The plaintiffs in the suit are now pledging to take the case to state court, a route they initially avoided as eminent domain laws in New York tend to be relatively favorable to the state.

In the federal suit, the landowners and tenants charged that the state’s use of eminent domain was improper as it was intended for a private gain of developer Bruce Ratner, who sought to move the Nets basketball team to a new arena on the site and build over 6,000 apartments. The suit was tossed out before reaching the trial phase.

“Now we will turn to the state courts to vindicate our rights. We will soon file an action in New York state court under state law as we were expressly permitted to do by the rulings of the federal courts,” the lead attorney for the plaintiffs, Matthew Brinckerhoff, said in a statement.

In an interesting twist, the folks at Develop Don’t Destroy Brooklyn point out that today is the third anniversary of the landmark Kelo v. New London decision by the Supreme Court, a case that cleared the way for states to use eminent domain for economic development.

Update 12:05 p.m.

Statement from Bruce Ratner, chairman of developer Forest City Ratner