Opinion ID: 779379
Heading Depth: 3
Heading Rank: 2

Heading: Plan Commission's Stated Public Purpose

Text: 62 Next we will examine whether the Plan Commission's stated public purpose satisfies the Fifth Amendment's public use requirement. As we have stated, the Court has held that the public use requirement is coterminous with the scope of a sovereign's police powers. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1014, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984) (citing Midkiff, 467 U.S. at 240, 104 S.Ct. 2321 (1984)). See generally R. Epstein, Takings 108-112 (1985). Regulations enacted pursuant to the police power must be substantially related to the advancement of the public health, safety, morals, or general welfare. See Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 395, 47 S.Ct. 114, 71 L.Ed. 303 (1926). 19 The Plan Commission argues that if the covenant is vacated, then HNS may develop the property in the future, thereby removing vacant houses and creating a commercial zone that may be an asset to the community. However this possible future public benefit, even combined with the possibility that HNS may decide to remove the vacant homes, is not substantially related to the advancement of the public health, safety or welfare. 63 First, this case contrasts sharply even with those cases where courts have pushed the limits of the Public Use Clause and have held that a state transfer of property to a private entity served a public interest. For example in Poletown Neigh. Council v. City of Detroit, 410 Mich. 616, 304 N.W.2d 455, 458 (1981), the Michigan Supreme Court authorized a municipality to take private property for the development of a General Motors plant. In that case, the city of Poletown condemned a site approved by General Motors under the authority of the Economic Development Corporations Act. Id. at 457. The court upheld the stated public purpose of a new General Motors plant, stating that the city presented substantial evidence of the severe economic conditions facing the residents of the city and state, the need for new industrial development to revitalize local industries, the economic boost the proposed project would provide, and the lack of other adequate available sites to implement the project. Id. at 459. Poletown differs from the case at hand. There, the city made specific findings pursuant to a legislatively determined public use (under the Economic Development Corporations Act) as to the exact needs of the local community and the property was condemned for a specific type of economic development that met those needs and statutory requirements. 64 Similarly, in Hawaii Hous. Auth. v. Midkiff the Supreme Court validated takings of private property for transfer to individuals under the Hawaii Land Reform Act. Midkiff, 467 U.S. at 233-34, 104 S.Ct. 2321 (citing Haw.Rev.Stat. § 516 (1976)). The land reform statute allowed a local commission to target certain properties and permit the holders of long-term leases on those properties to purchase the leased property from the owners. Id. The Hawaiian legislature determined that ownership of land in Hawaii was so highly concentrated as to constitute a land oligopoly and thus allowed those transfers to occur without the landlords' consent. Id. These transfers were determined by the Court to be in the public interest because they would effect a decrease in land prices and an increase in land transfers. Id. at 240-241, 104 S.Ct. 2321. In Midkiff, the actual act of the transfer, regardless of the proposed use of the property, was found to serve a public purpose. 65 Here there is no determination that commercial development in and of itself would serve some overriding public purpose. In fact there is no limit as to the actual commercial or residential purposes that HNS may use the property. Under § 3-6-13-2 of the Allen County Zoning Ordinance land zoned C-2A may be used to provide goods and services that meet day-to-day needs. However, owners of areas that are zoned C-2A may also use the property for most C-1A and C-1 uses such as a service station, a tire store, a car wash, a laundromat, a tavern, a package liquor store, a massage salon, a bowling alley, a pool hall, billboards, and manufactured or mobile homes. See Daniels, 125 F.Supp.2d at 351. As the Daniels point out, the impact on the community depends on the use to which the property is put, and without knowing the use, the Plan Commission could not reasonably find that the vacation of the covenant could benefit the community. 20 The only common feature to all of the potential future commercial uses of the Lots would be to confer a private benefit on HNS either through their own development of the Lots or the sale of the property to a developer. The underlying purpose of a government taking that transfers a property interest to a private entity must be for a public benefit, and in this case any speculative public benefit would be incidental at best. 66 Secondly, the Plan Commission did not find that any eventual commercial development would be an asset to the community, merely that it could be an asset to the community. This type of possible public use does not satisfy the Fifth Amendment requirements. The Supreme Court has held that when there is a delegation of power to a local government to determine a public use, it is not enough that property may be devoted hereafter to a public use for which there may be an appropriate condemnation. Vester, 281 U.S. at 448, 50 S.Ct. 360 (holding that a public use declaration that an excess condemnation was in furtherance of the public use was not suitably defined enough to justify the taking under a state law requiring that condemnations be supported by a public use) (emphasis added). 21 The Plan Commission argues in response that we should not just consider the actual purposes that were considered, but also any  conceivable public purpose. See Gamble, 5 F.3d at 287 (emphasis in original). However, that standard, as enunciated in Midkiff, has traditionally applied to state legislatively or congressionally designated public purposes employed to justify the use of eminent domain and so does not apply to independent findings by the Plan Commission that are unsupported by state code. See Midkiff, 467 U.S. at 244, 104 S.Ct. 2321 (Thus, if a legislature, state or federal, determines there are substantial reasons for an exercise of the taking power, courts must defer to its determination that the taking will serve a public use. (emphasis added)). See also Armendariz, 75 F.3d at 1321. Even so, while in this case there may be some conceivable public benefit of some possible future use of the property, that benefit will always be subservient to the future private uses of the Lots, and therefore private benefits, by HNS. Much like the value of the property taken, public use is to be determined at the time of the taking, and at the time of the taking of the restrictive covenant, the possible future commercial development could not be rationally described as for a public purpose. Cf. Coniston Corp., 844 F.2d at 463 (The taking is complete when it occurs....) (citing First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 320, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987)). The public use requirement would be rendered meaningless if it encompassed speculative future public benefits that could accrue only if a landowner chooses to use his property in a beneficial, but not mandated, manner. 67 In sum, because the Plan Commission has not followed legislative determinations of what constitutes a valid public use, nor provided any facts that demonstrate that the covenant vacation is substantially related to a public interest, we conclude that the Plan Commission has violated the public use requirement of the Takings Clause by vacating the restrictive covenant for a private purpose.