Poletown Overturned

Terrific news from Michigan: The state Supreme Court has reversed the infamous Poletown decision of 1981. In that case, the court allowed the City of Detroit to seize an entire neighborhood so GM could build a plant; it helped pave the way for the widespread eminent domain abuse of today. With County of Wayne v. Hathcock, the earlier ruling is overturned -- "in order," the court writes, "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."

That comes too late for the people of Poletown, where over 1000 homes, over 600 businesses, and a vibrant community were destroyed. But it sets an important precedent for the future.

The Institute for Justice has more about the case here. You can read the court's decision here.

Comments

[Jennifer]

Hopefully this will help, but I still think the best way to end eminent domain abuse is to pass a law stating that any property condemned through eminent domain must be redeemed at ten times its market value. Well, maybe five.

[Skeptikos]

Here is a link to the Detroit Free Press article about this, http://www.freep.com/news/mich/land31_20040731.htm(thanks to http://obernews.typepad.com/)

Check out the quote by Professor Mogk ?Any limitation on the power of eminent domain will reduce the chances of the city accomplishing those kind of projects," Mogk said. "No other city with which Detroit competes has such limitations placed upon its ability to acquire tracts of land for future development?

Any limitation!!! Jeez, who woulda known, a prof supporting statist landstealing. Isn?t that a tad bit Leninist. I mean ?Any limitation?.

Shit disturber that I am, I?ve already dragged out his e-mail and sent a very polite (really, very civil and polite) e-mail asking if he really meant ?ANY?.

[Skeptikos]

Oh, and Jennifer, do you include abandoned apartment buildings that are home to crack dealers too? (Like the kind we used to have a lot more of here in Chicago) I hate the way ED is used, but your standard seems as radical as Prof Mogk. And it also may be why so many people ignore us when we talk about this issue.

[matt]

Emminent domain itself is evil as far as I'm concerned. Whether the government decides to take my land for some "public purpose" or just plans on handing it off to some big corporation makes no difference to me. Either way my property has been confiscated and there's not a whole lot I can do about it.

[Skeptikos]

Matt same question to you.

Even when you abandon it?

[Skeptikos]

I think people use the word evil a little too easily. Like say that guy, you know him, GW Bush. Maybe a Islamic fundi pissing on an infidel perhaps. ED is like so many other things in this life. It has been used to do evil, but it itself about as evil as gunpowder.

[Brett Bellmore]

No, it's evil. Maybe sometimes a necessary evil, but still evil. Forget that, and it gets used when it's not even remotely "necessary".

And this decision has NOTHING to do with "abandoned" property. It has to do with what they're confiscating the property FOR. The state constitution lets governments force sale of property for public purposes. The Court simply ruled that selling the land to another private owner is NOT a "public" purpose.

[Andrew D. Todd]

I am not really very interested in real estate.

What I do find more interesting is the possible application of eminent domain to intellectual property rights. Intellectual property rights are rather dubious sorts of property rights, since they consist exclusively in the right to enforce a monopoly upon the public. Thomas Jefferson rejected them, root and branch.

One current example is the SCO-IBM-Red Hat-Novell-Autozone-Daimler Chrysler case, presently going on in Utah and elsewhere. I refer you to Groklaw for the full details.

http://www.groklaw.net/

As nearly as I can determine, SCO's case is comprehensively meritless, but SCO is systematically abusing legal procedure in an attempt to sabotage Linux. The general consensus is that, by channels which have not yet been documented, SCO is being paid to do so by Microsoft. SCO is, demanding, pro forma, a royalty of $695 per computer, but people who have attempted to buy such a license, with a view to getting SCO to accept money on false pretenses and lay itself open to eventual prosecution, have found that SCO will not take their money. The components which SCO claims to own represent only a small portion of an operating system, and, based on Microsoft pricing, a fair market value would be about five or ten dollars, complete with an understood obligation to provide certain maintenance services. Say, about ten cents, net, or twenty million dollars for the entire country, under the most optimistic computation. On that basis, SCO would be bankrupt forthwith. SCO is effectively in the position of Shylock in Merchant of Venice, demanding a pound of Antonio's flesh "because it is my humor." If SCO's copyrights could be eminent-domained under "quick-take" procedure, and then, public-domained, eminent-public-domained for short, then SCO would loose all standing to sue anyone but the eminent-domaining party. Additionally, the publication of the SCO source code would very probably result in large numbers of people coming forward with evidence tending to diminish SCO's claims. Eminent domain would short-circuit SCO's legal manipulations, forcing them down to the bottom line. Furthermore, the "reduction of disinformation" would most like result in SCO's officers being indicted on securities fraud charges and fleeing the country.

