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Eduardo Penalver's Defense of Sotomayor's Didden decision:

Eduardo Penalver, a prominent property scholar, has written an interesting, but I think ultimately unsuccessful defense of Judge Sonia Sotomayor's ruling in the Didden case, which I described and criticized here, here, and here. As readers will recall, Didden involved a case where two businessmen's property was condemned because they refused to pay $800,000 to Gregg Wasser, a developer designated by the Village of Port Chester, NY as the primary redeveloper of its "redevelopment area" under a 1999 agreement.

Here is Penalver's argument:

At first glance, the facts of the case sound like Kelo redux, except with a developer on the receiving end of the condemnation instead of elderly homeowners. But there is a wrinkle. Language in Kelo left the door open for challenges to condemnations where the stated reason for the condemnation (in this case, economic redevelopment) is not the actual reason for the exercise of eminent domain — a sort of pretext challenge to condemnations. The plaintiffs in this case alleged that, after Port Chester had authorized the condemnation of land within the redevelopment district but prior to the actual condemnation of their parcel, the designated developer demanded an $800,000 payment from the developer/landowner to walk away from his power to condemn the parcel....

While I think there are some significant problems with the trial court's opinion, and while I disagree with the Second Circuit's use of a summary order, the case does not seem to me to be such a clear slam dunk for the plaintiffs that it should cause Sotomayor any serious trouble. The Liptak story [in the NY Times] made a great deal of the demand for the $800,000 payment, and rightly so. But the fact may be less obviously damning than initially appears to be the case.

The demand for the payment was made, as I understand the facts, by the developer granted by Port Chester the exclusive power to carry out redevelopment within the designated redevelopment area. That area included the plaintiffs' parcel. Now, I take it that the redeveloper agreed to take on his role because he stood to make a tidy profit from redeveloping the land within the redevelpoment area pursuant to the comprehensive plan and empowered with the ability to assemble parcels through the use of eminent domain. But the redeveloper certainly looked at the economics of the entire plan, and the profit to be earned from the plan as a whole. That profit would not come from every parcel or every individual element of the overall plan, but on the accomplishment of the redevelopment plan as a whole.

In the redeveloper's negotiations with the plaintiffs, the plaintiffs indicated that they wanted to redevelop their parcel within the redevelopment area (as part of a project that would have included some land they owned outside the redevelopment area) themselves, keeping the profits from that project for themselves as well. It appears to have been in the context of these negotiations that the redeveloper asked for the $800,000 payment in order to forgo condemnation and as his condition for allowing plaintiffs to, in effect, remove their parcel from the larger redevelopment area.

The plaintiff quoted in the story called this extortion. But it's not obvious to me that this is the best way to characterize the dynamics of the situation. If the redevelopment of the plaintiffs' parcel was one of the elements on which the redeveloper stood to make a substantial profit, foregoing his own monopoly right to redevelop that parcel (a right given to him by the city when it designated him the developer for the redevelopment project) would have altered (from his perspective) the economics of the larger project as a whole. In other words, if I'm reading the facts correctly... to earn the profits from that parcel would have represented a significant opportunity cost to the redeveloper, and, as such, his demand for some compensation for walking away strikes me as less sinister.

The key problem with Penalver's rationale is that the redevelopment agreement only gave Wasser the power to condemn property for the purposes of advancing the goals of the redevelopment plan, which the district court decision (available here) quoted as "to revitalize and beautify the Village's long neglected waterfront, eliminate a deteriorating downtown urban blighted area, bring sorely needed jobs to the Village, add to the Village's tax base, and importantly, bring the public back to the Village's downtown and waterfront." It did not give him the power to condemn property solely because the current owners refused to pay him money or grant other concessions in exchange for his forbearance. Had the agreement done so, it would have been a clear violation of federal constitutional restrictions on "pretextual" takings intended to benefit a private party (reaffirmed even in Kelo v. City of New London, as Penalver notes), and possibly also a violation of New York state law.

Penalver in effect suggests that, even if this taking wasn't needed to promote the redevelopment of Port Chester, it was constitutionally permissible because the owners' property helped to pay Wasser for his services in redeveloping the area. However, neither Kelo nor any other federal decision has ever held that the government can condemn the property of one individual in order to compensate some other private party for performing a public service. A program to pay public officials by condemning private property and transferring ownership to them would surely be unconstitutional. That conclusion is even more clear if the property is transferred to a private individual who isn't a government employee.

Penalver also argues that the Sotomayor panel's decision was justified by the fact that the owners had not filed their claims in time under the statute of limitations. As I noted in an earlier post, this point ignores the fact that Sotomayor's opinion decided the substantive constitutional issue as well. Even if Sotomayor was right about the statute of limitations question, she commmited a grave error in her extremely cursory resolution of the constitutional issue. The latter, of course, is vastly more important than the former and is the reason why the case has attracted so much attention.

Moreover, as I explained in this amicus brief (pp. 14-16) coauthored with several other property scholars, the Second Circuit's resolution of the statute of limitations issue was in fact inseparable from its resolution of the substantive question. The court had ruled that the three year statute of limitations expired in 2002, three years after the declaration of the 1999 redevelopment plan. However, this simply ignores the fact that the owners were challenging not the declaration of the plan as such, but rather Wasser's pretextual use of it in November 2003 as leverage for extorting money from them. Our amicus brief explains more fully why Kelo and other Supreme Court precedents allow owners to challenge pretextual takings even in cases where they occur within a redevelopment area. Indeed, as we explain there (pp. 11-12) the Kelo majority actually cited a 2001 case where a taking within a redevelopment area was invalidated as an example of the kind of pretextual condemnation that they believed to be unconstitutional.

Steve:
It did not give him the power to condemn property solely because the current owners refused to pay him money or grant other concessions in exchange for his forbearance.

Well, of course not, and no one is saying so. Penalver is arguing that Wasser was entitled to condemn the property under the development plan, and since that would have resulted in a profit for Wasser, there's nothing wrong with him expecting to be paid for foregoing that profit.

Your argument is that the mere fact he requested payment conclusively establishes that the "sole" reason for the condemnation was that the owners refused to pay him money. It establishes a "but for" cause, clearly, but if the taking was permissible under the original development plan, you can't declare that the request for payment retroactively makes the whole thing a pretext - no matter how many times you stomp your foot and call it "extortion."

Let's look at it this way. Absent the request for payment, you have a straightforward condemnation pursuant to a formal redevelopment plan - something that, like it or not, is basically untouchable at the Circuit level after Kelo. So when we add in the fact that the developer offered to forgo condemnation in exchange for a monetary payment, this changes what? Now the whole redevelopment plan is a pretext? Is there evidence in the record that the developer was systematically shaking everyone down in this fashion, as opposed to giving one landowner an opportunity to opt out of an otherwise unremarkable development plan?
6.16.2009 8:36pm
Henry T:
Penalver's argument seems to me as wrong as it could possibly be. His argument is premised on the idea that the developer had an actual legitimate right to the property, and was merely asking for money in exchange for not not exercising their rights.

