Can NO Compensation Be Just Compensation?

VFW Denied Opportunity to Argue Eminent Domain Case to U.S. Supreme Court

 This week the United States Supreme Court denied certiorari review in City of Milwaukee Post No. 2874 Veterans of Foreign Wars of the United States v. Redevelopment Agency of the City of Milwaukee, No. 09-1204 (cert. petition filed Apr. 2, 2010).  The VFW, the previous owners of the subject property, sought just compensation as a long-term tenant in a building with a nominal rent ($1 rent per year).  Relying on the “undivided fee rule”, the Wisconsin Supreme Court found that the VFW’s long-term lease had no value, despite the extremely favorable terms, and even though both parties agreed that the lease had significant value, because the remainder of the building where the VFW was located was underutilized and allegedly required asbestos abatement and demolition, which made the property’s overall fair market value zero dollars. 

 As a result of the ruling by the Wisconsin Supreme Court, which the U.S. Supreme Court has now refused to hear on appeal, the VFW was actually required to pay back several hundreds of thousands of dollars which had been awarded as the value of its lease interest by a lower court in Wisconsin.

McKirdy & Riskin’s Anthony F. Della Pelle, Esq., was interviewed recently on the Fox News Channel to provide commentary about this case.  The video can be viewed here.  

The full text of the VFW’s brief can be found here. 

Not all states apply the “undivided fee rule”, but like Wisconsin, New Jersey courts generally apply this doctrine in eminent domain valuation cases.  Whether the result reached in the VFW case would be reached in any New Jersey eminent domain case, however, will ultimately depend upon the particular circumstances involved.

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.