#26 Spring 2000
THE RISE OF THE "TAKINGS" CLAUSE (Part 1)
l TAFOL LITIGATION ACTIVITY
l PRIMARIES AND THE FIRST AMENDMENT
2000 Page 1
RISE OF THE "TAKINGS" CLAUSE
By Larry Salzman
There is no absolute right to property protected by any court
in America today. Nor has that right ever in our history been consistently
so protected. The primary cause of this failure is philosophic.
Hardly anyone understands the concept of individual rights, but
there were periods during which it was better understood than it
As a legal matter, the movement against property rights owes its
success largely to judicial irresponsibility---to the refusal of
judges to stand against popular majorities and legislatures aiming
to violate individual rights. Despite that history, it has recently
become common for lawyers of all political stripes to state that
property rights---at least in land---are making a comeback, that,
in key respects, the rights are better protected by courts today
than at any time during the past 60 years.
conclusion is not warranted, but it does have some basis. In
the last two
decades, there has been a trend in U.S.
Supreme Court cases giving new importance to the "takings" clause
of the Fifth Amendment and new attention to the right to property.
Thus, some victims of terrible abuse---who previously were refused
entry into court---now stand at least a chance of winning their
cases. But the reforms are not enough---and will not succeed---unless
the deeper premises behind the failure to protect property are
examined and discredited.
19th century, property was well guarded against both official
tyranny in two ways. First, courts routinely
denied governments the power to seize or significantly regulate
property, declaring such actions beyond the authority of legislatures.
For example, in Fletcher v. Peck,1 the Court held that a state
legislature could not deprive an owner of his property by repealing
the statutes which had originally granted him his title. And in
Citizens Savings & Loan Association v. Topeka2,
the Court found illegal an issuance of public bonds, the proceeds
were turned over to a bridge company.
courts acquiesced, they ordered the government to compensate
property owners according to the "takings" clause
of the Fifth Amendment. That clause states that "private property" shall
not "be taken for public use, without just compensation." This
clause is the Constitutional source of eminent domain---the government's
power to lawfully seize property with payment---from private owners.
This clause has been interpreted by courts as containing two distinct,
obvious protections: property may not be taken by the state unless
1) it is for a public use and 2) compensation is paid. At one time,
the state had to show clearly that its intended use was public
and the government had to pay for it in order to wrest control
of property from its owner.
2000 Page 2
While the "takings" clause does not actually protect
the right to property, it often serves as an effective deterrent.3
In practice, the clause was rarely raised by lawyers of the 19th
century because courts regularly prohibited the state from taking
property thus mooting the issue of compensation.
By the 20th
century, however, courts generally refused to stand against a
or regulation of property, arguing only over
what payment the "takings" clause demanded. And increasingly
they ruled that the "takings" clause demanded nothing.
In an important
1915 case, for instance, the city of Los Angeles shut down the
business of entrepreneur J.C. Hadacheck,
wiping out three-quarters of a million dollars in equity, by outlawing
brick-making on all land within the city limits. The court raised
no objection, stating that "there must be progress, and if
in its march private interests are in the way, they must yield
to the good of the community."4 (The imposition of city-wide
zoning was the "progress" spoken of here). In hundreds
of cases thereafter, as long as some "rational relationship" existed
between a regulation and a vaguely-defined notion of the "health,
safety or welfare of the community," no court would rise to
defend an owner of land.5 And "rational," according to
courts, came to mean virtually any relationship a legislator wasn't
too embarrassed to state publicly.6
reporting history between then and now record the ever declining,
extinction of, judicial protection for the
right to property in nearly all its forms.7 Much of deprivation
of property rights comes under the title of "regulation." The
legislature, it is said, can regulate property at will within its "police
powers" and risk no liability for a "taking."
Wendall Holmes is widely credited with developing the first judicial
test for determining whether a property regulation
was within the "police power" or outside it. A "taking" occurs,
he wrote, when a regulation "goes too far" in burdening
landowner.8 Too far? By reference to what? Justice Holmes
provided no answer---and trapped 20th century "takings" law
in a swamp of unprincipled debate.
decades, justices have continued to ask whether a regulation "goes too far"---whether it crosses the bounds
of the "police power" or whether a "taking" occurred.
As one commentator
observed, the Court has used "at least
four different tests for determining when a 'taking' occurs, without
explaining why its inquiry should differ from one 'takings' case
to the next or providing clear guidelines as to when each 'takings'
test should be applied."9 Each test provided a different analysis.
No member of the Court agreed on the precise scope of the "police
power." As applied by each justice, no single test could be
counted upon to reach the same result among them. Sometimes the
determination would rely on the percentage of the property taken;
sometimes on the type of property; sometimes on the type of government
action---most often it wasn't particularly clear.
The "standards" are used to determine whether a government
act falls within the "police power" or outside of it.
Where the court finds that the state acted within the power, it
will rule that no "taking" has occurred, and no compensation
is due to the owner. Where the court rules that the government's
actions fall outside the "police power," it will order
the government to compensate the landowner for depriving him of
his property rights.
