SILVER CREEK DRAIN DIST V EXTRUSIONS DIVISION INC
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Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C h i e f J u s ti c e
Maura D. Corrigan
J u s t ic e s
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
Opinion
____________________________________________________________________________________________________________________________
FILED JUNE 17, 2003
SILVER CREEK DRAIN DISTRICT,
Plaintiff-Appellant,
v
No. 119721
EXTRUSIONS DIVISION, INC., and
AZZAR STORE EQUIPMENT, INC,
Defendants-Appellees,
____________________________________
BEFORE THE ENTIRE BENCH
TAYLOR, J.
We granted leave to appeal in this case to consider
whether environmental-contamination conditions are factors to
be considered when a court is determining fair market value to
establish just compensation in a condemnation action under the
Uniform Condemnation Procedures Act (UCPA ), MCL 213.51 et seq.
We hold that they are to be considered. Accordingly, we
reverse the judgment of the Court of Appeals in this regard
and
remand
this
matter
to
the
trial
court
for
further
proceedings consistent with this opinion.
I.
Defendant
FACTUAL
AND PROCEDURAL BACKGROUND
Extrusions
Division,
Inc.
(Extrusions),
operates a plastics extruding business and owned an eight-acre
parcel of vacant land adjacent to its operations complex in
Grand Rapids. In 1992, Extrusions applied to the city of Grand
Rapids for a permit to build a warehouse on the eight acres.
The application was denied, and Extrusions was informed that
the Silver Creek Drain District (Drain District), in 1991, had
identified the parcel as its desired site for a storm-water
retention pond. Extrusions claimed that denial of a permit,
together with the failure of the Drain District to commence a
condemnation action, amounted to an unconstitutional taking of
private property without just compensation. Accordingly, in
1992, Extrusions initiated an inverse-condemnation action
against the city and the Kent County Drain Commissioner.
On March 7, 1994, the Drain District, pursuant to the
UCPA ,
tendered a good-faith “just compensation” offer1 in the
amount of $211,300 to Extrusions for the parcel. This offer,
as allowed under MCL 213.55(1) of the
1
UCPA ,
also reserved the
“Before initiating negotiations for the purchase of
property, the agency shall establish an amount that it
believes to be just compensation for the property and promptly
shall submit to the owner a good faith written offer to
acquire the property for the full amount so established
. . . .” MCL 213.55(1).
2
Drain District’s right to proceed against Extrusions in a
federal or state action for contamination-cost recovery.2
Cost-recovery
actions
are
intended
to
give
governmental
authorities the ability to seek reimbursement from those
responsible for the damage done to the land by the release of
hazardous substances. At the time of this litigation, the
procedure to reserve the right to bring a cost-recovery action
against the condemnee was new, having been established by
amendments of the
UCPA
in 1993. The purpose of the amendments
was not merely to allow the condemnor to reserve the right to
demand remediation costs, but also to ensure that, if a
reservation of rights occurred, the funds for condemnation
would be escrowed to satisfy any judgment that the condemnor
might eventually secure against the condemnee.3
2
Cost-recovery proceedings may be brought under
federal Comprehensive Environmental Response Compensation
Liability Act (CERCLA ), 42 USC 9601 et seq., or under part
of the Natural Resources and Environmental Protection
(NREPA), MCL 324.20101 et seq.
3
the
and
201
Act
As discussed above, § 5 of the amended UCPA (MCL 213.55)
requires a condemning agency to deposit its estimated just
compensation amount in escrow when it files the condemnation
complaint; this escrowed amount is to pay the condemnee upon
the order of the court. MCL 213.55(5); MCL 213.58(4). However,
in the 1993 amendments of the UCPA , in order to facilitate the
collection
of
remediation
costs
of
environmental
contamination, the Legislature allowed the agency, when it
submits a “good faith” written offer, to reserve the right to
seek contamination costs from the condemnee. If this is done,
the escrowed funds may remain in escrow “as security for
remediation costs of environmental contamination . . . .” MCL
(continued...)
