Opposition Brief — Goldstein v. Pataki (No. 07-1247)

G2 | FILED

oT

| MAY 16 2008

No. 07-1247 OFFICE OF THE CLERK

IN THE

Supreme Court of the Gnited States

DANIEL GOLDSTEN, et al.,

Petitioners,

VV,

GEORGE E. PATAKI, et al.,

Respondents.

On Petition for Writ of Certiorari

To The United States Court Of Appeals

For The Second Circuit

BRIEF IN OPPOSITION FOR

THE ESDC AND MUNICIPAL RESPONDENTS

DOUGLAS M. KRAUS

*PREETA D. BANSAL

Counsel of Record

SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP

Four Times Square

New York, NY 10036

(212) 735-3000

MICHAEL A. CARDOZO

JANE L. GORDON

OFFICE OF CORPORATION COUNSEL

OF THE CITY OF NEW YORK

100 Church Street

New York, NY 10007

(212) 788-1043

Counsel for Respondents the City of

New York, Michael Bloomberg,

Daniel Doctoroff, Andrew M. Alper,

Joshua Sirefman, and New York City

Economic Development Corp.

Counsel for Respondents New York

State Urban Development Corp.

d/b/a Empire State Development

Corp. and Charles A. Gargano

QUESTION PRESENTED

Did the courts below properly conclude that the complaint

failed to state a claim under the Public Use Clause of the

Fifth Amendment where:

the proposed urban redevelopment project

involving eminent domain undisputedly will

revitalize a large swath uf land in central Brooklyn,

more than half of which has been designated

blighted and earmarked for redevelopment for

more than 40 years and is dominated by open,

dilapidated and environmentally hazardous

railyards, and

the project admittedly will include, among other

public purposes, construction of'a new major

sports arena, affordable housing, public open

space, and significant public mass transportation

improvements?

ii

TABLE OF CONTENTS

QUESTION PRESENTED

TABLE OF AUTHORITIES

STATEMENT

I.

I].

THERE IS NO CONFLICT AMONG THE

LOWER COURTS WARRANTING THIS

COURT’S ATTENTION

A.

The Second Circuit’s “Pretext” Analysis is

Consistent with the Very Few Lower Court

Decisions that Have Addressed Pretext

Claims in Public Use Clause Cases. ............::ec000ee 16

There is No Legal Conflict or Confusion

that Agencies Such as ESDC with

Legislatively Delegated Eminent Domain

Powers are Entitled to the Same Deference

as Legislatures in Their Public Use

Determinations

THE DECISION BELOW IS FULLY IN

ACCORD WITH THIS COURT’S

LONGSTANDING PRECEDENTS

A.

B.

The Project Serves Multiple Undisputed

Public Purposes

There is No Warrant for Examining the

Subjective Thoughts of Public Officials to

Determine Whether Admittedly Valid Public

PUG WPORRUEE «cscs ccccccccessseresseossessecserens 25

iil

C. The Lower Courts’ Determination that the

Complaint’s Allegations of Improper Motive

Cannot Survive Dismissal Does Not Merit

PR go cdnvcivicsecissvatccssanscocaccoecverses 27

III. THIS COURT’S REVIEW IS

UNWARRANTED BECAUSE ISSUES

CONCERNING THE BOUNDS OF EMINENT

DOMAIN POWER ARE ACTIVELY

PERCOLATING IN STATE LEGISLATURES

AND COURTS

. THIS CASE IS NOT A GOOD VEHICLE TO

CONSIDER THE QUESTION PRESENTED

BECAUSE OF ISSUES CONCERNING THE

NEED FOR BURFORD ABSTENTION

CONCLUSION

iv

TABLE OF AUTHORITIES

Cases Page(s)

49 WB, LLC v. Village of Haverstraw, 839

N.Y.S.2d 127 (N.Y. App. Div. 2007) 16, 18, 26, 29

Armendariz v. Penman, 75 F.3d 1311 (9th Cir.

1996) (en banc)

Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955

Berman v. Parker, 348 U.S. 26 (1954)

Board of County Commissioners v. Lowery, 136

P.3d 639 (Okla. 2006)

Broadway 41st Street Realty Corp. v. New York

State Urban Development Corp., 733 F. Supp.

735 (S.D.N.Y. 1990)

Brody v. Village of Port Chester, 434 F.3d 121 (2d

Cir. 2005)

Burford v. Sun Oil Co., 319 U.S. 315 (1943)

CBS Outdoor Inc. v. New Jersey Transit Corp.,

Civil Action No. 06-2428 (HAA), 2007 WL

2509633 (D.N.J. Aug. 30, 2007)

City of Norwood v. Horney, 853 N.E.2d 1115

(Ohio 2006)

Daniels v. Area Plan Commission, 306 F.3d 445

(7th Cir. 2002)

Vv

Develop Don't Destroy Brcoklyn v. Empire State

Development Corp., 816 N.Y.S.2d 424 (N.Y.

App. Div. 2006), appeal denied, 862 N.E.2d

790 (N.Y. 2007) |

Develop Don't Destroy (Brooklyn) v. Urban

Development Corp., No. 104597/2007, 2008

N.Y. Misc. LEXIS 551 (N.Y. Sup. Ct. Jan. 11,

8, 9, 21, 23

Didden v. Village of Port Chester, 322 F. Supp. 2d

385 (S.D.N.Y. 2004), aff'd, 173 Fed. Appx.

931 (2d Cir. 2006), cert. denied, 127 S. Ct.

1127 (2007)

Edwards v. Aguillard, 482 U.S. 578 (1987)

Franco y. National Capital Revitalization Corp.,

930 A.2d 160 (D.C. 2007) 16, 17, 18, 26

Gallenthin Realty Development, Inc. v. Borough of

Paulsboro, 924 A.2d 447 (N.J. 2007)

Harrison Redevelopment Agency v. DeRose, 942

A.2d 59 (N.J. Super. Ct. App. Div. 2008)

Hawaii Housing Authority v. Midkiff, 467 U.S.

229 (1984) 13, 20, 22

Kelo v. City of New London, 545 U.S. 469 (2005) ....... passim

Louisiana Power & Light Co. v City of Thibodaux,

360 U.S. 25 (1959)

MHC Financial Ltd. Partnership v. City of San

Rafael, No. C 00-3785 VRW, 2006 WL

3507937 (N-.D. Cal. Dec. 5, 2006)

National R.R. Passenger Corp. v. Boston & Maine

Corp., 503 U.S. 407 (1992)

Pennell v, City of San Jose, 485 U.S. 1 (1988)

Port Chester Yacht Club, Inc. v. Iasillo, 614 F.

Supp. 318 (S.D.N.Y. 1985)

Rhode Island Economic Development Corp. v.

Parking Co., L.P., 892 A.2d 87 (R.1. 2006)

Rindge Co. v. L.A. County, 262 U.S. 700 (1923)

Rosenthal & Rosenthal Inc. v. New York State

Urban Development Corp., 605 F. Supp. 612

(S.D.N.Y.), aff'd, 771 F.2d 44 (2d Cir. 1985)

Rosenthal & Rosenthal Inc. v. New York State

Urban Development Corp., 771 F.2d 44 (2d

Cir. 1985)

Schneider v. District of Columbia, 117 F. Supp.

705 (D.D.C.), aff'd as modified sub nom.

Berman y. Parker, 348 U.S. 26 (1954)

Shoemaker v. United States, 147 U.S. 282 (1893)

Southeast Land Development Associates, L.P: v.

District of Columbia, No. Civ.A. 05-

1413RWR, 2005 WL 3211458 (D.D.C. Nov.

1, 2005)

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S.

Ct. 2499 (2007)

Vii

United States v. Gettysburg Electric Railway Co.,

160 U.S. 668 (1896)

Waldo's, Inc. v. Village of Johnson City, No. 89-

CV-897, 1989 WL 153727 (N.D.N.Y. Dec.

15, 1989)

Western Seafood Co. v. United States, 202 Fed.

