The Volokh Conspiracy

It is often argued that regulatory takings doctrine is a form of “Lochnerism” and a revival of “substantive due process” constraints on economic regulation.  So, for instance, in his Dolan v. Tigard dissent, Justice Stevens traces the history of the doctrine to the Lochner period and finds the roots of regulatory takings doctrine in late-19th century substantive due process.

The so called “regulatory takings” doctrine . . . has an obvious kinship with the line of substantive due process cases that Lochner exemplified. Besides having similar ancestry, both doctrines are potentially open ended sources of judicial power to invalidate state economic regulations that Members of this Court view as unwise or unfair.

As a historical matter, Justice Stevens was correct that the first decisions obligating states to compensate  landowners for the taking private property for public use  (Chicago, Burlington & Quincy Railroad v. Chicago) and holding that the regulation of land use could require compensation if it “goes too far” (Pennsylvania Coal v. Mahon) date from the so-called “Lochner era.”  Curiously enough, the authors of these two opinions are, respectively, Justice John Marshall Harlan and Justice Oliver Wendell Holmes.  Why is this curious?  Because Justices Harlan and Holmes wrote the two dissenting opinions in Lochner.  So while contemporary commentators and critics may see regulatory takings doctrine as Lochnerism reborn.  Those who challenged Lochner at the time apparently saw things differently.

A federal district court in Massachusetts has ruled in favor of the property owners in United States v. 434 Main Street, Tewksbury, an important asset forfeiture case. This is the case where the federal government sought the forfeiture of a motel on the grounds that a few of the motel’s customers had bought or sold illegal drugs on the premises – even though there was no evidence that the owners knew about the sales or facilitated them in any way. I previously discussed the case in this post, and it was also the focus of a Washington Post column by George Will.

Magistrate Judge Judith Dein’s opinion emphasizes the unusually extreme facts of this case as a basis for ruling that the motel was not eligible for forfeiture:

After reviewing the scores of cases cited by the parties, I find this case to be notable in several critical respects, including (1) the Government has identified only a limited number of isolated qualifying drug-related incidents spread out over the course of more than a decade, none of which involve the Motel owner or employees; and (2) the witnesses unanimously confirmed that no efforts were undertaken to work with the Motel owner to try and reduce drug crimes at the Property prior to the institution of the forfeiture action, nor was any warning given as to the possibility of forfeiture prior to suit being filed. As a result, the instant case is easily distinguishable from other cases where the “draconian” result of forfeiture was found to be appropriate.

The decision is based on statutory grounds and does not address the constitutional issues raised by takings targeting innocent property owners. Indeed, Judge Dein reiterates the longstanding, but in my view dubious, doctrine that “it is not necessary that the forfeited property be owned by a culpable person.”

Although the case is a significant victory for property owners, it also highlights the difficult of combating asset forfeiture abuse. The motel owners won only after extensive litigation. And even then, they might not have succeeded but for the efforts of the Institute for Justice, the prominent libertarian public interest law firm specializing in property rights issues that represented them pro bono, and helped attract national attention to the case. And the case may not be over yet, since federal prosecutors could decide to appeal. Most owners of property targeted for asset forfeiture do not have the resources for a prolonged legal battle. Asset forfeiture abuse remains a serious problem in many states. The struggle over this issue will continue.

As the Boston Business Journal points out, the case is also notable as “a high-profile loss for U.S. Attorney Carmen Ortiz, whose office has been besieged by criticism in recent weeks over her handling of the prosecution of Internet activist Aaron Swartz.” It will be interesting to see whether Ortiz decides to appeal this decision to the US Court of Appeals for the First Circuit.

CONFLICT OF INTEREST WATCH: I have worked with the Institute for Justice on several other property rights cases, but had no involvement in this one.

UPDATE: I should emphasize that, whatever one thinks of Carmen Ortiz, the problem of asset forfeiture abuse is not limited to this one controversial prosecutor. The practice of targeting innocent property owners and then making it difficult or impossible for them to challenge the seizure of their assets is common in many states. The real tragedy here is that Ortiz’s actions were probably only modestly more egregious than what has become standard practice in many jurisdictions.

John Ross of Reason has a nice article summarizing the problem of asset forfeiture abuse, as exemplified by dubious practices in the nation’s capital:

Jerrie Brathwaite was not in her car when Washington, D.C. police seized it in January 2012. She had lent her 2000 Nissan Maxima to a friend, and that friend was pulled over, searched, and found to be in possession of drugs. A year later, Braithwaite—who has never been charged with a crime—still doesn’t have her car back, and no one from the Metropolitan Police Department (MPD) will return her calls.

Brathwaite, 33, is knee-deep in the murky world of civil asset forfeiture, where confiscated cars, cash, and other property disappear into police coffers, and where legal recourse for owners is confusing, slow, and expensive. Under civil forfeiture, police can seize property from people who are never convicted—much less charged with—a crime. Unlike criminal forfeiture, where the government must prove property was used in the commission of crime, civil forfeiture law presumes an owner’s guilt....

Brathwaite’s situation—and the MPD’s behavior—are not uncommon. Civil forfeiture is a national problem. Law enforcement agencies seize millions of dollars worth of property each year with little or no due process for owners. In all but six states property owners are considered guilty until proven innocent. State law typically allows law enforcement to keep most or all of the proceeds from forfeiture—an enormous incentive to police for profit.

I previously wrote about this problem here, here, and here. In 2009, the Supreme Court heard a case addressing the question of whether forfeiture policies that give owners little or no opportunity to challenge the seizure of their property violates the Due Process Clause of the Fourteenth Amendment, which bans states from depriving people of “life, liberty, or property, without due process of law.” That case was dismissed on procedural grounds. Hopefully, the justices will revisit the issue in the future. As a lower court judge, Justice Sonia Sotomayor wrote an important opinion striking down a particularly egregious asset forfeiture regime on due process grounds. I hope the Supreme Court ultimately adopts a similar approach.

UPDATE: I have made minor changes to this post to eliminate some awkward wording.

