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Debunking Conservatives’ Rhetoric That Judge Sotomayor is Hostile to Property Rights: Part I – Bart Didden and Port Chester, New York

A story in today’s New York Times paints Republicans as eager to make Judge Sonia Sotomayor’s views on property rights a big issue in her confirmation hearings. This follows a screaming editorial in the Washington Times, drawing on the writings of University of Chicago Law Professor Richard Epstein, that accuses Judge Sotomayor of having a “bias against private property.” A close examination reveals remarkably little factual support for this breathless claim. The attack on Judge Sotomayor’s views on property rights stems from misguided criticism of two Second Circuit rulings — both of them unanimous — in litigation involving longstanding efforts by the Village of Port Chester, New York, to revitalize its blighted downtown and waterfront areas through a comprehensive redevelopment project that involved the acquisition of private property within the project area by eminent domain.

In two successive posts, we will examine each of those cases, one involving Bart Didden and the other William Brody, debunking the rhetoric with the reality. We start today with the facts of Port Chester’s redevelopment project — facts studiously ignored by Judge Sotomayor’s critics –and then discuss the Didden case specifically. The facts and quoted material are taken from published accounts and the courts’ rulings in the Didden and Brody cases.

According to the Washington Times, “It’s a mystery how [Judge Sotomayor] could square this case [Didden] with the Constitution’s requirement that private property can be taken only for ‘public use.’” This central accusation of the editorial fatally ignores the facts of Port Chester’s comprehensive redevelopment project as well as applicable precedent governing the exercise of eminent domain, an essential government power that prevents private property owners from blocking a project that a government body has determined is necessary to advance a public purpose. In order for such a project to go forward, it is essential that any disputes over the legitimacy of the public purpose finding be litigated and resolved promptly. And a property owner whose property is taken as part of such project is of course entitled by the Constitution to receive “just compensation.”

Port Chester, a small community in Westchester County northeast of New York City, had been trying unsuccessfully for decades to revitalize its distressed downtown and waterfront areas. Finally, in 1999, it was able to proceed with a comprehensive redevelopment project “planned as a mixture of public-use space and private development.” After public hearings, Port Chester’s Board of Trustees made specific findings of public purpose for the project necessary under New York law to begin acquiring the properties within the 27-acre redevelopment zone. In particular, the Board stated that the redevelopment project was “designed to revitalize and beautify the Village’s long neglected waterfront, eliminate a deteriorating downtown urban blighted area, bring sorely needed jobs to the Village, add to the Village’s tax base, and importantly, bring the public back to the Village’s downtown and waterfront.” The Village issued public notice of the project and identified the properties located within the 27-acre redevelopment zone and thus subject to condemnation.

Thereafter, a private development company, G & S Port Chester LLC (G & S), chosen by the Village “to coordinate the land acquisition and construction contracting aspects of the project,” began the process of acquiring the properties within the redevelopment zone. Many of the property owners reached buy-out agreements with G & S; in instances where such agreements could not be reached, the Village exercised its right to acquire the properties through eminent domain. Some families were displaced by the project, “most of whom were renting substandard or illegal apartments in deteriorated structures.” Although not required by the Constitution to provide any compensation to non-property owners, the Village and G & S paid renters $4,000 to assist them in relocating. And, as part of the project, millions of dollars were spent improving the public infrastructure, “including the construction of a waterfront park and new sea wall; new water, sanitary and storm sewers; new traffic controls, curbing and lighting and removal of old overhead utility lines.” This project, called The Waterfront at Port Chester, is the town’s new centerpiece.

There is no legitimate basis for asserting that Port Chester’s comprehensive redevelopment project does not amply satisfy the public purpose requirement of the Constitution necessary for the exercise of eminent domain. Indeed, in Kelo v. City of New London, the Supreme Court held that a city’s economic redevelopment plan qualifies as a public use within the meaning of the Takings Clause, even though some of the property taken as part of the redevelopment project may benefit individual private parties. Although property rights advocates have been harshly critical of Kelo, they cannot properly quarrel with judges on lower courts, including Judge Sotomayor, who are required to adhere to Supreme Court precedent. Unable to do so, they have attacked Judge Sotomayor by attempting to cast two Port Chester property owners, Bart Didden and William Brody, as judicial victims.