But this is completely backwards. The property still belonged to the owner; since the mere creation of the redevelopment plan didn't actually pay the owners for their property, it couldn't possibly have transferred any ownership right to the developer.
6.16.2009 8:50pm
neurodoc:
Forgive the laziness, but would someone provide a few more of the possibly relevant facts - when the $800K "offer" was made that would have allowed Didden to keep and develop the property himself, did he know how much he would receive were the property to be condemned? What value was put on Didden's property for condemnation purposes? Any reasonable proportionality between the $800K to have back the development rights to his own property rather than have it condemned and what Wasser would invest in the whole redevelopment project and expect in "tidy profit" from the project as a whole? If Wasser had cared to, could he have broke the whole project into as many pieces as he wanted and sold them off to others, including those whose properties would otherwise be taken through condemnation, and walked away with whatever profits he could have amassed by flipping the individual pieces, or was he limited or precluded by a masterplan he had committed to when granted the redevelopment rights?
6.16.2009 9:09pm
ruuffles (mail) (www):
In case anyone forgot, the other two judges on the panel that agreed with Sotomayor were George W. Bush appointees.
6.16.2009 10:24pm
Gonzer Maven (mail):
I just love the academics who, in order to justify their preferred result ignore legal doctrine and go on about the facts (the case here), or ignore the facts and go on about abstract propositions of law.

The power of eminent domain is an attribute of sovereignty -- an inherent sovereign power that can be properly delegated for public uses, but may NOT be subdelegated or a fortiori bartered away by its possessor -- a well-settled constitutional no-no.

What the 2nd circuit opinion ignores is that the developer was trying to exact a price from Didden for having the Village refrain from condemning Didden's land. Thus, the exercise of this sovereign power in this case was controlled not by any public entity that could lay a claim to pursuing a public benefit to nsatisfy public necessity, but by a private individual acting in pursuit of his private gain. This made the result doubly illegal: (a) the control of the sovereign power was impropely surrendered by the Village to a private individual, and (b) the taking was not for a public use because, as I understand it, Didden was about to build a drugstore building himself, so taking his property and turning it over to the redeveloper for the construction of just such a building himself accomplished nothing.

With regard to point (a) above, you may want to dig up a comparatively recent Pennsylvania case (110 Washington Street, as I recall) in which the Commonwealth Court analyzes this problem and concludes that control of the sovereign power of eminent domain may not be turned over by the government entity to whom it was delegated by the legislature, to a private party so that he, not the public entity, gets to control when and under what circumstances the power would be exercised. As I read Penalver's analysis quoted by Ilya, he does not appear to understand any of this.
6.17.2009 1:17am
David Schwartz (mail):
Let's look at it this way. Absent the request for payment, you have a straightforward condemnation pursuant to a formal redevelopment plan - something that, like it or not, is basically untouchable at the Circuit level after Kelo. So when we add in the fact that the developer offered to forgo condemnation in exchange for a monetary payment, this changes what? Now the whole redevelopment plan is a pretext? Is there evidence in the record that the developer was systematically shaking everyone down in this fashion, as opposed to giving one landowner an opportunity to opt out of an otherwise unremarkable development plan?
It is, at least to me, self-evident that it changes absolutely everything. The condemnation was solely to benefit the public, not Wasser. It was not Wasser's right to give away and certainly not his to sell.

The "offer" from Wasser was as improper as asking for money not to file a criminal complaint. Either Wasser had the right to decide if the property would be seized or not. If not, then you cannot argue the right was his to sell. If so, he was acting as a public official selling his decision on a public issue for money to put in his own pocket.
6.17.2009 4:00am
arbitraryaardvark (mail) (www):

Arlington, Va.—The Institute for Justice today announced that it has successfully negotiated a settlement with the Village of Port Chester in the wake of a 2008 federal court victory by local businessman William Brody.
6.17.2009 7:31am
Brian S:

Absent the request for payment, you have a straightforward condemnation pursuant to a formal redevelopment plan - something that, like it or not, is basically untouchable at the Circuit level after Kelo.


This is like saying that, if a cop arrests a prostitute after demanding a bribe to not arrest her, it's not extortion because "absent the request for payment" it's a legitimate arrest.

The redevelopment authority granted the developer wide latitude to condemn property within a given area, but did not specifically identify what properties would actually be condemned. Because this means that the plan effectively delegated a state power to the developer and allowed him to use discretion to exercise it, we can judge the use of that discretion as we would judge any such exercise. And if a government official with a discretionary power demands a payment in exchange for not exercising that power, it's extortion, period, end of sentence.

I also can't believe that more isn't being made of the statute of limitations decision here. I know that most of our courts are so bound and determined to not establish takings precedents useful to property rights advocates that they will happily issue absurd rulings no matter what the facts, but this really takes the cake. These courts have actually ruled that the plaintiffs should have appealed a condemnation that had not happened yet. I am offended by any "redevelopment" taking of any kind, since Kelo was wrongfully decided. I'm double offended by an extortionate taking. I'm triply offended by an extortionate taking defended using logic that argues, "Well, the developer was granted a rent-seeking right to profit, so he was entitled to use extortion to make sure he maximized that profit". I guess the statute of limitations issue makes me quadruply offended, which is a pretty high level, I guess.
6.17.2009 7:42am
SamW:
"A program to pay public officials by condemning private property and transferring ownership to them would surely be unconstitutional."

Since when is a program to pay public officials unconstitutional? The only purpose of the Plan was to benefit the cities QOL and tax base, so it could profit government and the public of the City. Cities privitise all kinds of functions (from parking to garbage collecting), giving the government monopoly to a private party, in return for a spilt of the government profit, because a private actor will do a better job. So to, with the redeveloper, here.
6.17.2009 9:03am
jfalk:
There's a distinction to be made here, though I don't know enough of the facts to decide. (And I live next door to Port Chester.) Penalver's basic idea is that Port Chester outsourced eminent domain to someone who paid a market rate for the privilege of effective exercising eminent domain. At that point, Penalver suggests that the payment was actually simply a recoupment of part of his fee, ie, Didden was to pay him back what he already paid for the right to condemn the land -- that right would then pass to Didden, who, since he already owned the land, would have no need to condemn it, of course.
This is quite different than the case where a public official asks for a bribe, since he had no propertied interest in the right to declare eminent domain.
So, on Penalver's assumption that all the developer asked for was a payment not to exercise rights he's already paid for, isn't the whole problem whether or not he's allowed to buy those rights at all? If, as some of the commenters suggest, that action is itself illegal, then the analysis of what the developer then did with his responsibility ought to be irrelevant.
6.17.2009 9:26am
Steve:
This is like saying that, if a cop arrests a prostitute after demanding a bribe to not arrest her, it's not extortion because "absent the request for payment" it's a legitimate arrest.

I don't think it's like saying that, and I think Professor Penalver explains why.