Co-blogger Orin Kerr describes a planned effort by one local government to raise revenue by increasing asset forfeitures through the use of drug-sniffing dogs. Unfortunately, this is just one example of a growing trend of using asset forfeiture as a fundraising tool for law enforcement agencies. In this recent post, I rounded up many sources documenting the problem, including excellent articles by Radley Balko and George Will, and this report by the Institute for Justice. Asset forfeiture laws frequently victimize property owners who haven’t even been convicted of any crime, and in some states give them little or no opportunity to challenge the forfeiture of their possession, thereby flagrantly violating the Due Process Clause of the Fourteenth Amendment, which denies government the power to take away property without “due process of law.” This column by Steven Greenhut is a good summary of the problem:

Few groups of “sinners” were singled out in biblical accounts more than “tax collectors,” who were not merely state agents collecting revenues that taxpayers rightfully owed to the government. They were the source of particular loathing because they were extortionists, who profited personally by shaking down as much money from citizens as possible...

The Gospel accounts provide an early lesson in the danger of marrying the profit motive with governmental power. The possibility for abuse is great. Yet throughout the United States, government agencies increasingly rely on “civil forfeiture” to bolster their strained budgets. The more assets these modern-day tax collectors seize, the more money they have for new equipment and other things....

If, for instance, your neighbor borrowed your green Buick and sold some marijuana to an undercover agent, the law enforcement agency can seize the car. The owner might not have done anything wrong, but the car was indeed used in the commission of a crime. Activists point to instances where the government has become more creative in seeking assets—homes, cars, bank accounts—based on minor violations of the ever-expanding criminal code... As the number of regulatory crimes grows, the cases in which the government can seize assets grows along with it....

There is something terribly disturbing about this “policing for profit” trend, especially in our current world where the number of laws keeps growing. We’ve all become accustomed to police increasing their ticket-writing to backfill their budgets, but asset forfeiture takes the profiteering to a new and disturbing level. Agencies know that it’s so costly for people to fight their forfeiture proceedings that many victims simply cede the property without a fight. That’s wrong.

The Supreme Court planned to address some of the constitutional issues raised by dubious asset forfeitures in the 2009 case of Alvarez v. Smith, but ended up dismissing the case on procedural grounds. As a lower court judge, Justice Sonia Sotomayor wrote an opinion curbing especially egregious asset forfeitures that violate the Due Process Clause. Hopefully, the Supreme Court will eventually follow her example on this issue.

In the meantime, awareness of asset forfeiture abuse is slowly rising. But reform efforts are hindered by the reality that most of the victims are relatively poor and lack political clout. In addition, law enforcement agencies and local governments are unwilling to part with this lucrative revenue source, especially in difficult economic times.

UPDATE: It’s worth noting that drug-sniffing police dogs are often highly inaccurate, because dogs want to please their human handlers and therefore may turn up a false positive because that’s the reaction they think the handler wants. As Radley Balko explains, this can lead to bogus asset forfeitures:

The consequences of misusing police dogs go well beyond unconstitutional searches. A drug dog’s alert can help establish a connection between a suspect’s property and drug activity, allowing police to seize the property for possible forfeiture. Even if the owner is never charged with a crime, the burden is on him to go to court to win back what was his, a process that often costs more than the property is worth. In a case I reported last year, for example, college student Anthony Smelley had $17,500 in cash that he’d won in an accident settlement seized when police in Indiana pulled him over and a drug dog alerted to Smelley’s car. It took Smelley more than a year to win the cash back in court, even though a subsequent hand search turned up no illegal substances.

The danger of a false positive induced by a dog’s desire to please is especially great when asset forfeiture is a possibility, because law enforcement officers often have a strong desire to maximize the amount of property they can seize for their agency’s benefit. Moreover, many of the dogs used for drug-sniffing are retrievers. And, as my fellow retriever owners know, retrievers are even more eager to please than most other dog breeds.

Asset forfeiture laws in many states allow the police to seize property that has supposedly been used to commit a crime, and then keep the proceeds for themselves. Often, these laws victimize people who have not been convicted of any crime, and indeed did not even know that their property might have been misused. They also often give the owner little or no opportunity to challenge the seizure, thereby flagrantly violating the Due Process Clause of the Fourteenth Amendment. Needless to say, such perverse incentives lead to many abuses, as documented in a 2010 report by the Institute for Justice.

Two excellent recent articles by George Will and Radley Balko describe some particularly egregious examples.

Here is Will:

Russ Caswell, 68, is bewildered: “What country are we in?” He and his wife, Pat, are ensnared in a Kafkaesque nightmare unfolding in Orwellian language....

In the lawsuit titled United States of America v. 434 Main Street, Tewksbury, Massachusetts, the government is suing an inanimate object, the motel Caswell’s father built in 1955. The U.S. Department of Justice intends to seize it, sell it for perhaps $1.5 million and give up to 80 percent of that to the Tewksbury Police Department, whose budget is just $5.5 million. The Caswells have not been charged with, let alone convicted of, a crime. They are being persecuted by two governments eager to profit from what is antiseptically called the “equitable sharing” of the fruits of civil forfeiture, a process of government enrichment that often is indistinguishable from robbery....

Since 1994, about 30 motel customers have been arrested on drug-dealing charges. Even if those police figures are accurate — the police have a substantial monetary incentive to exaggerate — these 30 episodes involved less than 5/100ths of 1 percent of the 125,000 rooms Caswell has rented over those more than 6,700 days. Yet this is the government’s excuse for impoverishing the Caswells by seizing this property, which is their only significant source of income and all of their retirement security.

The government says the rooms were used to “facilitate” a crime. It does not say the Caswells knew or even that they were supposed to know what was going on in all their rooms all the time. Civil forfeiture law treats citizens worse than criminals, requiring them to prove their innocence — to prove they did everything possible to prevent those rare crimes from occurring in a few of those rooms. What counts as possible remains vague. The Caswells voluntarily installed security cameras, they photocopy customers’ identifications and record their license plates, and they turn the information over to the police, who have never asked the Caswells to do more.

