Monday, June 27, 2005
The Takings Clause Is the Right Clause
Kelo | 11:51 PM | | Comments (2) | TrackBack
Perhaps I am missing something in the back and forth between Marty and Walter, but I don't see how it helps to consider the matter in Kelo as a due process problem rather than as a "public use" question under the takings clause.
There's no doubt what the city did was to take private property. I assume that, were there no takings clause and were there only a due process clause, such an outright land grab would violate due process. How could it not be in most instances?
I take the takings clause, then, to be important because it is something of a carve out from the due process clause. Even though it might seem like a deprivation of due process for the government to just take your property without your consent, the constitution expressly ratifies the power of eminent domain. In making that exception to the due process clause's limit on government's power over private property, however, the constitutional text set forth limits on what qualifies as a valid exercise of the eminent domain power -- one of the limits being the requirement that the taking be for a public use.
If all of this is right, then you simply can't avoid the "public use" analysis in a case like Kelo. If you try to just treat the issue as a due process matter, and conclude that the city violated due process, can't the city just argue back -- wait, we fall within the "public use" safe harbour of the Takings Clause. And then aren't you back to square one, having to decide whether it's for a public use? If it is, doesn't the city win?
Of course, the matter is arguably different in a case where the issue is whether the governmental action is even a takings to begin with. But notice how strange the world becomes if we move the doctrine of regulatory takings into the due process box in the way Walter suggests. I suppose the clever government in Walter's preferred doctrinal world suddenly becomes desparately interested in showing that their "regulations" really are takings after all -- at least whenever the regulation would flunk Walter's due process review. By showing the regulation to be a regulatory taking, the government could then at least implement the regulation upon paying just compensation whenever they could show that it satisfies the public use test -- a test that Walter suggests is necessarily going to be more lenient than the due process test. Whereas, if the government cannot show the regulation to be a takings, they are completely powerless to act.
For my part, then, I'd keep things as they are - with most of the battles over limits on the regulation of property playing themselves out as takings clause disputes.
More from Walter Dellinger on Takings and Due Process
Kelo | 02:11 AM | Marty Lederman | Comments (0) | TrackBack
Here is my brief reply to Marty's excellent response: I do think that using the correct clause -- due process rather than takings -- would change results in some cases going in both directions. At present the Court is using the "commercial speech" doctrine and the takings clause in cases where the real issue ought to be whether the law or action in question violates the due process clause (in addition to using them in cases in which they really are appropriate) . The result of using the wrong tool is that (1) much economic regulation gets no judicial review at all while (2) some narrow set of economic regulations that can arguably be dragged into the First Amendment or the Takings Clause rubric can get too much. Except for the real first amendment and takings cases, all economic regulation ought to get something like Cleburne serious rational-basis scrutiny. Justice Kennedy -- even though his opinion was ostensibly under the takings clause -- hinted that this is where he would go as well.
Sunday, June 26, 2005
Which Clause?: Locating the "Public Use" Requirement
Kelo | 11:03 PM | Marty Lederman | Comments (1) | TrackBack
Walter Dellinger suggests that it is more appropriate to view the requirement of "public use" as emanating from the Due Process Clause of the Fourteenth Amendment, rather than from the Just Compensation Clause of the Fifth Amendment (as incorporated by the Fourteenth). I happen to think that Walter is probably correct -- but I wonder what follows from this, and whether there isn't a good reason that property-rights advocates should be reluctant to look to the Due Process Clause for greater protection.
As for the merits of Walter's suggestion: It's worth recalling that there is no language in the Fifth Amendment (or anywhere else in the Constitution) that expressly requires that "takings" of property be for a "public use" or a "public purpose." The Fifth Amendment merely provides that takings that are "for public use" must be (justly) compensated. It might be fair to read this language as resting on an assumption that all takings are for public uses. This was, for instance, Justice Holmes's understanding in Mahon, where he wrote that the “protection of private property in the Fifth Amendment presupposes that it is wanted for public use, but provides that it shall not be taken for such use without compensation.” 260 U.S. at 415. However, it's not fair, I think, for a plain-meaning or original-intent constitutionalist [note: I'm not one] to derive a prohibition on non-public-use takings from the Just Compensation Clause. To be sure, Justice Thomas argues in his Kelo dissent that there is an "express" public-use limitation in the Fifth Amendment itself, relying principally on the theory that if the words "for public use" did not impose a distinct requirement, they would be surplusage. But I'm doubtful: As Jed Rubenfeld has explained, perhaps the words "for public use" were included in order to indicate that compensation is due when the public uses the "taken" property (in the sense of affirmatively exploiting some productive attribute of private property for a particular state-dictated service, in a manner “approach[ing] a taking-over or conscription of the relevant property for the mandated use," 102 Yale L.J. at 1150), but not when the public (i.e., the state) does something other than using the property, such as destroying it (see, e.g., Caltex; Miller v. Schoene) or condemning it or requiring that it lie fallow (see, e.g., Mugler; Central Eureka Mining Co.).
In any event, Ilya is absolutely correct to note that in the late-Nineteenth and early-Twentieth Centuries, the Court derived the "public use" requirement not from the Fifth Amendment's words (the Court not yet having recognized the Fifth Amendment as "incorporated" against the states), but instead from principles of due process (see, e.g., Missouri Pac. Ry. v. Nebraska; Thompson v. Consolidated Gas), or even from pre-constitutional postulates, such as Justice Chase's famous "take from A to give to B" dictum in Calder v. Bull. (See generally Mark Graber, “Naked Land Transfers and American Constitutional Development,” 53 Vand. L. Rev. 71 (2000) (historical survey of nontextual constitutional prohibition on transfers of land from “A” to “B”); John V. Orth, “Taking From A and Giving to B: Substantive Due Process and the Case of the Shifting Paradigm,” 14 Const. Comment. 337, 339, 344 (1997) (noting that in the heyday of laissez-faire, “taking from A and giving to B” became the prime shorthand to describe what was forbidden by “substantive due process”; but that after the demise of Lochner, such a “simple paradigm[]” became an “embarrassment[] as legal discourse”).)
It's notable, in this regard, that Justice O'Connor does not begin her Kelo dissent with the words of the Constitution, but instead with the famous Calder v. Bull dictum -- a dictum that "merely" indicates that because it is against "all reason and justice" to take from A and give to B, courts should not presume that legislatures have been given such powers or that legislatures have done any such thing. Of course, that notion -- that legislatures have not been afforded the power to effect transfers of property from A to B -- has been anachronistic in our legal system for quite some time, and is almost unrecognizable after enactment of the 16th Amendment and the development of the modern, redistributive state. But even if one agrees with Justice Chase that legislatures have not been afforded the power to effect some sorts of transfers to private parties, and even if one concludes that this absence of power isn't simply a matter of state law, but is also reflected in the federal Constitution, I agree with Walter that it is a matter within the purview of the Due Process Clause, which prohibits the rare "naked transfers" that cannot be explained by any rationale other than the desire to benefit discrete private parties at the expense of others.
But what would follow from this shift to the Due Process Clause? After all, under that clause, economic regulation is ordinarily subject to the deferential rational-basis test, which is precisely the test the Court did employ in Berman and Midkiff. As Justice Kennedy notes in his concurrence, the government does not always win: regulation of property is unconstitutional if it is "clearly intended to injure a particular class of private parties, with only incidental or pretextual public justifications." See also note 17 of the Stevens opinion, citing the "class of one" equal protection case Village of Willowbrook v. Olech. But the scrutiny the Court applies under the Due Process Clause is no more rigorous than the scrutiny applied in the modern public-use cases, including Kelo. Therefore, although I agree with Walter that the Due Process Clause is the proper "tool for the job," I wonder why he thinks the outcomes of the job might be different if only the Court were to use the appropriate tool.
Walter Dellinger Writes . . . .
Kelo | 04:56 PM | Tom Goldstein | Comments (0) | TrackBack
Much of what is wrong with Takings Clause jurisprudence seems to me to have been caused by the unwillingness of property rights advocates and sympathetic Justices to revisit the total abandonment of economic due process and their use of the Takings Clause where due process provides a better tool. Take a case like Eastern Enterprises in which massive retroactive liability is imposed on coal companies. The law may have been unconstitutional (I think it was) as a violation of the due process clause. Of the five Justices who thought it unconstitutional, only Justice Kennedy was willing to say it violated economic substantive due process. The other four in the majority were terrified by coming anywhere near "Lochner." So they invoked the technical sounding Takings Clause. This is essentially the same clumsy move William O. Douglas made in Griswold. Since he and most of his colleagues in the majority were unwilling to condemn the Connecticut Birth Control ban as a violation of liberty without due process for fear of sounding like Lochner, Douglas rolls out the Third Amendment etc. Like Kennedy in Eastern Enterprises, John Marshall Harlan is the only Justice who will treat the issue as one of substantive due process -- and he writes a better opinion as as result.
