EMINENT DOMAIN, A COURT REPENTS
August 12, 2004
In July of this year, the Michigan Supreme Court struck an unexpected blow for freedom; a decision, which hopefully will restore a little sanity to the raging nationwide debate over private property rights.
For more than two decades now, cities and counties across America have been using their constitutional right of eminent domain to forcibly take private property from its rightful owners, then turn around and sell that same property to other private owners under the pretense that doing so is a “public use”. Over the past couple of decades, this abuse of power has occurred tens of thousands of times.
Local governments have defended their actions by claiming that they were acting in the public’s best interest, because each property so taken was allegedly developed to a higher and better use by the new owners. These forced transfers of ownership were supposedly a “public use,” because they (a) resulted in increased economic development, and (b) resulted in more tax revenue for the local governments.
From the beginning of the Republic, the Fifth Amendment to the U.S. Constitution has allowed the taking of private property by government, provided that the taking was for public use, and provided that the taking was accomplished through due process of law, including paying the owner just compensation for the loss of their property. “Just compensation” has generally meant fair market value in an arm’s length transaction.
The principle behind the power inherent in eminent domain was that no holdout property owner should be able to stand in the way of the construction of necessary public infrastructure by refusing to sell; or by demanding an exorbitant price for their property, thereby extorting money from the taxpayers. eminent domain has always been a bit unfair to the displaced property owner, but properly used it was and is a necessary compromise in the tension between the rights of private citizens and the interests of the public.
The founding fathers recognized the necessity of sometimes forcing a citizen to sell his or her property to the government, because they included a provision for such an event in the Bill of Rights of the U.S. Constitution.
There have been many abuses of eminent domain over the decades. Governments have abused this power to speculate on land for which they had no immediate need; condemning it and then sitting on it till the price went up. Governments have forced people who can’t afford lawyers to sell their property for less than market value. Governments have devalued land by zoning it for limited use, bought it, then rezoned it for a higher use, making it worth many times what they paid for it.
On a broader scale, however, the entire exercise of eminent domain began to go terribly astray, when local governments started using their power to transfer ownership of property from one private owner to another private owner; not taking property for public use, but for the benefit of private investors.
The landmark decision in this debate occurred in the Michigan Supreme Court in 1981 in a case called Poletown Neighborhood Council v. City of Detroit. There the court decided that the City of Detroit properly used its power of eminent domain to condemn nearly 500 acres of residential and business property to sell to General Motors to build a new auto plant.
Located on the 465 acres of land, which was forcibly seized by the city and transferred to General Motors, were approximately 1,400 homes and more than a hundred businesses; all of which were uprooted by the city and forced to relocate. Also, several churches were required to relocate, some forcibly, with armed police officers dragging protesting parishioners away.
Mind you, this condemnation and seizure was not done so the city could build a library or public park, which would have been bad enough. Rather, all of those churches and residential and commercial properties were taken from private owners and sold to another private owner, who merely promised to spur economic development, create jobs, and increase tax revenues to the city.
Since that fateful 1981 decision, courts all across the country have used Poletown as a basis for allowing similar takings in their states. If the owner of a professional sports franchise wanted to build a new stadium and couldn’t find a large enough parcel of land where he wanted to build, no problem. He just called up his friends on the local city council or county commission and asked them to use their right of eminent domain to condemn the property, buy it, and then sell it to him.
Such unconscionable abuse of government power has become commonplace across America.
On July 30th of 2004, however, in a unanimous seven to zero decision, the Michigan Supreme Court reversed itself and tried to make things right, at least prospectively. In a case known as County of Wayne v. Hathcock, the Michigan Supreme Court overturned its own precedent, acknowledged the mistake it had made 23 years earlier, and declared that taking private property to resell it to another private party is not a public use after all.
The court decided that spurring economic development and enhancing tax revenues were not really “public uses” and, therefore, not legitimate or constitutional grounds for taking private property. The justices said in their written opinion that their earlier decision in the Poletown case was a “radical departure from fundamental constitutional principles.”
The justices also wrote, “We overturn Poletown 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.”
Did you catch that? The way I read that statement, a state supreme court said in July of 2004 that it wanted to preserve the legitimacy of the judicial branch of government by returning to the courts’ traditional and constitutional role of interpreting the laws, not creating them.
One can reasonably infer from those words that in those justices’ opinion, a court that creates laws rather than exposits them is not acting legitimately. Conservatives have known that forever, but it is both shocking and refreshing to hear a state supreme court acknowledge it.
Property rights activist, Rodney Stubbs of Salem Oregon, brought another equally important Michigan case to my attention. In a case known as Detroit Wayne County Stadium Authority v. Alibri, one Frida Alibri, was coerced under threat of condemnation into selling her property, so a sports stadium could be built.
