Wednesday, December 08, 2010

In effort to get Supreme Court to hear Columbia eminent domain case, AY precedent and New York practices seen as outliers favoring condemnors

The Columbia University expansion case should reach a reckoning this week at the U.S. Supreme Court, which, if in the unlikely case it accepts the appeal, could place a check on eminent domain as practiced in New York State.

As I wrote in September, after seeing a surprising Appellate Division victory overturned unanimously by the state Court of Appeals, which relied on its Atlantic Yards decision, Tuck-It-Away owner Nick Sprayregen and the Kaur/Singh family are trying to get to the Supreme Court.

On his Inverse Condemnation blog, land use attorney Robert Thomas has posted the entire set of briefs in the petition for certiorari (Tuck-It-Away, Inc. v. New York State Urban Dev. Corp.) at the United States Supreme Court.

Will cert be granted?

The justices will meet December 10 to consider a number of cases and are expected to announce December 13 which cases they will accept (aka "grant certiorari").

It's always a long shot to get a case to the U.S. Supreme Court. Plaintiffs in the federal Atlantic Yards eminent domain case were rejected in June 2008, though one justice, the conservative Samuel Alito stated that he would've granted the petition.

As I wrote at the time, a decision to reject does not mean that the cases below were decided correctly, just that the appeal didn't present enough issues of law--conflicts in the interpretation of the Supreme Court's highly contested 6/23/05 Kelo v. New London decision--to merit review.

However, with some two-and-a-half years for additional cases that seemingly clash with Kelo to emerge, the petitioners in the Columbia case have a somewhat better shot.

Bad luck for AY plaintiffs

And, notably, the 2008 Atlantic Yards decision in federal appellate court, Goldstein v. Pataki, is cited several times in amicus briefs as an example of courts ignoring Kelo and leaning too far in favor of condemnors.

Moreover, New York's legal regime--in which cases start in appellate court, not trial court, and there's no opportunity to cross-examine condemnors--is cited as uniquely favorable toward condemnors.

In other words, even though a legal strategy may have been the best one in the face of a deal that was politically airtight, it was always an uphill battle.

The questions at issue

The cert petition, prepared by counsel of record Norman Siegel and several other lawyers, poses two Questions Presented:
This Petition should be granted to address two urgent questions arising from the Court of Appeals of New York's dismissal of Petitioners' challenge to the legitimacy of the governmental takings at issue in this case:

1. Whether it was error for the Court of Appeals of New York to disregard the principles enunciated in Kelo v. City of New London, 545 U.S. 469 (2005) in sanctioning the use of eminent domain for the benefit of a private developer, when the circumstances presented by the instant case exemplify the very bad faith, pretext, and favoritism that this Court warned could result if Kelo's safeguards were ignored?

2. Whether the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States imposes any minimum procedural standards, in accordance with the requirement of fundamental fairness, to preserve a property owner's meaningful opportunity to be heard within the context of an eminent domain taking?
The contrast with Kelo

The petition states:
In sharp contrast to the situation in Kelo, in which a municipal agency adopted a “carefully considered” development plan which had no preselected private beneficiary, ESDC worked backwards, pre-ordaining Columbia as the beneficiary of its eminent domain power. Having settled on this, ESDC endorsed a plan, developed behind closed doors by Columbia itself, to transfer private property to Columbia in furtherance of the university’s expansion dreams. ESDC then collaborated with Columbia to devise after-the-fact traditional public purposes to justify the takings, and even allowed Columbia to create the very blight-like conditions that ESDC then proposed to remediate.
However, the Court of Appeals' decision never mentioned Kelo:
The Court of Appeals’ conscious disregard of Kelo should warrant certiorari in its own right, but, in any event, has ramifications far beyond the particulars of this case. The Kelo majority made clear that its decision was predicated on the existence of certain minimum safeguards that demonstrated the absence of favoritism or pretext on the part of a condemning authority. Since Kelo, however, courts have struggled to interpret concepts like “mere pretext,” “favoritism,” and “a comprehensive development plan,” leading to inconsistent results around the country. The Court of Appeals’ outright refusal to address Kelo brings this confusion to a new level. If such significant evidence of bad faith, pretext, and impermissible favoritism in the context of eminent domain is insufficient to trigger the protections discussed in Kelo, then Kelo itself, and its safeguards, have been rendered meaningless.
The other issue involves the playing field:
Moreover, Respondent’s arbitrary and premature closing of the administrative record prior to the resolution of Petitioners’ Freedom of Information Law (“FOIL”) litigation violated Petitioners’ due process rights under the Fourteenth Amendment to the U.S. Constitution and constitutes a discrete ground for invalidating the proposed taking. Because New York law does not provide for trial-level review of administrative decisions regarding eminent domain, the administrative record comprises the sole record reviewable by an appellate court in any eminent domain challenge. By preventing relevant and responsive documents from ever appearing in the record, Respondent sought to ensure that the “careful and extensive inquiry” that this Court required as a “safeguard” protection in Kelo would never come to pass.
A damning (?) ESDC email

