Didden v. Village of Port Chester is potentially the most important federal public use eminent domain case since Kelo v. City of New London.

I recently coauthored an amicus brief on behalf of myself and seven other legal scholars specializing in property and eminent domain, urging the Supreme Court to hear this case. The brief is available here. Among the signatories are Richard Epstein (University of Chicago), Jim Ely (Vanderbilt), Viet Dinh (Georgetown), Ben Barros (Widener); Eric Claeys (St. Louis University); Adam Mossoff (Michigan State); and my colleague Steve Eagle. Here is a brief description of the facts:

[T]wo Port Chester [New York] property owners joined with the Institute for Justice (the public-interest law firm that litigated the Kelo case) to ask the Supreme Court to look again at the issue of eminent domain abuse and ensure that lower courts do not read Kelo to completely eliminate judicial review. The case illustrates the dangerous results of the Kelo decision and asks what should be an easy question: Does the Constitution prevent governments from taking property through eminent domain simply because the property owners refused to pay off a private developer?

In 2003, private developer [Gregg Wasser] approached Bart Didden and Domenick Bologna with a modest proposal: they could either pay him $800,000 or give him a 50 percent interest in their proposed business, or he would cause the Village of Port Chester to take their property from them through eminent domain. Outraged, they refused. The Village condemned their property the very next day.

Bart and Domenick filed suit in federal court, arguing that the taking violated the Fifth Amendment of the U.S. Constitution, which only allows property to be taken for a "public use." Shockingly, the trial court threw out their case, and the Second Circuit agreed. Because their property lay within a "redevelopment area," a region the Village had designated as subject to its eminent domain power, the Constitution didn't protect them from condemnation, even though they had alleged that they were condemned solely because they resisted the developer's attempted extortion....

"What the developer and Village of Port Chester did is nothing short of government-backed extortion," said Didden. "I had an agreement to develop a pharmacy, a plan fully approved by the Village, and in the eleventh hour I was told that I must either bring this developer in as a 50/50 partner or pay him $800,000 to go away. If I didn't, the City would condemn my property through eminent domain for him to put up a pharmacy. What else can you call that but extortion? I hope the Supreme Court sets things right."

The crucial legal issue involves an ambiguity in Kelo. It's not clear whether or not Kelo permits pretextual condemnations within "redevelopment areas." Kelo held that condemnations for "economic development" purposes should get nearly absolute deference from judges so long as they are part of an "integrated development plan;" moreover, courts are not supposed to "second guess" the quality of the plan, so even very poor plans that have little chance of achieving their objectives and blatantly favor private interests can still immunize condemnations from challenge. However, Kelo also emphasized that "pretextual" takings - where the stated public interest rationale is just a cover for the true purpose of benefiting a "private party" - are still forbidden. In an important concurring opinion to the 5-4 decision, Justice Kennedy called for heightened judicial scrutiny of condemnations where there is a legitimate suspicion of "favoritism" towards a private party.

It's hard to find a more blatant example of pretextual condemnation and "favoritism than the Didden case. The plaintiffs' property was only condemned because they refused to pay $800,000 to Wasser. Had they given in to Wasser's threats and paid him the money, there would have been no public benefit, because the money would have gone into Wasser's pocket, not the Village treasury. Moreover, Wasser's planned use for the property - building a Walgreens pharmacy - is almost exactly the same as the current owners (who plan to open a CVS). So there is no potential economic gain to the community from transferring the land to Wasser; indeed, the area's taxpayers will be net losers because they will have to foot the bill for the condemnation. Nonetheless, the condemnation did occur within a designated "redevelopment area," so the Second Circuit Court of Appeals held that it is immunized from legal challenge under Kelo.

In our amicus brief, the other property professors and I argue that Kelo should not be interpreted as a blank check for pretextual takings in redevelopment areas. Otherwise, private interests across the country could follow Wasser's example and use the establishment of redevelopment areas as a tool to extort money from area property owners. There are hundreds, if not thousands, of redevelopment areas around the country, so there is a great deal of potential for abuse if the Second Circuit's approach to this issue prevails.

Even if the Supreme Court reverses Didden, it will eliminate only some of the most blatant cases of eminent domain abuse. Kelo and most of the harmful takings it authorized would still continue in place. However, overruling Didden would still be an important step forward in combatting blatantly pretextual takings.

CONFLICT OF INTEREST WATCH: The property owners in this case are represented by the Institute for Justice, the libertarian public interest law firm that also represented the New London property owners in Kelo. As I have mentioned on this blog in the past, I worked for IJ as a summer law clerk in 1998 and have done several pro bono amicus brief projects for them since then.

UPDATE: In addition to the professors who signed on to the brief, I would also like to recognize the contributions of Nazish Agha of Cadwalader, Wickersham & Taft, who helped prepare the brief and also arranged for her firm to finance the printing and filing of the brief as a pro bono project. As experienced appellate lawyers know, it costs a good deal of money to print and file a Supreme Court brief, so CWT's assistance was extremely helpful.