3
On May 26, 1994, the Drain District executed, as required
by
MCL
213.55(4)(e),
a
“declaration
of
taking,”
which
indicated that this private property was being taken for
purposes of a necessary public improvement.
In June, the $211,300 good-faith “just compensation”
amount was placed in escrow. The Drain District then filed its
condemnation action and again reserved the right to bring a
federal or state cost-recovery action.
On February 20, 1995, the parties stipulated, and the
trial court ordered, that the parcel be conveyed to the Drain
District and that the Drain District pay Extrusions $211,300
for
the
taking.
Following
this,
the
Drain
District,
notwithstanding the stipulation and order, sought an order
that would hold the funds in escrow as security for the
remediation costs as allowed under the
response,
citing
part
201
of
the
UCPA .
Natural
Extrusions, in
Resources
and
3
(...continued)
213.58(2).
However, even if the governmental agency reserves the
cost-recovery option against a condemnee, under subsection 6a
(MCL 213.56a) a court can order an agency to waive its right
to pursue a cost-recovery action under certain circumstances.
The predicate for seeking this reversal of the agency’s
election is that, under part 201 of the NREPA , the condemnee
has no liability because it did not cause the contamination.
MCL 213.58(3). If the court orders the waiver of the rights,
the agency is required to submit a revised good-faith offer.
Subsection 6a(3) also allows the parties to a condemnation
action to stipulate the reversal of the reservation.
4
Environmental Protection Act (NREPA), MCL 324.20101 et seq.,
claimed that it was not the cause of the contamination as
identified in the amendments and, thus, was not liable for
remediation costs. Accordingly, it argued, on the authority of
MCL 213.55(5) and MCL 213.58(4), that the funds should be
released. On November 3, 1995, by stipulation, the court
ordered the escrowed sums, as well as interest, paid to
Extrusions.
In a 1997 bench trial concerning valuation, the court
found
that
the
value
of
the
eight-acre
parcel,
if
environmental concerns were ignored, was $278,800. The court
then
determined
that
the
parcel
“was
an
environmentally
contaminated site, with respect to which a reasonably prudent
purchaser would have required, at a minimum, a formal Type-C
Closure from the [Department of Natural Resources] as a
condition precedent to closing.”
Because the court found that the reasonable cost of the
Type-C closure was $237,768, it concluded that the net fair
market value was $41,032. The court entered an order to that
effect and reiterated in the order that the once-escrowed
$211,300 was awarded to Extrusions.
On appeal, the Court of Appeals reversed in part and
5
remanded the case to the trial court.4 The Court of Appeals
held that the
UCPA
gave no authority for a court to consider
any contamination factor in the establishment of fair market
value. Rather, contamination could only be considered in
separate proceedings for remediation costs. It was the Court’s
position that this outcome was appropriate because § 5 of the
UCPA
provided “little guidance regarding the factors a court
should
consider
compensation.”5
when
Given
called
the
on
minimal
to
determine
guidance,
concluded that the plain language of the
UCPA
the
just
Court
amendments
addressing federal and state cost-recovery actions meant that
only in those separate proceedings could such factors be
considered.
We
granted
District’s
claim
leave
to
that
a
appeal
court
to
may
consider
consider
the
a
Drain
parcel’s
environmental condition as a factor affecting fair market
value in a determination of just compensation under the
UCPA .
We conclude that a court may consider such conditions in
establishing fair market value and, thus, reverse the judgment
of the Court of Appeals on this issue only.
4
245 Mich App 556, 557-558; 630 NW2d 347 (2001).
5
Id. at 563.
6
II. STANDARD OF REVIEW
This case presents an issue of statutory interpretation of
UCPA
provisions. Statutory interpretation is a question of law that
we review de novo. Cruz v State Farm Mut Auto Ins Co, 466 Mich
588, 594; 648 NW2d 591 (2002).
