Landmark Eminent Domain Abuse Decision [UNANIMOUS!] - Michigan Supreme Court Halts Eminent Domain For "Economic Development": Court States Poletown Was "Erroneous"
 

"We overrule Poletown," the Court wrote, "in order to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law."
 
Justice Robert Young [Jr.], who wrote the lead opinion, called the 1981 case allowing Detroit's Poletown neighborhood to be cleared for a GM plant a "radical departure from fundamental constitutional principles."
 
"It was a terrible mistake. Now, the Michigan Supreme Court has restored the rights of all Michiganders to keep their homes and businesses, even if another, politically connected private business wants them. This is a great day for property rights nationwide."
 
July 31, 2004
 
By John Kramer
 
The Institute for Justice
 
 
 
Washington, D.C. - In a case with nationwide implications to halt the abuse of eminent domain, the Michigan Supreme Court last night reversed its infamous Poletown decision, which had allowed the condemnation of private property for so-called "economic development."
 
In a unanimous decision in County of Wayne v. Hathcock, issued at 9:30 p.m. on Friday, July 30, the Court decisively rejected the notion that "a private entity's pursuit of profit was a 'public use' for constitutional takings purposes simply because one entity's profit maximization contributed to the health of the general economy."
 
In the 1981 Poletown decision, the Michigan Supreme Court allowed the City of Detroit to bulldoze an entire neighborhood, complete with more than
1,000 residences, 600 businesses, and numerous churches, in order to give the property to General Motors for an auto plant.
 
That case set the precedent, both in Michigan and across the country, for widespread abuse of the power of eminent domain.
 
It sent the signal that courts would not interfere, no matter how private the purpose of the taking.
 
But in Hathcock, the Court called Poletown a "radical departure from fundamental constitutional principles."
 
"We overrule Poletown," the Court wrote, "in order to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law."
 
According to Dana Berliner, an attorney with the Institute for Justice http://www.ij.org, which filed a brief in the Hathcock case, the case has profound nationwide implications.
 
"Poletown was the first major case allowing condemnation of areas in the name of jobs and taxes. It is cited in every property textbook in the country. The Court literally rewrote the book with this decision," said Berliner.
 
The use of eminent domain for private development has become increasingly common throughout the United States. According to Public Power, Private Gain, authored by Berliner, there were 10,000 properties either taken or threatened with eminent domain for private parties in the U.S. between 1998 and 2002.
 
And state supreme courts from Nevada to Connecticut have relied on the Poletown decision when upholding the condemnation of land for private parties.
 
"The Court made an exception in Poletown because of the supposedly enormous benefits of the General Motors plant," said Berliner. "Instead, the exception swallowed the rule."
 
The application of Poletown in Michigan produced disastrous results.
 
Michigan courts tended to forbid small condemnations for private parties, but when the city and developer claimed the project would have a significant economic impact, lower courts upheld the takings.
 
"Poletown gave cities and developers an incentive to make outrageous, wildly inflated predictions [regarding] the impact of the project," explained Scott Bullock, senior attorney at the Institute for Justice.
 
"It was the worst possible incentive. The Poletown project itself also didn't come close to living up to the promises. In all likelihood, it destroyed more jobs than it created."
 
The Michigan Supreme Court also decided another important eminent domain case, although one that has received less attention.
 
In Detroit Wayne County Stadium Authority v. Alibri, the Stadium Authority told Frida Alibri it would condemn her property if she didn't sell "voluntarily."
 
It promised, among other things, that it would not be given to a private party. After the sale, it was indeed transferred to a private corporation.
 
At that point, Alibri sought to get her property back, because the Stadium Authority didn't have the power to condemn for that purpose, and it had told her that the purpose was not transfer to a private party.
 
The trial court agreed with Alibri; the appellate court, however, agreed with the Stadium Authority.
 
The Michigan Supreme Court returned the property to its rightful owner -- Mrs. Alibri.
 
"Most people end up selling under threat of eminent domain, rather than spend years in court fighting it, so these two decisions truly prevent the government from taking property for private parties," according to Berliner.
 
"The government can't convince people to sell by telling them their property will be used for a public use, then turn around and transfer it to a private party."
 
"The Poletown decision gave cities the green light to take property for private parties," said Chip Mellor, president and general counsel of the Institute for Justice.
 
"It was a terrible mistake. Now, the Michigan Supreme Court has restored the rights of all Michiganders to keep their homes and businesses, even if another, politically connected private business wants them. This is a great day for property rights nationwide."
 
The Institute for Justice and the Mackinac Center for Public Policy filed a friend of the court brief in the Hathcock case -- co-authored by George Mason Law School professor Ilya Somin and Institute for Justice Senior Attorney Dana Berliner -- discussing the disastrous effects of the Poletown decision in Michigan and the country, as well as the failure of the Poletown project to live up to its promises.
 
The Institute for Justice also filed a friend of the court brief in the Alibri case.
 
The Hathcock decision is available at:
 
 

Additional, related reading:
 
Front Row, Left to Right: Justice Robert P. Young, Chief Justice Maura D. Corrigan, Justice Stephen J. Markman

Back Row, Left to Right: Justice Marilyn Kelly, Justice Michael F. Cavanagh, Justice Clifford W. Taylor, Justice Elizabeth A. Weaver
 
Michigan Supreme Court
 
P.O. Box 30052
 
Lansing, Michigan 48909
 
Chief Justice's Office: 517-373-0126
 
Clerk's Office: 517-373-0120
 
 
Biography of Justice Robert P. Young, Jr.
 
