Sotomayor's Testimony on the Didden Case:

In the same exchange with Senator Grassley where she misstated the holding of Kelo v. City of New London, Judge Sotomayor also defended her ruling in the controversial Didden case, where her Second Circuit Court of Appeals panel ruled that it was constitutionally permissible for a state to condemn property because the owners had refused developer Greg Wasser's demand to pay him $800,000 or give him a 50% stake in their business, threatening to have the property condemned if they did not comply. As I have argued in the past, this is precisely the sort of "pretextual" taking that even the Supreme Court majority in Kelo considered to be unconstitutional.

Responding to Grassley's questions, Judge Sotomayor claimed that the ruling was unexceptionable because it was based purely on the property owners' failure to file their case within the three year period required by the statute of limitations. Nothing to see here, let's just move on.

There are two serious problems with this explanation. First, Sotomayor's panel clearly addressed the substantive constitutional issue as well, ruling that "even if Appellants' claims were not time-barred, to the extent that they assert that the Takings Clause prevents the State from condemning their property for a private use within a redevelopment district, regardless of whether they have been provided with just compensation, the recent Supreme Court decision in Kelo v. City of New London . . . obliges us to conclude that they have articulated no basis upon which relief can be granted." Didden v. Village of Port Chester, 173 Fed. Appx. 931, 933 (2d Cir. 2006) (emphasis added). Thus, even if Sotomayor was right about the statute of limitations question, she still made a seriously flawed ruling on the far more important constitutional issue.

Second, as I explained in this amicus brief (pp. 14-16) coauthored with several other property scholars, the Second Circuit's resolution of the statute of limitations issue was in fact inseparable from its resolution of the substantive question. The court had ruled that the three year statute of limitations expired in 2002, three years after the declaration of the 1999 redevelopment plan that gave the city the authority to use eminent domain in the area. But the plaintiffs' property was not condemned at that time and Wasser did not make his extortionate threats until November 2003, after which their property was almost immediately condemned.

Until that time, it was impossible to file a pretextual taking claim because no pretextual taking had yet occurred or even been threatened. Judge Sotomayor’s panel ruled that Bart Didden and Dominick Bologna’s case was time-barred because she assumed that there is no legal difference between the mere declaration of a redevelopment area and the use of condemnation for purposes of extortion. The panel’s seemingly technical procedural ruling was actually based on a serious substantive error about the law of pretextual takings, as described in Kelo.

The second point described above is probably too complex to discuss in detail in a televised hearing with strict time limits (though I do discuss it in my written testimony to the Judiciary Committee). For nonexperts, the important point to remember is the first one: Sotomayor's panel ruled on the constitutional property rights issue as well, not just the technical statute of limitations question.