Atlantic City Eminent Domain – Birnbaum

Fifty Years of Strength and Survival

Charlie Birnbaum is a piano virtuoso and the major piano tuner in Atlantic City. He owns a three-story walk-up apartment building near the new Revel Casino and within sight of the ocean and Atlantic City’s famed Boardwalk. Charlie, with help from his son and son-in-law, has personally maintained and refurbished the entire building, laying new sheetrock and repairing brick by hand. He rents the second- and third-floor apartments to long-term elderly tenants at below-market rates.

Charlie’s emotional ties to the property run deep; it has been a symbol of hope and survival in his family for decades. Charlie’s parents—Holocaust survivors who met hiding in the forests of Poland during World War II—purchased the building as their primary residence in 1969 when they moved to Atlantic City. Their time as partisans in Poland made them—and, by connection, Charlie—uniquely sensitive to the importance of having “their own space.” When Hurricane Gloria hit Atlantic City in the 1985, Charlie’s father—already elderly—refused to leave the building, telling Charlie that if he left he’d have nothing to come back to. Charlie’s parents lived in the building continuously until his father passed away in 1987.

After that, Charlie’s mother continued to live in the building, first on her own and later with a home health aide, until they were both tragically murdered there in the late 1990s. But Charlie refuses to let one moment of tragedy overshadow decades of family history and the predominantly joyful memories attached to that beloved family home. The building stands as a reminder to Charlie of his parents and the time he and his family shared there together. Charlie firmly believes that the building—and, specifically, his ability to keep his parents in their own home instead of in a nursing home—prolonged both of his parents’ lives.

But the home is more than just a reminder: Charlie will tell you it is now prolonging his life as well. Now 65, Charlie has developed a serious but non-life-threatening autoimmune condition that requires him to rest frequently. The only thing that has allowed him to continue working is the fact that his parents’ home gives him a central location near the casinos he services which he can use as a piano studio and home base for his successful piano-tuning business. Without this convenient home base in Atlantic City, Charlie would be physically unable to continue tuning pianos. The building is literally the only thing that keeps Charlie working—and Charlie believes that work is the only thing keeping him healthy.

CRDA Is Trying to Take Charlie’s Property Because It Thinks It Can with Impunity

If the state government has its way, the home Charlie’s parents left him won’t be his for much longer. In fact, it won’t be much of anything.

In June 2012, CRDA approved the “South Inlet Mixed Use Development Project” supposedly intended to “complement the new Revel Casino and assist with the demands created by the resort.” The project authorizes CRDA to use eminent domain to seize Charlie’s property along with 61 other parcels, but there is nothing in the project that requires the seized properties to be used for anything in particular.

Indeed, CRDA’s intent to use eminent domain to seize Charlie’s property is the only aspect of the plan that is concrete. Documents released by CRDA indicate that there is no substantive project or plan beyond the plan to condemn the properties. CRDA does not even have a formal development plan in place. Rather, it appears that CRDA only has a nonbinding “conceptual” plan—proposed by Revel—that could serve as a possible template for future development of the area. This conceptual plan includes “restaurants, specialty stores, boutiques and residential housing for rent and purchase” —all private uses, if they come to fruition at all. But there is nothing that indicates what exactly Charlie’s property would be used for and nothing that requires CRDA to use it for anything described in the conceptual plans. In fact, there is nothing that requires CRDA to use Charlie’s property for anything at all.

For too long, CRDA has been allowed to get away with whatever it wants with impunity, and that means it has started to act like it can get away with whatever it wants. It is about to learn otherwise.

New Jersey Courts Uphold Property Rights Protections

There is only one thing standing between the people of New Jersey and this flagrant abuse of power—the state courts. New Jersey’s courts in particular have issued strong recent opinions protecting property rights against municipal abuses.

The New Jersey Superior Court has already invalidated a prior attempt by CRDA to use the power of eminent domain for an unconstitutional purpose. In Casino Reinvestment Development Authority v. Banin, the Institute for Justice successfully defended Atlantic City homeowner Vera Coking when CRDA attempted to take her home and give it to Donald Trump to use the land for a private limousine parking lot for his casino. In invalidating the condemnations, the New Jersey Superior Court found that there were insufficient assurances that the properties to be condemned—including Ms. Coking’s—would actually be used to build a parking lot. The court noted that “nothing explicitly prevent[ed] Trump from changing the use of the properties at any point it might choose after acquisition.”

