What is the correct and fair way to remove Mike Hearn from the Bitcoin development?
If you mean bitcoind development, it would be by convincing the other developers to no longer accept his patches, and convincing the community to not use his patches either. The critical matter, as always, is one of trust.
Here's a good start: why not make the argument in this thread, right here and now, as to what is so "out of line" about "Mike's actions" that the community ought to reject him/his work?