On Nov. 7, 2006, Michigan voters will be asked to consider
Proposal 4, a state constitutional amendment that would alter the law regarding
eminent domain, which is the legal theory by which the government can take
private property for certain public uses if the government pays just
compensation. The proposed amendment was drafted by the Michigan Legislature in
the wake of the U.S. Supreme Court’s widely criticized ruling in the 2005 case
Kelo v. New London. The measure was placed on the ballot by a vote of 106-0 in
the Michigan House and 31-6 in the Michigan Senate. Proposal 4 would amend the
constitution if a majority of electors vote for it, and it would become
effective 45 days after the 2006 general election.
There are provisions about eminent domain in both the federal
and Michigan constitutions. The federal provision appears in the Fifth
Amendment, which states, "(N)or shall private property be taken for public use,
without just compensation."† As will be discussed under the heading "Kelo v. New
London" on Page 6, the Kelo ruling held there were few limits on the use of
eminent domain under the Fifth Amendment, meaning that any further limits would
have to be developed under state law.
The state provision on eminent domain appears in Article 10,
Section 2, of the Michigan Constitution:
"Private property shall not be taken for public use without just
compensation therefor being first made or secured in a manner prescribed by law. Compensation shall be determined in proceedings in a court of record."
Proposal 4 would change Article 10, Section 2, to read:
"Private property shall not be taken for public use without just
compensation therefore being first made or secured in a manner prescribed by
law. If private property consisting of an individual’s principal residence is
taken for public use, the amount of compensation made and determined for that
taking shall be not less than 125% of that property’s fair market value, in
addition to any other reimbursement allowed by law. Compensation shall be
determined in proceedings in a court of record.
"‘Public use’ does not include the taking of private property
for transfer to a private entity for the purpose of economic development or
enhancement of tax revenues. Private property otherwise may be taken for reasons of public use as that term is understood on the effective date of the amendment to this constitution that added this paragraph.
"In a condemnation action, the burden of proof is on the
condemning authority to demonstrate, by the preponderance of the evidence, that
the taking of a private property is for a public use, unless the condemnation
action involves a taking for the eradication of blight, in which case the burden
of proof is on the condemning authority to demonstrate, by clear and convincing
evidence, that the taking of that property is for a public use.
"Any existing right, grant, or benefit afforded to property
owners as of November 1, 2005, whether provided by this section, by statute, or
otherwise, shall be preserved and shall not be abrogated or impaired by the
constitutional amendment that added this paragraph."
If enacted, Proposal 4 would narrow the scope of permissible
government takings. A 2004 Michigan Supreme Court case, Wayne County v.
altered Michigan takings law by prohibiting the use of eminent domain in the
pursuit of economic development. Proposal 4 not only incorporates that decision,
but would put additional limits on government takings.
The features of Proposal 4 are addressed below in the order in
which they appear in the proposal.
† The Fifth Amendment did not originally affect the use of eminent domain by state governments. Eventually, after the passage of the 14th Amendment, the Fifth Amendment’s limitations on takings were held to apply against state takings as well. This evolution is discussed below.
125 Percent Compensation for Principal Residences
Proposal 4 would provide a homeowner with at least 125 percent
of the fair market value of their property whenever that property serves as
their "principal residence." Most Michigan citizens will be familiar with the
concept of a "principal residence," since they receive a tax break for their
principal residence on the state property taxes, but essentially the term refers to the home a resident lives in for the majority of the year. As in the current law of eminent domain, a jury would determine the fair market value the government would need to pay to a property owner for a taking.‡
‡ "Regulatory takings," in which property owners lose part or all of their property’s value because of a new government regulation, could still be decided without a jury.
Prohibiting Takings for Economic Development or Revenue
Proposal 4 would place an explicit prohibition in the Michigan
Constitution on any government takings for the purpose of economic development
or the enhancement of tax revenue. Economic development and enhancement of tax
revenue are two of the justifications cited by the city of New London, Conn., in the Kelo taking. Those rationales were also cited by the Michigan Supreme Court in the 1981 Poletown Neighborhood Council v. Detroit decision, which allowed an entire community to be taken and converted into an auto plant. The legal rationale behind the Poletown ruling has since has been overturned.
Incorporating Current Categories of Acceptable Public Uses
Proposal 4 states, "Private property otherwise may be taken for
reasons of public use as that term is understood on the effective date of the
amendment to this constitution that added this paragraph." In effect, this
language accepts the three currently recognized categories of public use that
allow Michigan government to transfer property from one private party to
another. These categories were identified in the Michigan Supreme Court’s 2004
Wayne County v. Hathcock decision.
The court called the first of these categories "public necessity
of the extreme sort otherwise impracticable." These "public necessities" involve infrastructure like railroads, canals and
other point-to-point transportation. The court held that the second category
involved takings "when the private entity remains accountable to the public in
its use of that property," such as petroleum pipelines, which may be privately
owned but remain heavily regulated by the government.
The third category, which the court labeled "property … selected on the basis of ‘facts of independent public significance,’" basically involves takings to
Under Proposal 4, these three "public-use" categories would
become the only ones through which Michigan governments could constitutionally
use eminent domain to convey property from one private party to another.
Shifting and Raising the Burden of Proof
The fourth feature is a shift in which party has the burden of
proof. Under current statutory law, the owner has the burden to show that the
use of eminent domain is improper. When challenging whether the taking is for a
public use, the owner can prevail only if he or she can show that there was
fraud, an error of law or an abuse of discretion in the government’s decision.
Proposal 4 would change this procedure by placing the burden on
the government to show that a taking is appropriate. In most cases, Proposal 4
would require that the existence of a public use be demonstrated by a
"preponderance of evidence," meaning slightly more than 50 percent of the
evidence. Where the purported public use is the eradication of blight, however,
the proposal would require the government to prove the existence of blight by
"clear and convincing evidence," which is more than a preponderance of evidence, but less than the evidence required for proof "beyond a reasonable doubt," the standard for criminal convictions.
Judging Blight Property by Property
Proposal 4’s fifth feature requires that blight be determined on
a property-by-property basis. Under federal law, when government officials claim that they are eradicating blight, they may take an entire neighborhood, even if numerous properties within that area are not themselves blighted. Typically, the entire area is then turned over to a developer, who tears down any existing structures and builds something new.
Proposal 4 would limit the properties that the government can
take to only those that are in and of themselves blighted. Proposal 4 would thus prevent a government from easily obtaining an entire area with the intent to hand it over to a developer.
Maintaining Current Statutory Rights
The last feature of Proposal 4 would prevent the diminution or
removal of any statutory protections that existed for owners as of November 1,
2005 (a date near the final ratification of the amendment within the Michigan