Friday, December 04, 2009

Can decision in Columbia eminent domain case reopen AY case? DDDB is trying, but there are both similarities and contrasts (and also precedent)

Based on the surprising 3-2 Appellate Division decision yesterday blocking the the Empire State Development Corporation's use of eminent domain for the Columbia University expansion, Develop Don't Destroy Brooklyn, organizer and funder of the Atlantic Yards eminent domain case, hopes that it can succeed in the rare step of reopening the latter.

It's not easy. First, the Court of Appeals has to agree to such a rare step.

Then the plaintiffs have to win. And that wouldn't be easy, either, because the decision in the Columbia case was in significant tension with the Court of Appeals' decision just last week in the Atlantic Yards eminent domain case.

And even if the Columbia decision is not overturned, it is possible--depending on which frame the court uses--to make a distinction between the Columbia case and the Atlantic Yards case. Then again, there are some fundamental similarities.

Fundamental flaw

The fundamental flaw in Justice James Catterson's (two-judge plurality) opinion yesterday is that he completely ignored the Court of Appeals decision in the Atlantic Yards case, an opinion cited in Justice Peter Tom's Columbia dissent as compelling the Court of Appeals to defer to the ESDC's designation of blight.

(Libertarian law professor Ilya Somin also points this out, in a post on the Volokh Conspiracy.)

Not dissimilarly, the Chief Judge Jonathan Lippman's majority opinion in the Atlantic Yards case failed to engage with some fundamental issues in the dissent filed by Judge Robert Smith.

DDDB statement

DDDB issued a press release:
“The timing of the ruling is certainly propitious,” said Matthew Brinckerhoff, lead counsel for the home and business owners who just nine days ago had lost the first stage of their legal challenge to the confiscation of their properties. “As Justice Catterson rightly observed the Empire State Development Corporation’s abusive practices are the height of ‘idiocy.’ In the next few days, we will file a motion asking the Court of Appeals to reconsider its ruling in our case, based on this new indictment of the agency’s standard operating procedure. We know that the Court of Appeals will now review the Columbia University ruling, and we are optimistic that the abuse of power detailed in Justice Catterson’s powerful opinion, combined with the agency’s similar conduct in the Atlantic Yards case will cause a few of the Judges who already expressed skepticism to reconsider their decision. This will give us a rare second bite at the apple. We will not waste it.”
Reopening the case

Brinckerhoff told me that, in most circumstances, a motion for reconsideration is futile. He said he was "cautiously hopeful" that the Court of Appeals, recognizing that the two rulings appear inconsistent, would accept the motion.

Then it could, at minimum, hold the case in abeyance until the appeal in the Columbia case is decided. That appeal could be heard in March, with a decision coming within six weeks after that.

In comparison

Brinckerhoff acknowledged there the underlying facts of the two cases pose distinctions.

I'll point out a few:
  • There's no evidence that any part of the Columbia site was blighted prior to the university's pursuit of expansion. In the case of the Atlantic Yards site, more than half the site (mainly the Vanderbilt Yard) was long part of the Atlantic Terminal Urban Renewal Area (ATURA), and thus considered blighted. Those challenging eminent domain were property owners and renters in blocks below ATURA.
  • The ESDC's use of not one but three blight studies in the Columbia case, as well as the denial of Freedom of Information Law requests to the plaintiffs, showed evidence of bad faith.
  • The plaintiffs in the Columbia case conducted their own "No-Blight Study" to counteract the ESDC's finding; while AY opponents filed a forceful response to the official Blight Study, it was not used in the same way in court.
  • While in the Columbia case the court found no evidence of a public benefit, in the Atlantic Yards case, multiple (though highly debatable) benefits were found, including the arena, the improvement of transit facilities, and the provision of affordable housing.
  • Catterson's decision relied on Supreme Court Justice Anthony Kennedy's concurrence in the federal Kelo vs. New London case, which set out indicia--such as "substantial commitment of public funds to the project before most of the private beneficiaries were known"--of a sweetheart deal. The Atlantic Yards plaintiffs unsuccessfully raised those issues in federal court, and in state court relied on state cases and the state constitution.
Still, said Brinckerhoff, on core issues such as what constitutes blight--Catterson slammed the ESDC's use of the concept of underutilization--and the use of vague standards, "it has to apply to Atlantic Yards."

Catterson wrote:
The petitioners assert, inter alia, that UDCA is unconstitutional as applied by the ESDC because the agency has failed to adopt, retain or promulgate any regulation or written standard for the finding of blight.
Catterson agreed. While the plaintiffs in the AY case did not raise this issue, the same lack of standards would apply to the pursuit of eminent domain in Brooklyn.

Catterson also pointed to the evidence of pretext--that blight was not identified as a justification until after the project was announced. In his dissent last week, Smith cited similar evidence in the Atlantic Yards case, but the majority ignored it.

"It's a little hard for me to see the Court of Appeals affirming [the Columbia case] in a way that's meaningful," said Brinckerhoff. "I'm hopeful that the Columbia case drives home the error in Lippman's belief that [the court] needs to defer to the administrative agency."

Effect on bond sale

The dismissal of the Atlantic Yards case last week gave the go-ahead for the sale of $500 million in tax-exempt bonds, which should begin next week. No interest rate has been set yet, nor has insurance been assigned, but the bonds crucially got an investment-grade rating, one notch above junk but the same rating given to bonds for the Yankees and Mets stadiums.

"If I was involved in the bond sale, I would be looking at this decision and it would concern me, in a way that is very unexpected," Brinckerhoff said. The case is going to go to the Court of Appeals, he noted, "and judges ruled one way that seems rather inconsistent, in an opinion that doesn't cite [the AY case]."

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