In 2007, in Gallenthin Realty Development, Inc. v. Paulsboro, the New Jersey Supreme Court ruled that a city could not classify property as blighted—and then use eminent domain to seize it in the name of redevelopment—merely because it could have been put to more productive use. In invalidating the city’s classification of the plaintiff’s land as “blighted,” the Gellenthin Court found that there are meaningful, judicially enforceable limits on what constitutes a “public use,” and these limits do not allow the condemnation of property simply because it is “not used in an optimal manner.” Furthermore, the court held that cities that want to condemn blighted areas must provide real record evidence of the blight they are trying to alleviate—bland recitations of statutory criteria are in and of themselves insufficient.

Against the backdrop of these strong judicial opinions, the Institute for Justice now challenges CRDA’s condemnation of Charlie’s property on two constitutional grounds. First, in this case there are insufficient assurances—indeed, there are no assurances—about the future use of Charlie’s property. CRDA has no formal development plan or agreement. Rather, it has only vague general plans about what it might want to build—restaurants, boutiques, and other kinds of things that are not the things that are currently there. Even if such things were a public use, there is absolutely no obligation—legal or otherwise—for CRDA to build what it thinks it might want to build.

Second, New Jersey caselaw precludes the taking of private property using eminent domain for pure economic development—which is exactly what CRDA is now attempting to do. The New Jersey Supreme Court has imposed meaningful limits on cities’ ability to use eminent domain to seize private property, and those protections apply no less to CRDA than to redevelopment agencies.

Federal Courts Abdicate Their Role as Property Rights Protectors

State protections against eminent domain abuse have become all the more essential since the federal courts have abdicated their essential duty of enforcing constitutional limitations on eminent domain.

Under Kelo v. New London, a city can measure its citizens’ worth in how much they pay in taxes, meaning that a family can be uprooted, cast aside, and its home destroyed if someone richer comes along who might pay more in taxes.

The demise of the U.S. Constitution’s “public use” clause began with the U.S. Supreme Court’s 1954 decision in Berman v. Parker, in which Washington, D.C., used eminent domain to renew what were in those days called “slums.” Rather than rule narrowly that the city could condemn decrepit tenements that presented a genuine threat to public health, the Supreme Court instead decided that the constitutional term “public use,” which had a specific historical definition, could be blurred to mean accomplishing merely a “public purpose,” such as slum removal. Worse yet, the Supreme Court also decided that local governments wielding eminent domain, rather than courts, get to decide what constitutes a “public purpose.” Thus, a vital constitutional check on government’s power of eminent domain was lost.

The erosion of the “public use” clause in the Constitution reached a new low in the 2005 ruling in Kelo v. City of New London, which has become one of the most reviled decisions in U.S. Supreme Court history—and rightly so. In Kelo, the City of New London, Conn., decided to seize non-blighted homes and turn them over to another private party in the hope that the new owners would use the land in a way that could create jobs and pay higher taxes. The Supreme Court upheld the taking, ruling that even a mere promise of generating “public benefits,” whether those benefits are likely or not, justifies taking someone’s home and turning it over to another private party for that party’s private profit. Under Kelo, a city can measure its citizens’ worth in how much they pay in taxes, meaning that a family can be uprooted, cast aside, and its home destroyed if someone richer comes along who might pay more in taxes. And so, just as “public use” was blurred to mean “public purpose” in Berman, “public purpose” was further blurred into “public benefit” in Kelo. And with each of these steps adding legal imprecision to otherwise well-defined words, the fundamental right to own property, which was so important to the Framers and has been essential to our liberty and prosperity, was undermined.

The nationwide backlash against Kelo was swift and nearly unanimous. Public opinion polls consistently show that more than 80 percent of Americans disapprove of using eminent domain for private gain. As of 2013, 44 states have legislatively reformed their statutes to some degree to afford property owners greater protection against the wrongful seizure of their property through eminent domain. Three state supreme courts have squarely considered the Kelo question and unequivocally rejected the use of eminent domain for economic development. And many other courts across the country—including New Jersey courts—have begun enforcing meaningful limitations on the government’s ability to use eminent domain to seize private property. Unfortunately, state officials in New Jersey seem to be some of the last people to get the message. But with the litigation on Charlie’s behalf, that is about to change.

The Institute for Justice: Fighting to Protect Property Rights for More than 20 Years

The Institute for Justice is the national law firm for liberty. It has earned the reputation as a formidable foe of eminent domain abuse. Defending Charlie Birnbaum is part of the Institute for Justice’s commitment to strategic litigation that will help restore judicial protection for private property rights. The U.S. and every state constitution include property rights because they are the foundation of our independence as responsible citizens. Indeed, for most Americans, ownership of a home or business is the cornerstone of their efforts to provide for their families and realize their dreams. Thus the wrongful use of eminent domain to transfer property from one private owner to another does not simply destroy a home or business; it very often destroys a life, one patiently built through years of hard work.

The Institute for Justice has litigated eminent domain cases nationwide, successfully preserving the rights and properties of the politically and financially disenfranchised. Among IJ’s victories are:

• Casino Reinvestment Development Authority v. Banin—In a classic David versus Goliath battle, the Institute for Justice scored a major victory for property rights in July 1998 when the New Jersey Superior Court ruled that CRDA could not use eminent domain to seize widow Vera Coking’s home of 37 years and give it to Donald Trump for his private development.

• Pittsburgh Fifth and Forbes—IJ helped saved more than 120 small businesses in downtown Pittsburgh in 2000 from the mayor’s plan to abuse eminent domain.

• Mississippi Major Economic Impact Authority v. Lonzo Archie—IJ represented the Archie family in their successful fight to save 24 acres of property and several homes they owned since 1941. The state tried to seize the Archie family’s private property in 2001 for the benefit of Nissan Motor Corporation, to which it had already given more than $290 million in subsidies and tax breaks and approximately 1,300 acres of land.

• City of Mesa v. Bailey—In September 2003, the Arizona Court of Appeals unanimously struck down the City of Mesa’s use of eminent domain for private gain. The city attempted to seize a small car repair shop so a privately owned hardware store could relocate.

• Saleet v. City of Lakewood—In 2004, as a result of an IJ lawsuit representing 17 home and business owners, citizens from the city of Lakewood voted down an eminent domain abuse project that would have demolished an entire neighborhood for high-priced condominiums and an upscale mall. Shortly afterwards, Lakewood voters rejected the bogus blight designation, which applied to 93 percent of the city.

• City of Tempe v. McGregor—In October 2005, as a result of the Institute for Justice Arizona Chapter’s legal defense, Arizona courts rejected the city of Tempe’s attempt to condemn private property for the benefit of a wealthy private developer.

• Brody v. Village of Port Chester—In December 2005, the 2nd U.S. Circuit Court of Appeals ruled that the Village of Port Chester violated IJ client Bill Brody’s constitutional rights by condemning his property for private development without giving him notice of his one opportunity to challenge the condemnation.

• City of Norwood v. Horney—In a resounding repudiation of the U.S. Supreme Court’s decision in Kelo v. City of New London, the Ohio Supreme Court unanimously ruled in July 2006 that the city of Norwood acted unconstitutionally by taking the homes of the Institute for Justice’s clients.

• Wells v. City of Riviera Beach—In May 2007, the Institute for Justice successfully defeated an attempt in Riviera Beach, Fla., to displace more than 5,000 residents for a massive private development project that included a yacht marina, luxury condominiums and upscale hotels.

• City of Long Branch v. Brower—In 2010, the Institute for Justice helped defeat the city of Long Branch’s attempt to condemn an entire beachfront neighborhood.

• Community Youth Athletic Center v. City of National City—In April 2011, the Institute for Justice successfully challenged a 692-property eminent domain zone in National City, Cal. The court’s opinion found not only that National City lacked a legal basis for its blight declaration, but also included important due process and public records holding with implications far beyond redevelopment law.

Litigation Team

The litigation team for this case is Institute for Justice Senior Attorneys Robert McNamara and Jeff Rowes.

Dana Berliner

Litigation Director

Dana Berliner serves as Litigation Director at the Institute for Justice, where she has worked as a lawyer since 1994. She litigates property rights, economic liberty and other constitutional cases in both federal and state courts.

Robert McNamara

Senior Attorney

Robert McNamara serves as a senior attorney with the Institute for Justice. He joined the Institute in August 2006 and litigates cutting-edge constitutional cases protecting First Amendment, property rights, economic liberty and other individual liberties in both federal and state courts.

Dan Alban

Attorney

Dan Alban serves as an attorney with the Institute for Justice. He joined the Institute in September 2010 and litigates cutting-edge constitutional cases protecting free speech, property rights, economic liberty and other individual liberties in both federal and state courts.

For more information, please contact:

John E. Kramer

Vice President for Communications

Institute for Justice

901 North Glebe Road, Suite 900

Arlington, VA 22203

(703) 682-9320 ext. 205

jkramer@ijstaging.wpengine.com