Monday, May 19, 2008

Two by Kelly

Daniel B. Kelly (Olin Fellow, Yale) has posted two pieces on eminent domain on SSRN.  They are:

The Limitations of Majoritarian Land Assembly 

In their article, Land Assembly Districts, Professors Michael Heller and Rick Hills address the collective action problem arising from excessively fragmented land. They propose an innovative solution: Land Assembly Districts (or LADs). In this Article, I raise several concerns regarding LADs in particular and majoritarian land assembly in general. LADs rely on majority voting by a neighborhood's existing owners. Yet majority voting, coupled with the possibility of heterogeneity, means that LADs may both approve socially undesirable assemblies and disapprove socially desirable ones. LADs also permit owners to bargain over a project's surplus. But such bargaining creates additional costs for developers, as well as a potential bilateral monopoly problem, both of which may result in fewer desirable assemblies. There is thus no reason to believe a priori that LADs are superior to either eminent domain or private assembly. Finally, because LADs require courts to delineate the circumstances in which eminent domain would continue to be permitted, LADs may not even offer an administrability advantage. Indeed, LADs ultimately may rely on judicial expertise to an extent the authors themselves believe is problematic. Still, LADs constitute a creative proposal worthy of consideration.

Pretextual Takings

Since Kelo v. City of New London, the preferred litigation strategy for challenging a condemnation that benefits a particular private party is to allege that the taking is "pretextual." This Article contends that, although pretextual takings are socially undesirable, the current judicial test for identifying such takings is problematic. Yet an alternative, intent-based test might be impracticable, as well as underinclusive: condemnors often have mixed motivations, particularly when confronted with a firm's credible threat to relocate. Instead, the Article develops a framework that emphasizes informational differences between the government and private parties. When the state lacks information regarding the optimal site for an assembly, the state may need to rely on a private party to identify, as well as develop, a particular site. However, when the state itself possesses information regarding the site, precondemnation private involvement, as well as post-condemnation involvement by a preferred private party, is generally unnecessary. Such involvement increases the likelihood of a pretextual transfer without any corresponding public benefit. The Article concludes that, based on these differences, a burden-shifting framework, analogous to Title VII's test for identifying pretext, can be adopted in the takings context. The new framework is then applied to several situations in which allegations of pretext are likely to arise.

Ben Barros

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