Casino Reinvestment Development Authority v. Birnbaum

Atlantic City should lose its gamble to take private property rights

Cases > Property Rights > Casino Reinvestment Development Authority v. Birnbaum
Won: The court concluded that property may only be condemned for projects that will proceed in "the reasonably foreseeable future."
Case Court: New Jersey Superior Court

Charlie Birnbaum’s family lives in Atlantic City. A casino coveted their land so the New Jersey Casino Reinvestment Development Authority (CRDA) decided to take the Birnbaums’ home and give it to the casino, ostensibly to benefit the state’s economy. Birnbaum sued because giving his property to a privately-owned casino is not a legitimate reason for the government to take his land – government may only take land (with compensation) for a “public use.” The trial court agreed with Birnbaum. The state appealed and PLF filed an amicus brief arguing that government speculation about “economic development” is not a public use that justifies taking a private home and transferring it to a different private owner.

The New Jersey Casino Reinvestment Development Authority (CRDA), a state agency, sought to take the Atlantic City family home of Charlie Birnbaum. Birnbaum’s family had owned the home for decades, but that didn’t matter to state bureaucrats. The CRDA admitted it wanted the property to benefit privately-owned casinos, saying that: “The state has recognized the economic engine is the casinos, and Atlantic City is vital to the success of the State of New Jersey. That’s the public purpose here.”

The Fifth Amendment to the Constitution says in part:  “nor shall private property be taken for public use, without just compensation.” Taking Birnbaum’s private property to benefit a privately owned casino does not equate to a public use, and the CRDA’s contention that doing so serves a “public purpose” is both misleading and untrue. The trial court held that the CRDA’s nebulous idea to remake Atlantic City by taking Birnbaum’s property without a concrete plan for a public use of the property did not sufficiently protect Birnbaum’s private property rights.

The government cannot take property for public use unless it specifically identifies the public use it intends for the property, and puts forth a plan to follow through with the proposal. The limits of government speculation are illustrated by the fact that the casino the CRDA sought to benefit went bankrupt within a few years of its opening its doors. Yet the CRDA is doubling down on its takings bet and continues to demand Birnbaum’s property by appealing. PLF filed an amicus brief explaining the significant constitutional limitations on eminent domain and the folly of courts granting permission to government to take private property for some other private owner’s use.

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What’s at stake?

  • The government may not legitimately use its power of eminent domain to take private property for vague reasons and with no immediate need to use the property. A generalized assertion of future economic development cannot suffice as a “public use.”
  • The taking of private property to promote “economic development” encourages powerful private interests to game the government’s power to their own benefit, often at the expense of poor and minority communities.

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