Landmark Eminent Domain Abuse Decision: Michigan Supreme Court Halts Eminent Domain For “Economic Development”

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, 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....

Thanks to Julie Smithson at Property Rights Research for the link.