PropertyProf Blog

Texas Supreme Court Decision in Severance v. Patterson

Over at the Land Use Prof blog, Matt Festa has a great post on Severance v. Patterson, an important Texas Open Beaches Act case recently decided by the Florida Supreme Court.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Mossoff on Patent Takings

Adam Mossoff (George Mason) has posted How the "New GM" Can Steal from Toyota on SSRN.  Here's the abstract:

This essay explains how a 2006 court decision arising from the manufacture of the F-22 Raptor fighter jet paves the way for government-owned General Motors to steal intellectual property. In Zoltek v. U.S., the Court of Appeals for the Federal Circuit held that a loophole in the Tucker Act (28 U.S.C. § 1498) prevented owners of patented processes from suing the federal government for certain types of unauthorized uses of their patents. The Zoltek court also held that patents are not secured as constitutional "private property" under the Takings Clause of the Fifth Amendment. At the time, many judges and lawyers thought that these statutory and constitutional loopholes for patent-owners were insignificant; at worst, they argued, this benefits only military contractors and the like.

Fast forward four years and the federal government now owns the "new GM." It was inconceivable in 2006 that Uncle Sam soon would be in the business of making cars, not to mention in the businesses of banking and insurance, setting salaries of CEOs, purchasing mortgages, etc., etc. This dramatic turn of events means that court decisions that once seemed exceedingly narrow have acquired new breadth and scope. This essay thus explores how Zoltek justifies extensive infringement of U.S. patents by GM and other firms now working for the federal government. Although it is arguable that denying patent-owners their constitutional rights is insignificant in any situation, the events since 2006 at least suggest that many people spoke too soon when they claimed that Zoltek was of little import or concern.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Eagle on The Really New Property

Steven J. Eagle (George Mason) has posted The Really New Property: A Skeptical Appraisal on SSRN.  Here's the abstract:

This article reviews recent scholarship invoking the prophetic tradition in American jurisprudence and calling for the transformation of property law. It contrasts imposed top-down social change with Burkean and Oakeshottian gradual change derived from conversation within our legal and cultural tradition. The work of Robert Ellickson is presented as illustrating the development of property law in the Burkean tradition. Transformative property scholarship, on the other hand, largely reflects Osborne and Gaebler's view that government should steer and private actors row, reinforced by Thaler and Sunstein's call for soft paternalism. The article asserts, however, that Kant and Berlin's admonition that all of humankind is "crooked timber" precludes officials from a privileged position, a postulate well supported by public choice theory.

The article views the change in conceptual thinking from Hohfeldian property to Heller's anticommons and assertions of disintegration and entropy of property. These set the stage, for instance, for advocacy of "rightsizing", through the shrinking private parcels through smart growth and densification, and the supersizing of government-controlled land through condemnation for urban redevelop.

Other topics discussed are regionalism, new governance, and the creation of affordable housing, through, among other things, the rearrangement of traditional landlord-tenant relationships. The article expresses skepticism that flaws inherent in the top-down transformation of property would permit outcomes that are coherent and effective, and could withstand capture by affected interest groups.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Further Thoughts on the Judicial Takings Standard

As I mentioned in a prior post, I am working on an article on Judicial Takings after Stop the Beach.  In that prior post, I discussed the private-private v. private-public distinction and its significance for judicial and regulatory takings.  In this post, I will make two further arguments about the judicial takings standard.  First, there was no need for the Court to address the judicial takings standard in Stop the Beach.  Second, there is no need for a unique judicial takings standard, and judicial takings cases can be analyzed under the Court's current takings standards.  As with the prior post, what follows is largely text from my draft article, with footnotes removed.  I will probably post the article on SSRN sometime in the next week or so.

The Supreme Court Did Not Need to Resolve the Judicial Takings Standard in Stop the Beach

The three opinions issued by the justices in Stop the Beach contain a significant amount of discussion of whether the Court needed to reach the issue of the substantive takings standard applicable to judicial takings cases.  Justice Scalia’s plurality opinion argued that the Court needed to reach this issue; Justices Kennedy and Breyer each argued in concurrence that the Court did not need to reach this issue.
On the surface, this debate might seem to be of largely academic interest, because none of the opinions issued in Stop the Beach commanded a majority of the Court.  If Justice Scalia’s opinion had commanded a majority, then whether the Court needed to reach the issue of the substantive standard might have mattered a great deal – if the Court did not need to reach this issue, then Justice Scalia’s discussion of the standard might be discounted as mere dicta.  Because Justice Scalia did not command a majority for his position, his discussion of the substantive judicial takings standard is not binding precedent, dicta or not.  On further consideration, however, resolving the issue of whether the Supreme Court needed to reach the substantive standard will be critical to lower federal courts deciding judicial takings challenges, because those courts themselves will have to decide whether and when they need to address the substantive judicial takings standard. 

Justice Scalia’s argument for the proposition that the Court needed to resolve the substantive standard is straightforward:  the Court cannot decide whether there has been a judicial taking until it decides what constitutes a judicial taking.  Thus, in critiquing Justice Breyer’s position that the Court need not reach the issue, Justice Scalia wrote:  “Justice Breyer cannot decide that petitioner’s claim fails without first deciding what a valid claim would consist of.”  Justice Breyer responded by asserting that “courts frequently find it possible to resolve cases – even those raising constitutional questions – without specifying the precise standard under which a party wins or loses.”  Justice Breyer also noted the consistent theme in the Court’s prior decisions of the importance of deciding only the narrow issue presented by a case.  For his part, Justice Kennedy also argued that it was a bad idea for the Court to reach out and decide issues that it need not reach before those issues had been considered in the lower courts and by commentators.

Justices Breyer and Kennedy have the better of this argument.  Justice Scalia, of course, was correct that a court needs to have at least some idea of the applicable substantive standard before it resolves a party’s claim.  But Justice Breyer was also correct that in some cases a court need not resolve the specific standard before it rejects a claim.  Consider a common law court deciding for the first time whether to recognize a doctrine of felony murder in a case where it turns out that the victim is still alive.  The court would be entirely correct to decide the case without resolving the specific felony murder standard, because on any conceivable analysis, a murder prosecution requires the victim to be dead.  Although the law on judicial takings is still wide open, everyone would agree that to state a judicial takings claim a property owner would have to demonstrate that a state court judicial action was a departure from, or inconsistent with, the prior property law in that jurisdiction – if a state court holding is consistent with the state’s prior property law, then nothing has been taken from the property owner. (See Lucas).  Alternatively, this same point can be made in terms of a comparison to takings by the legislature or the executive.  Under no theory of judicial takings could a judicial action be a taking if it would not be a taking for the legislature or the executive to do the same thing.  A legislative or executive action is not a taking if it is consistent with the state’s background principles of property law.  (again, see Lucas).  For a takings claim to be made, the property owner must establish that something was taken.  In Stop the Beach, the Court unanimously concluded that the Florida Supreme Court’s holding was consistent with the prior Florida law on beachfront property.  Under no conceivable standard, then, could the Florida Supreme Court’s holding be a judicial taking, and the United States Supreme Court therefore did not need to reach the specific substantive standard for judicial takings to reject the Petitioner’s claims. 

Justices Kennedy and Breyer were also correct to argue that it is unwise to reach an issue if it is unnecessary to do so.  An overarching theme of this Article is that the issues presented by judicial takings are far more complex than the Court’s opinions in Stop the Beach (including those by Justices Kennedy and Breyer) might suggest.  Had the Court finally resolved any of these issues in Stop the Beach without recognizing their complexity, it might have created more problems than it solved.

Lower federal courts considering judicial takings claims would therefore be wise to resolve only the narrow issues presented by any particular case.  Under any conceivable theory of judicial takings, a judicial taking can only occur if the challenged state court holding is inconsistent with the state’s prior property law.  If a court concludes that the challenged state court holding is consistent with the prior law in that state, then the court should reject the judicial takings claim without reaching the issue of the specific judicial takings standard.

There is no Need for a Unique Judicial Takings Standard

The logic of judicial takings rests on two basic points.  First, the judiciary is a state actor, and is subject to the constitution.  Second, the judiciary is capable of taking property.  The first point seems incontrovertible, and the examples of judicially mandated private-public transfers discussed in my prior post demonstrate that the second is true as well.  As Justice Scalia argued in his Stop the Beach plurality, “the Takings Clause bars the State from taking private property without paying for it, no matter which branch is the instrument of the taking.”

On this logic, there is no need for a unique test for judicial takings.  A judicial action should be considered a taking under the Just Compensation Clause if the equivalent action would be a taking if it was performed by the legislature or the executive. 