Balko describes an equally ridiculous case:

When the Brown County, Wis., Drug Task Force arrested her son Joel last February, Beverly Greer started piecing together his bail....

“The police specifically told us to bring cash,” Greer says. “Not a cashier’s check or a credit card. They said cash.”

So Greer and her family visited a series of ATMs, and on March 1, she brought the money to the jail, thinking she’d be taking Joel Greer home. But she left without her money, or her son.

Instead jail officials called in the same Drug Task Force that arrested Greer. A drug-sniffing dog inspected the Greers’ cash, and about a half-hour later, Beverly Greer said, a police officer told her the dog had alerted to the presence of narcotics on the bills — and that the police department would be confiscating the bail money.

“I told them the money had just come from the bank,” Beverly Greer says. “We had just taken it out. If the money had drugs on it, then they should go seize all the money at the bank, too. I just don’t understand how they could do that....”

It took four months for Beverly Greer to get her family’s money back, and then only after attorney Andy Williams agreed to take their case. “The family produced the ATM receipts proving that had recently withdrawn the money,” Williams says. “Beverly Greer had documentation for her disability check and her tax return. Even then, the police tried to keep their money....”

Civil asset forfeiture is based on the premise that a piece of property — a car, a pile of cash, a house — can be guilty of a crime. Laws vary from state to state, but generally, law enforcement officials can seize property if they can show any connection between the property and illegal activity. It is then up to the owner of the property to prove in court that he owns it or earned it legitimately. It doesn’t require a property owner to actually be convicted of a crime. In fact, most people who lose property to civil asset forfeiture are never charged. ...

Although Mrs. Greer was able to recover her money, authorities in Wisconsin and elsewhere continue to seize cash based on “alerts” by drug-sniffing dogs, that can be extremely misleading:

But even in the odd world of asset forfeiture, the seizure of bail money because of a drug-dog alert raises other concerns. In addition to increasing skepticism over the use of drug-sniffing dogs, studies have consistently shown that most U.S. currency contains traces of cocaine. In a 1994 ruling, for example, the U.S. 9th Circuit Court of Appeals cited studies showing that 75 percent of U.S. currency in Los Angeles included traces of narcotics. In 2009, researchers at the University of Massachusetts analyzed 234 bills collected from 18 cities, and found that 90 percent contained traces of cocaine....

Stephen Downing, a retired narcotics cop who served as assistant police chief in Los Angeles, says it isn’t surprising that a drug dog would alert to a pile of cash, since it usually has traces of drugs.

“I’d call these cases direct theft. They’re hijackings,” says Downing, who is now a member of Law Enforcement Against Prohibition, an organization of former police and prosecutors who advocate ending the drug war.

Downing says he recently consulted a medical marijuana activist in California who was told to bring his bail money in cash, despite the fact that state law allows payment with a cashier’s check, a registered check or a credit card. “It makes me wonder if this seizing of bail is a new idea getting shopped around in law enforcement circles.”

While the details of these abuses vary, the underlying problem is the same: an asset forfeiture system that allows law enforcement agencies to seize the property of the innocent and then keep the loot for themselves. This predictably leads to a situation where many take the property first and only ask questions later – if at all. As Balko points out, low-income property owners are particularly likely to be victimized, because they often lack the funds to hire a lawyer to contest the seizure and state law often does not pay for a public defender in these cases.

CONFLICT OF INTEREST WATCH: I have done pro bono work on other cases for the Institute for Justice, which is representing the property owner in the Tewksbury case.

UPDATE: I wrote this post before noticing Jonathan Adler’s earlier post on the same subject. I am leaving this post up because it goes into much more detail. Also, I disagree with Jonathan’s statement that this sort of abuse is “constitutional.” The Supreme Court ruled that it was in Bennis v. Michigan. But I think the dissenters in that case (a cross-ideological coalition of Justices Kennedy and Stevens) got it right.

Moreover, Bennis held merely that the seizure of innocent owners’ property does not automatically violate the Due Process Clause. It did not rule on the Due Process Clause issues that arise when the authorities seize the property with little or no evidence that it actually was used in a crime, or when they fail to give the owner a meaningful and prompt opportunity to challenge the seizure in court. In a 2009 case, the Supreme Court planned to address the latter issue, but ended up dismissing the case as moot.

UPDATE #2: In an update to his post, Jonathan clarifies that he too is sympathetic to many of the arguments made by the Bennis dissenters. For my part, I agree with him that not every morally objectionable forfeiture practice is necessarily unconstitutional.

In the recent case of Bowlby v. City of Aberdeen, the Fifth Circuit Court of Appeals just ruled that Fourteenth Amendment Due Process Clause property rights claims can be filed in federal court, despite the fact that the Supreme Court’s 1985 Williamson County decision bars many Takings Clause property rights claims from federal courts.

Robert Thomas of the Inverse Condemnation blog has a good summary of the relevant issues:

If you tried to explain the practical results of Williamson County’s ripeness requirements to someone not familiar in the last 30 years of regulatory takings jurisprudence, they would probably think you were joking....

[U]nder Williamson County, a property owner alleging a violation of her express federal constitutional right prohibiting takings without just compensation cannot bring that federal constitutional claim in a federal court. Instead, she is first required to present her state claim for compensation to a state court before she can even think of a federal action. And if she loses in state court, she will be deemed to have also litigated the federal claim, even if she expressly did not. Williamson County’s rationale was that there is no violation of the Fifth Amendment by a state or local government unless and until the property owner could both show that there was a taking, and that the state had denied compensation. So, you see, you have to lose your state takings claim to ripen your federal takings claim....

Williamson County gets particularly bizarre when courts extend it beyond the takings clause, since what thin justification exists for the rule is grounded in the language of the Fifth Amendment. Yet, the lower federal courts regularly apply it to Equal Protection and Due Process Claims, somehow transforming Williamson County from a limited takings requirement to a full-blown bar to the federal courthouse door for any plaintiff alleging a property-related claim....

