Brody v. Village of Port Chester

• Decision Date: 24 September 2003
• Docket Number: Docket No. 01-9219.
• Citation: 345 F.3d 103
• Parties: William BRODY, Plaintiff-Appellant, William V. Minnich, William J. Minnich, Minic Custom Woodwork, Inc., and St. Luke's Pentecostal Church, Inc., Plaintiffs, v. VILLAGE OF PORT CHESTER, Defendant-Appellee, Charles A. Gargano, in his official capacity as Chairman, President, and Chief Executive Officer of the New York Urban Development Corporation, d/b/a Empire State Development Corporation, Defendant.
• Court: U.S. Court of Appeals — Second Circuit

345 F.3d 103

William BRODY, Plaintiff-Appellant William V. Minnich, William J. Minnich, Minic Custom Woodwork, Inc., and St. Luke's Pentecostal Church, Inc., Plaintiffs, v. VILLAGE OF PORT CHESTER, Defendant-Appellee Charles A. Gargano, in his official capacity as Chairman, President, and Chief Executive Officer of the New York Urban Development Corporation, d/b/a Empire State Development Corporation, Defendant.

Docket No. 01-9219.

United States Court of Appeals, Second Circuit.

Argued: June 2, 2003.

Decided: September 24, 2003.

Dana Berliner, Institute for Justice, Washington, DC (William H. Mellor, Marni Soupcoff, Institute for Justice, on the brief, Martin Kaufman, Atlantic Legal Foundation, New York, NY, on the brief), for plaintiff-appellant.

Alan D. Scheinkman, Epstein, Becker & Green, P.C., New York, NY (Darryll A. Buford, J. William Cook, on the brief), for defendant-appellee.

Michael Rikon, Goldstein, Goldstein, Rikon & Gottlieb, P.C., New York, NY, for amicus curie Michael Rikon.

Before: SACK and SOTOMAYOR, Circuit Judges, and DANIELS, District Judge.^*

SOTOMAYOR, Circuit Judge.

Plaintiff-appellant William Brody appeals from a judgment of the United States District Court for the Southern District of New York (Harold Baer, Jr., District Judge) granting summary judgment for defendant-appellee the Village of Port Chester ("the Village") on plaintiff's constitutional challenge to New York's Eminent Domain Procedure Law. See N.Y. Em. Dom. Proc. Law § 201, et seq. (Consol.2003) (hereinafter "EDPL"). Brody claims that the procedures used by the Village in condemning his commercial property for use in an urban redevelopment project denied him due process by failing to provide adequate notice about the timing or the significance of the public hearing, which was his sole opportunity to present arguments against the taking of his property. Additionally, Brody claims a failure of due process in the lack of individual notice that the Village had issued a "determination and findings," and thereby had triggered, under Article 2 of the EDPL, an exclusive, thirty-day period in which a property holder may appeal the decision to take his or her property. See Minnich v. Gargano, No. 00 Civ 7481 HB, 2001 WL 1111513 (S.D.N.Y. Sept.20, 2001). Because Brody was not aware of the issuance of the determination and findings, he argues that he was denied due process of the laws in violation of the Fourteenth Amendment as he was effectively denied access to his opportunity for judicial review of the condemnation decision. His property has since been condemned, the Village has formally taken title pursuant to Article 4 of the EDPL, and the property has been sold to the Village of Port Chester Industrial Development Agency ("Village IDA"), which has begun to demolish what Brody asserts are his buildings.

The district court held that Brody's claims were barred by res judicata based on its conclusion that he could have asserted them as counterclaims in the Article 4 proceeding by the Village to take title to his property. On appeal, Brody argues that the district court erred in granting summary judgment on res judicata grounds because EDPL § 208 allows such claims to be brought only in Article 2 proceedings and, therefore, these constitutional challenges could not have been asserted as counterclaims to the Village's Article 4 proceeding. The Village, in turn, has moved to dismiss the appeal, arguing as a threshold matter that Brody lacks standing to pursue his constitutional challenges. Further, the Village argues that Brody's claims are moot because he relinquished his claim to title by accepting an advance payment for the taking of his property, and because the property has since been sold to the Village IDA, which is not a party to this action, and demolition has begun.

We hold that Brody has standing to challenge the lack of individual notice about the publication of the determination and findings and that the failure to raise this constitutional challenge as a counterclaim in response to the Village's Article 4 proceeding cannot have res judicata effect because, as a matter of New York law, Brody could not have asserted his constitutional challenges in that proceeding. We also hold that Brody's claims are not moot. We therefore vacate the district court's grant of summary judgment and remand for further proceedings consistent with this opinion.