The prototypical judicial takings fact pattern involves a change in property law by a state judiciary.  Although this fact pattern may appear to be superficially different from the standard regulatory takings case, it in fact fits very well into the structure of the Court’s existing regulatory takings jurisprudence.  The Court has considered takings challenges to legislative changes to property law that are similar to changes that might be made by the judiciary.  In Hodel v. Irving, for example, the Court held that a legislative change to rules relating to the transfer of property at death was an unconstitutional taking.  It is important to note (as discussed further in my prior post) that Hodel involved a private-public transfer – the change in law resulted in the property interests in question escheating to the state at death, rather than transferring to another private person.  For present purposes, it is sufficient to recognize that it is easy to imagine a state court making the type of change in law that the legislature made in Hodel.  It is similarly easy to imagine state court decisions making other types of changes to the law that would resemble other branches of the Court’s regulatory takings caselaw.  The private-public transfer scenarios discussed in the prior post that involved judicial alterations of use rights in property that could easily be analyzed under cases such as Penn Central and Lucas, and of judicial requirements of public access to private property that are similar to those at issue in cases like Kaiser Aetna and Nollan.

There can be little question that a legislative or executive action that simply declared that previously-recognized property rights no longer existed would be a regulatory taking under the Court’s existing takings jurisprudence.  The dominant theme of the Court’s most recent regulatory takings cases is that a government action is a taking if it is the equivalent of an exercise of eminent domain, and this principle of equivalence prominently featured in Justice Scalia’s Stop the Beach plurality opinion.  The declaration that a property right no longer exists is certainly the equivalent of the taking of that property right through eminent domain.  Prior to each government action, owners held private property rights; after each, those rights were held by the public.  Thus, as Justice Scalia argued in Stop the Beach, “If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property, no less than if the State had physically appropriated it or destroyed its value by regulation.”  In his opinion, Justice Scalia placed his emphasis on “or a court.”  Here, I would place the emphasis on “a legislature.”  The branches of government are equivalent in this context, and there is no need to create a unique standard for judicial takings.

Ben Barros

[Comments are held for approval, so there may be some delay in posting]

Distinguishing Between Private-Public and Private-Private Transfers in Judicial and Regulatory Takings

I've been working on a fairly lengthy post-Stop the Beach article on judicial takings.  I will probably post the article on SSRN in a week or so.  In the meantime, I wanted to blog about a distinction that is at the core of my arguments in the article.  As I explain further below the fold, government actions that mandate the transfer of property interests from private property owners to the public ("private-public transfers") should be distinguished from government actions that mandate the transfer of property interests between private persons ("private-private transfers").  I argue that judicial takings, and regulatory takings more broadly, should apply only to private-public transfers, but not to private-private transfers.

I touched on this distinction way back in my first post on the grant of cert in Stop the Beach (see point 5).  Immediately after Stop the Beach was decided, Jerry Anderson asked the following question:

I am curious about Justice Scalia's position that courts may not eliminate "established private property rights." What do such rights consist of? For example, assume that a state court decides to move from a "good faith" approach to adverse possession to an "objective" standard, which will allow some possessors to prevail, even though they knew the land they were occupying was not theirs. This is a standard "evolution" of common law, yet it does, under Justice Scalia's rigid formulation, result in a party losing property that it would not have lost under the old common law test. Is that a "taking"? Can the court NOT change such a common law test without having to compensate property owners?

To me, such a change in adverse possession law involves a private-private transfer, and should not fall within the judicial takings analysis.  In excellent posts taking up Jerry's question, Lior Strahilevitz and Eduardo Penalver both discussed the private-private nature of the change in adverse possession law.

What follows below the fold is a very lengthy treatment of this issue.  The rest of the post is taken from a few sections of my draft article, with the footnotes removed.  I'd very much welcome any comments on the argument.  In particular, I'd be interested in references to similar arguments, if any, that have been made in the existing regulatory takings literature.

Distinguishing Between Private-Public Transfers and Private-Private Transfers

Cases in which the challenged government action transfers private property to the public may be distinguished from cases in which the government action transfers private property from one private person to another.  Here are some examples of the first type of case, which I call a “private-public” transfer:

•    A court redefines a certain area that had been private property to be public property.  Beachfront property has been a focus of recent judicial takings cases and commentary in significant part because it involves an often-contested border between public and private property.  In all jurisdictions, at some point on the beach private property ends and public property begins.  This borderline is set at various places in various jurisdictions, but two likely candidates are the mean high tide line (i.e., the average point that the water reaches at high tide) and the vegetation line (i.e., the point at which vegetation starts to grow).  On many beaches, there is an area of sand between the mean high tide line and the vegetation line, and this part of the beach is commonly used for recreation.  Imagine a jurisdiction had clearly established caselaw that set the mean high tide line as the public-private boundary.  If the state supreme court in that jurisdiction issued an opinion changing the boundary to the vegetation line, then the area of beach between the mean high tide line and the vegetation line, which had been private, would be transferred by the judicial decision to public ownership.  

•    A court grants public access to what had previously been private property.  Imagine that, as in the prior example, a jurisdiction has clear caselaw that establishes the mean high tide line as the private property boundary for beachfront property.  In this scenario, however, the state supreme court departs from prior precedent and holds that the public must be allowed access to the area between the mean high tide line and the vegetation line.  Here, unlike the prior example, the property remains in private hands, but it is subject to a public right of access.  The judicial action can be conceptualized as removing part of the private property owner’s right to exclude, or as transferring an easement for public access from the private property owner to the public.  If the legislature or an executive agency had done the same thing, this action would be a per se taking under the Supreme Court’s regulatory takings caselaw.

•    A court changes property law so that private property transfers to state ownership.  A property owner typically has the right to transfer property at death.  Imagine that a state supreme court changed its existing law, and held that upon a property owner’s death, certain types of property escheated to the state.  This judicial action would lead to the transfer of private property to the state.  If this change in the law was performed by the legislature or an executive agency, it would be an unconstitutional taking under the Supreme Court’s regulatory takings jurisprudence.

•    A court destroys existing use rights in private property.  Imagine that in our hypothetical jurisdiction, the pre-existing caselaw clearly permitted a property owner to build on a particular type of property.  The state supreme court then issues an opinion changing the law, and as a result the property owner is no longer permitted to build on the property.  Whether or not this change would constitute a taking if enacted by the legislature or an executive agency would depend on the specific facts of the case and the idiosyncrasies of regulatory takings law.  In at least some circumstances, such a legislatively- or executively-enacted change would be a taking.  Regardless of whether the change is unconstitutional, it involves a private-to-public transfer because the use rights that before the judicial action were in private hands no longer exist as private property.  These use rights were not transferred to another private person; rather, use rights were destroyed as private property rights.  The destruction of private property rights in this sense is the equivalent of transferring them to the public.  The government could change the law to re-create these use rights, and thereby transfer them back to the private property owner. 

The second type of case, which I call a “private-private” transfer, involves a government action that transfers property from one private person to another.  Here are some examples:

•    A state supreme court changes its rules on interpreting ambiguous conveyances; as a result, person A is held to own a parcel of property, whereas person B would have owned the parcel under the prior law.

•    A state supreme court changes its law of future interests; as a result, person A now holds the future interest to a certain parcel of property, where under the former rule, person B now holds the future interest to that parcel of property.

•    A state supreme court changes its law on creation of easements; as a result, an easement that would have been valid under the prior law no longer exists.  The easement is effectively transferred from the person who would have been the easement holder (person A) to the person who owns the property that would have been subject to the easement (person B).

•    The obverse of the previous scenario:  a state supreme court changes its law on creation of an easement; as a result, an easement that would not have been valid is now valid.  The easement is effectively transferred from the person whose property would have been free of the burden of the easement to the person who now owns the benefit of the easement.

•    A state supreme court changes its rules on contracts (e.g., the statute of frauds or the parol evidence rule); as a result, person A loses a dispute over ownership of a parcel of property to person B; person A would have won under the old rule.

•    A state supreme court changes its interpretation of its recording act; as a result, person A’s interest in a parcel of property is invalid, where it would have been valid under the prior law.

•    A state supreme court changes its rules on adverse possession; as a result, person B owns the property whereas under the prior rule, person A would have owned the property.

Various distinctions might be made between these scenarios; some, for example, involve changes in substantive property law, while others involve changes in other areas of law that affect property ownership.  For now, however, I will focus on the private-private nature of the transfer that is common to all of the scenarios.

