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.

SCOTUSBlog’s Lyle Denniston reports that oral argument did not appear to go very well for the landowners in Koontz v. St. Johns River Management Authority.

Something really big, and potentially decisive, happened to a major new property rights case between the time the Supreme Court took it on, and Tuesday’s argument by lawyers before the Court. The very idea that an unconstitutional “taking” had occurred to an owner of a small plot of ground in Florida seemed near to vanishing, propelled toward oblivion by a spreading fear on the bench that maybe the entire regulatory apparatus of government might be at risk. Credit lawyers for a state agency and the federal government for deepening this anxiety. . . .

The owner’s claim that there had been a “taking” had been strenuously assailed by Justice Antonin Scalia, whose vote the landowner almost certainly had to have. That was probably the most menacing development for Koontz. But the worry that seemed to spread across the bench, that a victory for Koontz might well pull the government’s public works projects into constant constitutional court battles, spelled trouble, too.

Denniston is almost certainly correct that if the landowners have lost Justice Scalia, they won’t win the case. Here’s another report from Lawrence Hurley of Greenwire.

For more on the Koontz case, see here.

Tomorrow the Supreme Court will hear oral argument in a potentially important takings case, Koontz v. St. Johns River Water Management District. In this case, a landowner is challenging the state’s refusal to grant a permit to develop wetlands unless the landowner agreed to various conditions, including the performance of off-site mitigation. When the landowner refused, the agency refused to grant the permit and the landowner sued, claiming that the conditions the government sought to impose violated the rough proportionality requirement of Nollan and Dolan. Although he prevailed in the lower courts, the Florida Supreme Court reversed, concluding that (among other things) that the rough proportionality requirement did not apply to off-site mitigation requirements or to situations where a permit is never issued. Given the issues involved, Koontz could have a major effect on environmental mitigation requirements and land-use regulation at all levels of government.

Ilya previewed Koontz and Greenwire covered the case when the Court granted cert. For more on the case, here are comments by Richard Epstein and — from a quite different perspective — Richard Frank. One thing all would agree on, however, is that this could be a very important case — easily the most important property rights case heard by the Roberts Court to date.

UPDATE: The Pacific Legal Foundation represents the landowner in this case, and there are quiet a few posts on Koontz on the PLF blog. (PLF also represented the Sacketts in Sackett v. EPA from last term.)

On the other side of the case, Doug Kendall of the Constitutional Accountability Center comments here. CAC was formerly know as Community rights Counsel, an organization that reliably opposed regulatory takings claims in federal courts.

Today, the Supreme Court issued a unanimous decision in Arkansas Game and Fish Commission v. United States. The case involved a claim by the Arkansas Game and Fish Commission that the federal government’s repeated deliberate flooding of its property between 1993 and 2000 constituted a taking requiring compensation under the Fifth Amendment, which mandates that the government pay “just compensation” for takings. The flooding caused extensive damage to forest land owned by the Commission.

Today’s opinion by Justice Ruth Bader Ginsburg rules that temporary flooding can qualify as a taking at least sometimes, but tells us very little about how to determine whether a given case of flooding qualifies as a taking or not:

We rule today, simply and only, that government-induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection. When regulation or temporary physical invasion by government interferes with private property, our decisions recognize, time is indeed a factor in determining the existence... of a compensable taking....

Also relevant to the takings inquiry is the degree to which the invasion is intended or is the foreseeable result of authorized government action.... So, too, are the character of the land at issue and the owner’s “reasonable investment-backed expectations” regarding the land’s use.... Severity of the interference figures in the calculus as well.

So far as it goes, I think the Court’s decision is clearly correct. For reasons I discussed here, there is no good reason to hold that temporary flooding can never count as a taking. This is especially true if the flooding was deliberate and inflicted permanent damage on the property owner’s land. Temporary physical invasions qualify as takings in many other contexts (e.g. – overflights by aircraft), and there is nothing special about flooding that should lead the Court to create a categorical exception. To the contrary, allowing the government to temporarily flood private property without paying any compensation whatsoever would severely undermine the purpose of the Just Compensation Clause, which is, as a 1960 decision puts it, to “bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.”