But setting that aside, the issue in this case is not whether the demand for payment was proper. Feel free to swear out a criminal complaint over that if you like. The question is whether the taking was proper, and I don't think it can be said that the taking was "solely" due to the refusal to tender payment, not when the taking was already authorized pursuant to a bona fide redevelopment plan.
6.17.2009 9:38am
AF:
Penalver in effect suggests that, even if this taking wasn't needed to promote the redevelopment of Port Chester, it was constitutionally permissible because the owners' property helped to pay Wasser for his services in redeveloping the area.

Professor Somin is missing the argument. The point is not that the profit from the development of Didden's property compensates the developer. Rather, the point is that the development of Didden's property is part of the redevelopment plan and cannot be viewed in isolation without obscuring the economic realities of the situation.

There is no allegation that CVS was interested in Didden's property before the redevelopment project was underway or that the business opportunity was independend of the redevelopment project. On the contrary, the redevelopment project provided for a drugstore in that very location. So what Didden was trying to do was capture for himself the profits made possible, in fact expressly anticipated, by the redevelopment project. The developer reasonably asked Didden for payment in exchange for the opportunity to capture those profits. When Didden refused, the developer stuck to the original plan. At any rate that is the most plausible reading of the facts.

Now, the complaint was dismissed on 12(b)(6), so maybe there is some set of facts consistent with the allegations in the complaint that would constitute a Fifth Amendment violation. If so, the complaint should not have been dismissed under the old rule of Conley v. Gibson. Under the new Twombly/Iqbal regime, however, the dismissal may have been correct because plaintiff's allegations of extortion and pretext are implausible. See also Goldstein v. Pataki.

I am sure critics of Didden will join me in lamenting these new pleading rules that make it so difficult for plaintiffs to take advantage of the pretext exception to Kelo deference.
6.17.2009 9:47am
Gonzer Maven (mail):
David Schwartz is right. The power to exercise eminent domain was not the redeveloper's to sell, so he was asking for a lot of money in exchange for what? Nothing. Why nothing? Because it is another long settled principle of eminent domain law that not even the lawful possessor of that power can bargain it away. The power of eminent domain is legislative and a legislature may not contract away its power and thereby tie the hands of future legislatures. Therefore, contracts promising that the would-be condemnor won't exercise the power to take are ultra vires, void ab initio and unenforceable.

Had it been the Village that entered into such a contract it would not be bound by it, and it could proceed to condemn the subject property anyway. A fortiori, in this case this would not even have been [an invalid] contract with the Village because the consideration would have gone to the redeveloper, not the Village.
6.17.2009 10:02am
SamW:
AF, exactly right, that is the most plausible reading of the facts. It also explains why Didden did not object to the Plan when it was adopted. The Plan raised the value of his property, only later when he sought to opt out of the Plan and keep the profit, the Plan created, did he suddenly object (too late).
6.17.2009 10:11am
Brian S:

The Plan raised the value of his property, only later when he sought to opt out of the Plan and keep the profit, the Plan created, did he suddenly object (too late).


Imagine a scenario where a town contracted out a road-building plan that would require eminent domain to a private developer.

That private developer can choose from among a range of properties to condemn to build the road.

Whatever properties he does not choose will rise in value because they will have new road front.

If that developer went to each property owner in question and said, "If you give me half the anticipated rise in value of your property if I don't choose it, I won't choose it. But if you won't play ball I'll make your property one of the ones I take, so you'll be screwed," it's cut and dried extortion. It would absolutely not be a "reasonable demand by the developer for part of the profits".

The fact that some government scheme potentially raises the value of your property does not make that increase less yours. It does not mean that you aren't entitled to object when someone tries to extort you out of it. If that was true, then no property anywhere in the country is rightfully owned [since the value of every parcel in the nation is at least partially dependent on government action] and no one can ever be extorted in connection with eminent domain. Is that what you're arguing?


The question is whether the taking was proper, and I don't think it can be said that the taking was "solely" due to the refusal to tender payment, not when the taking was already authorized pursuant to a bona fide redevelopment plan.


Allowing the taking to proceed following the extortion attempt denies the plaintiff relief and rewards the conspirators in the plan.
6.17.2009 10:28am
David Schwartz (mail):
Even if SamW and AF are completely right, the SoL argument is still completely bogus. Whether or not the taking is pretextual can only be evaluated once the decision to take has been made.

In any event, AF's argument strikes me as completely bogus. The State has no business seizing property whose value will increase simply to capture that increase for itself. The original owners have the right to develop their own property.

SamW's argument doesn't make sense. How did he "opt out of the Plan"? It sounds like he opted to do precisely what the plan called for. The increase in the value of his property is his to do with as he wishes, the State has no right to sell it.
6.17.2009 10:32am
rosetta's stones:
If Penalver is trying to help Sotomayor, he'd do better to keep his mouth shut. This issue is about the only one with any potential to blow up on her. It's her only real risk, and he's bringing a magnifying glass to it.

Kelo is bad law, and like the grandaddy of evil eminent domain cases, Poletown, the courts need to 'fess up and overturn their mistake. If they don't issue that mea culpa, they open up cases like this one. It's not only bad law, it's bad policy. Kelo invites corruption.
6.17.2009 10:39am
Justin (mail):
Brian S,

Nobody has accused anyone of doing anything like that in this case. And if someone did make that accusation, it simply is not plausible.
6.17.2009 10:46am
AF:
I think Brian S's hypothetical of a road is a good one. If the developer was going to multiple property owners and seeking payment in exchange for not condemning their property, that would be a violation. But that is not what is alleged.

What is alleged is that a single property owner whose property was in the redevelopment area and subject to condemnation approached the developer and asked for his property not to be condemned so he could do exactly what the redevelopment plan called for.

In terms of the road hypothetical, it is as if a property owner who is in the path of the road wants to build a private section of road with a toll booth. The developer asks for a portion of the revenues, the property owner refuses, and the developer proceeds to build the road as planned.
6.17.2009 10:48am
rosetta's stones:
Bad hypothetical, AF. The road ROW is taken by the public, for a public use, and will be taken no matter what the toll booth guy and the road builder scheme. Better stick to the adjacent properties hypo.
6.17.2009 11:01am
AF:
The adjacent properties hypo is inapposite. Properties adjacent to a road are not part of the road and are not subject to condemnation. In contrast, properties in the redevelopment area are part of the redevelopment and are subject to condemnation. Moreover, the redevelopment plan includes a pharmacy. Didden's proposed pharmacy is just part of the redevelopment, analogous to the road itself, not to an adjacent property.

If Didden's property were adjacent to the redevelopment area -- or if the redevelopment area had not previously been finalized -- then the adjacent properties hypo would be on point.
6.17.2009 11:10am
SamW:
"How did he "opt out of the Plan"? It sounds like he opted to do precisely what the plan called for."

Only because the Plan made it possible, at all. It's no coincidence that Didden tried to do what the plan called for because he was trying to capture the profits of the Plan. He supported the Plan before he opposed it, only because he later realized that he could not take all the profits of the Plan.
6.17.2009 11:14am
Justin (mail):
The hypothetical is silly because nobody is alleging that the development plan was incidental to an extortion or fraudulent scheme, like it would be in the road hypothetical.
6.17.2009 11:15am
Steve:
Does it make a difference to ANYONE that the it was the landowner who approached the developer and tried to negotiate his way out from under the condemnation, as opposed to the developer going around and trying to extort cash payments using the threat of condemnation as leverage?

