How Much Time Does the Government Have to Take Your Property?

After the government determines to use eminent domain, how much time does the government have to take your property?

First, the New York Eminent Domain Procedure Law (“EDPL”) § 207 provides for petitioning the appellate court to review a condemnor’s determination and findings of its proposed public project and proposed exercise of eminent domain.  This opportunity for judicial review may be reviewed by the Court of Appeals.

After that process, EDPL § 401 provides for the time during which a condemnor may commence a proceeding to acquire the property necessary for the proposed public project.  The condemnor has up to three years after the latest of three scenarios, the third being “entry of the final order or judgment on judicial review pursuant to [EDPL] § 207” in which to commence an eminent domain proceeding.

But what happens if a condemnee appeals to the Court of Appeals to review the condemnor’s decision to exercise eminent domain, the Court of Appeals dismisses the appeal without reviewing the merits, and the condemnor commences an eminent domain proceeding more than three years after the appellate court confirmed the condemnor’s determination but within three years from the Court of Appeals dismissal?  Is the commencement timely or did it miss the three year statute of limitations deadline?

The Appellate Division, First Department, held on July 5, 2016, that the three year statute of limitations of EDPL § 401(A)(3) runs from the Court of Appeals dismissal date of the appeal (even if dismissed without considering the merits) and not the initial Appellate Division decision on the merits.  City of New York v. 2305-07 Third Ave., LLC, 2016 NY Slip Op 05352, 2016 N.Y. App. Div. LEXIS 5195 (1st Dep’t 2016).  The court held that a Court of Appeals dismissal not on the merits is still a “final order or judgment on judicial review” under EDPL § 401(A)(3).

The First Department affirmed Justice Shlomo Hagler’s decision in Matter of the City of New York [Fifteenth Amended Harlem-East Harlem Urban Renewal Plan (East 125th Street), Stage 1], 2015 N.Y. Misc. LEXIS 2975, 2015 NY Slip Op 31524(U) (Sup. Ct. N.Y. County 2015).

The First Department also agreed with the Fourth Department’s decision in Matter of City of Syracuse Industrial Development Agency [J.C. Penney Corp. – Carousel Center Co., L.P.], 32 A.D.3d 1332 (4th Dep’t 2006), and found the decision squarely on point.

The First Department reasoned, “The plain and common-sense interpretation of the statute is that ‘the final order or judgment on judicial review’ is the final order or judgment disposing of any EDPL 207 challenge and terminating judicial review.”  “Nothing in the statute supports an interpretation that ‘the final order or judgment on judicial review’ entails a determination on the merits.  If the legislature so intended, it could have appended the language ‘on the merits.’”

We were co-counsel on behalf of one petitioner in the underlying EDPL § 207 proceeding contesting the City’s determination and findings, from which the above decision arose.

The City commissioned a blight study, which concluded that the City’s proposed project and use of eminent domain would remove blight, maximize appropriate land use, remove or rehabilitate substandard and unsanitary structures, among other things.

The problem was that the blight report failed to demonstrate the failure of the City to maintain its own properties in the area deemed blighted, and the City instead used that as a pretext to take the petitioners’ private properties.

The trial court dismissed this argument, relied on Goldstein v. New York State Urban Development Corporation, 13 N.Y.3d 511 (2009), which adopted the holding of Kelo v. City of New London, 545 U.S. 469 (2005), and basically held that self-serving, manufactured blight studies must be given great deference, thereby broadening the definition of what is a public purpose that is required in order to exercise the power of eminent domain.  E. Harlem Alliance of Responsible Merch. v. City of New York, 2010 N.Y. Misc. LEXIS 1257, 2010 N.Y. Slip Op 30023(U) (Sup. Ct. N.Y. County 2010).

The Appellate Division, First Department, affirmed, and, in addition to Goldstein, supra, also relied on the then-recent decision Kaur v. New York State Urban Development Corporation, 15 N.Y.3d 235 (2010), which reaffirmed the broadening definition of what is considered a public purpose in order to exercise eminent domain.  Uptown Holdings, LLC v. City of New York, 77 A.D.3d 434 (1st Dep’t 2010).

However, Judge Catterson saw through the City’s pretext and, in a lone concurrence, stated,

“In my view, the record amply demonstrates that the neighborhood in question is not blighted, that whatever blight exists is due to the actions of the City and/or is located far outside the project area, and that the justification of underutilization is nothing but a canard to aid in the transfer of private property to a developer.  Unfortunately for the rights of the citizens affected by the proposed condemnation, the recent rulings of the Court of Appeals in [Goldstein and Kaur] have made plain that there is no longer any judicial oversight of eminent domain proceedings.  Thus, I am compelled to concur with the majority.”

The Court of Appeals affirmed, with Judge Smith’s lone concurrence echoing Judge Catterson’s concurrence.  Uptown Holdings, LLC v. City of New York, 16 N.Y.3d 764 (2011).

The July 5, 2016, First Department decision is available at:

http://www.courts.state.ny.us/reporter/3dseries/2016/2016_05352.htm