New York High Court Upholds Eminent Domain for Private Gain

Arlington, Va.—The New York Court of Appeals, the state’s highest court, today announced that it would uphold the decision of the Empire State Development Corporation (ESDC) to condemn privately owned homes and small businesses to make way for wealthy developer Bruce Ratner’s so-called “Atlantic Yards” development of 16 mammoth skyscrapers centered around a basketball arena.

“Today’s decision puts homes and businesses throughout New York at risk of condemnation,” said Dana Berliner, a senior attorney at the Institute for Justice (IJ), which filed a friend-of-the-court brief in the case.  “Courts have a duty to look carefully at the government’s claim that it has the right to take someone’s home or business, and the Court of Appeals has simply refused to do that.”

While upholding the taking, the New York court did not go so far as to embrace the United States Supreme Court’s much-maligned reasoning in the 2005 Kelo v. City of New London case, which held that the U.S. Constitution allows governments to condemn property for economic development alone.  Instead, the Court found the takings were for a “public use” because of the ESDC’s determination that the area to be condemned was “blighted”—a determination that was based on a study paid for by the would-be developer and not even initiated until years after the Atlantic Yards project was announced.

In a dissent, Judge Robert Smith excoriated the majority for abandoning its duty to critically examine the ESDC’s assertions.  “To let the agency itself determine when the public use requirement is satisfied is to make the agency a judge in its own cause,” Judge Smith wrote.  “I think that it is we who should perform the role of judges, and that we should do so by deciding that the proposed taking in this case is not for public use.”

“The developer’s study did not find anything a normal person would call ‘blight,’” explained Berliner.  “Instead, it found that the neighborhood was ‘underutilized’—in other words, that the developer could think of bigger things that could be built where these homes and businesses are.  If that is all that is necessary for condemnation, then literally every piece of property in New York is at risk.”

The majority’s opinion frankly acknowledges that the court may be opening the door to “political appointees to public corporations relying on studies paid for by developers . . . [as] a predicate for the invasion of property rights and the razing of homes and businesses.”  But, it says, preventing such abuses is not the job of the courts, advising New Yorkers to look to their legislature to fix any problems.

“New York is one of only seven states that has failed utterly to pass any kind of eminent-domain reform in the wake of the Kelo decision, and today’s opinion will only make things worse,” said IJ Staff Attorney Robert McNamara.  “The state courts are looking to the legislature to fix the problem, while the legislature is apparently looking to the courts.  And that means more and more New Yorkers will be looking at condemnation notices.”  

“Property rights are as sacred to citizens of New York as they are to Americans nationwide, and New Yorkers have rightly looked to their courts to protect those rights,” concluded IJ President and General Counsel Chip Mellor.  “Today’s opinion should be a clarion call to the state legislature that they cannot avoid this issue any longer.  Now is the time to give state residents the reform and protections they desperately need.