Well, in Bowlby v. City of Aberdeen, No. 11-60279 (May 14, 2012), the U.S. Court of Appeals for the Fifth Circuit provided a different view, and injected a modicum of reality into the strange world of Williamson County. We won’t go too far into the case’s details, except to say that the plaintiff had a business permit, which the City summarily revoked. She sued in federal court for a taking and for procedural due process and equal protection violations, and the court promptly dismissed her complaint under Williamson County. She did not pursue an appeal of the takings dismissal, but asserted that Williamson County’s state litigation requirement of that case did not require dismissal of the due process or equal protection claim.....

The Fifth Circuit reversed, concluding that Williamson County is applicable only to takings claims, and not due process or equal protection [property rights] claims.

The Fifth Circuit is correct in ruling that there is precedent indicating that Takings Clause claims are treated differently from Due Process Clause and equal protection claims (see pp. 10-11 of the opinion). On the other hand, the logic of Williamson County is broad enough to cover not only other types of property rights cases, but nearly all constitutional rights claims against state and local governments. For example, if a state government tries to suppress an individual’s freedom of speech, we could require him to sue in state court because the government action might turn out to have been illegal under state law, or a violation of the state constitution. The same goes for any action by state or local government that might violate the federal constituion: there’s always a chance that a state court might strike it down as a violation of state law. Williamson County ruled that this possibility requires takings claims to be litigated in state court and then (in most cases) barred from federal court even if the property owner loses her state case. But the same “logic” readily applies to most other constitutional cases against state and local governments.

As I explained here, this arbitrary singling out of takings cases is one more example of the second class status of property rights in modern constitutional jurisprudence. In the 2005 San Remo case, four justices – including Justice Kennedy and Justice O’Connor, joined Chief Justice William Rehnquist’s concurring opinion arguing that the Court should reverse Williamson County and allow Takings Clause cases the same access to federal courts routinely extended to citizens asserting other violations of other constitutional rights:

The Court.. remark[s], that state courts are more familiar with the issues involved in local land-use and zoning regulations, and it suggests that this makes it proper to relegate federal takings claims to state court. Ante, at 23. But it is not apparent that any such expertise matches the type of historically grounded, federalism-based interests we found necessary to our decision in Fair Assessment. In any event, the Court has not explained why we should hand authority over federal takings claims to state courts, based simply on their relative familiarity with local land-use decisions and proceedings, while allowing plaintiffs to proceed directly to federal court in cases involving, for example, challenges to municipal land-use regulations based on the First Amendment....

Williamson County’s state-litigation rule has created some real anomalies, justifying our revisiting the issue. For example, our holding today ensures that litigants who go to state court to seek compensation will likely be unable later to assert their federal takings claims in federal court....

I joined the opinion of the Court in Williamson County. But further reflection and experience lead me to think that the justifications for its state-litigation requirement are suspect, while its impact on takings plaintiffs is dramatic.

Hopefully, the Supreme Court will eventually change its position on this issue, much as Rehnquist did.

UPDATE: Joshua Thompson of the Pacific Legal Foundation has more information about the case here. PLF filed an amicus brief supporting the property owner, which was extensively relied on by the Fifth Circuit in its decision.

UPDATE #2: Since property rights issues often split jurists along ideological lines, it is perhaps worth noting that all three judges on this panel were Democratic appointees.

UPDATE #3: I should briefly explain why it matters that these cases be able to go forward in federal court rather than state court. In many cases, state judges will protect federal constitutional rights just as well as federal courts do. In some situations, however, that will not be the case, either because the state judges are less competent than their federal counterparts or because they are less willing to uphold claims against the state government that they serve. The latter is particularly likely in cases where state judges (many of whom are elected) are part of the same political coalition as the state officials whose actions are being challenged as unconstitutional. As the Supreme Court explained in the famous case of Martin v. Hunter’s Lessee (1816):

It is... argued, that no great public mischief can result from a construction which shall limit the appellate power of the United States to cases in their own [federal] courts.... [A]dmitting that the judges of the state courts are, and always will be, of as much learning, integrity, and wisdom, as those of the courts of the United States, (which we very cheerfully admit,) it does not aid the argument. It is manifest that the constitution has proceeded upon a theory of its own.... The constitution has presumed.... that state attachments, state prejudices, state jealousies, and state interests, might sometimes obstruct, or control, or be supposed to obstruct or control, the regular administration of justice. Hence, in controversies between states; between citizens of different states; between citizens claiming grants under different states; between a state and its citizens, or foreigners, and between citizens and foreigners, it enables the parties, under the authority of congress, to have the controversies heard, tried, and determined before the national tribunals.

The Supreme Court today issued a unanimous decision in favor of the property owners in the important case of Sackett v. EPA [HT: GMU law student Matthew Roberts]. The opinions in the case (an opinion for the court and two concurring opinions by Justices Ginsburg and Alito) are available here. Justice Alito’s concurring opinion includes a particularly clear description of what was at stake:

The position taken in this case by the Federal Government—a position that the Court now squarely rejects—would have put the property rights of ordinary Americans entirely at the mercy of Environmental Protection Agency(EPA) employees.

The reach of the Clean Water Act is notoriously unclear. Any piece of land that is wet at least part of the year is in danger of being classified by EPA employees as wetlands covered by the Act, and according to the Federal Government, if property owners begin to construct a home on a lot that the agency thinks possesses the requisite wetness, the property owners are at the agency’s mercy. The EPA may issue a compliance order demanding that the owners cease construction, engage in expensive remedial measures, and abandon any use of the property. If the owners do not do the EPA’s bidding, they may be fined up to $75,000 per day ($37,500 for violating the Act and another $37,500 for violating the compliance order). And if the owners want their day in court to show that their lot does not include covered wetlands, well, as a practical matter, that is just too bad. Until the EPA sues them, they are blocked from access to the courts, and the EPA may wait as long as it wants before deciding to sue. By that time, the potential fines may easily have reached the millions. In a nation that values due process, not to mention private property, such treatment is unthinkable.