[Skeptikos]

Brett, No this decision is not about the "abandoned" properties issues. I was overjoyed when I heard about this decision. It was about time that some state court finally noticed this.

But the abandoned property issue does have to do with the concept of ED as evil. I am sorry, molesting children is evil. Beating your wife is evil. Castro is evil. ED is a tool, often abused and used in evil ways, but to call it evil, is too merely cheapen the word evil.

[matt]

Skeptikos,

Taking my property without my permission is called theft. Yes it is evil. It doesn't matter if the government or a group of private thugs are doing the taking. Theft is theft.

If I abandon my property then it is no longer mine. I don't think that necessarily makes it the government's property either. Someone else, it seems, could claim ownership of it. But that's not really the issue here.

[Jennifer]

Skeptikos-
This business of taking over abandoned buildings to produce tourist shopping areas probably adds to the urban blight problem overall. Consider-- as things stand now, if one house on my block is abandoned, that increases the chance that the government will step in and give the whole freaking neighborhood to some pedestrian-mall developer, so what incentive do I or my neighbors have to stay in an area that is likely to be condemned?

It's one thing if my home is taken away because I happen to possess the only piece of property where, say, a vital defense bulwark can be built to save our country from an invader. It's another thing entirely if my home is confiscated to make some rich corporation richer. Forcing eminent domain to pay far more than a property is worth will make it less likely to be abused, and more likely to be used only when it is absolutely necessary.

[Jennifer]

Skeptikos-
One other thing. I am not a lawyer, but I know that if I decided to build and use an outhouse in my backyard I could get in trouble for endangering my neighbors, or at least damaging their chance to derive full enjoyment of their property. I don't know what the exact charge against me would be, but I know that my property would not automatically be condemned and sold to a buddy of the City Council. Whatever laws prevent me from building outhouses in a suburban neighborhood could likely be used against those whose decaying buildings endanger urban neighborhoods, as well.

[Mona]

I'm very pleased by this. During law school, I moderately surprised people in Property class by volunteering to argue against the corruption of eminent domain the Poletown case represented. ("Her? She's a libertarian, and aren't they always for business and against the little guy?")

[Don]

The Michigan court decision said that the Constitution's validity derived from the fact that it was ratified by the people. Therefore, the meaning of the language in the Constitution should be what the average joe at the time of ratification would have understood. They then said that the Poletown decision derived from an unnatural interpretation of the phrase "public use" -- not the kind of thing that would have occurred to the average joe (even as augmented by knowledge of the case law of the time). Therefore, they concluded, the Poletown decision was invalid.

That was the Michigan court. But what if the U.S. Supreme Court used the same approach in deciding what the phrase "regulate commerce among the several states" means? It's this magic little phrase that's used to justify an enormous amount of what Congress does. At some point (1930s), the Supreme Court decided this phrase is equivalent to "regulate anything that REMOTELY AFFECTS commerce among the states". You want to grow hay to feed your cows? Congress can set limits on that, because it affects how much hay or cows you might cause to be transported across state lines. Half the federal government hangs on this overstretching of the language.

But the Michigan people said that the language of the (state) Constitution depends on what the average person ("We the People") would have thought at the time of enactment. You can see that if the U.S. Supreme Court thought the same as the Michigan court, it would be a near revolution. Vast swaths of what Congress has done would be held to be invalid. Anyway, further extension of the federal government could be stopped, and legal challenges could possibly be mounted against past abuses.

