New York’s Highest Court Backtracks on Property Owners’ Rights in Eminent Domain Case

Spring 2010

By Craig Mausler

In In re Goldstein v. New York State Urban Development Corp., New York State used its power of eminent domain to seize property that would be included in a private developer’s twenty-two-acre mixed-use development project.1 The project was to include a sports arena for a professional basketball team and numerous high rise buildings, the latter of which would serve both commercial and residential purposes.

New York State law requires that there be a finding of “substandard and insanitary” conditions, and that the development would serve a “public use, benefit or purpose,” in order for the power of eminent domain to be invoked constitutionally. The plaintiffs originally brought suit in U.S. district court, raising both federal and state challenges to the state’s exercise of eminent domain power. After losing all federal claims in that case, the district court refused to exercise jurisdiction on the state law claims. As such, the lawsuit was re-commenced six months later in the New York State court system on the state law claims.

By the time Goldstein reached the New York State Court of Appeals, the main issue for the court was whether using eminent domain powers to aid private commercial entities in pursuit of private economic gain—with perhaps some incidental public benefit—constitutes a “public use.”2 The landowners challenged the state’s argument that this development project fell within the constitutional definition of “public use,” contending that:

authorizing the condemnation of their properties for the Atlantic Yards project is unconstitutional because the condemnation is not for the purpose of putting their properties to “public use” within the meaning of article I, § 7 (a) of the State Constitution—which provides that “[p]rivate property shall not be taken for public use without just compensation”—but rather to enable a private commercial entity to use their properties for private economic gain with, perhaps, some incidental public benefit.3

By a 6-1 vote, the New York State Court of Appeals rejected the petitioners’ argument and held that “it is indisputable that the removal of urban blight is a proper, and, indeed, constitutionally sanctioned, predicate for the exercise of the power of eminent domain.”4 Although the court agreed that the landowners’ property was not blighted in accordance with existing statutory and constitutional definitions, it found that it “[has] never required that a finding of blight by a legislatively designated public benefit corporation be based upon conditions replicating those to which the Court and the Constitutional Convention responded in the midst of the Great Depression.”5 Instead, wrote the majority, it is entirely proper for the court to modify this definition to meet the needs of the existing case.6

In his dissent, Justice Smith expressed concern about the majority opinion’s deference to the definition of “blight” presented by both the state and private developers, but applauded its resistance to adopting an even more sweeping interpretation of eminent domain.7 He underscored the fact that New York case law did not establish a general proposition that property may be condemned and turned over every time a state agency thinks it would help to improve a neighborhood. Justice Smith also pointed out that economic development and job creation, not the elimination of blight, were the original justifications for this project and that, even if blight were a proper justification for the project, the record did not support any type of finding that these neighborhoods were, in fact, blighted or insanitary. Stating that the “determination of whether a proposed taking is truly for public use has always been a judicial exercise,” the dissent ultimately concluded that “while no doubt some degree of deference is due to public agencies and to legislatures, to allow them to decide the facts on which constitutional rights depend is to render the constitutional protections impotent.”8



1 In re Goldstein v. New York State Urban Dev. Corp. 13 N.Y.3d 511 (2009).

2 Two members of the majority, Justice Read and Justice Pigott, dismissed the case on procedural statute of limitations grounds, never reaching the merits of the dispute.

3 13 N.Y.3d at 523 (emphasis added).

4 Id. at 524. According to the court, blight “has been deemed a public use since the court’s decision in Matter of New York City Hous. Auth. v. Muller, 270 NY 333 (1936).”

5 13 N.Y.3d at 524-25.

6 The majority stressed the need for judicial action when “reasonably” necessary:

Whether a matter should be the subject of a public undertaking—whether its pursuit will serve a public purpose or use—is ordinarily the province of the Legislature, not the Judiciary . . . . It is only where there is no room for reasonable difference of opinion as to whether an area is blighted, that judges may substitute their views as to the adequacy with which the public purpose of blight removal has been made out for those of the legislatively designated agencies; where, as here, “those bodies have made their finding, not corruptly or irrationally or baselessly, there is nothing for the courts to do about it, unless every act and decision of other departments of government is subject to revision by the courts” (Kaskel, 306 NY at 78).

Id. at 526.

7 According to Justice Smith:

[t]he good news from today’s decision is that our Court has not followed the lead of the United States Supreme Court in rendering the ‘public use’ restriction on the Eminent Domain Clause virtually meaningless. The bad news is that the majority is much too deferential to the . . . Empire State Development Corporation.”

Id. at 546 (Smith, J., dissenting).

8 Id. at 552.

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