The Court bases its decision on statutory grounds, ruling that the property owners are entitled to judicial review of their case under the Administrative Procedure Act. It therefore did not reach the issue of whether such review is also required by the Due Process Clause of the Fifth Amendment, which states that the government may not deprive individuals of life, liberty, or property without due process of law. The scope of the decision is therefore limited. And, as Justice Alito goes on to explain, “the combination of the uncertain reach of the Clean Water Act and the draconian penalties imposed for the sort of violations alleged in this case still leaves most property owners with little practical alternative but to dance to the EPA’s tune.” He urges Congress to clarify the scope of the CWA so that property owners will at least have a clearer indication of the scope of EPA authority over their land. Despite these limitations, the decision is a significant victory for property rights, and a rare case of unanimity on an important property rights issue.

I leave it to others to debate whether it is appropriate for a Supreme Court justice to urge Congress to clarify the law in one of his opinions. But it’s worth noting that this is not the first time such a thing has happened. Justice Ruth Bader Ginsburg famously urged Congress to reverse the Court’s interpretation of Title VII of the Civil Rights Act in her dissent in the Lily Ledbetter case.

UPDATE: As co-blogger Orin Kerr pointed out in this 2007 post, Justice Ginsburg later stated that one purpose of her dissent in Ledbetter was “”to attract immediate public attention and to propel legislative change.”

I’m delighted to report that Clark Neily of the Institute for Justice will be guest-blogging this week, about IJ’s “judicial engagement” project. IJ is one of the leading libertarian public interest law firms in the country, and I’ve always much respected their work.

As readers of this blog doubtless know, both conservatives and libertarians are split on the degree to which courts should act aggressively in reviewing legislation for constitutionality, as opposed to deferring to legislative action, especially in the area of so-called “substantive due process.” My sense is that different bloggers on this blog themselves disagree on this subject; and I suspect that I wouldn’t always agree with IJ’s broadest positions on this. But I much look forward to Clark’s explanation of IJ’s views, and I think our readers will find them interesting as well.

On Tuesday, I will be appearing at a Supreme Court preview panel sponsored by the George Mason University School of Law American Constitution Society. The other two presenters are Prof. Michael Seidman (Georgetown) and Prof. Stephen Vladeck (American). The panel will start at 4 PM, and take place in Room 221 at the George Mason law school building. It is open to both GMU students and the public.

Each panelist will focus on one important upcoming case within his area of expertise. I plan to talk about Sackett v. EPA, an important property rights case. The other two panelists will focus on United States v. Jones, a Fourth Amendment case, and Douglas v. Independent Living Center, an important preemption/health care case. We will also, of course, take questions about other issues that the Court is likely to address.

Timothy Sandefur  produces important research on economic liberty. I’m pleased that the Independence Institute, where I work, recently hosted an event for him to promote his book. I’m also happy that he has become part of the team of Cato Institute writers, which I have been part of since 1988. As a contributing editor of Liberty, I have followed his writing since he was a law student. And of course I commend Eugene for inviting him to guest-blog for VC. However, one item in his blogging appears to me to be erroneous:

When talking about “substantive due process,” as I’ve been doing, one must address a number of myths about that theory that, sadly, are so common that many law students are never even taught what the theory even means.

I.

Here is a good example: “the Supreme Court has never in its entire history tried to derive [substantive due process] from the text of the Constitution.” Nelson Lund & David B. Kopel, Unraveling Judicial Restraint: Guns, Abortion, and the Faux Conservatism of J. Harvie Wilkinson III, 25 J.L. & Pol’y 1, 3 (2009). Now, whether one accepts or rejects the idea of “substantive due process,” this claim is just false. The Supreme Court had repeatedly explained how substantive protections arise from the Constitution’s text.

The quote is not precisely accurate, and here, the lack of precision leads to a serious error. In the article that Sandefur cites, Nelson Lund and I were discussing and criticizing Roe v. Wade. After a quote from Roe about “the Fourteenth Amendment’s concept of personal liberty,” we then wrote: “This was presumably a reference to the doctrine of substantive due process, which the Supreme Court has never in its entire history tried to derive from the text of the Constitution.”

Our statement as actually written was accurate. Sandefur supplies no example to counter our statement that “the doctrine of substantive due process” (that is, of selective incorporation, unenumerated substantive rights such as those in Meyer v. Nebraska and Roe v. Wade, and so on) has never been the beneficiary of a Supreme Court attempt to derive it from the text of the Constitution.

Instead of showing a case where the Supreme Court did what we had said it did not do (explicate a textual basis for “the doctrine of substantive due process”), Sandefur instead supplies two quotes from Supreme Court cases that did something else.

The first quote, from Loan Ass’n v. Topeka (1874) is little more than an asserted conclusion, albeit one I happen to think is correct. The block quote from Hurtado v. California (1884) provides a litany of things that are not “due process of law”; such as bills of attainder, or special laws enacted to favor or harm a particular individual or group. The Hurtardo quote presents a common nineteenth century view of “due process of law,” with, at least arguably, hundreds of years of roots in American legal understandings. Some of the background of this thinking can be found in Frederick Mark Gedicks, An Originalist Defense of Substantive Due Process: Magna Carta, Higher-Law Constitutionalism, and the Fifth Amendment, 58 Emory L.J. 585 (2009) and James W. Ely, The Oxymoron Reconsidered: Myth and Reality in the Origins of Substantive Due Process, 16 Const. Comment. 315 (1999). Both authors trace the “due process of law” concept from Magna Carta’s “law of the land” provision, through Dr. Bonham’s Case (voiding a local monopoly on the practice of medicine) and its explication by Edward Coke, and to its understanding by the American colonists. This understanding (which might have been incorrect as a matter of English law) was adopted by the American Framers, and carried forward by antebellum state courts.