Unfortunately, the Court gives very little guidance on how to determine whether a given case of flooding is a taking or not. The opinion lists several factors that might be relevant, but does not explain how many need to be present before a taking can be said to have occurred, or what to do if some factors cut one way and some the other. It also says nothing about how much deference, if any, is due to the government in such cases. The Court does not even address the federal government’s extremely dubious argument that damage inflicted by flooding on downstream owners is categorically excluded from qualifying as a taking, even though the justices expressed great skepticism about this claim at the oral argument. These and other issues will have to be dealt with by the lower court on remand.

I suspect that the justices bought unity at the expense of clarity here. In the meantime, it seems clear that Arkansas Game and Fish Commission is going to result in further litigation in the lower courts, as property owners and government agencies advance competing interpretations of the Court’s vague standards for determing whether a temporary flood qualifies as a taking or not.

That said, the Court did take an important step in decisively rejecting the federal government’s extreme position that temporary flooding can never be a taking. The case is therefore joins Sackett v. EPA as a rare unanimous victory for property rights in the Supreme Court.

UPDATE: In this post, I explained why the Court is applying the Just Compensation Clause to this case despite the fact that it involves the flooding of government-owned land, while the text of the Fifth Amendment specifies that it applies only to “private property.” Under longstanding current Supreme Court precedent, the Takings Clause applies to both private and state-owned land. I have some doubts about the correctness of those decisions, but the Court is unlikely to overrule them anytime soon.

UPDATE #2: Brian Hodges of the Pacific Legal Foundation comments on this post here:

Professor Ilya Somin.... praised today’s U.S. Supreme Court decision in Arkansas Game & Fish Commission v. United States as “a rare unanimous victory for property rights” and “an important step in rejecting the federal government’s extreme position that temporary flooding can never be a taking....”

Professor Somin highlights, however, a couple a paragraphs toward the end of the decision that injected unnecessary confusion into an otherwise clear opinion....

While I agree that the language is unclear, I am not so sure that the quoted passage will cause too much confusion in future litigation. The passage lists, without differentiation, various tests, developed over the years, to determine regulatory and/or physical takings. For example, the Court recites the “intent or foreseeability” and “character of the invasion” tests from Ridge Line, Inc. v. United States (2003) and Portsmouth Harbor Land & Hotel v. United States (1922)—both are tests that have never been applied to regulatory takings....

Although some may be tempted to argue that the Court created a chimera from blended regulatory and physical takings tests, the Court did not intend to do so. Instead, the Court stated that its decision was narrow, “We rule today, simply and only, that government induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.” And elsewhere, in Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002), the Court advised that it is “inappropriate to treat cases involving physical takings as controlling precedents for the evaluation of a claim that there has been a ‘regulatory taking’ and vice versa.” The upshot being that the tests that control physical invasion takings still control physical takings cases, and the tests that control regulatory takings still only apply in regulatory takings cases.

I continue to believe that the opinion is clear in rejecting the government’s extreme claim that temporary flooding can never be a taking, but unclear as to the standards that determine when temporary flooding is a taking. As Hodges notes, the Court lists a grab bag of relevant factors drawn from both regulatory and physical takings cases. So it is by no mean clear which set of precedents applies here. Of course one can argue that the language listing possible relevant factors is just dictum and that the sole holding is, as the Court puts it, “only... that government induced flooding temporary in duration gains no automatic exemption from Takings Clause inspection.” But if the list of factors is just dictum, that makes the opinion less clear, not more, as lower courts would have even less guidance on the question of how to figure out whether a given case of temporary flooding qualifies as a taking or not.

UPDATE: Robert H. Thomas of the Inverse Condemnation blog rounds up other reactions to the decision here.

