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Sotomayor's Troubling Property Rights Ruling in Didden v. Village of Port Chester:

University of Chicago and NYU law professor Richard Epstein points out that Judge Sotomayor was on a Second Circuit panel that issued the unsigned opinion in one of the worst property rights decisions in recent years, in the case of Didden v. Village of Port Chester. This does not bode well for her likely future rulings on property rights issues that come before the Supreme Court. In a 2007 National Law Journal op ed on Didden (no longer available on line, but excerpted here), Epstein and I discussed the facts of this disturbing case:

The U.S. Supreme Court's 2005 decision in Kelo v. City of New London generated a backlash on both sides of the political spectrum..... Many of the rear-guard defenders of this ill-conceived decision insisted that abusive condemnations are an aberration in an otherwise sound planning process. They, it turns out, were wrong. Didden v. Village of Port Chester, a most unfortunate decision out of the 2d U.S. Circuit Court of Appeals, helps demonstrate the shortcomings of their optimistic view.

In 1999, the village of Port Chester, N.Y., established a "redevelopment area" and gave its designated developer, Gregg Wasser, a virtual blank check to condemn property within it. In 2003, property owners Bart Didden and Dominick Bologna approached Wasser for permission to build a CVS pharmacy on land they own inside the zone. His response: Either pay me $800,000 or give me a 50% partnership interest in the CVS project. Wasser threatened to have the local government condemn the land if his demands weren't met. When the owners refused to oblige, their property was condemned the next day.

Didden and Bologna challenged the condemnation in federal court, on the grounds that it was not for a "public use," as the Fifth Amendment requires. Their view, quite simply, was that out-and-out extortion does not qualify as a public use. Nonetheless, the 2d Circuit . . . upheld this flexing of political muscle.

In fairness to Sotomayor and the other judges on the panel, their ruling was in part based on the Supreme Court's 2005 decision in Kelo v. City of New London, which defined "public use" extremely broadly. However, the majority opinion by Justice John Paul Stevens also emphasized that "the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit," was not enough to count as a "public use." It is difficult to imagine a more clearly pretextual taking than this one, since Didden and Bologna's property would not have been condemned if it weren't for their refusal to pay Wasser the money he sought to extort from them. Wasser's plan for the property was to build a Walgreen's pharmacy on it, which is virtually identical to the previous owners' plan to build a CVS. There was no general public benefit that Wasser's plan would provide that would not have been equally well achieved by allowing Didden and Bologna to keep their property and carry out their plan to put a CVS there.

The Didden panel decided the case in part based on procedural grounds (claiming that Didden and Bologna filed their case too late). However, it also clearly rejected their public use argument on the merits (see pp. 3-4 of the Second Circuit's opinion, available in the appendix to the property owners' cert. petition). Sotomayor's endorsement of this ruling is a strong sign that she has little or no interest in protecting constitutional property rights. Her appointment is likely to exacerbate the second-class status of property rights in the Court's jurisprudence.

The fact that the Supreme Court refused to take the case is not much of a point in the ruling's favor. The Court accepts only a tiny fraction of all the cert petitions that come before it and refuses to hear many important cases. Moreover, the panel further reduced the chance of appellate review by leaving this important decision unpublished.

For more details on Didden, see this amicus brief urging the Supreme Court to review the case, which Epstein and I filed along with several other property scholars.

ruuffles (mail) (www):
Do you have information about whether the circuit was polled for an en banc hearing?
5.26.2009 3:06pm
shertaugh:
Ilya:

The same folks who supported Bush II appointments to SCOTUS should applaud this ruling.

The panel's order was issued by Sotomayor and two Bush II appointees, Peter Hall and Reena Raggi.

What's not to like . . . that Bush II appointees don't get the 5th Amendment's Takings Clause?

Seriously, this is the kind of "legal analysis" that drives people crazy. An unsigned court order from three judges is turned into a full-throttle assault on SS's view of the 5th A.

Whatever . . .
5.26.2009 3:09pm
Ilya Somin:
The same folks who supported Bush II appointments to SCOTUS should applaud this ruling.

The panel's order was issued by Sotomayor and two Bush II appointees, Peter Hall and Reena Raggi.

What's not to like . . . that Bush II appointees don't get the 5th Amendment's Takings Clause?


I am not required to approve of everything done by Bush II appointees. Bush was a "big government" conservative who did not set a high priority on property rights. It would not surprise me if some of his judicial appointees didn't either. If either Hall or Raggi had been nominated to the Supreme Court by Bush, I can assure you I would have cited this case against them too.
5.26.2009 3:14pm
Justin (mail):
So today is "Attack Sotomayor for signing on to opinions that follow precedent" day. So much for judicial conservatism.
5.26.2009 3:16pm
BTD (mail):
Sounds like you wish Sotomayor was a little more activist in this area.

Am I understanding you correctly on this point?
5.26.2009 3:18pm
Ilya Somin:
So today is "Attack Sotomayor for signing on to opinions that follow precedent" day. So much for judicial conservatism.

