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Justice is Blind to Property Rights
[February 21, 2003]

By S. M. Oliva

The U.S. Supreme Court today declined to hear the case of Three O Realty v. Empire State Development Corporation, an appeal of a New York state court’s decision to allow that state to seize a number of privately owned buildings (via eminent domain) for the benefit of the New York Times Company, which plans to construct a new headquarters on the stolen land. The Supreme Court’s one-sentence, unexplained order effectively abolishes Three O’s property rights in their modest Manhattan building, and affirms New York’s longstanding practice of taking private property whenever a politically-connected company seeks to acquire land outside the free market.

The Court declined to hear Three O’s appeal despite the fact New York officials intentionally lied in taking the disputed building. State governments have long been allowed to take private property that constitutes “blight.” Three O’s building was by no means blighted—it contained a number of thriving independent businesses. In fact, the state only issued an official finding of “blight” after they decided to take the building. Blight was simply a pretext designed to give legal cover. The state’s only interest here was giving the New York Times cheap property so that the newspaper wouldn’t construct their new headquarters in New Jersey.

To add insult to injury, New York taxpayers—already among the nation’s most burdened—will likely foot part of the bill for the Times’ project. Under the agreement between the state and the Times, any development costs over a certain amount will be rebated to the company in the form of taxpayer subsidies. And rest assured, in New York, every projects runs over development costs.

In one sense, the Court’s decision to ignore this case is unsurprising. Since the New Deal Era, the nation’s judiciary has increasingly turned a blind eye to the struggle of property owners against tyrannical government. In jurisdictions like New York, private property exists in name only. The Fifth Amendment’s requirement that private property may only be seized for “public” use is largely meaningless. Traditionally, this means that the government can only take land in the first place if it is necessary to fulfill a government purpose, such as a military facility or a post office. Now takings are used for “economic development,” which essentially means corporations that have political connections can seize property from companies that don’t pay enough fealty to state authorities.

The Court’s failure to address the manifest injustice in this case reflects a key flaw of conservative jurisprudence. The Rehnquist Court has been reluctant to intervene in state matters, despite clear evidence that the federal constitution is being trashed. This Court has an excessive attachment to long discredited theories of federalism and “state’s rights.” If America stands for anything, it’s the proposition that we are a united republic dedicated to the protection of individual rights. Had Three O’s property been seized by the federal government, instead of New York, this case would have likely fared better before this Supreme Court. And therein lies the outrage.

It is a tenet of Jeffersonian republicanism that power should be devolved to the local level, on the theory that government is best when closest to the people. This case is the exception that disproves the rule. Few governments in this country have exhibited as much pervasive corruption and hostility to individual rights as that of the city of New York. In the past year alone, the city has raised property taxes, strengthened its monopoly over public schools, banned smoking on most private property, and effectively voided the lease of the World Trade Center’s current owner, forcing him to submit to a protracted, harmful, and utterly ridiculous public-approval process for designing buildings to replace those facilities lost on September 11, 2001. The Three O case may be a drop in the bucket compared to all that, yet it’s still reflective of just how ruthless and unprincipled local leaders in New York are.

According to Joe Wright, a New York property rights activist who first brought the Three O case to CAC’s attention, the Court’s decision today will affect a number of other challenges to New York State’s unconstitutional land seizures now pending in local courts. In the absence of leadership from the Supreme Court, the lower courts will continue to rubber stamp these government seizures without even requiring the state to act truthfully in stating their reasons for taking private property. The judiciary is the only thing standing in the way of the executive and legislative branches in this instance, and given the fundamental corruption at the heart of New York’s elected institutions—as Wright told me, it’s nearly impossible to unseat an incumbent New York state legislator—there now exists little to no hope of relief for aggrieved property owners in the Empire State.

Of course, the government isn’t solely to blame. The New York Times Company is the major culprit in this particular case, because they went seeking special favors from government officials, while at the same time their editorial page continues to rail against lower taxes and individual rights in general. The Times claims there’s no problem, because their editorial management is separate from their corporate management. But nobody is fooled by this fake “Chinese wall”—the Times’ actions here are a perfect embodiment of their economic and moral philosophy: government is the only proper arbiter of economic interests, rather than individuals engaged in voluntary trade.


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