Retired baseball All Star John Olerud has persuaded the Clyde Hill, Washington Board of Adjustment to force his neighbors to chop down two valuable trees on their property so that he will have a better view of the Seattle skyline:

Nine years after he won his third Gold Glove as a Seattle Mariners first baseman, John Olerud has won a victory in a different venue.

The Clyde Hill Board of Adjustment ruled Wednesday night that Olerud’s neighbor to the west must remove two trees because they unreasonably obstruct Olerud’s view of Lake Washington and the Seattle skyline.

The board’s 3-2 order is the first time the city has told a resident to cut down a tree under a 1991 “view obstruction and tree removal” ordinance...

An appraiser hired by John and Kelly Olerud said their $4 million home would be worth $255,000 more if the rare Chinese pine and the Colorado spruce across the street were cut down and replaced with smaller plants. The Chinese pine’s value is estimated at more than $18,000.

Removing the trees would widen the west-facing view from his family room by 65 percent, Olerud told the Board of Adjustment, giving his house the same amazing view of Seattle’s skyline that’s visible from nearby Northeast 20th Street....

“We love the trees, they are valuable and we don’t want to remove any of them,” Baker said. He said the Oleruds “have a fabulous property and, no matter how valuable it is, the ordinance doesn’t promise them an unobstructed view. It doesn’t entitle them to more than they paid for [when they bought their house, at which time the Bakers' trees were already there]....”

Removing the trees wouldn’t unreasonably decrease the Bakers’ enjoyment of their property, the board said. The view ordinance says an owner’s enjoyment of a tree must be determined “by an objective evaluation,” and “the personal attachment of a party to particular trees or landscaping shall not be compelling.....”

Under the board’s order, the Oleruds must pay the cost of removing the trees and replacing them with smaller trees or shrubs.

Some readers have asked me whether the Board’s order forcing the Bakers to destroy their trees is a taking requiring compensation under the Fifth Amendment. Under current Supreme Court precedent, probably not. Since the order doesn’t create a “physical invasion” of the property or even come close to destroying 100% of its economic value, it would likely be analyzed under the Penn Central test, which is generally very favorable to the government. In my view, current precedent is far too permissive. When government orders the destruction of valuable private property, it should be considered a taking unless the property is creating a public nuisance or some other kind of clear harm, or the property was illegal contraband at the time it was acquired. Wartime military necessity could also be an exception. But I’m not going to defend that view in detail here.

The Constitution aside, laws like the Clyde City ordinance are ill-conceived. One of the main purposes of private property is to allow owners to do as they wish with their land even if neighbors would prefer a different use. In some cases, we might want to restrict land uses if they create a large-scale harm to the neighborhood that individual neighbors cannot address on their own, due to collective action problems. But this, pretty obviously, is not such a case.

The ordinance also undermines economic efficiency. While the Oleruds value having an unobstructed view of the skyline, the Bakers just as clearly value the trees. If the Oleruds are not willing to offer the Bakers a large enough payment to persuade them to cut down the trees voluntarily, that’s a strong sign that the Bakers value the trees more than the Oleruds value the view. While the ordinance states that authorities must ignore “the personal attachment” that owners feel for their trees, that personal attachment is a part of the trees’ value just as much any “objective” assessment of their sale value on the market.

This is not a case where effective bargaining between the two sides is prevented by high transaction costs. The Oleruds and the Bakers are neighbors and can easily negotiate with each other. The Oleruds did in fact negotiate with the Bakers, but could not reach agreement. They did not offer enough money to persuade the Bakers to give up their trees. That suggests that leaving the trees alone is not only more respectful of property rights, but also promotes economic efficiency. Societal wealth is maximized when property rights are held by those who value them the most. In most cases, the best way to ensure that is to let property owners decide for themselves whether they want to sell a particular right. The Bakers are in a good position to determine whether they value the trees more than the Oleruds are willing to pay, or not. A government agency, by contrast, has no good way of determining how much subjective value the Bakers really attach to the trees, and therefore no way of knowing whether they value the right in question more than the Oleruds do.