It is widely believed--especially after a state Senate oversight hearing last January--that the ESDC and its consultants are bent on finding evidence of blight, sufficient to justify eminent domain. The petition cites some evidence:
Indeed, by e-mail dated May 12, 2006, ESDC’s Senior Counsel, Joseph Petillo (“Petillo”), questioned a draft Request for Proposal (“RFP”) for the Manhattanville blight study, stating, “Why do this? ... I’m uncomfortable with us shining a spotlight on the process used to manufacture support for condemnation.” Petillo then added: “In this post-Kelo period, maybe we want to craft the support for our blight findings in a less public way – such as more discretely wrapping this up with work being performed by the EIS consultant.”
AKRF's blight standards

The petition, using a reference to Atlantic Yards, suggests that perennial ESDC consultant AKRF is inconsistent:
In order to arrive at this conclusion, AKRF departed from the methodologies it had employed in its prior work for ESDC, and even considered types of data that it had previously repudiated.

[Footnote] For example, AKRF did not explain why it designated as vacant those buildings in Manhattanville with only 25 per cent of floor area unoccupied, when, in a July 2006 study of the Atlantic Yards project in Brooklyn, AKRF had used a 50 per cent vacancy threshold. AKRF’s Manhattanville study also emphasized open building code violations as evidence of blight, whereas the Atlantic Yards study had explicitly rejected such evidence as unreliable.
Why no Kelo?

Even though Kelo was discussed during oral argument and relied on by petitioners and the lower court decision, it was ignored by the Court of Appeals.

Why? A footnote suggests it's because Kelo concerned economic development:
Thus, it appears that, by refusing to address Kelo in upholding ESDC’s takings, the Court of Appeals decided sub silentio that Kelo was inapplicable once blight remediation had been asserted as a public purpose.
Why it's necessary

The brief relies on Justice Anthony Kennedy's concurrence in Kelo:
At a minimum, this Petition permits the Court to issue guidance on what constitutes “an impermissible private purpose,” and what amounts to “mere pretext” and favoritism in the context of eminent domain. Such guidance would be welcomed by the lower courts which have, in the five years since Kelo’s issuance, either struggled to apply its holdings or, in the case of the Court of Appeals, simply ignored it.

Justice Kennedy explicitly conditioned his concurrence on specific features undertaken during New London’s planning process which convinced him to vote with the majority. Specifically, Justice Kennedy placed great emphasis on the fact that “[t]he identity of most of the private beneficiaries were unknown at the time the city formulated its plans,” and that, rather than “picking out a particular transferee beforehand,” a variety of different developers and plans were evaluated before one was chosen. Given these facts, it was beyond peradventure “that [New London’s] development plan was intended to revitalize the local economy, [and not] to serve the interests of Pfizer, Corcoran Jennison, or any other private party.” Thus, Justice Kennedy concluded, “while there may be categories of cases in which the transfers are so suspicious, or the procedures employed so prone to abuse, or the purported benefits are so trivial or implausible, that courts should presume an impermissible private purpose, no such circumstances are present in this case.”
The contrasts with New London

The petition aims to distinguish the cases, citing what Atlantic Yards watchers may see as remarkable parallels:
  • Columbia’s Project was Never Designed To Achieve a Pre-Designated Public Purpose
  • The Identity of the Private Beneficiary Was Known Beforehand
  • The Instant Project was Driven by its Beneficiary
  • No Competitive Process Was Initiated To Select the Project’s Developer
  • Because Columbia Paid The Costs of its Own Expansion Campaign, The Project Was Not Pre-Vetted By The Appropriation of Public Funds
Appellate court responses vary

The petition suggests that federal appellate courts have interpreted Kelo differently, and those challenging Atlantic Yards got the short end of the stick:
For example, the U.S. Court of the Appeals for the Second Circuit recently suggested that the pretext analysis in Kelo is applicable only in those cases involving takings predicated solely on economic development. In Goldstein v. Pataki, the Second Circuit upheld a taking where the property owners alleged that the asserted public purposes for the taking – the remediation of blight and the creation of affordable housing and recreational facilities at the Atlantic Yards facility in Brooklyn – were pretextual.