Appx. 670 (Sth Cir. 2006)

Statutes and Rules

42 U.S.C. § 1983

N.Y. Em. Dom. Proc. LAw §§ 101-709

(McKinney 2002 & Supp. 2008)

N.Y. Em. Doom. Proc. LAw § 201 (McKinney

N.Y. EM. DOM. Proc. Law § 202 (McKinney

Supp. 2008)

N.Y. EM. Dom. Proc. LAw § 203 (McKinney

N.Y. Em. Dom. Proc. LAw § 204(A) (McKinney

Supp. 2008)

N.Y. Em. Doo. Proc. LAw § 204(B)(1)

(McKinney Supp. 2008)

N.Y. EM. DOM. Proc. Law § 207 (McKinney

N.Y. EM. Dom. Proc. LAw § 207(A) (McKinney

N.Y. EM. Do. PROC. Law § 207(B) (McKinney

N.Y. EM. Dom. Proc. LAw § 401(A)(3)

(McKinney 2002)

N.Y. EM. Dom. Proc. LAW § 402(B)(4)

(McKinney 2002)

N.Y. Em. Dom. Proc. LAw § 402(B)(5)

(McKinney 2002)

N.Y. Em. Dom. Proc. Law § 502(B) (McKinney

N.Y. ENVTL. CONSERV. LAW §§ 8-0101 to 8-0117

(McKinney 2005 & Supp. 2008)

N.Y. UNCONSOL. LAws §§ 6251-92 (McKinney

2000 & Supp. 2008)

N.Y. UNCONSOL. LAws § 6252 (McKinney Supp.

ix

N.Y. UNCONSOL. LAWS § 6266(3) (McKinney

Other Authorities

CASTLE COALITION, 50 STATE REPORT CARD:

TRACKING EMINENT DOMAIN REFORM

LEGISLATION SINCE KELO (2007),

http://www.castiecoalition.org/pdf/

publications/report_card/50 State Report.pdf

(last visited May 15, 2008)

NATIONAL CONFERENCE OF STATE

LEGISLATURES, EMINENT DOMAIN,

http://www.ncsl.org/programs/natres/

EMINDOMAIN.htm) (last visited May 15,

Petition for Writ of Certiorari, Kelo v. City of New

London, 545 U.S. 469 (2005) (No. 04-108),

available at 2004 WL 1659558

This case involves the use of eminent domain in support

of the proposed Atlantic Yards Arena and Redevelopment

Project in central Brooklyn (the “Project’”’). The allegations

in Petitioners’ complaint do not refute, and both courts

below unequivocally found, that the Project will remove

blight that has plagued more than half the footprint of the

Project for at least four decades.

The Project will also accomplish multiple other, well-

established public purposes: construction of a $120 million

platform over the Vanderbilt Yards—trail tracks which

currently are below street level and create an enormous open

trench that isolates the Project area from the surrounding

communities; a new sports arena designed by renowned

architect Frank Gehry containing a 10,000-square-foot public

atrium and pedestrian passageway to the subways; office

buildings; 6,680 housing units (2,250 of which will be

below-market rate); significant mass transit improvements,

including a new state-of-the-art railyard for the New York

State Metropolitan Transportation Authority and its Long

Island Rail Road as well as extensive public subway

improvements; and eight acres of publicly accessible open

space. The arena will be the home of the National

Basketball Association franchise now known as the New

Jersey Nets, finally fulfilling the goal of returning a major-

league professional sports team to Brooklyn for the first time

since the Brooklyn Dodgers left in 1957. The Project will

also result in extensive environmental remediation of the

Project site,

2

Although they do not dispute most of the Project’s public

purposes, Petitioners make the “far-reaching” (App. 10a)!

claim that condemning their properties to facilitate the

Project would violate the Public Use Clause of the Fifth

Amendment because the public officials who approved the

Project were in fact motivated by the sole or primary purpose

of enriching the Project’s private developer, and thus the

Project’s undisputed public purposes are merely

“pretextual.” Petitioners base this pretext claim upon

nothing but conclusory allegations that a host of “corrupt and

coopted” (App. 9a) state and city officials (including

Respondents Mayor Bloomberg and former Governor

Pataki), none of whom had any evident or alleged motive to

abdicate their roles of significant public trust to curry favor

with the developer or the other private Respondents,

conspired to support the Project for private rather than public

benefit.

The courts below each properly concluded that

Petitioners’ claim could not survive a motion to dismiss

because, even if a pretext claim was theoretically cognizable

in the face of multiple, concededly quintessential public

uses, the speculative and conclusory allegations in

Petitioners’ complaint could not support a claim of pretext.

References to the Appendix to the Petition for Certiorari are

“App.” herein. References to the Joint Appendix in the court

of appeals are “JA”. The Joint Appendix consisted of the

Petitioners’ complaint and all documents referenced therein.

See, e.g., Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S.

Ct. 2499, 2509 (2007) (courts faced with a Rule 12(b)(6)

motion “must consider the complaint in its entirety, as well as

. documents incorporated into the complaint by reference”).

3

STATEMENT

1. ESDC and the Eminent Domain Process in New York

Respondent New York State Urban Development

Corporation d/b/a Empire State Development Corporation

(“ESDC”) is a public benefit corporation created by the New

York State Legislature in 1968. ESDC’s primary statutory

role is to foster development, urban stabilization and

revitalization of distressed areas by eliminating blight and

constructing viable commercial, industrial and residential

projects that create employment, increase state and local tax

revenue and otherwise contribute to the public welfare and

civic good.” |

One of ESDC’s most important revitalization tools is its

power of eminent domain. The assembly of diversely owned

parcels necessary for large-scale projects, particularly in

densely populated urban areas that are layered r-ith public

infrastructure and competing private interests, is often

impossible without condemnation. The original World

Respondents can be grouped into four sets: (1) former

Governor George E. Pataki; (2) the “ESDC Respondents,”

consisting of ESDC and its former chief executive, Charles A.

Gargano; (3) the “Municipal Respondents,” consisting of the

City of New York, Mayor Michael Bloomberg, former Deputy

Mayor Daniel L. Doctoroff, the New York City Economic

Development Corporation and two of its former presidents,

Andrew M. Alper and Joshua Sirefman; and (4) the “Forest

City Ratner (or “Private” or “FCRC”) Respondents, consisting

of Bruce C. Ratner; James P.. Stuckey; Forest City Enterprises,

Inc.; Forest City Ratner Companies; Ratner Group, Inc.;

FCRC, LLC; Brooklyn Arena, LLC; Atlantic Yard

Development Co. LLC; BR Land, LLC; and FCR Land, LLC.

This brief in opposition is submitted on behalf of the ESDC

and Municipal Respondents.

4

Trade Center, the revitalization of Times Square, and

Lincoln Center for the Performing Arts all are examples of

the crucial role of eminent domain in accomplishing critical

public policy objectives within major cities such as New

York.

In the legislation creating ESDC, the Urban

Development Corporation Act of 1968 (the “UDC Act”),

N.Y. UNCONSOL. LAWS §§ 6251-6292 (McKinney 2000 &

Supp. 2008), New York’s legislature delegated to ESDC the

sovereign power of eminent domain to achieve its objectives.

ESDC is directed to “encourag[¢] maximum participation by

the private sector of the economy,” N.Y. UNCONSOL. LAWS

§ 6252 (McKinney Supp. 2008), “in part by promoting large-

scale real estate projects that create and retain jobs and/or

reinvigorate distressed areas.” Develop Don’t Destroy

Brooklyn v. Empire State Dev. Corp., 816 N.Y.S.2d 424, 427

(N.Y. App. Div. 2006), appeal denied, 862 N.E.2d 790 (N.Y.

2007). ESDC may use eminent domain to acquire property

“necessary or convenient” to carrying out its mission, N.Y.

UNCONSOL. LAws § 6263 (McKinney 2000), and has power

to override compliance with local laws (including zoning

laws) after consultation with local officials, id. § 6266(3).

To exercise its power of eminent domain, ESDC must

comply with New York’s Eminent Domain Procedure Law

(“EDPL”), adopted in 1977 to govern and lend uniformity to

eminent domain proceedings in New York. See N.Y. Em.

