Was Kelo Novel? The Second Circuit Says “Yes.”

Within hours of the Kelo opinion coming down back in 2005, it became the “party line” of its admirers that the majority opinion approving “economic redevelopment” (i.e., redevelopment for pure financial gain, without the justification of blight removal) was no big deal, even if House Speaker Nancy Pelosi thought it was the handiwork of God.  The Supreme Court, went their argument, had done nothing new; it was the same-old, same-old stuff of earlier decisions like Berman and Midkiff.  But it wasn’t. Those two cases (as well as the later Boston & Maine Railroad case) had made it clear that it was the elimination of blight or other undesirable conditions that justified the exercise of eminent domain in cases of private-to-private transfer of the taken land, and provided the “public purpose” said to justify the taking.


Just how serious is the rule that in private-to-private transfers it is the elimination of blight (or some other undesirable condition) that constitutes the “public use,” may be gleaned from a recent Pennsylvania Supreme Court decision in Condemnation in rem by Redevelopment Authority of Philadelphia, 2007 Pa. LEXIS 2894, holding that even when the avowed plan of the redevelopment agency was to turn over the taken land to a private religious group for the establishment of an avowedly religious school, that fact did not render the taking impermissible under the Establishment Clause of the First Amendment. It was the taking and the elimination of blight that was the “public purpose” of the taking, and that justified the taking. What happens to the condemned property after its taking and its reconveyance to a redeveloper, has no effect on the public use determination. So says the Pennsylvania Supreme Court. For a recent commentary on this topic, see Steven  J. Eagle, Does Blight Really Justify Condemnation? 39 Urban Lawyer 833 (Fall 2007).


Now, the U.S. Court of Appeals for the Second Circuit has weighed in on the subject of whether Kelo was novel, in Goldstein v. Pataki (Docket No. 07-2537-cv, Feb. 1, 2008, affirming 488 F.Supp.2d 254). This is the New York case approving the Atlantic Yards Project, a huge, 22-acre development in Brooklyn, that will include an NBA stadium and that is going to be built by Forest City Enterprises, a development company owned by mega-developer Bruce Ratner.


As the court explained at length in Goldstein, it had no alternative but to follow Kelo, and terefore had to reject the plaintiffs’ challenge to the proposed taking,  Its opinion does a thorough job of doing just that. But in the process, the court provided an insight into its assessment of Kelo’s novelty. As the court put it: “Kelo posed a novel question of law precisely because the city of New London had ‘not [been] confronted with the need to remove blight’.” So there you have it: for whatever it’s worth, the Second Circuit agrees with Kelo’s critics on this point – the decision was novel, just as many of its critics had it from the outset.


The other novel point noted by the court in Goldstein was that “[p]rior to Kelo, no Supreme Court decision had endorsed the notion of a ‘pretext’ claim, …” But don’t get your hopes up on that one. The Goldstein opinion makes it clear that saying so is one thing, being permitted by a court to prove it is another. On that point see Robert Thomas’ discussion  Pleading Kelo Pretext: What About Justice Kennedy? on his inversecondemnation.com blog of February 6th.