Here’s the latest in a controversy we’ve been following.
In 624 Broadway LLC v. Gary Housing Authority, No. 22S-CT-140 (Aug. 29, 2022), the Indiana Supreme Court held that the Authority failed to provide the property owner adequate notice that it would be taking its property as part of a redevelopment project.
The Gary Housing Authority wanted to redevelop 624 Broadway’s commercial property in downtown Gary into mixed-use residential. The Authority instituted an “administrative taking” under Indiana law, which is “an alternative to the ‘traditional’ lawsuit route” that “occurs when an authorized governmental body condemns property and awards damages through resolutions.” Slip op. at 2.
The administrative taking statute only requires notice to the property owner by publication. And that’s exactly the notice the Authority gave 624 Broadway. “It twice published notice of the resolution and upcoming meeting in two area newspapers of general circulation.” Id. Broadway’s agent found out about the meeting from a reporter, and he appeared at the meeting and spoke. At the meeting, the Authority confirmed the taking and assessed $75k in damages, and set another meeting to consider objections.
The owner asked to postpone that meeting, but the Authority refused. The owner even sued (unsuccessfully) to get a TRO to stop the meeting so that the owner’s appraiser could evaluate the property. With nothing stopping it, the Authority held the meeting, at which it concluded it could take the property, and awarded the $75k in damages. One day after that meeting, the owner’s appraiser inspected the property, and a short time later issued a report valuing it at $325k.
624 Broadway raised a constitutional due process argument, asserting that the notice provided by the Authority was insufficient. Hold on, the Authority countered, the statute only requires us to publish notice of the taking and our hearing, and there’s no question we did that. Although the lower courts bought that assertion, the Indiana Supreme Court didn’t.
Taking property required due process notice, and that process requires some kind of hearing. The notice provided must be reasonably calculated to inform. Yeah, the Authority complied with the statute and published notice, but that alone doesn’t mean the notice of the hearing was “constitutionally sound.” The court noted that “[c]ertainly, a statute can provide more protection than the Constitution. But when a statute provides less, the government must do more.” Slip op. at 5 (footnote omitted).
Not that notice by publication is always bad. You can publish notice where it isn’t possible or practicable to give other kinds of notice. But if you know where to find someone, or can easily figure that out, then you have to make an effort.
The Housing Authority admittedly knew the identity and address of 624 Broadway’s registered agent. Indeed, its September 19 damages resolution included his address. 624 Broadway’s articles of organization, filed with the Indiana Secretary of State, listed its registered agent, his address, and an email address for service. Further, the Housing Authority demonstrated its ability to successfully communicate with 624 Broadway during its eminent domain lawsuit. See L.D., 938 N.E.2d at 671 (finding notice by publication insufficient when a party “had successfully given notice” in a previous case but “made no attempt to do so” in the instant case). Yet once it transitioned to an administrative taking, it apparently became incapable of sending a letter or email to 624 Broadway. An administrative taking may be a “streamlined procedure for taking private property,” Util. Ctr., Inc. v. City of Fort Wayne, 985 N.E.2d 731, 736 (Ind. 2013), but it cannot circumvent the Constitution. “[W]hen notice is a person’s due, process which is a mere gesture is not due process.” Mullane, 339 U.S. at 315. Because the Housing Authority knew how to provide personal notice, its notice by publication was a “mere gesture.”
Slip op. at 6.
But wait, the owner’s agent actually knew about the meeting (found out from a reporter) and showed up. That’s not enough? No, the court concluded, “we cannot say 624 Broadway was not prejudiced: under our harmless error standard, and error’s ‘probable impact’ is “sufficiently minor’ if it did not ‘affect the substantial rights of the parties.'” Id. (citation omitted). It is likely that if the Authority provided adequate notice, 624 Broadway could have at least had its appraisal ready to go.
Having found a problem the next question was remedy. The court concluded that the owner is not entitle to vacate the taking, because the court was not convinced that it was for a bad purpose. “And nothing indicates that the taking was ‘subterfuge … to convey private property to a private individual for private use’ or that the Housing Authority acted arbitrarily and capriciously.” Slip op. at 7. So the court declined to vacate the taking, and sent the case back for a properly-noticed hearing on damages where the Authority can consider all of the owner’s evidence. Yeah, that’ll surely change things.
We shall see.
More on the decision here (“Gary Housing Authority violated Constitution in eminent domain case“).