853 N.E.2d 1115 (Ohio 2006)
In the city of Norwood, surrounded by Cincinnati, an industrial base eroded over 40 years, leading to municipal debt and physical changes in neighborhoods.1 Construction of Interstate 71 in the 1960s bisected residential areas in the appellants' neighborhood, creating dead-end streets, increasing traffic, noise, and light pollution, and converting some residential properties to commercial use.2 Appellants Carl and Joy Gamble had lived in the neighborhood for over 35 years, raising their children there, while Joseph P. Horney and Carol Gooch owned and operated rental properties in the area.3
A private developer, Rookwood Partners, Ltd., proposed redeveloping the area into more than 200 apartments or condominiums and over 500,000 square feet of office and retail space owned by Rookwood, along with two large public parking facilities owned by the city expected to generate nearly $2,000,000 in annual revenue.4 Norwood, operating with a deficit, entered a redevelopment contract in which Rookwood agreed to reimburse the city for project expenses including costs from any use of eminent domain.5 The city initially encouraged Rookwood to pursue voluntary purchases from owners.6
Rookwood secured acquisition agreements from a substantial majority of necessary property owners, but the appellants refused to sell.7 The city retained Kinzelman Kline Grossman using funds provided by Rookwood to prepare an urban-renewal study.8 The study concluded the neighborhood was a 'deteriorating area' under the Norwood Code, despite many homes being in fair to good condition with no tax delinquencies.9 After public hearings and planning commission approval, city council passed ordinances adopting the redevelopment plan and authorizing the mayor to appropriate the appellants' properties.10
In the consolidated appropriation actions, the trial court found the neighborhood was not a slum, blighted, or deteriorated area but was a deteriorating area.11 The court upheld the takings after determining no abuse of discretion in that finding and returned the cases for jury trials on compensation.12 After the juries rendered verdicts on property values, Norwood deposited the full amounts awarded, obtained titles to the properties, transferred them to Rookwood, and Rookwood began demolishing the houses.13
The trial court refused to enjoin Rookwood from using or damaging the property pending appeal.14 A divided court of appeals denied a stay, citing R.C. 163.19. The Supreme Court of Ohio accepted jurisdiction.15 It issued orders preventing the appellees from destroying or altering the properties pending review. It considered the appropriations along with the constitutionality of R.C. 163.19.16
Whether the appropriation of private property primarily for economic development satisfies the public use requirement of Section 19, Article I of the Ohio Constitution when the primary beneficiary is a private entity?17
Section 19, Article I of the Ohio Constitution provides that private property shall ever be held inviolate but subservient to the public welfare, requiring that any taking of private property be for a public use.18 The public-use requirement is a limitation on governmental power that cannot be satisfied by economic benefit to a private party standing alone, as that would render the clause a nullity.19 While economic development may be considered among other factors, it is insufficient by itself to justify a taking when the primary beneficiary is a private entity rather than the public at large.20
No. The established facts demonstrate that Rookwood Partners was the primary beneficiary of the appropriations.21 Rookwood proposed the redevelopment plan calling for apartments, condominiums, office and retail space owned by Rookwood, and parking facilities, with the city expecting nearly $2,000,000 in annual revenue.22 Norwood entered a redevelopment contract in which Rookwood agreed to reimburse the city for expenses including eminent domain costs.23 The city delegated much of its authority to the developer after Rookwood secured most voluntary sales but the appellants refused.24
The city's own study funded by Rookwood concluded the area was deteriorating despite homes in fair to good condition with no tax delinquencies.25 The trial court found the neighborhood was not a slum, blighted, or deteriorated area.26 These facts show the plan was tailored to the developer's needs rather than eliminating an existing public harm, so the takings fail the public-use test.27
The appropriations do not satisfy the public use requirement of Section 19, Article I of the Ohio Constitution.28
Related opinions on this issue
I concur in the majority but emphasize that economic development can be a valid public purpose when part of a comprehensive plan to eliminate blight.29 In this case the record does not support a finding that the appropriations were necessary to eliminate blight because the city's own consultants determined that the neighborhood was not blighted.30 The Ohio Constitution provides greater protection for property rights than the federal Constitution.31
Courts must interpret it according to its text and history rather than following federal precedent.32
Whether the Norwood Code standard of a 'deteriorating area' for authorizing eminent domain appropriations is void for vagueness?33
Due process requires that laws regulating the use of eminent-domain powers provide fair notice of proscribed conduct and sufficient standards to prevent arbitrary or discriminatory enforcement.34 When a statute or ordinance implicates fundamental constitutional rights such as property rights, courts apply heightened scrutiny.35 A standard that incorporates speculation about future conditions rather than the property's present state fails to give property owners fair notice and invites subjective application.36
Yes. The Norwood Code's definition of a deteriorating area lists factors such as incompatible land uses, faulty street arrangement, obsolete platting, and diversity of ownership that exist in virtually every urban neighborhood and offers little practical guidance.37 The standard is satisfied not only when an area is deteriorating. It is also satisfied when an area is in danger of deteriorating into a blighted area.38
This incorporates speculation about future conditions rather than focusing on the property's condition at the time of the taking.39 The trial court found the neighborhood was not a slum, blighted, or deteriorated area. The court upheld the takings solely on the deteriorating-area finding after the study funded by Rookwood reached that conclusion despite many homes in fair to good condition.40 This standardless standard fails to afford fair notice and permits arbitrary enforcement.41
The Norwood Code standard of a 'deteriorating area' is void for vagueness and unconstitutional.42
Whether the provision in R.C. 163.19 prohibiting courts from enjoining the taking and use of appropriated property pending appellate review violates the separation-of-powers doctrine?43
The separation-of-powers doctrine vests judicial power exclusively in the courts under Section 1, Article IV of the Ohio Constitution.44 Courts possess inherent authority to issue stays and injunctions necessary to preserve the subject matter of litigation and make their judgments effective.45 A statute that categorically prohibits courts from exercising this authority during appellate review of eminent-domain takings improperly encroaches on judicial functions.46
Yes. R.C. 163.19 provides that once the agency deposits the compensation award and gives security, the right to take and use the property shall not be affected by appellate review.47 After the juries rendered verdicts, Norwood deposited the full amounts, obtained titles, transferred the properties to Rookwood, and Rookwood began demolishing the houses. The trial court refused to enjoin Rookwood from using or damaging the property pending appeal.
The court of appeals denied a stay citing the statute.48 This blanket prohibition prevents courts from protecting the property during review and therefore violates the separation of powers.49 The unconstitutional portion can be severed, leaving the remainder of the statute in effect.50
The provision in R.C. 163.19 prohibiting courts from enjoining the taking and use of appropriated property pending appellate review violates the separation-of-powers doctrine and is unconstitutional.51
Related opinions on this issue
I respectfully dissent because the majority's decision represents a significant departure from established Ohio law regarding eminent domain.52 For over a century this court has deferred to legislative determinations of public use and necessity.53 The city of Norwood followed all statutory requirements and made findings that the appropriations were necessary for the public welfare.54
The trial court and court of appeals both found that the takings served a legitimate public purpose.55 The majority's decision will have far-reaching negative consequences for urban redevelopment throughout Ohio because cities will be severely limited in their ability to revitalize economically distressed areas.56 I would affirm the judgment of the court of appeals.57