Noting that “private economic development [was] neither the sole, nor the primary asserted justification for the Atlantic Yards Project,” the Second Circuit declined to apply the more searching, “skeptical” review contemplated by this Court in Kelo. Rather, the court held that Kelo did not mandate “a closer objective scrutiny” if the redevelopment plan at issue was “justified in reference to several classic public uses.” Referencing Justice Kennedy’s warning that a searching review was required where transfers were so suspicious or procedures so prone to abuse that an impermissible private purpose could be presumed, the Second Circuit suggested that Justice Kennedy “may well have intended this caveat to apply exclusively to cases where the sole ground asserted for the taking was economic development.”

In contrast, other courts have relied on Kelo to either invalidate or remand takings where economic development was not the sole rationale, but was asserted in conjunction with other classic public purposes.

...Also in contrast to Goldstein, which limited pretext claims to allegedly false or irrational public purposes, the Supreme Court of Hawai’i concluded that such claims could be considered where the taking had a predominantly private benefit, holding that, “the ultimate question for the court is whether the ‘actual purpose was to bestow a private benefit.’”
The ESDC response

The ESDC brief in opposition was prepared by counsel of record Joseph M. Ryan and several others, including AY counsel Philip Karmel.

(I will quote from it less extensively, in part because the copy available is a scan, requiring retyping rather than allowing cutting and pasting.)

The response cites the various benefits the project would provide to the city, state and neighboring area. Citing the ESDC's review of a Statement of Findings under the New York State Environmental Quality Review Act, the ESDC "objects to Petitioners' repeated statements that there is no comprehensive or integrated plan for the Project."

Responding to the charges

The ESDC states that the case does not raise questions implicated by Kelo, because the Court of Appeals rejected claims of bad faith and pretext, saying the latter was "unsubstantiated by the record."

And while the petitioners challenge the Court of Appeals' conclusion that the record supports the ESDC's blight determination, "[t]hat factbound determination raises no issue warranting review by this Court."

As for claims that the ESDC's finding was tainted because the ESDC used AKRF, a consultant that had previously worked for Columbia, the Court of Appeals noted that ESDC engaged a second consulting firm, Earth Tech, which reached similar conclusions.

The Petillo email, according to the ESDC, represented "ambiguous, subjective musings of a staff attorney" who had no role in the project. The brief notes that, when the email was read aloud during the oral argument, one judge suggested the case was the same with or without the email.

The role of Kelo

The ESDC says the petitioners misread Kennedy's opinion, reaffirming the Supreme Court's deferential standard of review.

And whether there's uncertainty in lower courts "is of no moment here, because the Court of Appeals never suggested that pretext was irrelevant in this case, where the condemnation is for the purposes of remediating blight and advancing education, not economic development as understood in Kelo."

The ESDC ties it up:
If this Court were to hold that the "mere pretext" doctrine should be limited to economic-development takings, then the judgment of the Court of Appeals would be affirmed because the public purposes in this case are blight eradication and the construction of educational facilities. yet if the Court were to hold that the "mere pretext" doctrine should apply in all eminent domain cases, then the judgment of the Court of Appeals would similarly be affirmed because the Court of Appeals has already determined, based on its review of the voluminous record of proceedings before the CPC [City Planning Commission] and ESDC, that there is no factual basis for Petitioners' "pretext" allegations in this case.
Beyond that, the cases cited from other states do not conflict with the Court of Appeals decision, the ESDC contends.

Another basis

Moreover, as noted by the Court of Appeals, the ESDC states, the status of the Columbia expansion as an educational project provides an alternate basis for ESDC's public use determination. No finding of blight is necessary.

"Petitioners do not explain how their claim of pretext... could undermine that conclusion," the ESDC argues.

