David Cooper’s article, entitled “Eminent Domain Proceedings and the Scope of the Project Rule: Navigating a Misunderstood Valuation Doctrine,” was published in the Winter Edition of the New York State Bar Association’s Municipal Lawyer Journal. The Article covers strategies for municipalities at the early stages of the eminent domain process to prepare for potential valuation challenges in subsequent just compensation trials.
The ”Miller Rule,” announced by the U.S. Supreme Court in 1943, dictates that the owner of a condemned property cannot enhance its “just compensation” award on a theory that the project for which the parcel was taken increased the market value of all properties in the neighborhood. A property located in a neighborhood experiencing revitalization as a result of a major public/private partnership could be worth far more than a property located in a distressed area experiencing little growth. The Miller Rule indicates that the condemned parcel should be valued as it existed before the Project commenced. An issue that often arises is how to value a property when the revitalization project occurs over various phases, and the condemned parcel was not included in the initial project phase. In this instance, a court may determine that the parcel was not within the original “scope of the project,” and as such, could be valued as if it were located within a rising market reflecting the revitalization of the overall neighborhood. The article offers insights for municipal officials into how New York courts have applied the Miller Rule to multi-phased projects, and how best to prepare during the initial steps of the eminent domain process for subsequent claims that the condemned parcel was not in the initial “scope” of the project.
