The fifth amendment to the United States Constitution, as well as most state constitutions, provides that private property shall not be taken "for public use" unless just compensation is paid. American courts have long construed this to mean that some showing of "publicness" is a condition precedent to a legitimate exercise of the power of eminent domain. Thus, when a proposed condemnation of property lacks the appropriate public quality, the taking is deemed to be unconstitutional and can be enjoined. In practice, however, most observers today think the public use limitation is a dead letter. Three recent decisions, upholding takings that courts would very likely have found impermissible in the past, support this view.
In the first case, Poletown Neighborhood Council v. City of Detroit, the Michigan Supreme Court approved the city of Detroit's plan to condemn a 465-acre tract of land and reconvey it on favorable terms to the General Motors Corporation (GM) for construction of an automobile assembly plant. GM had previously announced its intention to relocate certain Detroit-based manufacturing operations if the city did not provide a new plant site. The purported public benefits of the condemnation (the "public use") included retaining over 6,000 jobs, preserving tax revenues, and avoiding the social deterioration caused by a declining industrial and population base. The Poletown Neighborhood Council, representing approximately 3,400 area residents whose homes, shops, and churches were to be bulldozed to make way for the plant, opposed the project, claiming it did not satisfy the public use requirement. Over two vigorous dissents, the Michigan Supreme Court held the proposed taking a legitimate public use.
The second case, City of Oakland v. Oakland Raiders, sustained an even more unconventional exercise of eminent domain. The Oakland Raiders professional football team, after failing to renew its stadium lease with the city of Oakland, announced that it intended to move to Los Angeles. The city responded by seeking to condemn the intangible contractual rights associated with the Raiders' franchise, including player contracts. The city apparently contemplated operating the team for a brief period while seeking a private owner willing to keep the team in Oakland. Although not deciding conclusively that the proposed taking served a public use, the California Supreme Court held that neither the plan's exotic object – the intangible contractual rights of a professional sports team – nor the possibility of a resale to a private party precluded an exercise of eminent domain.
Finally, Hawaii Housing Authority v. Midkiff is probably the most important of the three cases, because it is the United States Supreme Court's first pronouncement on the meaning of "public use" since Berman v. Parker was decided in 1954. At issue in Midkiff was the constitutionality of the Hawaii Land Reform Act of 1967, which allows persons renting homes in development tracts of five or more acres to condemn their landlord's interest and thereby acquire an estate in fee simple. A unanimous Court, citing figures suggesting that land ownership in Hawaii is highly concentrated, sustained the Act as a constitutional means of "[r]egulating oligopoly and the evils associated with it," in particular the inability of renters to purchase homes at a "fair" price. 13 Although declaring that courts play a role in enforcing the public use clause, and that a "purely private taking" would be unconstitutional, the Court nonetheless characterized the historical judicial posture as one of extreme deference: "where the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensated taking to be proscribed by the Public Use Clause."
Constitutional Law | Law | Law and Economics | Property Law and Real Estate
Thomas W. Merrill,
Economics of Public Use,
Cornell L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/370