My point, of course, is that the ruling didn't follow precedent, but in fact went against Kelo's statement that "pretextual" takings are unconstitutional. And I am not a judicial conservative.
5.26.2009 3:19pm
Justin (mail):
I understand that's your argument, yes.
5.26.2009 3:21pm
Ilya Somin:
Sounds like you wish Sotomayor was a little more activist in this area.

Am I understanding you correctly on this point?


It depends on how you define "activist." I believe that judges should aggressively protect rights that are enumerated in the Constitution. If that is "activist," so be it. I have previously argued that "activist" is not a useful category in debates over constitutional law. Whether or not a decision is "activist" says little about its correctness. What matters most is whether it conforms to the text and original meaning of the Constitution.
5.26.2009 3:23pm
jmcg (mail):
I think this signals broader property rights problems that have yet to surface within the Obama administration. Surely the attorneys responsible for preparing Sotomayor for the murder boards (and thus the Administration) were aware of the Didden case before announcing her nomination today. I'm really feeling like Obama's silence on Kelo during his campaign was quite deliberate.
5.26.2009 3:26pm
rosetta's stones:
From Somin's amicus brief:


If the Second Circuit is not overruled, private
developers will be handed a blueprint on how to take private
property for their own benefit, irrespective of any public
interest. They will therefore lobby local governments to
obtain these valuable rights, and in so doing undermine the
security of expectations that allows redevelopment to take
place without government intervention. The creation of such
areas will usher in a vast new arena for political intrigue by private interests seeking to extract money from current
owners by threatening them with condemnation if they refuse
to pay.



The "vast new arena for political intrigue" isn't confined to illegitimate property condemnations, but that's one of the areas in which the courts have aided the favored few, by facilitating actions taken by these "Development Authorities". It's really a formula for corruption and insider influence at the local level... in my city for example, where we have constant complaints over this. It's shameful that the SC ignored that, in refusing to take up this case.

Then there's the property issue...
5.26.2009 3:28pm
BTD (mail):
Responding to:

"Ilya Somin:
Sounds like you wish Sotomayor was a little more activist in this area.

Am I understanding you correctly on this point?

It depends on how you define "activist." I believe that judges should aggressively protect rights that are enumerated in the Constitution. If that is "activist," so be it. I have previously argued that "activist" is not a useful category in debates over constitutional law. Whether or not a decision is "activist" says little about its correctness. What matters most is whether it conforms to the text and original meaning of the Constitution."

"Rights enumerated in the Constitution?" That seems open ended to me. What language do you see as enumerating the right you believe should be "aggressively protected?"

I am glad to see that you reject the "activist" cant. This seems right to me -- "Whether or not a decision is "activist" says little about its correctness."

However, this seems more problematic:

"What matters most is whether it conforms to the text and original meaning of the Constitution."

I would prefer "original purpose." further, I would argue that application of the original purpose to current circumstances requires a more comprehensive evaluation than "original meaning."

That said, is it your argument that the "original meaning" of the Constitution addressed the circumstances of the Portchester case? If so, how?

Now
5.26.2009 3:35pm
Steve:
The summary Second Circuit decision states as follows:

(1) The case was clearly time-barred under the relevant statute of limitations;

(2) Even if not for the statute of limitations, Plaintiffs would lose under Kelo anyway; and

(3) We agree with the District Court that there was no extortion.

Kind of a snoozer, really. I don't know whether it was extortion or not, but surely the word of Profs. Somin and Epstein does not have to be taken as gospel on the point! This post strikes me as a Kopel-sized overreaction.
5.26.2009 3:43pm
Ilya Somin:
it your argument that the "original meaning" of the Constitution addressed the circumstances of the Portchester case? If so, how?

Extortion to benefit a private party is not a "public use" under the plain text, nor is it the way that the words were understood at the time of the Framing or at almost any time in the next 150 years or so of American legal history.
5.26.2009 3:47pm
BTD (mail):
Was the taking itself extortionate? Or was there a subsequent action that was extortionate?

It seems to me the taking itself was distinct from the extortion. What am I missing?
5.26.2009 3:51pm
Ilya Somin:
1) The case was clearly time-barred under the relevant statute of limitations;

(2) Even if not for the statute of limitations, Plaintiffs would lose under Kelo anyway; and

(3) We agree with the District Court that there was no extortion.

Kind of a snoozer, really. I don't know whether it was extortion or not, but surely the word of Profs. Somin and Epstein does not have to be taken as gospel on the point! This post strikes me as a Kopel-sized overreaction.


Neither the District Court nor the 2nd Circuit denied that the taking occurred because Wasser threatened to have the property condemned unless the owners paid him $800,000 he demanded. That is pretty clearly extortion, whether the court used that term or not. More importantly, it pretty clearly mans that the public interest rationale for the taking was pretextual. Finally, the court did not state that there was "no extortion." They merely said that the city's "voluntary" efforts to "resolve" the case were not extortion, which is not the same thing as saying that Wasser's demand for money in exchange for not condemning the property didn't constitute extortion.
5.26.2009 3:52pm
Ilya Somin:
It seems to me the taking itself was distinct from the extortion. What am I missing?

