Thursday, January 3, 2019

The Supreme Court’s Takings Clause Jurisprudence: A Comedy of Errors

by Curtis Herbert

Although the Supreme Court gets a great many things right, certain areas of the Constitution have been neglected or wrongfully changed. One such area is the Takings Clause. Over the course of several decades, the Supreme Court has effectively rewritten the clause, radically altering both its scope and the protections that it offers.

The necessary background doesn’t begin with Kelo v. New London, or even the precedents Justice Stevens cites in his majority opinion. It begins with the basic concepts of property law. Ownership of property gives the owner a whole host of rights. She does not merely have the right to exclude; otherwise she could not enter her own land. She also has the right to construct buildings and to use her land for grazing, farming, or simply to let it sit. Title to land also necessarily includes the ability to dispose of it as she chooses: to sell it, give it away, or bequeath it in a will. These rights stop, however, when there is material damage to someone else, as when a property owner constructs a building that produces soot which covers her neighbor’s house, which is a tort. It’s your land, and you can do what you want with it so long as you don’t harm anyone else. It is this concept of property that is protected in the Takings Clause, not one reduced to merely the right to exclude or the right to sell property.

But the Court’s errors breeze over such paltry barriers as enumerated rights. In the 1978 case of Penn Central Transportation Co. v. New York City, a majority of the Court held that, if New York so chose, it could prohibit the construction of a 55-story office building above a train station. This decision was made through a landmark preservation law, which forced owners of “landmark sites” (as designated by a committee) to seek permission before altering their sites. When Penn Central entered into a lease with another company to construct office buildings above the station, the Landmarks Preservation Committee intervened. In response, Penn Central claimed a violation of the Takings Clause and sought just compensation. The Supreme Court found no violation. It held that the city could block development of the air above the station with no regard to the several million dollars this would cost Penn Central. In doing so, it erred through several crucial misreadings of the Takings Clause.

First, Justice Brennan’s attempt to equate the committee’s decision with zoning laws is simply wrong. He misses the point entirely. Because owning property does not include a right to harm others or increase the risk of disease or fire, laws which protect neighbors and passerby from harm do not infringe on an existing property right. Now, zoning laws are (at least ostensibly) motivated by a desire to regulate for safety or the public welfare. But in Penn Central, no one alleged that the proposed building would be unsafe — only that it would be ugly. The committee that prohibited the building didn’t seek to protect any of the interests that provide reason for zoning laws. But it did remove Penn Central’s ability to make decisions which are inherent, inextricable, and central to the idea of property ownership, absent any pretense save for ‘we don’t like it.’

Second, Justice Brennan performs an act of linguistic gymnastics worthy of Chief Justice Marshall. He states that “the law does not interfere with what must be regarded as Penn Central’s primary expectation concerning the use of the parcel. More importantly, on this record, we must regard the New York City law as permitting Penn Central not only to profit from the Terminal but also to obtain a ‘reasonable return’ on its investment.”

As it turns out, when you remove the words “taking” and “just compensation” from the Constitution and replace them with words such as “primary expectation” and “reasonable return,” the results you get are very different. The plain text requires that if a taking (a deprivation of property rights) has occurred, then just compensation (the market value of the rights being interfered with) must be paid. The newer, more hip version Justice Brennan creates asks not whether there was a taking, but whether the “primary expectation” that guided purchase of the land was interfered with, or whether the owner of the property could obtain a “reasonable return” on her investment in the property. This is nothing less than a radical alteration of the Takings Clause, one that even Justice Stevens (who would later write the majority opinion in Kelo, as well as in Babbit v. Sweet Home) dissented from.

The Kelo opinion contains a similarly fanciful reading of the Takings Clause. Susan Kelo was the owner of a small pink house that the government bulldozed to make space for a new research facility. In his majority opinion, Justice Stevens does what Justice Brennan did in Penn Central: delete a phrase and add his own. (To be fair to Justice Stevens, he was faithfully interpreting a couple of abhorrent precedents. While I would rather have seen the precedents overturned, this makes his opinion much less absurd than Brennan’s.)

In any event, the phrase Justice Stevens reads out is the requirement that property be taken “for public use.” Nobody denies that the bulldozing of Susan Kelo’s property, if it was indeed constitutional, constituted a taking. Accordingly, she was paid just compensation. The issue before the Court concerned whether or not the taking was constitutional in the first place. Susan Kelo and her lawyers proclaimed that since the taking was not for “public use,” it was unconstitutional even if compensation was paid. Justice Steven then proceeded to don his Brennan hat, and he equated public use with public benefit, or public purpose. What, then, are the public purposes that the city of New London used to sustain their actions? In a case called Midkiff, a willfully oblivious and shameless Court held that “the State’s purpose of eliminating the social and economic evils of a land oligopoly” qualified as public use. Here, Justice Stevens followed their tawdry example, holding that making room for a research building in order to revitalize the economy is a public use. The Court, naturally, will be extremely deferential to governments when they decide what is an economic benefit, ripping out the heart of the phrase “public use.”

The end result is that Kelo v. City of New London did to “public use” what Wickard v. Fillburn did to “commerce among the several states.” It took a phrase which imposed real limitations on federal power and interpreted it in such a nebulous way as to render it entirely devoid of its original meaning. When Wickard is combined with Penn Central, the ability of the government to seize private property is increased in a way that is inconsistent with the Takings Clause. The Supreme Court ought to take a hard second look at this area of constitutional law.

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