Dom. Proc. LAW §§ 101-709 (McKinney 2002 & Supp.

2008). The EDPL establishes comprehensive procedures for

extensive up-front public review and input followed by

expedited judicial review.

A prospective condemnor first must notice and convene a

public hearing concerning the “proposed public project.”

N.Y. Em. Dom. Proc. LAw § 201 (McKinney 2002); see also

N.Y. Em. Dom. Proc. LAw §§ 202-203 (McKinney 2002 &

5

Supp. 2008). A record of the hearing is maintained, and

those in attendance have a right to be heard and to have their

views entered into the record in writing or orally. N.Y. EM.

Dom. Proc. LAW § 203 (McKinney 2002). Next, the

condemnor must make and publish “its determination and

findings” specifying, among other things, “the public use,

benefit or purpose to be served by the: proposed public

project.” N.Y. EM. DOM. Proc. LAW § 204(A), (B)(1)

(McKinney Supp. 2008). The deadline for such publication

is 90 days from the close of the public hearing. Jd. § 204(A).

Any “aggrieved” person then has 30 days to challenge

the determination and findings in a petition before the

Appellate Division of the State Supreme Court, which has

“exclusive” jurisdiction. N.Y. EM. Dom. Proc. LAw

§§ 207(A), (B), 208 (McKinney 2002). The EDPL directs

that the Appellate Division “shall either confirm or reject the

condemnor’s determination and findings” after considering

whether:

(1) the proceeding was in conformity with the

federal and state constitutions,

(2) the proposed acquisition is within the

condemnor’s statutory jurisdiction or authority,

(3) the condemnor’s determination and findings

were made in accordance with procedures set forth

in this article and with article eight of the

environmental conservation law, and

(4) a public use, benefit or purpose will be served

by the proposed acquisition.

Id. § 207(C). The EDPL’s pre- and post-determination

procedures have been upheld as furnishing due process. See

Brody v. Vill. of Port Chester, 434 F.3d 121, 134-36 (2d Cir.

2005).

6

Under Article 4 of the EDPL, the last stage of the process

before condemnation is the proceeding to acquire title to the

properties designated for taking. The prospective

condemnor has three years to initiate such a proceeding after

a “final order or judgment” has been rendered in the EDPL §

207 proceeding (if one has been filed). See N.Y. EM. Dom.

Proc. LAW § 401(A)(3) (McKinney 2002). Once notified of

the Article 4 proceeding, condemnees-to-be may appear and

answer. Id. § 402(B)(4). If the court determines that the

procedural requirements of the EDPL have been complied

with, it grants the petition. /d. § 402(B)(5). The. “acquisition

of the property” becomes “complete” when the condemnor

files the court’s order with the acquisition map with the

county clerk or register. Jd. The condemnor has 30 days to

serve a notice of acquisition upon each condemnee, see id. §

502(B), who then may file a claim for just compensation.

See id. § 503(B).

ESDC’s exercise of eminent domain is a discretionary

action subject to the State Environmental Quality Review

Act (““SEQRA”), N.Y. ENVTL. CONSERV. LAW §§ 8-0101 to

8-0117 (McKinney 2005 & Supp. 2008), which requires

state agencies to study and attempt to mitigate the adverse

environmental effects of actions they approve.

2. The Atlantic Yards Project

ESDC is the sponsor and lead agency for the Atlantic

Yards Project, which was first announced in December 2003.

(App. 189a 4 68.) Petitioners allege (App. 184a-185a fj 51-

53), and Respondents must assume for purposes of this

appeal, that Respondent Forest City Ratner Companies

(“FCRC”) initiated the Project.

a. The Project Site

The Project’s site encompasses 22 acres of land: that “has

suffered from physical deterioration and relative economic

imactivity for at least four decades. Dominated by an

approximately 9-acre open rail yard and otherwise generally

characterized by dilapidated, vacant, and underutilized

properties, the site creates a clear visual and physical barrier

between the neighborhoods north and south of Atlantic

Avenue” near downtown Brooklyn. (JA222 (blight study).)

While surrounding neighborhoods have experienced a

revitalization that began in the late 1970s, the Project site has

not—largely because of the remaining below-grade open-air

rail yards that divide the area. (JA161-162; 228-229; 237;

1044.) At the heart of this area lie portions of the “Atlantic

Terminal Urban Renewal Area” or “ATURA,” which was

created in 1968 and earmarked for comprehensive

redevelopment pursuant to an urban renewal plan. (JA215-

216.) As Petitioners concede, the City first designated

ATURA as blighted in 1968. (App. 186a J 55, 58.) The

renewal plan for ATURA has been repeatedly amended over

the years, but all prior plans to remediate this blighted site

have proven fruitless. As late as April 2064, the City

reconfirmed, for the tenth consecutive time, the ATURA’s

blight designation and extended the accompanying renewal

plan for another 40 years. (App. '86a-187a J 57; JA215.)

Petitioners have never disputed that the ATURA is

blighted, and that it has been so designated and earmarked

for comprehensive redevelopment for forty years. While

they grudgingly allege that “(njearly half’ the Project site

falls within the ATURA (App. 186a4 55), the record shows

that number to be approximately 63%. (JA215.) The district

court accepted the 63% figure (App. 35a), and Petitioners

conceded it at oral argument before the court of appeals.

Petitioners have defined as the “Takings Area” the entire

8

non-ATURA section of the Project site (App. 186a § 55),

which consists of numerous parcels that were owned by 76

different parties prior to 2003. Currently, only 27 separate

tax lots in the Takings Area remain wholly or partially under

the control of parties other than the Project sponsor, the City,

or the Metropolitan Transportation Authority.

The blight study ESDC commissioned in early 2006,

before making the findings necessary to proceed under the

UDC Act, confirmed that the blight extended beyond the

ATURA into the Takings Area. (JA213-593.) Specifically,

the study concluded that one or more blight characteristics

were present on most lots within the Takings Area. (JA310-

482.) Buildings on five of those lots—ones that FCRC had

acquired through private purchase—had so deteriorated that

they posed a threat to public safety and had to be demolished

immediately. (JA502-543.)> See Develop Don't Destroy

Brooklyn, 816 N.Y.S.2d at 428-29. More generally, the

blight study showed that “the non-rail yard portion of the

project site is characterized by unsanitary and substandard

conditions” including vacant and underutilized buildings,

vacant lots, and structures “suffering from serious physical

deterioration.” (JA216.)*

These buildings’ major structural deterioration was not, as

Petitioners conclusorily assert (App. 187a 4 60), caused by the

Project itself. The blight study documents severe and long-

standing damage to roofs, floors, and walls, as well as water

and rot damage to the timber floorings and floor joists.

(JA502-543.) These buildings were, when the study was

conducted, “permanently exposed to the elements.” (JA502,

510, 515, 519, 522, 530.)

* The Petition contains numerous factual assertions that were

shown to be false by the record or by the state court in

Develop Don't Destroy (Brooklyn) v. Urban Development

(cont'd)

9

b. Approval of the Project

The extensive review, public input, and approval procedure

under multiple state laws is discussed exhaustively in

Develop Don't Destroy (Brooklyn) v. Urban Development

Corp., No. 104597/2007, 2008 N.Y. Misc. LEXIS 551 (N.Y.

Sup. Ct. Jan. 11, 2008), see id. at *5-15, and is summarized

briefly herein.

In February 2005, ESDC, along with the City of New

York and the New York City Economic Development

Corporation, joined FCRC in signing two memoranda of

understanding concerning the Project (JA1005-1016, 1028-

1034), by which it was agreed, among other things, that

ESDC would be the “lead agency” under SEQRA for

purposes of examining the proposed project’s environmental

impacts, and that, subject to the approval of ESDC’s Board

of Directors and other conditions, ESDC would exercise its

power under New York state law to override New York City

zoning. (App. 189a | 70.) Neither memorandum was an

(cont'd from previous page)

Corp., No. 104597/2007, 2008 N.Y. Misc. LEXIS 551 (N.Y.