III . ANALYSIS
“Eminent domain” or “condemnation” is the power of a
government to take private property. The power arises from the
sovereign power of the state and is of ancient provenance.6
The federal government’s power in this regard is found in the
Fifth Amendment of the United States Constitution, in which it
is stated that the government may not take private property
unless it is done for a public use and with just compensation.
Every Michigan constitution has had a similar clause requiring
just
compensation
in
circumstances.7
these
Our
current
Constitution states that: “[p]rivate property shall not be
taken for public use without just compensation . . . .”8
In Michigan, in furtherance of this constitutional power,
statutes
have
regulated
the
exercise
and
procedure
of
6
See Magna Carta, Grant 39 (1215): “No freeman shall be
. . . disseised . . . unless by the lawful judgment of his
peers, or by the law of the land.”
7
See Const 1835, art 1, § 19; Const 1850, art 18, § 2;
Const 1908, art 13, § 1.
8
Const 1963, art 10, § 2.
7
condemnation.
In
1980,
condemnation statutes in the
the
UCPA .
Legislature
unified
all
Under the act, echoing the
Constitution, it was stated at MCL 213.55(1) that a court was
to “. . . ascertain and determine just compensation to be made
for the acquisition of the [condemned] property.”
As is evident, the “just compensation” requirement in the
statute mirrors the identical requirement in our Constitution.
This reiteration of the constitutional language is significant
because to the degree the Constitution has been construed to
outline the nature of “just compensation,” the statute must be
similarly construed because no act of the Legislature can take
away what the Constitution has given. Sharp v City of Lansing,
464 Mich 792, 810; 629 NW2d 873 (2001).
Thus, we must determine the meaning of the phrase “just
compensation” in our Constitution. As we recently outlined in
Michigan Coalition of State Employee Unions v Civil Service
Comm, 465 Mich 212, 222-223; 634 NW2d 692 (2001), in analyzing
constitutional language, the first inquiry is to determine if
the words have a plain meaning or are obvious on their face.
If they are, that plain meaning is the meaning given them. If,
however, the constitutional language has no plain meaning, but
is a technical, legal term, we are to construe those words in
their technical, legal sense.
Moreover, in that undertaking,
we are to rely on the understanding of the terms by those
8
sophisticated in the law at the time of the constitutional
drafting and ratification. The rule is, as we said in Michigan
Coalition, that “if a constitutional phrase is a technical
legal term or a phrase of art in the law, the phrase will be
given
the
meaning
that
those
sophisticated
in
the
law
understood at the time of enactment unless it is clear from
the
constitutional
language
that
some
other
meaning
was
intended.”9
The meaning of “just compensation” cannot be discerned
merely
by
a
careful
reading
of
the
phrase.
The
words
themselves, as the Court of Appeals found, just do not inform
a court about the potential complexity and variety of factors
to be considered in determining value.10 This circumstance is
9
465 Mich 223. We also pointed out in Michigan Coalition,
id. at n 9, that the same rule, pursuant to the Legislature’s
directive at MCL 8.3a, applies to the construction of a
statute.
10
It is, perhaps, useful to illustrate the correctness of
the point, inasmuch as the partial concurrence and dissent of
Justice Weaver asserts the contrary. In establishing value
for residential properties, for example, can sentimental
factors such as long-time ownership or historic importance be
considered?
Or in the case of commercial properties, can
business interruption be considered in establishing value and,
if so, how?
Should an income-capitalization approach be
considered in a business valuation, or should some other
approach, such as cost-less-depreciation or sales of
comparable properties be used to assist in fixing value? As
is obvious, one cannot merely review the dictionary
definitions of “just” and “compensation” and combine them to
produce a coherent meaning for this phrase.
Rather, as a
result of longstanding legal practice and custom, as revealed
(continued...)
9
not unusual in the realm of statutory construction.
example,
it
can
be
occasionally
do,
use
seen
also
words
when
such
as
statutes,
For
as
they
“negligence,”
“due
process,” or “equity.” These are words with meanings that are
not generally self-evident from a mere reading of the words or
an assessment of their definitions in a dictionary. They are,
in this respect, unlike self-evident words such as “bridge,”
“road,” “building,” or “horse.”
