Real Estate & Property Law

Cert Petition in Goldstein v. Pataki: How to Plead Kelo Pretext

By rht

The homeowners threatened with eminent domain for the Atlantic Yards project in Brooklyn, New York have filed a petition for a writ of certiorari in Goldstein v. Pataki, 516 F.3d 50 (2d Cir. 2008).

The petition points out the schizophrenic nature of Public Use analysis after Kelo: on one hand, the Court's holding that "pretextual" takings or incidental public benefit  would seem to allow an inquiry into the motivation of the condemnor, and the "actual purpose" of the taking.  On the other, the Court's continuing reliance on the sweeping language of Berman and Midkiff might suggest that any reason that is "conceivable" would insulate a taking from further judicial scrutiny.  As I wrote here:

The crux of the issue in Goldstein was whether factual allegations of pretext could be trumped by the invocation of the Berman-Midkiff-Kelo legal standard of conceivable public use.

In other words, the appellants have effectively conceded what Rosenthal found to have been a complete defense to a public-use challenge: that viewed objectively, the Project bears at least a rational relationship to several well-established categories of public uses, among them the redress of blight, the creation of affordable housing, the creation of a public open space, and various mass-transit improvements.

Slip op. at 13-14.  Here's the Second Circuit's rationale in a nutshell:

We need not go further. As Berman and Rosenthal illustrate, the redevelopment of a blighted area, even standing alone, represents a ?classic example of a taking for a public use.?

Slip op. at 15.  In other words, according the court, it doesn't matter one whit whether a taking was accomplished by ignoring or subverting the public process, whether a taking was designed to bestow private benefit on a government insider, or whether a taking was accomplished to punish a landowner for wanting to develop her property.  Under the Goldstein holding, such facts are not relevant unless some conceivable post-hoc linkage between the project and public benefit cannot be be conjured up from the record by government lawyers or a court.  Fat chance of that happening since -- as Justice Scalia noted -- government agencies generally do not employ "stupid staffs" who cannot paper a record with some possible public benefits that may stem from just about any project or regulation. 

The Questions Presented by the Goldstein petition:

Is the Court?s statement that the Public Use Clause prohibits the taking of ?property under the mere pretext of a public purpose, when [the] actual purpose [is] to bestow a private benefit,? Kelo v. City of New London, 545 U.S. 469, 478 (2005), a rule of general application, or is it limited to takings justified solely on economic development grounds?

Does the substantial deference afforded to legislative public use determinations under Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984), apply to non-legislative condemnation decisions?

What are the elements of a Public Use Clause claim, and how should such a claim be evaluated on a motion to dismiss, given the tension between Kelo?s
assurance that ?purpose? and ?pretext? matter and Midkiff?s statement that courts should defer to a legislative taking that appears ?rationally related to a conceivable public purpose??

The petition is posted here.  A press release with background is here.

Kelo has been wielded too broadly.  It did not, as many courts wrongly assume, validate all economic development takings, or takings supported by a blight determination.  The only question presented by that case was whether economic development takings are, in all cases, violative of the Public Use Clause.  In other words, a claim of per se invalidity, i.e., they never are legal.  The Kelo opinion still left open the possibility that takings supported by claims of blight or economic development would not pass muster, a position expanded upon by Justice Kennedy in his concurring (and fifth vote) opinion. 

Finally, Goldstein is a pleadings case -- the plaintiffs' complaint was dismissed for failing to state a claim under Rule 12(b)(6) -- where the court held that even if everything the plaintiffs claimed were true, they were not entitled to go forward and muster proof.

Full post as published by inversecondemnation on April 01, 2008 (boomark / email).