Sup. Ct. Jan. 11, 2008), or that were not properly preserved for

consideration by this Court. These include assertions that: (1)

property was excluded from condemnation because of a “deal”

between FCRC and another developer (Petition at 6 n. 2); (2) a

rival developer bid more than FCRC did for the right to build

over the Vanderbilt Yards facility (id. at 8); (3) the request for

proposals to which FCRC and the rival bidder responded was

inferior to a subsequent request made by the MTA in

connection with a site in Manhattan (id. at 9 n. 4); and (4) the

Project’s creation of 2,250 units of affordable housing will be

offset by the displacement of “2,929 at-risk households” (id. at

12-13). Respondents reserve the right to present a more

comprehensive rebuttal of these and other erroneous factual

assertions by Petitioners should the Petition be granted.

10

approval, binding agreement or final determination

concerning the Project.

On September 16, 2005, ESDC announced that the

Project might have a “significant effect” on the environment

and would therefore necessitate preparation of an

environmental impact statement. (JA1036.) On August 23,

2006, in accordance with the directives of EDPL Article 2,

ESDC held a duly noticed public hearing on the Project.

Additional community forums not mandated by the EDPL

were held on September 12 and 18, 2006. (See JA1206.)

After reviewing comments and testimony received at the

public hearing and community forums, as well as the written

comments submitted and the Final Environmental Impact

Statement, ESDC made its Final Determination and Findings

under the EDPL. (See JA1204-1227.)

In its Determination and Findings, ESDC announced its

decision to exercise eminent domain to support the Atlantic

Yards Project. Chief among the public purposes it found the

Project would serve was the elimination of blighted

conditions within the Project site—both in the ATURA and

in the Takings Area. (JA1204, 1207.) Other public benefits

and uses identified included:

e “a publicly owned state-of-the-art arena to

accommodate the return of a major-league sports

franchise to Brooklyn [and] a valuable athletic

facility for the City’s colleges and local academic

institutions”;

e “2,250 affordable housing units and between

3,075 and 4,180 market-rate housing units”;

e “8 acres of publicly accessible open space that

links together the surrounding neighborhoods”;

11

improved public transit facilities;

“environmental remediation of the Project Site”;

and

a host of “economic benefits,” including the

creation “4,538 new jobs in the City” and the

generation of billions of new tax dollars for the

City and State.

(JA1208-09.)

On December 21, 2006, the New York State Public

Authorities Control Board (PACB)}—whose three voting

members are designees of the Governor, the Speaker of the

State Assembly, and the Majority Leader of the State

Senate—issued its resolution approving the State’s financial

contribution to the Project. (JA1310-18.) The City of New

York and the Metropolitan Transportation Authority (a State

agency) have also consented to the Project. The Project has

the support of a host of elected state and local officials,

including Senator Charles Schumer and Congressman Ed

Towns, then-Governor George Pataki, Mayor Michael

Bloomberg, Brooklyn Borough President Marty Markowitz,

City Comptroller William C. Thompson, Public Advocate

Betsy Gotbaum, and numerous State and City legislators,

local leaders, affordable housing advocates and union

officials. (JA605-623.)

3. This Action

In October 2006, short-circuiting the EDPL’s judicial

review process, the Petitioners filed a federal complaint in

which they asserted, pursuant to 42 U.S.C. § 1983, that

ESDC and the other public Respondents were threatening to

violate their constitutional rights under the Public Use

Clause of the Fifth Amendment and the Equal Protection and

12

Due Process Clauses of the Fourteenth “ nendment. (App.

204a-212a.) Their theory was—and remains—that a host of

public officials, including ESDC employees, Mayor

Bloomberg, and then-Governor Pataki, engaged in a

wholesale abdication of governmental responsibility by

banding together to support the Atlantic Yards Project for the

sole purpose of conferring a benefit on the Project’s

corporate sponsor, FCRC, and its CEO, Bruce Ratner. A

few days after they filed their complaint, a reporter asked

Petitioners’ counsel how suit could have been filed “before

eminent domain has been used by the state.”. (JA1228.)

Counsel responded: “{W]e need to get discovery, where we

get to question people under oath and get documents that

will support what we already know... .” (JA1228-29

(emphasis added).)

Kicking off their complaint with bald accusations of

“misuse of government[] power” and “betrayal of public

trust,” Petitioners asserted that all of the public Respondents

acted at all relevant times “in service of the interests of a

private developer,” and, oblivious to their public

responsibilities, “obediently [fell] into“line’ with FCRC’s

plans for the Project. (App. 17la-172a) The “facts”

identified to support this conspiracy theory consisted, in

essence, of complaints about the process and sequence by

which the Project was first proposed and developed (App.

184a-194a)—a process and sequence that comported fully

with the procedures enacted by the legislature directing

ESDC to cooperate with—indeed, “encouragi[e] maximum

participation by’—private entities. N.Y. UNCONSOL. LAws

§ 6252 (McKinney Supp. 2008). Not a single paragraph in

the entire complaint alleged any fact demonstrating that the

public Respondents had or could have had any reason to

abdicate their professional and public responsibilities in

order to collude for the sole purpose of enriching the private

developer.

13

Petitioners immediately sought permission to seek

expedited, far-flung discovery of written communications

and deposition testimony to reveal the subjective “motives”

of public officials in supporting or facilitating the Project.

That motion for expedited discovery was stayed in relevant

part.

Respondents thereafter moved to dismiss the complaint

for failure to state a claim, as well as on grounds of ripeness

and abstention. The district court referred the motion

initialiy to a magistrate judge. -

4. The Decisions Below

Magistrate Judge Levy issued a+ Report and

Recommendation recommending dismissal (App. 116a-

168a) on grounds that abstention under Burford v. Sun Oil

Co., 319 U.S. 315 (1943), was warranted in light of the

State’s comprehensive statutory scheme for judicial review

of public use determinations. Accordingly, he did not reach

the question whether plaintiffs had stated a federal

constitutional claim upon which relief could be granted.

The district court dismissed with prejudice the federal

claims in their entirety. (App. 3la-115a.). Although it

rejected Judge Levy’s recommendation that abstention. was

warranted, it concluded that plaintiffs had failed to state a

claim for relief under the Public Use Clause.

After analyzing the three controlling Supreme Court

cases—Berman v. Parker, 348 U.S. 26 (1954), Hawaii

Housing Authority v. Midkiff, 467 U.S. 229 (1984), and Kelo

v. City of New London, 545 U.S. 469 (2005)—the district

court articulated its view of the pertinent inquiry under that

Clause: “[A] taking fails the public use requirement if and

only if the uses offered to justify it are ‘palpably without

reasonable foundation,’ such as if (1) the ‘sole purpose’ of

14

the taking is to transfer property to a private party, or (2) the

asserted purpose of the taking is a ‘mere pretext’ for an

actual purpose to bestow a private benefit.” (App. 103a

(citations omitted).) Under neither test, the district court

held, could Petitioners’ challenge survive dismissal.

The district court concluded that Petitioners’ bare

accusation that “(t]he public does not benefit from the taking

of Plaintiffs’ properties” was unsupported by their own

allegations, which challenged only the extent—but not the

existence—of the Project’s numerous public purposes.

(App. 104a.) Because Petitioners plainly had not alleged that

the Project would serve no public purpose, the district court

found that their claim necessarily failed under the well-worn

principles established by Berman and Midkiff. The court,

however, construed Kelo as permitting Petitioners to state a

claim if they could allege facts that the asserted public

purposes for the Project were “mere pretexts” for an “actual

purpose” to “bestow a private benefit.” (App. 107a (quoting

Kelo, 545 U.S. at 478).) Applying that test, the district court

concluded that Petitioners’ allegations again fell short of the

mark. Petitioners had failed to “allege any facts suggesting

that any Defendant had any reason to bestow a benefit on

any private party. Therefore, even if plaintiffs could prove

every allegation in the Amended Complaint, a reasonable

juror would not be able to conclude that the public purposes

offered in support of the Project [were] ‘mere pretexts’

within the meaning of Kelo.” (App. 109a.)

