Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In a case that promises to test the limits of the U.S. Supreme Court’s controversial June decision in Kelo v. City of New London, the city of Philadelphia has been hit with a federal civil rights suit brought by landowners who claim the city illegally used its powers of eminent domain to take about four acres of land just to create a driveway for a new 11-acre FedEx facility. For the landowners — the heirs of the late Morris Stein — the federal suit is just the latest chapter in an ongoing battle that began in 2001 when the city’s Redevelopment Authority condemned five parcels of land the family had owned since 1987. The parcels of land, which are located near 36th Street and Grays Ferry Avenue, are zoned “least restricted.” At the time, the Stein family was using the land for several purposes, including storing mountains of rock salt and rental of a billboard. A portion of the land was also leased to Waste Management Inc. When the RDA took the land, it offered less than $160,000 in compensation. The owners contested the amount and their case was heard by the city’s Board of Viewers, a three-member panel that ultimately concluded that the landowners should be paid more than $1 million. Both the city and the landowners appealed that decision, and the dispute about the value of the land is set to go to trial before a jury on Oct. 28 in the Philadelphia Court of Common Pleas. As the trial date nears, court records show the city and the landowners are still miles apart in their appraisals of the land’s value. The Stein family’s lawyer, Susan J. French of Wolf Block Schorr & Solis-Cohen, said she would be calling expert appraisers who value the land at $2.7 million to $4 million. The RDA, French said, has effectively raised its offer to about $250,000, according to the report of the appraiser who is expected to testify for the RDA. French said the trial is expected to last about a week, and that other experts for the Stein family will testify that the land is especially valuable because of its “least restricted” zoning status and its prime location near railroad tracks and the Schuylkill Expressway. Such a location, French said, is a prime spot for a waste transfer facility because Philadelphia, like New York, is currently running out of landfill space and will soon need to export its trash much farther away. The cheapest way to do that, French said, is by train. But the Stein family isn’t waiting for the outcome of the Oct. 28 trial. In a tactic that significantly raises the stakes, the family filed a federal civil rights suit last week that accuses the city and the RDA of violating its rights under the U.S. Constitution, alleging the condemnation of the land was illegal. Attorney Michael Pileggi filed the suit on behalf of the Stein family’s company, Down Under GFB Inc., a Narberth, Pa., company that is jointly owned by the late Morris Stein’s three children — Stephen Stein, Gail Newman and Maddie Lynn. The suit alleges that the RDA’s taking of the land was illegal because it was done “solely to benefit” FedEx. It seeks an order requiring the city to return the land to Down Under. At first blush, that allegation might seem to be at odds with the U.S. Supreme Court’s decision in Kelo, which upheld the use of eminent domain to seize private property for economic development. But in an interview, French said Kelo actually supports the Stein family’s claim because the high court’s 5-4 ruling upheld the taking of private property for another private use only when the decision is the result of a carefully developed economic plan. In the majority opinion in Kelo, Justice John Paul Stevens found that the Fifth Amendment allows government to take private property for “public use,” but that it is up to local governments, by and large, to define that term. Ruling against the landowners, Stevens found that a city’s carefully formulated economic development plan is entitled to deference — even if it mainly benefits private entities. In the Stein family’s case, French said, there was no such plan in place. Instead, she said, the land was taken from them simply to benefit FedEx so that its trucks could enter and exit its new facility directly from Grays Ferry Avenue and not from 36th Street or Wharton Street. Pileggi clearly had Kelo in mind when he drafted the complaint in Down Under GFB Inc. v. City of Philadelphia. The suit alleges that “to date the RDA never developed a carefully considered development plan and its taking of plaintiff’s land was done solely to benefit private entities.” The suit alleges that RDA officials “conferred a large portion of plaintiff’s condemned property to a private corporation, the FedEx Corp., that has been utilizing the property for private profit.” City Solicitor Romulo L. Diaz Jr. declined to comment on the suit and referred questions to the RDA’s assistant general counsel, Nicholas J. Scafidi, who could not be reached for comment. A spokeswoman for FedEx also declined to comment on the suit, saying she was unable to locate company officials who are familiar with the case. In the federal suit, Pileggi contends that “the RDA’s inadequate offer fails to take into account the unique location of these properties and the characteristics that dramatically increase the value of these five parcels of land.” Because of the RDA’s “blatant undervaluing” of the land, the suit says, Down Under “has attempted to negotiate fair and just compensation.” But the suit alleges that the RDA has “refused to return to plaintiff its property or negotiate a fair and just price.” Pileggi contends in the suit that the Stein family was the victim of numerous illegal policies, and that the city “was deliberately indifferent to the need for more or different training, supervision, investigation or discipline in the areas of: use of its powers of eminent domain; exercise of RDA powers; [and] RDA employee’s use … of condemnation proceedings for a private use.” The city’s policies, the suit alleges, led RDA employees “to believe that they can violate the rights of citizens, with impunity, including the use of fraud and falsehood … with the foreseeable result that city of Philadelphia employees are more likely to violate the constitutional rights of citizens.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.