Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / State Supreme Court Rebukes Engler’s Takings Stance

State Supreme Court Rebukes Engler’s Takings Stance

Property rights ideology rebuked

May 29, 1998 | By Keith Schneider
Great Lakes Bulletin News Service

Last week, six justices of the Michigan Supreme Court raised the sharp ax of their collective wisdom and finally sent into eclipse a radical legal theory about "property rights" and environmental protection that had heavily swayed some state judges, intimidated regulators, and cost taxpayers nearly $100 million.

In a stirring unanimous decision on March 24, the justices ruled that the Department of Natural Resources did not have to pay $5.9 million to Joseph Kosik and his family. The Kosiks, well-known developers in the area, had been blocked in 1988 from filling in wetlands in order to build a restaurant, bar, and sports complex on 82 acres they owned in Waterford Township in northern Oakland County. The family sued, claiming the state action constituted a seizure that merited just compensation, and two lower courts agreed.

The Supreme Court had a different view. It said there was plenty of room on 82 acres for the Kosiks to build what they wanted and still preserve the wetlands. In handing down its ruling in the case, K& K Construction versus the Department of Natural Resources, the justices overturned the lower courts and simultaneously returned Michigan to the mainstream of American jurisprudence.

But even as the Court directs the Kosiks to try a new design, and serves up a pointed rebuke to property rights ideologues, the ruling also raises fresh questions about the sorrowful management of the state’s natural resources in the 1990s, and the Engler Administration’s governing vision.

In the seven years prior to the Supreme Court decision, a tiny knock in the cradle of right wing ideology had grown into a political juggernaut that has taken Michigan on a wild, expensive, and damaging ride. The property rights movement’s goal of weakening environmental laws and intimidating regulators had been advanced in large part by alliances the governor himself had forged with leaders and their ideology. Nowhere else in the nation has the property rights movement’s message -- that natural resource protections were a seizure of private property that merited just compensation by taxpayers -- been sewn so deeply into the garment of state actions. In effect, property rights ideologues argue that they should be paid for breaking the law.

During his campaign for governor in 1990, Mr. Engler talked about protecting property rights, and after becoming governor named aides sympathetic to the property rights message to lead his Department of Natural Resources and the Department of Environmental Quality.

He also placed property rights advocates in key court positions, among them Clifford W. Taylor, a conservative judicial activist. In 1996, Judge Taylor helped the Mackinac Center prepare its manifesto on property rights that attacked government’s "power over individual liberty" and accused environmental regulations of "essentially stealing the worth of one’s property."

Judge Taylor was recently appointed to the Supreme Court by Mr. Engler, though he recused himself in the K&K Case. Judge Taylor had served on the three-judge Appellate panel that in 1996 affirmed the trial court ruling that the Kosiks’ property rights had been taken and taxpayers should pay for the loss.

The result of this systematic placing of property rights advocates in crucial positions has paid off in a big way for development interests, many of them the governor’s supporters.

• In 1995, Mr. Engler and the Republican-led Legislature struck a deal that paid $94.85 million in taxpayer funds to oil producers and mineral owners who had filed a lawsuit claiming their property rights had been violated when they were blocked from ruining the Nordhouse Dunes, a coastal wilderness area near Ludington.

Engler defended the Nordhouse settlement as a saving of taxpayer funds because the trial court had awarded the oil companies even more damages. The payout, though, was made to some of the state Republican party’s largest donors and before the Supreme Court had the opportunity to fully weigh the issues. The Supreme Court’s decision last week, which environmental attorneys say involved similar issues as in the Nordhouse case, strongly indicates that the settlement was premature.

• In 1996, the Department of Environmental Quality utterly failed to react when 11 people in Manistee County were injured by a leak of hydrogen sulfide from a natural gas well. A senior DEQ official said his hands were tied and he wouldn’t take action against the company, or move to regulate other dangerous wells in neighborhoods, because the property rights of the mineral owners were paramount over the welfare of citizens.

• In 1997, the DEQ awarded a Texas peat mining company a permit to tear up more than 2,000 acres of the Minden Bog in Sanilac County. The permit, the largest ever awarded to damage a state wetland, reversed a decision by the DNR to deny the very same permit in the 1980s. The company sued, claiming its property had been taken and filed a $300 million lawsuit for just compensation. Russell Harding, the DEQ director, said he issued the permit because he believed the company might prevail in the state courts.

The Supreme Court ruling in the K&K Construction sends a long-awaited message to state jurists that developers no longer can ransom the state treasury because they don’t want to follow environmental law. It should quiet the clamor of property rights advocates who cry "takings" at the slightest hint that the community’s well-being affects what they can do with their land. Most importantly, it ends the Engler Administration’s ability to use improper lower court rulings to justify bad decisions that put natural resources and public safety at risk.

A version of this article was published by the Detroit Free Press on March 29, 1998.

Michigan Land Use Institute

148 E. Front Street, Suite 301
Traverse City, MI 49684-5725
p (231) 941-6584 
e comments@mlui.org