As part of the deal, Ms. Alibri was promised that the property would not be sold later to a private party. Notwithstanding the promises made, after the transaction closed, ownership indeed was transferred to a private party. Consequently, Frida Alibri sued to get her property back.
The case went back and forth. The trial court decided that Alibri should get her property back. The appeals court, however, agreed with the Stadium Authority, saying it could keep the property. Ultimately, the Supreme Court decided that the taking was not a legitimate one after all, and Frida Alibri got her property back.
Like the A-Boy Electric case out of Oregon, where the U.S. Supreme Court said that the City of Tigard was wrong when it told A-Boy that they could not build on their property unless they deeded a piece of their land to the city for a public bike or pedestrian path, this was a victory for the little guy.
These Michigan cases are important ones and the decisions should ripple through courts across the country as the original Poletown decision did. The fact that the Michigan justices minced no words in their decision should be a wake-up call to courts across the country that they should reexamine their approach to this important issue.
In reality, what the Michigan Supreme Court decided was just common sense. After all, what meaning is there to the right to own private property, if government has the right to forcibly take that property from you and sell it to someone else, simply because the other party wants to use the property for a higher purpose than you? The very notion fails the smell test.
Hopefully these historic decisions out of Michigan signal the beginning of the end of at least this kind of judicial attack on private property rights. Maybe these decisions are a sign that the courts are beginning to realize that allowing governments to call anything they want a “public use” and then take it makes a mockery of the Fifth Amendment
One can hope. However, I remain a bit cynical. Environmental activists, who are probably the most blatantly socialist of all “respected” special interest groups, and their well-placed friends on the bench, will not easily give up the ground they have gained in this arena; especially in the more urban parts of the country.
Liberals have long realized that they can never build the kind of utopian, socialist society that they envision for America, unless they first gain control the use of private property or eliminate the concept altogether. After all, the right to own private property is the cornerstone of a free society. People who are allowed to own and control property think differently than people who can’t. They are more independent; more self-sufficient; harder to govern; even more willing to risk their lives to protect and keep what they have.
Karl Marx acknowledged as much when he distilled the essence of communism to one thing: the abolition of private property. You cannot easily subjugate a people and make them work for the good of all mankind, when they have the choice to work for their own good and accumulate more stuff for themselves and their families.
The movement to destroy the concept of property ownership in this country is an insidious one. Not only have the radical environmentalists been working overtime through the public schools and through the media to undermine the notion of private property, but many conservatives, including many in the business community, have unwittingly bought their line.
I can’t tell you how many times some conservative friend has asked me to help them stop an “evil developer” from building a bunch of new houses in the field or wooded lot across the street from their home.
These shortsighted conservatives believe in property rights until their neighbor wants to do the same thing with his property that they have done with theirs. Then suddenly, the thought of houses where a wooded lot once stood, blinds them to the principle involved. Without blinking an eye, die-hard conservatives often use the coercive power of government to limit their neighbors right to use his property as he wishes.
It is common today for big retailers like Wal-Mart and Costco to hire an army of lawyers whenever they want a building permit for a new store. Why? Because the local conservative business community routinely uses the power of government in an effort to keep the big retailers out and avoid the competition. The very zoning laws the local businessmen hated when they were trying to build their stores suddenly become valuable weapons for keeping out the competition.
I experienced a real eye opener while giving a speech to a homebuilders group in the Portland, Oregon area. I was railing against Oregon’s oppressive land use system, which is probably the worst in the country, when a well-dressed builder, who looked to be in his thirties, stood to his feet and said, as best as I can remember his words:
Mr. Sizemore, the West was settled by rugged people who crossed the plains and mountains and endured extreme hardship, all in the hope of homesteading a piece of land and someday calling it their own. Property rights were important back then.
But today, he said, the West is settled and times have changed. Today, the very idea that any individual should own a piece of private property is an obsolete one. It is time we began viewing property in more of a community sense, rather than a private sense.
Such a statement may sound shockingly un-American to you. Indeed, it is. Regretfully, however, it is increasingly becoming a common view in this country.
Those who hold to it may or may not know it, but they are playing with fire, for when our government ceases to serve its primary purpose of keeping its citizens secure in their property, it ceases to be legitimate or American.
© 2004 Bill Sizemore - All Rights Reserved
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Bill Sizemore is a registered Independent who
works as executive director of the Oregon Taxpayers Union, a statewide
taxpayer organization. Bill was the Republican candidate for governor
in 1998. He and his wife Cindy have four children, ages eight to thirteen,
and live on 36 acres in Beavercreek, just southeast of Oregon City, Oregon.
Property rights activist, Rodney Stubbs of Salem Oregon, brought another equally important Michigan case to my attention. In a case known as Detroit Wayne County Stadium Authority v. Alibri, one Frida Alibri, was coerced under threat of condemnation into selling her property...