over whether it is present. Thus, the decision does effectively abdicate judicial review, even though it doesn’t say it in so many words.
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November 24, 2009, 5:18 pmIlya Somin says:
A minor correction: the title for a person serving on the Court of Appeals is Judge, not Justice.
Thanks! I’ll make the correction.
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November 24, 2009, 5:19 pmKazinski says:
I think that could be useful, imagine a local or state government appropriating land from the Audubon Society or Nature Trust for “economic underdevelopment”.
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November 24, 2009, 5:26 pmCrunchy Frog says:
Whether or not the area to be condemned is ‘blighted’, doesn’t the new arena in itself constitute a ‘public use’? Who’s gonna buy tickets to Nets games, and countless other events? The public, that’s who.
Though why anyone would want to buy tickets to a Nets game is beyond my comprehension.
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November 24, 2009, 6:36 pmNickM says:
Aren’t the Nets already an example of blight?
Nick
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November 24, 2009, 7:51 pmIlya Somin says:
Whether or not the area to be condemned is ‘blighted’, doesn’t the new arena in itself constitute a ‘public use’? Who’s gonna buy tickets to Nets games, and countless other events? The public, that’s who.
The fact that members of the public might go to the game, doesn’t mean that it is a “public use” any more than the fact that members of the public might live in Ratner’s luxury condos does so. Otherwise, anything could be a public use, because virtually any land use involves some use by at least some members of the public. The traditional definition of a “public use” is either government ownership or a privately owned facility that members of the general public have a right to use as a matter of legal right (e.g. — a public utility that is legally required to serve any and all members of the public).
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November 24, 2009, 8:14 pmShelbyC says:
Well, doesn’t the fact that the public has to buy tickets from a private individual to get in make it a private use?
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November 24, 2009, 8:23 pmTim says:
You say the government agency can declare it blighted...however, in this case doesn’t the opinion say an outside consulting firm made that determination? Is that important?
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November 24, 2009, 8:34 pmmga2 says:
I have practiced on behalf of developers in condemnation of underused property and am of the opinion that there is essentially no tract of urban land that cannot fit the definition of blight.
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November 24, 2009, 8:46 pmCornellian says:
The whole point of the public use limitation is to prevent takings even when a state agency deems them desirable. To let the agency itself determine when the public use requirement is satisfied is to make the agency a judge in its own cause.
Seems like sound reasoning to me. I wish more people who make this argument in the context of property rights would adhere to it in the context of other rights as well, and not let the executive branch be the judge of whether it is justified in eavesdropping on your phone calls or locking you up without charges and without a trial.
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November 24, 2009, 10:39 pmAllan Walstad says:
On the up side, there are 49 other states to choose from when making a home. I’ve found New York (Finger Lakes mainly), much like California, to be a nice place to visit. Period.
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November 24, 2009, 11:55 pmspo says:
The payments should simply be well above market value. Like a premium of 33% for homeowners and small businesses with a kicker for special hardship. Yeah, people like where they live etc., but if someone gave me 33% more than my house was worth–I’d take it in a second.
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November 25, 2009, 5:47 amGuy says:
Multi-million dollar mansions are arguably underdeveloped in that there is probably a more economically efficient way to use the land (most of it isn’t producing anything at all), but why do I doubt the state of New York is about to seize large tracts of land in the Hamptons?
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November 25, 2009, 6:01 amEd Unneland says:
I don’t think New York has terrible nomenclature. A Supreme Court Justice explained to me that he had unlimited general jurisdiction, and that the Court of Appeals was added onto the judicial system later than Supreme Court (and was unfortunately first named the Court of Errors ... now that’s terrible nomenclature). This explanation was given to me in 9th grade on a trip to Adams Street. Must have been ’77 or ’78.
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November 25, 2009, 8:57 amWednesday Round-up | SCOTUSblog says:
[...] Supreme Court’s 2005 ruling in Kelo v. New London by both the WSJ Law Blog and NPR. Ilya Somin at The Volokh Conspiracy offers a lengthy commentary on the [...]
