Saturday, December 01, 2007

Judging Eminent Domain

From: "Ruth Eisenberg"
To: "Jordi Reyes-Montblanc"
Subject: Eminent Domain lawsuit
Date: Sat, 1 Dec 2007 12:29:22 -0500

Real Estate

In the Region / Connecticut

Judging Eminent Domain
Published: December 2, 2007

SUCCESS BEFORE A JURY Timothy S. Hollister, left, and James W. Bergenn
successfully sued the Town of Branford for eminent-domain abuse.
George Ruhe for The New York Times

THE recent $12.4 million jury verdict against the Town of Branford for eminent-domain abuse signals the public’s heightened sensitivity to the issue, said lawyers for both sides in the case.

The September verdict, which the town is expected to appeal, should serve as a warning to municipalities trying to appropriate privately owned land without a legitimate public purpose. It can be “a high-risk proposition,” said Timothy S. Hollister, a lawyer for the development company and landowners who sued the town in Superior Court in Waterbury.

More commonly a topic reserved for civics class, eminent domain has come up in many a kitchen-table conversation since 2005, when the Supreme Court issued its ruling in a high-profile Connecticut case, Kelo v. New London.

That ruling affirmed the City of New London’s right to force Susette Kelo and other homeowners in the Fort Trumbull neighborhood to sell out in order to make way for economic revitalization.

The Kelo decision was widely criticized for making it easier for municipalities to seize properties for private economic development billed as beneficial to the public. The high court left the door open for states to enact further restrictions on eminent domain, however.

The clamor from voters has been loud enough that 34 states have done so, to varying degrees, according to the National Conference of State Legislatures.

Numerous polls around the country have shown widespread concern about the potential for abuse of eminent domain, “and how profound the costs are for the people who are put through that,” said Dana Berliner, a senior lawyer for the Institute for Justice, a nonprofit libertarian law firm based in Arlington, Va., which represented the New London homeowners in their appeal.

Lawyers in the Branford case found that nearly everyone questioned during jury selection had at least a vague notion of what the Kelo case was about. For most, the lasting impression was that eminent domain “could be a bad thing,” said James W. Bergenn, another lawyer for the developer.

Branford officials have vehemently defended their decision in 2003 to take a 77-acre parcel of land owned by Frank Perrotti Jr. of Hamden and Thomas Santa Barbara Jr. of Branford.

The two men had originally agreed to sell the property to a Monroe-based development company, New England Estates, for $4.75 million if the town approved the company’s plans to build a 268-unit residential development.

But after the town’s planning and zoning commission denied its development application in 2002, New England Estates raised the possibility of an affordable-housing project instead.
Connecticut law makes it much harder for towns to turn down developments in which at least 30 percent of the units meet the state’s definition of affordable.

Town officials began questioning the site’s suitability for housing because of its proximity to a closed landfill.

In May 2003, the Board of Selectmen voted in favor of a proposal to take the property by eminent domain for the purpose of investigating possible environmental contamination and perhaps to develop ball fields there. The town’s legislative body approved the taking three months later.

New England Estates petitioned the New Haven Superior Court for a temporary injunction halting the taking. In December 2003, the judge trial referee, Anthony V. DeMayo, denied the injunction. The next month, the town took ownership of the property, for which it paid Mr. Perrotti and Mr. Santa Barbara $1.1 million.

A vast majority of cases challenging such takings are resolved through injunctions; takings temporarily halted by court injunction are often abandoned. But because Judge DeMayo had granted New England Estates and the landowners the right to seek a claim for damages, this case took a different path: The developer and landowners took it to trial, alleging a violation of their civil rights under the takings clause of the Fifth Amendment and seeking lost profits.
Mr. Hollister, the developer’s lawyer, maintained that town officials had made up reasons to take the land simply to stave off development.

Unlike the City of New London, which exercised its power of eminent domain after a “fair, public and factual” process, Mr. Hollister said, Branford pursued a process “so unfair and distorted as to violate the Constitution.”

The jury agreed, awarding New England Estates $11.2 million in lost profits plus $1.2 million for expenses already incurred on the project. The jurors also awarded $340,000 to the landowners for lost option payments.

Those awards followed a separate decision by Judge William T. Cremins of the Waterbury Superior Court, in another complaint filed by the landowners, that revalued the 77 acres at $4.6 million and ordered the town to pay the additional $3.5 million. Both sides have appealed that decision.

While the Kelo case wasn’t discussed in the courtroom during the six-week trial, it certainly informed the proceedings, Mr. Bergenn said.

At the conclusion of jury selection, “I knew I had nobody who hated developers,” he said. “Without Kelo, it would have been more of an uphill battle.”

The town’s lawyer in the case, Kerry R. Callahan, has filed a motion to set aside the trial verdict based on a variety of issues; a decision was still pending as of last week.

While Mr. Callahan agreed that the jury was well aware of Kelo, he took a much dimmer view of its impact. Jurors were “more wary of and perhaps even hostile to the concept that a government could take private property,” he said.

“By the end of the trial,” he added, “it was clear that the jury was hostile to the whole eminent domain process.”

No comments: