It is a fundamental tenet of
our system of government that the legislative and executive branches can provide
greater protections to individual liberties than are understood by the courts to
be protected in existing law. Protections by the courts form only a floor. It
is increasingly becoming recognized that the judiciary, in Michigan and the
United States at large, has abdicated its responsibility by setting that floor
far below its intended level in relation to property rights. The legislature
and executive now have the responsibility of remedying this situation and
ensuring that private property rights once again receive the respect they
deserve in a free society.
branches of government, as well as the people, have a role to play in the
protection of private property from illegitimate takings. Each single effort is
important to advancing a defense for property owners against the power of the
government. A full combination of efforts within and among each branch,
however, is the best approach for returning to, and maintaining, what Madison
called the only “just government” — one which exists to protect property.
Section I of
this study identifies the failures of the judiciary. Ensuring legitimate
protections at this level is the most direct method for achieving reform. As
previously mentioned, however, judicial interpretation is the one area over
which the people have the least direct control. In future elections and
appointments, the people should scrutinize their choices and secure onto the
bench judges who accept a role as arbiters of the original intent of the
constitutional framework and its takings clause. Judicial philosophy is often
unpredictable, therefore this method is the least powerful one for instituting
interpretation can be controlled, however, by providing clearer laws for
interpretation which will limit the judiciary’s power to ignore private property
rights. Constitutional and statutory revisions to the current takings law must
be adhered to in future court decisions, thus providing greater controls on the
judiciary’s opportunities to stray from the Founding principles.
A constitutional amendment of Article X, Section 2, which provides a clearer
enunciation of private property rights protections will embed such protections
in the supreme law of Michigan. Establishing a constitutional remedy provides a
greater degree of permanency than any other reform effort, though it is probably
the most difficult to implement.
To combat the
courts’ unwillingness to compensate partial or regulatory takings, language
should be added to Michigan’s current takings clause [See Table 2]. One
revision would alter the clause to read the property shall not be “taken or
damaged” without just compensation. Including “damaged” will make
restrictions on uses of property compensable. Although property is not actually
transferred to the state in regulatory takings, the bundle of rights inherent in
property is damaged by restrictions on its use.
Another alternative is to revise the clause to read
property shall not be “taken, in whole or in part,” thus ensuring that partial
takings are compensable under the constitution. Similarly, a separate section
could be added to explicitly deal with regulatory takings and deprivations of
uses of property. Language to prevent deprivations of property uses without
compensation will ensure that individual property owners are not forced to bear
the full cost of a regulation or action intended to benefit all of society.
legislature introduced a joint resolution in January of 1995 which proposed an
amendment to their constitution with similar language to address the issue of
regulatory takings. The resolution was withdrawn two months later. The
legislature proceeded, however, to pass one of the most comprehensive property
rights protection acts to date.
Given the rigors of amending the constitution,
the Michigan legislature might pursue legislation leading to comprehensive
statutory protections of private property rights. The scope of this
legislation could go far beyond that of Michigan H.B. 4433 which merely mandates
that the attorney general establish takings impact assessment guidelines in
relation to two departments. Comprehensive legislation could address the need
to broaden the definition of takings, ease the process by which aggrieved
property owners may be compensated, and require governmental officials to
analyze the impact of their law making and regulatory actions [See Appendix B].
Any comprehensive measure must limit all
governmental entities — legislative and executive; state and local. Municipalities have the
power to “take” only by delegation from the legislature. The
legislature, therefore, may condition that power. The entire gamut of
governmental authorities have abused their authority in relation to private
property. Only an act which limits the authority of the entire structure will
afford the guarantees property owners deserve under a just
The first priority should be to expand the scope
of a compensable taking beyond that understood by the current judicial
structure. Any governmental action that results in either a physical occupation
of property, in whole or in part, provides the basis for the definition of a
“taking,” and is primarily consistent with the current judicial interpretation
of the takings clause. In addition to this, the legislature should deem as a
taking any action which results in a non negligible reduction in the value of an
This eliminates the confusion involved in determining what parcel is to be examined for takings purposes.
Currently, if 10 acres of a 100-acre area are rendered undevelopable by a
regulation, the judge must determine whether the 10 acres or the 100 acres is
the relevant parcel. If he chooses the 10 acres, there is a 100 percent
limitation on use and the owner will be compensated. If he chooses the 100
acres, there is only a 10 percent taking and the owner is not guaranteed
compensation because only a portion of his land has been limited. When the
standard is that any non-negligible effect on property constitutes a taking, no
matter which parcel is deemed relevant, the owner is guaranteed compensation for the entire value of the affected property — the value of the 10 acres and any incidental loss to the remaining 90 acres.
This definition of taking will also combat the current judicial opinion that a taking has not
occurred unless all economically viable uses are destroyed by a governmental
restriction on the use of property. Clearly, property owners should not face a
loss in value to their property without compensation. Property cannot be
separated from its worth and the expectations placed on such property by its
owner. For this reason, value should be attached both to the property and to its uses. Any deprivation in a previously legitimate use of property, in whole or in part, should be deemed a taking. The value of the use will then figure into the determination of the amount of compensation. Legislation passed without an expansion of the scope of compensable takings will fail to remedy the current failures in judicial interpretation that currently leave many owners helpless
when facing governmental actions which affect their property.
The legislation should also ensure that just compensation is paid to an aggrieved
property owner. Compensation should take into account the amount of reduction
in fair market value of the property affected by a governmental action when more
than a de minimis reduction occurs. In determining this reduction, however,
values attached to specific intended or proposed uses of the property must also
go into the calculus of just compensation.
To rest the calculus only on the fair market value of the property in its
current condition is inherently unjust.
Furthermore, the legislature might limit the scope of allowable takings to only those for true
“public uses." A public “use” cannot exist if the public is not actually
using the property taken, i.e. where the government does not retain exclusive
control over the property or use that has been restricted. This section will
remedy the holding in Poletown Neighborhood Council v. City of Detroit
which allowed takings of land for essentially private uses. Setting a more
stringent standard for evaluating legitimate public uses and returning the power
to make such a determination to the judiciary is a vital component for limiting
the illegitimate expansion of governmental power.
Additionally, a comprehensive bill could ease the process by which property owners can defend
their rights. In today’s system, the costs of bringing suit often makes it
extremely difficult for the individual property owner to challenge governmental
actions and hold officials accountable. Awarding attorney fees and costs to
property owners who prevail in a takings challenge
makes it economically reasonable for property owners to defend their rights and
removes a formidable barrier to suit that currently insulates governmental
entities from legal accountability. The original draft of Michigan’s H.B. 4433
included a provision like this. It was unwisely removed, however, when the bill
was revised in committee.
A further barrier to suit is the sovereign immunity power of the state. The legislature should take the position
that challenges to governmental actions which affect constitutional rights
should never be subject to the state’s permission. Because the judiciary
has the power to throw out frivolous lawsuits and ensure that plaintiffs have
standing, removal of the permission to sue requirement in relation to takings
actions will not eliminate any vital state administrative power.
Another vital element to a comprehensive legislative reform is to require takings impact analyses for all
actions at every level of government. The Michigan legislature has
moved in this direction with its requirement that the attorney general formulate
guidelines for assessment to be followed by the Department of Natural Resources
and Department of Environmental Quality in H.B. 4433. It could move beyond this, however, to
require such assessments of all governmental entities, including local
governments and the legislature itself. Coupling the assessments to an
expansion in the definition of takings will ensure that governmental officials
have a full understanding of the impact of their decisions. Moreover, the basic
requirements of a takings impact assessment can be defined by the legislature.
Governmental entities should state the interest which would be furthered by the
governmental action, certify that the action is necessary to advance the
purpose, assess the impact the action is likely to have on property rights,
establish that no alternative means are available for meeting the state interest
that may have a lower impact on property, and certify that the benefits of the
action actually outweigh the costs.
Included in the assessment process could be notification to property owners likely to be affected by a governmental
action and opportunities for those owners to challenge the necessity of the
action. Again, the goal should be to allow affected property owners
opportunities to avoid long and costly court processes to validate their rights
to compensation for, or injunction of, the action.
The legislative branch has the ability to restructure the takings law and thereby restore the status of
property rights in Michigan. Reform at this level can affect the passage of
laws, promulgation of rules, and enforcement of state policies. Comprehensive
legislative reform should receive the highest priority in Michigan’s struggle to
protect its citizens.
Finally, if the executive branch prevents itself from actually instituting illegitimate takings, property owners
will be spared the harms of governmental actions or can more easily avoid a
lengthy court process now necessary to determine their rights when takings
occur. The governor should execute an order [See Appendix A] which provides
guidelines for executive department actions to ensure that government officials
assess the property rights implications of their actions and institute the least
intrusive means for meeting any governmental objective, understand that takings
is a category much broader than the judicial definition, and respect property
owners who may have a legitimate takings claim against an action.
In 1988, President Ronald Reagan issued Executive Order 12,630, “Governmental Actions and Interference With
Constitutionally Protected Property Rights,” to control federal executive
department actions in this way. The order requires most governmental
regulations to undergo takings impact analysis in an effort to avoid enforcing
regulations or laws in a manner that would result in unnecessary takings. By
establishing budgetary responsibility within each department for compensation
awards, each section of the executive is forced to bear fiscal responsibility
for their actions. This order has gone mainly unused, especially during
the Clinton Administration. Nonetheless, it has formed the basic model
for most takings impact assessment legislation in the states and in Congress.
It also serves as a good base model for Michigan’s governor to follow in the
creation of his own executive order.
President Reagan’s executive order, however, did not
attempt to expand the definition of takings to be used by the government in
evaluating its actions. A complete executive order in Michigan should recognize
that compensable takings occur more often than they would be found to occur in
today’s judicial environment This added level of protection will allow
the executive order to be almost as protective for property rights as a
comprehensively structured property rights statute passed by the legislature.
Michigan’s elected officials have a responsibility to
pursue an agenda which seeks to guarantee a higher level of protection for
property rights. As each branch moves toward the goals delineated above, a
layer of protections will emerge that will ensure that the cost of pursing
community interests will be born by the entire community. As Richard Epstein,
professor of law at the University of Chicago, stated in Takings, “When
the stakes are high, any shift in course has important consequences."
Reform must shift the cost of governmental actions so they do not fall
disproportionately on individual property owners.