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My Op ed On the Property Rights Implications of Judge Sotomayor's Decision in Didden v. Village of Port Chester:

The Orange County Register recently published my op ed on the troubling implications of Judge Sotomayor's ruling in Didden v. Village of Port Chester:

It's not easy for a judge to undermine property rights further than the Supreme Court did in 2005 in Kelo v. City of New London, Conn. But Judge Sonia Sotomayor, who is scheduled to begin Senate cofirmation hearings today on her nomination to the high court, succeeded. In the 2006 case of Didden v. Village of Port Chester she signed on to perhaps the worst federal court property rights decision in recent memory.

In Kelo the court held that the government can condemn a person's property and transfer it to someone else in order to promote economic development. In Didden, Judge Sotomayor's federal appellate-court panel went further, upholding the government's condemnation of property after the owners refused to pay extortion money to a politically influential private developer.

In 1999 the village of Port Chester, N.Y., established a "redevelopment area," giving designated developer Gregg Wasser a virtual blank check to condemn property within the area. When local property owners Bart Didden and Dominick Bologna sought a permit to build a CVS pharmacy in the area, Wasser demanded that they pay him $800,000 or give him a 50 percent partnership interest in the store, threatening to have their land condemned if they said no. They refused, and a day later the village condemned their property.

Didden and Bologna challenged the condemnation on the ground that it was not for a "public use," as the Constitution's Fifth Amendment requires. Their argument was simple and compelling: Extortion for the benefit of a private party is not a public use. In a short, cursory opinion, Sotomayor's panel upheld the condemnation.

Although based partly on Kelo's very broad definition of "public use," the Didden ruling extended the term beyond what Justice John Paul Stevens had in Kelo. In particular, Stevens had noted that "the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit," was not enough to count as a "public use." As an example of such an unconstitutional pretextual taking, he cited a case with far less egregious facts than Didden....

Kelo was a 5-4 decision, denounced by many on both left and right. The next few Supreme Court nominees could well determine whether it is overruled -- or is expanded to weaken property rights even further. Under the guise of "redevelopment," local governments across the country often condemn property for the purpose of transferring it to politically favored interests. Since World War II, hundreds of thousands have lost their homes. Usually, those displaced are poor, minorities or the politically weak -- a point emphasized by the NAACP in its amicus brief in Kelo. The stakes here are very high.

Judge Sotomayor's ruling in Didden suggests that she would uphold even the most abusive condemnations, taking the court even further in the same misguided direction.

Probably because of space constraints, the editors cut most of my discussion of claims that Didden was correctly decided because the property owners failed to file their case on time or because Gregg Wasser had a conflicting account of the facts. The statute of limitations issue is ultimately a sideshow because the panel clearly resolved the constitutional claim as well, and because the the two were in fact inextricably connected (points I addressed in more detail here). Wasser's alternative account of the facts is also irrelevant because Sotomayor's panel was legally required to assume the truth of Didden and Bologna's version of events, and because Wasser's version doesn't actually undermine the plaintiffs' claims that he used the threat of eminent domain as leverage for extortion.

PersonFromPorlock:
So, from the government's point of view, is this a bug or a feature?
7.13.2009 4:50pm
Tatil:
Is there any place where we can find your discussion of "claims that Didden was correctly decided because the property owners failed to file their case on time?"
7.13.2009 4:52pm
troll_dc2 (mail):

Judge Sotomayor's ruling in Didden suggests that she would uphold even the most abusive condemnations, taking the court even further in the same misguided direction.




The more you write, the less I think of you. Your use of the word "suggests" indicates that you are a man on a mission.

Suppose she wins confirmation, and suppose she votes for an owner in a property-rights case. Will you write a blog pointing out that your prediction was wrong?
7.13.2009 4:59pm
AF:
Wasser's alternative account of the facts is also irrelevant because Sotomayor's panel was legally required to assume the truth of Didden and Bologna's version of events . . . .

Not any more. Allegations are only assumed true if they are "plausible." See Twombly.
7.13.2009 5:01pm
Pro Natura (mail):
...and suppose she votes for an owner in a property-rights case.
A basic application of inductive reasoning leads to the conclusion that your supposition is extremely unlikely. Are you someone who would encourage others to step into a cage with a man-eating lion because you believe it's always just barely possible the beast has adopted a vegetarian diet?
7.13.2009 5:10pm
Steve:
Again with Didden. I continue to encourage people to read the District Court decision on plaintiffs' motion for a preliminary injunction, because you will be amazed at just how dishonest this "extortion" narrative turns out to be.

