Denial of SCOTUS Review: Open Door for More Takings Under Kelo?

Our blog often focuses on Court action that shapes the law surrounding the substantial power of eminent domain. However, in some instances, Court inaction may lead to detrimental consequences for property owners when faced with a governmental taking. One notable example of Court inaction that is worth discussing is the case of Eychaner v. City of Chicago where the Supreme Court of the United States chose not to review the case. The Supreme Court’s decision to deny certiorari in Eychaner last term effectively expanded the scope of the controversial decision in Kelo v. City of New London by permitting the taking of land from one private owner to give it to another for a potential future public purpose. (Emphasis added).

As a quick refresher: Kelo involved the efforts of a Connecticut city to undertake a local “redevelopment” project by seizing privately owned property and turning it over to private redevelopers who would then build new buildings with commercial and residential uses where the private homes used to exist. After years of contention, the Supreme Court held that economic development could be a legitimate and legal “public purpose” to use eminent domain under the Federal Constitution, provided that the laws of the state in question permitted takings via eminent domain for these specific purposes. While many states have since passed eminent domain reform laws to restrict the ways in which eminent domain may or may not be used, States like New Jersey do not, and have never permitted “economic development” seizures by eminent domain and continue to limit the use of eminent domain in local redevelopment matters to redevelop “blighted areas.” See N.J. CONST. art. 8, § 3, ¶ 1.

In Eychaner, the City of Chicago went a step further and took land from one private owner in order to give it to another private owner for the stated purpose of preventing the land from possibly becoming a blighted area in the future. Dissenting from the Court’s denial of certiorari, Justice Thomas opined as follows:

[T]his petition provides us the opportunity to correct the mistake the Court made in Kelo. There, the Court found the Fifth Amendment’s “public use” requirement satisfied when a city transferred land from one private owner to another in the name of economic development. See 545 U. S., at 484. That decision was wrong the day it was decided. And it remains wrong today. “Public use” means something more than any conceivable “public purpose.” See id., at 508–511 (THOMAS, J., dissenting). The Constitution’s text, the common-law background, and the early practice of eminent domain all indicate “that the Takings Clause authorizes the taking of property only if the public has a right to employ it, not if the public realizes any conceivable benefit from the taking.” Id., at 507–514; see also id., at 479 (majority opinion) (acknowledging that “many state courts in the mid-19th century endorsed ‘use by the public’ as the proper definition of public use”). Taking land from one private party to give to another rarely will be for “public use.” But see id., at 513–514 (THOMAS, J., dissenting). The majority in Kelo strayed from the Constitution to diminish the right to be free from private takings. See generally id., at 505–523 (same).

[Eychaner v. City of Chicago, 594 U. S. ____, slip op at 2 (2021)]

The Court’s decision not to correct (or even modify or disrupt)  Kelo could continue to benefit large corporations and developers with considerable political influence and power. While the New Jersey Constitution permits the use of eminent domain in local redevelopment matters to help redevelop “blighted” areas, New Jersey has witnessed the use of eminent domain in areas that would not ordinarily seem to qualify as blighted in the views of many observers, such as redevelopment projects in tony suburbs like Princeton and some of New Jersey’s wealthier communities in Bergen County.  In addition, it is important to acknowledge several legal protections that are now available to safeguard against pretextual and ambiguous takings. Specifically, the Appellate Division has confirmed that New Jersey law limits the use of eminent domain for local redevelopment purposes to properties that are “reasonably necessary” to an identified redevelopment project. Borough of Glassboro v. Grossman, 457 N.J. Super. 416 (App. Div. 2019).  In Grossman, the Appellate Division reversed the lower court’s judgment affirming the exercise of eminent domain for local redevelopment purposes because the condemning authority presented no evidence substantiating that the property taken was necessary for the redevelopment project in question. Id. at 422.

Moreover, closely related to the protections set forth in Grossman, certain New Jersey development authorities are required to submit evidence-based assurances that proposed plans will be implemented in the reasonably foreseeable future. New Jersey Courts have held that these condemning authorities lack the discretion to take property for future public use unfettered by court consideration of whether or when the proposed redevelopment will occur. See Casino Reinvestment Dev. Auth. v. Birnbaum, 458 N.J. Super. 173, 193-94 (App. Div. 2019) (involving the Casino Reinvestment Development Authority).

In addition to the information mentioned above, one of the easiest ways for a property owner to begin the fight against eminent domain is to retain experienced counsel as early as possible. For over 50 years, McKirdy, Riskin, Olson & DellaPelle, P.C. has concentrated its practice in this special area of the law and has earned a reputation for persistently defending its clients’ constitutionally-recognized property rights. For example, our firm was involved with defending the property rights at issue in the Grossman matter mentioned above. If you are confronted with the threat of eminent domain, please feel free to contact us for a free consultation.