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Archive for May, 2010
If you are interested in eminent domain, oral arguments in the Kaur case, in the New York Court of Appeals (that state’s highest court) are coming up in June. Kaur is the case in which the New York Appellate Division struck down the plans of Columbia University and the Empire State Development Corporation to take by eminent domain a neighborhood adjacent to Columbia, for the University’s expansion.
But the problem with this project, as found in the blistering opinion of Justice Catterson, writing for the majority of the New York Appellate Division, was that the “blight study” that preceded the formal decision to condemn was a mess. The big problem was that the “blight” was manufactured by Columbia which has acquired a number of buildings in private transactions, and then just let them sit vacant and allowed them to deteriorate. Presto! “Blight.” There was also conflict of interest on the part of the folks who prepared the blight study, as well as improprieties by the government in making available the documents that the property owners thought were necessary to present their case properly.
So not only does this case raise the question of whether this attempt to take some ordinary folks’ land for the benefit on an elite university meets the “public use” limitation of the Fifth Amendment, but also — even if you assume that this is “public use” — whether the decision to condemn was legitimate.
So the oral argument should be fun to watch. It will also be interesting to see whether the folks on the Court of Appeals — including the liberals who are forever preening themselves with regard to how they look out for the “little guy” confronting the power of big government and big business — will rise to the challenge and confront the internal conflict within their position. So stay tuned on this one.
For a good, more detailed summary, read an article in Reason magazine that reviews this controversy. Go to http://reason.com/archives/2010/05/27/the-blight-stops-here
Follow up. For a video of the oral argument, go to www.inversecondemnation.com
They say that late is better than never, so proceeding on that theory we bring the following dispatch from last fall. The Luce Forward News blog of November 24, 2009, reports that last fall that firm handled a California condemnetion case in which CalTrans took a family-owned Winnebago dealership. The offer was $958,000 (including nothing for the value of the dealership’s business goodwill). Shortly before trial, CalTrans settled for $8,000,000, which comes to about eight time the original offer.
For the full text of the Luce Forward blog item go to http://www.luce.com/newsarticles/detail.aspx?publications=1082&qs=results%3Dyes%26inThe%3Dfeatured%26AdvancedServices%3Da3a9884d-1013-4aae-82fe-e03be6439140
We learn from a federal appellate court opinion (in which the property owners unsuccessfully sought to recover damages for the city’s bad faith in pursuing an eminent domain action against them) that in the underlying state court condemnation action, the town offered $15,250, contending that the owners’ lot was unbuildable. But at trial the appraiser was born again and testified that the lot was buildable and it was worth $140,000. The award was $184,000. By our calculator, that’s 12 times the original offer.
You can find this information in Palermo v. Town of Reading, (1st Cir. 2010) Case No. 09-1049 (unpublished opinion) . Our thanks for that one to Robert Thomas, at www.inversecondemnation.com . To find the entire federal court opinion that reports this controversy in detail, go to http://www.inversecondemnation.com/files/09-1049u-01a.pdf
Mark your calendars. The annual ALI-ABA| Land Use Institute is coming up on August 25-28, 2010, and will be held at the La Fonda on the Plaza hotel in Santa Fe, New Mexico, which is one of our favorite locations.
This is a quality program that has been running for decades and enjoys a good reputation among land-use lawyers and planners. The program will cover developments in land-use and eminent domain law, and will consist of small breakout sessions dealing with specific topics ranging from Federal Laws Affecting Local Land-Use, “Green” requirements, to public-private partnerships, among others.
For detailed information and a program brochure, contact ALI-ABA, 4025 Chestnut Street, Philadelphia, PA 19104-3099, telephone (215) 243-1630, www.ali-aba.org.
You remember the Kelo case, don’t you? But do you remember the details of the city of New London plans that were the raison d’etre for the taking of the homes of Susette Kelo and her neighbors?
What persuaded the U.S. Supreme Court to go along with New London’s supposedly sound redevelopment plans was that the earlier coming of Pfizer pharmaceutical company to New London presented the city with an opportunity to use the redevelopment process to kick out the inhabitants of Susette Kelo’s lower middle-class neighborhood, raze it to the ground and build upscale shops and condos that would cater to Pfizer’s upscale professional employees, thus bringing prosperity and higher taxes to the city.
But, as we are sure you know by now, those plans weren’t worth anything. The redevelopment project never got off the ground, upwards of $80 million in public funds was wasted, and Pfizer announced that, instead of bringing jobs to New London it was shutting down its local research facility and moving out of town, taking some 1400 jobs elsewhere. This is old news.