The facts are thus: In 1999, the town approved a large redevelopment plan and made a finding of public purpose. The plaintiffs thereupon entered into voluntary, and apparently quite amicable, negotiations with the town and the developer, trying to bargain their way out of having their property condemned. Negotiations continued on and off for four years, at which point the plaintiffs suddenly declared that the developer's latest proposal amounted to "extortion."

If someone can look at these facts, and determine that the whole thing was a shakedown scheme even though the property owner was the one who sought negotiations, then there's not much hope for them. The idea that this case represents some sort of classic example of a pretextual taking - sort of the Caperton of post-Kelo litigation - is pure comedy.
7.13.2009 5:38pm
ShelbyC:
Ilya, to what extent would "side deals" be allowed when dealing with a developer? It seems that this would be as issue anytime the emeninent domain authority is delegated to a private party. Would it matter if the propostion ran the other way? For example, if a developer is degelated descretionary emeninent authority, and thinks he can make $10,000 by condemning lot X, can the owner of lot X offer him $11,000 not to? The Port Chester case highlights all sorts of problems with "economic development" takings.
7.13.2009 5:39pm
ShelbyC:

I continue to encourage people to read the District Court decision on plaintiffs' motion for a preliminary injunction, because you will be amazed at just how dishonest this "extortion" narrative turns out to be.


I'm not sure it's dishonest. Demanding that you be paid not to condemn someone's property sounds like extortion to me. But this is a problem inherient in delegating the condemnation power to for-profit entities.
7.13.2009 5:56pm
PDXLawyer (mail):
I enjoy the posts on takings, and find them persuasive, except for one problem - how they relate to privately owned infrastructure projects, like railroads and power lines.

My intuition is that condemnation powers would be essential for these types of projects in many cases. I can make a case that these are "public" projects in a way that shopping malls are not, but there doesn't seem to be muc precedential support for this idea. Ideas anyone?
7.13.2009 6:06pm
Owen H. (mail):
How dare she follow precedent yet again!
7.13.2009 6:15pm
Steve:
Demanding that you be paid not to condemn someone's property sounds like extortion to me.

How can four years of amicable negotiations be characterized as extortion, when they were initiated by the party now claiming extortion? If they had refused to negotiate altogether, the condemnation would have been unassailable, but because they agreed to talk it over with the property owner they now have to face a claim of extortion? Makes no sense.

Would it matter if the propostion ran the other way? For example, if a developer is degelated descretionary emeninent authority, and thinks he can make $10,000 by condemning lot X, can the owner of lot X offer him $11,000 not to?

I think it depends on the facts. If the government claims it has to condemn lot X for a public purpose, and yet it's willing to let lot X remain vacant as long as the developer gets paid off, that calls into question the original assumption that there was a public purpose.

But in this case, the property was being condemned to build a drugstore, and the property owner said, "Wait, let's talk it over, I'm in negotiations with a drugstore chain and maybe your plan will work just as well if I remain the owner." In other words, it's fine for the government (or the government-authorized developer) to consider whether alternatives to the approved plan would further the public purpose just as well, but it would be problematic if the government were able to simply forgo the stated "public purpose" in exchange for cash.
7.13.2009 6:16pm
rick.felt:
-Knock-knock

-Who's there?

-Didden

-Didden who?

-Didden you know that Sotomayor's confirmation is a foregone conclusion?
7.13.2009 6:24pm
David Schwartz (mail):
How can four years of amicable negotiations be characterized as extortion, when they were initiated by the party now claiming extortion? If they had refused to negotiate altogether, the condemnation would have been unassailable, but because they agreed to talk it over with the property owner they now have to face a claim of extortion? Makes no sense.
Because the negotiations revealed the pretext clearly. Yes, without the negotiations, it would have been much harder to prove the condemnation was pretextual, but it still would have been.

Say the government chooses not to hire me for a position. Maybe their reasons are unassailable. Then they say, "hey, if you want the job, stop arguing that the Didden taking is pretextual". Well, now it's pretty clear why they weren't hiring me, isn't it?

Here we have a case where a developer is personally making the final condemnation decision. And his criteria is what will make *him* the most money. If that's not a pretextual taking -- what is? How does "this will make the developer the most money" constitute a public use?
7.13.2009 6:45pm
Steve:
How does "this will make the developer the most money" constitute a public use?

The actual "use" of the property - a drugstore - is the same either way.

Your argument that the condemnation would have been pretextual even without the negotiations makes no sense. There is no pretext argument whatsoever aside from the one arising out of the negotiations.