The Just Compensation Clause Should Apply to Private-Public Transfers, but not to Private-Private Transfers

My argument that the Just Compensation Clause should apply to private-public transfers, but not to private-private transfers, has three parts.  First, private-private transfers do not “destroy” or “take” property in the same sense as private-public transfers.  Second, there is scant support in the Court’s regulatory takings jurisprudence for applying the Just Compensation Clause to private-private transfers.  Third, there is no support in Justice Scalia’s Stop the Beach plurality for including private-private transfers within a judicial takings doctrine.

(1) Private-Private Transfers Neither “Destroy” Nor “Take” Property in the Same Sense As Private-Public Transfers

Recall the examples of private-public and private-private transfers discussed above.  Some of these scenarios involve what fairly could be termed the destruction of a private property right.  The example involving a change in future interest law, for example, might involve the invalidity of an interest that would otherwise have been valid.  It is not a stretch to call this change a destruction of the future interest in question.  So, too, with the example of the easement that otherwise would have been valid under the prior law; the change in law can fairly be termed a destruction of the easement.

These two examples, however, do not involve the destruction of a property right in the sense that it was used to describe the examples involving private-public transfers.  In the private-public transfers, the private property right was destroyed as an interest in private property; those rights are no longer held by any private person, and are public, not private, property.  In the private-private examples involving the future interest and the easement, in contrast, the interests are best conceptualized as being transferred to another private person, rather than as being destroyed outright as private property interests.

This distinction can be illustrated by comparing the easement-destruction example and the beachfront land example involving judicial redefinition of the public-private boundary line.  If the easement is destroyed, the property interests represented by the easement effectively transfer from the person who would have been the holder of the benefit of the easement (person A) to the holder of the property that would have been burdened by the easement (person B).  Person B could later grant those interests to person A or another person.  That is, person B could re-create the destroyed easement.  In the beachfront land example, in contrast, no private property owner could re-create the destroyed property interests.  In the first beachfront example, the state supreme court moved the boundary between public and private property from the mean high tide line to the vegetation line.  This action destroyed the private property between the mean high tide line and the vegetation line.  The private property interests at issue no longer exist – no private person could re-create them under any circumstance.  Rather, these interests have become public property.  The public, of course, could act through a government entity to re-create the destroyed private property interests, for example by legislatively granting the land at issue to a private person.  The private-public transfer involved in this example, however, truly destroys private property in that the property interest is no longer private, while the private-private transfer at issue in the easement example preserves the interests as private property, albeit in a different private owner.

Similarly, a private-public transfer “takes” property in a way that a private-private transfer does not.  It is natural to read the word “taken” in the Just Compensation Clause as applying to those circumstances where the government action transfers the property interest from a private person to the government.  The development of the Court’s regulatory takings jurisprudence shows a consistent recognition that the government can take property in this sense without an exercise of eminent domain.  The foregoing discussion of the beach front property scenario demonstrates that property can be taken through judicial action just as it can be taken by regulation – the effect on the property owner in the version of the scenario involving an underlying legislative action is the same as it is in the version where the judiciary acts on its own.

In a private-private transfer, in contrast, the government action does not take property in the same way.  To be sure, it does not do violence to the word “take” to say that the examples of the private-private transfers discussed above take property from one person and transfer it to another.  There is good reason, however, to focus on both ends of the transaction in interpreting the Just Compensation Clause.  The historical evidence suggests that the Just Compensation Clause was inspired by private-public transfers, and the Supreme Court’s recent regulatory takings jurisprudence has increasingly focused on the equivalence of the contested regulatory act to an exercise of eminent domain.  By its nature, eminent domain involves a private-public transfer.  It is true that at least under the Supreme Court’s caselaw that the government is able to transfer private property taken by eminent domain to another private party.  Even here, however, the transfer would be private-public-private, rather than simply private-private.  That is, even when eminent domain is used to transfer property from one private person to another, there is an intervening period of government ownership.

Even if private-private transfers do not “take” property from an owner in the sense used here, they do “deprive” the owner of property.  At the beginning of the transfer, the private person owned certain property.  At the end of the transfer, they did not.  Following the text of the Fifth Amendment, this distinction between “take” and “deprive” suggests that there is a textual basis to apply the Just Compensation Clause to private-public transfers, but not to private-private transfers.  The relevant portion of the Fifth Amendment reads:  “No person shall . . . be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”  The Due Process Clause of the Fourteenth Amendment echoes the language of that in the Fifth Amendment:  “nor shall any State deprive any person of life, liberty, or property, without due process of law.”  Focusing on both the front and back ends of the transfer provides a natural demarcation of which types of transfers are subject to the Just Compensation Clause and the Due Process Clause.  Both private-public and private-private transfers imposed by a government actor “deprive” owners of private property, and are subject to the requirements of the Due Process Clause.  Only private-public transfers, in contrast, “take” property, and are subject to the requirements of the Just Compensation Clause.

(2) There is Little Support in the Court’s Contemporary Regulatory Takings Jurisprudence for the Application of the Just Compensation Clause to Private-Private Transfers

The Supreme Court’s regulatory takings caselaw has largely involved challenges to government actions that result in private-public transfers.  The regulatory takings case that most resembles the prototypical judicial takings scenario of a change in substantive property law is Hodel v. Irving, which involved a legislative alteration of an owner’s power to transfer certain types of property at death.  The legislation at issue, however, changed the law so that the at the owner’s death, the property at issue would escheat to the state, rather than transfer to another private person.  The legislative change thus created a private-public transfer, rather than a private-private transfer.  Similarly, Webb’s Fabulous Pharmacies v. Beckwith, which features prominently in discussions of judicial takings, involved a court holding that certain private funds had become “public money.”

The land use regulation cases that are at the core of the Court’s contemporary regulatory takings jurisprudence also involve private-public transfers.  As discussed above, land-use restrictions transfer the use rights at issue from the affected private property owners to the public.  In Lucas v. South Carolina Coastal Council, for example, South Carolina’s Beachfront Management Act prohibited David Lucas (or any other owner of the subject property) from building on two parcels of beachfront property that he owned.  The use rights that Lucas had previously held were therefore transferred to the public.  Similarly, in Penn Central Transportation Co. v. City of New York, the owners of Grand Central Terminal claimed that New York’s landmarks preservation law prevented them from building in the air space above the terminal.  The Supreme Court rejected this takings claim, but the property owner’s theory was that the government had transferred its claimed use rights from the owner to the public.

The early regulatory takings case of Pennsylvania Coal Co. v. Mahon at least in part involved a private-private transfer.  Pennsylvania’s Kohler Act prohibited the mining of coal beneath inhabited structures unless the owner of the coal also owned the structure.  In circumstances where the owner of the coal was different from the owner of the structure, the Kohler Act therefore transferred the right to mine the coal at issue from the coal company (private) to the owner of the structure (also private).  There are good reasons, however, to see Mahon as a substantive due process case, rather than a regulatory takings case in the mold of contemporary cases like Penn Central and Lucas.  The Supreme Court recently recognized in Lingle v. Chevron that the substantive due process inquiry in early cases differs in important respects from the contemporary regulatory takings inquiry.  If Mahon is understood as a substantive due process case, then it does not lend support for applying the Just Compensation Clause to private-private transfers.  As noted above, a private-private transfer constitutes a “deprivation” within the meaning of the Due Process Clause, and both procedural and substantive due process concepts apply to private-private transfers.

Contemporary physical invasion cases such as Nollan and Kaiser Aetna involved a transfer of the right to exclude from private property owners to the public.  Indeed, each case involved private property being subject to access by the public.  Similarly, PruneYard Shopping Center v. Robins involved access to a mall by members of the public, and United States v. Causby involved overflights by military airplanes.

One contemporary physical invasion case did involve a type of private-private transfer:  Loretto v. Teleprompter Manhattan CATV Corp.  Loretto involved a challenge to a New York law that required private property owners to allow cable companies to install wiring and equipment on their property, and prohibited the owners from demanding compensation from the cable companies in return.  Unlike the other physical invasion cases discussed above, the right to exclude in Loretto was transferred not from a private property owner to the public generally, but was instead transferred from private property owners to cable companies, which are private corporations.  Put another way, all of the physical invasion cases involve what effectively is the transfer of an easement from a private property owner to another party.  In most physical invasion cases, this easement is transferred to the public.  In Loretto, it was transferred to a private corporation.