The district court opinion denying plaintiff's motion for a preliminary injunction (304 F. Supp. 2d 548) really demonstrates the absurdity of the "extortion" claim. From the earliest stages of the redevelopment process, the property owner was pursuing negotiations with the developer. They never went to court to challenge the right of the city to condemn their property pursuant to the redevelopment plan; they instead chose to negotiate with the developer to try and reach a mutually beneficial result. The negotiations went on for years and years. And then, when the negotiations ultimately failed to work out, the same party who cheerfully initiated negotiations and participated in them for 4 years points to the developer's most recent offer and labels it "extortion"! Ridiculous.
6.17.2009 11:16am
dave h:
The point is, if Didden wants to build a pharmacy, and the redevelopment plan calls for a pharmacy, what possible cause for eminent domain is there? There is no advancement in public use/purpose/whatever - there is just enrichment of one private party over another. This is demonstrated by the demand for payment - if it's in the public interest to transfer ownership, how does that change if the developer gets $800k from the owner?
6.17.2009 11:24am
SamW:
Because, dave h, the work of the Plan administrator is what makes that particular property support a pharmacy, at all. The area would still be a run down blight, otherwise.
6.17.2009 11:30am
Don M. (mail):
I have never posted here, and am not a lawyer, simply an engineer with what I would like to think of as common sense, and an ability to read english.

The way I understand it, the original, current, owner of the property would like to build a pharmacy on the land that he currently owns.

I also understand that the re-developer, would also use this parcel of land to build a pharmacy.

Since either party plans to do the same thing with the land, isn't letting the original owner of the property do the development satisfying the "public use" standard?

After all, it should be of no consequence to the government who owns the property or who profits from ownership of said property.

The public use involved is increased tax revenues, increased employment, cleaning up a "blighted" area (not knowing the current condition of the land in question, I use "blighted" in quotation marks, since what I would consider "blight" may not be in existence).

Therefore, if the "public use" is satisfied, would the taking by condemnation not be unecessary, and thus unconstitutional?

The way I see it, the only part not satisfied here is the re-developer, who misses out on potential profit for doing the re-development, but again, I can't see why that is a "public interest" or a "public use" question. After all, if the locality involved has an income tax, then that "public use" (increased taxes on the incremental income of whomever builds the pharmacy), is satisfied, is it not?

I have often wondered why one has to be a lawyer or a judge to be a Supreme Court Justice, as I see no constitutional reason to do so.

I think that putting a "common sense" expert on the court could resolve a lot of these types of issues, where the non-lawyer just says "huh?" and raises the point that common sense has been lost.
6.17.2009 11:32am
rosetta's stones:

The adjacent properties hypo is inapposite. Properties adjacent to a road are not part of the road and are not subject to condemnation. In contrast, properties in the redevelopment area are part of the redevelopment and are subject to condemnation.


It's almost precisely apposite, AF, and adjacent properties and those within the road ROW are basically analogous in these cases. Road ROW's are commonly fought over, and eminent domain shenanigans are used to enrich/harm those doing the fighting... all for a public purpose of course, but that sure don't preclude rentseeking politicians and their buddies from scrambling for cash. This urban redevelopment project is precisely analogous, in a real sense.

And now, the eminent domain shenanigans have been multiplied, as the boundary surrounding them has become more diffuse... thanks to Kelo.
6.17.2009 11:37am
SamW:
It may be "common sense" to you. It does not make economic sense, though. You develop an entire blighted area, not a a single property. Unless, the Plan can realize some of the profit on all of the properties in the Area, there will be no development at all and no pharmacy on that property.
6.17.2009 11:38am
AF:
The point is, if Didden wants to build a pharmacy, and the redevelopment plan calls for a pharmacy, what possible cause for eminent domain is there?

Therefore, if the "public use" is satisfied, would the taking by condemnation not be unecessary, and thus unconstitutional?


The same questions could be asked of the property owner who wants to put in a private toll booth on a highway (assume the toll booth is going to be there either way, and the only question is who owns it, the property owner or the developer of the highway).
6.17.2009 11:38am
rosetta's stones:
Don M., be gone with you. The law has no place for common sense engineers.
6.17.2009 11:39am
dave h:
How does it not make economic sense? Just as much area is being redeveloped, it's just that one person is doing part of the redevelopment on their own instead of the gov't taking their land and having another private party doing it.
6.17.2009 11:43am
SamW:
It does not make economic sense because only under the Plan will the entire area be developed. But the Plan does not exist to begin with, unless it realizes profit on all property in the area, in the aggregate.
6.17.2009 11:50am
Soronel Haetir (mail):

How does it not make economic sense? Just as much area is being redeveloped, it's just that one person is doing part of the redevelopment on their own instead
of the gov't taking their land and having another private party doing it.



The basic argument as I understand it is that the compensation the developer is receiving for doing this work on behalf of the city involves the profit from putting in this drug store. The $800k payment is supposed to compensate the developer for part of his overall work while allowing the property owner to keep the drug store himself.

Now, a claim has been made that this is not a legal compensation scheme because it transfers eminent domain power to a private party but that issue is not being contested here.
6.17.2009 11:51am
David M. Nieporent (www):
They never went to court to challenge the right of the city to condemn their property pursuant to the redevelopment plan
That's because, contrary to the nutty opinion Sotomayor joined, they would have no standing to do so, because they hadn't suffered any injury -- indeed, any injury they might suffer is purely hypothetical, since it's entirely possible that no condemnation would ever take place.
6.17.2009 11:53am
David M. Nieporent (www):
Because, dave h, the work of the Plan administrator is what makes that particular property support a pharmacy, at all. The area would still be a run down blight, otherwise.
Sure it would. After all, valuable areas are never developed without eminent domain. And government development plans are always successful, because city councilmen are known for being great central planners.
6.17.2009 11:56am
SamW:
David, There clearly is an injury to a property owner who is included in the Plan in 1999 because it makes a public claim on the property, that did not exist in law before, whether it's excercized or not.
6.17.2009 11:58am
SamW:
Sure, David, you can argue that they should have not adopted the Plan at all. Shame Didden didn't raise that claim in 1999.
6.17.2009 12:02pm
Brian S:

The adjacent properties hypo is inapposite. Properties adjacent to a road are not part of the road and are not subject to condemnation. In contrast, properties in the redevelopment area are part of the redevelopment and are subject to condemnation. Moreover, the redevelopment plan includes a pharmacy. Didden's proposed pharmacy is just part of the redevelopment, analogous to the road itself, not to an adjacent property.

If Didden's property were adjacent to the redevelopment area -- or if the redevelopment area had not previously been finalized -- then the adjacent properties hypo would be on point.


