Takings: An introduction

We have received a stream of email messages today asking for our comment on the Supreme Court’s decision today in Kelo v. New London. In Kelo, a narrowly divided Court in essence upheld the City of New London’s condemnation and transfer of private property from A to B in the name of economic development. According to the Court, the rationale of economic development made the taking a public use supporting the city’s exercise of its power of eminent domain under the Fifth Amendment.
The Court’s decision is disappointing, but hardly surprising. Indeed, if you are the least bit surprised by the decision, I would suggest that you haven’t been paying attention. As Justice Thomas makes clear in his brilliant dissent, the Court’s decision is simply the incremental extension of its wayward “public use” jurisprudence.
Takings similar to New London’s have occurred for years all over the United States. In 2000, for example, the property of a profitable car dealership in Richfield, Minnesota was condemned by the city on precisely the same grounds as the plaintiffs’ homes in Kelo and given to Best Buy for the construction of its corporate headquarters. The Minnesota Supreme Court split 3-3 and thereby affirmed lower court rulings sustaining the public use prong of the takings requirement. For the past hundred years the Supreme Court’s case law has taken an extremely broad and ahistorical reading of the public use component of the takings clause.
The jurisprudence represents the Court’s accommodation of governmental power over individual rights. The founders of course deemed the right to property one of the rights men held by nature along with the rights to life and liberty, the other rights protected by the due process clause of the Fifth Amendment. The right to liberty — witness the Court’s accommodation of the assetion of governmental power over basic speech rights in the McConnell case last term — isn’t faring much better than the right to property.
Few decisions rendered by the Supreme Court each term have outcomes that should be dictated by clear constitutional mandates. Yet the Court errs especially in those cases, such as McConnell and Kelo. The granddaddy of such clearly incorrect cases is the Court’s decision in the Minnnesota Mortgage Moratorium case of 1934, in which the Court authorized the state statutory impairment of contract in the name of, well, a national emergency.
The Court has also authorized the legislature to take much of a property’s value by regulation before the constraints of the takings clause come into play. How much is too much? The answer, my friend, is blowing in an ad hoc balancing test that “necessarily entails complex factual assessments of the purposes and economic effects of government actions.”
What is left of the Fifth Amendment’s takings clause is the requirement of “just compensation.” Hey, don’t knock it, that’s the part where lawyers take their 40 percent.
In section 1784 of his magisterial Commentaries on the Constitution, Justice Joseph Story wrote:

The concluding clause [of the Fifth Amendment] is, that private property shall not be taken for public use without just compensation. This is an affirmance of a great doctrine established by the common law for the protection of private property. It is founded in natural equity, and is laid down by jurists as a principle of universal law. Indeed, in a free government, almost all other rights would become utterly worthless, if the government possessed an uncontrollable power over the private fortune of every citizen. One of the fundamental objects of every good government must be the due administration of justice; and how vain it would be to speak of such an administration, when all property is subject to the will or caprice of the legislature, and the rulers.

We’ve come a long way from the time when Congress could pass, and the states could enact, a constitutional amendment reading: “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.” It sounds a little rigid and extreme, doesn’t it?


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