#21 Summer 1998
FORMER TAFOL PRESIDENT VICTORIOUS
SUPREME COURT or THE TRUE MEANING
OF THE TAKINGS CLAUSE
l NOTES AND COMMENTS
Panel at Second Renaissance Conference
TAFOL on the Web
Free Speech in Public Schools
l ELECTION OF BOARD MEMBERS
1998 Page 1
PRESIDENT VICTORIOUS IN SUPREME COURT or THE TRUE MEANING OF
THE TAKINGS CLAUSE
By Stephen Plafker
Former TAFOL president Michael Mazzone, one of his clients, and
the Washington Legal Foundation have prevailed in the United States
Supreme Court in the IOLTA case1 described in the Winter 1998 issue
of this Bulletin. The case involves a Texas program which requires
that lawyers place certain of their clients' funds in interest-bearing
bank accounts, the interest from which is used to provide legal
services to low-income persons.
Their opponents were the members of the Texas Supreme Court and
the Texas Equal Access to Justice Foundation (TEAJF), the organization
which spends the money taken. Supporting their opponents with amicus
curiae briefs were the federal government, the attorneys general
of thirty-four states, the Conference of (State) Chief Justices,
the Conference of State Governments and a conglomeration of other
governmental organizations, The American Association of Retired
Persons, eighty-four bar associations, foundations, and funds,
and the American Bar Association. Michael was supported by seven
amicus briefs. His supporters included the Texas Justice Foundation,
the National Right To Work Legal Defense Foundation, the Mountain
States Legal Foundation, Defenders of Property Rights, certain
members of the Texas House of Representatives, the Attorneys' Bar
Association of Florida, the Pacific Legal Foundation, and, of course,
The Association for Objective Law.
claim was based on the "Takings Clause" of
Amendment2 which reads: "nor shall private property
be taken for public use, without just compensation." This clause presupposes
that the government may take private property by force, but only
for a public purpose. Property interpreted, the expression "public
purpose" would be synonymous with "governmental purpose," and "governmental
purpose" would be determined by reference to the principles
found in "The Nature of Government" and in the Declaration
of Independence. It would take into account Ayn Rand's definition
of rights. Since any taking is in derogation of rights, it could
only be done if necessary, i.e., if the government had no alternative.
Finally, the owner would have to receive the full cash value for
the lost property. One consequence of this last component is that
the government could never take money, for under the "just
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compensation" requirement, it would have to give the same
one on the Court now believes in rights (or at least property
Under modern theory, the government may take
property for any purpose that benefits a large number of people.
To prevail on a claim of violation of the Takings Clause, the victim
must show three things: that he has an "interest" in
the property, that the government has taken the property, and that
he has been denied just compensation. In the IOLTA case, The Supreme
Court determined only the first: that Michael's client had the
required "property interest."
Rehnquist wrote the majority opinion. His reasoning proceeds
No one disputes that the principal belongs
to the client. History shows that Texas follows the common law
rule that "interest follows principal." Therefore, any
interest earned belongs to the owner of the principal: i.e., the
There were two dissents. One, written by Justice Breyer, took
the position that federal law prevents the clients from realizing
interest from the deposits eligible for the IOLTA program. Therefore,
there was no property right for the State to take. The other, written
by Justice Souter, concentrated on points not raised in the appeal.
(This despite the fact that, under the rules, the parties were
not permitted to argue these points.) Justice Souter would have
decided the two other issues against Michael and his client. His
dissent is apparently an attempt to influence the subsequent progress
of the case.
The case has been returned to the lower courts for a determination
of the other two issues. Michael will now have to convince the
courts in Texas that his client's property was taken and that it
had some value. This may require him to show that his client could
earn interest on the money.
Richard Pena, President-elect of the Texas State Bar, sent a fax
blast" to Texas Bar members: "The Supreme Court decision
is disappointing, but it by no means signals the end of funding
legal services to the poor through IOLTA programs . . . . Darrell
Jordan of Dallas, who represented the TEAJF and Texas Supreme Court
in the appeal, assured me that the Texas IOLTA program is alive
and well and that TEAJF will conduct business as usual."
supporters and Texas State Bar members replied to this "blast." Dee
Tagliavia sent an e-maIl to President Pena: "I for one applaud
the Supreme Court's decision. I hope that control over the disposition
of property belonging to persons who have sought legal counsel
in this and other states will ultimately reside with those persons.