But now we learn from CNNMoney.com (May 18, 2010) that Pfizer is in the midst of more massive layoffs. “Pharmaceutical giant Pfizer said Tuesday that it will reduce its staff by another 6,000 jobs and shut down eight factories in its ongoing mission to cut costs in the wake of its merger with Wyeth.” Etc.
So the moral here is that economic urban redevelopment may use the government as its strong-arm land acquisition agent, but in the end it is no more than a private, not public, entrepreneurial activity that involves all the familiar risks and pitfalls of entrepreneurship — including business failures. So a municipality that engages in such activities not only abuses the rights of the displaced property owners but also those of the taxpayers. As Associate Justice of the California Court of Appeal, Macklin Fleming, once put it:
“The promoters of such [redevelopment] projects promise that in time everyone will benefit, taxpayers, government entities, other property owners, bondholders; all will profit from increased development of property and increased future assessments on the tax rolls, for with the baking of a bigger pie bigger shares will come to all. But the landscape is littered with speculative real estate developments whose profits turned into pie in the sky;…” Regus v. City of Baldwin Park, 70 Cal.App.3d 968, 982 (1977)
You can find the CNN story at http://money.cnn.com/2010/05/18/news/companies/pfizer_job_cuts/index.htm
What you see is not unusual. Eminent domain lawyers get to see a lot of aerial photographs of cities, and we have often been struck by the enormous amounts of urban land taken up by freeways and freeway interchanges, as well as parking lots and structures.
Downtown in 1957 (left) and 1965 (right). The dense urban fabric of Downtown Hartford was severely damaged during urban renewal in the 1960s.
A while back we blogged about the city of New York giving huge amounts of money to baseball teams like the Yankees and the Mets for stadium construction. And then, of course, there is the new stadium that is being built in Brooklyn as part of the notorious Atlantic Yards project. So we figure that this was all part of the old Roman technique of panem et circenes – bread and circuses — that Roman emperors provided to the plebeians to divert their attention from the ongoing decline and ultimate fall of ancient Rome.
We figured that, though not pretty, this was understandable because there is much going on in New York City from which, by the lights of New York politicians, attention of the populace needs to be diverted. But for all our curmudgeonly cynicism, we hadn’t even begun to understand the degree of municipal corruption going on in the Big Apple.
The light started dawning as we read Jim Dwyer’s column, About Town, in yesterday’s New York Times – Companies We Keep, And Pay For, May 16, 2010, at p. 22 (News Section). The basic racket involves a big New York based company letting it be known that it is contemplating moving out of the city, like the New York Stock Exchange did a while back. Thereupon local politicians rush in with bags of public money to induce the company to stay in New York, and in some cases — like those of the New York Times and the NYSE — offering to take by eminent domain some land for these worthies’ new buildings. But that, it now appears, only scratches the surface. You ain’t seen nothin’ yet.
Dwyer begins by noting that the big, fancy publisher Conde Nast got $10.8 million in rent and tax breaks to move into a Times Square tower that was already heavily subsidized, and is now said to be having discussions with government officials about relocating downtown, into the tower planned as 1 World Trade Center. The Port Authority of New York and New Jersey has agreed to provide $1 billion in financing for the building.
It turns out that New York has been subsidizing some real biggies — outfits you’d think are the last ones to qualify for public handouts. In Dwyer’s words:
“Many of the threats to leave were barely disguised feints, and sometimes not even that. Conde Nast, for instance, publishes some of the most exalted titles in the magazine business, and the chances that the company would move out of Manhattan are slim to none. Other businesses equally unlikely to to leave the media capital — The New York Times Company, CBS, Reuters, NBC, News America, ABC, McGraw Hill, Viacom, Hearst — were also given public money.
But most of the recipients, especially of the larger deals, were in the financial industry. Goldman Sachs was given $650 million in city and state subsidies to build Battery Park, and JPMorgan Chase was awarded $240 million for space in Lower Manhattan. Others that have been given public subsidies include the American International Group,, or A.I.G.; Credit Suisse; Bear Stearns; Merrill Lynch; Bank of America; Citicorp (now Citigroup); Morgan Stanley.”
Your tax money at work.
For the full text of Dwyer’s column go to http://www.nytimes.com/2010/05/16/nyregion/16about.html
Another controversy has arisen concerning the route for the California high speed rail line. This time it’s not aroused NIMBY suburbanites concerned about getting high speed trains in their back yards. Now, the high speed rail folks have to contend with a real heavyweight – the Union Pacific railroad.
