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Court Refuses to Make New York Compensate Former Nursing Home Owners

April 16, 1990

WASHINGTON (AP) _ The Supreme Court today refused to make New York compensate the former owners of a Buffalo nursing home forced by the state to remain open even though it was losing money.

The court, without comment, let stand a ruling that the state’s ordering the home’s owners to keep it open when they wanted to shut it down did not amount to a ″taking″ of private property.

The Constitution allows government, through eminent domain, to take private property for public use but requires that ″just compensation″ be paid.

At issue in the Buffalo case was whether a temporary taking occurred when Abbott Manor Nursing Home’s owners were forced by state officials to absorb about $30,000 in monthly operating losses for three years.

The New York Court of Appeals, the state’s highest court, ruled last June 8 that no taking occurred.

The June ruling overturned lower court decisions that there had been a taking, and that the state owed Abbott Manor’s owners $542,000.

Before his death in early 1976, Bernard P. Birnbaum owned and operated Abbott Manor, which had some 80 residents. At the time of his death, the home was losing between $20,000 and $30,000 each month.

As co-executor of his brother’s estate, Saul Birnbaum notified state officials about Bernard’s death.

The state position was that the home could not be closed because no alternate facilities were available.

After failed negotiations with state officials, the estate announced that all Abbott Manor residents would be removed by Sept. 7, 1976.

State officials, however, obtained a court order blocking the home’s closing and the removal of its residents. Two of the home’s employees were appointed as receivers in charge of operations, but the Birnbaum estate was forced to pay all costs.

The receivership was not ended until Sept. 14, 1979, after all Abbott Manor residents had been placed in other facilities.

In the appeal acted on today, lawyers for the Birnbaum family argued that ″requiring a private business to remain in operation and to bear substantial operating losses, without providing just compensation ... is precisely the kind of harm″ the Constitution prohibits.

The case is Birnbaum vs. New York, 89-1108.

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