Rather, they are words that
fall into that category we have described as technical legal
terms or phrases of art in the law, and thus they are to be
given the meaning that those sophisticated in the law gave
them at the time of enactment.
We believe it is necessary, if
the law is to be applied uniformly across the state, that this
class
of
words—words
that
are
freighted
with
historic
meaning—be given the same legal meaning in all our courts
rather than allowing each court to impose its own meaning. to
hold otherwise would all but ensure in similar cases different
outcomes in different courts, as Justice Weaver, drawing from
her opinion would apparently be content to allow.
10
This means
(...continued)
through countless judicial opinions over the centuries, this
phrase means something more than the sum of its discrete
parts.
That juries would make decisions on these issues,
after being instructed on the law, is not contradictory to the
point we raise.
That is always the process whether the
statute at issue is susceptible to plain-meaning analysis or
is interpreted using some other method of statutory
explication.
10
that, in this case, it is appropriate to review the consensus
understanding in 1963, by those skilled in this area of law,
of the meaning of “just compensation.”
Throughout our history and clearly by the 1960s, it was
uncontroversial that a determination of “just compensation”
required the consideration of all the multiplicity of factors
that go into making up value. In the nineteenth century, while
summarizing just compensation and its meaning in American
constitutional law, Michigan Supreme Court Justice Thomas M.
Cooley,
in
his
treatise
The
General
Principles
of
Constitutional Law in the United States of America, said:
The rule by which compensation shall be
measured is not the same in all cases, but is
largely affected by the circumstances. If what is
taken is the whole of what the owner may have lying
together, it is clear that he is entitled to its
value, judged by such standards as the markets and
the opinions of witnesses can afford, and that
this, except in extraordinary cases, must be the
full measure of his injury.11
The United States Supreme Court has had a similar and
unvarying view of this matter, holding in Searl v Lake Co
School Dist No 2, 133 US 553, 564; 10 S Ct 374; 33 L Ed 740
(1890), that the value of land must include “every . . .
element entering into its cash or market value, as tested by
its capacity for any and all uses . . . .” Then, again, in
11
Cooley, Constitutional Law (Boston; Little, Brown and
Co, 1880), p 341.
11
1933, the Supreme Court held that “[t]he requirement that
‘just
compensation’
shall
be
paid
is
comprehensive
and
includes all elements . . . .” Seaboard A L R Co v United
States, 261 US 299, 306; 43 S Ct 354; 67 L Ed 664 (1923);
accord Jacobs v United States, 290 US 13, 16-17; 54 S Ct 26;
78 L Ed 142 (1933). The calculation is to “include any element
of value that [property] might have by reason of special
adaptation to particular uses.” Clark’s Ferry Bridge Co v Pub
Service Comm, 291 US 227, 238; 54 S Ct 427; 78 L Ed 767
(1934). Yet again in 1956, the high court held that “[j]ust
compensation includes all elements of value that inhere in the
property . . . .” United States v Twin City Power Co, 350 US
222, 250-251; 76 S Ct 259; 100 L Ed 240 (1956).12
Michigan’s understanding of just compensation has been
identical in all relevant particulars.13 In In re Widening of
Gratiot Avenue, 294 Mich 569, 574-575; 293 NW 755 (1940), we
explained that “‘[t]he determination of value is not a matter
of formulas or artificial rules, but of sound judgment and
12
This continues to be the universal rule. As it was
stated more recently, just compensation “has been held to be
equivalent to the full value of the property. All elements of
value inherent in the property merit consideration in the
valuation process.” 4 Nichols, Eminent Domain (rev 3d), ch 12,
§ 12.01, pp 12-2 to 12-3.
13
The effect on
proceeding itself may
value. MCL 213.70(1);
Project, 376 Mich 311,
market value of the condemnation
not be considered as an element of
In re Urban Renewal, Elmwood Park
318; 136 NW2d 896 (1965).