What puts it on point is the fact that, AFAIK, the condemnation authority was not specifically wed to a finite and set in stone plan, but was extended over a wide area to allow a plan to be formulated.

In other words, there were a wide range of properties involved, which would either be condemned and redeveloped in selected by the defendant, or would be tranformed into abutters of the new development if they weren't.

So the plaintiffs, like the other property holders who could have been impacted by this scheme, would be in doubt as to whether they would lose their property for a given period of time, until the defendant made up his mind.

It is that element of discretion that makes the situation analogous to the road development hypothetical. In both the actual case and in the hypothetical, private property owners would either be targets of eminent domain, or abutters whose property value would rise following the exercise of eminent domain, based on the discretionary judgment of a developer. That developer either offered to use or threatened to use that discretion [depending on where you want to put your emphasis here] in exchange for a private payment.

What exactly was the plaintiff being asked to buy, if not the discretion of an agent of the state?
6.17.2009 12:08pm
dave h:
What work is the developer doing on behalf of the city? Are we talking about the actual work of planning, or the work of building, etc?
6.17.2009 12:12pm
SamW:
Yes, Dave, planning, sub-contracting, contracting, selling, advertising, brokering, building, improvements, time, effort, etc.

(Including time and effort making an area known and attractive to a chain store)
6.17.2009 12:21pm
Steve:
That's because, contrary to the nutty opinion Sotomayor joined, they would have no standing to do so, because they hadn't suffered any injury -- indeed, any injury they might suffer is purely hypothetical, since it's entirely possible that no condemnation would ever take place.

Oh, right, the "nutty" opinion. How about nutty section 207 of the New York Eminent Domain Procedure Law, which says you have thirty days to go to court and challenge the municipality's finding of public purpose. As a matter of state law, you don't get to sit around until the acquisition finally takes place and then say wait, I disagree that there's a public purpose.

As for the statute of limitations, let's go to the district court's ruling:

As I held in Didden I, the statute of limitations began to run on July 14, 1999, once Port Chester authorized a land disposition agreement with G&S, which covered the use of eminent domain incidental to the implementation of the redevelopment Project, and it was found that there was a legitimate public purpose for condemnation. Didden, 304 F. Supp. 2d 548, 2004 WL 239718 at 16. Plaintiffs, however, assert that they did not suffer any injury until November 5, 2003, when G&S and Wasser allegedly attempted to exact a cash payment from them. Plaintiffs claim that they "could not have envisioned that the Private Defendants could engage in such conduct in March 1999." This argument does not save Plaintiffs' claim from being time-barred.

The March 30, 1999 letter from Plaintiffs to the Board shows that Plaintiffs were fully aware that a finding of public purpose would expose their property to the prospect of condemnation. They even expressed concern that the consequences of Port Chester entering into the LADA with the Private Defendants would mean that they would not have a "level playing field" from which to negotiate with G&S, and that G&S would have leverage because of its option to condemn the property of "those property owners with whom they are unable to finalize a deal." Consequently, Plaintiffs were able to, and did in fact, contemplate Port Chester's actions in 1999. This action was commenced on January 16, 2004, nearly five years after Plaintiffs sent their March 30, 1999 letter, and well over four years after Post Chester issued a public purpose finding and decided to enter into a land disposition agreement with G&S. Therefore, I find that all of Plaintiffs' claims are time-barred.


The facts of the case demonstrate just how off you are on the statute of limitations point. Rather than go to court in 1999 to challenge the finding of public purpose, the landowner chose instead to enter into negotiations with the developer. After four years of negotiations that they themselves initiated, they decided the developer's final offer wasn't good enough. That was their right, but how the heck can they point to the final offer and claim that that was the source of their injury?
6.17.2009 12:29pm
Sargent (mail):
SamW, it does make economic sense if the property owner opts into the plan, thereby effectively playing the role of a sub-contractor executing the designs of the plan for that particular grid-space of land. That seems to be what happened, no?

It's a question of means and ends. The goal is to make the land productive. To pursue this goal, municipalities may use the power of eminent domain to take, and then redevelop, the land. The power to take is tied to the necessity; if the taking is not necessary to execute the redevelopment plan, if the plan self-executes because the owners opt-in, then taking via eminent domain is not allowed.

Kelo says it's okay to shoot opponents in the chest. Didden says it's equally okay to shoot helpers in the back.
6.17.2009 12:40pm
Brian S:

As a matter of state law, you don't get to sit around until the acquisition finally takes place and then say wait, I disagree that there's a public purpose.


Right, but in federal court, if I wanted to make a 5th Amendment appeal based on the exception in Kelo, wouldn't I have to wait until I actually suffered the injury of the taking?

Because if I do, then it seems like New York's Eminent Domain Procedure law, by splitting the finding of public purpose out from the actual condemnation, and attaching the SoL to the former and not the latter, is a subterfuge designed to forestall the ability of a plaintiff to assert a federal right.
6.17.2009 12:45pm
SamW:
Sargent, Didden wanted the benefits of the Plan without any costs. Classic rent seeking. Or to use your terminology, he wanted to be a sub-contractor, without sub-contracting.
6.17.2009 12:46pm
Sunshine is good:
I want to thank Ilya and the commenters in this thread. I'm a non-lawyer and always have trouble understanding the different moving parts of the sausage machine, but the explanations present here are easy to read and understand. I'd love to read 100 more of these threads than 10 more political threads I can find anywhere else on the net.
6.17.2009 12:51pm
Steve:
Right, but in federal court, if I wanted to make a 5th Amendment appeal based on the exception in Kelo, wouldn't I have to wait until I actually suffered the injury of the taking?

Well, the problem is that neither the district court nor the circuit court bought the theory that "it was a public purpose back in 1999, and it only became a pretextual private purpose when the demand was made in 2003." Given the context of ongoing negotiations over that four-year period, with the plaintiffs merely seeking to point to the developer's final demand in 2003 and declare that as the point where the taking magically shifted from okay to not okay, it's understandable why this theory didn't get much purchase.

The problem created for plaintiffs by Kelo is not so much a statute of limitations issue, but that if you want to fit within the Kelo exception, you're going to have to challenge the finding of public purpose within the parameters of state law or else you're going to be collaterally estopped from bringing it up later in a federal proceeding.
6.17.2009 12:59pm
KilgoreTrout_XL (mail):
I agree with Steve's comment up at top- the land was condemned in part, yes, because the owners wouldn't pony up. But that was a necessary step on the road to redevelopment of the aggregate parcel. The Redeveloper is entitled to, you know, develop the whole damn thing.

If you don't like URPs, then, yeah, you won't like this much (I'm neither here nor there, depending). But you change that law in the legislature, not in court.
6.17.2009 1:00pm
dave h:
Does the fact that the state "expose(d) their property to the prospect of condemnation" give them standing? I don't know that much about standing, in part because I think it's mostly ridiculous, but from what I understand mere exposure to the possibility of harm is not enough to confer standing. If this is the case, surely the statute of limitations is not running at a time that you aren't allowed to sue?
6.17.2009 1:08pm
dave h:
Also, correct me if I'm wrong here, but this seems to be the argument of people who agree with the decision:

It is in the public interest to redevelop the property. In order for this to occur, the government must make it financially attractive to the redeveloper. This cannot occur if individual property owners are allowed to develop the property themselves unless they also pay the appointed developer. Is that right?
6.17.2009 1:13pm
SamW:
In property law, generally, any adverse claim to your property interest, now or in the future, is actionable injury.