The court of appeals affirmed. Recognizing that “the

primary mechanism for enforcing the public-use requirement

has been the accountability of political officials to the

electorate, not the scrutiny of the federal courts” (App. 13a),

the court rejected the “argument that the ESDC is

undeserving of such deference because it is merely a state

agency deputized by the legislature.” (App. 20a.) The court

noted that this Court “has expressly extended deference in

15

such matters to both ‘Congress and its authorized agencies.’”

(Jd. (quoting Berman, 348 U.S. at 33).) It further took

judicial notice of the fact that the PACB (a body that

included designees of the Speaker of the State Assembly, the

Majority Leader of the State Senate, and then-Governor

Pataki) had approved the State’s financial contribution to the

Project. (App. 20a n.7.)

The court of appeals held that the complaint’s allegations

foreclosed “any blanket suggestion that the Project can be

expected to result in no benefits to the public.” (App. 16a.)

For example, “the complaint does not allege, nor could it,

that either the Renewal Area or the Takings Area are devoid

of blight.” (App. 17a.) In fact, the court found that the

Petitioners had “effectively acknowledged the Project’s

rational relationship to numerous well-established public

uses” (App. 24a)}—“among them the redress of blight, the

creation of affordable housing, the creation of public open

space, and various mass-transit improvements.” (App. 17a.)

Finally, the court of appeals disagreed with Petitioners

that these public purposes “should nonetheless be rejected as

‘pretextual,’ not because they are false, but because they are

not the al reason for the Project’s approval.” (App. 17a.)

The cov.. concluded that the kind of pretext claim advanced

by Petitioners was of “especially dubious jurisprudential

pedigree” (App. 24a) because it would require, contrary to

this Court’s holdings in Berman and Midkiff, analysis of the

“purity of the motives” of government officials (App. 25a)

through “full judicial inquiry into the subjective motivation

of every official who supported the Project, an exercise...

fraught with conceptual and practical difficulties” (App.

26a.)

While “preserving the possibility that a fact pattern may

one day arise” where “a closer objective scrutiny of the

justification being offered is required” (App. 27a (emphasis

a3

¥

16

in original)), the court rejected that this is such a case. In

this case, “{a]lthough the claim is far-reaching, the specific

allegations underlying it are less so.” (App. 10a.)

Petitioners “have failed to allege any specific examples of

illegality in the elaborate process by which the Project was

approved, any specific illustration of improper dealings

between Mr. Ratner and the pertinent government officials,

or any specific defect in the Project that would be so

egregious.” (App. 30a.)

REASONS FOR DENYING THE PETITION

I. THERE IS NO CONFLICT AMONG THE

LOWER COURTS WARRANTING THIS

COURT’S ATTENTION

A. The Second Circuit’s “Pretext” Analysis is

Consistent with the Very Few Lower Court

Decisions that Have Addressed Pretext

‘Claims in Public Use Clause Cases.

Attempting to create a conflict among the courts where

none exists, Petitioners cite only three other cases since Kelo

in which pretext claims arguably have been litigated: an

unpublished decision from the Northern District of

California, MHC Financial Ltd. Partnership v. City of San

Rafael, No. C 00-3785 VRW, 2006 WL 3507937 (N.D. Cal.

Dec. 5, 2006), a New York State intermediate appellate court

decision, 49 WB, LLC v. Village of Haverstraw, 839

N.Y.S.2d 127 (N.Y. App. Div. 2007), and a decision of the

District of Columbia Court of Appeals, Franco v. National

Capital Revitalization Corp., 930 A.2d 160 (D.C. 2007).

That sparse and undeveloped case law in itself strongly

militates against this Court’s review. Moreover, the decision

below does not conflict with those cases, and is fully in

accord with the few other decisions that have addressed

pretext claims in the aftermath of Kelo.

17

In Franco, the District of Columbia Court of Appeals

reversed the trial court’s striking of a Public Use Clause

defense to a condemnation, but did so under very different

circumstances. There, the draft bill authorizing the

condemnation “did not explain why the properties were

‘necessary’ or to what ‘public use’ they would be devoted.”

Franco, 930 A.2d at 163. Nine months later, after public

hearings, the District of Columbia Council passed the bill

approving the condemnation, but the passed version included

a set of findings that were not in the version that had been

reported on by the committee. These inserted findings,

which no further public hearings had been held to address,

asserted in conclusory fashion that the properties were part

of a complex that was “‘a blighting factor’” in the nearby

communities. Jd. There was no cited study that supported

this legislative “finding,” and no opportunity for the public

to contest the finding.

Mr. Franco, the owner of the condemned property,

sought to block the condemnation by asserting that the

asserted public purpose was pretextual. Concluding that Mr.

Franco had properly pled a pretext defense on the merits, the

Court of Appeals stated that while “the permanent legislation

recites that NCRC [the condemning agency] had ‘advised the

Council that the Skyland Shopping Center is blighted,’ . .

according to Mr. Franco, NCRC admitted that it had made

no such finding.” Jd. at 171.

In fact, Franco is in accord with the decision below. The

court in Franco, like the Second Circuit below, stated that in

those rare cases where a pretext claim or defense might be

pled, litigation of such a claim is limited to review of the

objective record underlying a public use determination.

Franco admonished that the word “pretextual” in Kelo “is

used to characterize the public benefits that will flow from

the taking, not the thought processes of legislators or other

governmental officials.” Franco, 930 A.2d at 173 (citing

18

Kelo, 545 U.S. at 490 (Kennedy, J., concurring)). Thus, “if

the record discloses . . . that the taking will serve ‘an

overriding public purpose’ and that the proposed

development ‘will provide substantial benefits to the public,’

the courts must defer to the judgment of the legislature.”

Franco, 930 A.2d at 174. Reviewing Kelo, Franco also

expressly rejected the constitutional significance of Mr.

Franco’s allegations that the taking failed the public use

requirement because “the identities of the benefiting private

parties were known before the taking was authorized by the

legislature and that there is no comprehensive plan for

redeveloping the area.” Franco, 930 A.2d at 175.

The two additional cases cited by Petitioners are

inapposite and not in conflict with the decision below. In

MHC Financing Ltd. Partnership v. City of San Rafael, No.

C 00-3785 VRW, 2006 WL 3507937 (N.D. Cal. Dec. 5,

2006), a rent control ordinance applicable to mobile home

parks was challenged as violative of the Public Use Clause.

Citing Kelo, the district court denied the city’s motion for

summary judgment on plaintiff's private takings claim, see

MHC Financing, 2006 WL 3507937, at *14, because there

was no evidence that the ordinance was part of a “carefully

considered development plan,’” or that the ordinance did

more than confer “a private benefit on the incumbent

tenants.” id. In making the latter determination, the court

stated that a court should “‘review the record’” to see if a

‘plausible accusation of impermissible favoritism to private

parties’” has merit. Jd. (emphasis added) (quoting Kelo, 545

U.S. at 491 (Kennedy, J., concurring)). But the case had

nothing to do with the transfer of real estate or other tangible

property from one owner to another, and thus the court’s

discussion of Kelo was purely a matter of analogy.

Similarly, in 49 WB, LLC v. Village of Haverstraw, 839

N.Y.S.2d 127 (N.Y. App. Div. 2007), an on-the-face review

of the allegations concerning public use and the underlying

19

record exposed the pretextual nature of the asserted public

purposes. The owner of the property proposed to devote it to

substantially the same uses (including affordable housing) as

the village proposed, and the village’s determination and

findings in support of condemnation “fail[ed] to articulate

how or in what manner the condemnation . . . fosters any

benefit to the public which would not be obtained absent the

condemnation.” /d. at 139; see generally id. at 139-42.

Here, by contrast, the Petitioners’ allegations on their

face concede multiple undisputed public purposes served by

the Project. It-is only the subjective motivation of officials

that Petitioners seek to challenge as impure and pretextual.