Martinned says:
Put simply: Republicans wouldn’t use eminent domain because they don’t believe in it, and Democrats don’t use eminent domain because they’d have to take the land from groups (like the poor) who disproportionally vote Democratic. Where’s the problem?
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November 25, 2009, 1:12 pmA.S. says:
This is not obvious at all. (More generally, whenever a lawyer says “obviously”, I immediately look there for the flaw in the argument.)
The contours of what “economic underdevelopment and stagnation” means isn’t clear at all from this opinion, and there is no reason to think that this problem affects “virtually any area”. (BTW, it also isn’t clear to me that either “economic underdevelopment” or “stagnation” are sufficient — the opinion uses the conjunctive not the disjunctive.)
Ilya is assuming a slippery slope here from the railyard and surrounding area of Brooklyn to virutally any other area in New York — Upper East Side, Wall Street, Chappaqua, where ever. His continued use of the words “virtually any area” to describe the areas that this opinion affects seems to me to be inappropriate. The words of the opinion — areas that suffer from economic underdevelopment and stagnation — should be used instead.
Also, FYI, my understanding is that the team will likely be called the “Brooklyn Nets”.
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November 25, 2009, 2:14 pmChristopher says:
Anyone who lives in Brooklyn knows that these claims about blight are absolute nonsense. Atlantic Yards lies wedged between two of Brooklyn’s most attractive neighborhoods, Fort Greene to the north and Park Slope to the south. It’s in the shadow of an enormous, highly-trafficked mall/shopping center, and the part of Atlantic Avenue that runs to the west of Atlantic Yards is packed with upscale shops and restaurants. Most of the empty lots nearby I would venture are the ones owned by Ratner already.
To put it another way: I would love to live within a quarter mile of Atlantic Yards, but I don’t have the $2000/mo. it would take to rent there. If Ratner builds his stadium there, it might become such a hassle to live nearby that prices would drop and I could actually afford it.
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November 25, 2009, 4:36 pmNickM says:
Martinned — the Hamptons is a very wealthy area on Long Island.
Nick
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November 25, 2009, 11:33 pmMartinned says:
Yes, I know. But I meant to agree with the earlier commenter: The Hampton’s aren’t in any immediate danger of being Keloed.
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November 26, 2009, 10:16 amRich Rostrom says:
If I had the money and political/insider skills to pull it off... I’d like to wait Ratner has a $billion or so invested — then have the property condemned and handed over to me on the same sort of dubious grounds.
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November 27, 2009, 4:02 amDaniel Goldstein: Governor Paterson’s New London | News from: The Huffington Post - Breaking News and Opinion says:
[...] last week’s ruling by New York’s high court—that the state could seize homes and businesses for Bruce [...]
Daniel Goldstein: Governor Paterson’s New London | Blogs on reviews and hotest trends says:
[...] last week’s ruling by New York’s high court—that the state could seize homes and businesses for Bruce [...]
Daniel Goldstein: Governor Paterson’s New London | Obama Biden White House says:
[...] last week’s ruling by New York’s high court—that the state could seize homes and businesses for Bruce [...]
The Volokh Conspiracy » Blog Archive » New York Appellate Court Invalidates Taking of “Blighted” Property for Transfer to Columbia University, but Contradicts State Supreme Court in the Process says:
[...] if there was “economic underdevelopment” or “stagnation” in the area. As I explained in this post, Goldstein allows state officials to designate almost any area as blighted and then condemn [...]
The Volokh Conspiracy » Blog Archive » George Will on “Blight” Condemnations in New York says:
[...] discussed the state high court decision upholding the Atlantic Yards condemnations in this post. For my earlier analyses of the case, see here and here. Will’s column also discusses the recent [...]
Twirip says:
Picking on Obama again?
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January 4, 2010, 9:49 pm