12
discretion based upon a consideration of all the relevant
facts in a particular case.’” In considering various factors,
we have held that compensation may include an award for the
taking of leasehold, see id.; for fixtures, see In re Slum
Clearance, 332 Mich 485; 52 NW2d 195 (1952); for business
interruption expenses, see In re Grand Haven Hwy, 357 Mich 20;
97 NW2d 748 (1959); and even for the increase in value
attributable to the reasonable probability that the property
would be rezoned, see State Hwy Comm’r v Eilender, 362 Mich
697;
108
NW2d
755
(1961).
Thus,
in
our
law,
“just
compensation” was a legal phrase of art in 1963 that meant,
and still means, that the proper amount of compensation for
property takes into account all factors relevant to market
value.14 It is this meaning that the constitutional drafters
and ratifiers are held to have understood when they were
adopting the Michigan Constitution of 1963, and a similar
understanding is attributed to the legislators, who also used
the phrase “just compensation” when they enacted the
UCPA
in
1980.
That the legislators who amended the
14
UCPA
in 1993 provided
We reiterated the general rule recently in Dep’t of
Transportation v Van Elslander, 460 Mich 127, 129-130; 594
NW2d 841 (1999), where we described what is relevant to just
compensation as “any evidence that would tend to affect the
market value of the property as of the date of the
condemnation . . . .”
13
the procedures and means for securing remediation costs and
dovetailed those with the just-compensation determination
indicates
no
intent
to
abrogate
the
meaning
of
“just
compensation” established in our jurisprudence. Indeed, to
attribute such an intent, i.e., the intent to diminish a
constitutional
standard
by
statute,
is
to
place
the
legislators in the posture of acting unconstitutionally. This
we avoid unless no other construction is possible15 and, as
such an alternate construction is possible, we adopt it.
The Court of Appeals error was to utilize the plain
language doctrine in a context where it was inapplicable. The
phrase “just compensation” cannot be analyzed on the basis of
the plain understanding each word conveys, but is a phrase of
art
that
imports
with
it
all
the
understandings
those
sophisticated in the law give it.
Moreover, we agree with the argument made in the brief
amicus curiae of the Attorney General, on behalf of the
Michigan Department of Transportation, that the Court of
Appeals was led to error by the commingling of two different
concepts: (1) accounting for contamination in a determination
of fair market value and (2) making an assessment of liability
and damages for the cost of remediation of environmental
15
See Gora v Ferndale, 456 Mich 704, 722 n 15; 576 NW2d
141 (1998).
14
contamination.
As the Attorney General pointed out, a condemnation
action is an in rem proceeding governed by the
UCPA .
It is
instituted to allow a state agency to take title to privately
owned property; thus, the agency and the owner are parties. An
essential part of the proceeding is the determination of the
fair market value of the property. Because this proceeding is
not
designed
to
assign
liability
for
environmental
contamination, the value of the property is unaffected by
whether its owner would be liable for the contaminated state
of the property. The estimated costs of remediation are
relevant only as they pertain to the fair market value of the
property.
In contrast, a cost-recovery action under Michigan’s
environmental-cleanup
laws
is
an
in
personam
proceeding
specifically designed to assign liability for remediation
costs.
NREPA
Those costs are typically sought under
CERCLA
or the
and the fair market value of property is not relevant in
such proceedings.
Further, in a cost-recovery action, in
addition to the agency and the owner, any other person or
entity, such as prior owners, lessees, adjacent property
owners, or other third parties who may have contributed to the
contamination, may be parties. Finally, that the damages
awarded in a cost-recovery action are different, sometimes
15
dramatically
so,
from
the
amount
by
which
contamination
reduced fair market value,16 makes manifest how different these
proceedings are. What is to be grasped, then, is that the
primary connection between a condemnation proceeding and a
cost-recovery action is the escrow that may be created during
the
condemnation
proceeding
to
provide
security
for
the
payment of the potential cost-recovery award.