The same fear of revisiting Lochner has led to much of the misguided "regulatory" Takings jurisprudence where that clause is used instead of due process I don't study this area, so I don't really know which of the governmental acts challenged as regulatory Takings I would think were unconstitutional as violations of substantive due process and which not. But I am sure that is the right framework for analysis, not the Takings Clause.
When the Takings Clause is sent in to do the work of Due Process, it is the wrong tool for the job. Most often it is the Just Compensation element that renders the Takings Clause inapposite to the issue before the Court. That clause of the Fifth Amendment (better called the Just Compensation Clause) is violated when and only when the state fails to provide adequate compensation to the owners of the property (assuming a public purpose, a criteria that seems particularly difficult for a court to second guess). When you have a case like Brown v. Washington Legal Foundation (which I argued on behalf of Justices of the Washington Supreme Court, who had adopted the rule using interest from lawyers trust accounts to fund legal services) this issue came up in a pristine form. Clearly the interest on the accounts was the property of the clients and (in my view, unlike some who had defended earlier attacks) it seem to me to have been "taken" by the state. But no compensation was due, because there was no loss: individually accounting for the money would exceed the money due. At argument, I was asked something along these lines: "Are you saying that if I have a piece of property that is a crummy little plot that has no value the government can come and just take it?" I responded that that was exactly what I was saying -- as far as the takings clause is concerned. If the property is worth $10 and the government pays $9 it has violated the clause. But if its worth $10 and loses all $10 in value and the government pays you $0 it has not denied Just Compensation. Whatever problems there are with the IOLTA program, the Takings clause doesn't seem the right tool. And the same is true of this term's San Remo case.
In cases like Eastern Enterprise, Justice Kennedy is willing to go right to due process -- read his majority opinion in State Farm v. Campbell (invalidating a state's award of excesssive punitive damages) and his majority opinion in Lawrence v. Texas the same term (invalidating Texas anti-gay law) and together they read like the same opinion. I think he is right both times.
For anyone interested in an explication of my view that the abandonment by many liberals economic liberty has weakened the underpinnings for the protection of personal liberty and that, correspondingly, that the refusal by many conservatives to recognize a constitutional basis for the protection of personal liberty has weakened the case for the protection of economic rights, see my Simon Lecture at the Cato Institute.
Legislative fix?
Kelo | 08:57 AM | Nicole Garnett | Comments (0) | TrackBack
David is right to chide me for suggesting that the members of the New London City Council are not "real people." His sentiment is echoed in Michael Kinsley's suggestion that ruling for the property owners would be "judicial activism." I'm going to leave to one side arguments about why -- as Ilya noted in an earlier post -- the Court selectively champions democratic outcomes. I imagine that subject may come up tomorrow, in the context of the 10 Commandments case -- and in the weeks to come if there is a retirement on the Court.
On the subject of democracy, however, I just received an email from Julia Mahoney at UVA who reports:
"Here in Virginia, the response to the decision has been fast and furious: within a day and a half, several state legislators vowed to introduce legislation restricting the eminent domain powers of localities."
This was really interesting to me: During an interview for the Elkhart, Indiana public radio station Friday, I learned that Indiana has convened an "Eminent Domain Study Commission."
I wonder how common this response will be, and what such a commission might recommend?
Larry Tribe on Justice O'Connor in Midkiff and in Kelo
Kelo | 08:27 AM | Marty Lederman | Comments (1) | TrackBack
Professor Laurence Tribe, who argued Midkiff in support of the Hawaii Housing Authority's land reform statute, writes with this observation about Justice O'Connor's contrasting opinions:
"In arguing Midkiff, at the level of formal doctrine I urged a standard identical to that for substantive due process challenges; but fearing precisely the kinds of identity-attacking and/or community-disintegrating moves that some think New London made in Kelo, I emphasized both in my brief and in oral argument the strong support in historical tradition and in economic utility for the state's comprehensive scheme for transforming oligopolies with respect to residential property in key areas of the state into well-functioning real estate markets -- thereby arguing that the state law at issue would survive not only rationality review but any plausibly heightened standard, as well. Although Justice O'Connor's opinion for the Court in Midkiff recited some of that material, her opinion was painted with a surprisingly broad brush -- and I was only mildly surprised in Kelo to see her retrace some of her steps from Midkiff and retract the most sweeping of the statements to be found there. Adding the Kennedy Kelo concurrence to the O'Connor Kelo dissent yields a 5-4 majority for at least trying to develop workable criteria for ferreting out corrupt or otherwise pretextual takings."
Barron and Kinsley on Kelo
Kelo | 08:08 AM | Marty Lederman | Comments (2) | TrackBack
David Barron has this Op/Ed today in the Hartford Courant. "The Supreme Court concluded it would follow the wise counsel of previous courts, and defer to the economic policy choices of the people's representatives. But if the court showed admirable deference in refusing to second-guess the city, it also rightly backed away from statements in some earlier opinions that sounded almost like abdication. . . . Important as [its] caveats are, though, Kelo's real significance lies in its broad view of local planning power."
And here's Michael Kinsley's syndicated column. Although his principal theme is that in Raich and Kelo "the danger of conservative judicial activism has been averted for another year," he is fairly contemptuous of the Kelo reasoning: "The court ruled, 5 to 4, that yuppification is a valid public purpose. Or at least it was reasonable for the city to promote yuppification. Who wouldn't like a few more Starbuckses in town? The four dissenters (O'Connor, Scalia, Thomas and the Chief) said: If this is a "public purpose," what in the world is not? One answer is that the town's elected officials thought that the project served a public purpose and that the various subsidies and favors were worth the price. But they may or may not have thought this. When the local government showers a big development with money and favors, it's usually not about sovereignty but about lack of sovereignty. Private developers play jurisdictions off against one another, extracting concessions from all that none would actually make a sovereign decision to give. A Supreme Court decision that concessions of this sort were unconstitutional would have taken them off the table and actually increased the effective sovereignty of elected officials."
Does anyone agree with Kinsley that this is a blow to local sovereignty and that elected officials would have breathed a sigh of relief if the Court had reversed?
Saturday, June 25, 2005
Regulation, Public Use, and Just Compensation
Kelo | 08:52 PM | Eric Claeys | Comments (4) | TrackBack
This is probably my last post, but Marty's questions about just compensation provide an excellent place to frame the disagreement between the two sides in this discussion. I think there is some room for Marty's suggestion about just compensation, though I bet in circumstances narrower than Marty would like, and with compensation higher than Marty would like.
Let me start where Marty starts, with the observation that "the Constitution does not require the state to provide 'just compensation' when one is victimized by a thief." For those of us who start where Justice Thomas starts, that's not the happiest analogy. Rather, when a private property owner suffers a theft, the law gives her the right to elect damages or an injunction for return of the property. That injunction protects a huge range of rights for the owner--the right to say no, the right to bargain, &c. Our beef is this: When Walmart convinces a city council to order eminent domain, the city extinguishes the injunction and all the secondary rights the injunction protects. They're part of constitutional "private property." (This is where Richard Epstein's argument in Takings starts.)
Sometimes, those secondary rights consist of the community values Marty and Nicole have been writing about. Economic-development eminent domains then can extinguish built-up social capital in close communities, as the Mirror of Justice folks have been writing about. But the owner often exercises the right to say no or to bargain because the owner has other, equally valuable, investment plans for the property. Even if public opinion doesn't respect owners who are investors and not little old ladies, sound property theory should. When eminent domain is easy to get, its use discourages lots of little investments in property than matter at least as much as to the local economy as a targeted development project.
As I've explained at length in an article (cited by Justice Thomas!), if one subscribes to more or less this critique, the conclusions for takings law are as follows:
1. The only time the ousted owner should get just compensation is when the public uses the property. The owner breaks even on the payment and does a little better on the fact that, as a member of the public, she gets expanded access to public facilities.
