This Court Gets Property Right
by Bill Sizemore

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 imminent 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 travesty 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, which supposedly (a) resulted in increased economic development, and (b) resulted in more tax revenue for the local government.

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 also provided that the taking was undertaken through due process of law, including paying to 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 imminent 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 and thereby extort money from the taxpayers. Imminent 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 unabashedly limited government founding fathers obviously 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 this power by government over the past two centuries, but the entire imminent domain thing went terribly astray when local governments began using that power to transfer ownership of property from one private owner to another private owner.

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 imminent 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 imminent 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."

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.

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.

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