Loretto thus presents a challenge to my assertion that the Supreme Court’s contemporary regulatory takings jurisprudence has typically involved private-public transfers.  There are a number of responses to this challenge.  First, the cable companies at issue in Loretto were public utilities, not ordinary private corporations.  The distinction between private and public entities is a permeable one, and utilities, like common carriers, enjoy something of a quasi-public status.  For example, utilities are often delegated the power of eminent domain.  In this context, it is notable that the equipment involved in Loretto was part of the larger cable network used to serve the public as a whole.  The transfer in Loretto therefore has elements of a private-public transfer.  Similarly, in Causby, the airplane overflight case, the outcome likely would not have changed if the overflights were by commercial airliners rather than military planes.  Although commercial airlines are private entities, as common carriers they serve the public at large, and an invasion of private property by a common carrier can fairly be seen as an invasion by the public.  Second, it can be argued that Loretto is simply wrong on its facts, even if its rule that regulations that require physical invasions by the public are per se takings is sound.  Third, and related to the second point, it can be argued that the Court in Loretto applied the wrong law to its facts, and was therefore led into an incorrect holding.  I admit that it is a stretch to reconceptualize Loretto as a substantive due process case, because its analysis is stated expressly in terms of regulatory takings concepts and cases.  But if Loretto is understood as involving a private-private transfer, then under the approach that I advocate here, it should be evaluated under due process concepts, not takings concepts.  Even under the relatively robust substantive due process inquiry advocated by Justice Kennedy, the law at issue in Loretto would likely have been deemed constitutional, because the trivial impact on private property owners was imposed by a law for the easily justifiable purpose of allowing the cable companies to provide cable service to the public.

This brings us to the line of recent regulatory takings cases that most clearly involve private-private transfers.  Most of the cases in this line involved regulatory takings and due process challenges to the retroactive imposition of monetary liability, typically in the pension context.  So long as the newly-imposed monetary liability is owed to another private person, rather than the government, this type of case involves a private-private transfer.  Two earlier cases in this line, Connolly v. Pension Benefit Guarantee Corp., and Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., Inc.,  rejected takings claims to this type of retroactive imposition of liability, and therefore do not provide strong support for the application of the Just Compensation Clause to private-private transfers.

The most recent case in this line, Eastern Enterprises v. Apfel, did hold that a retroactive imposition of liability for health benefits was unconstitutional.  The justices’ positions in Apfel, however, were highly fractured, and no position commanded a majority.  Justice O’Connor’s plurality opinion applied a regulatory takings analysis to find the imposition of liability unconstitutional.  There are four reasons why Justice O’Connor’s plurality does not provide strong support for applying the Just Compensation Clause to private-private transfers.  First, it is only a plurality opinion.  Second, and relatedly, Justice Kennedy dissented from the plurality’s regulatory takings analysis.  Justice Kennedy’s opinion did express some concern that the government could avoid takings liability by mandating private-private transfers.  As I will argue further below, however, Justice Kennedy’s positions in Stop the Beach and other cases strongly suggest that he would address these concerns through the application of substantive due process doctrines, not regulatory takings doctrines.  Third, as the fragmented opinions in Apfel suggest, the underlying question in these cases of whether the imposition of monetary liability can fairly be understood as a taking remains controversial and unresolved.  Fourth, Apfel was decided before Lingle v. Chevron.  In Lingle, the Court recognized that its regulatory takings jurisprudence had been inadvertently infected with substantive due process concepts.  As a result, the Court held that the “substantially advances” test, which had appeared to be well established in the Court’s regulatory takings jurisprudence, should be rejected as an artifact of now-outdated substantive due process doctrine.  A close look at the Apfel plurality reveals that it is based on vested rights and non-retroactivity concepts that historically have been grounded in substantive due process, not takings.  As the Court later recognized in Lingle, it is wrong to incorporate substantive due process concepts into the regulatory takings analysis.

Finally, one case in this line, United States v. Security Industrial Bank, applied a regulatory takings analysis to a private-private transfer in a way that is hard to discount.  Unlike Apfel, Connolly, and Concrete Pipe, Security Industrial Bank did not involve the retroactive imposition of monetary liability.  Rather, it involved the retroactive application of a lien avoidance statute.  The retroactive termination of a lien under the statute would have amounted to a private-private transfer of the lien interest from the lien holder to the owner of the property subject to the lien.  To avoid constitutional retroactivity problems, the Court interpreted the statute to apply only prospectively.  Although the Court noted that the case fit awkwardly into the regulatory takings framework, it rested its retroactivity concerns on regulatory takings cases.  Most importantly to present issue, the Court specifically rejected the government’s argument that takings concepts should not apply because the case involved a private-private transfer rather than a private-public transfer.  In a prior case, Armstrong v. United States, the Court had held that the destruction of a lien on government property through the operation of sovereign immunity constituted a compensable taking of the lien.  In Security Industrial Bank, the government attempted to “distinguish Armstrong on the ground that it was a classical ‘taking’ in the sense that the government acquired for itself the property in question, while in the instant case the government has simply imposed a general economic regulation which in effect transfers the property interest from a private creditor to a private debtor.”  The Court’s rejected this argument in one sentence:  “While the classic taking is of the sort that the government describes, our cases show that takings analysis is not necessarily limited to outright acquisitions by the government for itself.”  In support of this proposition, the Court cited Loretto, PruneYard, and Mahon.  As discussed above, Loretto does provide limited support for the application of the Just Compensation Clause to private-private transfers, although PruneYard and Mahon do not.  The Court’s position in Security Industrial Bank therefore had minimal precedential support, but the case itself now provides the clearest example of the Court applying a regulatory takings analysis to a private-private transfer.

Although its discussion is relatively explicit, Security Industrial Bank provides thin support for the application of the Just Compensation Clause to private-private transfers.  The Court’s cursory discussion of the subject was not well supported by precedent.  Further, the Court used the regulatory takings analysis as a justification for construing the statute narrowly, rather than as a justification for invalidating the entire statute.  The Court could have used due process based non-retroactivity concepts to reach the same point.  Finally, as with the other cases in the Apfel line, the overall thrust of the Court’s opinion in Security Industrial Bank is inconsistent with Lingle’s recognition of the importance of separating the takings and substantive due process analyses.  Post-Lingle, constitutional concerns about the retroactive imposition of private-private transfers that historically have been rooted in substantive due process should not be seen as a part of the regulatory takings analysis.  Understanding that this type of retroactivity claim is the province of substantive due process will further the significant clarification that Lingle has brought to regulatory takings doctrine.

Security Industrial Bank and Loretto therefore should be seen as the outliers in the Supreme Court’s regulatory takings jurisprudence.  The Court’s regulatory takings cases – including the iconic cases such as Penn Central and Lucas – overwhelmingly have involved private-public transfers.  The Court’s caselaw therefore provides very little support for applying a regulatory takings analysis to private-public transfers, whether mandated by the legislature, executive, or judiciary.

(3) There is no Support in Justice Scalia’s Plurality Opinion for the Application of the Just Compensation Clause to Private-Private Transfers

Justice Scalia’s plurality opinion in Stop the Beach had a very strong focus on private-public transfers.  The opinion, for example, noted that Webb’s Fabulous Pharmacies closely resembled the claimed taking in Stop the Beach, and repeatedly emphasized the private-public transfer that was involved in that case.  The opinion does contain two passages that, taken in isolation, might be taken as support for the application of the Just Compensation Clause to private-private transfers.  On closer inspection, however, neither passage in fact provides this support.

In the first of these passages, Justice Scalia wrote:  “Moreover, though the classic taking is a transfer of property to the State or to another private party by eminent domain, the Takings Clause applies to other state actions that achieve the same thing.”  Taken alone, the words “to another private party” might be interpreted as providing some support for applying the regulatory takings inquiry to private-private transfers.  This sentence is the beginning of a paragraph that highlights the trend in the Court’s regulatory takings jurisprudence of equating certain regulatory acts to exercises of eminent domain, and it is true that under Kelo and similar cases the government may use eminent domain to transfer property from one private person to another.  As discussed above, however, these exercises of eminent domain are private-public-private, not private-private.  The paragraph closes with a sentence that emphasizes the private-public transfer that was involved in Webb’s, and in context of the overall private-public thrust of the plurality opinion, the words “to another private party” should be taken simply as an accurate statement of the Court’s post-Kelo eminent domain jurisprudence.  Further, both Justices Scalia and Thomas dissented in Kelo, and it is fair to presume that Chief Justice Roberts and Justice Alito would likewise be hostile to Kelo-type uses of eminent domain.  There would be a certain level of dissonance involved with maintaining a position that Kelo is wrong and maintaining that the regulatory takings inquiry should apply to private-private transfers because of Kelo.  This passage from the Stop the Beach plurality opinion therefore should not be read as support for applying principles grounded in the Just Compensation Clause to private-private transfers.