As to Didden, the main “victim” in the Washington Times editorial, the Times claims that “Judge Sotomayor served as the senior judge on one 2006 case, Didden v. Village of Port Chester, which . . . professor Richard Epstein described as ‘about as naked an abuse of government power as could be imagined.’ Her judicial panel’s ruling might be the worst violation of property rights ever approved by a federal appeals court.”

In fact, Bart Didden was a commercial developer who owned property in the blighted area that he had been trying for years, without success, to develop into a CVS pharmacy. As Didden himself has admitted, CVS in or about 1996 told him flatly that it was “not interested in Port Chester.” All that changed with the redevelopment project. Thus, in 1999, far from objecting to any “public purpose” for the project, Didden wrote to the Village, noted the new interest of CVS and other possible tenants in his property, and asked the Village to remove his property from the proposed redevelopment zone. The Village declined to do so. Nonetheless, with full knowledge that his property was subject to condemnation, Didden entered into a lease with CVS in 2003. G & S had previously announced an intention to locate a Walgreens drug store in the same retail area of the redevelopment zone, but after objections from Didden, withdrew proposed amendments to the site plan needed to accommodate the Walgreens store. Negotiations between Didden and G & S over the retail site collapsed, and Port Chester then initiated condemnation proceedings against Didden’s property.

Didden then turned these failed business negotiations into a federal case, filing a lawsuit against Port Chester and G & S in 2004 in which he claimed that he had been the victim of extortion by G & S, that there was no public purpose for the condemnation of his property, and that Port Chester’s acquisition of his property was unconstitutional. According to Didden, G &S had demanded he pay them $800,000 or give G & S a partnership interest in his project, or G & S would cause Port Chester to condemn Didden’s property. Although Judge Sotomayor’s critics like to state Didden’s extortion claim as fact, according to the District Court G & S disputed it, asserting that the company was attempting to reach a buy-out agreement with Didden and was as willing to be bought out by Didden as it was to acquire Didden’s property, and had informed Didden that the condemnation process was continuing.

The District Court dismissed Didden’s complaint, holding that it was time-barred. Under the applicable statute of limitations, Didden had three years to bring his complaint alleging a violation of his constitutional rights, but had waited nearly five years to sue. In so holding, the District Court explained that Port Chester had made its public purpose findings in 1999 subjecting Didden’s property to condemnation pursuant to its redevelopment plan, and that Didden did not dispute being notified of this, but waited until 2004 to sue when he was unable to realize his own preferred plans for the property.

In addition, the court held that Didden had waived his right to challenge the public purpose of the redevelopment project, since New York law allowed only thirty days for such a challenge to be brought in state court after the issuance of the public purpose findings by the Village. The federal court further noted that under applicable law, the Village and G & S had no obligation even to attempt to negotiate with Didden, merely the obligation to offer Didden “just compensation prior to acquiring title to [his] property.” Accordingly, the court found no bad faith on the part of the defendants.

Didden appealed, and in an unsigned summary order, a unanimous three-judge panel of the Second Circuit — Judge Sotomayor and Republican appointees Reena Raggi and Peter Hall — upheld the District Court’s dismissal of Didden’s complaint as time-barred, agreeing with the District Court that the time for Didden to sue began to run in 1999 when Port Chester announced its public purpose for the condemnation of properties in the redevelopment district. In addition to holding that Didden had filed his lawsuit too late, the unanimous panel went on to state that even if he had not, Didden’s claim that the Takings Clause prohibited Port Chester from condemning his property “for a private use within the redevelopment district” was meritless under the Supreme Court’s decision in Kelo. In particular, the Second Circuit cited the Supreme Court’s statement in Kelo that it would not “second-guess the City’s determinations as to what lands it needs to acquire in order to effectuate the project.”

