Overcoming New York's Stacked Deck

By Dana Berliner

New York’s eminent domain procedures are wildly biased in favor of the government. Five years ago, they were even worse. But thanks to IJ client Bill Brody, a federal appeals court has finally ruled that there are limits to just how much government can stack the deck in its favor.

In 2000, I got a call from Bill Brody of Rye, N.Y. His commercial building in Port Chester was being condemned for a Stop & Shop parking lot and he hoped IJ would help him challenge the taking.

IJ Senior Attorney Scott Bullock, paralegal extraordinaire Gretchen Embrey and I traveled to Port Chester and saw a thriving Main Street, with a mix of Hispanic restaurants, home furnishing stores and small apartment buildings. A family operated a small private marina and fresh lobster business on the waterfront. Brody’s building had eleven small businesses, including a laundromat, an electrical supply business, and a dance studio. The whole area was slated to be taken for a private developer who planned to bring in a Costco, Stop & Shop, and other large chain businesses.

IJ client Bill Brody has spent five years fighting New York’s unconstitutional eminent domain laws.

The Port Chester situation raised a number of important legal issues. The supposed basis for the taking was that the area was “blighted,” but Port Chester’s study showing “blight” was decades old and not reflective of the tremendous improvements Brody and others had created. The contract between Port Chester and the developer gave the developer an extraordinary amount of power to choose the properties it wanted and to decide whether or not they would be taken by eminent domain. New York’s highest court, the Court of Appeals, hadn’t heard a case about the use of eminent domain for private development in decades, and Bill Brody’s case presented a clear example of abuse of power.

There was just one problem. Under New York law, Brody had already lost the opportunity to challenge the taking of his property for private use. New York has the most bizarre, illogical condemnation process I have ever seen. In New York, condemnees have one 30-day window in which to object to the government taking their homes and businesses. The window closes, however, before the actual taking and before the owner even knows for sure that his property will be taken at all. Worse still, municipalities didn’t have to tell owners about this single, short-lived opportunity. After a public hearing, they published an announcement—essentially a classified ad—in the legal notices section of the paper that said the project had been approved but neglected to mention anything about a legal challenge. They didn’t even have to publish the actual address of the properties under threat. Owners had 30 days to challenge the possible taking of their property sometime (up to ten years) in the future. That’s it.

By the time he called us, Brody had already missed his chance to mount a constitutional defense of his property.

New York’s system struck all of us at IJ as, well, ludicrous. The most basic requirement of the Fourteenth Amendment’s due process clause is notice and opportunity to be heard when the government takes something away from you. Depriving someone of the right to challenge the taking of his property based on a newspaper notice that says nothing about legal challenges would be a joke if it didn’t result in people actually losing their homes and businesses without any recourse to the courts. New York’s law obviously violated due process, and so in late 2000, the Institute for Justice brought a lawsuit in federal court challenging New York’s law on behalf of Brody and two other owners.

Amazingly, it’s taken three trips to the appeals court to finally get a ruling that New York’s law was in fact unconstitutional. First, we got an injunction that prevented Port Chester from moving forward on the condemnation. The 2nd Circuit reversed that, and Brody’s buildings were immediately transferred to the developer, who tore them down. Then the trial court ruled that Brody should have brought his case in state court and thus couldn’t bring it in federal court. The 2nd Circuit reversed again. Then, the trial court ruled that Port Chester’s meaningless newspaper notice was good enough. And the 2nd Circuit reversed again. The court finally concluded, as it should have in the first place, that cities may not take people’s property without telling them about their one opportunity to defend themselves. Brody never should have lost his building in this ridiculous process.

Now, back in the trial court for the fourth time, it’s too late for Brody to get his building back. Instead, he will ask for a return of the land and/or compensation for the violation of his rights.

In response to the lawsuit, the New York legislature finally changed the law to at least require better notice; now a letter is mailed to owners and actually tells them what is going on. But the 2nd Circuit’s decision has a wider impact. It says that there are limits to just how much a State can stack the deck against property owners in eminent domain actions. The decision will help owners in the future when other states or cities try to rig the process to prevent owners from defending themselves.

Bill Brody has gone through five years of eminent domain hell. He has been up to the federal appeals court and back down to the trial court three times. At the same time, he has had to go to state court to try to receive compensation for his destroyed buildings—buildings Brody had refurbished in hopes of providing a secure future for his wife and three young daughters. It took more than a year after the developer kicked him out of his property to receive any money at all.

Governments try to maximize their power and make it as difficult as possible for individuals to prevent the loss of their home or small business. Fighting back takes courage, patience and incredible perseverance. It is the few owners like Bill, who stand up and fight, that set the precedents that protect us all.

Dana Berliner is an IJ senior attorney.


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