Economic Development as Public Use: Why Justice Ryan's Poletown Dissent Provides a Better Way to Decide Kelo and Future Public Use Cases
Federal Circuit Bar Journal, Vol. 15, p. 201, 2005
53 Pages Posted: 24 Jan 2006
Eminent domain is the power of the government to take private property for public use, provided the property owner receives compensation. This power is contained in the Takings Clause of the Fifth Amendment, which states, nor shall private property be taken for public use, without just compensation. Interpretations of the Public Use Clause, and what actually constitutes a public use, have varied considerably among scholars, lawyers, and jurists since the enactment of the Fifth Amendment. The Supreme Court's most prominent public use cases in the past 50 years are Berman v. Parker, Hawaii Housing Authority v. Midkiff, and, as of June 2005, Kelo v. City of New London. These cases demonstrate the Supreme Court's significant deference to governmental decisions to use eminent domain and condemn private property. Specifically, the Midkiff Court stated that such governmental determinations of public use only warrant highly deferential rational basis scrutiny. Under this standard of review, the Court upholds the government's use of eminent domain, provided it is rationally related to a conceivable public purpose.
Although state courts are not confined to the Supreme Court's reasoning, a great majority of states have followed the Court's deferential lead in interpreting their own state constitutions' public use clauses. Until recently, one of the leading state court cases dealing with eminent domain was Poletown Neighborhood Council v. City of Detroit. In sustaining the condemnation of private property to make way for an automobile manufacturing plant, the Michigan Supreme Court held that the potential for economic development, forecasted to result from the retention and creation of jobs, constituted a valid public use. Economic development, in this context, is essentially the creation of jobs and tax revenue from businesses that receive land condemned through eminent domain. Recently, the Michigan Supreme Court overruled Poletown in County of Wayne v. Hathcock. The Hathcock court adopted the rationale of Poletown dissenter, Justice Ryan, holding that economic develoment was not a valid public use justifying the exercise of the eminent domain to transfer property from one private party to another.
The Connecticut Supreme Court, however, still adheres to the deferential Midkiff rationale in interpreting its state constitution's public use clause, subjecting state or local government exercises of eminent domain to a relatively low level of scrutiny. In March 2004, that state's high court held that economic progress trumped the private property rights of some residents of New London, Connecticut in Kelo v. City of New London. The Supreme Court granted certiorari in Kelo and ultimately affirmed the Connecticut Supreme Court's ruling, marking the first time in twenty years that the Court has addressed the public use issue.
Part I of this Note addresses the history of Public Use Clause jurisprudence and the role that the courts play in reviewing exercises of eminent domain. Part II examines the Michigan Supreme Court's decision in Hathcock overruling Poletown, and the Connecticut Supreme Court's decision in Kelo to continue to apply the highly deferential standard of review. It also analyzes the three factors laid out by Justice Ryan in his dissenting opinion in Poletown, which the Michigan Supreme Court ultimately adopted in Hathcock, and their application to Kelo. Part III provides a critique of the Supreme Court's decision in Kelo affirming the state supreme court's decision. Part IV applies Justice Ryan's Poletown exceptions to Kelo. Finally, Part V analyzes the many problems caused by a broad interpretation of public use and blind deference to the legislature.
The debate over the meaning of public use is the subject of a great many scholarly writings. Although this Note addresses that issue, its primary purpose is to analyze and critique the Kelo decision, as well as to provide an alternative rationale to decide Public Use Clause real property cases that is sensitive to the many benefits of eminent domain and the fundamental liberty interests inherent in private property.
Keywords: economic development, public use, kelo, kelo v. city of new london, hathcock, country of wayne v. hathcock, poletown
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