Poletown Neighborhood Council v. City of Detroit

Brief Fact Summary. A city condemned private property in order to give it to a corporation so jobs would not be lost.

Synopsis of Rule of Law. Condemnation for the public welfare cannot be forbidden, even if there is incidental private gain.

Facts. High unemployment exists in the City of Detroit (Defendant). General Motors decided to end its manufacturing operations in the city. If they left, the unemployment numbers would substantially increase, and then the city would lose millions of dollars in real estate and income tax revenues. General Motors made an overture to the city about finding a suitable plant site in the city. A site was found, and the city used the power of eminent domain to evict the residents from their homes. Plaintiffs challenge the constitutionality of using the power of eminent domain to condemn one person’s property to convey it to a private person.

Issue. Can a municipality use the power of eminent domain to condemn property for transfer to a private corporation to build a plant to promote industry and commerce, thereby adding jobs and taxes to the economic base of the municipality and state?

Held. Yes.
Condemnation for a private use cannot be authorized whatever its incidental public benefit, and condemnation for a public purpose cannot be forbidden whatever the incidental private gain. This dispute is whether the proposed condemnation is for the primary benefit of the public or the private user.
The Legislature has determined that governmental action of the type proposed here meets a public need and serves a public purpose. It cannot be reversed by the court unless it is arbitrary and incorrect.
The power of eminent domain is to be used here to accomplish the essential public purpose of alleviating unemployment and revitalizing the economic base of the community. The benefit to private interest is merely incidental.
The power of eminent domain is restricted to furthering public uses and purposes and is not to be exercised without substantial proof that the public is primarily to be benefited. When a specific private interest is to be benefited, heightened scrutiny will be used and the public benefit must be clear and significant.

Dissent. The right to own and occupy land must not be subordinated to private corporate interests unless the use of the land condemned by or for the corporation is invested with public attributes sufficient to fairly deem the corporate activity governmental. The court has subordinated a constitutional right to private corporate interests in this case.

Discussion. The public welfare would be served by taking private property and giving it to another private party in order to give the economy a boost. Even if the private party receiving the party is using it to benefit themselves, the incidental effect of the party generating profits, according to the court, will benefit the public and so is a valid exercise of the eminent domain pow