In the second passage, Justice Scalia wrote:  “If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property, no less than if the State had physically appropriated it or destroyed its value by regulation.”  Some of the private-private transfer scenarios discussed above might involve the “declar[ation] that what was one an established right of private property no longer exists.”  For example, the scenarios involving changes to the law of future interests and the law of easements in one sense each declared that a private property interest no longer existed.  As discussed above, however, these scenarios do not involve the elimination of interests as interests in private property; rather, they are better seen as involving the transfer of property interests from one private person to another.  Any suggestion that this passage provides support for applying the Just Compensation Clause to private-private transfers can be refuted simply by placing the passage into its context in Justice Scalia’s plurality opinion:

In sum, the Takings Clause bars the State from taking private property without paying for it, no matter which branch is the instrument of the taking.  To be sure, the manner of state action may matter:  Condemnation by eminent domain, for example, is always a taking, while a legislative, executive, or judicial restriction of property use may or may not be, depending on its nature and extent.  But the particular state actor is irrelevant.  If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property, no less than if the State had physically appropriated it or destroyed its value by regulation.  “[A] state, by ipse dixit, may not transform private property into public property without compensation.”

Every other sentence in this paragraph is focused solely on government actions that result in transfers of private property to the public.  In context, the passage at issue, like the remainder of Justice Scalia’s plurality opinion, should be read as being concerned with private-public transfers, not private-private transfers.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Echeverria on Stop the Beach Renourishment: Why the Judiciary is Different

John D. Echeverria (Vermont Law School) has posted Stop the Beach Renourishment: Why the Judiciary is Different on SSRN.  Here's the abstract:

This essay, one of a collection of essays on Stop the Beach Renourishment v. Florida Department of Environmental Protection to be published by the Vermont Law Review, has two objectives. First, it attempts to situate the Supreme Court’s debate over the judicial takings concept within the framework of established takings doctrine. The results of this analysis suggest that the justices’ split over the judicial takings concept reflects fundamental disagreement about the relative virtues of per se vs. ad hoc analysis and about the nature of the Takings Clause as a constraint on government action.

Second, this essay assesses the merits of the judicial takings concept by analyzing the core issue of whether court rulings, like actions by the other branches of government, can constitute “takings” within the meaning of the Takings Clause. Contrary to Justice Antonin Scalia’s argument that all branches of government must be treated the same under the Takings Clause, this essay concludes that there are numerous reasons for treating courts differently, including: (1) the judiciary is not vested with the eminent domain power; (2) the rationale that takings liability serves to constrain majoritarian political impulses generally does not apply to the judicial branch; (3) the judicial takings concept would undermine the relationship between the federal and state court systems; (4) the state courts’ institutional structure provides a relatively strong assurance of fidelity to federal constitutional values; and (5) court rulings on property law issues tend to apply broadly across the community rather than single out particular individuals to bear special burdens.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Farber on Owning Up to the Environment

Daniel A. Farber (UC Berekely) has posted Owning Up to the Environment on SSRN.  Here's the abstract:

This essay argues that, rather than being a constitutional bulwark against environmental regulation, certain kinds of property rights can actually ease constitutional barriers created by current Supreme Court doctrine. These environmental property rights (EPRs) are either rights to prevent environmental degradation (such as conservation easements) or limited rights to impair the environment (such as tradable pollution permits.) Among other possible benefits, these property rights may help nudge constitutional law in a more environmentally friendly direction in the areas of standing, takings, and the federal commerce power.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Christie on Beachfront Property

Donna R. Christie (Florida State) has posted Of Beaches, Boundaries and SOBs on SSRN.  Here's the abstract:

As sandy beach property has become more scarce and more expensive, the controversies between upland owners and public users of the beach have increased. The public has an absolute right under the public trust doctrine to use the beach below the mean high water line (MHWL) boundary that defines the limits of state lands and littoral ownership, but “knowing” where that ambulating line is at any given time is virtually impossible. This uncertainty exacerbates the tensions that in Florida are leading to clashes between private land owners and the public. Setting a fixed boundary would lead to more certainty and consequently less controversy, but both legal and policy issue arise concerning this approach. In once instance, however – setting a fixed boundary between upland owners and submerged, public trust lands for purposes of government restoration of critically eroding beaches – a fixed boundary with appropriate protections for littoral owners seems to address problems of certainty, as well as legal and policy concerns. The Florida Beach and Shore Preservation Act’s (BSPA) use of this approach has been challenged in the Florida Supreme Court and subsequently in the U.S. Supreme Court in Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Protection. This article explores public and private interests in beaches and shores, and how the complexities of coastal boundaries contribute to controversies about the use of beaches. The article then looks at how the BSPA attempts to protect both the private and public interests in the coast through, among other provisions, establishing a fixed boundary for restored beaches. Finally, the challenges confronting Florida’s beach management that have arisen as a result of suits in the Florida Supreme Court and now in the U.S. Supreme Court are analyzed.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

NY Court of Appeals Rules in Columbia University Eminent Domain Case

The New York Court of Appeals today upheld the use of eminent domain for an expansion of Columbia University.  Ilya Somin comments at the VC; Matt Festa comments at the Land Use Prof Blog; Tim Sandefur comments at the PLF's blog; and Robert Thomas comments at the Inverse Condemnation Blog.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Supreme Court Rules in Stop the Beach

The Supreme Court today ruled in the Stop the Beach judicial takings case.  In an opinion by Justice Scalia, the Court rejected the judicial takings claim.  The Court's judgment was unanimous, but there were fragmented opinions on various issues, as described further below.  For background on the case, see this post.  For a recap of the oral argument, see this post.  For a great description of the social conflicts behind the dispute, see this article from the New York Times Magazine. 

I will be updating this post with analysis of the Court's opinions and with links to commentary about the case.

A Quick Summary of the Opinions

Justice Scalia delivered the Opinion of the Court, which was unanimous, for Parts I, IV, and V.  These parts together hold that the Florida Supreme Court's opinion was sufficiently consistent with Florida caselaw that the takings claim should be rejected.  Justice Scalia's opinion, however, is not the Opinion of the Court for Parts II and III.  These Parts reach the issue of judicial takings, and assert that under the correct circumstances, a judicial action can violate the takings clause.  Justice Scalia was joined in these Parts by the Chief Justice and Justices Thomas and Alito.  Justice Stevens did not participate in the case (because he owns Florida beachfront property), and the four other Justices (Kennedy, Ginsburg, Breyer, and Sotomayor) declined to join in Parts II and III of Justice Scalia's opinion.  Justice Kennedy wrote a concurring opinion, joined by Justice Sotomayor, and Justice Breyer wrote a concurring opinion, joined by Justice Ginsburg.  Together, these concurrences suggest that it was unnecessary to reach the issue of whether it is ever possible to have a judicial taking.  So on this critical issue, the Court split 4-4.  Because of the tie, Justice Scalia's opinion is not controlling precedent on this issue.  The overall issue of whether there can ever be a judicial taking is therefore still open as a matter of Supreme Court caselaw. 

Analysis

(1) What is the standard for judicial takings?  As noted above, the big question of whether there can ever be a judicial taking is still open.  If the ultimate answer to this question proves to be "yes", what would be the standard for deciding whether there is a judicial taking?  Four justices objected to even considering this issue, but Justice Scalia's opinion proposes the following standard:  "If a legislature or a court declares that what was once an established right of private property no longer exists, it has taken that property . . ." (Slip op. at 10, emphasis original).  Later in his opinion (at 23), Justice Scalia rejects the standard suggested by Justice Stewart's Hughes v. Washington concurrence that a decision that "constitutes a sudden change in state law, unpredictable in terms of relevant precedents" would be a taking. So the focus of Justice Scalia's proposed standard is on whether there is an established right of private property, not on whether the outcome was predictable.  There might often be a congruence between clear establishment of a right and predictability of an outcome, but Justice Scalia gives a few examples (at 23-24) where that might not be the case.