So yes, “due process of law,” in a textualist sense, can require judicial action against even laws which may have been enacted under proper procedures, such as special legislation (e.g., taking property from X to give it Y). And, quite obviously, this traditional view of “due process of law,” summarized in Hurtardo, has very little to do with “the doctrine of substantive due process.” The former, text-based view, condemns special legislation; yet you can’t use the modern Supreme Court’s “doctrine of substantive due process” to attack a congressional statute that was enacted for the obvious benefit of one corporation, whereas such a challenge might be plausible under the “due process of law” principle of Hurtardo.

In short, Nelson and I did not voice any objection to the principle of “due process of law” as briefly explicated in Hurtardo. Instead, we claimed that the Supreme Court’s doctrine of substantive due process (which is much more wide-ranging and dubious) has not been derived by the Court from the text of the Constitution. Hypothetically, it might have been possible to so derive at least some of the modern SDP decisions, but I suggest that the absence of any Supreme Court citations from Sandefur rebutting what we actually said is further support for our point.

The Supreme Court has just issued its opinion in Stop the Beach Renourishment v. Florida Department of Environmental Protection, a key property rights case. Unfortunately, the most important constitutional issue at stake – what, if any government actions count as “judicial takings” remains mostly unresolved. I summarized the facts of the case here:

Under Florida’s Beach and Shore Preservation Act (the Act), the state government is required to establish “renourishment” projects to restore waterfront land that has become “critically eroded.” Once the projects are complete, the Act gives the state title to any newly dry land that has been cleared as a result of the project’s pushing back the waterline. This deprives waterfront property owners of their previously existing right to ownership of land up to the “mean high water line” (MHWL). This is exactly what happened to the six waterfront property owners in Florida’s Walton County, whose holdings abutted a renourishment project established in the area. The property owners formed a group called Stop the Beach Renourishment, which is the petitioner in this case.

The project established in their area resulted in the creation of additional dry land between the property owners’ holdings and the ocean – land which was claimed by the state. The property owners argued that the state’s acquisition of land inside the MHWL constitutes a taking that requires compensation under the Takings Clause of the Fifth Amendment. The Florida Supreme Court ruled against the property owners, holding that state law did not give them the right to own all property up to the new MHWL created by the project. The property owners now argue, in the U.S. Supreme Court, that the Florida court decision amounts to a “judicial taking” that deprived them of property rights through a sudden and unexpected revision of state law by the state judiciary.

The Supreme Court held unanimously (8-0, with Justice John Paul Stevens recusing himself) that the Florida Supreme Court’s decision against the property owners did not materially alter previous Florida jurisprudence, and therefore ruled against the property owners. However, the Court did not issue any ruling on the far more important issue of what counts as a “judicial taking” under the Takings Clause of the Fifth Amendment.

I. The Four Justice Plurality Opinion.

Justice Scalia’s plurality opinion, signed by the four most conservative justices, holds that judicial takings do occur and implies that federal courts should not be especially deferential to state courts in determining whether one has happened:

States effect a taking if they recharacterize as public property what was previously private property.... The Takings Clause… is not addressed to the action of a specific branch or branches. It is concerned simply with the act, and not with the governmental actor…. There is no textual justification for saying that the existence or the scope of a State’s power to expropriate private property without just compensation varies according to the branch of government effecting the expropriation. Nor does common sense recommend such a principle. It would be absurd to allow a State to do by judicial decree what the Takings Clause forbids it to do by legislative fiat...

Our precedents provide no support for the proposition that takings effected by the judicial branch are entitled to special treatment, and in fact suggest the contrary. [emphasis added]

The plurality says that a judicial taking occurs any time a state court “declares that what was once an established right of private property no longer exists,” and should be treated the same as any other taking by a state government. The fact that it was done by the judiciary rather than by legislature or executive should not matter.

The plurality’s approach strikes me as sound. However, it did not get the support of a majority of justices.

II. Justice Kennedy’s Concurrence.

In a concurring opinion, Justice Anthony Kennedy (joined by Justice Sonia Sotomayor) argues that these kinds of cases should be analyzed under the Due Process Clause of the Fourteenth Amendment rather than under the Takings Clause of the Fifth Amendment. He contends that a “The Court would be on strong footing in ruling that a judicial decision that eliminates or substantially changes established property rights, which are a legitimate expectation of the owner, is ‘arbitrary or irrational’ under the Due Process Clause.”
Kennedy does not make clear what counts as an “established property right” that is a “legitimate expectation of the owner.” The reference to the “arbitrary or irrational” standard suggests that only the most extreme departures from previous precedent would count as judicial takings.

Since Kennedy is likely to be the key swing voter on this issue (as on many others), his position in future cases will be very important. It is also very unclear.

Kennedy makes a variety of arguments in defense of his claim that the Due Process Clause is a better hook for these kinds of claims than the Takings Clause. None of them strike me as persuasive. This one is probably the most important:

The usual due process constraint is that courts cannot abandon settled principles.....

But if the state court were deemed to be exercising the power to take property, that constraint would be removed. Because the State would be bound to pay owners for takings caused by a judicial decision, it is conceivable that some judges might decide that enacting a sweeping new rule to adjust the rights of property owners in the context of changing social needs is a good idea.

The idea, then, that a judicial takings doctrine would constrain judges might just well have the opposite effect. It would give judges new power and new assurance that changes in property rights that are beneficial, or thought to be so, are fair and proper because just compensation will be paid.

Kennedy’s point is greatly overstated. If judges enact “sweeping new rule[s]” that amount to takings under federal constitutional law, those rulings would probably be invalid under state law as well. In virtually all states, the power to take property is reserved to the legislature. By definition a judicial taking is one that is not authorized by the legislature. Even if a judicial ruling could be a taking under federal law without requiring legislative authorization under state law, legislatures are likely to be vigilant about forestalling and reversing judicial rulings that end up costing them large amounts of money – if only because legislators would probably prefer to spend the funds on their own favorite programs.

Strangely, even as he argues against applying the Takings Clause to these issues, Kennedy leaves open the possibility that it might potentially be applicable in some future judicial takings case.