Unless you think, of course, the plaintiffs could have argued "the whole thing was a shakedown scheme, even though when we offered to negotiate, they flatly refused and insisted on proceeding with the condemnation." That would be a difficult argument to sell.

The idea that I can initiate negotiations, and then accuse the other side of extortion simply because they were willing to negotiate with me, is just ridiculous.
7.13.2009 6:56pm
Jiffy:
This may be the same question that Steve is asking, but how does whether or not there is an effort "extort" money from the property owner alter whether the property is taken for a "public use?" It seems that characterization of the "use" as public or not is independent of whether there has been some impropriety in the exercise of the eminent domain power. An impropriety in exercising the power may have other consequences (e.g., criminal liability), but is it obvious that it alters whether the ultimate "use" is public?
7.13.2009 7:15pm
ShelbyC:

But in this case, the property was being condemned to build a drugstore, and the property owner said, "Wait, let's talk it over, I'm in negotiations with a drugstore chain and maybe your plan will work just as well if I remain the owner."


Right. It would server the public purpose just as well, but the developer wouldn't have gotten his cut. So he said, OK, you compensate me for the money I'd have made, or I'll condemn the property and make the money, correct?
7.13.2009 7:16pm
ShelbyC:

The idea that I can initiate negotiations, and then accuse the other side of extortion simply because they were willing to negotiate with me, is just ridiculous.


No, if someone is going to break your legs, and you offer to pay him $500 not to, it's still extortion.
7.13.2009 7:19pm
loki13 (mail):

The idea that I can initiate negotiations, and then accuse the other side of extortion simply because they were willing to negotiate with me, is just ridiculous.


No, if someone is going to break your legs, and you offer to pay him $500 not to, it's still extortion.


Yes, this analogy would be completely correct, IF:

1. The 5th Amednment allowed body breakings for a public purpose, provided there was just compensation.

2. Your blighted body was condemned as part of a development scheme, and a developer could make money breaking all of your bones.

3. But you realized there might be an alternative leg breaker that would pay you more for breaking your legs.

4. So you tried to negotiate with the developer a set-aside for your legs so you could sell your leg-breking to someone else.

Yeah, otherwise, it's just like that.
7.13.2009 7:31pm
ShelbyC:

Yes, this analogy would be completely correct, IF:


The analogy, as you well know, was intended to address the comment that you can't be extorted if it was you who opened the negociations, smartass :-).
7.13.2009 8:04pm
Steve:
Right. It would server the public purpose just as well, but the developer wouldn't have gotten his cut.

Your assumption is that the public purpose would be served equally well either way. Maybe yes, maybe no, but there's no legal doctrine that says "if the government threatens to condemn your property for a given use, you can automatically stop them just by promising to use it the same way yourself." Maybe there ought to be, but there's not.

No, if someone is going to break your legs, and you offer to pay him $500 not to, it's still extortion.

Well, other than the fact that this was a 100% lawful condemnation, but for the argument that the negotiations equate to extortion, this would be a good analogy.

If someone is threatening to take lawful action against you, and you say "wait, is there anything I can offer you to get you to change your mind," even a child would laugh at you for trying to label a "yes" answer as extortion.
7.13.2009 8:07pm
David Schwartz (mail):
Your argument that the condemnation would have been pretextual even without the negotiations makes no sense. There is no pretext argument whatsoever aside from the one arising out of the negotiations.
The developer had the authority to make and did in fact make the final condemnation decision based upon whether or not it would line his pockets. How does that not make any claim that the taking is for a public purpose pretextual? The negotiations simply make it possible to prove this.
7.13.2009 8:17pm
David Schwartz (mail):
It seems that characterization of the "use" as public or not is independent of whether there has been some impropriety in the exercise of the eminent domain power. An impropriety in exercising the power may have other consequences (e.g., criminal liability), but is it obvious that it alters whether the ultimate "use" is public?
If that were true, then the taking is obviously not for a public use. The developer and the owner were both going to use the land for a pharmacy. If one private pharmacy is a public use, so is another.

In any event, that battle was lost already. The taking simply must be for a public purpose. The land itself need not be put to a public use.
7.13.2009 8:24pm
ShelbyC:

If someone is threatening to take lawful action against you, and you say "wait, is there anything I can offer you to get you to change your mind," even a child would laugh at you for trying to label a "yes" answer as extortion.


I don't know. If someone is going to show my wife pictures of me having an affair, and I offer to pay them not to, and they accept, they'd probably be on shakey ground.