(2) What is the future of judicial takings litigation?  One fear about allowing judicial takings is that the federal courts will become the courts of last resort for property disputes.  Justice Scalia suggests that a litigant who loses before a state supreme court can only raise a judicial takings challenge through a cert petition to the United States Supreme Court. (Slip op. at 23).  But property owners who were not a party to the original litigation could challenge the state supreme court's decision as a judicial taking in the lower federal courts:  "And where the claimant was not a party to the original suit, he would be able to challenge in federal court the taking effected by the state supreme-court opinion to the same extend that he would be able to challenge in federal court a legislative or executive taking previously approved by a state supreme-court opinion." (at 23).  I am not at all an expert on Williamson County and San Remo, so I can't yet fully evaluate the impact of this statement.  And, of course, Justice Scalia's opinion is not binding on this point.  But Justice Scalia certainly seems to invite property owners to (a) bring cert petitions claiming judicial takings if they lose in state supreme court; even though cert petitions have a low chance of being granted, a petition claiming a judicial taking would get a sympathetic read from at least some of the Justices' chambers; and (b) bring lower court judicial takings cases if they were not litigants before the state supreme court.  These invitations, combined with the lack of clear guidance on any of these issues from the Court, suggest that we will see a lot of litigation on these issues in the near future.

[UPDATE:  Some further thoughts about the litigation that we're likely to see.  First, I think that state supreme courts might be especially careful after Stop the Beach to paper up their property opinions well.  As the actual outcome in Stop the Beach showed, state property law often allows a substantial amount of wiggle room.  Another way of putting this is that state law property rights might not always be as clear as many people suppose.  Second, it may be that the statute of limitations has not yet run on judicial takings claims based on some recent state supreme court decisions.  I don't have any specific case in mind, but property owners who were not parties to the initial litigation might start bringing claims in the lower federal courts.  Third, although the denial of cert would preclude a takings claim by the litigant in the state supreme court, the cert denial would have no precedential value, so every cert denial in a judicial takings case might be followed by claims brought in the lower federal courts by similarly situated property owners.  Fourth, these claims are going to be very challenging for the lower federal courts.  Not only is the standard for judicial takings unclear, but the procedural propriety of bringing judicial takings claims in the lower federal courts is not even clear -- Justice Scalia suggested that these claims could be brought, but his opinion is not controlling precedent on this point.  It could turn out in some case down the road that these kind of claims cannot be brought in federal court.  Faced with this mess, lower federal courts would do well to do what the Supreme Court ultimately did in Stop the Beach:  look for some precedential support for the state supreme court opinion that is being challenged, and reject the constitutional challenge.] 

(3) Justice Kennedy's concurrence could be very important.  Justice Kennedy raises a number of interesting issues in his concurrence.  I want to focus for now on just one.  Consistent with his approach in a number of other takings cases, Justice Kennedy has advocated for a relatively robust role for due process analysis.  The most important statement in Justice Kennedy's concurrence might be this:  "The Court would be on strong footing in ruling that a judicial decision that eliminates or substantially changes established property rights, which are a legitimate expectation of the owner, is 'arbitrary or irrational' under the due process clause." (Slip op at 4).  Like Justice Scalia's proposed judicial takings test, this one focuses on clearly established property rights.  So it is possible to count six votes for the proposition that a state supreme court opinion that eliminates clearly established property rights is unconstitutional:  the Chief Justice and Justices Scalia, Thomas, and Alito on judicial takings grounds, and Justices Kennedy and Sotomayor on due process grounds.  I also think it is very interesting that Justice Sotomayor joined Justice Kennedy's opinion, rather than Justice Breyer's.  This may be a hint that Justice Sotomayor may be more protective of property rights than many of the Court's liberal justices have been over the last few years.  It is worth remembering in this context that both Justice Brennan and Justice Marshall wrote a number of takings opinions that were very pro-property owner (e.g., the San Diego Gas & Electric dissent by Justice Brennan, the Loretto opinion by Justice Marshall).

(4) Justice Stevens may have been missed by the pro-government side.  Justice Stevens has been the intellectual leader of the pro-government side on regulatory takings issues since at least 1987.  This is speculation (though informed speculation), but I would have expected Justice Stevens to have made the case against recognizing a doctrine of judicial takings had he not recused himself.  Justice Breyer was satisfied with making the case that this issue shouldn't be decided now.  I think that Justice Stevens would have said more. [UPDATE:  Tony Mauro at the BLT has some additional thoughts on the impact of Justice Stevens' recusal].

(5) Potential impact on the broader regulatory takings issue.  There are two notable things about the plurality portion of Justice Scalia's opinion for regulatory takings more broadly.  First, it continues to emphasize the concept of equivalence that has been a theme in recent regulatory takings cases.  By "equivalence" I mean the idea that a regulation or other government action is a taking if it is the equivalent of an exercise of eminent domain.  (See slip op. at 8).  This idea was a major theme in Lingle v. Chevron.  I think that this is a potentially important concept in that it may circumscribe the scope of regulatory takings - regulations that lead to a total diminution in value of property are easy to equate to an exercise of eminent domain; regulations that result in a lesser diminution in value seem much less like the equivalent of an exercise of eminent domain.  Second, Justice Scalia's opinion includes a shot across the bows of state supreme courts that might want to use the background principles exception from Lucas to insulate a regulatory action from a takings claim.  After quoting the relevant language from Lucas, he states that "A constitutional provision that forbids the uncompensated taking of property is quite simply insusceptible of enforcement by federal courts unless they have the power to decide what property rights exist under state law." (Slip op. at 22).  In other words, in Justice Scalia's view, federal courts shouldn't be too deferential to state court characterizations about the scope of property rights.

(6) Some classic Scalia.  In taking on Justice Breyer's argument that there was no need to address the core judicial takings issues, Justice Scalia makes a reference to a classic tongue twister:  "JUSTICE BREYER must either (a) grapple with the artificial question of what would constitute a judicial taking if there were such thing as a judicial taking (reminiscent of the perplexing question how much wood would a woodchuck chuck if a woodchuck could chuck wood?) or (b) answer in the negative what he considers to be the 'unnecessary' constitutional question whether there is such a thing as a judicial taking."  Justice Scalia treats the question of the woodchuck as open, but it of course has an answer:  a woodchuck would chuck as much wood as a woodchuck could chuck if a woodchuck could chuck wood.

(7) The Euclid cameo.  Michael Allan Wolf, who knows a lot about Euclid, just pointed out to me that Justice Scalia badly miscites Euclid - see the slip opinion at p. 12, describing Euclid in a parenthetical as "recognizing that block zoning ordinances could constitute a taking, but holding that the challenged ordinance did not do so."  As Michael pointed out, this is clearly wrong on a number of levels.  Most importantly, in my humble opinion, is that Euclid is not a takings case.  It is a substantive due process case, as Justice Kennedy suggests in his concurrence (slip op. at 3).  I really don't think that it is helpful to Justice Scalia's broader agenda to treat Euclid as a takings case, and in any event it is simply wrong to do so. 

A couple of random points.  First, in my first big post about this case, I wrote:  "I would guess that Justice Scalia was instrumental in obtaining the cert grant.  I predict that the Supreme Court will find a taking in Stop the Beach and that Justice Scalia will write the opinion of the Court."  Well, I was at least half right.  My predictions after oral argument were a little more on target re: the outcome.  Second, it has frequently been observed that blogs have compressed the cycle of analysis on Supreme Court opinions.  Having just tried to put together some cogent thoughts in about three hours really drove that point home for me.  Third, Justice Scalia showed academics no love at all, and did not cite the leading law review articles on judicial takings.  Justice Kennedy did cite some, but not all, of the leading articles on point.  Fourth, I noted before that I advocated in the past (albeit as a law student) for federal judicial takings review of state court property decisions.  Here is what I said in my student note (63 Fordham L. Rev. at 1881-82) on the judicial takings standard: 

The Court should explicitly adopt Justice Stewart's Hughes v. Washington test, while avoiding the problematic "reasonable expectations."  State court findings in just compensation cases should be reviewed to ensure that they define property using legitimate statutory and common law precedent, rather than using the inherent flexibility of common law to define property rights out of existence.  If the state courts previously have recognized a property interest, either between private individuals or between an individual and the state, then the state cannot destroy that interest without compensation.  Such a requirement would accommodate the desire to have the state's property law serve as the primary source of the definition of property, while maintaining the protection of liberty required by the Just Compensation Clause.

This is somewhat close to the standard that Justice Scalia proposed, which is kind of cool.  The problem is that I'm not sure that I still agree with what I said as a law student.  I'll have to sort that out sometime soon.

Further thoughts on the case from around the blogosphere and the media (to be updated periodically):

Lior Strahilevitz has a thoughtful analysis of the question raised by Jerry Anderson (on the property listserv and in the comments here) at the University of Chicago Law School Faculty Blog.

Timothy Sandefur comments on the case at the Pacific Legal Foundation's blog. [UPDATE:  Tim has a second post with some further thoughts on the case.]

Josh Blackman is happy that Justice Sotomayor may be more protective of property rights than Justices Breyer or Ginsburg.

