N.Y. Eminent Domain Fight Appealed to the U.S. Supreme Court,
Property Owners Seek Protection from Extortion

With the results of this week’s elections, 34 states have adopted eminent domain reform in the wake of the U.S. Supreme Court’s wildly unpopular decision in Kelo v. City of New London.

Yesterday, two Port Chester 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, a private developer 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.

“Kelo was a terrible decision but it still didn’t go this far,” said Dana Berliner, a senior attorney with the Institute. “The lower courts in this case said they wouldn’t even give these owners an opportunity to prove their case.  We are asking the Court to clarify that Kelo did not suddenly turn every redevelopment area in the United States into a Constitution-free zone.”

The Institute’s petition, filed jointly with Edward Phillips and Richard O’Rourke of the White Plains law firm Keane & Beane, asks the Court to determine two related questions.  First, does the Fifth Amendment’s “public use” requirement apply after a city declares a neighborhood to be a “redevelopment area”?  Second, does the U.S. Constitution permit governments or citizens acting on their behalf to demand money in exchange for allowing property owners to keep their land?

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

“The government cannot require arbitrary cash payments from its citizens as a condition of allowing them to keep what’s already theirs,” said Institute Staff Attorney Robert McNamara,  “Bart and Domenick stood up in the face of a government-sponsored shakedown.  They should be applauded for that, not punished.”

The Institute argues that, even after the Kelo decision, courts have to evaluate eminent domain actions on an individual, case-by-case basis.  A government’s determination that a whole area needs “redevelopment” doesn’t give it a blank check to take every property within that region for any reason it chooses—nor does it give private developers free reign to extort money from property owners in the neighborhood.

“The Supreme Court got it completely wrong in Kelo, and they will have to overturn that decision.  This is their first opportunity to start moving in the right direction,” Berliner added.