For more than two decades the Michigan Supreme Court’s decision in Poletown Neighborhood Council v. Detroit allowed governments in that state to take most any property they wanted to transfer to most anyone they wanted for most any reason they wanted. The U.S. Constitution’s “public use” restriction was satisfied, the court ruled, even when Detroit seized an entire ethnic neighborhood to hand over to General Motors for a new factory.
Alas, this case was no anomaly. As Steven Greenhut, an editorial writer for the Orange County Register, observes in his timely new book, Abuse of Power: How the Government Misuses Eminent Domain, “governments increasingly use eminent domain to take property from one private owner in order to give it to another private owner.” A small home owner or businessman then “must surrender his home or business because a wealthy developer — perhaps a big campaign contributor and mover and shaker in the community, or an out-of-town corporation promising an expanded tax base for the city — has bigger and better plans for it.”
The abuses are legion. But sometimes property owners — “ordinary heroes,” Greenhut calls them — fight back and beat city hall. Today they often do so with the aid of the Washington-based Institute for Justice, which has made protection of property rights one of its most important objectives.
So rank have been the outrages that in July the Michigan Supreme Court expressly overruled its Poletown decision “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.” The new case, Wayne County vs. Hathcock, barred use of eminent domain to construct an industrial and office park. Michigan may no longer seize private property for “economic development,” that is, to hand to new private owners who might pay more in taxes.
Although the case has no formal legal force outside of Michigan, it reflects a slow renaissance of judicial respect for property rights. The Poletown decision was oft-cited by other courts as they ruled that public officials could take land at their pleasure. Wayne County will help shift legal currents in the other direction.
Indeed, all legal eyes now fall on the U.S. Supreme Court, which is considering a case involving the city of New London, Connecticut. The Connecticut Supreme Court, relying upon the reasoning of Poletown, upheld the plan by the New London Development Corporation to take scores of modest riverfront homes and businesses to build luxury houses, expensive office space, and a hotel. “How come someone else can live here, and we can’t,” asks Susette Kelo, one of the dispossessed landowners.
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