Robert H. Thomas collects some links at the Inverse Condemnation Blog.

Ilya Somin comments on the case at the VC.

David Bernstein comments on the substantive due process aspects of the case at the VC here and here.

Ilya Shapiro of the Cato Institute discusses the case.

NPR's Nina Totenberg has a story on the case.

Steve Eagle comments here at PropertyProf.

UPDATING the list of commentary a few days later:

Eduardo Penalver has some excellent thoughts at Prawfs.

Tim Mulvaney has an op-ed on the case.

Ben Barros

[photo of Destin, Florida beach via Wikicommons]

[Comments are held for approval, so there will be some delay in posting]

Wright on the Denominator Problem

Danaya C. Wright (Florida) has posted A New Time for Denominators: Toward a Dynamic Theory of Property in Regulatory Takings Relevant Parcel Analysis on SSRN.  Here's the abstract:

Despite the Supreme Court’s 25-years of fierce forays and rapid retreats in the battle over property rights and the takings clause, two intractable theoretical problems have eluded the Court’s attempts to provide guidance for state actors as to when a regulation will, in the words of Justice Holmes, “go too far.” Those two problems lie in identifying the relevant parcel against which a property restriction will be weighed (the parcel as a whole, relevant parcel, or denominator issue) and the relevance of the timing of a regulation in analyzing the extent and reasonableness of a landowner’s expectations of unregulated use for compensation purposes. The first is a question about how we identify the quantum of property “taken” by a regulation; is it one toothpick out of a very large bundle of property rights or is it the entirety of a relatively small bundle? The second is a question about the fairness of changing land-use regulations mid-stream, so that a person who purchased land under one regime might be entitled to compensation when a new, stricter regime significantly diminishes the uses she can make of her land. These two issues merge together when takings jurisprudence demands that we identify the relevant parcel at some regulatory moment in time. This article suggests that we should not be analyzing takings claims in single snapshot moments, but should instead look at actions the landowner has taken to make herself vulnerable to the supposed harms of regulations. This article challenges traditional takings jurisprudence and offers a better way to balance the legitimate interests of landowners with the needs of the public in regulating land uses.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Ely on Stevens, Kagan, and Property Rights

James W. Ely Jr. (Vanderbilt) has a column in today's Washington Times titled Stevens, Kagan and property rights. (H/T Ilya Somin).  Ely remarks that "Justice Stevens consistently dismissed property rights claims and voted to strengthen government control over the lives of individuals," and goes on to discuss Stevens' positions in regulatory takings and public use cases.  At least since the mid-1980s, Stevens has certainly been the leader of the pro-government wing of the Court on takings cases, and he has written some of what are (in my humble opinion) the worst regulatory takings opinions in recent memory.  Even though the ultimate holdings in Keystone and Tahoe Sierra are probably correct (especially because both were facial challenges), Stevens' majority opinions in each are terrible, as was his dissent in Lucas.  This said, there is one passage in Ely's op-ed that strikes me as misleading:

In Kelo, Justice Stevens virtually eviscerated the public use limitation of the Fifth Amendment at the federal level. Under his reading of public use, legislators appear to have almost unlimited power to take homes and businesses for economic development. The beneficiaries likely will be corporations and others with political clout. In practice, developers and local officials often work in tandem to eliminate neighborhoods and displace residents in order to achieve hypothetical economic gains.

While I'm not a big fan of Kelo, I don't think it is true that Justice Stevens eviscerated the public use limitation - the Supreme Court as a whole eviscerated it in unanimous opinions in Berman and Midkiff.  I've never seen a convincing argument why the result in Kelo was not mandated by Berman and Midkiff.  So it seems unfair to place all of the blame on Stevens.

It will be very interesting to see what happens with the Court's liberal wing on takings cases after Stevens' departure.  Stevens has so dominated this area that it is hard to pin down exactly where Justices Ginsburg and Breyer stand -- sure, we have their votes, but I can't recall either writing an opinion in a takings case.  Justice Sotomayor and potential Justice Kagan are relatively blank slates on regulatory takings issues.  It may be that this issue has become so ideological that the liberals will consistently vote against property owners.  On the other hand, there is good reason to think that the liberals may be sympathetic to property owners in at least some contexts.  After all, Justice Brennan wrote what is probably the most pro-property-owner opinion in any takings case (his dissent in San Diego Gas & Electric).  We might get a preview of what is to come when the Court decides Stop the Beach sometime in the next couple of weeks.  Because Justice Stevens recused himself, the Court's liberal wing won't be able to follow his lead.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Cert Petition in Just Compensation Case

Ilya Somin at the VC has a post describing a cert petition in a potentially important Just Compensation case, City of Milwaukee Post No. 2874, Veterans of Foreign Wars v. Redevelopment Authority of the City of Milwaukee.  The case involves the "undivided fee" rule, which can lead to gross undercompensation of holders of under-market leases.  Gideon Kanner has a post on the case, as does Robert Thomas at the Inverse Condemnation Blog.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

Eminent Domain and the Political Process

Can the political process protect property owners from the use of eminent domain?  Consider this story from Fox News:

Officials in Auburn, New York threatened to possibly use eminent domain to force property owners to sell their land so a developer could build a multi-million dollar hotel and conference center. But in a surprise vote, the Auburn Industrial Development Agency unanimously voted not to use eminent domain by a vote of 9 to 0.

As negotiations continued with three property owners over the past several months, it appeared that Auburn would have to resort to eminent domain to clear the way for the proposed 88 room, $11 million hotel and conference center. City officials said the hotel would bring jobs, new tax revenue, and improve the city, which is located in upstate New York, as it plans to launch a music festival in two years.

There was at least one hold out, Mike Kazanivsky, who owns a barren grass strewn lot that he says he bought to build a small miniature golf and ice cream amusement park. When we stood on his property two weeks ago, he wept at the thought that he could be forced to sell his land for a private project. . . .

He insists he does not want to sell his plot of land.

“Everyone kept saying you have to put a figure on it, you have to put a figure on it. How do you put a figure on something you don’t want to sell?”

He insisted “I never wanted to stop progress, but I didn’t want them to take this from me.” . . .

So, to recap, the city proposes taking property through eminent domain, then backs off after the issue becomes controversial.  So, in at least one case, the political process did protect the property owner.  But the plural of anecdote is not data - the political process worked in this case, but might not in others.

(H/T Erika Lauer)

Ben Barros

[Comments are held for approval, so there will be some delay in posting]

The Extraordinary Story of Dr. Karel Des Fours Walderode, Part II

When we last left off, our protagonist Dr. Walderode was a citizen and permanent resident of the newly created Czech Republic.  [For those keeping score, his family estate in Bohemia had, by this time, been situated at different times in six different countries, and controlled at various points by an empire, a fascist dictatorship, a communist dictatorship, and -- on 3 occasions -- a republic].

In 1992, having met all the conditions for restitution of property seized under the Benes Decrees, Walderode filed his claim for restitution of his family estate, parts of which were now owned by 4 Czech state agencies, one town, and several private companies.  And that, believe it not, was when things started to get really complicated. 

Walderode's petition for restitution was a political hot potato, and then-Prime Minister, now President Vaclav Klaus, who is notoriously against restitution claims under the Benes Decrees, decided to enter the fray.  He sent a "legal opinion" to the relevant agencies, stating that Walderode's claim was "legal" but "unacceptable."  Nevertheless, for a time Walderode was successful: the Czech Central Land Office granted his petition, and he took possession of his lands in September 1993.

But opponents of the restitution did not give up.  For two years they kept up the political pressure, and finally in November 1995 the Central Land Office annulled its previous decision and the petition was re-opened.  In February 1996, the Czech parliament passed what was popularly known as "Lex Walderode," amending the restitution law to require that claimants could demonstrate uninterrupted Czech citizenship from the time their property was seized under the Benes Decrees.  Because Walderode's citizenship was revoked by the Communists when he went into exile, he could no longer meet the conditions for restitution.  At age 92, Walderode lost his property again.

That year, he took his case to the UN Human Rights Committee; by the time it issued its opinion in his favor in 2001, he was already dead.  The Czech government did not re-open the case. 

Walderode's surviving spouse, Dr. Johanna Kammerlander, is a lawyer and has continued to fight for restitution of the estate.  In September 2008, the Czech Supreme Court found in her favor -- with regard to about a half acre of forest.  But the precedent set in that case is expected to lead to the return of much of the estate.  

We'll have to see what happens: the extraordinary story isn't finished yet.   

