Posted by Ilya Somin:
The Ohio Supreme Court's decision in Norwood v. Horney and the Future of
Eminent Domain:
http://volokh.com/archives/archive_2006_07_23-2006_07_29.shtml#1153959401
The Ohio Supreme Court's unanimous decision in [1]Norwood v. Horney,
issued today, is an important victory for property rights. Perhaps the
most significant element of the decision is the fact that the Court
went beyond banning "economic development" condemnations of the sort
permitted by the U.S. Supreme Court in Kelo v. City of New London, and
also suggested that there are state constitutional limitations on the
governments' power to condemn property that is designated as
"blighted." The Ohio Supreme Court has also become the 11th state
supreme court to ban Kelo-style condemnations under its state
constitution, a decision which largely negates the shortcomings of
Ohio's woefully inadequate post-Kelo "reform" law. I. Banning Economic
Development Takings.
First and most obviously, Norwood bans the condemnation of property
for transfer to another private party in order to promote "economic
development." The Ohio Supreme Court has now become the eleventh state
high court to ban Kelo-style takings under its state constitution, and
the second to do so since Kelo was decided (following Oklahoma):
Although we have permitted economic concerns to be considered in
addition to other factors, such as slum clearance, when determining
whether the public-use requirement is sufficient, we have never
found economic benefits alone to be a sufficient public use for a
valid taking. We decline to do so now....
We hold that an economic or financial benefit alone is insufficient
to satisfy the public-use requirement of Section 19, Article I [of
the Ohio Constitution]. In light of that holding, any taking based
solely on financial gain is void as a matter of law and the courts
owe no deference to a legislative finding that the proposed taking
will provide financial benefit to a community.
Unfortunately, there is an important problem here, because the Ohio
Court still permits "economic concerns to be considered in addition to
other factors, such as slum clearance, when determining whether the
public-use requirement" has been met. If this exception is interpreted
broadly, it could greatly undermine the impact of Norwood, since local
governments can often cite some "other factor" to justify a
condemnation that is in reality undertaken for development purposes. A
categorical ban on the "economic development" rationale would have
been better. If the "other factors" are sufficient to justify
condemnation in their own right, well and good. But it is a mistake to
allow otherwise inadequate factors to go through because of claims
that the condemnation will also promote development. Hopefully, Ohio
courts will interpret the "other factor" exception narrowly. II.
Potentially Limiting Blight Condemnations.
The most unique and original aspect of the Norwood decision is the way
in which it may limit "blight" condemnations, as well as those purely
for "economic development" purposes.
As I have pointed out in both blog posts (e.g., [2]here), and in my
academic work (see [3]here and [4]here), broad definitions of blight
of the sort which are all too common in state legislation can
undermine a ban on economic development takings by licensing local
officials to declare virtually any area blighted, thereby allowing the
property there to be condemned. Recent state court decisions have
concluded that such areas as Times Square and downtown Las Vegas are
"blighted," thereby justify condemnation of property to build a new
heaquarters for the New York Times and new parking lots for
politically influential Las Vegas casinos. See Las Vegas Downtown
Redev. Agency v. Pappas, 76 P.3d 1 (Nev. 2003) (Las Vegas case); In re
W. 41st St. Realty v. N.Y. State Urban Dev. Corp., 744 N.Y.S.2d 121
(N.Y. App. Div. 2002) (Times Square case).
The Norwood decision can help put a stop to such abuses, especially if
courts in other states choose to adopt its reasoning. In Norwood,
numerous homes in relatively good condition were condemned by a local
government under an ordinance that allows condemnatin of property that
was in a "slum" area, "blighted," or "deteriorated." Only the third of
these ("deterioration") was claimed to be present by the government in
the Norwood case. The Ohio Supreme Court refused to permit
condemnation under this rationale because the city's definition of
"deterioration" would permit condemnation of virtually any property in
any neighborhood:
As defined by the Norwood Code, a �deteriorating area� is not the
same as a �slum, blighted or deteriorated area,� the standard
typically employed for a taking. And here, of course, there was no
evidence to support a taking under that standard. To the contrary,
the buildings in the neighborhood were generally in good condition
and the owners were not property-tax delinquent...
The Norwood Code sets forth a fairly comprehensive array of
conditions that purport to describe a �deteriorating area,�
including those found by the trial judge in this case: incompatible
land uses, nonconforming uses, lack of adequate parking facilities,
faulty street arrangement, obsolete plotting, diversity of
ownership. In addition, the trial court identified the following
factors as supporting the determination that the neighborhood was
deteriorating: increased traffic, dead-end streets that impede
public safety vehicles, numerous curb cuts and driveways, and small
front yards. But all of those factors exist in virtually every
urban American neighborhood. Because the Norwood Code�s definition
of a deteriorating area describes almost any city, it is suspect.
(emphasis added).
Although Norwood addressed only the issue of condemnations of
"deteriorated" areas rather than "blighted" ones, the exact same
reasons why the Ohio Supreme Court rejected the City of Norwood's
"deterioration" rationale can also be used to strike down overly broad
definitions of blight.
Up until now, no other state supreme court has confronted the
contradiction between banning "economic development" takings and
permitting blight condemnations under a virtually limitless definition
of "blight." Hopefully, other states will resolve this issue in a way
similar to Ohio's approach. III. Connection to Post-Kelo Legislation.
The Norwood decision is also noteworthy because Ohio recently enacted
one of the least effective of all post-Kelo reform statutes. As I
explain in greater detail in a forthcoming [5]article (pp. 69-71), the
new Ohio law accomplishes almost nothing. The centerpiece of the law
is the establishment of a commission to consider eminent domain reform
- a commission stacked with representatives of interest groups that
benefit from economic development takings.
The conjunction of the Norwood decision and Ohio's virtually useless
post-Kelo law emphasizes the need to recognize that we cannot rely
exclusively on the political process to protect constitutional
property rights, a point I previously stressed [6]here and [7]here.
Sometimes, judicial intervention is also needed.
CONFLICT OF INTEREST WATCH: As noted [8]here, I once briefly worked
for the Institute for Justice, the public interest law firm that
represented the property owners in Norwood and Kelo, and have written
several pro bono amicus briefs for them.
References
1. http://www.sconet.state.oh.us/rod/newpdf/0/2006/2006-Ohio-3799.pdf
2. http://volokh.com/posts/1149295176.shtml
3. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=874865
4. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=677763
5. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=874865
6. http://volokh.com/posts/1148845890.shtml
7. http://volokh.com/posts/1152307122.shtml
8. http://volokh.com/posts/1152307122.shtml
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