UPDATE: The Seattle Times article linked above says that this is the first time the ordinance in question was actually used to force a homeowner to cut down their trees. It’s possible this means that neighbors usually reach agreement voluntarily, thereby ensuring that the ordinance has little effect. But it’s also possible that those who want to force their neighbors to remove trees are able to use the threat of the ordinance to get tree owners to give up their rights at prices far below their true value.

The Supreme Court has just decided to hear an important regulatory takings case, St. Johns River Waste Management District v. Koontz. Paul Beard of the Pacific Legal Foundation, which is representing the property owner, has a helpful summary of the case:

Coy A. Koontz wants to develop commercial land, most of which lies within a riparian habitat protection zone in Orange County, Florida. He applied for a dredge and fill permit with the St. Johns Water Management District. St. Johns agreed to grant the permit, but only on the condition that he place a conservation easement over his land, and perform mitigation off-site by replacing culverts and plugging certain drainage canals on other properties not owned by Koontz and miles away from the property. When Koontz refused to perform the off-site mitigation, St. Johns denied the permit.

Koontz filed an inverse condemnation suit in circuit court. Koontz argued that the off-site mitigation requirement violated Nollan v. California Coastal Commission and Dolan v. Tigard. The circuit court applied Nollan and Dolan, holding that the requirement bore no connection to the project’s alleged impacts on the riparian habitat protection zone. The court awarded Koontz compensation for a temporary taking.

The court of appeals affirmed, but the Florida Supreme Court reversed. The Supreme Court held that no taking under Nollan and Dolan had occurred, because (1) Nollan and Dolan apply only to forced dedications of interests in real property (not to mitigation work); and (2) Nollan and Dolan apply only when government approves and issues a permit with conditions (not when it denies a permit, and therefore nothing has been demanded of or taken from the landowner).

Nollan and Dolan held that there must be an “essential nexus” and “rough proportionality” between the purpose behind a government-imposed physical invasion of property and the objectives of any permit scheme where development permits are conditioned on allowing the physical invasion. If such a connection is lacking, then the required physical invasion counts as a taking for which the government must pay “just compensation” under the Fifth Amendment. In other words, the government can’t use its permit power as leverage to force property owners to allow other people to use their land for fear of losing the right to develop it. If you own beachfront property, for example, the government can’t force you to let people sunbathe there by threatening to forbid you the right to build a house on the land if you don’t.

This case is similar. Koontz is forbidden to develop his land unless he does maintenance work on completely separate government land that has no connection to his own. There is the difference that, unlike the owners in Dolan and Nollan, he isn’t being forced to allow a physical invasion of his land, but is instead denied the right to use the land himself unless he undertakes to make improvements on a different property. But given the severity of the latter deprivation, the government has still “taken” his land for reasons that have no connection to any harm that he or his land is actually causing.

There are some additional, more technical issues here, which I may write about in future posts. But the big one is whether a taking occurs if the government denies a property owner the right to develop his land in order to use it as leverage to force him to provide some form of public service elsewhere.

Much more can be said about this potentially important case, and I hope to do so in future posts. For now, congratulations to the Pacific Legal Foundation for getting yet another important property rights case to the Supreme Court, following on their unanimous victory in Sackett v. EPA.

The transcript of today’s oral argument in the important Supreme Court takings case of Arkansas Game and Fish Commission v. United States is now available here. I discussed the issues in the case in this post.

Legal reporter Lawrence Hurley of Greenwire interprets the oral argument as going badly for the federal government:

A majority of Supreme Court justices appeared sympathetic today to the Arkansas Game and Fish Commission’s argument that it is owed compensation by the Army Corps of Engineers for timber damage caused by flooding.

The commission claims it deserves compensation under the takings clause of the Fifth Amendment for a loss of revenue in timber sales in the Black River Wildlife Management Area in the northeast part of the state.

