A Post-Kelo Update
Ilya Somin writes at The Volokh Conspiracy about what looks to be the most important eminent domain case to reach the Federal Courts since the Kelo decision:
[T]wo Port Chester [New York] property owners joined with the Institute for Justice (the public-interest law firm that litigated the Kelo case) to ask the Supreme Court to look again at the issue of eminent domain abuse and ensure that lower courts do not read Kelo to completely eliminate judicial review. The case illustrates the dangerous results of the Kelo decision and asks what should be an easy question: Does the Constitution prevent governments from taking property through eminent domain simply because the property owners refused to pay off a private developer?
In 2003, private developer [Gregg Wasser] approached Bart Didden and Domenick Bologna with a modest proposal: they could either pay him $800,000 or give him a 50 percent interest in their proposed business, or he would cause the Village of Port Chester to take their property from them through eminent domain. Outraged, they refused. The Village condemned their property the very next day.
Bart and Domenick filed suit in federal court, arguing that the taking violated the Fifth Amendment of the U.S. Constitution, which only allows property to be taken for a “public use.” Shockingly, the trial court threw out their case, and the Second Circuit agreed. Because their property lay within a “redevelopment area,” a region the Village had designated as subject to its eminent domain power, the Constitution didn’t protect them from condemnation, even though they had alleged that they were condemned solely because they resisted the developer’s attempted extortion….
“What the developer and Village of Port Chester did is nothing short of government-backed extortion,” said Didden. “I had an agreement to develop a pharmacy, a plan fully approved by the Village, and in the eleventh hour I was told that I must either bring this developer in as a 50/50 partner or pay him $800,000 to go away. If I didn’t, the City would condemn my property through eminent domain for him to put up a pharmacy. What else can you call that but extortion? I hope the Supreme Court sets things right.”
As Somin points out, this case seems egregious even by Kelo standards:
It’s hard to find a more blatant example of pretextual condemnation and “favoritism than the Didden case. The plaintiffs’ property was only condemned because they refused to pay $800,000 to Wasser. Had they given in to Wasser’s threats and paid him the money, there would have been no public benefit, because the money would have gone into Wasser’s pocket, not the Village treasury. Moreover, Wasser’s planned use for the property – building a Walgreens pharmacy – is almost exactly the same as the current owners (who plan to open a CVS). So there is no potential economic gain to the community from transferring the land to Wasser; indeed, the area’s taxpayers will be net losers because they will have to foot the bill for the condemnation. Nonetheless, the condemnation did occur within a designated “redevelopment area,” so the Second Circuit Court of Appeals held that it is immunized from legal challenge under Kelo.
This will be the first opportunity of a reconstituted Supreme Court under Chief Justice Roberts and Justice Alito to speak on the eminent domain issue. The result bears watching.