Other lower courts have refused to recognize a pretext claim

in the face of much less support for valid public purposes

than presented here. See, e.g., Western Seafood Co. v.

United States, 202 Fed. Appx. 670, 675 (Sth Cir. 2006)

(rejecting pretext argument although the beneficiaries of the

transfer of property were “identified prior to or at the earliest

stages of the City’s planning process”); CBS Outdoor Inc. v.

New Jersey Transit Corp., Civil Action No. 06-2428 (HAA),

2007 WL 2509633, at *14-15 (D.N.J. Aug. 30, 2007)

(rejecting “bald legal allegations” that the purported

purposes of a project were dubious, or that there was

favoritism or bias, as insufficient to state a pretext claim).

B. There is No Legal Conflict or Confusion

that Agencies Such as ESDC with

Legislatively Delegated Eminent Domain

Powers are Entitled to the Same Deference

as Legislatures in Their Public Use

Determinations.

The court of appeals correctly rejected the argument that

ESDC’s determination to condemn is undeserving of

deference merely because ESDC is a state agency with

legislatively delegated erninent domain powers (rather than

20

the legislature itself). There is no lower court conflict on this

point.

This Court has expressly extended deference to both

“Congress and its authorized agencies.” Berman, 348 U.S.

at 33 (emphasis added) (upholding condemnation by the

District of Columbia Redevelopment Land Agency, a public

benefit corporation created by Congress and granted the

power of eminent domain for “the redevelopment of blighted

territory”). Jd. at 29; see also Schneider v. District of

Columbia, 117 F. Supp. 705, 710-11 (D.D.C. 1953)

(summarizing the District of Columbia Redevelopment Act),

aff'd as modified on other grounds, sub nom. Berman vy.

Parker, 348 U.S. 26 (1954).

The cases cited by Petitioners do not evidence a lower

court conflict regarding the degree of deference to be

afforded to a condemning agency as opposed to a legislature.

In Daniels v. Area Plan Commission, 306 F.3d 445 (7th Cir.

2002), the reason the court did not extend deference to the

condemnor’s determination was not because of its status as a

local planning commission with delegated eminent domain

powers, but because the commission had premised its public

use determination on a ground (economic development) that

fell outside the Indiana legislature’s delegation of authority

to it. See id. at 462-63.

In fact, consistent with the decision below, the Daniels

court acknowledged that a local agency acting within its

delegated powers of eminent domain should be afforded the

same deference due to a legislature: “[T]o the extent that the

decisions of the . . . Commission fall under specific Indiana

legislative determinations of public use, they should not be

disturbed unless the decision is ‘palpably without reasonable

foundation.”” Jd, at 460 (quoting Midkiff, 467 U.S. at 241).

Similarly, in Armendariz v. Penman, 75 F.3d 1311 (9th

Cir. 1996) (en banc), the Ninth Circuit addressed not the

21

deference owed to a public agency’s condemnation

determination pursuant to its legislatively delegated

authority, but “an uncompensated taking through a raw

misuse of government power.” Jd. at 1321 (emphasis

added). At issue there was an alleged “scheme by [city

Officials] to evict tenants, deprive the plaintiffs of rental

income... , prevent owners from learning what repairs were

necessary to come into compliance, and invent new

violations.” Jd. “The alleged purpose of this scheme was to

deprive the plaintiffs of their property, either by forced sale,

driving down the market value of the properties so a

shopping-center developer could buy them at a lower price,

or by causing the plaintiffs to lose their properties by

foreclosure.” Jd. The court not surprisingly stated as dictum

that “the usual extreme deference that courts owe to

legislative determinations of public use” was not appropriate

to such de facto confiscatory enforcement activity by

individual city officials acting without legislative delegation

of eminent domain powers. Id.; see also id. at 1313-15

(detailing alleged scheme).

The limited holdings of Daniels and Armendariz are fully

consistent with the decision below. There is no claim that

ESDC acted outside, or in excess of, the power granted to it

by the legislature under the UDC Act. In fact, ESDC’s

authority to proceed with the Project under state law

(including the UDC Act and SEQRA) was specifically

upheld in a comprehensive and lengthy decision by the New

York State Supreme Court, New York County. See Develop

Don't Destroy (Brooklyn) v. Urban Dev. Corp., No.

104597/2007, 2008 N.Y. Misc. LEXIS 551, at *1, *6-14,

*30-77 (N.Y. Sup. Ct. Jan. 11, 2008); see also id. at *1, *7-

14, *20-30 (upholding Project approvals by the Metropolitan

Transportation Authority and the PACB).

22

THE DECISION BELOW IS FULLY IN

ACCORD WITH THIS COURT’S

LONGSTANDING PRECEDENTS

The decisions below are a straightforward application of

this Court’s long-standing precedents concerning the

deferential level of judicial review accorded to public use

determinations—precedents that were reaffirmed in 2005

and embraced by eight Justices in Kelo v. City of New

London, 545 U.S. 469 (2005).

This Court iong has construed the “public use” limitation

to trigger only the most deferential judicial scrutiny. A

taking serves a “public use” when “the exercise of the

eminent domain power is rationally related to a conceivable

public purpose.” Hawaii Hous. Auth. v. Midkiff, 467 U.S.

229, 241 (1984). Because “[t]he role of the judiciary in

determining whether that power is being exercised for a

public purpose is an extremely narrow one,” Berman vy.

Parker, 348 U.S. 26, 32 (1954), a court should not

“substitute its judgment for a legislature’s judgment as to

what constitutes a public use ‘unless the use be palpably

without reasonable foundation.” Midkiff, 467 U.S. at 241

(emphasis added) (quoting United States v. Gettysburg Elec.

Ry. Co., 160 U.S. 668, 680 (1896)).

Applying these bedrock principles, the proposed taking of

Petitioners’ properties plainly passes constitutional muster.

A. The Project Serves Multiple Undisputed

Public Purposes.

Petitioners do not and cannot deny that remediation of

longstanding blight is a quintessential public purpose. See,

e.g., Berman, 348 U.S. at 33-35; Rosenthal & Rosenthal Inc.

v. New York State Urbax Dev. Corp., 771 F.2d 44, 46 (2d

Cir. 1985) (removal of blight “is a classic example of a

taking for a public use”). They admit, moreover, that the

23

majority of the Project site is in fact blighted (App. 186a-

187a Ff 55, 57; App. 198a 4] 104-05), and the courts below

recognized as much in reviewing the complaint (App. 18a,

104a-105a). See also Develop Don't Destroy (Brooklyn),

2008 N.Y. Misc. LEXIS 551 at *58; (“{PJetitioners concede

that the majority of the Project area is blighted, as they are

not challenging the blight designation under ATURA’as.to

63 percent of the site, which has stood for nearly 40 years.”’).

And other purposes that will be served undeniably are

public ones: a new sports arena—home to: a major-league

professional sports team in Brooklyn for the first time since

the move (heartbreaking for many residents) of the Brooklyn

Dodgers in 1957—will be built on the Project site; mass

transit will be improved by the building of, among other

things, a new railyard to service the massive public

transportation hub at Atlantic Yards and a new subway

entrance; new public open space will be created; and below-

market-rate affordable housing will be constructed. Cf, e.g.,

Kelo, 545 U.S. at 497-98 (O’Connor, J., dissenting)

(identifying as clear “public uses” “a railroad” and “a

stadium”); Nat’l R.R. Passenger Corp. v. Boston & Maine

Corp., 503 U.S. 407, 422-23 (1992) (taking to facilitate

intercity rail service furthered a public use); Pennell v. City

of San Jose, 485 U.S. 1, 11-12 (1988) (efforts to relieve

housing market pressures were within State’s police powers);

Shoemaker v. United States, 147 U.S. 282, 297 (1893)

(noting numerous decisions holding that “land taken in a city

for public parks and squares, by authority of law.. . . is taken

for a public use”); Southeast Land Dev. Assocs., L.P. v.

District of Columbia, No. Civ.A. 05-1413RWR, 2005 WL

3211458, at *5 (D.D.C. Nov. 1, 2005) (taking to build

baseball stadium did not violate the Public Use Clause).