Far from evincing a “bias against private property” as her critics charge, Judge Sotomayor in the Didden case was carefully following law and precedent, a hallmark of her judicial career. Moreover, her vote in this case was hardly an outlier. As noted, the panel’s ruling was unanimous; Didden’s motion asking the full Second Circuit to re-hear his case was denied without recorded dissent, as was his petition for a writ of certiorari to the Supreme Court.

Using the Didden case to claim that Judge Sotomayor is hostile to private property rights is, in short, a misrepresentation of her judicial record.

Comments

Pingback from Reports on Judge Sotomayor’s Record | SCOTUSblog
Time: July 7, 2009, 4:53 pm

[...] Debunking Conservatives’ Rhetoric That Judge Sotomayor is Hostile to Property Rights: Part I -… [...]

Comment from M. Ryan
Time: August 3, 2009, 2:27 pm

Although I find the condemnation of land for private use appaling, there are many mitigating facts in the Didden/Wasser (G & S) dispute. As a resident of Port Chester and a personal aquaintance of Mr. Didden’s, I wish to share some additional facts regarding the sordid history of the Port Chester develpment saga. First, I am not here to defend the actions of the town, nor the developers G & S (read Gregg Wasser), which I find despicable. Port Chester has a long history of corruption in the area of land use and development.
On the other hand, Bart Didden and his partner owned the parcel of land in question for many years. The original structure which housed a pharmacy and a gun shop burned down and was demolished. It lay as an empty lot, right in the center of downtown, piled with rubble and shot through with weeds for well over a decade. In the late 80’s or early 90’s, Didden and his partner proposed a five story office building on the lot, but never went ahead to bring the project to fruition. When Wasser came along with a proposal to develop the downtown area, there was a public hearing held. Mr. Didden did not attend.
Furthermore, another local business owner went around trying to get the other property owners whose properties or businesses might be effected by the project to organize and come up with some compromise concessions etc.. Nearly all of them, including Mr. Didden, showed no interest in getting together to fight or influence the project. That business owner ultimately lost his property, and multi-million dollar businesses located there to condemnation by the town. Amongst all the property owners, there is one who has prevailed in court, but he chose to actively fight his case from day one and was compensated.
Didden, on the other hand, ignored the town’s develpment plans until he learned that his parcel, considered blighted (which, I must admit it was, although I have doubts that should have allowed the town to take it away and hand it over to a private developer), had been turned down by CVS and Wasser had gotten Walgreen’s to agree to put a drugstore on that spot. He then entered into a footrace with the developer and claimed to have gotten CVS to agree, at least in principle, to a thirty year lease. Meanwhile, Wasser was moving ahead with his plans. Incidentally, Didden would have received the market value of his parcel, plus or minus 10%. That market value would have been considerably higher if during all the the previous years he had bothered to clear away the rubble and clean up and shown real movement towards developing the property prior to the parcel being labelled as blighted.
Wasser, seeing that the total value of his project would be diminished without Didden’s parcel, and having planned a Walgreen’s pharmacy on the site, proposed the $800K or 50% interest options to abandon his claim to the parcel. Extortion? Possibly, but Justice Sotomayor points out that Wasser had legally been granted the right to develop the blighted parcel and therefore the requeat was not illegal, therefore not ‘extortion’ in a court of law. Furthermore, Didden failed to express his opposition in the proper venues, first the public hearing, then in the local courts. Sotomayor declined to hear the case on those grounds, stating the Court of Appeals was not the proper place to bring the claim. Perhaps Didden might have prevailed had he had better legal representation, but here he was trumped by Wasser; During the years leading up to the case, Wasser and his company, D&G spoke about it to nearly every local real estate attorney. The result was that all the legal experts in the area were prevented from representing Didden in court!! Smarmy on Waser’s part, but all’s fair in love and war….
In any event, Didden sat on the land doing nothing for himself, nor the town for well over 15 years. Wasser, on the other hand, astutely perceived that the empty lot was under utilised and included it in his development zone. The statement above that there was no plausible public benefit as in the 99 Cents Store flys in the face of the actual situation on the ground. On the contrary, the land was fallow and Didden showed no prior signs of rehabilitating it.

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