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The Michigan Supreme Court has overturned a landmark 1981 ruling on eminent domain, a move that now sharply limits the government’s power to seize land in the name of economic development. The state’s high court ruled on July 30 that the landmark case, Poletown Neighborhood Council v. Detroit, 410 Mich. 616, 304 N.W.2d 455, which had allowed for the razing of 1,300 homes and 140 businesses to pave way for a General Motors Corp. plant, violated the Michigan Constitution. The ruling was made in Wayne County v. Hathcock, No. 124070-78, which was dismissed. All seven justices voted to overturn the historic decision, which has been cited favorably in 10 courts nationwide, and long used by municipalities to justify employing eminent domain for revitalization. “It is true, of course, that this Court must not ‘lightly overrule precedent.’ But because Wayne County itself was such a radical departure from fundamental constitutional principles . . . we must overrule 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,” wrote Justice Robert Young, who wrote the opinion. The decision marked a big victory for property-rights supporters who have long argued that municipalities have abused their eminent domain power by seizing property from homeowners and small businesses to turn it over to big companies that can generate greater tax revenues. [NLJ, July 19.] “I’m relieved. [The reversal] makes clear that there was something wrong with the Poletown decision,” said attorney Alan Ackerman of Troy, Mich.’s Ackerman & Ackerman, who represented a group of land owners in Wayne County. “The Supreme Court in this state probably recognized how the factual setting of 1981 should not create law in 2004.” But Poletown supporters disagree, arguing the high court’s ruling now jeopardizes several pending revitalization efforts, and will especially hurt future efforts to revive blighted areas. “I can tell you that if this was the law back in the eighties and nineties and early 2000s, there would have been no two automobile assembly plants in Detroit, there would have been no Fox Theater development, and in all likelihood there would have been no new stadiums,” said attorney Mark Zausmer of Zausmer, Kaufman, August & Caldwell in Farmington Hills, Mich., who represented Wayne County in its recent attempt to seize land and build a high-technology park near Detroit Metro Airport. “I think certainly this will hinder Michigan’s ability to compete for jobs and development when these kinds of projects are jeopardized,” Zausmer added. Attorney John Echeverria, executive director of the Georgetown Environmental Law and Policy Institute, blasted the Michigan ruling, calling it a “a high-handed judicial act” that strips legislatures of their right to determine when eminent domain is appropriate. Echeverria, who wrote a brief in support of Wayne County to the Michigan Supreme Court on behalf of the International Council of Shopping Centers, said the Poletown reversal contradicted and ignored U.S. Supreme Court precedence on eminent domain law. He said a 1954 case, Berman v. Parker, 348 U.S. 260, gave the Legislature broad authority to exercise eminent domain to advance a legitimately defined public purpose-in that case a redevelopment project in Washington. And a 1984 case, Hawaii Housing Authority v. Midkiff, 467 U.S. 229, upheld the Hawaii Legislature’s use of eminent domain to break up a land oligopoly and create a diverse set of property owners. “It’s for the Legislature, not for the courts, to decide these questions,” Echeverria said. “I think the [Michigan] decision is bad social policy and I think it’s bad judgment.” Richard Tranter, who is representing a developer in a condemnation case in Norwood, Ohio, agrees. “I think the Michigan Supreme Court may have just stepped out of line with federal constitutional analysis,” said Tranter of Dinsmore & Shohl in Cincinnati. While Tranter doesn’t believe the Poletown ruling will stick outside Michigan, he warns that anti-eminent domain forces will try to use it to derail revitalization efforts elsewhere.

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