Thus, as the district court concluded, plaintiffs’ bare

accusation that “(t]he public does not benefit from the taking

of Plaintiffs’ properties” was unsupported by their own

24

allegations. (App. 104a.) In truth, “although Plaintiffs

allege that the net gain in tax revenues wil! be lower than

defendants have predicted, they do not allege that there will

be no net gain.” (/d.) Likewise, “although Plaintiffs allege

that Defendants’ claims about job creation are overstated,

they do not suggest that the Project will fail to create jobs.”

(id.) And “Plaintiffs do not allege that the Project will fail to

achieve a significant net increase in housing units in the area,

and it is clear that it is intended to do so.” (App. 105a)

Finally, “Plaintiffs also do not allege that the Project’s non-

quantifiable public benefits”—like the return ofa major-

league sports team to Brooklyn—“are false.” (App. 106a.)

While Petitioners do challenge some of the asserted

public purposes (creation of affordable housing and jobs) on

grounds that the full targeted gains will not be realized,

assertions about the inadequate extent rather than the

nonexistence of certain public benefits, even if true, do not

state a claim under the Public Use Clause. It has been settled

for over half a century that “the legislature, not the judiciary,

is the main guardian of the public needs to be served” by an

exercise of eminent domain and the appropriate scope of the

project. Berman, 348 U.S. at 32. Accordingly, even in those

cases—unlike this one—where the sole justification for the

taking at issue is economic development, a federal court

should not “second-guess [a condemnor’s] considered

judgments about the efficacy of its development plan,” or try

to evaluate for itself whether the public purpose asserted will

actually be realized. Kelo, 545 U.S. at 488-89. Nor should it

“second-guess [a condemnor’s} determinations as to what

lands it needs to acquire in order to effectuate the project.”

Id.; see also Berman, 348 U.S. at 35-36 (“It is not for the

courts to oversee the choice of the boundary line nor to sit in

review on the size of a particular project area. Once the

question of the public purpose has been decided, [these

decisions rest] in the discretion of the legislative branch.”).

25

There is No Warrant for Examining the

Subjective Thoughts of Public Officials to

Determine Whether Admittedly Valid

Public Purposes are “Pretextual’’.

While the court of appeals held open the possibility that

allegations in a particular case (not present here, it found)

may allow for some objective inquiry concerning the validity

of cited traditional public purposes, it properly held that the

subjective thought processes of public officials should not be

probed in order to determine whether admittedly valid

multiple public purposes are “pretextual.” Petitioners’

argument to the contrary misreads Kelo.

Petitioners and amicus curiae curiously argue that Kelo

expanded rather than constricted the degree of constitutional

scrutiny under the Public Use Clause. They contend that a

Public Use challenge can now proceed by merely alleging a

principal motive or intent to benefit a private party—even if

the public purposes of the project at issue are plain and

admitted (and not limited to economic development). Given

that Kelo itself reaffirmed the deferential standard of judicial

scrutiny of Berman and Midkiff, the court below properly

rejected that broad proposition.

Indeed, the Court granted certiorari in Kelo “to determine

whether a city’s decision to take property for the purpose of

economic development satisfies the ‘public use’ requirement

of the Fifth Amendment.” Kelo, 545 U.S. at 477 (emphasis

added); see also Petition for Writ of Certiorari at i, Kelo v.

City of New London, 545 U.S. 469 (2005) (No. 04-108),

available at 2004 WL 1659558. Acknowledging the

narrowness of the question presented, the Kelo Court

emphasized a key factual distinction from Berman: “Those

who govern the City [of New London] were not confronted

with the need to remove blight in” the area designated for

redevelopment. Kelo, 545 U.S. at 483. It also noted

26

plaintiffs’ argument that “using eminent domain for

economic development impermissibly blurs the boundary

between public and private takings.” Jd. at 485.

Nonetheless, the Court explained, under the broad deferential

standards enunciated in Berman and Midkiff, the City’s

determinations that the takings would foster economic

development and therefore served the public interest were

entitled to respect, and foreclosed any challenge under the

Public Use Clause. See id. at 480-82, 484-86.

Amicus curiae counsels against a rule of law that would

limit the ability of plaintiffs to develop a factual record to

support suppositions of illicit motive. But as the Second

Circuit correctly observed, even if a pretext claim can

survive review of the complaint and documents referenced

therein on a motion to dismiss, litigation of such a. claim

must be limited to an objective factual record, because “a full

judicial inquiry into the subjective motivation of every

official who supported the Project [is] an exercise . . . fraught

with conceptual and practical difficulties.” (App. 26a; see

also id. at 27a (quoting Edwards v. Aguillard, 482 U.S. 578,

636-37 (1987) (Scalia; J., dissenting)).) Where that objective

record demonstrates that a proposed condemnation will

further numerous, substantial and undisputed public

purposes, even proof of impure subjective motives on the

part of public officials approving the condemnation could

not negate the public purposes served by the project. A

contrary rule of law would allow harmful fishing expeditions

into the subjective motivations of public officials.

That kind of subjective—rather than objective, on-the-

record—scrutiny is precisely what has been rejected by

every lower court to consider the possibility of a pretext

claim in the wake of Kelo. See supra pp. __ (discussing

Franco v. Nat'l Capital Revitalization Corp., 49 WB, LLC v.

Vill. of Haverstraw, and MHC Fin. Ltd. P'ship v. City of San

Rafael; see also Brody v. Vill. of Port Chester, 434 F.3d 121,

27

136 (2d Cir. 2005) (no judicial “examination of the thought

processes of those exercising the legislative prerogative” is

warranted under the Public Use Clause). |

Cc. The Lower Courts’ Determination that the

Complaint’s Allegations of Improper

Motive Cannot Survive Dismissal Does Not

Merit Review by this Court.

Even if the subjective motives of public officials could

be relevant to a Public Use Clause inquiry, both courts below

determined that this particular complaint did not allege facts

sufficient to challenge such motives. (App. 30a, 108a-109a.)

As the district court found, Petitioners’ conclusory

allegations concerning former Governor Pataki’s, Mayor

Bloomberg’s and other public officials’ purportedly illicit

desires and intents in this case did not amount to alleged

facts or “‘a plausible accusation of impermissible favoritism

to private parties.” (App. 108a (quoting Kelo, 545 US. at

491 (Kennedy, J., concurring)).) The complaint did not

allege, for example, any special relationship between any of

the public Respondents and Bruce Ratner,-or how or why the

former would have had any reason to abdicate their

significant professional and public responsibilities in order to

benefit the latter. Accordingly, the court of appeals

concluded that “[aJlthough [Petitioners’ pretext] claim is far-

reaching, the specific allegations underlying it are less so.”

(App. at 10a.)

That case-specific determination does not merit review

by this Court, and thus this case is not a proper vehicle to

28

consider the question presented concerning the viability of a

properly pled claim of pretext.

WI. THIS COURT’S REVIEW IS UNWARRANTED

BECAUSE ISSUES CONCERNING THE .

BOUNDS OF EMINENT DOMAIN POWER

ARE ACTIVELY PERCOLATING IN STATE

LEGISLATURES AND CQURTS

Insofar as Petitioners and umicus seek review by this

Court of the appropriate bounds of eminent domain power in

the wake of Kelo, such review is unwarranted because these

issues are being vigorously debated and resolved in the

political and judicial branches of state and _ local

governments, where they are best resolved. CKelo itself

emphasized that while the decision set forth the broadest

extent of the eminent domain power, “nothing in [it]

precludes any State from placing further restrictions on its

exercise of [that] power.” Kelo, 545 U.S. at 489.

Indeed, through statute, citizen initiative and

constitutional amendment, or a combination of those

instruments, 42 states have changed their eminent domain

laws since Kelo was decided. See CASTLE COALITION,

50 STATE REPORT CARD: TRACKING EMINENT DOMAIN

REFORM LEGISLATION SINCE KELO 1 (2007),

http://www.castlecoalition.org/pdf/ publications/report_card/

50_State_Report.pdf (last visited May 15, 2008); see also

NATIONAL CONFERENCE OF STATE LEGISLATURES,

EMINENT DOMAIN, _http://www.ncsl.org/programs/natres/

> Amicus curiae suggests that this case is a vehicle for the Court

to clarify the scope of Bell Atlantic Corp. v. Twombly, 127 S.

