County of Wayne v. Hathcock

Brief Fact Summary.

Plaintiff sought to condemn the Defendants’ land for the construction of a large business and technology park. The trial court found that the proposed developments constituted a public purpose. The court of appeals affirmed. Defendants appealed.

Synopsis of Rule of Law.

A forced transfer of land from one private entity to another private entity constitutes a “public use” if the receiving entity: 1) is involved in a public necessity; 2) remains subject to public oversight with respect to the transferred property; or 3) if the subject property is selected because of an independent public need.

Facts.

Wayne County (Plaintiff) received federal grant money, which required for properties purchased with the grant money had to be put to commercial use. Plaintiff’s development plan for lands purchased with the grant money included building a corporate mall, hotel, conference center, and recreational facilities, which would create 30,000 jobs and generate $350 million in tax revenue from a broader tax base of industrial, service, and technology sectors. After purchasing 1,000 acres in voluntary sales, Plaintiff began condemnation proceedings to purchase nineteen additional adjacent lots. Hathcock and the other holdover owners (Defendants) alleged that the proposed condemnations were not for “public use” as mandated by the state constitution.

Issue.

Whether a forced transfer of land from one private entity to another constitutes a taking for “public use”?

Held.

Yes. The lower court’s ruling is reversed and remanded for entry of an order of summary disposition. A forced transfer of land from one private entity to another private entity constitutes a “public use” if the receiving entity (1) is involved in a public necessity or (2) remains subject to public oversight with respect to the transferred property, or (3) if the subject property is selected because of an independent public need.

Concurrence.

(Weaver, J.): Although Plaintiff claims that the condemnations will bring many benefits to the county. However, the receiving entity will not be under an obligation to give the public access; the county will have no methods to ensure that the property will be for public use; and the properties would not be condemned for an independent public purpose protecting general health or safety.

Discussion.

Public necessities are highways, railroads, canals, and other vital instrumentalities of commerce. Here, the construction that Plaintiff has planned is not a public necessity or a vital instrumentality of commerce. The receiving entity would be subject to public oversight with respect to the transferred property if the public is able to exert its will independent of the receiver, thus remaining a measure of control. Here, the Plaintiff is expected to pursue its own financial interests on its own terms and there is no mechanism guaranteeing the public that the property will be used for public use. The transferred property must have been chosen for an independent public purpose, not because of how it would be used after the transfer or how it would serve the interests of the receiving entity. Here, there is no evidence that the property in question was condemned for a public purpose other than transferring it for private development. Allowing the exercise of eminent domain for a private entity purely for economic benefit can dramatically reduce property rights.