The damage to the timber was caused by the Army Corps’ management of the Clearwater Dam upriver, the state maintains. Between 1993 and 2000, the Army Corps tinkered with the water flow from the dam, which the commission said led to flooding that eventually killed many mature oak trees at the Black River site....

The Supreme Court justices appeared hostile to the federal government’s position — espoused by Deputy Solicitor General Edwin Kneedler — that no landowners downstream of a government-operated dam can seek compensation in part because they should be aware of the inherent risks of owning land on a floodplain. The federal government would not “have got into the flood control business” if it was going to face litigation over its management of projects, Kneedler said....

Some of the justices appeared particularly concerned with Kneedler’s contention that landowners downstream could never make a claim even though a property owner with land next to a dam reservoir could potentially seek compensation if the water regularly floods his property.

“Your position seems to be if it’s downstream, it’s not the government,” Justice Anthony Kennedy told Kneedler.

Chief Justice John Roberts seemed to share that concern in pointing out evidence in the record that the Army Corps was aware that the Black River site would be flooded if there were deviations in the water release plan.

I largely agree with Hurley’s analysis of the argument, though with the usual caveat that oral arguments don’t perfectly predict the justices’ ultimate votes. All four of the conservative justices who asked questions appeared to be sympathetic to the property owners’ position. Justice Clarence Thomas (who almost never asks questions) maintained his silence. But he is likely a safe vote for the Commission, based on his past strong support for property rights. Only Justice Breyer seemed to be clearly leaning towards the federal government. Justices Ginsburg and Sotomayor asked some tough questions of both sides, though I suspect they will ultimately side with the federal government. Elena Kagan recused herself, probably because of her earlier involvement in this case when she was Solicitor General.

Even some of the liberal justices seemed skeptical about the government’s remarkable argument that flooding caused by a government-built dam can never be considered a taking of downstream property owners’ land, even if the flooding is permanent. Deputy Solicitor General Edwin Kneedler claimed that such flooding was an inevitable result of operating dams in such areas in the first place, and was justified by the great benefits created by the dams.

But none of this proves that there was no taking. The fact that flooding is inevitable once the government builds and operates a dam does not mean that the resulting invasion of downstream owners’ property is not a taking. Intrusions on property owners’ land are often an inevitable result of building roads in populated areas, including roads that create major public benefits. But that doesn’t mean that such construction is not a taking. Likewise, even if the dams create enormous benefits that far outstrip their costs, that too doesn’t prove there was no taking. As the Supreme Court famously stated in Armstrong v. United States (1960), “[t]he Fifth Amendment’s guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” That point applies to destruction of private property caused by dams just as much as that created by roads. Both roads and dams may create public benefits big enough to justify the taking of private property in order to realize them. But the Takings Clause requires the government to pay compensation to the owners when it does so, so as not to “forc[e]... some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” As Justice Scalia put it in the oral argument, “the issue is who is going to pay for the wonderful benefit.... Should it be everybody, so that the government pays, and all of us pay through taxes, or should it be... this particular sorry landowner who happens to lose all his trees?”

Kneedler was also unpersuasive in suggesting that there can’t be a taking in such cases because owners of riparian property know that flooding is a common risk near large rivers. Flooding caused by the government is still different from natural flooding, and is not an inherent “natural” risk of owning property near a river. Moreover, property owners in dense urban areas know that government road-building that displaces private property owners is a common occurrence in such areas. But that doesn’t mean that such displacement doesn’t qualify as a taking.

Some of the justices in the oral argument raised the question of exactly how much damage the Fish and Game Commission’s land actually suffered from the flooding caused by the Army Corps of Engineers. They note that it may be hard to separate that damage from damage caused by naturally occurring floods. Even if this is true, it’s only relevant to the question of how much compensation should be paid, not the issue of whether any compensation at all is due. A taking could have occurred even if the Game and Fish Commission overestimated the amount of damage it inflicted.

UPDATE: Damon Root, who attended the oral argument, had a similar impression of the justices’ leanings.