For example, in a quiet title action (an action to determine ownership), if someone down the street is claiming an interest in your property, after you die and tells your neighbors, you have a ripe claim.
6.17.2009 1:21pm
Don M. (mail):
SamW:

But that should not be goverment's concern -- I guess I don't understand why the government's powers should be used to benefit one favored person economically versus another person.

We don't know, and have no evidence of the political leanings of the two parties involved, their history of political donations, nor any evidence of relationships to the city officials.

This is the real damage that Kelo has done. It has now granted the government the power to take private citizens property and pass it along to more politicaly powerful or politically favored parties, under the guise of "public use", which is now defined so loosely as to mean "Whatever the Hell the government says it is."

AF:
First, highways and drug stores serve very different public purposes. Highways provide transportation and are accessible to the general public, and are generally beneficial to everyone in the public in the area, either through direct use of the highway or reduced traffic on other roads that the new road relieves.

Also, in most cases, highway easements take only a portion of land, and increase the value of your remaining land, if the road was needed in the first place, and not just a make work program for road builders.

I am not saying eminent domain is not needed, only that eminent domain should not be used to favor one private interest over another.

In this case, the argument is not about "public use", as loosely defined as that is, but which private party should get the profits from the use.

If this project made "economic sense" without eminent domain power, then the re-developer is free to approach the land-owners involved and offer a fair price to those owners and do the development without the use of eminent domain.

However, that is clearly not the case here. The re-developer is only willing to do the development if the government forces the current owners to hand their land over to them at whatever price the government determines it is worth. If a land-owner does not wish to sell his property to another private party, then please explain to me why he should have to?

It should not be the province of government to force the transfer of assets from one politically disfavored individual to another politically advantaged individual. I know that we do so already via property taxes, income taxes, and the rest, but where do we stop?

Or, is the argument that there is no concept of private property anymore, and that what we have paid for that private property is simply a lease from the government that can be revoked at any time for any reason. Remember, Kelo was written in such a way as to allow takings for any reason the government decides is "public use."

Again, the "public use" argument for this property is marginal at best in either scenario, and the public use will be the same regardless of who builds the pharmacy, then how does it become the government's power to

A) Decide which private party profits from the use
B) What the fair selling price of the land is
6.17.2009 1:25pm
David M. Nieporent (www):
David, There clearly is an injury to a property owner who is included in the Plan in 1999 because it makes a public claim on the property, that did not exist in law before, whether it's excercized or not.
I don't know what this means.

It could mean that the prospect of imminent condemnation reduces the market value of the property, and that this constitutes injury, but I think that argument is foreclosed by the Tahoe-Sierra case. If completely, albeit temporarily, preventing you from building isn't a taking, then merely making it less likely that you'll build surely isn't.
6.17.2009 1:30pm
David M. Nieporent (www):
Oh, right, the "nutty" opinion. How about nutty section 207 of the New York Eminent Domain Procedure Law, which says you have thirty days to go to court and challenge the municipality's finding of public purpose. As a matter of state law, you don't get to sit around until the acquisition finally takes place and then say wait, I disagree that there's a public purpose.
Yes, that's pretty nutty. And also irrelevant. The fact that the state deems the potential injury to occur at the time of Plan adoption in no way means that the federal government must or ought to treat the Plan, rather than the actual Taking, as the relevant injury.
6.17.2009 1:33pm
SamW:
dave h, Not quite. The economics of urban developement plans is that no one property owner in the area can rescue her property from blight, because all around her property are vacant lots or buildings, etc, the market is non-existant, credit is non-existant, ect. In order to make any property recover, there has to be an effort, as to all properties. The benefit accruing to all properties, from redevelopment, must be born by all property owners, or again, no property will be rescued from blight.

As an above commenter said, you can oppose all UDP's, if you want, and convince your legislatures to do the same.
6.17.2009 1:38pm
Steve H (mail):

Yes, that's pretty nutty. And also irrelevant. The fact that the state deems the potential injury to occur at the time of Plan adoption in no way means that the federal government must or ought to treat the Plan, rather than the actual Taking, as the relevant injury.


Doesn't it make more sense, though, to hold that the limitations period arises when a development Plan authorizing condemnation is adopted?

A lot of these plans take years to carry out, and if the clock restarted every time a different piece of property was formally condemned, it would be chaos, particularly since one property owner is not bound by res judicata to the outcome of the prior property owners' lawsuits.

So the result would be years and years and years of repetitive litigation over the same issue. The outcome of Didden (on the limitations ruling) seems to make more sense.

(It also seems to me that a municipality's adoption of a plan that covers my property, and includes the findings necessary to authorize the taking of my property, is clearly an injury, since it hampers my ability to do anything with my property. But I'm no expert on the law in that area. -- Does anyone know if a Plan adoption is recorded in the public records, so as to give formal notice to buyers of a city's plan to condemn?)

Anyway, if the ruling in Didden was so nutty, can you suggest any reason why not a single judge who heard the case on any level raised any objection to it?
6.17.2009 1:43pm
SamW:
"But that should not be goverment's concern"

OK, Don. Your legisaltors should hear from you then.
6.17.2009 1:53pm
Gonzer Maven (mail):
The trial court's "reasoning" quoted by Steve discloses how absurd its ruling was.


As I held in Didden I, the statute of limitations began to run on July 14, 1999, once Port Chester authorized a land disposition agreement with G&S, which covered the use of eminent domain incidental to the implementation of the redevelopment Project, and it was found that there was a legitimate public purpose for condemnation


There is ample case law holding that a municipality's plan to engage in redevelopment of an identified area (that includes the subject property), or as the courts often put it, the "mere" plan to condemn, is NOT actionable for the simple reason that the plan may not be implemented for a long time or at all. At that point there is usually no interference with the owner's use and thus no case or controversy unless state law provides a statutory right of action to validate or challenge THE REDEVELOPMENT PLAN, as for example California does. If the harm is done by delay or by the plan's implementation, that inherently occurs later, and the limitations period does not start running until then. If New York has such a statute Didden may have been able to challenge THE PLAN, not what he contended to be extorion which didn't occur until some time after the adoption of the plan. As far as I know, a gift of prophecy is not required of plaintiffs in the American law system, and on July 14, 1999, Didden had no way of knowing that the redeveloper would make him "an offer he could not refuse" at a later time.

The trial judge was wrong to suggest otherwise.
6.17.2009 1:54pm
Sargent (mail):
SamW, the key point is that redevelopment was going to happen anyway. And getting to the fact of redevelopment is supposed to be the city's only concern.

Two questions must be asked: is the land blighted, and is the "taking" a prerequisite for rehabilitation. Here, the answer to the second question was clearly no, since the owners were going to rehabilitate the property themselves.

