New Jersey’s Stance on Eminent Domain Since Kelo v. New London
The United States Supreme Court’s ruling in Kelo v. City of New London in 2005 served as a wake-up
call for eminent domain usage and abuse, as the Court affirmed that, depending upon any state or local laws to the contrary, it was and is permissible for government agencies to seize private property as a catalyst for economic development. In the wake of the decision, people were outraged, and state governments began to pass laws to protect their citizens’ property rights. States such as Arizona, Florida, Iowa, Michigan, and Wisconsin were quick to pass eminent domain reform bills, signing them into law within two years after the Kelo decision. Some states outlawed the use of eminent domain for “local redevelopment” purposes, while others created or tightened restrictions on the use of eminent domain for any purpose other than “traditional” purposes such as road creation, for building schools, parks and other typical government purposes.So, amidst these nationwide reform efforts, where does New Jersey stand? On September 9th, 2013, New Jersey became to 45th state to pass an eminent domain reform bill, eight years after Kelo. While the law provides some protection for property owners, some have voiced concerns that it doesn’t do enough to defend people’s property rights. An overview of New Jersey’s eminent domain reform legislation is available here: “Redevelopment Reform in New Jersey: What Does it Mean and Will it Work?”. The Castle Coalition, a non-profit organization dedicated to preventing eminent domain abuse, gives New Jersey a grade of “F” on its reform attempts. According to the group, little legitimate reform has been made, and the 2013 bill left too many loopholes that could lead to sustained abuse.
Since the adoption of the 2013 reform bill some municipalities have tried redevelopment without eminent domain, as the legislation allows, but others wonder whether the reform was potent enough. While not a typical municipal redevelopment case, in Atlantic City, property owner Charlie Birnbaum has been fighting the state and the Casino Reinvestment Development Authority (CRDA) to keep the Atlantic City building he inherited from his parents. He still uses the building to run his piano tuning business and rents it out to two tenants, but the state believes it could be used more productively, and wants to hand it to the CRDA for a redevelopment project.
Cases like Charlie’s are not all that uncommon—over the years, New Jersey has continually been criticized for its eminent domain usage, even after the Kelo backlash. For these reasons, property owners in New Jersey who may be the targets of eminent domain need experienced counsel to help them through the process, and to help insure that they do not become victims of eminent domain abuse.
The author acknowledges the assistance of John Oettinger, a summer intern at McKirdy & Riskin, in preparing this article. Mr. Oettinger is a member of the Class of 2018 at the University of Michigan’s Ross School of Business.