The trial court, we believe, understood this matter
properly and merely considered contamination as one factor,
albeit a significant one, in establishing a fair market value.
It was the trial judge’s conclusion that any purchaser would
have insisted on a minimal cleanup (the Type-C closure) that
would have made the property useable. The cost of this Type-C
closure is far different from the amount remediation would
have cost.17 Thus, we conclude that the trial court made its
just-compensation
determination
not
on
the
basis
of
Extrusions’ liability for cleanup costs, but on the basis of
the effect of contamination on the parcel’s fair market value.
This was an appropriate way to consider contamination in a
just-compensation proceeding under the
16
UCPA .
The actual cost of remediation in this case was
approximately $2.3 million, while the loss of value caused by
the contamination was found by the trial court to be $237,768.
17
See n 16.
16
We reverse that portion of the judgment of the Court of
Appeals holding that the
does not vest courts with the
UCPA
authority to consider contamination and how it affects fair
market
value
when
determining
just
compensation
in
a
condemnation proceeding. In all other respects, we affirm the
Court
of
Appeals
and
remand
this
case
for
proceedings
consistent with this opinion.
Clifford W. Taylor
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
17
S T A T E
O F
M I C H I G A N
SUPREME COURT
SILVER CREEK DRAIN DISTRICT,
Plaintiff-Appellant,
No. 119721
v
EXTRUSIONS DIVISION, INC, and
AZZAR STORE EQUIPMENT, INC,
Defendants-Appellees.
________________________________
CAVANAGH, J. (concurring).
Although the majority arrives at the correct result, it
unnecessarily reaches a constitutional issue.
We have stated
previously, "there exists a general presumption by this Court
that we will not reach constitutional issues that are not
necessary to resolve a case." Booth Newspapers, Inc v Univ of
Michigan Bd of Regents, 444 Mich 211, 234; 507 NW2d 422
(1993); see also Taylor v Auditor General, 360 Mich 146, 154;
103 NW2d 769 (1960).
Because resolution on statutory grounds
alone would suffice, I would not reach the constitutional
issue.
Additionally, I write separately to note that I am
concerned about the majority’s focus on original intent.
As
I noted in my concurrence in WPW Acquisition Co v City of
Troy,
466
Mich
117,
128-130;
643
NW2d
564
(2002),
the
drafters’ intent is but one method among many useful in the
endeavor to properly interpret our constitution.
Michael F. Cavanagh
Marilyn Kelly
2
S T A T E
O F
M I C H I G A N
SUPREME COURT
SILVER CREEK DRAIN DISTRICT,
Plaintiff-Appellant,
v
No.
119721
EXTRUSIONS DIVISION, INC.,
AZZAR STORE EQUIPMENT, INC,
Defendant-Appellees.
____________________________________
WEAVER, J. (concurring in part and dissenting in part).
I concur in the result only of the majority.
I write
separately to express my disagreement with the majority’s
construction of the constitutional concept, “just
compensation.”1
1
The majority suggests that “just
Article 10, § 2 of the Michigan Constitution provides:
Private property shall not be taken for public
use without just compensation therefor being first
made or secured in a manner prescribed by law.
Compensation shall be determined in proceedings in
a court of record.
(continued...)
compensation” is a “technical legal term or phrase of art”
that cannot be grasped by those not “sophisticated in the
law.”
Ante at 10.
This incorrect suggestion leads the
majority to conclude that the meaning of “just compensation”
must be restricted to the “consensus understanding in 1963,
by those skilled in this area of the law, of the meaning of
‘just compensation.’” Ante at 11.
While it may be that the understanding of “just
compensation” of those sophisticated in the law of
condemnation in 1963 may not differ significantly from that
of the common person, either past or present, this Court
should not engage in a method of constitutional construction
that unnecessarily sidesteps the long-established primary
rule of constitutional construction.