But I think that this case highlights the problem of delegating the condemnation power to a private individual. Does that private individual have to excercize that power with a public purpose? And if he exercises it with a financial motive in mind, is that an unlawful taking?
7.13.2009 8:29pm
David M. Nieporent (www):
If someone is threatening to take lawful action against you, and you say "wait, is there anything I can offer you to get you to change your mind," even a child would laugh at you for trying to label a "yes" answer as extortion.
Uh, I hate to tell you this, but that's a routine definition of extortion. It's "lawful" for me to tell your wife that you've been having an affair. It's extortion for me to say, "Pay me $10,000 or I'll tell your wife that you've been having an affair." The fact that you said, "I'll pay you money to keep you from telling her" first doesn't change that.
7.13.2009 9:36pm
David M. Nieporent (www):
Ugh. I should have refreshed the page first; I didn't know that ShelbyC had already taken my hypo.
7.13.2009 9:37pm
ShelbyC:
Sorry.
7.13.2009 9:47pm
Jiffy:
David Schwartz:


If that were true, then the taking is obviously not for a public use. The developer and the owner were both going to use the land for a pharmacy. If one private pharmacy is a public use, so is another.


I've read these three sentences a number of times, and I'm afraid I can't understand your point. Could you explain a bit more?
7.13.2009 11:22pm
Gabriel McCall (mail):
A pharmacy owned by the original landowner serves the public just as well as a pharmacy owned by the city's preferred developer; ergo, the taking of the land serves no public use since there's no increased public benefit resulting from the taking.
7.14.2009 12:38am
David Schwartz (mail):
Jiffy: If it is determined whether the taking is for a public use based on how the land is actually *used*, then taking land to put a private pharmacy on it cannot be for a public use unless every pharmacy is public use. If every private pharmacy is public use, then anything (except perhaps leaving the land empty) is public use. Of course, it is not determined whether a taking is for public use by looking at whether the land is ultimately used for a public purpose.
7.14.2009 3:17am
erp:
Let's cut to the chase. The concept of the CRA is the problem. Private property is one of the principles of our Republic. Allowing quasi-governmental entities like the CRA to take our property and our tax dollars and give them to developer, not for the public projects, like bridges and schools, but for the private profit, breaks down one of our basic trusts.

In addition to wreaking havoc on private property, the CRA was also responsible for the meltdown of our financial institutions.

Time to dissolve the CRA before it takes us down to a place from which we can't recover.

Sotomayor is a political hack and by her own admission, an affirmative action baby. Confirming her means just another sure vote for more of the same left wing claptrap for the next 40 years.
7.14.2009 9:11am
ArthurKirkland:

Sotomayor is a political hack and by her own admission, an affirmative action baby. Confirming her means just another sure vote for more of the same left wing claptrap for the next 40 years.


Judge Sotomayor likely soon will be Justice Sotomayor, and deservedly so. She has a distinguished academic and professional record and serves as a useful and vivid demonstration that the "good old days" -- in which she would have been almost reflexively denied a chance to study law, and even with a law degree might have been steered toward a secretarial career -- were bad, and that the broader allocation of opportunity (including that associated with affirmative action) has improved our country.

She may be a substantial force in a shift, fueled by Supreme Court selections by President Obama, that reduces or eliminates the rightward swing of the Supreme Court. I sense that this would displease some, especially those who conclude that legitimate range of legal debate ranges from Scalia to Thomas. I, however, hope to have the chance to welcome her contributions to the Supreme Court's evolution.
7.14.2009 10:22am
ShelbyC:

I, however, hope to have the chance to welcome her contributions to the Supreme Court's evolution.


I, for one, welcome our new insect overlords :-).
7.14.2009 12:08pm
Boonton (mail) (www):
Uh, I hate to tell you this, but that's a routine definition of extortion. It's "lawful" for me to tell your wife that you've been having an affair. It's extortion for me to say, "Pay me $10,000 or I'll tell your wife that you've been having an affair." The fact that you said, "I'll pay you money to keep you from telling her" first doesn't change that.



The hypothetical involved 'take lawful action'. Perhaps a better analogy might be someone broke into my store last night and took the safe with $5,000 in it. I happen to have a security camera and I see it was you. You approach me and say "I'll pay you the $5,000 back and return the safe if you don't press charges". I say "the safe is damaged and useless anyway because I know it can be easily taken, I need the $5,000 back plus another $5,000 for a new safe secured to the foundation with concrete". I'm not sure that would qualify as extortion.

I think the point about the extortion charge is that it seems odd considering the fact that the developer had condemnation powers to begin with. Why would he need a 'payoff' of 50% owership in the proposed drugstore when he could condem the property and build a drugstore with 100% ownership?

