The Ohio Supreme Court ruled on July 26 that a city could not condemn land solely for economic benefits and that a finding that the area to be taken for commercial development was “deteriorating” was too vague to justify the eminent domain action.

The city of Norwood was a suburb of Cincinnati that had lost much of its industrial base. Rookwood Partners, a private developer, proposed to develop a 10-acre mixed-use area in the city with 200 condominiums, retail buildings and two parking garages. Owners of five of 71 homes on the site refused to sell. Rookwood conducted a study for the city to show that the neighborhood, while not a “slum, blighted or deteriorated area,” was “deteriorating.” The city agreed and condemned the properties. The five holdouts appealed, but a trial court ruled that the city’s discretion should be given deference. A state appeals court agreed with the ruling.

On further review, the state supreme court said “the right to private property is an original and fundamental right” predating the formation of government itself and any taking by a public agency should be strictly scrutinized.

The court held that public entities can take private property for public use and economic concerns can be a factor in such takings. But the court ruled: “We have never found economic benefits alone to be a sufficient public use for a valid taking. We decline to do so now.”

The city therefore was required to show the taking was for the public good, such as clearing blighted areas for safety or public health reasons. The Rookwood study showed the area was not blighted—the houses were structurally sound and there was no evidence of safety and health concerns. According to the high court, the city’s finding that the area was “deteriorating,” that it may at some future time become blighted, was unconstitutionally vague to justify the taking of the disputed homes. It reversed the lower court rulings. Norwood v. Horney, No. 2006-Ohio-3799 (Ohio S.Ct. 2006).