Appeals Court Rules in Favor Of Norwood Homeowners

Washington, D.C.—In a loss for the City of Norwood, the Ohio Court of Appeals today ruled that property owners who do not face condemnation actions but still live in a so-called “blighted” neighborhood could bring a lawsuit against the City for constitutional and statutory violations. The unanimous decision from the First Appellate District Court in Hamilton County reinstates a lawsuit for four property owners who live in or have businesses in the Edwards Road neighborhood. Hamilton County Common Pleas Court Judge Robert P. Ruehlman had dismissed the lawsuit in November 2003.

“The last thing property owners should want is to have their neighborhood be declared blighted,” said Scott Bullock, a senior attorney with the Washington, D.C.-based Institute for Justice, which handled the appeal for the property owners. “We are thrilled that the appeals court recognized that property owners do not have to wait to restore their rights under Ohio law and the Constitution.”

The appeals court declared in today’s ruling, in an opinion by Judge Robert H. Gorman, “[I]t would be fundamentally unfair to make property owners wait until appropriation proceedings are commenced (if they ever are) before they can legally challenge the designation of the area in which their property lies as blighted, deteriorated, or deteriorating. Such a designation is an obvious cloud on their titles, impeding marketability, reducing market values, and chilling any plans for improvement.”

The appellate court victory reinstates the lawsuit originally filed in September 2003 for homeowners Edwin and Bonnie Foster, who have lived in their home on Dacey Avenue for more than 30 years; Tom and Debra Case, owners of Debco Electronics; R. Joseph Doud and Clifford Hall, Jr., owners of the Edge Inn; and John and Barbara Richards, who have had their radio repair shop along Edwards Road for more than 50 years. The case will now be sent back to the trial court and the property owners will be permitted to proceed with their claims.

“Every property owner in Hamilton County should rejoice at this ruling,” said IJ staff attorney Bert Gall. “Blight labels are indefinite, and property owners should not be stuck with this label for months, even years, without recourse to the courts.”

The Institute agreed that the property owners who already faced condemnation actions in the case and have had their day in court should be dismissed from this appeal and the appeals court did so. For those five home and business owners, in June 2004, Hamilton County Common Pleas Court Judge Beth A. Myers declared that the City of Norwood had abused its discretion in declaring the neighborhood blighted, but that the City could use eminent domain because the neighborhood was supposedly “deteriorating.” Under the standards for “deteriorating,” nearly any home or business could be taken by the government. Those property owners, also represented by the Institute for Justice, will appeal that ruling following compensation trials for their property.

The battle along Edwards Road in Norwood stems from developer Jeffrey Anderson’s desire to build “Rookwood Exchange,” a complex of private office buildings, condominiums and chain stores to replace the homes and locally owned businesses in the neighborhood. Anderson sought to buy many of the properties in the area, but several property owners are not interested in selling. That is when Norwood’s city government became involved. Because Anderson was unable to obtain the homes and businesses in the open marketplace, he asked Norwood’s City Council to pursue an urban renewal study of the area to see if the neighborhood was “blighted.” Anderson paid for the blight study, which the City Council approved on August 26, 2003. The study itself admitted that not one of the 99 homes or businesses in the area was dilapidated or delinquent on taxes. Anderson has also agreed to reimburse the City for the cost of condemning and taking the properties.

Norwood is not alone in its efforts to take property for private economic development. Indeed, according to the first-ever national report on eminent domain abuse, called “Public Power, Private Gain,” Ohio is one of the leading abusers of eminent domain in recent years. For example, Lakewood, a city on the outskirts of Cleveland, had declared a neighborhood very similar to the targeted area in Norwood “blighted” so that the land could be transferred to private developers, including, incredibly, Jeffrey Anderson, the same developer who stands to profit from the Norwood condemnations. The citizens of Lakewood through an initiative repealed the designation.

Assisting IJ as local counsel in the Norwood case is noted Cincinnati land use attorney Robert P. Malloy of Wood & Lamping, LLP.

The Institute for Justice is the nation’s leading legal advocate against the abuse of eminent domain, currently fighting battles across the nation against the taking of private properties by governments for the benefit of private parties. In addition to Norwood, these cases include New London, Conn., and metropolitan New York. The U.S. Supreme Court is now considering whether to take up the appeal of the New London case. IJ has already scored victories against the abuse of eminent domain in court and in the court of public opinion in Atlantic City, N.J.; Canton, Miss.; Mesa, Ariz; Pittsburgh, Penn.; and Baltimore, Md.