Here is where it might pay to vote for George W. Because, for whatever other faults he possesses, I think he'll tend more to appoint judges in the Michigan style -- even if unintentionally. It could have tremendous implications.

[Skeptikos]

Matt, First to your exception. Yes. And I have actually lived in a hood that it was extremely violent thugs that took over such a building. The city of chicago used ed to tear the building down. Frankly your exception to my statements is deliberaltly avoiding the issue.

Jennifer, interesting, but not probable, those same laws would essentially rely on the core concepts of ED, this is something I have studied, and it always leads back there.

And, since you both feel so strongly about ED, may I assume you are A. Going back to your countries of orgin and returning the land you live on to the first americans. or B. You are indeed the first americans that had the most horrid case of ED used against them. If you truly feel your arguement is correct, and are not descended from first americans (what you might call Indians) you would of course feel the land should be returned back to it's documented rightful owners. I am refering to the various treaties, and no abstract pie in the sky dreaming.

[Skeptikos]

I apologize for the crude retort I just offered, however your stances seem to be no less reactive than Prof Mogk. strong supporter of ED.

[Jennifer]

Joe-
That was my idea, and I never claimed to be a hard-core libertarian.

[drf]

Skeptikos:

do you remember the crack house at division and orleans they tore down back in the summer of 1999? right before they fixed up seward park and began tearing down the highrises of cabrini green (where that awful show "good times" was supposed to take place)?

tim sandefur (sandefur.typepad.com/) has some good thoughts on this. "highly recommendable" site!

cheers,
drf

[Skeptikois]

I probably was overreacting and not making my point. 1. 90% of the ED cases I am aware of fall into the evil category. 2. Much of my attention to the topic does come from a perspective of the Government that governs least, governs best. 3. I would love to see an end to abusive ED applications. 4. I do consider myself a hardcore Libertarian, put a practical one, who would like to see some real gains made. 4. I don't see any serious possibility of actually ending ED. 5. The only solution, almost an AA sort of thing, is to figure out what I can effect, and what I cannot not.

So I conclude that the chances of ending ED in my lifetime are so close to nil, even discusing it is a bit of solopism. But I can do my best to bring a view of justice to it. Which is why I was so happy about the Michigan courts movement.

The problem I have with many of the arguements I have read here, is that they resemble the far left view of guns. If a person is murdered with a gun, that means guns are evil. I find those style of arguements just to dishonest to entertain. Apologies for the wordiness.

And PS, Prof Mogk has not yet responded to my queries to the nature of a government without limits.

[thoreau]

Actually, there's a very good reason to pay above market price for homes claimed under ED:

The market price of a home is the price that buyers and sellers agree on when the seller was planning to sell anyway. Nobody sells a home just so that he or she can get market price and move into a comparable home in a comparable neighborhood. People usually sell for one of the following reasons:
1) Personal or professional factors necessitate a move.
2) They want/need and can afford a better home.
3) They want/need the cash from the sale and are prepared to move into less expensive housing.

People who had no plans on moving generally need more than the market price to coax them out of their home. And it isn't just irrational stubbornness. There are costs to moving. Some are easily quantifiable (moving vans, administrative costs of buying and selling, lost wages from time spent house-shopping and moving, etc.). Some are less quantifiable--it's difficult to quantify the dollar value of hassle or emotional attachment (although I suspect that some economist somewhere has found a good way to approximate those costs).

Compensating a home owner at above market rate recognizes ALL of the costs incurred when he's forced to move, not just the cost of a replacement home elsewhere. I think a rule of 1.5x to 2x market rate would be eminently reasonable (pun intended). It would probably make the process of ED both easier (fewer home owners will go to court if they're offered more money) and rarer (upping the price tag will hopefully cause policymakers to take a more careful look at the alleged public interest at stake before they invoke ED).

Finally, I should add the obvious disclaimer that I'm not actually defending the principle behind ED, I'm simply suggesting a fairer/less unfair (take your pick) way of going about it.

