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When Eminent Domain Loses

The Ohio Supreme Court strikes a major blow for property rights.

12:00 AM, Jul 27, 2006 • By DUNCAN CURRIE
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LAST SUMMER, in the case of Kelo v. New London, a bitterly divided U.S. Supreme Court upheld (and slightly expanded) the constitutionality of local governments' seizing private property for economic development via the "takings power" of eminent domain. But in his majority opinion, Justice John Paul Stevens took care to insert this sentence in the closing paragraphs: "We emphasize that nothing in our opinion precludes any State from placing further restrictions on its exercise of the takings power."

Wednesday morning, the Buckeye State did just that. In a unanimous 7-0 decision, the Ohio Supreme Court ruled in favor of Norwood property owners who were challenging the confiscation of their land through eminent domain. (Norwood is a suburb surrounded by Cincinnati.) It marked the first eminent-domain ruling by a state supreme court since Kelo, and will surely set a precedent for other states wrangling over this issue. "It gives guidance to courts for the future," says Dana Berliner, a senior attorney at the Institute for Justice, which litigated the case in behalf of the appellants.

The decision in Norwood v. Horney was an amalgam of several rulings, all of which laid out benchmarks for judging the legality of property seizures.

First: The Ohio High Court implicitly rejected the rationale behind Kelo. "Although economic factors may be considered in determining whether private property may be appropriated," wrote Justice Maureen O'Connor, "the fact that the appropriation would provide an economic benefit to the government and community, standing alone, does not satisfy the public-use requirement of Section 19, Article I of the Ohio Constitution." In Norwood, the demolition of property was to make room for a sprawling, $125-million project known as Rookwood Exchange, which would include office space, luxury condos, and retail stores.

Second: The court called for "heightened scrutiny when reviewing statutes that regulate the use of eminent-domain powers." The city of Norwood had, on the basis of a study funded by Rookwood Partners, the private developer, declared the relevant neighborhood to be "blighted" and "deteriorating." A trial court later ruled that Norwood had abused its discretion in finding the location "blighted" but was correct to deem it "deteriorating." The "deteriorating" standard was considered sufficient to trigger the city's eminent-domain power.

The Ohio Supreme Court said this was rubbish. "We find that Norwood's use of 'deteriorating area' as a standard for appropriation is void for vagueness," wrote Justice O'Connor. "We further hold that the use of the term 'deteriorating area' as a standard for a taking is unconstitutional because the term inherently incorporates speculation as to the future condition of the property to be appropriated rather than the condition of the property at the time of the taking."

In plain English, that means Norwood grossly abused its authority. The mere possibility--or even probability--that an area may one day be blighted can hardly pass muster as legitimate grounds for property seizures. Indeed, by the yardsticks employed in Norwood--cracked sidewalks, light pollution, proximity to the highway, weeds, dead-end streets, and "diversity of ownership"--large bits of middle-class, suburban America are "deteriorating."

Third: The court rejected as unconstitutional the portion of Ohio's eminent-domain statute that--get this--barred judges from enjoining the seizure and redevelopment of property prior to appellant review. The law had essentially allowed developers to tear down homes after they provided just compensation but before the completion of the appeals process. According to the Ohio Supremes, this "violates the separation-of-powers doctrine."

All told, the Ohio Supreme Court delivered a smashing victory for property owners--and for common sense. Will it herald a change in the momentum of eminent-domain abuse? That depends on whether other states--and state courts--follow Ohio's lead. Already the tide may be shifting.

Duncan Currie is a reporter at The Weekly Standard.