2. In a few narrow situations, in which owners really have the whiphand over someone trying to assemble a large project, it should be appropriate to force off the objecting owner by paying just compensation plus a bonus. But there has to be a real necessity here--the kind that occurs when a dam builder can't build the dam without the permission of all the fellow riparians. The modern debate over urban development is far too loose on this point. Costcos and developers can build a functioning facility around a couple of holdouts. In Kelo, the city condemned a couple of the petitioners' facilities even though it exempted an Italian cultural club right next door to those petitioners. So I agree with Marty for air-pollution disputes, dams, irrigation projects, and rail lines, but not for condo projects or Costcos. (Also, as I've explained in scholarship, the proper substantive and doctrinal hook for this principle is regulatory-takings law, not public use or just compensation.)
3. In those cases where the forced sale is appropriate because of the intractable hold-out, the ousted owner should be made whole not only with just compensation, and not only for subjective losses and investment losses not ordinarily covered by just compensation. The owner should also be guaranteed a profit.
For the libertarians, the question of principle is this: If an assembly is going to be so valuable to society that it ought to trump ordinary principles of freedom and consent, then shouldn't society make sure that freedom & consent really are obstacles, and in those cases shouldn't it let the owner who loses the right to object share in the wealth created?
Kelo and federalism
Kelo | 08:46 PM | Ilya Somin | Comments (1) | TrackBack
Thanks to Marty Lederman for forwarding Bob Ellickson's insightful comments on the case. One of my regrets from my days as a Yale Law School student is that I wasn't able to take a class with Prof. Ellickson.
Ellickson's view of the politics and economics of Kelo-style takings is almost exactly the same as my own (see my earlier post below), yet he still supports the Court's decision on federalism grounds. This raises an important question: Why do conservatives and libertarians like myself, who normally favor federalism and decentralization, support stringent national constraints on local and state governments in takings cases? Maybe we are just inconsistent, but I think not.
Decentralized federalism works well in situations where citizens can "vote with their feet" in opposition to policies that oppress or harm them. If I think Virginia taxes are too high or its public services too inefficient, I can move to another jurisdiction where policies are different. Such interjurisdictional competition places real constraints on many abuses by local and state governments, because they fear losing residents and the tax revenue they produce.
Unfortunately, however, property rights in land are different. By its very nature, land is immobile. Therefore, voting with my feet won't help if the City of Falls Church (where I live) decides to condemn my home. To be sure, abusive condemnation policies might deter new homeowners from moving into the city. Nevertheless, the city still has a substantial captive market in those property owners who already live there, and incumbent politicians may not care if their abusive behavior hurts them only in so far as it causes reduced in-migration by potential future residents - a circumstance that probably won't have a major effect until several years have passed (by which time these particular politicians will probably be out of office anyway).
As Bob Ellickson suggests, abusive condemnations might be curbed by state courts, and there are indeed about a dozen states that forbid Kelo-style condemnations and others that restrict them. However, most state judges are elected, and the electoral process is often influenced by state party machines and interest groups (even more so than with other elections). Therefore, there is a danger of "capture" of state courts by development interests, just as - according to Prof. Ellickson himself - they often capture the eminent domain processes of local governments. Such "capture" is much less likely in the case of federal courts.
For these reasons, people like myself who generally favor competitive, decentralized federalism can at the same time favor stringent federal judicial review of public use cases.
Bob Ellickson on Kelo
Kelo | 07:36 PM | Marty Lederman | Comments (0) | TrackBack
Professor Robert Ellickson writes:
Contrary to all the Kelo-inspired popular talk about the demise of property rights, the trend over the past 40 years has been otherwise (thanks in significant part to Jane Jacobs). Following the Court's decision in Berman in 1954, cities were profligate in their use of eminent domain. In New Haven (my city, and admittedly an extreme case), about 15% of the population was forcibly displaced during the 1960's and 1970's. Today this sort of dislocation would be both politically and legally impossible. The popular reaction to Kelo is one indication of how sentiment has changed. Another is that the designers of the huge Big Dig highway project in central Boston deliberately bent over backwards to avoid having to displace a single resident. In short, the Institute for Justice should be delighted that popular opinion has moved so sharply its way. I actually worry that political opposition to eminent domain may go too far, as it has in Japan, where completion of the second runway at Tokyo's Narita Airport has proved to be impossible.
I largely agree with Tom Merrill's sentiments about the opinions in Kelo. The IJ has helped shift the Court's discussion toward greater respect for property owners' interests. Even Justice Stevens's opinion for the majority is a far cry from the undemanding rational-basis approaches adopted in both Berman and Midkiff. According to statistics gathered by Tom Merrill and (later) Corey Wilk, between 1953 and 2003, landowners prevailed on the public use question in just one out the 31 reported federal cases on the issue. (They prevailed about 17% of the time in the state courts.) After Kelo, this may well change. In sharp contrast to Berman and Midkiff, all four Kelo opinions are rich with ammunition for opponents of government projects.
I happen to strongly oppose, on policy grounds, virtually all economic-development initiatives of the New London stripe. They tend to be boondoggles that waste taxpayer money, coerce the politically weak, and corrupt the political process. But unlike the IJ, I do not favor strong national constitutional constraints in policy arenas where state policies would not have significant interstate consequences. On issues such as the use of eminent domain for economic development (as well as issues such as abortion, same-sex marriage, and euthanasia), isn't it better to let states develop independent policies? I'd prefer that the main battlegrounds on eminent domain issues be city halls, state capitals, and state supreme courts, not the federal courts. On that important structural question, I agree in this instance with Justice Stevens, not Justice O'Connor.
O'Connor's dissent
Kelo | 05:12 PM | Ilya Somin | Comments (0) | TrackBack
I am not the world's greatest fan of Justice O'Connor's judicial philosophy, and like many Kelo critics, I believe that J. Thomas' approach is the better way to go. However, O'Connor's argument is not nearly as indefensible as Marty Lederman and others claim.
First, it would NOT be necessary to overrule 100 years of precedent to go O'Connor's way. As I explain in an earlier post, virtually all the US Supreme Court takings cases in the first 50 years of that period were not actually decided under the Takings Clause at all, but under the Due Process Clause of the Fourteenth Amendment. Essentially, they held that the Lochner era Substantive Due Process doctrine put relatively modest constraints on takings, at a time when the Takings Clause had not - as yet - been held to be incorporated against the states. This is perfectly consistent with holding that the Takings Clause (setting aside the difficult issue of incorporation, which applies to the entire Bill of Rights and not just the Takings Clause), which after all explicitly deals with eminent domain, puts tighter limits on takings. Moreover, as Thomas points out, virtually all these early cases did in fact involve condemnations for public ownership or for common carriers. So all that would have to be "overruled" from this era is a few snippets of expansive rhetoric, some of which is probably dictum (Thomas' opinion does a good job of laying out the details on these 2 points).
Nor would it be necessary to repudiate Berman v. Parker, which upheld blight condemnations. Numerous state supreme courts - most recently Michigan in its reversal of Poletown in the Hathcock case - forbid economic development condemnations while still allowing blight condemnations. This is precisely what O'Connor advocates in her dissent.
And the rationale for doing so is a serious one, though I don't fully agree with it: When property is condemned for blight, the main goal is to remove the blight that is there, so the future activities of the new owner matter far less for the achievement of the ostensible goal of the taking than in a case like Kelo, where the goal can only be achieved if the new owner provides economic benefits to the community. Thus, as many courts put it, in blight condemnations the transfer of property to a new private owner is only "incidental" to the purpose of the taking because the main goal - eliminating blight - is achieved by the mere fact of eliminating the preexisting uses of the land - which is usually done by tearing them down while the property is still in government hands. I personally favor banning or at least severely constraining blight condemnations, but one doesn't have to take that view to support O'Connor's dissent.
Finally, it is the case that O'Connor's position DOES require overruling some of the more expansive rationales of Midkiff and perhaps Berman. But she explicitly urges this when she repudiates these cases' conclusion that the eminent domain power is coextensive with the police power. And even Stevens' majority opinion (as well as Kennedy's concurrence) fails to apply Midkiff's most extreme holding - that a public use is anything "rationally related to a conceivable public purpose." David Barron, Tom Merrill, and other Kelo defenders seem to agree in their posts below that this rule is no longer the law after Kelo. On this issue, O'Connor is - gasp! - so radical that all nine justices seem to agree with her.
The bottom line: it is not unusual for the Supreme Court to narrow the scope of past precedent by cutting back on its rationale rather than overrule it entirely. Even Brown v. Board failed to explicitly overrule Plessy v. Ferguson. O'Connor's dissent is very much in this long-established tradition.
