A Gleeful Obituary for Poletown Neighborhood Council V. Detroit

TL;DR: The case of Poletown v. Hathcock as discussed by the authors was a major victory for property owners not only in that state, but, indirectly, throughout the United States, leading to a rash of condemnations benefiting private parties.

Abstract: The Michigan Supreme Court's decision in Wayne County v. Hathcock, (1) overruling the infamous decision in Poletown Neighborhood Council v. Detroit, (2) represents a major victory for property owners not only in that state, but, indirectly, throughout the United States. The earlier decision greatly broadened the scope of the eminent domain power, enabling government to seize land for the benefit of private corporations such as General Motors, instead of for "public use," as the text of the state constitution required. In the years following Poletown, many state and federal courts embraced a similar theory of the "public use" clause, holding that any use the legislature declared to be a public benefit qualified as a public use. (3) The result has been a rash of condemnations benefiting private parties. The Hathcock court's decision to overrule Poletown vindicates an important legal principle to protect people from what the founding fathers called "the mischiefs of faction." (4) It sends a clear message to other courts that the abuse of eminent domain must be stopped, and that the government's power to seize property must be limited by effective constitutional restraints. As the United States Supreme Court considers the subject of eminent domain this term, an examination of this most famous of eminent domain cases is especially timely. (5) This article discusses the background and importance of Hathcock, and some of the important matters that must be addressed to further rein in the extreme government power of eminent domain. Part I describes the history of Poletown and its demise. Part II discusses Hathcock and its effect. Part III suggests the next steps that must be taken to restore the public use limitation as an effective brake on the condemnation power. I. THE STORY OF POLETOWN V. DETROIT A. The Litigation of Poletown In the early 1980s, high oil prices, inflation, and government regulation brought on a severe recession, which hit Michigan's automobile manufacturers especially hard. As Americans turned to cheaper and more efficient Japanese imports, the state's unemployment rate rose from 7 percent in March of 1979, to 9.9 percent a year later; 12.2 percent in March, 1981, and peaked at 16.3 percent in November, 1982. (6) The Detroit property tax base fell by $100 million. (7) Government attempts to resolve such problems included major subsidies to domestic businesses both at the state and federal levels. (8) In particular, Michigan sought to relieve the ailing General Motors Corporation. In 1980, GM informed the city of Detroit that it would be willing to construct a new factory in a region of the city known as Poletown (due to the large number of Polish immigrants living there). The company had already threatened to close a factory which would have cost the community 6,000 jobs, and, as Justice James L. Ryan would later note, the city felt severe pressure from GM's "immense political and economic power." (9) The Poletown neighborhood was "a rare commodity in an urban environment: a stable, integrated area that in many ways harkened back to the close-knit ethnic communities that characterized Detroit's past." (10) The GM project meant condemning over 1,000 properties and the homes of 3,438 people. (11) And although it was deteriorating in the 1980s, many residents cherished their neighborhood, where milkmen still made their rounds, (12) local policemen regularly lunched at Carl Fisher's Famous Bar-B-Q Restaurant, (13) and where, one resident recalled, "[p]eople watched out for one another.... In the suburbs, it's keep up with the Joneses.' Over here, nobody cared. You were neighbors." (14) As Jean Wylie explains in her history of the Poletown case, "even as late as 1980, the community was known for its sound housing stock, its low rents, its good access to shops and services, and its tolerance for divergent ethnic groups and religious denominations. ... [A] study done by the University of Michigan in 1980 suggested that 'this area may be one of the most continuously racially integrated areas in Michigan. …