The reply brief

The petitioners get the last word, in a reply brief, taking aim at the argument that the Court of Appeals examined claims of pretext:
But the Court of Appeals' decision never cites Kelo, nor does it examine the factors that Justice Kennedy identified, which the New York Appellate Division [which first heard the case] employed to analyze the evidence of pretext and favoritism here. Instead, when faced with the very factors that Justice Kennedy warned of, the Court of Appeals deliberately did not consider Kelo, instead deferring to a governmental administrative agency whose arguments the Court of Appeals relied upon wholesale.
As for the claim that conflict among lower courts is limited in nature, the brief states:
Respondent does not, nor could it, explain the inherent contradiction between the Second Circuit’s decision in Goldstein v. Pataki, which suggested that the “searching review” contemplated by Justice Kennedy should be limited only to takings for economic development, and other courts that have expressly adopted Kelo’s analysis for takings that allege classic public purposes.
Ignoring Kelo

The Court of Appeals did not examine the claim of pretext, according to the reply brief:
The Appellate Division plurality noted that any discussion of the constitutionality of the ESDC’s “scheme” must begin with analysis under Kelo and under the heading “THE KELO DOCTRINE MANDATES” outlined how the ESDC actions fell short of such mandates. The Court of Appeals ignored this issue entirely, and its cursory review of the record indicates that it had decided, erroneously, that Kelo did not apply. The difference between these decisions is not factual evaluation, but a disagreement on which legal standard to apply.
The brief adds a distinction not available to plaintiffs in the Atlantic Yards eminent domain litigation, who did not have a win at the lower court:
The difference between the treatment of the facts by the Court of Appeals and the Appellate Division is night and day, and highlights the importance of the need for this Court’s review.
However, the Appellate Division plurality opinion in the Columbia case also ignored the Court of Appeals' just-issued ruling in the state Atlantic Yards eminent domain case--an omission that turned out to be fatal.

Educational purpose?


The brief responds to the argument that the ESDC had multiple bases for eminent domain:
So too with regard to the issue of educational purpose and civic project the same rationale applies. The record below shows that such a designation was an after thought and not the dominant purpose for the adoption of the Columbia plan. While the Appellate Division plurality found no basis for a civic project, the Court of Appeals, ignoring Kelo found that the mere invocation of an educational purpose was enough to grant Columbia eminent domain.
Amicus brief: state Senator Bill Perkins

Harlem State Senator Bill Perkins, who represents the district including the Columbia expansion area and is a public critic of the effort, filed a friend-of-the-court (amicus) brief, with Denise Outtram the counsel of record.

(Also on the brief was Amy Lavine of Albany Law School, who co-authored a law review article with me about Atlantic Yards.)

Perkins's interest is expressed as follows:
As the representative of residents and businesses who would be adversely affected by the project, amicus has a very strong interest in ensuring that development within the district proceeds equitably and fairly, especially for the district’s minority and economically disadvantaged residents. These groups, although marginalized in the project approval process, would be disproportionately impacted by the expansion project.
The crux of the matter: pretext

The brief argues that the court did too little to examine pretext:
Despite this Court’s guidance in Kelo and the plurality decision of the appellate division below, the Court of Appeals discussed only one aspect of the case as relevant to the question of pretext: namely, the conflict of interest created by ESDC using the developer’s consultant to prepare one of the project’s blight studies. Matter of Kaur v. N.Y.S. Urban Dev. Corp. While this was certainly an important consideration relevant to Petitioners’ claims, the court did not take into account Petitioners’ other evidence of pretext. The court did not mention, for example, that the project site had not been deemed blighted or included in an urban renewal area prior to Columbia’s proposal. Matter of Kaur v. N.Y.S. Urban Dev. Corp. It did not acknowledge that Columbia – the developer – was the sole originator of the project and that no outside developers were solicited for proposals. Nor did the court consider that Columbia’s general project plan disregarded the long-standing community-based planning efforts of Community Board 9. Additionally, the court failed to see the significance of Columbia “underwriting” (or “buying”) the entire project planning process. In all of these respects, the case at bar presents a much more likely scenario of pretext than Kelo, yet the same factors that rendered the Kelo condemnations constitutional under the Fifth Amendment were treated as mere surplusage by the Court of Appeals.
More than the other briefs in this case, this takes a historical approach to the history of slum clearance, the abuse of blight, and the impact on minorities. The brief cites Lavine's law review article on the foundational Berman v. Parker case:
Berman’s extremely deferential rational basis standard of review allowed urban renewal projects to go forward across the country with an astonishing lack of attention to the welfare of the people that the programs were supposed to benefit.
The brief warns of the impact of the Columbia project:
Although only a relatively small number of residents would be directly displaced by the project – about 300, according to the environmental impact statement (EIS) – between 3,000 and 5,000 residents living near the project site will be indirectly displaced. Displacement, moreover, will disproportionately affect low income and minority households.