The Kelo Dog That Didn't Bark: The Inadequacy of "Just" Compensation
Kelo | 04:12 PM | Marty Lederman | Comments (5) | TrackBack
Thanks so much to Nicole, Eric and David for their very thoughful responses. I think there is a great deal of truth in much of what they write and, in fact, Nicole and Eric have each identified matters about which I was going to post separately, so . . . here goes with the first one.
The common public reaction to this cases has been: "How can that be constitutional? It's outright theft!" The oddity of this analogy, of course, is (as David Barron notes in an Op-Ed tomorrow) that (i) thieves do not ordinarily seek and receive permission from the city council to burgle from homeowners and (ii) the Constitution does not require the state to provide "just compensation" when one is victimized by a thief. My focus here is on the latter distinction: You'd hardly know it from popular and blogospheric accounts that New London is prepared to provide compensation for the value of the homes. Why doesn't that fact have much salience?
Nicole is right on the money in suggesting that the visceral public reaction is a reflection of the fact that we're talking about homes and community here. If the only properties at issue in the case had been the five that were being "held for investment properties," the public reaction would have been considerably muted. But what got the blood boiling was that New London is condemning the home in which Wilhelmina Dery has lived for her entire 87 years -- and what's worse, they're doing so at the bidding of a faceless, mega-corporation, in the hopes that Pfizer's presence will lead to the influx of homeowners (residents/taxpayers) of a very different social and economic stripe.
Justice Thomas thus was onto something very important in his dissent when he wrote that "no compensation is possible for the subjective value of these lands to the individuals displaced and the indignity inflicted by uprooting them from their homes." Nicole and Tom have both written thoughfully on this problem (71 G.W.L. Rev. at 945-49, 952-53, and 72 Corn. L. Rev. at 82-85, respectively). And the canonical treatments continue to include both Peggy Radin's work to which Nicole referred and Frank Michelman's landmark 1967 article (80 Harv. L. Rev. at 1255), in which he wrote:
"How do you translate into dollars the shock of changing neighborhoods and the damnable inconvenience of moving, or appraise the educational damage inflicted by midstream changes in schools? All these problems are multiplied a hundred or a thousandfold where large scale programs scatter large numbers of families. The imponderable and idiosyncratic nature of the losses involved, and the interminable wrangling over amounts which would result from imposing a legal requirement of 'just compensation,' furnish a classic instance in which compensation claims are defeated largely because of sheer impenetrability. Yet the violent unfairness of many such operations is manifest. The social gains hoped for from some urban redevelopment programs, while plausible enough to override any 'public purpose' objection, nevertheless depend on a still controversial conception. Easily identified, relatively small numbers of people are being handed a distinctly disproportionate and frequently excruciating share of the cost of whatever social gain is involved. . . . There is no palpable reciprocity; the sufferers rarely double as special gainers, and they must submit to the spectacle of private land developers (or new residents) moving in for what looks like a publicly subsidized benefit. Those dislocated are likely to be members of a social class which comes increasingly to be identified as a faction—'the urban poor.' Yet their influence and organization is not so great, certainly less than their numbers might indicate; and so the sense of having bargained for compensatory concessions probably brings little satisfaction. Altogether, the spectacle of uncompensated dislocations under these circumstances is an oppressive one."
But why should this problem be addressed by distorting the "public use" analysis? After all, if the transfer to Pfizer is a "public use" for purposes of the investment properties whose owners do not suffer from the same sorts of injuries, how can the "public use" calculus be different for Susette Kelo? Isn't the better solution to reassess the way in which "just compensation" is calculated?
Although the Court once hinted that alternative standards of just compensation might be appropriate when application of the fair-market-value test “would result in manifest injustice,” United States v. Commodities Trading Corp., 339 U.S. 121, 123 (1950), in recent years the Court has resisted the notion that the state is obliged to compensate for nonpecuniary losses. See Brown, 538 U.S. at 236-37 (it is “clear that, given ‘the liability of all property to condemnation for the common good,’ an owner’s nonpecuniary losses attributable to ‘his unique need for property or idiosyncratic attachment to it, like loss due to an exercise of the police power, is properly treated as part of the burden of common citizenship’”) (quoting Kimball Laundry Co. v. United States, 338 U.S. 1, 5 (1949)).
At oral argument, however, both Justice Kennedy (pp. 22-23) and Justice Breyer (pp. 47-50) expressed great concern about the adequacy of "just compensation" in the case of homowners, which led many (myself included) to predict that perhaps we'd see a separate cocnurring opinion presaging a possible reconsideration of what compensation is "just" in cases such as Kelo and Poletown.
But there's nothing of the sort in the opinions. Any ideas why not? Perhaps the reason for the Court's reluctance to start down the road of compensation for subjective or idiosyncratic losses is that, in Professor Merrill's words, a “principle of full indemnification would pose difficult valuation problems, for subjective value is inherently difficult to measure.” (Recall Michelman: "The imponderable and idiosyncratic nature of the losses involved, and the interminable wrangling over amounts which would result from imposing a legal requirement of 'just compensation,' furnish a classic instance in which compensation claims are defeated largely because of sheer impenetrability.")
what do people think of kelo
Kelo | 03:55 PM | | Comments (7) | TrackBack
I think Nicole is exactly right in how she frames what was at stake in Kelo -- protecting what's left of a neighbrohood vs promoting a vision of revitalization. Where I disagree with her is with her last sentence -- that "most real people" favor protecting the neighbrohood. My disagreement also extends to the general discussion that assumes that some out-of-touch elite is thwarting majority will in upholding the actions of the City of New London. I find this whole frame for analysis deeply puzzling. The City of New London acted through its city council. As far as i know, its mayor supports the project. The state of Connecticut issued bonds to help finance it. State law makes it perfectly clear that what the city did could be done. In short, every relevant political institution in Connecticut endores what happened in New Lndon. So why the utter confidence among those blogging that "most real people" think New London should not have been able to do what it did? I think the facile public choice analysis being pushed by the dissenters -- big developers ram this stuff through is. . . facile public choice analysis. After all, if the city failed to win approval for its redevelopment plan, we could say -- using facile public choice analysis -- that concentrated special interests thwarted the public interest by narrowly focusing on their particular losses (their homes) at the expense of superior but diffuse public benefits. That's often what we hear from public choice folks when, say, neighbors push anti-growth land use measures. All of this is to say that when a court upholds action taken by a city in full view of its people and backed up by clear state legislative authorization, we should be hesitant in assuming that the court has thwarted majority will. Maybe, just maybe, it has properly deferred to it. Put otherwise, if libertarians want to oppose majority action, go right ahead. But you can't have your cake and eat it, too.
O'Connor
Kelo | 03:24 PM | Eric Claeys | Comments (0) | TrackBack
I have a couple of reactions to Marty's thoughts about Justice O'Connor. I should warn up front that I'm in the same boat as Nicole, except more so -- I co-authored an amicus brief by the Claremont Institute arguing that the Court should take the position that Justice Thomas took in his dissent. (Anyone interested can read the brief here.) But I've been curious about O'Connor's positions for reasons similar to Marty. For several reasons, I'd be especially interested in others' reactions.
One lesson is more specific to O'Connor, and specifically to her pragmatism. In Palazzolo, O'Connor wrote a concurring opinion that described regulatory-takings law seem as ad-hoc and pragmatic as possible. Taken together, O'Connor's opinions in Lingle and Kelo illustrate nicely one recurring danger with pragmatism: By purporting focusing heavily on particulars, a pragmatist may miss the fact that she is really resolving different individual cases by appealing to different overarching theories of behavior and morality. In Lingle, O'Connor justified getting rid of the Agins substantially-advance test by appealing to the most REalist and pro-state elements of takings law; in Kelo, she appealed to the most libertarian and pro-freedom elements of takings law. This is probably not a fatally-damning defect in pragmatism, or at least not as practiced by more accomplished pragmatists like Richard Posner. But the disjunction between her opinions in Kelo and Lingle is probably representative of a serious risk with pragmatism in practice.
My other reactions to O'Connor's opinion relate more generally to the conservative wing of the Court. Takings law highlights a few real hard tensions in the way the Court's conservatives see con law. Excepting Justice Thomas, the conservatives sympathize with original meaning but also consider policy to varying degrees. The Kelo case exposes tensions between those alternatives in a couple of ways. Marty covered the first -- how do you come up with a coherent way to decide for Kelo when you've compromised the original meaning of "public use" because you agree that it's fundamentally OK to oust homeowners to build private dams and irrigation projects. I don't think this problem was fatal to the conservatives in Kelo as Marty suggests, but it is a serious problem.
