Posted by: Patricia Salkin | February 4, 2008

Second Circuit Upholds Use of Eminent Domain for Controversial Atlantic Yards Project

On Friday, the Second Circuit upheld the District Court’s dismissal of a complaint filed by fifteen property owners whose homes and businesses are slated for condemnation, finding that the use of eminent domain by the Empire State Development Corporation for the proposed 22-acre Atlantic Yards and Redevelopment Project in and around the Metropolitan Transit Authority’s Vanderbilt Yards in the heart of downtown Brooklyn, NY was a valid public use under the Fifth Amendment of the U.S. Constitution.   

Plans for the project include the construction of a sports arena that will be home to the NBA New Jersey Nets, as well as the development of at least sixteen high-rise apartment towers (including 2,250 units of affordable housing) and several office towers.  Approximately half of the proposed project footprint lies within a heavily blighted area, and adjacent lands are less blighted, including some individual parcels necessary for the project as a whole that may not in and of themselves be blighted.   Picking up on Justice Steven’s statement in Kelo v. City of New London, 545 U.S. 469 (2005) that “Nor would the City be allowed to take property under the mere pretext of a public purpose when the actual purpose was to bestow a private benefit,” the plaintiffs alleged, among other things, that all of the seeming legitimate public uses that have been advanced in support of the Project, are mere pretexts for a private taking in violation of the Fifth Amendment.  

The Court noted that even by the plaintiffs’ own admission, the Project would serve several well-established public uses including the redress of blight, the construction of a sporting arena and the creation of housing that includes affordable housing.  Although the plaintiffs alleged that the private sector Project sponsor (Bruce Ratner, who also happens to own the Nets) is the sole beneficiary of the Project and that the public uses are “pretexts” advanced by corrupt and coopted state officials, the Court stated that “the primary mechanism for enforcing the public-use requirement has been the accountability of political officials to the electorate, not the scrutiny of the federal courts.”  Although there is a role for the courts in reviewing a legislature’s judgment, this, said the Second Circuit is extremely narrow, as the Supreme Court has instructed lower courts not to “substitute [their] judgment for a legislature’s judgment as to what constitutes a public use ‘unless the use be palpably without reasonable foundation.’” Here, the Court said, “the specific allegations in the complaint foreclose any blanket suggestion that the Project can be expected to result in no benefits to the public…” and that viewed objectively, “the Project bears at least a rational relationship to several well-established categories of public uses, among them the redress of blight, the creation of affordable housing, the creation of public open space, and various mass-transit improvements.”  

The Court continued that the redevelopment of a blighted area represents a “classic example of a taking for a public use” and that it does not matter that the government enlists the services of a private developer to execute the development plan, nor does it matter that the property will be transferred to private developers.  Although some of the properties in the redevelopment area are not individually blighted, the Court said the State may condemn unblighted parcels as part of an overall plan to improve a blighted area.   

In addressing the pretextual argument, the Second Circuit noted that Kelo posed a novel question of law because in that case the city had not been confronted with the need to remove blight. The Court said that therefore the issue of pretext must be understood in light of the holding in that case, and that no Supreme Court decision prior had endorsed to notion a “pretext” claim.  The Circuit Court said that the issue of pretext is relevant only where it is contested that any public use would be served by the taking.  Such is not the situation in the case at bar. Further, said the Court, allowing this type of claim to move forward based solely upon the mere suspicion as to the motivation of public officials, “would add an unprecedented level of intrusion into the process,” and that it is not for the courts to second-guess every detail “in search of illicit improper motivation.” The Court noted that it is only the taking’s purpose, and not its mechanics that must pass constitutional scrutiny.

The Court concluded by noting that private economic development is neither the sole nor primary justification for this Project, and that the plaintiffs have failed to allege specific examples of illegality in the process by which the Project was approved. 

The plaintiffs have indicated that they intend to appeal to the U.S. Supreme Court for review.

Goldstein v. Pataki, 2008 WL 269100 (C.A.2 (NY) 2/1/2008).  

The opinion can also be accessed at: http://www.ca2.uscourts.gov:8080/isysnative/RDpcT3BpbnNcT1BOXDA3LTI1MzctY3Zfb3BuLnBkZg==/07-2537-cv_opn.pdf#xml=http://www.ca2.uscourts.gov:8080/isysquery/irl3890/1/hilite


Responses

  1. I agree with the Court of Appeals decision above, as I do with the controversial decision made by the US Supreme Court in Kelo, a case which outlines the contemporary standards for such Eminent Domain. The opponents of such rulings must realize that these holdings do not in any way break new ground. The large public outcry against such decisions may cause a casual onlooker to believe the opposite, but there is nothing revolutionary happening as a result of these decisions. For many decades, the Supreme Court has held that court should yield to legislative determinations of a public use, and that public use itself goes hand in hand with the police power. (See Berman v Parker (1954), Hawaii Housing Authority v Midkiff (1984), Brown v Legal Fund of Washington (2003) for a few examples) Police power includes the authority to promote economic development, and promoting economic development is practical only if private parties are to included in development projects. Private party benefits generated by a condemnation project to stimulate economic development have never been determined to be constitutionally suspect, so why should they now in the case of Bruce Ratner and Atlantic Yards? Plaintiffs may fear that an unchecked government will begin to take all property and giving it to a private party at a whim, but this has not been the case. It is important to remember that the courts are not ordering the government to do anything here, they are simply saying that it is permitted on the limited basis of public use, and public use is to be determined by a legislature elected by the populace.
    Bruce Ratner and his company are not seeking to revolutionize eminent domain law. It is of no consequence that the company is a private party who may benefit from this land transfer. They seek simply to use eminent domain to revitalize an area of downtown Brooklyn that for the most part has been an eyesore for decades. Just compensation is being paid to those unfortunates who are being displaced for this greater good, and I personally look forward to the day when I can purchase a ticket to Brooklyn Nets game. One only has to be a Knicks fan right now to share my sentiment.

  2. I respectfully disagree with this decision. Kelo has radically altered jurisprudence. Midkiff and Berman are not excessive deviations from a logical progression of jurisprudence (upholding condemnation if such condemnation alleviates a harmful use of property, and the valid public purpose is recognized after the harmful use ceases). Midkiff and Berman were limited in their application, and arguably were improperly relied on in Kelo. Atlantic Yards relies on Kelo. An unsound base of law allows for detrimental ripple effects in NY jurisprudence, as evidenced in the Atlantic Yards case.

    A recent lawsuit related to Atlantic Yards may contain a valid argument to reinstate the peoples’ inherent right to be free from arbitrary and capricious takings by addressing the method of weighing a public benefit vs. private benefit.

    http://www.brooklynpaper.com/stories/32/8/32_8_gk_yards_case.html


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