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New Jersey Supreme Court Limits Condemnation of "Blighted" Property:

Today, the New Jersey Supreme Court issued its unanimous opinion in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, an extremely important case addressing the government's power to condemn property that is "blighted" (hat tip: Seton Hall law prof Marc Poirier). The Court held that property which is merely "not fully productive" cannot be considered "blighted" and therefore cannot be condemned under Article VIII, Section 3 of New Jersey's Constitution, which states that:

The clearance, replanning, development or redevelopment of blighted areas shall be a public purpose and public use, for which private property may be taken [by eminent domain]. . .

As the Court points out in its opinion, "most property in the state" can be considered "not fully productive" and therefore subject to condemnation as blighted under the state government's definition of the term. Instead, the Court concludes that the term "blight" has a "negative connotation" and is limited to those areas where "deterioration or stagnation that has a decadent effect on surrounding property." This definition strikes me as still excessively broad and vague. After all, all sorts of conditions can be considered "deterioration" or have at least a small "decadent effect" on the surrounding community. If I fail to repave an old driveway on my property, it might start to look deteriorated, and there may be a small impact on the value of neighboring property. Nonetheless, the Court's definition is at least somewhat more reasonable than the virtually limitless definition (including all property that is "not fully productive") in the New Jersey blight law it struck down.

Unfortunately, the problem of overly expansive definitions of blight is not limited to New Jersey. It is a nationwide problem affecting many states, as I discussed in this op ed for the Legal Times last year. Even many recent post-Kelo eminent domain reform laws incorporate definitions of "blight" that still permit condemnation of virtually any property (see this paper for details).

Nonetheless, the New Jersey decision is a notable step forward, especially coming on the heels of City of Norwood v. Horney, last year's Ohio Supreme Court decision reaching a similar conclusion under that state's constitution. Ohio and New Jersey are both states notorious for their numerous abusive "blight" condemnations, and neither had passed any effective legislative reforms in the wake of Kelo v. City of New London.

Hopefully, Gallenthin and Norwood will help kick off a new trend of judicial skepticism towards expansive definitions of "blight."

Hans Bader (mail):
Even a stopped clock is right twice a day.

And the New Jersey Supreme Court, traditionally among the most anti-property-rights courts in America, got this case right.

Maybe they recognized that seizures of property for redevelopment have tended to hit minorities and the poor hardest. The NAACP made this point forcefully in the Kelo case, I think.

There have been New Jersey towns that seize private businesses just to give them to their competitors.

And New Jersey towns have seized perfectly good homes and businesses to give them to politically-connected businesses and developers.

It's a cesspool of corruption.

And it doesn't create jobs. Somehow, the jobs governments promise will be created when they seize private property for redevelopment tend not to materialize later.

It's just corporate welfare at its worst.
6.13.2007 4:22pm
O Smith (mail):
The Missouri Supreme Court issued an opinion yesterday that reaches a similar result. A Missouri statute defines a blighted area as land that "by reason of age, obsolecense, inadequate or outmoded design or physical deteroriation ha[s] become [an] economic and social liabilit[y]."

The court defined "social liability" as land which, inter alia, constitutes a "menace to the public health, safety, morals and welfare." And the court found that evidence of social liability was lacking on the record before it. The court may have fudged the standard of review in doing so (conflating arbitrariness w/substantial evidence), but like the New Jersey Supreme Court, found that evidence "focus[ing] only upon the prospective benefits of redevelopment — not the current state of the properties themselves . . . cannot serve as probative evidence of social liability . . . ."
6.13.2007 5:21pm
Ilya Somin:
The Missouri Supreme Court issued an opinion yesterday that reaches a similar result.

Do you have the title of the case, and perhaps, a link to the opinion?
6.13.2007 5:23pm
O Smith (mail):
Case name is Centene Plaza Redevelopment Corporation v. Mint Properties, et al.

6.13.2007 5:31pm
Ilya Somin:
Thanks!
6.13.2007 6:02pm
PatHMV (mail) (www):
Ilya, here's a link to the news article on the Missouri case.

I e-mailed you a link last Monday to a post which touched on the Missouri case, obviously just before it came out: Begging for Billionaires.
6.13.2007 6:23pm
PatHMV (mail) (www):
Last Monday week, not 2 days ago, that is...
6.13.2007 6:23pm
Patrick Wright (mail):
Ilya,

Here is a link for the Missouri case.
6.13.2007 6:37pm
Richard A. (mail):
By the way, the definition of "blight" has been stretched so far that downtown Princeton was declared blighted and is being redeveloped.
6.13.2007 6:56pm
Jonathan Pansius (mail):
Although the Oklahoma Supreme Court, in Board of County Commissioners of Muskogee County v. Lowery, 2006 OK 31, made an exception for blight removal in otherwise holding that the power of eminent domain could not be used solely for economic development, its previous holding in City of Midwest City v. House of Realty, 2004 OK 56 restricts the use of eminent domain for blight removal. Municipalities must strictly follow the state statutes defining blight and the procedures for making that determination. The cases are available free at www.oscn.net.
6.13.2007 7:34pm
ReaderY:
While the opinion prohibits eminent domain solely because a property is "not fully productive", it appears to permit it if an area is not fully productive because of a "diversity of ownership." This language would seem to include putting together small plots into a larger parcel of land that can be used for economic development, the exact situation in Kelo. It doesn't seem to impose particularly stringent limits on eminent domain for economic development purposes.
6.13.2007 8:31pm