The primary rule2 of
constitutional construction is that constitutional language
is to be interpreted according to “common understanding” as
1
(...continued)
This case was brought under the Uniform Condemnation
Procedures Act, MCL 213.51 et seq., which prescribes the
manner in which just compensation is “first made or secured”
pursuant to Const 1963, art 10, § 2.
2
If the plain meaning is unascertainable, secondarily,
“the
circumstances
surrounding
the
adoption
of
the
constitutional provision and the purpose sought to be
accomplished may be considered . . . .
Finally, whenever
possible,
an
interpretation
that
does
not
create
constitutional invalidity is preferred to one that does.”
State Highway Comm v Vanderkloot, 392 Mich 159, 179; 220 NW2d
416 (1974)(opinion by WILLIAMS , J.)
2
described by Justice COOLEY :
“A constitution is made for the people and by
the people. The interpretation that should be
given it is that which reasonable minds, the great
mass of the people themselves, would give it. ‘. .
. the intent to be arrived at is that of the
people, and it is not to be supposed that they
have looked for any dark or abstruse meaning in
the words employed, but rather that they have
accepted them in the sense most obvious to the
common understanding . . . .’” [Traverse City
School Dist v Attorney General, 384 Mich 390, 405;
185 NW2d 9 (1971).]
The Supreme Court has reiterated this primary rule of
constitutional construction: “Each provision of a State
Constitution is the direct word of the people of the State,
not that of the scriveners thereof.” Lockwood v Comm’r of
Revenue, 357 Mich 517, 565; 98 NW2d 753 (1959). Thus, when
attempting to interpret a constitutional provision, “‘the
primary source for ascertaining its meaning is to examine
its plain meaning as understood by its ratifiers at the time
of its adoption.’” People v Bulger, 462 Mich 495, 507; 614
NW2d 103 (2000), quoting Charles Reinhart Co v Winiemko, 444
Mich 579, 606; 513 NW2d 713 (1994).
Thus, the issue in this case is whether the term “just
compensation” can be said to possess a “plain meaning.”
Contrary to the majority’s suggestion, the meaning of “just
compensation” is neither difficult to discern nor does it
require “sophistication in the law” to be grasped.
3
Ante at
9-10, generally.3
“Just compensation” has long been readily and
reasonably understood to be that amount of money that puts
the property owner whose property is taken in as good, but
not better, a financial position after the taking as the
property owner enjoyed before the taking.4
The measure of
“just compensation” is “the property owner’s loss rather
than the government’s gain.”5
Though determining the dollar figure that most
accurately describes the property owner’s loss can be a
complicated task, such complication does not render “just
3
In certain circumstances, it is appropriate and
necessary to consider the meaning of constitutional terms that
are established in the law.
See, e.g., Michigan United
Conservation Clubs v Secretary of State (After Remand), 464
Mich
359,
414-420;
630
NW2d
297
(2001)(WEAVER ,
J.,
dissenting)(construing “acts making appropriations” in art 2,
§ 9 of the Michigan Constitution), and WPW Acquisition Co v
City of Troy, 466 Mich 117, 123; 643 NW2d 564 (2002)(holding
unconstitutional the Legislature’s definition of a statutory
term that conflicted “with the established meaning of the term
at the time that it was” adopted by constitutional amendment).
4
Wayne Co v Britton Trust, 454 Mich 608, 622; 563 NW2d
608 (1997); In re Edward J Jefferies Homes Housing Project,
306 Mich 638, 650; 11 NW2d 272 (1943); In re Widening of
Bagley Ave, 248 Mich 1, 5; 226 NW 688 (1929).
5
Brown v Legal Foundation of Washington, __ US __,__; 123
S Ct 1406, 1419; 155 L Ed 2d 376 (2003), in which the United
States Supreme Court reiterated that “[t]his conclusion is
supported by consistent and unambiguous holdings in our
cases.” See also Boston Chamber of Commerce v Boston, 217 US
189, 195; 30 S Ct 459; 54 L Ed 725 (1910).