...The top-down, Columbia-driven decision making process in this case exemplifies practices that were not designed to involve the West Harlem community in a meaningful manner.
Blight = coveted?

The brief suggests that the urban development process allows developers to manipulate the system to get choice land, rather than truly ruined territory:
Moreover, many redevelopment agencies, ESDC included, are run by unelected boards that insulate them from public opinion and allow private interests to more easily influence the eminent domain process to their own advantage. The extremely low threshold for finding blight in New York, see Matter of Goldstein v. Urban Development Corporation, gives even more advantage to politically connected developers. Unfortunately, the combination creates a perverse incentive for developers to seek blight determinations for economically desirable areas, rather than areas truly suffering from substandard conditions or market problems necessitating government intervention.
The first sentence above contains a footnote to the article Lavine and I wrote.

Amicus brief: Institute for Justice

The libertarian Institute for Justice (IJ), which represented Susette Kelo and put the issue on the national stage, submitted an press release and amicus brief, also attributed to the libertarian Cato Institute and The Becket Fund for Religious Liberty (which is considered about the impact of eminent domain on religious institutions). The IJ's Dana Berliner is the counsel of record.

The brief leads off by citing a varied response to Kelo, again suggesting that petitioners in the Atlantic Yards case got the short end of the stick:
As a result, lower courts have applied different standards. Several state supreme courts look to the motives of the condemnor. Others focus on whether the new private owner captures most of the benefits of the condemnation. A third group focuses on the extent of the planning process preceding the taking. Finally, the New York Court of Appeals and the United States Court of Appeals for the Second Circuit essentially ignore all these considerations. They define pretext so narrowly that even the most blatant favoritism will escape judicial scrutiny. This confusion calls out for resolution by this Court.
Also, according to the brief, the burdens of displacement have fallen mostly on "the poor or ethnic minorities with little political influence."

The question of pretext

The brief argues:
The present case is a particularly flagrant example of the abuse of eminent domain. It includes all four factors that this Court and lower courts have identified as indications of pretext: evidence of pretextual intent, benefits that flow predominantly to a private party, haphazard planning, and a readily identifiable private beneficiary. It therefore gives the Court an excellent opportunity to clarify the importance of each factor in adjudicating pretextual takings.
The brief cites multiple paths taken by courts in response to Kelo:
  • State Supreme Courts and Federal Courts Emphasizing the Actual Intentions of Condemning Authorities
  • Courts Emphasizing the Magnitude and Distribution of Expected Benefits
  • Courts Focusing on the Extent of the Pre-Condemnation Planning Process
  • The Presence of a Known Private Beneficiary
  • Courts That Virtually Define Pretextual Takings Out of Existence
Who's responsible for the latter, the tack least favorable to property owners? The courts in the Atlantic Yards cases:
The Second Circuit and the New York Court of Appeals have defined pretextual takings so narrowly that it is virtually impossible to challenge a condemnation on that basis. As discussed above, that conclusion places them at odds with the Seventh and Ninth Circuits and the highest courts of the District of Columbia, Hawaii, Maryland, Pennsylvania, and Rhode Island.
The AY cases

Exhibit A, so to speak, includes the Atlantic Yards cases. The brief states:
In Goldstein v. Pataki, the [federal] Second Circuit held that so long as a taking is “rationally related to a classic public use,” it is impermissible to “give close scrutiny to the mechanics of a taking ... to gauge the purity of the motives of various government officials who approved it.”

The Second Circuit also rejected claims that the takings should be invalidated because most benefits would flow to developer Bruce Ratner or because any benefits to the community would be “dwarf[ed]” by the project’s costs. Similarly, the court rejected the idea that any significant scrutiny was required because Ratner was the originator of the project and his status as the main private beneficiary of the takings was known from the start.