Here's Dave H's post above:

In order for this to occur, the government must make it financially attractive to the redeveloper. This cannot occur if individual property owners are allowed to develop the property themselves unless they also pay the appointed developer.


If true, this would make the city's justification a pretext, no? -- since the city's stated interest is rehabilitation, and not the distribution of private party profits which attends it? I.e., since the redevelopment on Didden's property was going to happen, the city's sole remaining concern was how it was going to redevelop the other blighted lots. Taking Didden's property was a convenient, but ultimately unconstitutional, solution to the City's sole remaining problem.

If Didden doing it himself made it less likely that a developer would take the contract to rehabilitate the remaining lots, then that was the city's problem, not Didden's; it was the city's job to add terms to the contract to make it more attractive to a prospective developer.

Finally, the request of an $800k pay-off is very strong evidence that "making it attractive to the developer" was the rationale behind the taking. With that added consideration to the developer, total rehabilitation of the properties would have proceeded apace.
6.17.2009 2:04pm
Steve:
As far as I know, a gift of prophecy is not required of plaintiffs in the American law system, and on July 14, 1999, Didden had no way of knowing that the redeveloper would make him "an offer he could not refuse" at a later time.

It's interesting how similar this language is to the amicus brief filed by Prof. Somin and others, which reads:

Its holdingcredits the Petitioners' with the clairvoyance to know in 1999 that Gregg Wasser would make crude efforts at extortion some four years later in 2003.


Of course, once you know that the plaintiffs voluntarily initiated a negotiation process in 1999 which continued right up until they deemed the developer's final offer insufficient in 2003, you realize how breathtakingly dishonest it is to suggest that suddenly, out of the blue, here comes this extortionate demand in 2003.
6.17.2009 2:11pm
Soronel Haetir (mail):

If Didden doing it himself made it less likely that a developer would take the contract to rehabilitate the remaining lots, then that was the city's problem,


Except the contract had already been entered into. The propety owner was trying to get out afterward.
6.17.2009 2:11pm
Steve:
Yes, that's pretty nutty. And also irrelevant. The fact that the state deems the potential injury to occur at the time of Plan adoption in no way means that the federal government must or ought to treat the Plan, rather than the actual Taking, as the relevant injury.

Look, you're the one who brought the statute of limitations into this, not me. I noted, correctly, that the plaintiffs chose not to challenge the finding of public purpose in 1999, as they were required to do under state law.

Having failed to do so, it honestly makes no difference whether the federal cause of action was timely or not. Let's assume they filed in 2001, well within the three-year statute. They're still collaterally estopped from arguing that the redevelopment plan didn't have a public purpose, and under Kelo, that's the end of their case.
6.17.2009 2:14pm
SamW:
"SamW, the key point is that redevelopment was going to happen anyway."

There is no basis for this statement. The Plan with powers related to ED was adopted in 1999 and is what allowed any development, to proceed, at all. It was not going to happen without the Plan.
6.17.2009 2:16pm
Soronel Haetir (mail):
Steve,

Not that challenging the public purpose prong would have been successful either. Bad as I think such projects are urban redevelopment counts and I doubt this plaintiff would have gotten anywhere even before Kelo.
6.17.2009 2:25pm
dave h:
But the question is, would the rest of the plan continue on without the Didden lot, given that Didden is developing the land himself? If the answer is yes, then there is no public purpose in claiming his land. The only reason to take it is to benefit the private developer; this is made clear by the fact that he was willing to let it be if he was given $800k. The public is no better off if the Didden pays the developer 800k, so why would the finding of public purpose change?

I would still like someone in favor of the decision to tell me whether my summary of their argument is correct, and if so to answer the follow-up question: is there anything the private party is barred from doing in the process of the development?
6.17.2009 2:26pm
SamW:
dave h, I did try to answer your question, above, at 1:38. The Plan would not have succeeded, or even existed, w/o ED.
6.17.2009 2:33pm
dave h:
SamW, I don't see how you agree or disagree with the argument I stated. Are you saying that no developer would agree to take on the project if individual owners could opt-out and develop the land themselves?

Again the questions that follow are:

Would the plan have succeeded if ED was not used on this specific property?

Does this justify the use of eminent domain by a private party for any reason whatsoever?
6.17.2009 2:44pm
Sargent (mail):
The Plan is the way to get to "rehabilitation." Taking the property was the way to activate the Plan.


In the redeveloper's negotiations with the plaintiffs, the plaintiffs indicated that they wanted to redevelop their parcel within the redevelopment area...


Once the plaintiffs decided to redevelop, the cities concerns about the plaintiffs' blighted property were obsolete. Whether or not the plaintiffs would "unfairly" profit is immaterial.

The rest of the properties were still a problem, sure, but they were the city's problem. And not one to be solved by taking the Didden lot and offering it as consideration to the developer.
6.17.2009 2:45pm
Soronel Haetir (mail):
Dave,

The plan was already underway. The contract had been drawn up with the city making certain assumptions. Certainly there would likely have been a developer willing to do the job with other assumptions, but here the property owner was trying to change those assumptions part way through the process.
6.17.2009 2:47pm
SamW:
"Are you saying that no developer would agree to take on the project if individual owners could opt-out and develop the land themselves?"

Yes.

"Would the plan have succeeded if ED was not used on this specific property?"

No.

"Does this justify the use of eminent domain by a private party for any reason whatsoever?"

No. Only according to the Plan, adopted by the legislature.
6.17.2009 2:52pm
Soronel Haetir (mail):
In a lot of ways this seems very similar to the complaints about mortgage bailout plans,with the private owner wanting to change the rules in the middle of the transaction. The city gave the developer the right to condemn properties as part of a redevelopment effort, one of the property owners wanted out and negotiated with the developer for that right, eventually getting fed up.

I am assuming that the developer's profit is in consideration for non-commercial development as well, since most projects of this nature I've seen include community centers and such.
6.17.2009 2:54pm
Sargent (mail):
SamW, correct me if I'm wrong, but I read you as saying that because the plan was adopted by the legislature, seeing the plan through was a "legitimate public purpose" under which ED could be justified.

Is that right?
6.17.2009 2:57pm
Steve H (mail):

Its holding credits the Petitioners' with the clairvoyance to know in 1999 that Gregg Wasser would make crude efforts at extortion some four years later in 2003.


Gee, this argument didn't persuade the Court? What a shocker.
6.17.2009 2:59pm
SamW:
I think so, Sargent. That is why "public use" must be litigated when the plan is adopted. Moreover, it's in the public interest for the public (though the City) to make good on its commitments, escpecially as to its fiscal interest.
6.17.2009 3:05pm
dave h:
SamW, some details would be nice. Is there evidence that no developers would take that deal? Why wouldn't the plan have succeeded if this specific property was removed, given that it was going to be developed and therefore not hurt the property values of the other properties?

