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Friday, December 8, 2006

Post-Kelo Case From The Second Circuit -- Didden v. Village of Port Chester

Ilya Somin has a detailed post up at the VC on Didden v. Village of Port Chester, a potentially important public use case out of the Second Circuit.  The case is up on a petition for cert to the Supreme Court, and Ilya and a group of other law professors (a bunch of prominent folks and a random guy (yours truly)) have filed an amicus brief asking the Court to take the case.  Ilya covers the facts of the case in his post, but I'll add two observations.  First, it is not clear to me that the Second Circuit actually read the Supreme Court's opinion in Kelo, rather than just reading the news reports about Kelo.  Second, I realize that signing on to the amicus brief undercuts my earlier request that the Court not grant cert on any takings cases for a few years.  As Emerson observed, consistency is the hobgoblin of little minds.

Ben Barros

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http://lawprofessors.typepad.com/property/2006/12/postkelo_case_f.html

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Ilya Somin at the VC has a post on Didden v. Port Chester, which is up on a cert petition to the Supreme Court. I also discussed Didden in a previous post. Ben Barros [Comments are held for approval, so [Read More]

Tracked on Jan 9, 2007 9:08:26 AM

Comments

Wow! If the record supports the claims of extortion--pay a private developer almost $1 million or he will have his friends in govt condemn the land--this should be a winner even under Kelo. Indeed, I would think a criminal investigation should be considered. Can the facts really be as bad as Ilya reports?

Posted by: Rick Duncan | Dec 9, 2006 3:00:53 AM

One more interesting point about Didden for fans of public choice theory: the three judge panel included Sotomayor, a Clinton appointee (although George HW Bush first appointed her to the federal district court), Raggi, a Regan appointee, and Hall, a George W. Bush appointee.

Why would such a panel render such an analytically skimpy ruling in a post-Kelo case, particularly in the present climate of post-Kelo scrutiny of eminent domain cases? I am not a fan of conspiracy theories, but I cannot help wondering whether the judges might have intentionally issued a bizarrely under-analyzed opinion in order to give the Supreme Court a quick second bite at the Kelo apple. Just a thought.

Posted by: Dan Cole | Dec 9, 2006 3:23:25 PM

Rick, the great thing about the case is that it is up on a motion to dismiss, so the allegation in the complaint about the demand has to be taken as true. I'm sure that the folks on the defense side would take another view, and part of their story is available from the District Court's opinion on a preliminary injunction motion that preceded the motion to dismiss. (The PI opinion shouldn't be considered in the litigation in its present procedural posture). I think the basic point of the allegation is credible. My best guess, based on the record as I've seen it so far, is that from the time the town enacted the redevelopment plan, the developer acted as if they owned the property, and not without reason -- the town had the contractual obligation to condemn the property at the developer's request. The fight here is about who gets the profits from developing the parcel for a drugstore. My guess is that in the meeting, the developer thought that they were entitled to a cut because of their contractual rights with the town. But the developer didn't own the property -- until eminent domain was used, the property owners did. The District Court and the Second Circuit didn't seem to understand the difference between declaring an area blighted and the actual use of eminent domain, which led both lower courts to what I think were very suspect rulings on both the merits and a related statute of limitations issue. And yes, I think that as pled in the complaint, the taking would be impermissible under Kelo, Midkiff, etc.

Dan, that's an interesting theory, but the fact that it was an unpublished opinion weighs against it. From having worked there as a law student, and having clerked in the SDNY, I know that the Second Circuit has a habit of using these unpublished opinions in cases that raise land use and local government issues that they just don't want to deal with.

Posted by: Ben Barros | Dec 9, 2006 7:25:56 PM

I just read the 2d Circuit's brief opinion in the case. The court found that:

(a) the Appellants' claim was barred by the statute of limitations because, according to the court, the claim became viable when the Village announced the public purpose supporting the condemnations, not upon the supposed "extortion" by the developer;

(b) even if the claim had not been barred by the statute of limitations, the condemnation was a valid public use under Kelo; and

(c) there was no extortion or exaction.

In my view, the court may well be right about (a), but its Kelo analysis under (b) is skimpy to say the least. And the court presents conclusion (c) without any supporting analysis. The almost complete absence of legal analysis in support of conclusions (b) and (c) are very troubling. I believe it warrants a request for rehearing en banc before petitioning for certiorari.