4
compensation” a “technical legal term or phrase of art.”
Indeed, though complicated, that task was expressly
dedicated by the 1850 and 1908 constitutions of Michigan to
a jury of “twelve freeholders, residing in the vicinity of
such property, or by not less than three commissioners,
appointed by a court of record, as shall be prescribed by
law . . . .”
2.
Const 1850, art 18, § 2; Const 1908, art 13, §
Further, this Court has said of condemnation
proceedings, “the jury is the judge of law and fact. Its
conclusions need not be based entirely on the testimony but
it may use its own judgment and knowledge from a view of the
premises and its experience as freeholders.”
Dep’t of
Conservation v Connor, 316 Mich 565, 593; 25 NW2d 619
(1947).6
While the task of quantifying just compensation
can be a complicated task, in light of this history, it
cannot seriously be suggested that the concept of “just
compensation” is anything but obvious on its face.
In addition, I write to express concern with the
majority’s adoption of a one-size-fits-all rule in the
6
Under
the
current
constitutional
and
statutory
framework, a just-compensation award is determined by a jury
or the court. Const 1963, art 10, § 2 provides in pertinent
part that “[c]ompensation shall be determined in proceedings
in a court of record.” MCL 213.63 provides in pertinent part,
“[t]he jury or the court shall award in its verdict just
compensation for each parcel.”
5
context of just compensation.
The majority asserts that
contamination costs must be considered in just-compensation
determinations or the court would “place the legislators in
the posture of acting unconstitutionally.”
This conclusion is certainly debatable.
Ante at 14.7
The statute at
issue provides:
Before initiating negotiations for the
purchase of property, the agency shall establish
an amount that it believes to be just compensation
for the property and shall submit to the owner a
good faith written offer to acquire the property
for the full amount so established. . . . The
good faith offer shall state whether the agency
reserves or waives its rights to bring federal or
state cost recovery actions against the present
owner of the property arising out of a release of
hazardous substances at the property and the
agency’s appraisal of just compensation for the
property shall reflect such reservation or waiver.
The amount shall not be less than the agency’s
appraisal of just compensation for the
property. . . . [MCL 213.55(1).]
The statute’s express consideration of what compensation is
just under the constitution does not necessarily mean that
the Legislature intended, or was constitutionally obligated
to require, that a good-faith offer be reduced by the cost
7
The majority notes that “the primary connection between
a condemnation proceeding and a cost-recovery action is the
escrow that may be created during the condemnation proceeding
to provide security for the payment of the potential cost
recovery award.” Ante at 16. However, the existence of the
escrow mechanism does not answer whether the Legislature
intended that the cost of remediation should be considered in
condemnation proceedings.
6
of remediation in order to constitute “just compensation.”
Though market value typically serves as a measure of just
compensation, it is not the sole criterion.
As recognized
by the United States Supreme Court, where the market value
is “too difficult to find” or the “payment of market value
would result in ‘manifest injustice’ to the owner or the
public,” the market value should not be the measure of just
compensation.
Kirby Forest Industries, Inc v United States,
467 US 1, 10; 104 S Ct 2187; 81 L Ed 2d 1 (1984).
Because the effect of contamination on the value of a
property is difficult to determine and is susceptible to
different remediation and calculation approaches, it is
perhaps more appropriate to leave this fact-laden and case
specific determination to the judge or jury rather than the
majority’s one-size-fits-all formula or artificial rule.
A
determination by a judge or jury is consistent with this
Court’s prior holdings that just-compensation awards in
condemnation proceedings should be decided on a case by case
basis.
“[T]he determination of value in condemnation
proceedings is not a matter of formula or artificial rules
but of sound judgment and discretion based upon a
consideration of all relevant facts in a particular case.”
In re Grand Haven Hwy, 357 Mich 20, 28-29; 97 NW2d 748
(1959), citing In re Widening of Gratiot Avenue, 294 Mich
7
569; 293 NW 755 (1940).
Elizabeth A. Weaver
8
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