The concept "police power" can
rationally be defined only by reference to Ayn Rand's theory
2000 Page 3
Government is formed to prevent the initiation of force among
individuals in society. Where a use of property
is an objective
threat, nuisance, or harm to others, the government can properly
put an end to that use. No "taking" of property has occurred
because what has been lost was never within the rights of the landowner
to begin with.
has almost never been explicitly recognized or embraced by judges.
where it is implicitly relied upon, lawyers and
judges---as thoroughly as philosophers---have misunderstood or
distorted the concept of "force." As a result, nearly
the whole of 20th century "takings" jurisprudence is
marred by an ever-expanding conception of what government actions
fall within the "police power." So much so that by 1978
the Court ruled that New York City was well within its "police
power" when it prevented the company that owned Grand Central
Station from erecting a skyscraper in the train station's place.
The destruction of Grand Central---the loss of aesthetic and historical
value to the
general public---was described as so great a harm that
the city had the lawful power to prohibit it.10 By judgment
of the U.S.
Supreme Court, Grand Central Station remained and no
compensation was paid.
Year by year
the court eked out opinions, relying on "common
sense"---sometimes reaching just results, more often not.
By the 1970's
nearly everyone---the Court, the bar, and the scores of scholars
wrote books and papers seeking to make sense of
the cases---perceived that "takings" law had totally
collapsed. The Court began to declare openly, in its opinions,
that lawyers could not rely on any one method of adjudication,
that the Court's decisions were formed on an "ad hoc" and "case-by-case" basis.
Then, almost suddenly, the Court turned. In a seminal case, it
surprised New York regulators by ordering them to pay landlords
for a seizure of less than 2 square feet of property. The regulators
were enforcing a law that allowed cable TV companies to install
electrical equipment on New York apartment buildings even over
the protest of the buildings' owners.12 In years past, no one would
have doubted that such a law would go unopposed by the court.
The court's message was clear and often repeated afterwards: the
state will be made to pay when it physically deprives a landowner
of his property---no matter how small the parcel involved. With
this, the hope for reform was spurred.
first target was set: to rein in the wildly expanding concept
of the "police power." They sought, and are still
seeking, to push property laws of all kinds---zoning, rent control,
wetlands legislation---outside the boundary of the "police
power." These types of government activities are now commonplace.
If courts determine that they are not within the "police power," then,
to the extent that the regulations deprive individuals of legitimate
uses of property, the state will be made to make restitution to
the owners. If the state must pay for its regulation, the reformers
(rightfully) argue, less regulation will occur.
1992 ruling in Lucas v. South Carolina Coastal Commission15 was
explicit cashing-in on the reform. The question in
Lucas was whether a South Carolina regulatory agency should be
ordered to pay more than a million dollars to a landowner when
it prohibited him from building two homes on the edge of his eroding
beachfront lot.14 The law preventing the development was motivated
largely by an environmentalist concern for the "health" of
the coastline. Similar laws had been enacted in many states by
1992. The case was judged so important that more than 50 lawyers
or public interest firms filed amicus briefs in defense of Mr.
2000 Page 4
more than 100 in support of the government.
definite trend has since emerged: governments will be made
to pay not only for physical "takings" but for
regulations that trample so far upon property rights as to
be the equivalent
of a "taking." The court's rulings since 1992 have slowly
expanded the number of circumstances in which this proposition
will be applied.
This has not
returned us to the 19th century; almost no court will actually
a "taking" today. In fact, a vast
movement among cities is now expanding the use of eminent domain
for spurious "urban renewal" projects. But more and more
the Court is willing to use the "takings" clause to exact
sizeable payments from the government; as a result, a deterrent
against some common forms of abuse is returning.
the majority in Lucas, Justice Antonin Scalia, was prepared to
provide a principled
way out of Holmes' morass---and
put a cap on the "police power." Beginning with the source,
Justice Scalia wrote an opinion acknowledging the unprincipled
nature of Justice Holmes' standard. He dismissed the expansionary
concepts of the "police power" as misguided "early
attempts" at understanding. For his own standard, he reached
back to the legal tradition celebrated for its protection of individual
rights: the common law.
was considered so radical that Justice John Paul Stevens, dissenting,
his opinion: "Today the Court launches a
missile to kill a mouse."
Hailed as a near revolution in property law---by dozens of articles
by both critics and proponents alike---the decision provided welcome
relief for Mr. Lucas. And the response by regulators, environmentalists,
and the court's dissenters to their curtailment was near shock.
In its context, it was a bold ruling---and a just result---but
it was no revolution. Rather, at the deepest level, the opinion
is fully in line with the judiciary's 100-year failure to secure
[To Be Continued ]
References and Notes:
1. 10 U.S. 87 (1810)
2. 87 U.S.
655 (1874) "There
are limitations on such power which grow out of the essential
nature of all free governments.
Implied reservations of individual rights . . . which are respected
governments entitled to the name."
