Eminent Domain Cases in the Economic Development Context

For those watching the evolution of the local governments’ power of eminent domain in economic development situations, two recent situations may be of interest. 

On February 3, 2004, the U.S. Court of Appeals for the 8^th Circuit made a decision on the injunction in the Aaron v. Target Corporation case out of St. Louis. The underlying dispute is over a piece of commercial property with a Target store on it. Target had been leasing the property from Aaron, but wanted to demolish an older store and build a new, bigger one. The landowner agreed to the project, but requested more rent for the lease.  Instead of responding, Target worked out a plan with the city to condemn the property, citing blighted conditions, and approving Target’s redevelopment proposal. The landowners were not aware of this activity and when they learned of it, they filed a takings suit in federal court claiming that the condemnation was not for “public use.” The lower court refused to abstain on the basis that formal state condemnation proceedings had begun and issued a preliminary injunction. However, the 8^th Circuit found that property owners would have adequate opportunity to raise the federal takings claim in the state court eminent domain proceedings, and that the lower court should abstain from the litigation.

On January 6, 2004, a petition for writ of certiorari was filed by landowners in Las Vegas, seeking court review of a Nevada Supreme Court decision in favor of condemnation to build a parking structure to serve the interests of private casino owners. The questions presented in Pappas v. Las Vegas, Nev., Downtown Redevelopment Agengy include: 

1. Does Nevada Supreme Court's reading of Berman v. Parker and Hawaii Housing Authority v. Midkiff violate fundamental constitutional right of private property ownership by permitting local governmental agencies acting in name of "economic redevelopment" to take property that is neither blighted nor surrounded by blight and give it to other private parties who supposedly can use that property more profitably, on theory that enhanced private profitability indirectly will benefit public? 
2. Does conflict among state courts interpreting Berman and Midkiff in addressing extent to which local governmental agencies can take property from one private owner and give that property to another private owner in name of "economic redevelopment" demonstrate need to revisit and clarify holdings of those decisions? 
3. If Nevada Supreme Court's reading of Berman and Midkiff is accurate, must this court now revitalize "public use" limitation placed on power of eminent domain by Fifth and Fourteenth Amendments in light of this court's more recent decision in Dolan v. City of Tigard, 512 U.S. 374 (1994), and in light of recent abuses of that power in name of "economic redevelopment"?  The petition has been distributed for conference on March 5, 2004.