Real Property Issues – Eminent Domain – Is Economic Gain a Public Use?
The American Dream has historically included owning a nice home. But what do you do when the government informs you that it is going to take your home and give it to someone else? Can it even do that?
The government may actually be able to do this. But, this doesn’t leave you without hope or recourse. There are limits to its power. Both the US Constitution as well as the Michigan Constitution require that the property be taken for public use, and that just compensation be granted. The Michigan Constitution actually provides greater protection and compensation than does the Federal Constitution. The definition of public use is also narrower in this state than in some others. That means that before the government can force you to sell your property to them, they must clear a higher hurdle than the US Supreme court sets.
When an ordinary person thinks of the term public use, various examples may spring to mind: schools, parks, roads, etc. However, the Supreme Court has expanded this definition greatly to include taking land from a few owners to give it to many renters, transferring it from one citizen to another if the property in question falls within a blighted area and there is a grand scheme for revitalization, and even taking it to stimulate the economy of a local area. It is this last example that produced outrage in this country and which led to the amendment of the Michigan Constitution.
In 2005 the Supreme Court decided the case of Kelo v. City of New London. The city had been approached by a large pharmaceutical company which wanted to build a new factory and parking area in the economically distressed city. A couple of people did not wish to sell their homes to the company, so the city decided to take those homes by force – by eminent domain. The US Supreme court decided that the economic stimulus to the city constituted public use (by this time the Court was using the term public purpose) and allowed the city to throw Mrs. Kelo out of the charming home where she had spent nearly her entire life, so that a parking lot could be built. In the end the deal fell through, and while Mrs. Kelo did lose her house, the company never built the promised expansion in New London. Everybody lost.
Interestingly, many had predicted that the Supreme Court would decide that economic stimulus was not a valid public use because the Michigan Supreme Court had reached that conclusion only a year before in a remarkably similar set of circumstances. After the devastating outcome of a GM expansion project in the 1970’s Michigan reversed its position and decided in 2004 that economic gain to the community was not a valid public use. It was therefore quite surprising that the Supreme Court decided otherwise the next year in Kelo.
While case law would have prevented a Kelo-type abuse of eminent domain in Michigan, the legislature did not wish to take any chances, and amended the Constitution to prevent it from happening here again. After all, case law can change as the decision in 2004 demonstrated. Now it is unconstitutional for this type of “taking” to occur. However, there are still other ways for the government to take your land for “public use.” While this one door has been closed in Michigan, many others are still open.
If a unit of government is threatening to take your home or property, do not wait until it’s too late. Seek legal help immediately.
For a free consultation call:
Attorney Jillian Sadler
Levitt Law Firm PC
(989) 772-6000
US Constitution 5th Amendment
Michigan Constitution Article 10, section 2
Kelo v. City of New London, 545 U.S. 469 (2005)
Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984)
Berman v. Parker, 348 U.S. 26 (1954)
Poletown Neighborhood Council v. City of Detroit, 410 Mich. 616, (1972)
County of Wayne v. Hathcock, 684 N.W.2d 765 (2004)