With the last question what I was asking was if the developer is given the discretion to spare or condemn each property in the development area, is it possible for him to be legally found to have abused his discretion, or is any decision he makes automatically justified?
6.17.2009 3:16pm
Soronel Haetir (mail):

Is there evidence that no developers would take that deal


Why is this a relevant question given that the deal as it existed included the contested property?

You seem to be complaining more about the compensation scheme than the overall project. I can certainly see why a city would prefer this sort of compensation plan since it removes the need to actually pay the developer out of city money.
6.17.2009 3:23pm
SamW:
Yes. There is the evidence of the marketplace, dave. That was the deal in the Plan. The plan would not have suceeded because you cannot develope an area, unless you can control it, and allowing opt-outs, without compensation, means you have no control to make commitments to multiple parties, or make plans, etc. to develope the area. Discretion is circumscribed also by the Plan.
6.17.2009 3:30pm
dave h:
My point is this: given that the land was going to be developed into a pharmacy no matter what, the only justification for it being a public purpose is that the development of the rest of the properties would fall apart if the original owner were allowed to build the pharmacy.

I don't see how there's evidence of the market. Was there really a bidding process to determine who would develop the land under conditions most friendly to the government? I admit I don't know enough about the case to say for sure that didn't happen.

I still don't see a satisfactory answer to my question about discretion (what does it mean that it is "circumscribed by the Plan"?) Can a developer condemn a property that was inside the plan purely out of spite? Because he thinks the owner hit on his wife? Furthermore, can the city condemn an entirely distinct piece of land because the developer would not agree to develop this area without it (essentially using it as compensation)? What if he only wanted that land out of spite?
6.17.2009 3:41pm
SamW:
What if, what if, Dan? You say your no lawyer but perhaps you are a law professor? I have to go now, its been nice chatting with you all and an informative discussion. Perhaps, we can discuss it another time.
6.17.2009 3:45pm
Sargent (mail):
SamW is probably right. Here's the key passage from Kelo:


Just as we decline to second-guess the City's considered judgments about the efficacy of its development plan, we also decline to second-guess the City's determinations as to what lands it needs to acquire in order to effectuate the project. "It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area. Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legislative branch." Berman, 348 U.S., at 35—36.


I don't agree with it, but that's the precedent.
6.17.2009 3:47pm
rosetta's stones:
I see a lot of discussion here, but you all need to reread Brian S.' post above. If his assumptions are correct, the discretion of the developer in this plan puts the run to any statute of limitations concerns in this case, as there was no real plan when this clock was started.

Also, the "plan" is far more nebulous than the firm boundaries described in the Kelo excerpt Sargent references above, which seems to imply only one tract, rather than the mix and match "plan" in Didden. Thus, the evolutionary phases of the plan directly impact the value of any property during any phase of that evolution, but also, properties are being grab bagged, it's not even a true plan.

Brian's post:


What puts it on point is the fact that, AFAIK, the condemnation authority was not specifically wed to a finite and set in stone plan, but was extended over a wide area to allow a plan to be formulated.

In other words, there were a wide range of properties involved, which would either be condemned and redeveloped in selected by the defendant, or would be tranformed into abutters of the new development if they weren't.

So the plaintiffs, like the other property holders who could have been impacted by this scheme, would be in doubt as to whether they would lose their property for a given period of time, until the defendant made up his mind.

It is that element of discretion that makes the situation analogous to the road development hypothetical. In both the actual case and in the hypothetical, private property owners would either be targets of eminent domain, or abutters whose property value would rise following the exercise of eminent domain, based on the discretionary judgment of a developer. That developer either offered to use or threatened to use that discretion [depending on where you want to put your emphasis here] in exchange for a private payment.

What exactly was the plaintiff being asked to buy, if not the discretion of an agent of the state?

6.17.2009 4:19pm
David M. Nieporent (www):
Look, you're the one who brought the statute of limitations into this, not me. I noted, correctly, that the plaintiffs chose not to challenge the finding of public purpose in 1999, as they were required to do under state law.

Having failed to do so, it honestly makes no difference whether the federal cause of action was timely or not. Let's assume they filed in 2001, well within the three-year statute. They're still collaterally estopped from arguing that the redevelopment plan didn't have a public purpose, and under Kelo, that's the end of their case.
Again, the whole point is: who cares about the plan? It's the TAKING that's being challenged, not the plan. And the taking didn't happen in 1999.
6.17.2009 4:40pm
David M. Nieporent (www):
If Didden doing it himself made it less likely that a developer would take the contract to rehabilitate the remaining lots, then that was the city's problem,

Except the contract had already been entered into. The propety owner was trying to get out afterward.
Ex-squeeze me? The property owner wasn't a party to any contract.
6.17.2009 5:03pm
Soronel Haetir (mail):

The developer had already entered into a contrract that included that particular lot. So a hypo where some other developer entered into a contract without that lot doesn't make sense.
6.17.2009 7:28pm
David Schwartz (mail):
Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legislative branch.
Bingo! And that's why the developer having the right to decide which properties are condemned, whether or not each individual condemnation furthered the public purpose, was the problem in this case. And that is also why the SoL restarts at each condemnation decision. (Because for each one there is the separate decision of whether that decision was in fact made at the discretion of the legislature, which in this case it clearly wasn't.)
6.17.2009 11:45pm
Soronel Haetir (mail):
David Schwartz,

What if instead of a developer it were the city executive with no further legislative input after enacting the plan?

I don't know that it is true in this case, but I can easily see such a plan being dependant upon the profit from this large commercial project in order to fund other work and that the property owner would be in exactly the same position after years of negotiation.

Face it, the law in this area just sucks.
6.18.2009 8:48am
David Schwartz (mail):
SH: The difference would be, at a minimum, that the city executive would not be making those decisions so as to maximally line his own pockets.
6.18.2009 9:51am
David Schwartz (mail):
And yes, the law does suck. How's this for a hypo:

My house is worth $350,000 FMV. The city can take it and pay me that. Some guy really likes my house. He offers me $400,000 for it, but I don't want to sell it.

So he goes to the city. Take my house, he says, pay me $350,000. Then sell the house to him for $400,000. The public purpose -- making the city $50,000 in revenue.

Legal?
6.18.2009 9:54am
Soronel Haetir (mail):
Unfortunately, likely yes.
6.18.2009 10:06am

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Comment Policy: We reserve the right to edit or delete comments, and in extreme cases to ban commenters, at our discretion. Comments must be relevant and civil (and, especially, free of name-calling). We think of comment threads like dinner parties at our homes. If you make the party unpleasant for us or for others, we'd rather you went elsewhere. We're happy to see a wide range of viewpoints, but we want all of them to be expressed as politely as possible.

We realize that such a comment policy can never be evenly enforced, because we can't possibly monitor every comment equally well. Hundreds of comments are posted every day here, and we don't read them all. Those we read, we read with different degrees of attention, and in different moods. We try to be fair, but we make no promises.

And remember, it's a big Internet. If you think we were mistaken in removing your post (or, in extreme cases, in removing you) -- or if you prefer a more free-for-all approach -- there are surely plenty of ways you can still get your views out.