New Jersey Court Ruling Halts City’s Eminent Domain Plans

Published October 31, 2016

An Atlantic City resident’s fight against the New Jersey Casino Reinvestment Development Authority’s plan to seize his property and resell it, for undisclosed private purposes has ended in victory, after a state judge ruled against the state agency.

Retired piano tuner Charlie Birnbaum, 69, has fought the state economic development agency’s plan to use eminent domain, the seizing of private property by government agencies for public use, to demolish his home and resell the property to private developers.

In August, New Jersey Superior Court Judge Julio Mendez, first appointed by Gov. James McGreevey (D) in 2002, ruled in favor of Birnbaum, halting the state agency’s plan to use eminent domain to seize his home and resell it to private companies.

In a 2005 case, Kelo v. City of New London, the U.S. Supreme Court decided governments could take private property for “private benefit” in addition to “public use,” which is allowed in return for fair compensation in the Fifth Amendment to the U.S. Constitution.

Government Gone Wild
Erica Jedynak, state director for the New Jersey chapter of Americans for Prosperity, says government cronyism is trampling on individuals’ property rights.

 “The fact that the Atlantic City Casino Reinvestment Authority could not provide, and claimed they did not have to provide, reasoning for taking over Mr. Birnbaum’s property shows that government’s overreach has gone too far,” says. “This case is a clear example of corporate cronyism, where government favors casinos over … the values those property rights greater.”

Taking for Private Use
Ilya Somin, a law professor at George Mason University, says the government often uses eminent domain laws to favor some businesses or individuals over others.

“I think that does often happen with eminent domain,” Somin said. “Small businesses are often targeted whereas big businesses often benefit.”

Somin says the Kelo decision expanded government’s power to seize property.

 “Early on, eminent domain was primarily or exclusively for government projects,” Somin said. “Now, it is invoked for any project that the government believes would benefit the public somehow, now, even if they’re not sure exactly what they’re going to use it for.

Somin says property rights and economic prosperity should complement one another.

“The rationale that is always given is, that you have to do this to promote economic development, or the city will otherwise will stagnate. I think the truth is just the opposite—secure economic and property rights… that’s what will give people incentives to invest. It’s not that property rights and economic development are somehow at odds.”