Finally, both the Second Circuit and a later decision by the New York Court of Appeals upholding the same takings failed to seriously consider evidence that the planning process was deliberately skewed to benefit Ratner. As Judge Robert Smith pointed out in his dissenting opinion in the state case, the original rationale for the condemnation was “economic development—job creation and the bringing of a professional basketball team to Brooklyn.” In re Goldstein v. N. Y. State Urban Dev. Corp. Apparently, “nothing was said about ‘blight’ by the sponsors of the project until 2005,” when the ESDC realized that a blight determination might be legally necessary.
And the problem continues:
The Court of Appeals’ decision in the present case gives free rein to pretextual takings just as much as the opinions in the Goldstein cases.
New York has it worst

The brief suggests the lack of balance in the system is widespread, but hits particularly hard in New York:
The issues raised by this case affect the rights of property owners across the country who are threatened by economic-development or “blight” takings. If courts do not protect property rights against pretextual condemnations, many people—particularly the poor, racial minorities, and those lacking political influence—risk losing their homes and businesses to condemnations undertaken for the benefit of well- connected private parties.

This danger is exacerbated in states like New York, which define “blight” broadly, making it possible to declare virtually any area blighted and then condemn it for transfer to a private interest. New York also employs uniquely dubious and abuse-prone eminent-domain procedures.
Why New York? The brief states that New York law, as in the AY decision, vastly increases the danger of pretextual takings in two ways.

First, blight means what those in charge say it is:
1. New York’s Definition of “Blight” Is Extraordinarily Broad.
The definition of “blight” endorsed by the Court of Appeals in the present case and Goldstein v. New York Urban Development Corporation is one of the broadest in the country, and therefore especially vulnerable to abuse.

In Goldstein, the court concluded that the property in question could be condemned as “blighted” and blight alleviation is a “public use” recognized by the New York Constitution, thanks to a constitutional amendment allowing the condemnation of slum areas.

The court, despite conceding that the area “d[id] not begin to approach in severity the dire circumstances of urban slum dwelling” that led to the enactment of New York’s state constitutional amendment allowing blight condemnations, found that “economic underdevelopment and stagnation” sufficed to constitute “blight.” Since there is nearly always “room for reasonable difference of opinion” as to whether any area is “underdeveloped,” the Goldstein standard is essentially limitless.

In the present case, the Court of Appeals applied the same definition of blight. Indeed, members of New York’s lower courts have already recognized that, after Goldstein and Kaur, “there is no longer any judicial oversight of” blight condemnations in New York. Uptown Holdings, (Catterson, J., concurring). The field is therefore left wide open for pretextual condemnations.
Note that Justice James Catterson wrote the plurality opinion in Kaur, the appellate division case finding for those challenging Columbia, and also, in the appeal of an Atlantic Yards environmental review case, wrote a stinging concurrence that read like a dissent.

Second, according to the brief, the process is skewed toward the condemnor:
2. New York’s Unique Eminent-Domain Procedures Leave the State’s Property Owners Particularly Vulnerable to Pretextual Takings.

The problems in New York’s eminent-domain law are exacerbated by the fact that New York’s eminent-domain procedures do not allow property owners access to any kind of adversarial process to build a record for judicial review.

...In fact, New York is literally the only state in which a person’s property can be condemned as “blighted” without anyone ever having to testify under oath about why it is “blighted” or having to answer any hostile questions about whether the property is, in fact, blighted. This uniquely circumscribed procedure makes New Yorkers particularly vulnerable to pretextual takings—which makes it all the more troubling that both the Second Circuit and the New York Court of Appeals have adopted such a radically permissive interpretation of Kelo.

[A footnote] New York is alone is refusing to provide any adversarial process to property owners challenging the validity of a taking.
Amicus brief: The Pacific Legal Foundation

Another libertarian legal organization, the Pacific Legal Foundation, submitted an amicus brief, with Damien M. Schiff as the counsel of record, focusing on this question:
Under what circumstances does the higher scrutiny described in Justice Kennedy’s concurring opinion in Kelo v. City of New London apply, and what does such scrutiny encompass?
Was Kelo decision even legit?

The brief offers a footnote that provides a crucial corrective to the popular understanding of the case, if not the legal record:
It is interesting to note, however, that investigative reporting completed after the Kelo decision revealed a wealth of evidence indicating that the condemnations were motivated by illegitimate private purposes. See [Ilya] Somin, 15 S. Ct. Econ. Rev. at 236-38. See, e.g., id. at 237 (“Evidence uncovered by an investigative reporter . . . shows that Pfizer ‘ha[d] been intimately involved in the project since its inception’ and that the . . . development plan and associated condemnations was ‘a condition of Pfizer’s move’ to New London.”). If anything, the true Kelo story underscores the importance of allowing for heightened scrutiny of prextextual takings claims.
Errors by the Court of Appeals?