 
Justice Young, of Detroit, received a bachelor’s degree and graduated cum laude from Harvard College in 1974, and a Juris Doctorate from Harvard Law School in 1977. He practiced law for 15 years with the law firm of Dickinson, Wright, Moon, Van Dusen & Freeman, then in 1992 was named vice president, corporate secretary and general counsel of AAA Michigan. He has served as a member of the Michigan Civil Service Commission and the Central Michigan University Board of Trustees. Justice Young was appointed to the Michigan Court of Appeals, 1st District, in 1995 and elected to the court in 1996. He was appointed to the Michigan Supreme Court by Governor Engler, effective January 3, 1999, to fill the seat vacated by Chief Justice Conrad L. Mallett, Jr. In 2000, he was elected to complete the term, which expired January 1, 2003. He was reelected in 2002. Justice Young's term expires January 1, 2011.
 
 
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Poletown seizures are ruled unlawful - [Michigan] State Supreme Court restricts government rights to take land
 

July 31, 2004
 
By John Gallagher, [Detroit] Free Press Business Writer
 
gallagher@freepress.com or 313-222-5173
 
Detroit Free Press
 
Detroit, Michigan
 
 
To submit a Letter to the Editor: letters@freepress.com
 
Reversing more than two decades of land-use law, the Michigan Supreme Court late Friday overturned its own landmark 1981 Poletown decision and sharply restricted governments such as Detroit and Wayne County from seizing private land to give to other private users.
 
The unanimous decision is a decisive victory for property owners who object to the government seizing their land, only to give it to another private owner to build stadiums, theaters, factories, housing subdivisions and other economic development projects the government deems worthwhile.
 
Detroit and other municipalities have used the Poletown standard for years to justify land seizures as a way to 'revitalize'.
 
In the decision, the court rejected Wayne County's attempt to seize private land south of Metro Airport for its proposed Pinnacle Aeropark high-technology park.
 
The Pinnacle project, announced in 1999, is geared to making Wayne County a hub of international high-tech development linked to the airport.
 
Backers of the Poletown standard warned that Friday's decision could be a "significant blow" to revitalization efforts in blighted cities like Detroit.
 
John Mogk, a professor of land-use law at Wayne State University, said Detroit needs to use its powers, known as eminent domain, to seize land to clear large tracts for new economic development, including retail centers, office parks and residential projects.
 
Dr. John Mogk, Habitat Detroit Board President
John Mogk
 
 
"Any limitation on the power of eminent domain will reduce the chances of the city accomplishing those kind of projects," Mogk said. "No other city with which Detroit competes has such limitations placed upon its ability to acquire tracts of land for future development."
 
In the original Poletown ruling, the court allowed the City of Detroit to seize private homes and businesses on the east side so General Motors Corp. could build an auto factory.
 
The bitterly-contested seizures and the court's ruling in favor of the city had national implications and led to similar rulings elsewhere.
 
Thousands of homes and dozens of churches and private businesses were bulldozed in Detroit's former Poletown neighborhood to make way for the GM plant.
 
Of 1,300 acres needed for Wayne County's Pinnacle project, property owners representing about 2 percent of the land have refused to sell.
 
They have resisted, in part, because much of the project would later be turned over to private developers and other entities.
 
In Friday's decision, known as Wayne County v. Hathcock after one of the landowners in the case, the court ruled that the sweeping powers to seize private land granted in the 1981 Poletown case violated the state's 1963 constitution.
 
"The county is without constitutional authority to condemn the properties," the court's opinion read.
 
All seven justices voted to overturn Poletown, although three dissented over some technical aspects that do not affect the main ruling.
 
Justice Robert Young, who wrote the lead opinion, called the 1981 case allowing Detroit's Poletown neighborhood to be cleared for a GM plant a "radical departure from fundamental constitutional principles."
 
"We overrule Poletown," Young wrote, "in order to vindicate our constitution, protect the people's property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law."
 
Alan Ackerman, one of the attorneys who represented landowners in the case, said he was "elated at the recognition that it is a government of limited powers. The Constitution did not contemplate that the government would do everything for everybody."
 
But a spokesman for Wayne County Executive Robert Ficano issued a statement saying that "the Michigan Supreme Court's decision to change Michigan law and divest municipalities from their ability to create jobs for their citizens is a disappointment not only for Wayne County, but for all of the Michigan communities struggling to address these difficult economic times."
 
The court said its ruling covers any condemnation cases now being heard before lower courts in which Poletown issues have been raised.
 
The former owners of Poletown properties that were seized to clear land for the GM plant are not affected by the decision.
 
The decision won't stop all uses of eminent domain.
 
All sides agreed [that] governments can still take private land for traditional uses such as slum clearance or for a private use deemed essential to the public good, such as to build a regulated public utility.
 
And the government's ability to seize land for governmental purposes such as building schools and roads was never in question.
 
What the decision [means] is that the cost of land just went up for municipalities trying to accomplish economic development.
 
Now that governments can no longer use the threat of seizure, private owners and speculators could demand higher prices to get out of the way of projects that government leaders deem essential.