[Jennifer]

Skeptikos-
The descendants of the original owners of my home now operate Foxwoods Casino and have more money than they know what to do with. They wouldn't live in my home if I paid them to do so. Nice try, though. Please don't confuse Eminent Domain with the Statute of Limitations.

The problem with ED for condemned buildings is that it is not just that building which is condemned, but the entire neighborhood. Do you think your home shold be confiscated because your neighbors down the street are slobs?

[joe]

Jennifer, ED is often used on individual buildings. The IJ is a good source, but they do slant the truth for their purposes, and you'd be best off enriching your understanding of the issues by expanding your base of information.

Must work. Be back.

[R C Dean]

Well, if violent thugs have taken over a building, why not arrest the thugs, rather than the building?

Truly abandoned property cannot be taken from its owner because it is ownerless.

[joe]

In practice, thoreau, most owners facing condemnation end up settling for above market value, plus relocation expenses. It's worth the extra money to the government to avoid the legislation and get on with it, and the owners realize that waiting for a verdict would leave them with a lower selling price.

[Russ D]

I am not perfectly versed in the abandoned property eminent domain cases in Chicago that Skeptikos writes of, but I know that the city originally tried to take the properties over because of tax delinquency. This would have been outright taking of the property rather than compensating the owner with fair market value ED usually requires.

[matt]

Skeptikos:

My exception? I'm not sure how I'm avoiding the issue. The issue is: should the government be allowed to take my land without my permission? I say no. Theft by government is still theft after all. And it was you who brought up the abandoned buildings side issue, not me.

[Richard]

Eminent Domain is evil. In St Charles, IL, there is a very nice family restaurant, the Manor, established many years, but the river. Our family loves eating there. Kids are welcome, the food is excellent and reasonably priced, the staff friendly.

Now the city - on behalf of some connected businesspeople, no doubt - wants to use eminent domain to seize it, boot out the owner, demolish it and turn it into trendy gift shops and probably a Starbucks. Maybe that would result in more sales tax revenue so the city officials could update their Crown Vics to the 2005 model with emergency package.

This is America - not Soviet Russia. This should not happen here.

[joe]

Lot of babies going out with bathwater here - which is not surprising, since IJ is trying to create exactly that outcome by conflating two unlike things.

There are four issues here.

1) Should the government be able to take property for a public use, with compensation? The Constitution says yes, Matt (who as an anarchist, has no use for a document that creates a government) says no.

2) Is a public purpose (for example, ending blight or removing a nuisance) that does not involve public ownership of the land taken count as a public use? The SCOTUS and Michigan Supreme Court say yes.

3) Does promoting economic development count as such a public purpose? If so, when? In general, a taking that allows for greater economic development in an area suffering because of some situation that retards development is considered Cosntitutional. There's a lot of judgement call on this, and cases are decided based on the facts.

4) Does the profitability of a private business (and job creation and tax payments and other reasons we heart corporations) count as a public good, when the corporation is big enough to create lots of jobs and pay lots of taxes? Poletown says yes, Michigan Supreme Court now says no.

IJ is trying to conflate points 2, 3, and 4, by saying that since the specific public purpose pointed to in the Poletown case doesn't satisfy the Constitution, that NO public purpose that doesn't involve government ownership can satisfy the Takings Clause.

[joe]

Richard, is ED still evil when the riverside property is being taken to build a bridge?

Follow up: if condemning land is ok for public roads, what does that mean for the libertoid dream of privatizing roadways?

[Jennifer]

Joe-
I grew up in Virginia, where ED abuses ran rampant long before they became a national issue. I personally can list a few situations wherein an entire neighborhood was ED'd, not to build a public highway or a military base, but some private development. Usually what happened was that, say, 600 el cheapo houses were condemned and replaced with a hundred deluxe condos that the former poor homeowners couldn't possibly afford. I know of several cases where entire neighborhoods have been ED'd to build a Wal-Mart or a pedestrian mall; I know of no instances of a single house being ED'd for a similar reason. I'll agree that ED is necessary in some cases, but NOT for private ownership.

