Judicial Takings and Givings

Recently the Washington Post commented on the Supreme Court's Lingle opinion on its editorial page .

THE SUPREME COURT'S decision this week in the case of Lingle v. Chevron didn't make big news. No surprise: The unanimous decision dealt with a technical-sounding question of property rights. But Lingle is important, because in it the court unambiguously repudiated a dangerous doctrine it had articulated in 1980, a doctrine with horrid implications for environmental and other regulatory enforcement.

To begin, note the editorial writer's concern is with environmental regulation, and not with property rights and the protection of individual liberty. In my view, in the name of environmental regulation, Congress has caused our national government to act, at times, in ways I regard as having horrid implications with respect to liberty and the protection of private property. Congress and our national government have often acted to limit how an individual can utilize his or her property, even when such uses do not harm the person or property rights of others.

The Takings Clause of the Fifth Amendment bans governmental seizure of private property without just compensation. Traditionally, this stricture was understood to ban only the physical expropriation of land or other things of value. But starting in the 1920s, the court expanded the concept to include certain regulatory actions that so devalue a person's property as to render it worthless. The idea of a "regulatory takings" makes sense at the extremes, but limiting it has proven tricky. Government actions often diminish property values, after all, so a broad regulatory takings principle could have the effect of forcing governments to pay people to get them to comply with the law. Precisely for this reason, the doctrine has become a favorite of libertarian legal theorists interested in using the courts to restrain the regulatory state.

Next, note the reference to the meaning of the Takings Clause of the 5th Amendment which reads as follows:

. . .nor shall private property be taken for public use without just compensation.

The commentary neglects to point out that the 5th Amendment also constrains Congress (and government more generally) in an additional way. Government can take private property only IF the taking involves government putting the private property it takes into public use, AND only if government pays the private property owner just compensation for the property it takes.

Now, consider the assertion that ". . . a broad regulatory takings principle could have the effect of forcing governments to pay people to get them to comply with the law." I suggest this assertion makes no sense. If we don't recognize the idea of a regulatory taking then, as Justice Holmes, wrote in 1922

We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.

That is, if we do not accept the idea of a regulatory taking, it then becomes possible for government to essentially take property by prohibiting certain uses that might be chosen by the property owner and thereby gain a specific public use of the property. For example, if government tells a property owner he cannot fill a small "wetland" on his property because it is habitat for migratory waterfowl, while the government doesn't physically take possession of the wetland, the government does in fact achieve a taking of the "wetland" as habitat for its migratory waterfowl. If we do not recognize a regulatory taking, government gets habitat for its waterfowl without following the "constitutional way of paying" for it.

The commentary continues

In 1980, the court, in a throwaway sentence whose importance the justices clearly did not appreciate, added a mischievous piece to this puzzle. The court suggested that a regulatory taking happens if a regulation "does not substantially advance legitimate state interests." This test seemed to suggest that courts should review not merely how much a regulation burdens property rights but whether that regulation is reasonable in the first place. Normally, such challenges take place under due- process principles. But unlike a traditional due-process challenge, where a court will defer to a regulation that has a rational basis, the new takings approach suggested a kind of heightened judicial scrutiny. In the years since, lower courts have applied this doctrine in rent control, land use and zoning cases. The test, had it found lasting legs, would have given judges the power to interfere with a whole swath of government actions.

I want to say that this view is mistaken because it cannot be based upon an accurate understanding of the reason the Supreme Court would consider whether a regulation "substantially advances legitimate state interests." In my view, the author of this editorial is not the only person to have misunderstood the relevant ideas and issues (even Supreme Court Justices have screwed this up) in this regard.

Having a private property right to something means a person can do with that property as he wishes, with one constraint in principle. An individual never has the right to use his property in a way that harms the person or property of another. One role of government (in my view the primary role) is to protect individuals from harm to themselves or their property caused by the actions of others. I suggest this is the most important meaning of the term "legitimate state interest." When the Court asked if a regulation "substantially advances legitimate state interests" the Court is really asking if the regulation is meant to limit an individual's use of property in a certain way because to use his property in that way would cause harm to the person or property of others. If this condition is met, then there can be no government taking. Government cannot take from an individual something the individual does not have a right to do. An individual never has the right to harm the person or property of another, and a regulation that prevents such harm can never be a taking. This is the reason the Court MUST inquire about legitimate state interests. If the regulation prevents harm to the person or property of others, there is no taking and there is no requirement that government pay the property owner to get him to comply with the law.

Return to my illustration of a wetland owned as private property. The wetland is the owner's. It is not the government's wetland. If government says the owner cannot fill the wetland because it is habitat for migratory waterfowl, then we should ask if this regulated land use harms the person or property of others. If it does, then government is not taking the person's property. If it does not, government is taking the person's wetland for its own use. No one else owns the habitat in this wetland but the individual owner. Therefore, filling the wetland cannot harm to the property of others. Perhaps the government will say that filling the wetland harms migratory waterfowl since there will be less habitat and hence a smaller population of waterfowl than would otherwise be the case. I think this makes lots of sense. But, who owns the waterfowl? No other person owns the waterfowl. Perhaps we should say that government owns the waterfowl. I think this makes lots of sense as well. Filling the wetland could harm the migratory waterfowl which is owned by government. But, government still does not own the individual's wetland. I think we must see this situation in one of the following ways: (1) Government has been using the individual's wetland for food and shelter for its migratory waterfowl without payment for those services, or (2) government can say the wetland cannot be filled only if it pays just compensation because it essentially takes the wetland so it can provide its waterfowl with food and shelter, or (3) we say that government cannot stop the owner from filling the wetland. Either government leaves the property owner alone to fill the wetland (3), or government gets involved in saving the wetland for the waterfowl by either paying the owner sufficient compensation to lead the owner to voluntarily choose to save the wetland as a source of income (1), or the government just takes the wetland and pays just compensation (2). But, as Justice Holmes suggested, government cannot get the wetland for its migratory waterfowl without following the Constitutional way of paying for the wetland.

If the editorial is correct about the direction the Lingle opinion moves Takings jurisprudence, then in my view, this opinion will take us away from the Constitution.