Legal services to the poor should be funded voluntarily, not by
expropriation. It is of absolutely no significance whatsoever that,
unaggregated, the property may have little or no value. What is
paramount is the rightful owner's control over that property; and
he may legitimately object to the use to which it is put by the
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a letter. It began: "Why would anyone want 'access
to justice' if, once granted access, the courts did not respect
individual rights and in particular the right to property? The
State Bar and the Supreme Court of Texas should not be trying to
fund 'access' to justice at the expense (and in violation) of individual
rights. The two entities in this State that should be most vigilant
in the protection of individual rights---the State Bar and the
State's highest court---have done everything in their power to
dodge the question: why are you funding legal services using other
people's money and without their knowledge and consent?" It
went on to conclude that, in light of the Supreme Court decision,
the State Bar was "on the wrong side of the issue." As
a direct representative of the lawyers, and therefore an indirect
representative of the clients, it "should have done what
I have done---defend and protect the rights of lawyers' clients
. . . [The State Bar] does not do what it is supposed to do,
and does what it is not supposed to do."
The fight continues.
1. Phillips v. Washington Legal Foundation, 118 U.S. 1925
2. Originally, this provision (and the rest of the Bill of Rights)
applied to the federal government only; it did not restrict the
states. In 1897, the Supreme Court held that the
Fourteenth Amendment made it applicable to the states.
NOTES AND COMMENTS
Panel At Second Renaissance Conference
Jim McCrory led a panel at the Second Renaissance Conference this
past July. The purpose of the panel was to discuss several groups
advancing positions consistent with Objectivism. Steve Plafker
stood in for Americans for Free Choice in Medicine, former Board
member Tom Bowden represented TAFOL, and Robert Tracinski, editor
of The Intellectual Activist, stated the position for
a new organization he is organizing as a successor to the Committee
for the Moral
Defense of Microsoft. After each representative gave a brief description
1998 Page 4
of his organization,
the meeting was opened to questions from the audience.
TAFOL On The Web
The Association for Objective Law now has a web site at http://www.nationweb.com/tafol.
Included at the site are a description of TAFOL, its purpose, principles
and program. Also at the site is an e-mail information request
form. Articles, op-ed articles and news items will be added to
the site from time to time.
of Radio Free Europe broadcasts of Georgi Markov's memoirs (a
that provoked the "umbrella murder" of
Bulgaria's Solzhenitsyn), a new human rights Web site, the Digital
Freedom Network, has published, uncensored, Bao Ge's anti-oppression
letter to the Chinese government. The letter, addressed to President
Jiang Zemin, espouses a political system in which the Chinese people
would be the masters of their country and calls for a free press.
Bao Ge, who was recently escorted out of China, was on hand for
the debut of the new site. He stated that because opponents of
China's communist government are not allowed to be heard, "attempts
by the Digital Freedom Network to break through such censorship
are extraordinarily significant."
The site (www.dfn.org)
currently contains several works from dissidents in China, Kenya,
and Cuba, among other countries. According to
a New York Times online report, the most poignant of these are
a number of prison journals. The journals and other materials,
including materials supplied by other on-line sources for republication,
are intended to make the Digital Freedom Network a one-stop-shop
for banned works. The instigation for the creation of the site
and over $1 million in funding comes from
Howard Jonas, founder and chief executive of a New Jersey-based
Internet telephony company.
Free Speech in Public Schools
at Killian (Florida) High School distributed a 20-page pamphlet
comments ridiculing the black principal
based on his race. The students were suspended from school and
then arrested and charged with a felony under a 1945 Florida criminal
libel law (apparently modeled after The Sedition Act of 1798) prohibiting
anonymous material that "tends to expose any individual or
any religious group to hatred, contempt, ridicule or obloquy." Florida's
hate crime law raised this first degree misdemeanor (apparently
1998 Page 5
a third degree felony carrying a penalty of up to five years
in prison. Fortunately for free speech, the state
dismissed the charges based on her belief that the statute
was unconstitutional because of recent court decisions. However,
she said it was a difficult decision due to the highly offensive
of the material. It should not have been a difficult decision.
It is precisely content that the government may not regulate
(as discussed by the U. S. Supreme Court in R. A. V v.
City of St.
Paul, Minnesota (1992) even though the content is reprehensible.
It is precisely unpopular speech that the First Amendment to
the Constitution is intended to protect, for popular speech
Election of Board Members and Officers
The Association for Objective Law is pleased to announce the
election of its Board of Directors and officers for the year, August
1998 through July 1999:
James McCrory, an attorney in private practice in New Mexico;
Michael Conger, an attorney specializing in tax and employee
benefits law with the firm of [omitted] in Kansas City, Missouri;
Stephen Plafker, a retired deputy district attorney living
in Glendale, California.
President: James McCrory
Vice-President: Treasurer: Michael Conger
Secretary: Stephen Plafker
A copy of the TAFOL amicus brief filed in Phillips v.
Washington Legal Foundation will be sent to any person
making a contribution $50 or more. [no longer available]
Copyright © 1998
The Association for Objective Law. All rights reserved. The Association
for Objective Law is a Missouri non-profit
corporation whose purpose is to advance Objectivism, the philosophy
of Ayn Rand, as the basis of a proper legal system.