[joe]

I know of those situation too, Jennifer. My point was that ED is not exclusively used in that manner, and therefore that criticisms of cases like that should not be thought of as applying to ED, or even private-to-private ED, as a whole.

RC tries to weasel out of the question with, "Truly abandoned property cannot be taken from its owner because it is ownerless." Unfortunately, we don't have a legal status for "truly abandoned property." Either the government's name is on the deed (making it public property), or a private party's name is on the deed. Your argument is a moral one, RC. For government action to be based on it, you have the government taking property it doesn't own.

[joe]

"the best way to end eminent domain abuse is to pass a law stating that any property condemned through eminent domain must be redeemed at ten times its market value.'

Real friend of the taxpayer, you libetarians.

[Skeptikos]

Not that any body is still following this thread, however Prof Mogk of Wayne State University who said this "Any limitation on the power of eminent domain will reduce the chances of the city accomplishing those kind of projects," Mogk said. "No other city with which Detroit competes has such limitations placed upon its ability to acquire tracts of land for future development." here http://www.freep.com/news/mich/land31_20040731.htm,
Had this answer to my querie concerning "Any limits"...

The reference to any limitation referred to a limitation beyond that
which
already exists under the law. When private property is taken for a
public
purpose and recoveyed to a private entity the action is subject to
heightened scrutiny under the Poletown test that the public purpose is
predominent and appropriate. Any did not mean any outside of current
legal
limitations.

Nice sidestep, but not convincing. I will credit him with answering me however, I do apprediate that, even should I decline to credit his answer.

[Bart Didden]

I AM VERY EXCITED ABOUT THIS DECISION!

I AM BEING EXTORTED AND MY PROPERTY HAS BEEN TAKEN 3 1/2 MONTHS AGO AND HAVE NOT RECEIVED EVEN ONE CENT YET!

CHECK OUT MY STORY ON MY ISSUE WEBSITE http://www.cvs4pcny.com or http://www.ourlawsuit.com

[Alan Krigman]

I just sent the following to the Philadelphia Daily news for consideration on the paper's "Opinion" page. The topic is hot in Philadelphia because of the city's Neighborhood Transformation Initiative. Under this program, blighted areas are being taken by eminent domain with the intent of turning them over to private developers. Note that condemnation of property that's "blighted" because it's inherently hazardous is allowed in the new Michigan decision. The wicket gets sticky when viable properties are mixed in with blighted buildings, and the city wants to clear a whole tract so it will be attractive for development.

Test of submitted letter follows:

Many low- and moderate-income Philadelphia residents have been rightly worried about the city's use of eminent domain. This legal principle lets a government body acquire real estate "for public use" at what is essentially fair market value, even if the owner doesn't want to sell. Eminent domain is important in Philadelphia today principally because of the Neighborhood Transformation Initiative. At issue are viable buildings or vacant lots in nominally blighted areas at prices that may, indeed, represent fair market value but aren't enough for the owners to buy comparable replacements.

The trend during the past several decades has been to define "public use" increasingly broadly. Interpretations of this phrase such as "for public benefit" or "for the greater good," have often been accepted. A decision just rendered by the Michigan Supreme Court may now halt that trend.

In the case at hand, Wayne County wanted to take land and sell it to a developer who would build a high-tech industrial park. The County argued that a "public purpose" would be served through greater real estate tax revenues and job creation. The Court agreed that the facility would provide a public benefit, but found that the project was not a "public use" and therefore violated the specific conditions for "takings" in the Michigan Constitution ? conditions which appear in identical form in the US and most state, including Pennsylvania's, Constitutions as well.

This decision will force government entities to substantiate the public use requirement of eminent domain. This may be impossible in some Neighborhood Transformation Initiative situations when property is turned over to a private developer. However, people who believe they can now keep their homes in areas identified for Neighborhood Transformation Initiative revitalization should bear two caveats in mind. First, the Michigan Court specifically allowed condemnation of property so blighted that it threatened health and safety, recognizing that the protection afforded by seizure and demolition is a public use, regardless of its subsequent disposition. Second, if the property is taken for purposes such as parks or schools, or is to be developed and ownership retained by a government agency such as the Philadelphia Housing Authority, or by a tightly regulated utility, the public use requirement is satisfied.

