In a lengthly Indiana Law Blog entry from May 11, 2003, on the use of eminent domain for private development, there is discussion of the 1981 Poletown Neighborhood Council v. City of Detroit decision where: "The Michigan Supreme Court ruled that a community could be condemned to allow General Motors to build a factory, accepting the argument that it would revitalize the community." The entry also noted that "The Poletown decision is used in a number of Law & Economics courses. Here is one link to the decision." An illustrated history of Poletown can be found here, via the Detroit News.
Yesterday the Michigan Supreme Court overturned Poletown. As reported here in the Detroit Free Press:
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.Here is the AP coverage in the Detroit Free Press.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. * * *
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." * * *
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 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 does mean 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.
The decision does not appear to be available yet -- when it is I will post it here. [Update 8/2/04] Here is the case link to the opinion, County of Wayne v. Hathcock.
[More] The Illinois Supreme Court, on 4/4/02, in Southwestern Illinois Development Authority v. National City Environmental, also ruled that "taking one owner’s private property and giving it to another for private use is an unconstitutional use of the power of eminent domain." Access it here.
A story dated 7/27/04, originally published in the San Diego Daily Transcript, reports:
The U.S. Supreme Court has been asked to consider the constitutionality of a widespread municipal practice: using eminent domain for economic development. The Court has been asked to rule on whether local governments may use eminent domain for economic development when the property being taken is not blighted.Posted by Marcia Oddi at July 31, 2004 01:15 PMIn a July 19 petition, the Washington, D.C.-based Institute for Justice asked the court to review a recent Connecticut state Supreme Court ruling that approved the taking of non-blighted homes for economic development. Officials in New London, Conn., want to take 15 homes and businesses owned by seven families and give the land to a private developer to create facilities to complement the nearby Pfizer research center.
If the Supreme Court agrees to hear the case it could resolve an issue that has divided the states as more localities, including San Diego, use eminent domain powers in the pursuit of increased tax revenues and jobs. At question is when does a city's appetite for revenue and jobs crash head on with the constitutional rights of a private property owner? * * *
California is among the most active states that have condemned property for the benefit of other private parties, with San Jose listed among the "worst" cities engaged in the practice, according to the report.
Bullock said the trend began in 1981 with the landmark decision in Poletown Neighborhood Council v. Detroit by the Michigan state Supreme Court. The ruling allowed Detroit to condemn a Polish neighborhood so that General Motors could develop a plant there. The city argued at the time that the plant would help turn around its deteriorating economic condition. The state court is reconsidering that decision and is expected to issue a ruling July 31. [As noted above, the Michigian Court overruled Poletown.]
The Institute for Justice hopes the Supreme Court will be compelled to hear the case because of numerous conflicting appellate court decisions on the issue. Bullock said the court is likely to make its decision in October.
Seven state supreme courts have upheld the right of cities to take non-blighted property for economic development, while eight states forbid private-to-private transfers where there is no blight. Another three are preparing to rule such condemnations unconstitutional, according to the institute's petition to the court. California is not included in any category.