Second, the public-use issue highlights problems that arise if, as the Court's conservatives do, one is cautious in one's originalism. The conservatives will sometimes follow originalism, but they bring to their originalism a cautiousness -- they won't embrace an original understanding unless the constitutional command is pretty focused, and unless the evidence seems clear to them that the Constitution requires the command. in other words, even if the Public Use Clause means what Justice Thomas says it means -- use by the public -- some condemnations that occur in local city practice could still be justified as exercises of the police power and not the eminent-domain power. So then, to apply originalism in a coherent manner, the conservatives would need to get straight on the original difference between the police power and the eminent domain power -- the subject of regulatory-takings jurisprudence. But the original meaning of the Takings Clause is not nearly as clear as the original meaning of the Public Use Clause, especially as it applies when the government tries to use the police power to condemn property. So even if the conservatives wanted to follow the original meaning of the Public Use Clause, blight cases and assembly cases would still give them fits. Keith Whittington and Randy Barnett have called the problem here one of constitutional construction -- the Constitution is determinate in part, but not in full, and a judge needs to fill in substantial gaps to make the original meaning of a provision work.
why the outrage
Kelo | 02:58 PM | Eric Claeys | Comments (0) | TrackBack
Marty raises a lot of good questions. I'm going to split my answers up. Let me take a whack at his question about why Kelo's so controversial. I think the following factors are important parts of a complete explanation. Kelo has caught the public's attention because the facts of the case highlight that there is a sharp distinction between the morality of everyday voters on one hand and of urban planners and land-use lawyers on the other. (Not to judge one or the other morality -- just to point out that, as a descriptive matter, there is a difference.)
Of course, that's been true since at least the 1950s (Berman) and probably since the 1920s, when the anti-blight movement first got going. There are at least 2 reasons why the public is much more primed to notice now. First, in 1950, it was not the case that most people on the street had a friend or relative whom a developer had tried to pressure out of her house. Berman and similar cases encouraged local governments and developers to get more aggressive; after 50 years, those cases' consequences now hit a lot of people where they live.
Second, in 1950, there were not well-organized conservative/libertarian grass-roots groups, impact-litigation groups, or alternative media. But conservatives & libertarians figured out how to organize the grass-roots in the 1970s and 1980s, and the repeal of the fairness doctrine and the rise of the internet created a lot of conserv-atarian media outlets in the 1990s. So now, when a case like Kelo comes down now, these media and policy entrepreneurs will make sure the public knows and run with the outrage.
I am sorry that Suzette Kelo lost, but I am not that sorry for IJ. By losing by the barest of 5-4 margins, IJ lost in the most lucrative and energizing way. Its staff will know what to do next.
Why the outrage?
Kelo | 01:12 PM | Nicole Garnett | Comments (1) | TrackBack
I am not the one to defend the Steven's position: I wanted -- but did not expect -- the Court to come out in favor of the property owners in this case. I do agree with Marty that Thomas, not O'Connor, comes closer to explaining what needed to be done for the plaintiffs to prevail.
Marty raises an interesting point: Why, if Kelo changed nothing about the law, are people so upset by the decision?
My sense is that the outrage over Kelo really isn't about the law. The outrage reflects two things: (1) the American ideal of equality ("HOW DARE THE GOVERNMENT TELL ME SOMEONE ELSE WILL PUT MY PROPERTY TO A BETTER USE!") And, (2) The extent to which, as Peggy Radin argues, our property becomes tied up in our personhood. For various reasons (the endowment effect, sentimentalism, the fact that our property situates us in community, etc.), we become deeply attached to our property and outraged at the thought that the government might take it -- and our communities -- away from us.
Mirror of Justice has an interesting series of posts about takings, community, and justice. (In the interest of full disclosure, many of them are by the very talented Rick Garnett, with whom I share a home and three children.)
I was particularly intrigued by the comments of Dean Mark Sargent of Villanova Law School. Mark grew up in New London and speaks eloquently of the loss of old neighborhoods through this redevelopment project and others in the past. ("When I think about this case, I see first what is gone -- an old Italian neighborhood, with a few Irish leavening the mix (but very few of what we called "Yankees" back then - and I don't mean Joe DiMaggio).")
But still Mark agrees with the decision:
"By 2005, the Fort was no longer a community. It was mostly dead and gone. Very few people remained -- most had left not because of the new pressure for economic development but because of decades of deindustrialization and white flight in the surrounding areas. I deeply sympathize with the attachment of the few remaining people, mostly elderly Italians (like my own relatives), too frail, frightened or stubborn to move. But if the balance point is not the inviolacy of property rights, but the needs of community (by which I mean something more specific than the common good), then the scales tilt toward the deeply impoverished old city of New London, desperate for tax revenue to support a poor, isolated and highly dependent population."
With respect, I disagree with Mark. But I think that his post captures what this case was really about. Kelo pitted the outrage of those justices who couldn't BELIEVE that the government is permitted to take property simply to upscale it against the sympathy of justices who couldn't BELIEVE that the Court would stand in the way of the efforts of a dying industrial city to better itself. The latter position prevailed in the Court, as we all expected. But, the former prevails in the hearts and minds of most real people, which is why people are so upset by Kelo, why it is so fun to teach public use cases in Property class, and why IJ has been so successful in the court of public opinion. (On the latter, see www.castlecoalition.org.)
Is the Lead Dissent in Kelo Defensible?
Kelo | 12:46 PM | Marty Lederman | Comments (0) | TrackBack
Kelo has been met with howls of outrage in the blogosphere and in the popular press. Indeed, it’s hard to recall any recent SCOTUS decision that has been so roundly and vociferously attacked. One might think that the Court had done something radically new and unexpected here.
But that’s simply not so, right? Kelo is entirely consistent with well over 100 years of established precedents, as Justice Thomas’s dissent basically (and refreshingly) concedes. Justice Stevens’s analysis, so consistently vilified online and in the press, is actually quite simple and straightforward: New London’s proposed condemnations are for a “public use” “[b]ecause over a century of our case law interpreting [the Just Compensation Clause] dictates [that] answer.” (I should add here that it is apparent that both Justice Stevens and Justice Thomas relied heavily on Tom Merrill’s wonderful amicus brief, which recounted the historical precedents in great detail.)
Does anyone disagree with this? In order for Kelo to win, wouldn't the Court have had to overturn numerous longstanding precedents? Justice Thomas himself identifies at a dozen that he would overrule, going back to 1896, and his list doesn’t even include the recent decisions in Monsanto and Brown (the IOLTA case). Moreover, these holdings were often unanimous (e.g., the two leading cases, Berman and Midkiff), or issued without dissent.Thus, I agree with Nicole that the truly shocking thing about Kelo is not the majority opinion, but instead that IJ was able to secure four votes to reverse. Three of those votes are not, perhaps, so surprising. But Justice O’Connor’s certainly was: She did, after all, write Midkiff (and Lingle). And hers was the fifth vote just two years ago in Brown, in which the Court reasoned that property may be taken for any use that could legitimately be supported by special taxes, or user fees—such as, in that case, to subsidize legal services for the poor. 538 U.S. at 232. This is (as it ought to be) simply the “rational basis” test ordinarily applied under the due process clause. (I am a bit surprised that the “public use” holding in Brown did not play a more prominent role in Kelo, barely being cited in the briefs and mentioned only in passing in note 14 of the Court’s opinion. Justice Scalia well understood the breadth of the “public use” holding in Brown. He complained in his dissent in that case that “[t]his reduces the ‘public use’ requirement to a negligible impediment indeed, since I am unaware of any use to which state taxes cannot constitutionally be devoted. The money thus derived may be given to the poor, or to the rich, or (insofar as the Federal Constitution is concerned) to the girlfriend of the retiring Governor.” Id. at 242-243 n.2.)
Justice Thomas, as is his wont, would have the Court repudiate more than a century of law. Much of the online commentary, especially that of a libertarian bent, is basically along these same lines. Which I suppose is fine, as far as it goes, but I think we’d all concede that it’s a nonstarter for eight of the nine Justices, and that by the time there is a Court majority in support of the convulsive changes advocated by Justice Thomas in cases such as Kelo, Raich, Sabri, Lopez, etc.—with Justices Brown and Pryor and two like-minded colleagues joining Justice Thomas—ours will be a very different Nation, and such doctrinal moves will be the least of our concerns.
But is there anyone out there willing to defend Justice O’Connor’s opinion? She ignores many of the cases (including Brown). Although she would reject much of the central reasoning of Berman and Midkiff, she doesn’t join Justice Thomas’s call to overrule the holdings. What is her rationale for distinguishing them? As I read her opinion, she attempts two sorts of moves.