3. There is
debate among defenders of property rights as to whether eminent
domain regarded in the 18th century as an
inherent---if dangerous---power of government, with the "takings" clause
added as a prudent limit on that power, or whether the due process
clause barred eminent domain and therefore, the "takings" clause
was thought by the Founders to be required as a grant of power
to preserve it. For the case for the latter, see, Bernard Siegan, "Majorities
May Limit People's Liberties Only When Authorized To Do So By The
Constitution." S.D.L. Rev 27 (1991). See also Bernard Siegan,
Property and Freedom, Transaction Books (1997).
v. Sebastian, 294 U.S. 394 (1915).
5. Dennis J.Coyle, Property
Rights and the Constitution, 166.
6. See Hawaii
Housing Authority v. Midkiff, 467 U.S. 229
(1984) (The "public use" requirement is thus
coterminous with the scope of a sovereign's police
powers . . . In short, the Court has made clear that it will
not substitute its judgment for a legislature's judgment
as to what constitutes a public use "unless the use be
palpably without reasonable foundation.")
of this fact will be included in part II of this
Coal v. Mahon, 260 U.S. 393 (1922).
2000 Page 5
E. Krier, The Takings-Puzzle Puzzle, 38 Wm. & Mary
L. Rev. 1143. 1144 (1997).
Central Transp. Co. v. New York City, 438 U.S. 104
Central Transp. Co. v. New York City, 438 U.S. at 125.
v. Teleprompter Manhattan CATV Corp., 458 U. S,
14. 505 U.S.
TAFOL LITIGATION ACTIVITY
1. TAFOL has been supporting the efforts to keep Elian Gonzalez
in this country. His American relatives have been trying to get
the courts to force the Immigration and Naturalization Service
to give him an asylum hearing. As mentioned in the last issue of
this Bulletin, our first effort was to file an amicus curiae brief
in their support in the Federal District Court.
The news has
not been good. After a pre-dawn raid in which the minions of
Mr. Clinton kidnapped Elian for the benefit of his friend,
Mr. Castro, the District Court ruled against these relatives. The
judges said they did not particularly like the result, but that
the Separation of Powers doctrine required that they not interfere
with the Executive Department's conduct of immigration policy
and foreign affairs.
The relatives appealed to the Court of Appeals which affirmed
the decision of the District Court. The relatives sought a rehearing,
and TAFOL (through Amy Peikoff and Bob Getman) wrote another amicus
curiae brief, completely different from the one filed in the District
Court supporting the rehearing request. Filing an amicus brief
in the Court of Appeals requires approval of all parties or the
granting of a motion by the Court. The Justice Department refused
to give consent to our filing, so the brief was sent to the Court
with a motion asking that it be accepted. The Court denied TAFOL's
motion to file the brief. This was particularly unfortunate because
the brief contains arguments no one else is making. (The decision
to reject the brief was made by the judge who had written the opinion
rejecting the appeal. He also rejected all other organizations'
requests to file friend of court briefs.) Then, the Court rejected
the request to rehear the case.
The Miami relatives' attempt to have the case heard by the Supreme
Court failed. Without any semblance of a hearing, Elian has been
sent back in his native slave state.
This case illustrates the fact that, until there are basic changes
in the culture's philosophy, there will be few advances in the
political environment. And the fact that failure to have a proper
philosophy has disastrous consequences.
2. There is slightly better news in the IOLTA case, the case where
TAFOL's former president, Michael Mazzone, is seeking to prevent
the State of Texas from stealing interest earned on funds held
temporarily by lawyers on behalf of their clients.
Originally, Michael lost his case in the District Court. This
decision was reversed by the Fifth Circuit Court of Appeals, and
the reversal was affirmed by the Supreme Court. The case was returned
to the trial court which again ruled against Michael and his associates.
Once again, they appealed. The case is again in the Fifth Circuit.
filed an amicus brief, written by Steve Plafker, in the Supreme
Court. It has just filed a brief, which is a modification
of the Supreme Court brief, in the Court of Appeals. As with the
brief in the Gonzalez case, the government (this time the state
government) did not consent to the filing. However, the Court of
Appeals granted TAFOL's motion to file this brief.
2000 Page 6
PRIMARIES AND THE FIRST AMENDMENT
The decision in California
Democratic Primary v. Jones1 contains
an interesting application of the right of association found in
the First Amendment.
In 1996 voters in California approved Proposition 198 changing
its primary system from one in which only party members could vote
in a party's primary to one in which the voters could choose among
all candidates running without respect to party registration.
for the proposition was to weaken "hard-line" candidates
and promote "moderate problem solvers." Its effect was
to allow non-party members to control the outcome of a party's
primary so that, for example, a Republican might vote for the weakest
Democrat to increase the chance that the Republican candidate would
win the general election.
The Supreme Court held the Proposition unconstitutional in that
it violated the right of political parties to exclude non-members
from voting in their primaries.
1. http://supct.law.cornell.edu/supct/html/99-401.ZS.html (in
[sorry, PDF link no longer works]
Copyright © 2000
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.