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June 10, 2007

Judge Finds Atlantic Yards Meets Public Use Standard

New York Law Journal
Mark Hamblett

A federal judge has dismissed challenges to the taking by eminent domain of property needed for the massive Atlantic Yards development in Brooklyn.

Eastern District Judge Nicholas Garaufis, after deciding he would not abstain from deciding the case, found that the combined housing, office space and sports arena project easily met the standard for "public use" takings under the U.S. Constitution.

Thirteen residents and businesses have refused to sell their apartments, buildings or long-term leases to Forest City Ratner Cos., the developer of the project. Judge Garaufis dismissed two consolidated complaints brought by property owners on the site who claimed their constitutional rights were violated by the planned condemnation of property to be developed by Forest City Ratner Companies.

The cases are Goldstein v. Pataki, 06-CV-5827, and Piller v. Pataki, 07-CV-152.

The decision will be published Tuesday.

Judge Garaufius dismissed three constitutional claims with prejudice. A fourth claim for judicial review under the state's eminent domain law was also dismissed, although plaintiffs are free to bring that claim in state court.

We're very happy about this result," said Jeffrey Braun of Kramer Levin Naftalis & Frankel, who represented Forest City.

"We're going right to the circuit," said plaintiffs attorney Matthew Brinckerhoff of Emery Celli Brinckerhoff & Abady. "Ratner can't take any of the property until this is resolved."

Magistrate Judge Robert Levy had recommended that the judge dismiss the case, in part because of U.S. Supreme Court abstention doctrine as outlined in the case of Burford v. Sun Oil Co., 319 U.S. 315 (1943). But after deciding not to abstain, Judge Garaufis made several findings, including that New York's Eminent Domain Procedure Law (EDPL), ยง207, provides "timely and adequate state review" of condemnations and that his keeping of the case would not disrupt state efforts to establish a coherent policy on eminent domain.

"In considering whether the project constitutes a 'public use' under the United States Constitution, this court will not disrupt the coherence of the EDPL, a generic statutory scheme designed to deal with takings of all kinds and for a virtually infinite variety of public purposes," Judge Garaufis said. New York City had argued that allowing the case to go forward would hurt the state's policy of promoting efficiency and reducing litigation.

New York's Empire State Development Corp., also a defendant, argued that the failure to abstain would promote "piecemeal litigation." Judge Garaufis disagreed, saying the defendants apparently were conflating the political process for selecting projects and sites for condemnation and the legal process for deciding whether a project serves a public use under the Constitution.

"This case simply does not require the court to consider whether the project is a good idea or whether it can be achieved only by taking plaintiffs' properties as opposed to other properties or no properties at all," he said. "Instead, the issue before the court is whether the taking of plaintiffs' properties is rationally related to a conceivable public use, as required by the U.S. Constitution."

Nor would his deciding the case run afoul of concerns expressed by the U.S. Supreme Court that a federal judge not get involved in "discretionary interpretation of state law," the judge said, because the questions of law "are straightforward and largely duplicative of the questions of federal law that this court must address."

Mr. Brinckerhoff said he was pleased with the judge's ruling on abstention under Burford "because we don't have to spend any more time litigating justiciability issues."

Public Use

In addressing the question of public use, Judge Garaufis reviewed the major case law on eminent domain, including the controversial ruling Kelo v. City of New London, 545 U.S. 469 (2005), where the U.S. Supreme Court found that a taking could be considered a public use even if it did not lead to the "use by the public" of the taken property.

The takings in New London, Conn., the court said, satisfied the public use requirement of the Fifth Amendment because the "public purpose" of the takings was "a program of economic rejuvenation."

Here, the plaintiffs' claimed that the sole purpose was to transfer property to a private party; the project would generate no or minimal economic benefits; it would not create jobs; their properties are not blighted; and the project will not increase affordable housing in any material way.

Judge Garaufis said the plaintiffs' conclusion that the public would not benefit in any way from the project was "baseless."

Each of the objections, he said, "concerns only the measure of the public benefit - as opposed to its existence - or otherwise fails to state a claim."

On the issue of blight, the judge said property may be taken, even if it is not blighted itself, where the "redevelopment is intended to cure and prevent reversion to blight in some larger area that includes the property."

Concerning the plaintiffs' claim that the sole purpose was to transfer property to a private entity, the judge said plaintiffs' "attempt to satisfy the 'mere pretext' test solely by alleging that the purported purposes of the project are dubious, but Kelo requires them to allege that the 'actual purpose' of the project is "to bestow a private benefit' on Forest City Ratner Co."

Later, Judge Garaufis added that, because the plaintiffs "concede the project will create large quantities of housing and office space, as well as a sports arena, in an area that is mostly blighted," their allegations, "if proven, would not permit a reasonable juror to conclude that the 'sole purpose' of the project is confer a private benefit."

Mr. Brinckerhoff said he was optimistic of prevailing at the U.S. Court of Appeals for the Second Circuit and added that, even in the event of a loss, he thinks the chances "are very, very high" that the U.S. Supreme Court would hear an appeal.

"This case has all the circumstances that the majority was saying in Kelo would raise problems," he said.

  • Mark Hamblett can be reached at mhamblett@alm.com.

Posted by amy at June 10, 2007 12:45 PM