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.