First, she offers a distinction between condemnations that eliminate previously “harmful” uses of property and those that don’t. Justice Stevens limits his response to a footnote (note 16), which is probably more than it deserves: This proposed distinction couldn’t deal with many of the governing cases, including Berman itself, as well as Monsanto, Brown, and several of the earlier cases that Justice O’Connor simply ignores. (More on this by Helvidius over at Ex Post.)
The second O'Connor move is not to offer any distinction at all, but instead simply to argue that any notion of “public use” (e.g., for economic development) that has no logical stopping point must be invalid. This is similar to the Chief Justice’s “reasoning” in Lopez—i.e., not to prescribe any affirmative test, but simply to reject any test that would (in the Court’s view) effectively foreclose any meaningful judicial review. That mode of reasoning has not had much success, or lasting power, in Commerce Clause doctrine (see Guillen, Raich), and I imagine it would have been similarly inefficacious and unsuccessful here, too.
This is not to say that the Court would have had to overrule Midkiff, Berman, et al., in order to reverse. As we now know (see Bush v. Gore), there’s no such thing as an opinion that “doesn’t write,” and the Court can do most anything it wishes—indeed, Justice O’Connor could have written a “we’ll know a non-public use when we see it” sort of opinion (which, in fairness, is essentially what she did). But was there a coherent, defensible way to reverse the judgment without significant overruling?
There are, of course, those who would affirm the holdings of prior cases while rejecting their rationales—Nicole, for instance, would favor a more stringent means/ends test. But does everyone agree that some such radical shift—or, more fundamentally still, Justice Thomas’s approach—would have been necessary, and that Justice O’Connor’s opinion doesn’t cut it? Conversely, does anyone actually think that the Stevens opinion is deficient, assuming that the Court was reluctant to overrule well-established, governing precedents?
Friday, June 24, 2005
Commentary by Kelo's lawyers
Kelo | 12:26 PM | Ilya Somin | Comments (0) | TrackBack
Dana Berliner and Scott Bullock, the Institute for Justice lawyers who represented Kelo in the case have been following our discussion, and have asked me to post the following commentary, which criticizes some of our posts and also makes some good points about the case as a whole. I agree with many, though not all, of their contentions.
Dana and Scott litigated Kelo all the way from the state trial court to the US Supreme Court and are also the key architects of IJ's extremely well thought out legal strategy for changing the law of public use. Agree or disagree, their thoughts on Kelo are certainly required reading for anyone interested in the case:
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Kelo was the right case to bring to the Supreme CourtWe have noticed a number of comments on this site suggesting that Kelo was somehow not the right case to bring and that a case more like the 99 Cents case would have been better. We believe Kelo was in fact the perfect case to bring, because it presented the issue as most people face it.
The Court did suggest that projects that don't go through a planning process might still be subject to challenge. The problem is that virtually every project in the country has a plan and goes through a planning process. There are a few outliers where the local government was too stupid or careless to do that, but they are few and far between. Instead, most projects are just like the project in Kelo. There was no outright corruption, although the process miraculously resulted in a project that exactly met the desires of a private party (in this case Pfizer). The result of the process, while purporting to have community input, was a foregone conclusion even before any of the hearings started.
Yes, Kennedy's concurrence hinted that maybe if there was outright evidence of collusion he would have voted for property owners. One out of a hundred cases, if that many, has some kind of direct evidence of corruption (and that would be illegal anyway under statute). That's not the problem. The problem is that you don't even need corruption or bribery. Why bribe your city officials if all you need to do is come up with a "plan" that shows you can make more money than someone else on a piece of property? And if we had brought 99 Cents and got a decision that told us that eminent domain when there is corruption is bad, we wouldn't have anything and that decision would be of use to almost no one.
Kelo had one element that, again, many people experience but that was not present in 99 Cents: the city doesn't even know what it was going to do with the property. That should be struck down as a speculative taking, but instead the Supreme Court is actively encouraging speculation. There is a gaping hole in Steven's opinion where he says that we don't know if there are private beneficiarcies here because WE DON'T KNOW WHO THOSE BENEFICIARIES ARE! How perverse! It is an open invitation to cities to do speculative takings. Condemn now, don't name the beneficiary, and then cut the sweetheart deals later on. A fiasco in the making!
Unlike the speculative takings in Kelo, in 99 Cents, the taking actually was going to result in "economic development." Costco was set to build on the site. It definitely was going to produce more taxes than the 99 Cents store. Costco was one of the largest tax payers in Lancaster, and if it had left, the loss of Costco would have had a very real and direct impact on the public. That was all part of the record. The Lancaster government actually had a stronger claim than New London that the taking would result in "public benefit."
The majority and the Kennedy concurrence offer some tiny room for future legal challenge. Those few condemnees in cities that don't bother to do plans or who actually engage in corruption may still be able to bring federal constitutional challenges. But the vast majority of individuals are left entirely without federal constitutional protection. If the majority thinks they offered any meaningful protection, they are completely disconnected from reality.
Dana Berliner and Scott Bullock
Why Kelo was wrongly decided
Kelo | 11:37 AM | Ilya Somin | Comments (5) | TrackBack
Just to stir things up a bit, I'm going to summarize the two most important reasons why I think Kelo was wrongly decided. Obviously, this can only be a brief summary of a complex set of arguments. For a more detailed statement of the case for banning economic development takings, see my article here:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=677763
I. Original meaning.
Justice Thomas' dissent does an excellent job showing that the original meaning of "public use" was either actual public ownership of the condemned property or at the very least a legal right of access by the public (as in the case of takings for railroads and other common carriers). It did not mean a mere potential benefit to the public, which is why the text does not use a term such as "public purpose," which the Kelo majority uses interchangeably with "public use." Many state supreme court decisions explicitly distinguish between "public use" and "public purpose" (I can provide cites to anyone who may be interested), and the US Supreme Court should follow their lead.
The majority cites late nineteenth and early 20th century Supreme Court decisions that seem to suggest that "public use" and "public purpose" or "benefit" are synonymous. However, not only are these statements mostly mere dicta (as Thomas points out), but the decisions in question are not even about the Takings Clause at all. As my colleague David Bernstein (a leading expert on the Lochner era) has argued, these cases were in fact decisions about the limits imposed on eminent domain under the Lochner-era substantive due process doctrine protecting economic liberties through the Due Process Clause of the Fourteenth Amendment. Whatever one's views on Lochner, I think it's clear that Lochner-era "substantive due process" decisions are not a reliable guide to the meaning of the Takings Clause.
II. The political process is fundamentally flawed.
Many Kelo defenders argue that we don't need strong judicial review of public use issues because the political process will prevent most abuses of eminent domain. This assertion cannot withsstand scrutiny for three crucial reasons:
First, the victims of economic development takings are usually poor and politically weak, while the beneficiaries are often large corporations or well-connected developers. For a variety of reasons more fully summarized in my article cited above, the political process is systematically biased in favor of the latter and against the former.
Second, the historical record is replete with massive and systematic evidence of eminent domain abuse. I cannot present all the evidence here (some of it is summarized in Thomas' dissent and in my article above), but will cite just one startling statistic (see my article for documentation): Since 1950, some FOUR MILLION Americans, most of them poor and/or ethnic minorities, have been uprooted from their homes by "urban development" condemnations. In most cases, the beneficiaries of the takings were wealthy development interests, while the poor and politically disadvantaged victims were given compensation far below the level of their actual losses. These condemnations also did little to actually improve economic development in the cities in question and in many cases probably retarded it.
Third, even if the political process does prevent most abuse (and I don't doubt that it can prevent some), that still wouldn't justify judicial abdication. It is likely that the political power of the press would prevent most violations of its free speech rights even if there were no First Amendment (a prediction actually borne out by the experience of Britain, where there is relatively little censorship despite the lack of strong judicial review of freedom of the press issues). Yet few if any advocates of judicial deference on takings questions would be willing to support similar deference on issues of press freedom, despite the fact that the political process probably protects the rights of the media far better than it protects the rights of the poor and minority homeowners who are the most common victims of eminent domain abuse. Even if a particular constitutional right is rarely violated, the judiciarly should still intervene in those cases where a violation does occur.