As for whether or not one drugstore equals another one: Suppose the town wanted to build a park and you owned a junkyard. You tell the town 'wait a minute, I just retired from the junkyard business and wanted to convert my property to a beautiful open space anyway which I'm happy to open to the public'. Does the town have to take you up on that offer or might it decide even though you say your plans are exactly the same, it would rather do the park itself? Here you had a town decide to let a private developer develop a whole section of land. Perhaps the town had decided he had the skill to bring in a group of businesses that added economically to the whole town through synergy. Does the town have the right to go with the developer's call if it decides he is worth a shot?
7.14.2009 12:52pm
ShelbyC:

Does the town have the right to go with the developer's call if it decides he is worth a shot?


Not if the developer's call is based on a property owner failing to pay him $800,000.
7.14.2009 6:30pm
Boonton (mail) (www):
OK let's flesh this out. Let's say we have a large track of land dominated by empty space, junk yards, run down buildings etc. A developer approaches a town and says that he can make this giant parcel of land into a high end 'village' of outlet stores. All the stores will have a similiar look and feel and this will dramatically increase the value of the property, generate higher property tax revenues, provide more jobs for the community and give them a place to shop.

So the condemnation right is granted to the developer who begins. One person with an adult bookstore decides he wants to hold out. The developer says there's no way the village will work with a seedy adult bookstore smack in the center where the coffee shop was planned. The owner says he's been in talks with Starbucks and would like to join this 'village'. The developer figures he is giving up some control over the 'look and feel' of this village and as such $800,000 is a reasonable price.

Now if the private for-profit nature of this botheres you imagine a slightly different taking. The town wants to build a bridge over a river to alleiviate traffic and make it easier for its police and fire dept to travel from one side of the town to the other as needed. They select a location for the bridge and its on your adult bookstore's ground. They move to take the property but you make a counter offer. You'll pay $700,000 if they instead opt to put the bridge 500 feet down the road. The town engineer reports that the bridge can be built there but it will be a bit out of the way requiring those using it to detour down a small side street rather than use the main one the town envisioned. As a result, the town says they'll reconsider for $800,000. You say no.

Is this 'extortion'?
7.15.2009 9:04am
Boonton (mail) (www):
Another issue that seems to get lost, which shouldn't because conservatives like to make a big deal about it, is that there's a huge difference between a law or act of gov't that is foolish, unfair, misguided, or bad policy and an act that is unconstitutional or in violation of the law.

Presumably this developer gave something to the town in exchange for access to such a large tract of property. To me, that would seem to imply that the developer has a legal right to condem property for its economic gain provided it is complying with whatever deal it made with the town. Likewise, if another entity wants the developer to waive that privilege or let it 'in on the deal' there's every right to demand monetary compensation or an ownership interest as the price of entry.

Now maybe what the town has asked of this developer is so absurdly one sided, so much of a sweetheart deal that it isn't a proper cause for public taking of private property. But that's not the issue asserted here. What is asserted here is that if the developer was given the right to take property to build a drugstore, the developer is extorting if it demands money to waive that right.

Sotomayor's job is not to judge the merit of whether public taking can be used to fuel private development. The SC has said it can. Nor is her job to determine if the town was acting like an asshole or if the developer was. The later is the job of the town and the former is the job of the town's voters. Her job is only to judge what the law allows and it doesn't seem like she was so out in left field here....
7.15.2009 2:20pm
David Schwartz (mail):
Presumably this developer gave something to the town in exchange for access to such a large tract of property. To me, that would seem to imply that the developer has a legal right to condem property for its economic gain provided it is complying with whatever deal it made with the town. Likewise, if another entity wants the developer to waive that privilege or let it 'in on the deal' there's every right to demand monetary compensation or an ownership interest as the price of entry.
The town cannot sell the developer something it does not have. The town's condemnation power extends only to individual parcels of land and only where each individual condemnation is for a bona fide public purpose.

There simply is no such thing as a right to condemn property solely or primarily for private gain. The developer cannot have acquired such a right from the town.
7.15.2009 6:57pm
sobi:
I just worry that Kelo will not be overturned soon enough. Congress is hopeless in addressing it. The Supreme Court failed to do their job in Kelo.

But I read that Sotomayor was also being praised for the non-violation of precedent in Didden. Personally, I have to conclude that stable bad law remains bad law and wants correction.

Precedent is hardly praise-worthy when it trumps justice. Justice is in there somewhere still, I think, or it should be.
7.16.2009 4:00am
Icarus:
During her public hearing, Sotomayor said she decided this on the basis that the statue of limitations had expired.......I am not familiar with the details, but if this is true, then she decided this correctly.
7.17.2009 2:12pm

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