Supreme Court Ruling—Property Ownership Rights

Supreme Court Ruling—Property Ownership Rights

6/23/2005
Legal Commentary The U.S. Supreme Court today in Kelo v. City of New London affirmed last year's decision by the Connecticut Supreme Court that a comprehensive economic development plan adopted by the City of New London was a public purpose sufficient to permit the condemnation and transfer of property to private developers to implement the plan, notwithstanding the requirement of the Fifth Amendment to the United States Constitution that private property be taken only for "public use'. This paves the way for such developments in states where the legislature has authorized condemnation for the purpose of economic development and the state constitution has not been judicially interpreted to impose more strict requirements on the exercise of the takings power. The decision is not likely to have a significant impact in Michigan, however, because the Michigan Supreme Court recently decided in County of Wayne v Hathcock that Michigan's constitution would permit such takings for transfer to private enterprise only in three specific contexts, (1) where public necessity of the extreme sort requires the coordinated assemblage of land by governmental action, as in the case of highways, railroad, canals and other instrumentalities of commerce, (2) where the entity to whom the property will be transferred remains subject to public oversight, such as in the case of regulated utilities, or (3) where selection of the property to be condemned is itself a matter of public concern independent of the use to which it will ultimately be put, as in the case of removing blighted housing with subsequent resale being incidental to that goal.
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