The taking occurred only because Wasser sought to use the threat of condemnation as leverage to extort money. When his demand for money was refused, he persuaded the city to proceed with the condemnation. The taking was part of the extortion in the same way that breaking a person's legs is an element of extortion in a situation where I threaten to break them unless he pays me $800,000 and I then carry out my threat when refuses to give me the money.
5.26.2009 3:55pm
Jess14 (mail) (www):
The thing with this case is Sotomayor was part of lower level courts. They had to follow precedent or fight being labeled judicial activists which is what the GOP today is worried about. It just shows she could follow the Supreme Court's interpretation.
More commentary on the nomination:
Video
5.26.2009 3:55pm
Greg (www):
Let's see, the decision was unsigned, unpublished and non-precedential. The actual takings part of the decision was dicta. Yeah, that definitely seems like cause for major concern!
5.26.2009 3:59pm
Ilya Somin:
Let's see, the decision was unsigned, unpublished and non-precedential. The actual takings part of the decision was dicta.

Actually, the takings part was one of two alternative justification for the decision, which makes it part of the holding under Supreme Court precedent. It's true that the decision was unsigned and unpublished. However, the important point here is what the case reveals about Sotomayor's views on property rights issues, not how much precedential significance it has.
5.26.2009 4:03pm
levisbaby:
Well, you've already mentioned today that once you decide that a jurist is "very liberal" that they are likely to render mistaken opinions, so this should not come as a surprise.
5.26.2009 4:05pm
levisbaby:
Since Sotomayor's decision appears to follow Kelo, would you say that her failure to side with the property owners shows that she lacks "empathy" with aggrieved property owners?
5.26.2009 4:07pm
BTD (mail):
Ilya:

You make a good argument here. I am inspired to look more closely into the matter.
5.26.2009 4:09pm
J. Aldridge:
Sotomayor's endorsement of this ruling is a strong sign that she has little or interest in protecting constitutional property rights.

The Reconstruction Committee did reject adding the Takings Clause under the 14th in late April of 1866.
5.26.2009 4:46pm
therat (mail):
Although I know nothing about the practices at the Second Circuit, it's my impression that unsigned and unpublished opinions at most appellate courts are drafted by judicial staff attorneys, not the justices themselves. True, Sotomayor would have had to sign off on the opinion, but it's hard to see why she'd put a huge amount of thought into one sentence (in an unpublished, nonprecedential opinion) that had absolutely no effect on the outcome of the case, regardless of whether the sentence was technically dictum. If one is trying to read the judicial tea leaves for evidence of her judicial philosophy, it makes little sense to scan such meaningless opinions with a fine toothed comb; rather, one should look at published decisions that she authored, where her choice of words is more likely to be carefully considered.
5.26.2009 5:02pm
Javert:

Kind of a snoozer, really.
Unless you happen to be one of the individuals whose dreams were destroyed by the thug, Wasser.
5.26.2009 5:06pm
rosetta's stones:

Since Sotomayor's decision appears to follow Kelo, would you say that her failure to side with the property owners shows that she lacks "empathy" with aggrieved property owners?


The proprety owners don't need empathy, they need their property rights respected. Although, one of the the property owners in Kelo, "Wilhelmina Dery, was born in her house in 1918 and has lived there her entire life", so she might fall under the aegis of Obama's desired trait of empathy. But the proprety issue stands alone.

I guess we shouldn't be surprised that post Kelo, the SC would run away from this case. And now we'll spend the next generation unwinding the nonsense that will inevitably arise because the SC allowed a pubic agency to force a transfer of property from one private party to another.

Next thing you know, governments will be forcing finance companies to merge, and injecting themselves into automotive bankruptcies.
5.26.2009 5:09pm
John Humbach (mail) (www):
Until the mid-1980s, the courts limited permissible takings by use of a "public use" or (more often) a "public purpose" requirement under the due process clause, not the takings clause.

As far as I can tell, the case of Hawaii Housing v. Midkiff (1984) was the first one ever to say that the takings clause includes a "public use clause." Of course, such a reading of the takings clause is, among other things, totally ungrammatical, but be that as it may. Since the due process clause has now been stripped of its "economic due process" teeth, the takings clause is the only one left.

At any rate, the Midkiff conception of "public use" seemed to be about as broad as anything the Supreme Court applied back in the old days under the due process clause. (And, indeed, the complaining property owners in Midkiff lost.)

The Midkiff "public use" conception is not, of course, broad enough to cover criminal extortion, but it's not at all obvious to me that the Portchester case involved criminal extortion (as opposed to cashing in on a possibly improvident grant of government largess). It's not obvious enough, anyway, that I'd be willing to run the risk of libel per se.

For more info on the history, look here.
5.26.2009 5:20pm
Anderson (mail):
Sotomayor was on a Second Circuit panel that issued the unsigned opinion in one of the worst property rights decisions in recent years, in the case of Didden v. Village of Port Chester

Oh no she Didden!!??



(EXCLUSIVE Anderson pun, Must credit Anderson!)
5.26.2009 6:01pm