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Poletown Lives Essays

The Political Economy of Public Use in Poletown: How Federal Grants Encourage Excessive Use of Eminent Domain

29 PagesPosted: 10 Jan 2005  

Date Written: February 2005

Abstract

This article argues that the use of eminent domain that was at issue in Poletown [304 N.W.2d 455 (Mich. 1981)] was flawed by fiscal constraints. The funding for the project, which leveled a thickly-settled neighborhood of Detroit in order to build an automobile plant, was provided almost entirely by the federal government. I argue that it is unlikely that the city of Detroit would have undertaken the project if it was required to raise its own funds to finance it or if the money had been given to the city by the federal government to do with as it pleased. The Michigan Supreme Court's intentions in Hathcock [684 N.W.2d 765 (Mich. 2004)] to forestall the use of eminent domain for Poletown-like economic development would be better served by an inquiry into the nature of the financing of the projects than a categorical ban on them.

Keywords: Eminent domain, public use, takings clause, local taxes, intergovernmental grants

JEL Classification: K11, H7

Suggested Citation:Suggested Citation

Fischel, William A., The Political Economy of Public Use in Poletown: How Federal Grants Encourage Excessive Use of Eminent Domain (February 2005). Available at SSRN: https://ssrn.com/abstract=645402 or http://dx.doi.org/10.2139/ssrn.645402

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The Death of Poletown: The Future of Eminent Domain and Urban Development after County of Wayne V. Hathcock

9 PagesPosted: 8 Aug 2005Last revised: 5 May 2014

Adam Mossoff

George Mason University - Antonin Scalia Law School, Faculty

Abstract

In Kelo v. City of New London, the Supreme Court held that economic development is a public use under the Fifth Amendment, but offered property owners some solace in federalism. Justice Stevens noted that many States already impose 'public use' requirements that are stricter than the federal baseline, citing the Michigan Supreme Court's 2004 decision in County of Wayne v. Hathcock. In Hathcock, the Michigan Supreme Court unanimously reversed its famous 1981 Poletown decision, handing down a bright-line rule that economic development is not a public use under the eminent domain provision in Michigan's constitution.

But was Justice Stevens justified in citing Hathcock as an example of a stricter limitation on the use of a state's eminent domain power? This essay suggests that he may not have been. Using the failed takings revolution to frame its analysis, this essay examines how bright-line rules typically become nullified in practice by alternative standards-based regimes. In regulatory takings, this occurred with the narrowing of the 1992 Lucas rule and the reaffirmation in Lingle v. Chevron (2005) that the standards-based Penn Central inquiry is the primary legal test for a regulatory taking. Something similar may occur under Hathcock, because the Michigan Supreme Court identified a standards-based exception to its bright-line rule prohibiting economic development in the use of eminent domain power - blight removal. As a standards-based legal regime, blight doctrine provides substantial discretion to local authorities in determining if property is blighted. Courts routinely defer to these policy judgments by public authorities. The result is that this standards-based exception may ultimately swamp the bright-line rule - economic development may continue with the aid of the state's eminent domain power under the rubric of blight removal. If this occurs, then Justice Stevens's paean to stricter state rules is mistaken, and property owners in Michigan and in the other states that have adopted blight exceptions to prohibitions on economic development are no more safe under their state constitutions than under the federal constitution.

Keywords: eminent domain, Fifth Amendment, public use, takings, Kelo, Hathcock, Poletown

Suggested Citation:Suggested Citation

Mossoff, Adam, The Death of Poletown: The Future of Eminent Domain and Urban Development after County of Wayne V. Hathcock. Michigan State Law Review, p. 837, 2004; MSU Legal Studies Research Paper No. 03-02 . Available at SSRN: https://ssrn.com/abstract=775885

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