New Jersey Supreme Court Limits Condemnation of "Blighted" Property:

Today, the New Jersey Supreme Court issued its unanimous opinion in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, an extremely important case addressing the government's power to condemn property that is "blighted" (hat tip: Seton Hall law prof Marc Poirier). The Court held that property which is merely "not fully productive" cannot be considered "blighted" and therefore cannot be condemned under Article VIII, Section 3 of New Jersey's Constitution, which states that:

The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken [by eminent domain]. . .

As the Court points out in its opinion, "most property in the state" can be considered "not fully productive" and therefore subject to condemnation as blighted under the state government's definition of the term. Instead, the Court concludes that the term "blight" has a "negative connotation" and is limited to those areas where "deterioration or stagnation that has a decadent effect on surrounding property." This definition strikes me as still excessively broad and vague. After all, all sorts of conditions can be considered "deterioration" or have at least a small "decadent effect" on the surrounding community. If I fail to repave an old driveway on my property, it might start to look deteriorated, and there may be a small impact on the value of neighboring property. Nonetheless, the Court's definition is at least somewhat more reasonable than the virtually limitless definition (including all property that is "not fully productive") in the New Jersey blight law it struck down.

Unfortunately, the problem of overly expansive definitions of blight is not limited to New Jersey. It is a nationwide problem affecting many states, as I discussed in this op ed for the Legal Times last year. Even many recent post-Kelo eminent domain reform laws incorporate definitions of "blight" that still permit condemnation of virtually any property (see this paper for details).

Nonetheless, the New Jersey decision is a notable step forward, especially coming on the heels of City of Norwood v. Horney, last year's Ohio Supreme Court decision reaching a similar conclusion under that state's constitution. Ohio and New Jersey are both states notorious for their numerous abusive "blight" condemnations, and neither had passed any effective legislative reforms in the wake of Kelo v. City of New London.

Hopefully, Gallenthin and Norwood will help kick off a new trend of judicial skepticism towards expansive definitions of "blight."

Is Open Space "Blighted"?

The Gallenthin Realty case Ilya mentions below nicely illustrates the risk that eminent domain can pose to environmental conservation if governments are allowed to take property for economic development purposes -- a problem Ilya and I discuss in our paper, The Green Costs of Kelo: Economic Development Takings and Environmental Protection, 84 Wash U. L. Rev. 623 (2006). The land at issue in this case largely consisted of undeveloped open space, including protected wetlands. The government sought to take the land for a development project because it was "not fully productive." Yet this is something that can be said of virtually all conservation properties; land that is devoted to conservation is not "fully productive," even though it may be providing many valuable functions and services. Indeed, the very point of conservation easements and the like is to protect environmental values by preventing land from being used to maximize economic production. Had the New Jersey Supreme Court held that this was a suitable justification for the use of eminent domain, this would have put made it easier for government agencies in New Jersey to take conservation lands through the power of eminent domain by labeling such lands as "blighted."

Environmental Implications of the Gallenthin Realty Blight Condemnation Case:

Jonathan is absolutely right to point to the environmental implications of the Gallenthin Realty case, discussed in his and my recent posts (linked below). I would add that much of the land that the Borough of Paulsboro sought to condemn in order to make it part of a "redevelopment" project, was in fact being used for environmental and conservation purposes. According to the New Jersey Supreme Court opinion, most of the property consisted of "undeveloped wetlands" that had been designated as protected wetlands by the state Department of Environmental Protection. In addition:

Gallenthin [the owner] leased portions of the property to an environmental clean-up organization, Clean Ventures, in 1997 and 1998. Clean Ventures used the property for river access, employee parking,and storage. Additionally, since 1997, a wild-growing reed, phragmites australis (phragmites), has been harvested from the Gallenthin property three times a year. The reed can be used as cattle feed and, according to plaintiffs, is recognized by the federal Environmental Protection Agency as a valuable plant species that actively neutralizes soil pollutants.

Anaheim Mayor Curt Pringle on Development Without Eminent Domain:

Anaheim Mayor Curt Pringle recently published this report explaining how cities (including his own) can promote development without resorting to the use of eminent domain. Many of the arguments are not new, but it is significant that the mayor of a major city is publicly endorsing them. Plus, Mayor Pringle was kind enough to cite my article on the notorious Poletown case as an example of how using eminent domain to promote development often causes more economic harm than good.

CONFLICT OF INTEREST WATCH: Pringle's report was published by the Institute for Justice, the libertarian public interest law firm that litigated the Kelo case. As longtime VC readers know, I have done some pro bono work on takings cases for IJ myself.