The brief states:
In rejecting Petitioners’ pretext claim, the New York Court of Appeals was content to identify two ostensible public purposes for the Columbia redevelopment project that had some measure of support in the record—namely, the remediation of blight and the pursuit of a “civic project” having “educational” and other benefits. The court thus applied the paradigmatic rational basis standard of pre-Kelo pretext claims, i.e., upholding the taking because it is “rationally related to a conceivable public purpose.” Midkiff. The decision does not explain why it chose not to apply the heightened scrutiny and presumption of invalidity sketched in the second half of Justice Kennedy’s concurrence.
What was wrong with Atlantic Yards decision?

The brief criticizes the federal appellate court decision in the Atlantic Yards case:
Although the Second Circuit’s application of a pre-Kelo rational basis review is troubling, far worse is the decision’s effective elimination of heightened scrutiny and the presumption of invalidity for nearly all pretext claims. The Second Circuit acknowledged the landowners’ allegations of pretext to concern “purported excesses in the costs of the plan as measured against its benefits,” allegations which also fall comfortably within one of Justice Kennedy’s three categories warranting heightened scrutiny—namely, transfers the benefits of which are “trivial or implausible.” See Kelo. Nevertheless, the court rejected the pretext claim on the pleadings because (1) the landowners had “already acknowledged the Project’s rational relationship to numerous well-established public uses,” Goldstein; 2) heightened scrutiny “would add an unprecedented level of intrusion into the process” and would lead courts into “second-guessing every detail in search of some illicit improper motivation”; and (3) the landowners had failed to allege specific instances of illegality or improper dealings concerning the project.

The Second Circuit’s apparent reasons for not acknowledging a multi-level scrutiny approach to pretext claims are unconvincing. First, the Second Circuit thought it significant that the project, on its ace, pursued acknowledged public purposes. But this observation only proves that a person could rationally consider the project to be related to a public purpose, which is the definition of rational basis, not heightened, scrutiny. Second, the court’s fears of judicial overreach are misplaced. By its very nature, heightened scrutiny implies some degree of searching review of the record that otherwise cannot be obtained with rational basis scrutiny. To hold that increased judicial scrutiny is to be avoided at all costs is tantamount to abandoning heightened scrutiny altogether, a result reconcilable with neither the Kelo majority, nor Justice Kennedy’s concurrence. Third, the court demanded that pretext claimants allege specific examples of pretextual action (without the aid of discovery); but requiring that the landowner produce examples of impropriety turns heightened scrutiny on its head. After all, as Justice Kennedy’s concurrence reveals, one of the hallmarks of heightened scrutiny is that it places the burden on the government to defend its actions, not on the landowner to prove the actions’ illegality. Moreover, the Second Circuit’s categorical assignment of the burden of production to landowners cannot be reconciled with the Kelo concurrence’s assertion that certain types of private transfers are so fraught with the risk of abuse that the burden should be placed on the government to demonstrate that a transfer really benefits the public generally.

The Second Circuit’s discussion of Justice Kennedy’s concurrence entirely ignores his analysis of when heightened scrutiny should be applied to pretextual claims of private transfers.
Hawaii vs. Brooklyn

The brief notes a discrepancy between a Hawaii Supreme Court case and the Atlantic Yards litigation:
The court then, quoting the Kelo majority, noted that “even where the government’s stated purpose is a ‘classic’ one, where the actual purpose is to ‘confer[] a private benefit on a particular private party[,]’ the condemnation is forbidden,” County of Hawai’i (quoting Kelo). Nevertheless, the court disclaimed “call[ing] for a ‘close[] scrutiny [of] the motives of the City Council’ or the ‘subjective motivation of every official,’ ” County of Hawai’i. A property owner would presumably be required to establish these factors in order to prove a pretext in the face of a “classic” public use. The court distinguished Goldstein on precisely this ground: there the landowners invited an investigation of subjective motivations, whereas here no such inquiry would be required. Yet the court went on to hold that a pretext claimant’s allegation of a “predominantly private benefit” could invalidate a condemnation notwithstanding “the stated public purpose.” That was the argument the Goldstein property owners made. (“[P]laintiffs . . . expend considerable effort explaining why these proffered public uses should nonetheless be rejected as ‘pretextual,’ not because they are false, but because they are not the real reason for the Project’s approval.”).
(Emphasis in the brief)

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