St. John's Law Review

Are You Still Master of Your Domain? Abuses of Economic Development Takings, and Michigan’s Return to “Public Use” in County of Wayne v. Hathcock

By: Peter M. Agnetti

One of the most awesome powers of government is the ability to condemn and take privately owned property through eminent domain. Over the past few decades many state courts and legislatures have come to interpret the state and federal Public Use Clauses in a manner that allows state and municipal governments to condemn and take private property for virtually any reason, as long as there is a somewhat rationally stated economic benefit in store for the government fisc. Indeed, such a rationale was recently endorsed by the U.S. Supreme Court in Kelo v. City of New London—any protection against economically motivated government takings that primarily benefit other private entities, also known as economic development takings, must now come from the states through legislative or judicial means. Despite the trend among state legislatures expanding the traditional meaning of the Public Use Clause, several recent state court decisions have successfully reined in expansive executions of eminent domain power.

In that same vein, the Michigan Supreme Court, in County of Wayne v. Hathcock, has seemingly given hope to private owners of real property by providing a “public use” standard for economic development takings. The court held that Michigan municipalities do not have the power under the state’s Public Use Clause to condemn private property for the purpose of transfer to another private party in order to spur economic development, except under exceptional circumstances. However, the court left open the issue—which is facing states nationwide—of what standard should be applied to economic development takings effectuated under the ruse of opportunistic classifications of property as “blighted.”

This Comment asserts that takings that do not fall within one of the limited exceptions outlined by the Michigan Supreme Court, and that primarily benefit a private entity at the expense of owners of non-blighted private property, not only fail to pass constitutional muster but also work in an economically inefficient manner so as to perpetually threaten all ownership of real property in the United States. The Comment also addresses and offers solutions to the widespread abuse of economic development takings done pursuant to blight designations, especially in the wake of Kelo.