While most understand that the U.S. Constitution’s Bill of Rights is critical to protecting certain rights (free speech, freedom of religion, etc.), it is often forgotten that in our system of federalism that state constitutions may provide increased levels of protection than even our federal constitution. This dynamic is sometimes referred to as the federal constitution setting the “floor” for rights as opposed to creating a “ceiling” on what is protected from government interference.[1]
Accordingly, in several instances the Michigan Constitution provides greater respect for certain rights than the U.S. Constitution does. One of these areas is how private property rights are protected from government “takings.”
The Constitution’s Fifth Amendment “takings clause” states that private property shall not “be taken for public use, without just compensation.”[2] This clause governs, among other things, the limitations on the power by governmental entities to exercise to condemn private property for a valid “public use.”
In 2004, the Supreme Court held 5-4 in its infamous Kelo v. City of New London decision that a “public use” under the Fifth Amendment could include, besides traditional public projects such as building infrastructure, projects which would benefit private developers for the purpose of “economic development.”[3] In her dissenting opinion, Justice O’Connor lamented that because of the broad nature of this decision, that “[t]he specter of condemnation hangs over all property. Nothing is to prevent the State from replacing any Motel 6 with a Ritz–Carlton, any home with a shopping mall, or any farm with a factory.”[4]
The Michigan Supreme Court decided the same question raised in Kelo differently under Article X, Section 2 of the Michigan Constitution. In Wayne County v. City of Hathcock, the Michigan Supreme Court overruled its prior Poletown decision (which allowed the City of Detroit to demolish the historic Poletown district in Hamtramck to make room for a General Motors plant) to conclude that simply promoting “economic development” was not a sufficient justification to condemn property under the Michigan Constitution.[5] The Michigan Constitution was amended several years later to reflect this decision. To date, the text of Article X, Section 2 reads as follows: “Public use does not include the taking of private property for transfer to a private entity for the purpose of economic development or enhancement of tax revenues.”[6]
To date, Michigan’s approach to eminent domain has been widely cited around the country as a model for the protection of private property rights in eminent domain disputes.[7] The courage that Michigan courts have possessed with respect to takings in an eminent domain context, however, has not been followed in other areas of takings law.
A “taking” may occur with or without a government explicitly exercising its power of eminent domain. A government actor may also initiate a taking through more indirect means; this kind of taking is referred to as a “regulatory” taking and can occur when a government action deprives a property owner of an “economically viable use of their land.”[8]
The test under the federal constitution for regulatory takings was articulated by the Supreme Court in Penn Cent. Transp. Co. v. City of New York[9] which requires evaluation of three factors: (1) the economic impact of the regulation, (2) the exent the regulation interferes with the “investment-backed expectations”of a plaintiff, and (3) the character of the governmental action.[10] Given the ambiguous nature of these factors, however, Federal courts have had some difficulty applying them.[11] As a result, plaintiffs have a low possibility of success in bringing these claims under the Fifth Amendment.[12]
In Michigan, the State Supreme Court had several opportunities to expand the regulatory takings framework under the state constitution to balance the scales towards private property rights and refused to do so.[13] In the recent case of The Gym 24/7 Fitness, LLC v. State,[14] the Michigan court of appeals simply applied the Penn Central factors provided by the Supreme Court to evaluate takings claims brought under both the federal and Michigan constitutions.[15] There, the plaintiff was challenging pandemic era lockdown restrictions which disrupted the plaintiff’s business. The Michigan Supreme Court denied the appeal of this case.[16]
This method used by the Michigan courts in The Gym 24/7 Fitness, LLC —following the analysis provided by the U.S. Supreme Court when interpreting constitutional rights—is a common one used by state courts known as “lock-stepping.”[17] That is, state courts will interpret its own constitutional rights to parallel the analysis provided by federal courts under the United States Constitution.
There may be a silver lining to Michigan courts’ strict adherence to Penn Central, however. The Gym 24/7 Fitness, LLC v. Michigan has now been docketed by the U.S. Supreme Court following the plaintiff’s appeal of the decision.[18] If the Supreme Court takes this case, it will have the opportunity to address whether Penn Central should be clarified or overruled entirely.
The regulatory takings legal landscape has significant relevance for land use issues. If the Supreme Court revisits Penn Central, private property rights may have to receive more deference from state officials whose decisions affect the value of certain properties. If you believe that your property has been unjustly affected by a regulation of some kind, the attorneys at Dalton & Tomich, PLC would be happy to take your call.
[1] Ilya Somin, A Floor, Not a Ceiling: Federalism and Remedies for Violations of Constitutional Rights in Danforth v. Minnesota, 9 Engage: Journal of the Federalist Society Practice Groups 2, 51 (June 2008).
[2] U.S. Const. Amend. V.
[3] Kelo v. City of New London, Conn., 545 U.S. 469, 484–486 (2005).
[4] Kelo v. City of New London, Conn., 545 U.S. 469, 503 (2005) (J. O’Connor, Dissenting).
[5] Cnty. of Wayne v. Hathcock, 471 Mich. 445, 483, 684 N.W.2d 765, 787 (2004) (“We conclude that the condemnations proposed in this case do not pass constitutional muster because they do not advance a public use as required by Const. 1963, art. 10, § 2.”).
[6] Mich. Const. Art. X, Sec. 2. (quotations omitted)
[7] See, e.g., Michigan Eminent Domain Laws, Institute for Justice (last visited March 21st, 2025), https://ij.org/issues/private-property/eminent-domain/michigan-eminent-domain-laws/
[8] Agins v. Tiburon, 447 U.S. 255, 260 (1980); see also Lingle v. Chevron United States Inc., 544 U.S. 528, 539 (2005) (overturning Agins other requirement for regulatory takings that
[9] 438 U.S. 104, 124 (1978).
[10] Id. at. 124
[11] See Robert H. Thomas, Missed Opportunities in State Takings Challenges to Pandemic Era Restrictions, State Court Report (February 5th, 2024) (characterizing the Penn Central factors as “opaque.”), https://statecourtreport.org/our-work/analysis-opinion/missed-opportunities-state-takings-challenges-pandemic-era-restrictions.
[12] Thrasher, Ramsey, Daunting Odds: Regulatory Takings Claims in the United States Circuit Courts of Appeals 10 (December 12, 2023) (finding that only 6.6% of regulatory takings have been decided in favor of plaintiffs), https://ssrn.com/abstract=4733024.
[13] Id.
[14] 341 Mich. App. 238, 989 N.W.2d 844 (2022).
[15] Id. at 268, 989 N.W.2d at 862.
[16] Gym 24/7 Fitness, LLC v. State, 10 N.W.3d 443 (Mich. 2024) (“On order of the Court, the application is again considered, and it is DENIED, because we are not persuaded that the question presented should be reviewed by this Court.”).
[17] Kevin Frazier, A Rallying Cry Against Lock-stepping, State Court Report (October 22, 2024), https://statecourtreport.org/our-work/analysis-opinion/rallying-cry-against-lockstepping.
[18] The Gym 24/7 Fitness, LLC, Petitioner, v. Michigan (No. 24-757) https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/24-757.html