Finally, Justice Breyer (joined by Justice Ginsburg) argued that the issue of what counts as a judicial taking need not be resolved in this case and refuses to take a position on the issue.

III. The (Very Uncertain) Bottom Line.

In sum, we know that at least six justices believe that at least some judicial actions qualify as unconstitutional takings (even if only under the Due Process Clause). We don’t, however, know much about what the relevant standards for identifying judicial takings are. If Justice Kennedy turns out to be the key swing voter in future cases, it’s possible that state courts will get a lot of deference, since only “arbitrary and irrational” judicial deprivations of previously established property rights would be overturned. However, I’m far from certain that I’m interpreting Kennedy’s vague statements correctly.

Property rights advocates avoided the worst-case scenario: a Supreme Court ruling holding that there is no such thing as a judicial taking that requires compensation under the Constitution. Whether they have won anything more than that remains to be seen. As Ben Barros at Propertyprof Blog puts it, “we will see a lot of litigation on these issues in the near future.”

IV. The Role of Justice Sotomayor.

Commentators such as Josh Blackman and Ben Barros point out that Justice Sotomayor joined Kennedy’s opinon rather than Breyer’s and suggest that this means she may be more supportive of property rights than I previously thought. However, for reasons noted above, it’s far from clear whether Kennedy’s approach really provides much in the way of protection for property owners. It’s also not clear whether that approach will turn out to be more or less protective than whatever rule Breyer and Ginsburg endorse in a future case where they are forced to confront the issue.

We also don’t know whether Sotomayor will continue to agree with Kennedy when and if the latter fleshes out some of the extremely vague points in his opinion. Kennedy and Sotomayor might turn out to have different interpretations of what counts as “a judicial decision that eliminates or substantially changes established property rights, which are a legitimate expectation of the owner.” They might also disagree on the meaning of “arbitrary and irrational,” as applied to judicial takings cases.

UPDATE: In addition to the analyses by Barros and Blackman, Ilya Shapiro and property rights specialist Tim Sandefur have also given their takes on the case. Both are somewhat more optimistic about the implications of the Court’s decision for protection of property rights than I am.

In today’s Stop the Beach opinion, Justice Scalia (joined by the other three conservatives) criticizes Justice Kennedy for arguing that what Scalia consider “judicial takings” should instead be handled as violation of the Due Process Clause:

The second problem is that we have held for many years (logically or not) that the “liberties” protected by Substantive Due Process do not include economic liberties. See, e.g., Lincoln Fed. Labor Union v. Northwestern Iron & Metal Co., 335 U. S. 525, 536 (1949). [EDITOR: But cf. Schware v. Board of Examiners, 353 U. S. 232 (1957) h/t Tim Sandefur]

The “logically or not” part gets me; Justice Scalia is not a lower court judge. If he think it’s not logical to strictly segregate economic and non-economic rights, he has the power to do something about it.

Imagine, instead, Justice Kennedy writing this sentence in an abortion case, in response to Scalia:

The second problem is that we have held for many years (logically or not) that the “liberties” protected by Substantive Due Process include the right to have an abortion.

Roe has been around for thirty-seven years now, and it’s high time the conservative Justices stop pretending that a decades-old opinion, on which there is huge cultural reliance (as sexual mores have changed in part to reflect the availability of abortion) is somehow less “precedential” than equally bad opinions from the 1930s, 40s, and 50s.

Of course, Scalia does have an answer to this analogy–we should avoid any decision reminiscent of the dreaded “Lochner era”: “Justice Kennedy’s language ... propels us back to what is referred to (usually deprecatingly) as “the Lochner era.”

And here’s my response to Scalia, from the second to last paragraph of my forthcoming “Rehabilitating Lochner:”

Lochner serves as a uniquely important negative exemplar of constitutional error in constitutional law scholarship, op-ed columns and blog posts, and even in Supreme Court decisions. When the Justices (and others) use Lochner this way, as shorthand for what they consider the “activist” sins of their opponents, they are substituting empty rhetoric for meaningful constitutional argument.

Thanks to Josh Blackman for the tip.

The Institute for Justice, a prominent libertarian public interest law firm, has an important new report detailing the many abuses of property rights in the asset forfeiture system. Here are a few of the key findings:

In most states and under federal law, law enforcement can keep some or all of the proceeds from civil forfeitures. This incentive has led to concern that civil forfeiture encourages policing for profit, as agencies pursue forfeitures to boost their budgets at the expense of other policing priorities. These concerns are exacerbated by legal procedures that make civil forfeiture relatively easy for the government and hard for property owners to fight. For example, once law enforcement seizes property, the government must prove it was involved in criminal activity to forfeit or permanently keep it. But in nearly all states and at the federal level, the legal standard of proof the government must meet for civil forfeiture is lower than the strict standard of “beyond a reasonable doubt” required for criminal convictions.....

[I]n most places, owners bear the burden of establishing their innocence. In other words, with civil forfeiture, property owners are effectively guilty until proven innocent....

Finally, federal civil forfeiture laws encourage abuse by providing a loophole to law enforcement in states with good laws for property owners: “equitable sharing.” With equitable sharing, state law enforcement can turn over seized assets to the federal government, or they may seize them jointly with federal officers. The property is then subject to federal civil forfeiture law—not state law. Federal law provides as much as 80 percent of the proceeds to state law enforcement and stacks the deck against property owners. Thus, the equitable sharing loophole provides a way for state and local law enforcement to profit from forfeitures that they may not be able to under state law.

The authors also provide the first comprehensive survey of state asset forfeiture laws, giving each a “grade” on the A to F scale. They find that most of them provide little if any protection for innocent property owners:

Only three states—Maine, North Dakota and Vermont—receive a combined grade of B or higher. The other 47 states all receive Cs or Ds.

• Most state civil forfeiture laws provide little protection to property owners. Six states receive an F and 29 states receive
a D for their laws alone. Lax federal laws earn the federal government a law grade of D-.