BACKGROUND

I. The Condemnation Proceedings

Plaintiff William Brody is a commercial property owner in the Village of Port Chester, New York, who acquired the property at issue in this litigation in 1996. As the site was part of a long-planned urban development project, the Village and project developers later approached Brody about purchasing his property. Brody refused to sell.

Unwilling to take no for an answer, the Village sought to condemn the land under the procedures set out in the EDPL. Consistent with that statute, the Village held a public hearing on June 7, 1999 to review the intended public use to be served by the proposed redevelopment. Notice of the hearing was published pursuant to EDPL § 202(A), which requires the condemnor to publish notice of the hearing in newspapers a certain number of days before the hearing, but does not require individual notice to the affected property holders. Another tenant alerted Brody to the meeting, which Brody then attended in order to request that his property not be condemned. Brody was allowed four minutes to speak, but also was offered additional time to speak at the end of the hearing. Subsequent to the meeting, the Village issued and published a formal "determination and findings." Brody was never given individual notice of either the determination or its publication, as none is required under New York law. Consequently, Brody claims to have been unaware that the determination and findings were published or that he would have only thirty days after the publication of the determination and findings to challenge them in court. According to Brody, after the June 7 hearing, he "waited to see what the Village would decide to do." Although he "always intended to fight them if they tried to take [his] building," Brody "hoped they would realize that [he'd] done a lot of good for Port Chester and decide not to."

Shortly after this initial June 7 hearing, the Village discovered that the notice it had published advising the public about the initial hearing had not met all the requirements of the EDPL. The Village then published notice of a second public use hearing, which was held on July 6, 1999. It is undisputed that the second notice complied with EDPL § 202(A). Brody claims to have received no actual notice of the second hearing, and, consequently, he did not attend.

On July 18 and 19, 1999, the Village published a summary of its determination and findings in the local newspaper, as required by EDPL § 204, stating that the redevelopment project would serve to rehabilitate "certain blighted, substandard and unsanitary areas of the Village," as well as "enhance public access to the waterfront, protect and encourage water-dependent uses, promote the development of mixed use and retail commercial uses on the waterfront, remediate environmental problems, and have a positive impact on the existing and continued development of the Village waterfront and downtown business areas." Under the EDPL, this publication triggered the running of an exclusive thirty-day period in which to appeal the determination to the Appellate Division. See EDPL §§ 207, 208. There is no requirement in the EDPL, however, that the affected property owner be given individual notice of the determination and findings or their publication. See EDPL § 204(A).

Brody claims to have been unaware that the determination and findings were published on July 18 and 19, or that he had a limited right to appeal within thirty days of the publication. See EDPL § 207. According to Brody, this explains his failure to seek judicial review in an Article 2 proceeding under EDPL § 207. Brody claims that had he known the findings were published and the legal significance of that publication, he would have challenged the taking of his property within the thirty day window.

On April 26, 2000, the Village commenced court proceedings to take title to Brody's property under Article 4 of the EDPL. See EDPL § 402. On May 17, 2000, Brody responded to the Article 4 petition and filed, through counsel, a verified answer, which set forth three affirmative defenses: (1) the Village violated the United States and the New York Constitutions, as well as the EDPL, when it attempted to take his property without making an offer to compensate him; (2) the developer had not negotiated with him in good faith; and (3) the Village failed to ensure that adequate sums were in place to pay any condemnation award. The court ultimately granted the Village's petition to take title in October 2000, on the condition that the Village make Brody an offer for compensation within sixty days as required by Article 3 of the EDPL.

II. The Federal Court Proceedings

On October 4, 2000, Brody filed the instant federal action, alleging that the EDPL violated the Due Process Clause of the Fourteenth Amendment, both facially and as applied to him. Specifically, Brody alleged that due process required the Village to provide those persons whose property was subject to condemnation with individual notice of the public use hearing, the Village's subsequent issuance of the determination and findings, and the thirty-day time limit on judicial challenges to the determination and findings.

The district court initially granted a preliminary injunction enjoining the Village from taking further steps in the condemnation process. Minnich v. Gargano, No. 00 Civ. 7481(HB), 2001 WL 46989 (S.D.N.Y. Jan.18, 2001). The Village took an interlocutory appeal of the injunction and, on August 8, 2001, while the cross-motions for summary...