Alan Krigman
KRF Corp
211 S 45th St
Philadelphia PA 19104
215-349-6500

[David Nieporent]

I don't understand why some people keep talking about "abandoned buildings." If the buildings are truly abandoned, then there's no owner to buy from. If the people who are using the word "abandoned" simply mean empty and unused (and presumably neglected), why not say so instead of saying abandoned?

And if the buildings are empty and unused, why not just buy them from their owners rather than taking it from them by force and then "compensating" them for it? Are there many owners of completely worthless, unused buildings that are unwilling to sell them? After all, the owners are paying property taxes on these worthless buildings, making them net negatives for the owners.

Skeptikos: if the building had crack dealers, why weren't those dealers arrested? Moreover, there's already a public nuisance theory that lets government act when a situation like that arises; ED has nothing to do with it.

As for the silly question about Indians: if you can find any "documented rightful owners" of my house, let me know. You may have trouble with the documents and the owners part, though; a history book that says that X tribe lived in the area is hardly a document demonstrating ownership of this particular parcel of land.

[kevrob]

But the Michigan people said that the language of the (state) Constitution depends on what the average person ("We the People") would have thought at the time of enactment.

Libertarians and conservatives, and others whose idea of a strict reading of the Constitution, usually apply either or both of two styles of interpretation. The first is a textualist approach that relies on the commonly accepted meaning of terms at the time they became part of the document. The second is "original intent," where the interpreter tries to discover what the authors meant by accessing the debates, discussions and writing leading up to ratification of the Constitution and its amendments. Nothing prevents a reader from combining these methods. Also, sometimes a common meaning would be preferred for a term, while another word or phrase may have been an already existing legal term - habeus corpus, frex.

What I like about the Michigan Court's attitude is that it mirrors what I have said to originalists for years. One can't look only to the intent of James Madison, or the 55 members of the Constitutional Convention, or even the writings of the triumvirate that gave us The Federalist Papers. One has to consider the objections of the proposed new arrangement's critics, in other words, The Anti-Federlist Papers, and read Jay, Madison and Hamilton as answering their arguments. The same process took place in the state ratification conventions. Opponents objected, and the proponents answered, trying to allay fears and promising adjustments to gain support. That is how we got the Bill of Rights, including the Takings Clause, in the first place. If I had my druthers, originalists would be trying to find out what voters in their local tavern were saying about the Constitution, before electing their local delegate to the state convention. They were, in their own way, Framers, too.

Kevin
(IANAL)

[kevrob]

...others whose idea[s support] /o/f/ a strict reading..

The Anti-Feder[a]list Papers..

I must get my typing fingers fixed. 🙂

Kvein

[David Nieporent]

KevRob, that approach is often known as "original understanding," though unfortunately sloppy/ignorant comentators often fail to differentiate it from "original intent."

[Robert]

I agree that some people are tossing the baby with the bathwater here.

Personally I think the "best" use of ED (if I can even say something so horrible) would be the local government's need to place a firehouse/police station/etc. in a new (or expanding) residential housing district. In this case, the placement is critical, and the landowner may not want to sell. Your unwillingness to part with your property (at a fair price) is considered less (in this case) than the public need to have a fire department centrally located to the fire district.

I've never seen a "public need" for a Wal-Mart, much less a critical piece of land for the only possible placement of said Wal-Mart.

In the case of confiscating private land to give to another private citizen, I can't think of a "good" reason for this. Maybe the concept of "blight" and/or "abandonment" but both of these seem to be abused far too often to be accepted.

Perhaps if the Government were to mark/denote these cases, and specifics (to resolve the situation), and give the landowner 6-12 months to alleviate the situation before ED applied? Of course if they change the criteria, they restart the time (a new 6-12 months). In many cases the "blighted" or "abandoned" land was lived on, and seemed in generally good repair. The marking of the land as "blighted" was just a convenient way to avoid ED...

Tough choices on how to properly handle this, but a good call reversing Poletown.

Robert