The municipal powers of eminent domain in Ohio received a defeat on Wednesday.

Ohio's highest court said a Cincinnati suburb may not take over private property to make way for a $125 million development of offices, shops and restaurants.

The case is the first challenge of property rights laws to reach a state high court since the U.S. Supreme Court ruled that local governments can seize homes for use in private development.

The Ohio case involved the city of Norwood, which used its eminent domain authority to overrule holdouts against private development. The project is meant to revitalize the neighborhood, but the state court says economic development alone doesn't justify taking homes.