O'Connor's lost majority/Stevens's rational basis review
Kelo | 10:54 AM | Nicole Garnett | Comments (1) | TrackBack
Interesting idea. I think that Orin may be onto something. I too thought when I read the opinion -- "wow, this view almost won." I am not sure that I agree with Eric that more work needed to be done in the opinion to make it a majority. First, O'Connor wrote Midkiff, so it might be the case that she wanted to distinguish it fairly quickly and move on. Second, O'Connor is not an originalist, so I doubt that she felt obligated to mull over the historical material to the extent that Eric describes. Lost majority or not, the lawyers at the Institute for Justice deserves credit for moving the Court from 0 votes (in Midkiff) to 4 (in Kelo). Their public use effort -- only a few years old -- is a case study in how to run a public interest campaign. I have hope that it will continue to bear fruit in the lower courts.
Whether the lower courts will take an interest in these cases depends in large part on the question raised by David -- what the standard of review really is. David is right that it can't be rational basis, which only requires some "conceivable" purpose. Eminent domain is used for specific purposes. So what is it? Pretext/capture? The, Poletown flunks -- as Justice Ryan observed in dissent, GM was calling the shots in that one. But, courts usually shy away from trying to figure out legislators' motives. The next round of cases will be interesting.
I must say that I always suspected that the difficulty of coming up with some standard other than total deference would give the Court pause. If the court will not require meaningful means-ends review -- which I favor, but this view didn't get one vote -- then we're left with Stevens's "usually ok" test or O'Connor's categorical test. But, there are difficulties with "owned or used by the public" as well. What about a mall? A minor league baseball stadium?
Did O'Connor lose the majority?
Kelo | 10:05 AM | Eric Claeys | Comments (0) | TrackBack
Over at the Volokh Conspiracy, Orin Kerr wonders whether Justice O'Connor's dissent was originally a majority opinion. I had the same reaction when I first read it. I think the answer is no, but I'd be curious what others think.
Reasons why it might have been a majority:
1. Part I of O'Connor's opinion is a statement of facts. Normally, dissents don't restate the facts unless they think there is some added polemical value in doing so. (For one excellent illustration, consider Justice Scalia's dissent in Morrison v. Olson.) Otherwise, a statement of facts is sometimes a tip-off that the dissenter writing for 4 justices lost a fifth.
2. O'Connor is _really_ mad in her dissent. The anger is really surprising given that she paved the road for Stevens' Court opinion when she wrote Midkiff 20 years ago. Maybe it was the anger of a majority-opinion writer scorned.
3. Justice Kennedy's concurrence suggests he's teetering on the fence on this issue. And it wouldn't be the first time he's changed his mind after conference.
But at the end of day, I don't think so. Reasons why:
1. As the GoldsteinHowe OT 2004 merits docket shows, O'Connor already had a majority opinion from the sitting in which Kelo was decided, namely Lingle.
2. While O'Connor's dissent is strong on policy and cites to Hamilton & Madison, I don't think it does as much work as a majority opinion would have needed to do to get the job done. O'Connor argued for deciding the case on the ground that economic development, standing alone, does not count as a satisfactory public use. To pull that off in a majority opinion, one would need to distinguish satisfactorily Midkiff and especially Berman. There's only a narrow difference in local practice between blight condemnations (Berman) and economic-development condemnations (Kelo). If a 5-4 majority were standing on that difference, I think O'Connor would have needed to explain at greater length her legal theory for distinguishing between the two.
Thursday, June 23, 2005
Whither Poletown?
Kelo | 08:58 PM | | Comments (2) | TrackBack
I agree that true rational basis review is no longer to be applied. But what flunks? One test concerns whether the city is just selling out to a powerful developer. But I am not sure exactly how that test is to be applied. The puzzle arises because of a number of different themes invoked in the Stevens opinion and in Kennedy's concurrence. On the one hand, there seems to be some interest in the city engaging in true planning and not just in an effort to up the tax base. On the other hand, there is is an interest expressed in ensuring that the city is not primarily tryng to aid a private party. At the limit, these two themes could be in tension. Take, for example, Poletown. That was clearly a taking that would help a known private party but it would also arguably have large public benefits (albeit benefits that might be understood as primarily for the tax base). In short, is Stevens suggesting that Poletown was wrongly decided? Is Kennedy? I think it fairly clear that Stevens means to be saying that some cases where the potential property tax benefits are smaller - like the 99 Cents Store case he cites (arguably with approval) in a footnote -- may flunk. But what about the elephant in the room -- Poletown itself? Of course, if Stevens does mean to suggest that Poletown flunks, that would not mean that he thinks Hathcock [a recent Michigan Supreme Court decision overruling Poletown] has the analysis right. Hathcock, were it cast in federal constitutional terms, seems impossible to square with the holding in Kelo. But are both Hathcock and Kelo in agreement that Poletown had it wrong?
Privatization, Justice Thomas and the little guy
Kelo | 08:03 PM | Nicole Garnett | Comments (2) | TrackBack
First, thanks to Ilya for posting Eugene's provocative question. The real problem with private/economic development takings is that they are an invitation to rent seeking. Why bargain if you can get the government to bypass the market for you? The FMV standard virtually guarantees that you will pay less than the bargained-for price. (If you pay anything at all; the government gives away the land in many cases.) That said, if the government is permitted to take land and give it away, isn't some kind of "planning requirement" potentially problematic? After all, private property owners are much more likely to make wise and efficient decisions about land use than the government. Elaborate planning requirements frequently are cited as one of the reasons that Urban Renewal failed so miserably. And, the many thousands of "public-private partnerships" are rarely commended for their efficiency.
Second, Thomas distinguishes himself, yet again, from the rest of the Court's conservatives -- especially for his repeated focus on the little guy. See also, e.g., Morales, Zelman, etc. I was not surprised by Justice Thomas's dissent. But I hope that others take note of it, especially his point (also made in Ilya's amicus brief) that the Court's "upscaling-as-public-use" regime could have the effect of empowering the powerful at the expense of the weak.
As Thomas notes, urban renewal wreaked havoc on urban communities populated by the political powerless (particularly those populated by African-Americans). It is my sense that most people recoil in horror when presented with classic "public use" facts. (My colleague Julian Velasco reports that his non-lawyer brother called to express his outrage within minutes of the Kelo decision). Unfortunately, these takings frequently occur at the local level, where cities use "desperation" as an excuse for abuse. Perhaps some state legislative reform -- motivated by concern for the "little guy" -- could help address this problem.
More on takings & privatization
Kelo | 05:09 PM | Eric Claeys | Comments (1) | TrackBack
I have heard Eugene Volokh's point before, and I have not been persuaded, for two reasons.
First, as a political matter, I just don't see why cities would respond to narrower conceptions of blight and economic development by condemning the land anyway and running state-run businesses. Let's assume that, most of the time, city governments and development corporations keep the respectful distance from developers and Walmarts that Justice Kennedy expects them to. Even then, the developers and Walmarts play a substantial role in initiating the condemnations; if they don't stand to get the land, I suspect cities won't aggressively look for it on their own. And most of the cities that use eminent domain for economic development are strapped for cash anyway. So if those cities knew they'd need to pay for what they took and operate the land, quite often they'd balk at putting up the money.
Second, the city's cost-benefit analysis is fundamentally different in the two cases. When the land goes to a private buyer, the city doesn't need to worry about whether the buyer will generate the benefits it claimed. As happened in Kelo: even if it turns out that the developer may never build a hotel that was supposed to generate some of the promised jobs and taxes, that's not the city's problem once the land is transferred. But if the city officials know they need to make a profit on the property they take, one would think they would internalize a lot more externalities before pulling the trigger.
Takings and privatization
Kelo | 04:33 PM | Ilya Somin | Comments (2) | TrackBack
Eugene Volokh raises an interesting point to which I would like to respond:
I would make two responses to Eugene's point:
First, I would argue that courts should forbid even takings that retain the property under public ownership if there is strong evidence that the main purpose was to benefit private parties rather than the general public. Indeed, such takings are sometimes invalidated by state courts. However, federal takings law has been so deferential for so many years, that you can't reform it all at once. And private-to-private takings are an easier place to begin doctrinally.
Second, there is an important incentive problem present in takings that does not arise with other types of "privatization" of public services. When property is condemned for transfer to a private party, there are usually very few if any limits on what the new owner can do with it. In Kelo and other economic development takings cases, the new owner has ZERO legal obligation to actually provide the economic benefits that allegedly justified the taking in the first place.
By contrast, when public services are "privatized" by contracting out, the contractors (as the term implies) are usually required to sign a binding contract that creates a legal obligation to provide the public service in question. For this reason, private-to-private condemnations that supposedly serve public purposes are much more vulnerable to abuse than are most kinds of privatization. Free market advocates are right to view them with heightened suspicion.
