The intent of the takings clause is to state that not only are takings which fail to compensate property owners illegal, but also that takings for purely private uses are illegal regardless of whether compensation is actually paid. This "public use" language in the takings clause is intended to prohibit the power of the government to take property for private uses. The purpose of the state is only to act as a public functionary, therefore, it is false to assume that the government has the power to advance private uses through its eminent domain power.
Unfortunately, the Michigan Supreme Court’s decision in Poletown Neighborhood Council v. City of Detroit substantially blurs the line between public and private uses. Dissenting from the majority in the case, Justice Ryan warned of the implications of this decision:
The reverberating clang of its economic, sociological, political, and jurisprudential impact is likely to be heard and felt for generations. By its decision, the Court has altered the law of eminent domain in this state in a most significant way and, in my view, seriously jeopardized the security of all private property ownership. This case will stand...for judicial approval of municipal condemnation of private property for private use....it seems important to describe...how government, in all its branches, caught up in the frenzy of perceived economic crisis, can disregard the rights of the few in allegiance to the always disastrous philosophy that the end justifies the means.
The Poletown 5-2 decision remains the law, and it is therefore necessary to understand its concept of "public use" review.
The Detroit Economic Development Corporation set out a plan to acquire, by condemnation if necessary, a large tract of land to convey to General Motors for an assembly plant site. The majority posed the issue at bar as:
Can a municipality use the power of eminent domain granted to it by the Economic Development Corporations Act, MCL 125.1601 et seq., MSA 5.3520(1) et seq., to condemn property for transfer to a private corporation to build a plant to promote industry and commerce, and thereby adding jobs and taxes to the economic base of the municipality and state?
The court was deciding this question at a time when the legislature considered Michigan to be in an economic crisis. Additionally, there was tremendous public support for clearing the way for the plant. Swept up in the process were the property owners.
Interestingly, General Motors had chosen the site and approached the city about obtaining the land. GM made demands for road improvements, tax breaks, and exemptions from certain penalties for its plant design. This, in and of itself, indicates that a private interest attempted to use the imprimatur of the state to acquire land.
The court recognized that condemnation for private use or purpose is forbidden. It found, however, that the legislature had determined governmental actions like those contemplated by Detroit met a public need and served an essential public purpose of fostering employment and revitalizing the economy when passing the Economic Development Corporations Act. The court argued that the determination of public use is primarily a legislative function, and the court established that it would give great deference to legislative declarations of a public purpose.
The loose judicial standard for determining a public use established by the Poletown Court is whether "substantial proof" can be provided "that the public is primarily to be benefitted." Land can be taken and then conveyed to private interests. The "public benefit cannot be speculative or marginal but must be clear and significant if it is to be within the legitimate purpose as stated by the Legislature." By shifting the analysis to "benefits," the court established a standard which looks to the effects of a taking, thereby converting the determination into a matter of policy instead of a matter of law. The court proceeded to determine that the Detroit plan was significant to the public and therefore allowable.
Even if the land could be more beneficially used by General Motors than by its then-residing owners, this should not justify invoking the power of eminent domain. Justice Cooley articulated that the power was intended to be far more limiting than the Poletown standard:
[T]here are many cases in which the property of some individual owners would be likely to be better employed or occupied to the advancement of the public interest in other hands than in their own; but it does not follow from this circumstance alone that they may be rightfully dispossessed.
Cooley further elaborated that conveyances to private parties who could indirectly serve the public interest were not sufficient considerations for meeting the public use requirement:
[I]f taken for a purely private purpose, it would be unlawful. Nor could it be important that the public would receive incidental benefits, such as usually spring from the improvement of lands or the establishment of prosperous private enterprises: the public use implies a possession, occupation, and enjoyment of the land by the public at large, or by public agencies; and a due protection to the rights of private property will preclude the government from seizing it in the hands of the owner, and turning it over to another on vague grounds of public benefit to spring from the more profitable use to which the latter may devote it.
The court, in providing deference to the legislature, has prevented itself from evaluating the nature of public use, thus has ignored the original principles inherent in public uses discussed by Cooley and the early case law in Michigan.
Justice Ryan’s dissent indicates this represents a major shift in the Michigan courts’ takings jurisprudence. Citing extensive authority, he writes, "It has always been the case that this court has accorded little or no weight to legislative determinations of ‘public use.’ ‘Whether the use for which land is sought to be acquired by condemnation is a public one is a judicial question.’" All cases cited by the majority supporting deference dealt with the legislature’s power to tax, not its power to take.
Deference to legislative pronouncements of public use insulates laws from review to the extent that anything can be deemed legitimate so long as it is labelled so. Justice Ryan describes the standard as "protean," "nebulous," and limitless. A vital component of a takings claim has been successfully removed from citizen challenge.
A 1993 Michigan Supreme Court decision, City of Lansing v. Edward Rose Realty, Inc., also deals with the issue of defining "public use." A Lansing ordinance provided for mandatory access to private property by the grantee of a city cable television service franchise. Should the owner of a dwelling, such as Edward Rose Realty, directly or indirectly prohibit any resident from receiving cable services by the grantee of the franchise, the ordinance allowed the cable provider to request that the city commence condemnation proceedings. The court differentiated this municipal action from that of Detroit in Poletown because here there was no state-enabling statute identifying a public use or purpose for the taking to which to defer.
The court held that a greater degree of review should be employed when no state statute exists to which they can defer. The ordinance "must be reasonable and not oppressive," must be "essential or indispensable to the accomplishment of the objects and purposes of the municipality," and must provide a clear and specific public benefit which predominates over the benefit to the private party. Actions by municipalities which are not acting under a mandate from the state, therefore, receive higher scrutiny in relation to "public use." The court found that the access requirements in this case could not withstand this level of review and deemed the taking exceeded the city of Lansing’s authority.