Ct. 1955 (2007). But as the court of appeals made clear, its

decision was not predicated upon the outer bounds of

Twombly or determination of pleading standards. (App. 12a.)

29

EMINDOMAIN.htm (last visited May 15, 2008); see also,

e.g., Harrison Redevelopment Agency v. DeRose, 942 A.2d

59, 89 CN.J. Super. Ct. App. Div. 2008) (“Since Kelo was

decided, greater judicial and legislative scrutiny of

redevelopment-based takings has occurred” in various

States.).

Of the eight States that have not responded to Kelo with

enacted legislation, referenda, or amendments, three have

seen changes to their eminent domain laws through court

decisions. See, e.g., Bd. of County Comm'rs v. Lowery, 136

P.3d 639, 647-52 (Okla. 2006); see also Gallenthin Realty

Dev., Inc. v. Borough of Paulsboro, 924 A.2d 447, 460 (N.J.

2007) (interpreting the State’s statutory definition of blight

narrowly); R.I. Econ. Dev. Corp. v. Parking Co., L.P., 892

A.2d 87 (R.I. 2006); see generally City of Norwood v.

Horney, 853 N.E.2d 1115, 1141 (Ohio 2006) (holding that

“economic development” is not a “public use” under the

State’s Constitution and noting that it need not follow Kelo

in interpreting its own constitution).

Although New York State has not yet enacted legislation

since Kelo, at least 17 bills have been introduced in the state

legislature. See 49 WB, LLC, 839 N.Y.S.2d at 130, n.1. And

New York’s state courts have scrutinized the public uses

served by proposed takings. See generally, e.g., id.

This locus for activity, initiative and diversity at the state

level is as it should be. As Kelo recognized, this Court’s

“earliest [public use] cases in particular embodied a strong

theme of federalism, emphasizing the ‘great respect’ that we

owe to state legislatures and state courts in discerning local

public needs.” 545 U.S. at 482 (citation omitted); see also

Rindge Co. v. L.A. County, 262 U.S. 700, 705-706 (1923)

(what constitutes public use “is influenced by local

conditions; and this Court . . . [should] regard with great

30

respect the judgments of state courts upon what should be

deemed public uses in any state.”’).

The variety of changes across the country reflects the

robust nature of the debate. Intervention by the Court at this

time would risk curtailing the vibrant discussion of policy

choices occurring at the state level.

[V. THIS CASE IS NOT A GOOD VEHICLE TO

CONSIDER THE QUESTION PRESENTED

BECAUSE OF ISSUES CONCERNING THE

NEED FOR BURFORD ABSTENTION.

The question presented by Fetitioners concerning the

scope of a “pretext” claim under the Public Use Clause may

not ultimately be reached in this case. Accordingly, this case

is not a good vehicle for consideration of the question.

Petitioners’ action was brought in federal court in

derogation of a comprehensive state statutory scheme that

provided for expedited judicial review of public use

determinations in state court. See N.Y. EM. DOM. PRoc.

LAW § 207 (McKinney 2002). Bypassing this state review

mechanism, Petitioners instead filed this action in federal

court. Respondents argued before the district court that the

court should abstain from deciding the matter. Magistrate

Judge Levy accepted that argument, although the district

court ultimately dismissed the complaint on the merits rather *

than on abstention grounds.

Magistrate Judge Levy concluded that Burford abstention

is called for because the federal interest in retaining

jurisdiction is outweighed by the State’s competing concern

to have particular kinds of cases adjudicated in a state.forum.

(App. 157a-158a.) Here, Judge Levy reasoned, “New

York’s EDPL sets forth a highly specific and comprehensive

mechanism for condemnees to challenge any aspect of a

condemnation in a state-created system of administrative and

31

judicial review” (App. 159a), and “it is indisputable that

eminent domain is traditionally a matter of local concern and

that the state has a vital interest in establishing a coherent

policy with respect to it” (App. 160a). Finally, Judge Levy

observed, “allowing plaintiffs to do an end-run around the

EDPL and instead litigate their claims in federal court would

provide incentive for forum shopping and thereby undermine

New York’s legislative scheme governing the exercise of

eminent domain power.” (App. 163a.)

Petitioners’ invocation of. the Public Use Clause as a

basis for asking the federal courts to review a public use

determination before state procedures have run their course

is extraordinary. The Supreme Court and lower federal

courts consistently have held that the exercise of eminent

domain, as well as public use determinations in support

thereof, are matters of quintessentially local concern. See,

e.g., La. Power & Light Co. v City of Thibodaux, 360 U.S. 25, 28-

29 (1959). Challenges to such determinations—even federal

constitutional challenges—therefore ordinarily belong in

state court, subject to ultimate review in this Court. Federal

district court scrutiny in the first instance is severely limited

and, when exercised, highly deferential. Indeed, in the thirty

years since the EDPL was enacted in 1977 and until this

case, federal district courts sitting in New. York have, in

decisions published in the Federal Supplement or available

through online sources, considered just five suits challenging

a condemnor’s proposed exercise of eminent domain

pursuant to New York law under the Public Use Clause of

the Fifth Amendment. Of those five cases, not one

proceeded to trial. One was dismissed for lack of ripeness

(Port Chester Yacht Club, Inc. v. lasillo, 614 F. Supp. 318,

323 (S.D.N.Y. 1985)); two were disposed of on, inter alia,

abstention grounds (Didden v. Village of Port Chester, 322

F. Supp. 2d 385, 388 (S.D.N.Y. 2004) aff'd, 173 Fed. Appx.

931 (2d Cir. 2006), cert. denied, 127 S. Ct. 1127 (2007);

Broadway 41st Street Realty Corp. v. New York State Urban

32

Development Corp., 733 F. Supp. 735, 744 (S.D.NLY.

1990)); one was dismissed on the basis of res judicata

(Waldo’s, Inc. v. Village of Johnson City, No. 89-CV-897,

1989 WL 153727, at *5 (N.D.N.Y. Dec. 15, 1989)); and one

was dismissed for failure to state a claim before: discovery

commenced (Rosenthal & Rosenthal, Inc. v. New York State

Urban Development Corp., 605 F. Supp. 612, 619

(S.D.N.Y), aff'd, 771 F.2d 44 (2d Cir. 1985)). By contrast,

during that same thirty-year period, the Appellate Division of

the New York Supreme Court has, in reported decisions

alone, adjudicated well over 100 proceedings brought

pursuant to EDPL § 207—with many of those proceedings

involving the consolidated petitions of multiple allegedly

aggrieved parties.

Federal district court review of local public use

determinations is the exception, not the rule. Allowing

plaintiffs to pursue challenges to public use determinations

in federal court in the first instance undermines the state

statutory scheme. Issues concerning the need for Burford

abstention may therefore prevent this Court from reaching

the merits of Petitioners’ public use claim, counseling

against grant of the Petition.

33

CONCLUSION

The petition for writ of certiorari should be denied.

Respectfully submitted,

MICHAEL A. CARDOZO

JANE L. GORDON

OFFICE OF CORPORATION COUNSEL

OF THE CITY OF NEW YORK

100 Church Street

New York, NY 10007

(212) 788-1043

Counsel for Respondents the City

of New York, Michael Bloomberg,

Daniel Doctoroff, Andrew M. Alper,

Joshua Sirefman, and New York

City Economic Development Corp.

Dated: May 16, 2008

DOUGLAS M. KRAUS

*PREETA D. BANSAL

Counsel of Record

SKADDEN, ARPS, SLATE,

MEAGHER & FLOM LLP

Four Times Square

New York, NY 10036

(212) 735-3000

Counsel for Respondents New

York State Urban Development

Corp. d/b/a Empire State

Development Corp. and

Charles A. Gargano