Michigan Supreme Court Sets New Standard for Constitutional Use of Eminent Domain

In what some are calling the “condemnation case of the year,” the Michigan Supreme Court ruled that Wayne County’s proposed land condemnation and transfer in support of economic redevelopment was unconstitutional. In County of Wayne v. Hathcock, 684 N.W.2d 765 (Mich. 2004), the Michigan Supreme Court found that the proposed condemnations did not advance a “public use” as required by the Michigan constitution. According to the Court, “alleviating unemployment and revitalizing the economic base of the community” did not pass constitutional muster. This decision, if followed elsewhere in the country, could seriously impair municipalities’ ability to use their eminent domain authority to facilitate brownfields redevelopment projects.

The dispute arose when Wayne County sought to update its rustbelt economy by building a 1,300-acre business and technology park adjacent to its newly renovated airport. The project was expected to create 30,000 new jobs and $350 million in tax revenue. A handful of property owners within the proposed park refused to sell their land to the county – leading to the condemnation actions.

In siding with the property owners, the court overruled Poletown Neighborhood Council v. City of Detroit, 410 Mich. 616 (1981). In that case, the city of Detroit had condemned an entire neighborhood – containing thousands of homes and businesses – in order to create a site large enough for a General Motors assembly plant. In the future, if Hathcock becomes the predominant view, municipalities will find it more difficult to revitalize depressed and blighted areas within their boundaries.

The significance of this decision has been elevated since the U.S. Supreme Court decided to hear an appeal in Kelo v. City of New London, Connecticut, No. 04-108. In Kelo, the Institute for Justice, a property rights organization, petitioned the Court to take an appeal of a decision in which the lower court had upheld the government’s use of its eminent domain power to condemn houses to advance an economic development plan. The Institute’s brief asserts that local governments should not be allowed to use their eminent domain power to condemn property for the benefit of private developers. The Connecticut and Michigan court decisions are squarely at odds.