City of Norwood v. Horney
110 Ohio St. 3d 353, 853 N.E.2d 1115 (2006)
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Rule of Law:
The Ohio Constitution's 'public use' requirement for eminent domain is not satisfied by economic or financial benefit alone, nor by a speculative 'deteriorating area' standard, and a legislative prohibition on judicial injunctions during appellate review of takings violates the separation of powers doctrine.
Facts:
- The city of Norwood, an urban environment surrounded by Cincinnati, experienced significant erosion of its industrial tax base over 40 years, leading to municipal financial debt.
- The appellants' neighborhood was significantly impacted by the construction of Interstate 71 in the 1960s, leading to the razing of homes, diminished front yards, increased traffic, noise, and light pollution, and a gradual shift from residential to commercial character.
- Rookwood Partners, Ltd., a private company, discussed redeveloping the appellants' neighborhood, proposing a mixed-use development (apartments/condominiums, office/retail space owned by Rookwood, and public parking facilities owned by Norwood) projected to generate nearly $2,000,000 in annual revenue for the city.
- Norwood and Rookwood entered a redevelopment contract where Rookwood agreed to reimburse the city for project expenses, including any eminent domain costs.
- Rookwood successfully acquired a substantial majority of the necessary properties through voluntary sales, but the appellants (Carl and Joy Gamble, Joseph P. Horney and Carol Gooch) refused to sell their properties.
- Because the appellants refused to sell, Rookwood asked Norwood to appropriate their properties and transfer them to Rookwood for redevelopment.
- Norwood retained a consulting firm, Kinzelman Kline Grossman (KKG), which, funded by Rookwood, prepared an urban-renewal study concluding the appellants' neighborhood was a 'deteriorating area' as defined by the Norwood Code, despite many homes being in fair to good condition, and predicted continued deterioration.
- Norwood City Council adopted the redevelopment plan and authorized the mayor to enter the redevelopment agreement with Rookwood and appropriate the appellants' properties.
Procedural Posture:
- Norwood City Council passed ordinances adopting the redevelopment plan and authorizing the appropriation of the appellants' properties.
- Norwood filed complaints in trial court against the appellants to appropriate their properties.
- The trial court found that Norwood had abused its discretion in finding the neighborhood a 'slum, blighted or deteriorated area,' but concluded there was no abuse of discretion in finding it a 'deteriorating area,' applying a deferential standard to the city's determination.
- The trial court then held trials on the issue of compensation, after which juries rendered verdicts on the value of the appellants’ properties.
- Norwood deposited the full awarded amounts with the court, obtained titles to the properties, and transferred them to Rookwood, which began demolishing structures.
- The trial court refused to enjoin Rookwood from using or damaging the property pending appeal.
- A divided court of appeals denied a stay of the trial court’s judgment, finding that R.C. 163.19 prohibited such relief.
- The Supreme Court of Ohio accepted the causes for review and issued orders preventing the destruction or alteration of the properties pending its decision.
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Issue:
1. May a municipality appropriate private property for transfer to a private entity based solely on the property being in a 'deteriorating area' or for economic benefit, consistent with the 'public use' requirement of Section 19, Article I of the Ohio Constitution? 2. Does R.C. 163.19, which prohibits courts from enjoining the taking and using of property after compensation is deposited but prior to appellate review, violate the separation-of-powers doctrine under the Ohio Constitution?
Opinions:
Majority - O'Connor, J.
1. No, a municipality may not appropriate private property for transfer to a private entity based solely on the property being in a 'deteriorating area' or for economic benefit, as such actions do not satisfy the 'public use' requirement of Section 19, Article I of the Ohio Constitution, and the 'deteriorating area' standard is void for vagueness. The Ohio Constitution considers property rights fundamental and 'inviolate,' demanding strict scrutiny of eminent domain use. While the U.S. Supreme Court's Kelo decision allowed economic development takings, Ohio courts are not bound by that interpretation for the Ohio Constitution and maintain an independent judicial review role, especially when property is transferred to a private entity. Economic benefit alone is insufficient to satisfy the public-use requirement; it can be a factor but not the sole basis for a taking. The Norwood Code’s definition of 'deteriorating area' is void for vagueness because it fails to provide fair notice to property owners and invites arbitrary enforcement, describing conditions common to virtually any urban area. Furthermore, the standard is unconstitutional because it relies on speculation about a property's future condition ('in danger of deteriorating') rather than its actual state at the time of the taking, which is impermissible for eminent domain. 2. Yes, R.C. 163.19's provision prohibiting a court from enjoining the taking and using of property after compensation has been deposited but prior to appellate review violates the separation-of-powers doctrine. The inherent power to issue or deny stays and injunctions is a core judicial authority, essential for the orderly administration of justice and to protect the subject matter of litigation. The legislature cannot control or impede this inherent judicial power, as doing so infringes upon the judicial branch's exclusive authority to interpret the constitution and act as a check on legislative power. This blanket prohibition interferes with the judiciary's constitutional and inherent authority. The unconstitutional portion of R.C. 163.19 can be severed, leaving the right to appeal 'as in other civil actions,' as previous cases did not address the separation-of-powers issue.
Analysis:
This case significantly strengthens private property rights in Ohio, rejecting the broader interpretation of 'public use' for economic development takings adopted federally in Kelo v. New London. It establishes a higher bar for municipalities seeking to use eminent domain, demanding a clear and present public harm (e.g., existing blight) rather than speculative future deterioration or mere economic gain. Moreover, the ruling reaffirms judicial independence by preserving courts' inherent power to issue injunctions, preventing irreversible alteration of property before full appellate review, thereby ensuring due process and a meaningful appeals process in eminent domain cases.