• Eight states receive a B or higher for their laws: Indiana, Maine, Maryland, Missouri, North Carolina, North Dakota, Ohio and Vermont. But extensive use of equitable sharing pulls down the final grades of five of those states: Indiana (C+), Maryland (C+),
Missouri (C+), North Carolina (C+) and Ohio (C-).

• The lowest-graded states overall, combining both poor laws and aggressive use of equitable sharing, are Georgia,
Michigan, Texas, Virginia and West Virginia.

I have previously criticized the asset forfeiture system here, here, and here, pointing out how it often violates constitutional property rights under the Due Process Clause. The Supreme Court had an opportunity to curb some of the more extreme violations of constitutional rights in Alvarez v. Smith, a case it ended up dismissing on procedural grounds.

CONFLICT OF INTEREST WATCH: As I have noted in previous posts involving IJ, I have written several pro bono amicus briefs for them in the past and was an IJ summer clerk during the summer of 1998, after my first year in law school.

Radley Balko has an interesting article in Reason detailing the many abuses of the asset forfeiture system, which often allows police to seize property without compensation – even in cases where the owners have not been convicted of any crime:

Over the past three decades, it has become routine in the United States for state, local, and federal governments to seize the property of people who were never even charged with, much less convicted of, a crime. Nearly every year, according to Justice Department statistics, the federal government sets new records for asset forfeiture. And under many state laws, the situation is even worse: State officials can seize property without a warrant and need only show “probable cause” that the booty was connected to a drug crime in order to keep it, as opposed to the criminal standard of proof “beyond a reasonable doubt.” Instead of being innocent until proven guilty, owners of seized property all too often have a heavier burden of proof than the government officials who stole their stuff.

Municipalities have come to rely on confiscated property for revenue. Police and prosecutors use forfeiture proceeds to fund not only general operations but junkets, parties, and swank office equipment. A cottage industry has sprung up to offer law enforcement agencies instruction on how to take and keep property more efficiently.

As I have argued elsewhere, many such seizures are a fairly blatant violation of the Due Process Clause of the Fourteenth Amendment, which bars state seizures of “property” without “due process of law.” In many cases, the authorities hold on to the seized property for months at a time without giving innocent owners any opportunity to contest the seizure whatsoever. If that isn’t deprivation of property without “due process,” it’s hard to see what is. The Supreme Court recently passed up an opportunity to curb asset forfeiture abuses in Alvarez v. Smith, which I wrote about in this Findlaw column written before the Court threw out the case on procedural grounds. Hopefully, the issue will make its way back to the Supremes, and they will see fit to give innocent property owners at least some protection for their constitutional rights.

I am not optimistic that the political process will protect these rights on its own. As Radley explains, police departments and prosecutors in many areas have a vested interest in perpetuating these practices. In addition, most of the people whose property is seized in this way are relatively poor and lacking in political influence. There have been a few modest reforms over the years. But for reasons Radley outlines, they have only addressed a small part of the problem.

The Supreme Court has dismissed as moot, Alvarez v. Smith, a potentially important property rights case [HT: Josh Blackman]. As I explained in this Findlaw column, Alvarez involved an important issue in constitutional property law. The plaintiffs were property owners whose cars or other possessions had been seized by Chicago police and held for many months or years at a time, without the owners having any opportunity to challenging the seizure in any kind of judicial hearing, and in some cases without any criminal charges being filed against the owners by the government. The car owners argued that these seizures were a violation of the Fourteenth Amendment’s guarantee that states cannot seize private property without “due process of law.”

The Court decided that the case was moot because the state had settled the case and returned all three cars to their owners prior to oral argument, and also reached settlement agreements addressing the other seized property. This is an understandable ruling. Far less defensible is the Court’s decision to vacate the Seventh Circuit Court of Appeals opinion that ruled in favor of the property owners. After all, the case clearly was not moot at the time the Seventh Circuit issued its decision in 2008. As Justice Breyer’s opinion for the Court points out, the Supremes don’t normally vacate a lower court opinion when a case is dismissed as moot because it has been settled. In this case, however, the Court relied on the rule that lower court opinions usually are vacated if the settlement occurred as a result of “happenstance” for reasons unrelated to the existence of a federal case. This rule strikes me as a dubious rationale for vacating opinions that were issued before any settlement occurred. Whatever the parties’ motives for settling later, the Seventh Circuit clearly had jurisdiction over the case at the time it was decided, and therefore its opinion should stand. Moreover, it is difficult to believe that the parties completely ignored the existence of a federal case in reaching their settlement agreements, since those settlements occurred after the Seventh Circuit had ruled in favor of the property owners.

Be that as it may, the Supreme Court’s decision not only avoids resolving the underlying constitutional issue, it also allows Illinois’ egregious Drug Asset Forfeiture Procedure Act (DAFPA) to stand, since the Court vacated the lower court decision striking it down. As I explained here, DAFPA allows the police to seize property that may have been involved in a drug-related crime and hold onto it for up to 187 days without allowing the owners to file for hearing challenging the seizure. Even after they are allowed to file, more months may pass before a hearing is actually held (over a year’s delay in all for some of the Alvarez plaintiffs). This is true even if the owners in question are never charged with any crime (as the three car owners involved in Alvarez were not), and even if the police don’t provide any proof that valuable evidence would be lost if the property is returned to the owners.

Of course, things could have been worse. When the Court initially agreed to hear this case, I thought it possible that it had decided to do so in order to reverse the Seventh Circuit on the merits. The fact that there was a serious likelihood that the Court might uphold this fairly blatant violation of Due Process Clause property rights is yet another indication of the second class status of constitutional property rights in the Court’s decision-making.

I suspect that this issue will eventually come before the Court again. As a result of the War on Drugs, these kinds of property seizures are common in many parts of the country. In some jurisdictions, police departments have incentives to seize property first and ask questions later, because they get to auction off property taken in drug investigations that lead to convictions, and keep the profits. Often, they can do this even if the property in question belonged to an owner who wasn’t convicted of anything himself.