Posted by: Dan Cole | Dec 9, 2006 7:30:43 PM

Dan,

Sorry, the order of your posts got switched. Anyway, my understanding is that the Second Cir. denied a petition for rehearing. I agree with your views on (b) and (c). (a) is the best issue for the defendants, but I think that plaintiffs are right on this largely because of the point I mention above -- there is a big difference between declaring a redevelopment area and identifying redevelopment as a public purpose on the one hand, and the actual exercise of eminent domain on the other. Also, plaintiffs aren't complaining about the redevelopment declaration; rather, they're complaining about conduct that happened right before eminent domain was used. If the plaintiffs had made a claim when the original redevelopment declaration was made that the developers would use the threat of eminent domain to bargain unfairly (and there is suggestion that the property owners were concerned about this at the time), I'd think that their claim would have been dismissed as unripe.

Posted by: Ben Barros | Dec 9, 2006 7:38:49 PM

Of course, this Court is so eccentric they may actually take the case. No one expected them to take Kelo, and no one expected Kelo to be close.

My comments are based on the research I did for my book (link below). The problem with the argument is that the notion of "pretext" to the Didden property. The real pretext is the redevelopment plan itself. That is what has to have a government purpose. And the Didden folks don't even talk about that. It is very unlikely that, unless you address the lack of government purpose in the redevelopment plan itself, the Court will challenge anything done under it.

Midkiff said government purpose only has to be "conceivable." That sounds like there don't have to be any facts, and that government purpose is not a question of fact for the trier of fact.

But the Court corrected that. In two 1996 cases, Romer v. Evans and U.S. v. Virginia, the Court went out of its way to indicate that government purpose is a FACT for the trier of fact. Kennedy expands on that in his Kelo concurrence, which is really a list for discovery.

What's happening now in Constitutional law is litigation under the "government purpose" test (see the Atlantic Yards recent lawsuit--the complaint is online at www.dddb.org). What in FACT is government purpose? That's the avant garde of Constitutional law. The Court has an answer. In both a pre-scrutiny regime case, Euclid v. Ambler (1926), and the case which established the scrutiny regime, West Coast Hotel v. Parrish (1937), the Court indicated that government purpose is the maintenance of important facts (housing in Euclid, income in Ambler). The concept of maintenance plays an important role in both cases. And of course this test applies to all government policy, since all government policy must have a government purpose. However, this is so far from what is argued in Didden to get the SC to hear the case, that I think the Court may say that the issues presented are simply too trivial to bother with.

The real question is, how does the redevelopment plan maintain Didden's business? It obviously doesn't. But until you "property rights" folks get your act together and realize that you are going to have to deal with complicated interrelationships of facts, you aren't going to get very far. Look at Norwood! That "victory" is so uncertain that now litigants on BOTH sides of eminent domain cases are citing it. Very messy! On top of that, the homeowners in Didden want their whole neighborhood restored (most of it was torn down before the Ohio Supreme Court said the taking was unconstitutional). The "property rights" movement just wants "clean" wins. But life isn't like that. So now the Institute for Justice--which represented the Norwood property owners--should be proposing vast changes in all kinds of laws, in order to restore that neighborhood to what it was. The "just leave me alone" mentality doesn't work. The "property rights" movement wants to get government out of their lives, but when they win, they simply become the government--with all the complex problems that involves. Are they ready?

Finally, the time bar thing in Didden, where the government is arguing that the suit is foreclosed because the property owners should have sued at the time the development district was formed. The moment a redevelopment plan is adopted, property within it is under a cloud, and that has a negative impact on property value, so a cause of action does arise at that point. However, the case can still be litigated at any time, because government purpose arises as a question whenever government acts pursuant to the plan. So the Didden facts did give Didden the right to sue. IJ doesn't make that argument however, because it really isn't interested in pursuing "government purpose," because that implicates it in continuing management of government.

If you want an example of what happens when litigants are required, after they win, to supply the "government purpose" they claimed was missing, check out the Abbott v. Burke education cases in New Jersey (www.edlaw.org). This is still in litigation after thirty years!!

Cordially yours,
John Ryskamp


The Eminent Domain Revolt: Changing Perceptions in a New Constitutional Epoch

The Eminent Domain Revolt: Changing Perceptions in a New Constitutional Epoch by John, Ryskamp (Paperback - Nov 1, 2006)
Books: See all items
Buy new: $24.95 Used & new from $24.95
Get it by Tuesday, December 12, if you order in the next 51 hours and 40 minutes.

Posted by: John Ryskamp | Dec 11, 2006 10:07:21 AM

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