Mercury News.com reports that Union Pacific has expressed its opposition to high speed trains using its right of way between San Jose and Gilroy. Union Pacific is concerned about safety problems that would arise if high-speed “bullet trains” were to operate in close proximity to slow freight trains. The concern is that a freight train might derail (as they do now and then) and slam into a bullet train, so Union Pacific wants the latter to operate on a separate right of way, 50 to 100 feet from Union Pacific’s property. The high speed train folks dismiss this as a negotiating strategy. We shall see.
So it appears that the high speed rail authority may have to resort to eminent domain, and this would raise an interesting and rarely litigated problem. California law allows the exercise of eminent domain for takings of property that is already devoted to public use, for another, more necessary public use. California Code of Civil Procedure §§ 1240.610-1240.700. This statutory scheme contemplates joint use of the subject property by both condemnor and condemnee. So if this case goes to trial that should be a good show.
The kicker here is that the high speed rail authority is on a tight schedule and a tight budget. It must start construction by Seprember 2012 or lose $2.25 billion in federal stimulus funds.
For the full Mercury News story, go to http://www.mercurynews.com/bay-area-news/ci_15058672
The word has come forth unto the nation, and the Fat Lady is singing. Our next Supreme Court Justice, replacing Justice John Paul Stevens, will be Elena Kagan, now Solicitor General and former Dean of Harvard Law School. The usual diversity-loving suspects are all for her.
We, on the other hand, are having our usual trouble understanding the views of our betters. Evidently, in the name of “diversity” we are now to have a Supreme Court that is Protestant-rein, consisting of six Catholics and three Jews, all of whom went either to Yale or Harvard. ‘Scuse us for asking, folks, but is that what you call “diversity”? We don’t support the idea that there should be seats on the high court reserved for this or that religion or race, as it was in the old days. But on the other hand, creating a judicial lineup that excludes all members of the country’s largest denomination, does seem a bit odd.
Since this blog is primarily about eminent domain, we cannot fail taking note of a “the-little-man-who-wasn’t-there” aspect of this nomination. The New York Times, of May 10, 2010, Obama Said To Pick Kagan For Opening On Top Court, at p. A15, provides its readers with a table listing the current hot topics, and reporting what Kagan’s views might be on those. Here they are:
Don’t Ask, Don’t Tell; Defining “Combatants;” Responding to Partisan Questions; Presidential Powers; Constitutional Theory; Wiretaps Without Warrants; Abortion; Judicial Activism; The Second Amendment; Death Penalty, and Same-Sex Marriage.
Yes indeed. No trace of eminent domain as an issue worthy of consideration. Mind you, as far as popular feelings are concerned, eminent domain, particularly after the Kelo case, has been a topic roiling the American public to a greater extent than any other — around 90% of Americans are opposed to that holding. But evidently, in the eyes of the bien pensant folks who mean to run our lives, it isn’t worth mentioning.
The courts have been telling us that if we don’t like the judge-made rules of eminent domain law, we should vote for legislative folks more in tune with the prevailing public view of the use and abuse of eminent domain, and more likely to reform the law of eminent domain legislatively. Good idea. Let’s vote the rascals out.
Follow up. So now it turns out that once Elena Kagan is confirmed, three out of the nine U.S. Supreme Court justices — Ginsburg, Sotomayor and Kagan — will be from New York. Diversity. Ain’t it wonderful? Actually, make that four justices. Justice Scalia, though born in New Jersey, moved to New York (Queens) at a tender age and was educated there.
Second follow up. Check out the column by Professor Jonathan Turley, in today’s Los Angeles Times, May 12, 2010, at p. A17, entitled It’s Their Private Court. Our favorite quote is Turley’s observation that the justices view the process of getting on the court “as if it were the judicial equivalent of graduating from Hogwarts School of Witchcraft and Wizardry.” For Turley’s entire op-ed piece go to http://www.latimes.com/news/opinion/commentary/la-oe-turley-supreme-court-20100512,0,811795.story
Turley quotes Justice Scalia, speaking at the American University Law School, where he informed a student that she should not expect to be considered for a Supreme Court clerkship given the law school she attended.
When you put it all together, it’s appaling that these are the people who get to lecture the rest of us about the wonders of “diversity.”
Third follow Up. For an interesting commentary on the symbolic and historical significance of the departure of the last Protestant from the Supreme Court, see Robert Frank, That Bright, Dying Star, the American Wasp, Wall Street Jour., May 15, 2010, at p. A3. The conclusion is that people who have it too good for too long a time, lose those very qualities that made them great to begin with. Frank quotes Jamie Johnson, a documentary film maker and heir to the Johnson & Johnson fortune as saying, “The generations of affluence bred a certain kind of casual pasive approach to life and wealth building. Lots of people just got lazy.” Which, come to think of it, applies to 21st century America as well.