Court of Appeals Bars Attempt to Block Eminent Domain Action

The New York Court of Appeals held that a property owner’s challenge to condemnation of property by the City of New York was untimely when it was not raised within four months of a finding by the City Planning Commission that the condemnation should proceed. In the April 4, 2006 decision in the Matter of City of New York (Third Water Tunnel Shaft 30B) the Court noted that under the Eminent Domain Procedure Law (EDPL) there is a two part process in completing condemnation (1) determining that a property should be taken for a public purpose and (2) commencing a judicial vesting proceeding to acquire title to the property. The Court held that once the City determined through an appropriate hearing process that the property should be condemned the owner’s challenge to the extent of the proposed condemnation had to be commenced within four months, even though no judicial proceeding was commenced by the City until approximately six months after the City determined to condemn the property.

In order to build a water tunnel the City determined to acquire the entire property even though once the shaft for the tunnel was dug only a portion of the property above ground would be used to vent and access the shaft. Six months after determining to condemn the property the City started a judicial vesting action. The property owner conceded the public purpose but raised, as a defense to the vesting action, a claim that acquiring the entire property would be excessive. The City moved to dismiss the defense and counter claim stating that this issue should have been raised in a separate Article 78 proceeding challenging the administrative determination to acquire the property, within four months of that determination. The Court of Appeals agreed.

The Court of Appeals noted that the general rule is that a challenge to an administrative action (Article 78 proceeding) must be commenced within four months of the date on which the administrative action becomes final and binding (there are specific exceptions that are shorter). While the owner argued that the action became final when the Mayor approved the capital budget proposal for the water tunnel, the Court found that the action became final when the City Planning Commission made its final determination to proceed with the acquisition and the City Council failed to exercise its right to review that determination. This case again demonstrates that when an administrative process has multiple steps it is always safer to challenge the earliest action, unless the courts have previously held that a challenge to that particular action can be brought later in the process.