Mark Edwards

[Comments will be held for approval, so there will be some delay in posting]    

The Extraordinary Story of Dr. Karel Des Fours Walderode

If the history of the 20th century in Europe could be encapsulated in the life of one man, that man might be Dr. Karel Des Four Walderode. 

He was born in 1904 and died in 2000, and his life sat at the intersection of the social and political upheaval that radically transformed, and re-transformed, and re-transformed again property rights in Europe.

Of French and German descent, he was born in the Kingdom of Bohemia, then part of the Austro-Hungarian empire, where his wealthy family had lived since the 17th century and owned, among other property, vast estates and a castle.  Until age 14 he was a citizen of the Austro-Hungarian empire.  But the Austro-Hungarian empire ceased to exist in 1918 with the reformation of Europe following World War One.  Walderode found himself situated in the newly formed Czechoslovak Republic, of which he was now a citizen.

In 1939, Germany invaded and occupied the parts of the Czechoslovak Republic it had not already grabbed under the Munich Agreement of 1938.  Germany dissolved the Czechoslovak Republic, and proclaimed the creation of a new state: the German Protectorate of Bohemia.  Walderode now found himself not only living in the German Protectorate of Bohemia, but also declared by Germany a German citizen, because his first language was German. 

In 1945, with the defeat of Germany, the German Protectorate of Bohemia ceased to exist.  The Czechoslovak Republic came back into existence.

The restored democratic Czechoslovak government under Edvard Benes issued what are now known as the Benes Decrees.  Under the Benes Decrees, people of German descent were presumed to have aided the German occupation.  As a result, they had their property confiscated without compensation, had their citizenship revoked, and were expelled from the country (although expulsion is not required under the Decrees, people who lost their citizenship were in fact expelled).   If, however, people of German descent could prove their loyalty to the Czechoslovak Republic during occupation, they could retain their citizenship and stay in the country.  Walderode was one of the very few able to prove that he remained loyal to the Czechoslovak Republic during the occupation (even though he had been conscripted for a year into the Wehrmacht), so he retained his Czechoslovak citizenship and was not expelled.  However, he still lost his property rights in his family's estates.  [You can read more about the seizures of property and expulsions under the Benes Decree in this excellent article by Timothy William Waters].  

In 1948, the Communists seized power in the Czechoslovak Republic, eventually renaming the country the Czechoslovak Socialist Republic.  Walderode was forced into exile by the Communists, who didn't care for his privileged lineage and most certainly were not impressed by that fact that he had recently proven his loyalty to the democratic government that they had just overthrown.  When he went into exile, the Czechoslovak Socialist Republic revoked his citizenship.

In 1991, after democratic government had been restored, he returned to a country now named the Czechoslovak Federative Republic and settled in Prague.  He was made a Czechoslovak citizen again in 1992.  Also in 1992, the Czechoslovak Federative Republic passed a law for the restitution of agricultural and forest property seized under the Benes Decrees, provided the claimant could demonstrate: (1) he had been a citizen at the time the property was seized; (2) he was now a permanent resident of the country; (3) he was loyal during the German occupation; and (4) he was a citizen at the time he submitted his claim for restitution. 

6 months later Czechoslovak Federative Republic itself ceased to exist, with the creation of separate Czech and Slovak Republics.  Walderode now found himself living in the Czech Republic.  The Czech Republic retained the restitution law.  Walderode met all four of the conditions for restitution, and so submitted his claim.  But . . .  .

What happened next will appear in Part II of this post!

Mark Edwards

Hudson on The Public Trust and the Lucas Remand

Blake Hudson (Stetson) has posted The Public and Wildlife Trust Doctrines and the Untold Story of the Lucas Remand on SSRN.  Here's the abstract:

Government attempts to protect ecosystems on private lands are often thwarted by Fifth Amendment takings claims demanding that “just compensation” be paid to the property owner. In the case of Lucas v. South Carolina Coastal Council, the U.S. Supreme Court found that a state statute could survive a takings claim if the state could prove on remand that “background principles of property law” applied to the subject property. Scholarly works since Lucas have argued that “background principles” includes the public and wildlife trust doctrines. However, on remand, the state failed to assert either doctrine in defense of the statute. Though authors have focused on this aspect of the case, no author has before, to my knowledge, discussed the oral arguments presented on remand to the South Carolina Supreme Court. These arguments were neither transcribed in court documents, nor detailed in the final court order. Strikingly, during the oral argument the court actually invited the state to assert the public trust doctrine, but the state was unprepared. This invitation by the court lends important support to the argument that the doctrines may be asserted to protect environmental regulations from takings claims under the circumstances presented in Lucas. This article details the history of the two doctrines, discussing the similarities between them and demonstrating their broad application to a greater number of resources than those protected in the seminal cases. The article next analyzes the Lucas remand, focusing on the court’s invitation to the state to assert the public trust doctrine. Finally, the article discusses how the U.S. Supreme Court could have decided the case without remand, by applying the doctrines directly – the nature of the doctrines would have allowed the Court to uphold the state law without violating the Constitution.

Ben Barros

[Comments are held for approval so there will be some delay in posting]

Historic Preservation and Takings

My property class did Penn Central late last week.  With impeccable timing, the St. Petersburg Times ran a story this weekend about a somewhat similar lawsuit arising out of local historic preservation regulations.  The City of St. Petersburg has designated the Hotel Detroit, built in the late 1880s, as an historic property.  According to the owners of the building, which is now used to house condominiums, the designation effectively thwarts their plans to demolish the structure and build a new high-rise in its place.  As this story shows, more than 30 years later, the debates in Penn Central remain alive and well.

Mike Kent

P.S.  Thanks to Stetson law student Megan Robison for bringing the case to my attention.

[Comments are held for approval, so there will be some delay in posting.]

Is that Property which the Law Declares to be Property?

In response to Virginia's celebration of confederate history month, and in connection with teaching takings this week, yesterday I had my property class read Henry Clay's argument against the emancipation of humans held as slaves.  Clay's argument was that if emancipation were to occur, it would constitute a taking, and thus was impermissible under the 5th Amendment without just compensation.  Since the government was not prepared to provide such compensation, emancipation would be an illegal and unconstitutional act.

Anticipating the rejoinder that there could be no taking if the thing taken were not property, Clay said, "That is property which the law declares to be property."  For at least 200 years, he said, both before and after the ratification of the Constitution, humans of African descent had been recognized as private property.  They were not just uncompensated labor; they could be alienated, possessed exclusively, and used like other forms of private property, including as security for debt.  Generations had relied on the law, and the law told them that slaves were property. 

Now, I was not about to ask first-year law students to argue the position that the emanicpation of slaves without full compensation of their former owners was a  legally wrong, unconstitutional act.  So, I took that position (and, in case there is any misunderstanding here, I'll say now what I said to my class: of course I don't think emancipation was wrong, and I'll kick the @*&%$ of anyone who says otherwise).  I then told my class to explain, if they thought I was wrong, why.

I made them focus on whether slaves had ever really been property, as the law had said they were.  I did not let them argue too long that the emancipation was not a taking (in the sense that it was merely a regulation that didn't go 'far enough'), or that compensation had already been provided through the slave's labor.  There are good arguments for those positions, perhaps, but they also allow us to dodge Clay's provocative claim.  So I insisted they tell me: is that property which the law declares to be property?   

It was a fascinating discussion, particularly in light of the typical skepticism with which my students had regarded the idea of unenumerated rights the week before when discussing zoning.  I'm as skeptical of 'natural law' as the next product of the Enlightenment, and yet . . . . try as we might, we just could not accept that humans had ever legitimately been property simply because the law had declared it.  But if that's true, then what is the source of authority that says otherwise?  Something greater than the Constitution?  And if we say yes, aren't we acknowledging and defending the existence of unenumerated rights, whether implied in the Constitution or not?  Isn't that the essence (so to speak) of natural law?

Regardless, it was a fascinating exercise, and one I highly recommend for your property classes.

Mark Edwards

[comments are held for approval, so there will be some delay in posting]

Neighbors v. Neighbors in New Jersey Beach Renourishment Dispute

The AP has a great story about a controversy brewing in Long Beach Island, New Jersey.  The beach is eroding, placing some beachfront homes at risk and endangering the community’s main recreational attraction.  But renourishment of the beaches would create dunes that would block some beachfront owners’ views of the beach.  When a nearby town used eminent domain to take an easement from some holdouts, the trial court gave a huge compensation award to the property owners.  So now the mayor and town officials of Long Beach Island are encouraging people to convince, and perhaps harass, their neighbors who are holding out.

Ben Barros

[Comments are held for approval, so there will be some delay in posting]