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72 Cornell L. Rev. 61 (1986-1987)
Economics of Public Use

handle is hein.journals/clqv72 and id is 75 raw text is: THE ECONOMICS OF PUBLIC USE Thomas W. Merrill t The fifth amendment to the United States Constitution, as well as most state constitutions, provides that private property shall not be taken for public use unless just compensation is paid.1 Ameri- can courts have long construed this to mean that some showing of publicness is a condition precedent to a legitimate exercise of the power of eminent domain. Thus, when a proposed condemnation of property lacks the appropriate public quality, the taking is deemed to be unconstitutional and can be enjoined.2 In practice, however, most observers today think the public use limitation is a dead letter. Three recent decisions, upholding takings that courts would very likely have found impermissible in the past, support this view. In the first case, Poletown Neighborhood Council v. City of Detroit,3 the Michigan Supreme Court approved the city of Detroit's plan to condemn a 465-acre tract of land and reconvey it on favorable terms to the General Motors Corporation (GM) for construction of an au- tomobile assembly plant.4 GM had previously announced its inten- tion to relocate certain Detroit-based manufacturing operations if the city did not provide a new plant site. The purported public ben- efits of the condemnation (the public use) included retaining over 6,000jobs, preserving tax revenues, and avoiding the social deterio- t Professor of Law, Northwestern University. This paper originated as a senior research project during the 1983-84 academic year at Northwestern University School of Law with Jeffrey P. Gray, whose contributions are gratefully acknowledged. The author would also like to thank the participants in a Law and Economics Workshop at the Uni- versity of Chicago, as well as Charlotte Crane, Mark Grady, Richard Helmholz, Carol Rose, and especially Victor Goldberg for many stimulating discussions and helpful com- ments on earlier drafts. Finally, a special note of appreciation goes to Steven Drickey for his research assistance. Financial support was provided by the Stanford Clinton, Sr. Research Professorship at Northwestern. 1 U.S. CoNsT. amend. V; see infra note 24 and accompanying text. 2 The general rule, to which the public use limitation provides an exception, is that a government taking may proceed so long as a citizen possesses an adequate remedy for ex post compensation. See, e.g., Regional Rail Reorganization Act Cases, 419 U.S. 102, 124-25 (1974). The other major exception is where the taking is without statutory au- thorization. See Ramirez de Arellano v. Weinberger, 745 F.2d 1500, 1510-11 (D.C. Cir. 1984) (en banc), vacated on other grounds, 471 U.S. 1113 (1985). 3 410 Mich. 616, 304 N.W.2d 455 (1981). 4 Although the projected cost of the condemnation to Detroit exceeded $200 mil- lion, GM subsequently purchased the property from the city for slightly more than $8 million. Id. at 656, 304 N.W.2d at 469 (Ryan, J., dissenting).

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