Commentary: Redefining 'public use' after the fall of Poletown

Three weeks ago, the Supreme Court of Michigan, in County of Wayne v. Hathcock, smashed an icon of politically connected developers and bureaucracies fixated on economic development when it overruled its 1981 decision in Poletown Neighborhood Council v. Detroit.

The 1981 decision was described in one law journal as holding that the state constitution did not bar the city of Detroit from condemning a neighborhood inhabited by persons of Polish ethnicity to facilitate the construction of a privately owned General Motors factory. New jobs and economic growth, said the 1981 decision, were enough to allow the municipality to facilitate the transfer of property from one private party to another.

In fact, the 1981 decision found a place in numerous cases across the nation and in over 200 law journal comments. As recently as 2003, a law professor cited it as one part of a trilogy of cases that provided little or no protection to property owners.

Just this year, the Connecticut high court, in Kelo v. City of New London, termed Poletown a landmark case in the use of eminent domain. The Connecticut court used Poletown to inform its decision that, according to the Wall Street Journal, upheld a bid by the city of New London to seize some perfectly fine waterfront homes and replace them with [a privately owned] office building.

On July 30, however, the Supreme Court of Michigan dismantled the 1981 precedent. Not only did Hathcock reverse Poletown, but the 1981 dissenting opinions were venerated. Hathcock has made Poletown an historical hobgoblin in eminent domain law.

Hathcock, in overruling Poletown, specifically applied the Michigan Constitution which, like Maryland's, only allows condemnation for public use. Hathcock held that public use for condemnation purposes is not demonstrated by vague economic benefit stemming from a private profit-maximizing enterprise.

Hathcock surely is predicated on state constitutional provisions. But, so was Poletown. Hathcock, of course, does not impair taking, for just compensation, for legitimate public use, i.e., building a public road or a public school or a public park. But, scorned now is the 1981 wink at taking from one property owner, by forced sale through condemnation, to shift property to a preferred profiteer.

Nor is Hathcock a lone harbinger of vitalized private property rights. The Supreme Court of Illinois in SWIDA v. National City Environmental, in 2002, refused to allow a development authority to take, by eminent domain, a landfill's land to convey the taken property to an adjacent auto racing facility for parking. The Illinois decision determined whether [the taking] achieves a legitimate public use pursuant to constitutionally exercised police power of the government and, therefore, whether eminent domain powers - were improperly exercised in taking of private property from one private entity for the benefit of another private entity.

The Illinois court rejected the taking. It would not condone the transfer of property to a private party for a profit when the property is not put to a public use.

The Illinois court recognized SWIDA's mission to promote development, but, the court wrote, that this goal must not be allowed to overshadow the constitutional principles that lie at the heart of the power of eminent domain.

Maryland - like Illinois and Michigan, the states discussed above - allows, by its constitution, taking of private property, upon payment of just compensation, for public use. The Poletown polemic was never cited by a Maryland appellate court. Regardless, those charged with economic development in Maryland - particularly in Baltimore - have been motivated by the mind-set that drove Poletown.

Look, for example, at MCC v. Chertkof, where in 1982, the Court of Appeals of Maryland exhaustively articulated when the city of Baltimore could use eminent domain for private benefit. Surely, the development of Baltimore's West Side, in conjunction with the restoration of the Hippodrome Theater, caused issues of taking of property from one private owner for the ultimate benefit of other private entities.

The Maryland examples reflect reports of national events. On July 4, a 60 Minutes rebroadcast had Mike Wallace say: Cities across America have been invoking eminent domain to force people off their own land so that private developers can build. - In Norfolk, Va., a family auto parts facility fights redevelopment which demands its property for extra parking for a Coca-Cola plant. In New Jersey, the fight involves North Bergen's attempt to condemn existing stores to allow construction of a Home Depot. In Kansas, the judiciary upheld the taking of private property for a retailer's distribution center.

During the 2004 session of the Maryland General Assembly, legislation to affect compensation in condemnation proceedings was introduced, but amended.

What was enacted, as Ch. 446, 2004 Laws of Md., was the authorization of a Task Force on Business Owner Compensation in Condemnation Proceedings. The task force, now apparently in formation, has, by law, six specific tasks. One is to illume the circumstances in which condemnation can be used.

The task force is not on an accelerated path. Its report is not due until December 2005. Its composition is yet undisclosed.

Decisions such as Hathcock will shed light on the circumstances in which condemnation can be used. So, too, will be whether the U.S. Supreme Court grants certiorari in Kelo, the 4-3 decision from Connecticut, described above.

If the nation's highest court takes Kelo, Hathcock will undoubtedly be drawn into play in the Court's analysis of public use takings. If the nation's highest court ducks Kelo, Hathcock nevertheless will have dislodged a support for governmental takings, and the fight to define public use will continue in the several states.

M. Albert Figinski is a partner in the Baltimore office of Saul Ewing LLP and a former circuit judge in Baltimore City.

Those charged with economic development in Maryland - particularly in Baltimore - have been motivated by the mind-set that drove Poletown.

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