Agreeing with Tom Merrill
Kelo | 04:07 PM | Ilya Somin | Comments (0) | TrackBack
I would like to note my agreement with most of Tom Merrill's excellent post on the meaning of Kelo (see below). Given that Prof. Merrill and I wrote amicus briefs supporting opposing sides in the case, it is significant that we both agree that Justice Kennedy's concurrence raises the bar the government has to meet to show that a condemnation serves a public use. At the very least, it is no longer the case that a taking serves a public use so long as it is "rationally related to a conceivable public purpose" - the ultra-deferential language often cited from the 1984 Midkiff case.
Obviously, I am much less satisfied with Justice Kennedy's approach than Prof. Merrill seems to be (I agree with the dissenters' arguments in favor of banning economic development takings entirely), but it is still noteworthy that academics with such different perspectives have interpreted Kelo and Kennedy's opinion in much the same way.
the ebb and flow of takings doctrine
Kelo | 03:57 PM | Eric Claeys | Comments (0) | TrackBack
Tom Merrill raises an interesting question for consideration -- why the Rehnquist Court's takings revolution has fizzled out. Here are a few preliminary thoughts. I think a lot of big doctrinal changes move in cycles. At the beginning, a determined coalition has a lot of running room. There may not be a lot of case law. The Court can make big changes in a hurry. Also, especially in cases in which the conservatives intend to take the law against contrary political and academic trends, in the early cases, the determined majority can swing at low-hanging fruit and avoid the harder questions. But quite often, in the early cases, the Court talks a much tougher game than it really means. This is really true when the conservatives cite original meaning as authority for rolling back pro-government doctrine. The tough talk eventually calls into question other, established doctrines, or political practices that are really well settled. Sooner or later, the most squeamish members of the coalition switch sides to side with the conventional result. It takes a decade or 15 years for this cycle to play out.
That portrait explains Lopez and Nollan/Dolan/Lucas. In the Commerce Clause, Justice Kennedy turned out to be all for federalism when dealing with what Jack Balkin called a "grandstanding" law, but not when forced to consider interfering with the DEA. In Lucas, Kennedy and O'Connor were fine with a rule requiring that environmental/conservation measures leave owners with at least one productive use of land; O'Connor and Kennedy bailed when an owner made a colorable argument that Lucas applied to a garden-variety zoning moratorium. Nollan/Dolan had more bite in practice, but exactions are in many senses more extreme than non-exacting zoning or conservation regulations. The conservative majority NEVER was enthusiastic about taking on rent control (see Yee v. Escondido), hence Lingle was a slam-dunk.
But Kelo suggests that the Court isn't even going to start down this path in public use. Or, to go analogize to the Commerce Clause, maybe Kelo is like Raich coming before Lopez. As I suggested and Tom now suggests, maybe Justice Kennedy will switch votes in a case on facts suggesting that the condemning authority is in the back pocket of the developer or business that wants to build.
Kelo and regulatory takings
Kelo | 03:50 PM | Nicole Garnett | Comments (0) | TrackBack
Tom and Marty both raise the question of whether Kelo is the nail in the takings-revolution coffin. I actually thought that the Tahoe-Sierra case served that purpose. The cases clearly haven't been going the way that property-rights litigators hoped that they would back when IJ started this (remarkably successful, up to this point) effort to breathe life into the public use limitation. (In the interest of full disclosure, I was a lawyer for IJ at that time.) That said, I think everyone was shocked that the plaintiffs in Kelo got four votes. So, things look slightly better for property-rights advocates than they did after the unanimous Lingle and San Remo County decisions.
On Ilya's point about selective deference: In the San Remo Hotel case (of Janice Rogers Brown fame), the Court unanimously ruled that the full faith and credit statutes precludes a plaintiff from relitigating takings claims in federal court, even though the Williamson County exhaustion rule requires them to start out in state court. The Chief Justice makes Ilya's point in a concurrence:
"In any event, the Court has not explained why we should hand authority over federal takings claims to state courts, based simply on their relative familiarity with local land-use decisions and proceedings, while allowing plaintiffs to proceed directly to federal court in cases involving, for example, challenges to municipal land-use regulations based on the First Amendment, see, e.g., Renton v. Playtime Theatres, Inc., 475 U. S. 41 (1986); Young v. American Mini Theatres, Inc., 427 U. S. 50 (1976), or the Equal Protection Clause, see, e.g., Cleburne v. Cleburne Living Center, Inc., 473 U. S. 432 (1985); Village of Belle Terre v. Boraas, 416 U. S. 1 (1974)."
A couple of more thoughts on Kelo:
First, I do think that Hathcock and other cases may signal a weariness by state court judges w/r/t economic development takings. I wonder if we won't see more policing in the courts where Justice Stevens suggests that it belongs?
Second, Tom is, in my view, completely right that this was a bad case for pressing the public use issue. It was hard to imagine that the Court would second-guess a local government's careful and extensive redevelopment plans. If the facts had been uglier (take from 99 Cents, give to Costco to prevent "future blight"), then I think the plaintiffs might have won.
Kelo and judicial deference to legislatures
Kelo | 03:37 PM | Ilya Somin | Comments (2) | TrackBack
One of the main arguments deployed by Justice Stevens' majority opinion, and also by other opponents of strong judicial review of takings, is the alleged desirability of judicial deference to legislative judgement. As Stevens puts it, courts should not "second-guess the City's considered judgments about the efficacy of its development plan."
However, Stevens and the other justices in the majority routinely vote to "second-guess" political decisions on issues like abortion, the death penalty, police searches, censorship of pornography, and privacy rights. While Stevens is probably right to assume that judges do not have as much expertise as elected officials do on takings, it is also likely that they have less expertise than legislatures do on most of the other issues mentioned above.
Perhaps there is a principled rationale for distinguishing takings and other economic liberties issues from the kinds of matters where Stevens & Co. are less willing to defer to legislative "expertise." But it is telling that Stevens does not even attempt to present such a rationale - either in this case or in other major decisions where the deference to expertise argument has been deployed (notably the recent medical marijuana/federalism case, Gonzales v. Raich, where Stevens used the same argument to justify judicial deference on federalism questions).
Update: Some people, including a commenter on this post, argue that Stevens does not need to justify his inconsistent treatment of deference to legislative expertise because "The whole modern apparatus of constitutional law is about distinguishing cases where judicial judgments are superior or required by constitutional obligation." However, there is a difference between saying that judicial deference is required because of superior legislative expertise on the issue in question, and saying that it is mandated by - for example - text, original meaning, or the unimportance of the right in question. I think there is a clear double standard in the way many judges use the expertise rationale for deference, even in cases where they might be able to justify their position on other grounds.
Observations on Kelo
Kelo | 03:04 PM | Ilya Somin | Comments (1) | TrackBack
I am sorry to come late to today's blogging, due to a conflicting engagement.
A few observations on Kelo. But first, the obligatory disclaimer: I authored an amicus brief in Kelo on behalf of urban development specialist Jane Jacobs (author of The Death and Life of Great American Cities). I have also, in the past, done pro bono work on takings cases for the Institute for Justice, the libertarian public interest group that represented Kelo.
Like the other participants, I was a bit surprised by the closeness of the vote, and even more so by the fact that all four dissenting justices would not only invalidate the condemnations in the present case but also categorically forbid all "economic development takings." In doing so, Justice O'Connor - author of the principal dissent - pointedly condemned some of the more expansive language on the scope of condemnation power used in the Court's previous opinions - especially Midkiff, which he herself authored. It's not often that a Supreme Court justice repudiates some of her own work!
The majority opinion by Justice Stevens leaves very little room for public use challenges to takings under the federal Constitution. However, the concurrence by Justice Kennedy is considerably more difficult to interpret.
On the one hand, Kennedy joins the majority opinion in full and also states that public use issues should be considered under a "rational basis" test, normally a mark of extreme deference. On the other , he makes clear that the type of rational basis employed should be "meaningful rational basis review" of the sort employed under the Equal Protection Clause in cases like Cleburne v. Cleburne Living Ctr (which he cites), where the Court imposed considerably more searching scrutiny on government actions than is usually imposed by the standard rational basis test.
Kennedy stresses that "[a] court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government's actions were reasonable and intended to serve a public purpose." He even holds out the possiblity that "[t]here may be private transfers in which the risk of undetected impermissible favoritism to private parties is so acute that a presumption (rebuttable or otherwise) of invalidity is warranted under the Pu