Although it may be lost in the shuffle of more highly publicized cases, tomorrow the Supreme Court will be hearing oral arguments in Arkansas Game and Fish Commission v. United States, the most important regulatory takings case in a long time. In this case, the US Army Corps of Engineers inflicted extensive damage on a 23,000 acre Wildlife Management Area owned by the Arkansas Game and Fish Commission through a series of recurring floods caused by Corps dam operations. The trial court ruled that this was a “taking” of property requiring “just compensation” under the Fifth Amendment and awarded over $5 million in damages to the Game and Fish Commission. But the Federal Circuit Court of Appeals reversed, concluding it was not a taking because the flooding was only temporary and the Corps did not intend to inflict permanent flooding or damage.

The case raises two important issues: whether permanent destruction caused by “temporary” recurring flooding can qualify as a taking under the Fifth Amendment, and whether a taking can occur even if the government did not intend to cause the resulting destruction (the federal government argues that there was no taking because the Corps of Engineers did not intend to permanently flood or damage the wildlife area). To my mind, the property owner should prevail on both issues. If the government destroys private property to advance some public policy goal, it does not matter whether it does so by permanent flooding or by a temporary flood. What matters is the destruction of the owner’s rights, not the means by which it was done. In both cases, the government took away the owners’ rights, and in both cases the destruction is permanent, even if the means by which it was achieved was not. As the Court explained in a famous 1871 case:

It would be a very curious and unsatisfactory result if in construing a provision of constitutional law always understood to have been adopted for protection and security to the rights of the individual as against the government, and which has received the commendation of jurists, statesmen, and commentators as placing the just principles of the common law on that subject beyond the power of ordinary legislation to change or control them, it shall be held that if the government refrains from the absolute conversion of real property to the uses of the public it can destroy its value entirely, can inflict irreparable and permanent injury to any extent, can, in effect, subject it to total destruction without making any compensation, because, in the narrowest sense of that word, it is not taken for the public use. Such a construction would pervert the constitutional provision into a restriction upon the rights of the citizen, as those rights stood at the common law, instead of the government, and make it an authority for invasion of private right under the pretext of the public good, which had no warrant in the laws or practices of our ancestors.

In the famous 1946 case of United States v. Causby, the Court ruled (correctly, in my view) that a taking had occurred when the government disturbed an owner’s property rights by recurring overflights by military aircraft. That was true even though the overflights were not permanent (the government’s lease on the property from which the planes flew was scheduled to run out in 1947) and the amount of damage was probably far less than that inflicted in the current case. I don’t see any meaningful distinction between damage inflicted by recurring overflights and that inflicted by recurring floods.

As for the Corps’ intentions, they should be irrelevant. What matters under the Takings Clause is whether the government actually took private property, not whether it intended to do so.

There is, however, one perplexing aspect of the case that potentially cuts in favor of the federal government, even though it does not appear to have been raised by the parties. The Fifth Amendment forbids the taking of “private property” without “just compensation” (emphasis added). Obviously, the land at issue here is owned by the Game and Fish Commission, which is a state government agency. So the Takings Clause should not apply to it.

I assume there is some technical legal reason or relevant precedent why both sides in this litigation have seen fit to treat the Commission’s property as if it were private property for constitutional purposes. Because of other commitments, I haven’t had the opportunity to give this case as much attention as I would have otherwise; so it’s possible that I’m missing something here. I have asked several experts who have followed this case more closely, as to what it might be. But so far, no one has given me a good answer. If you are a property law or constitutional law specialist and you think you have a good answer to this question, please let me know!

UPDATE: For readers who may not know, I should note that the term “regulatory taking” is often used to encompass all government actions that constitute a taking without formally resorting to the condemnation process, whether they actually qualify as “regulations” or not. For example, there was no regulation (in the narrow sense of the term) at issue in the Causby case. However, to make things more confusing, courts also sometimes distinguish between “physical takings” (takings, whether caused by a regulation or not, where there is a “physical invasion” of the owners’ property), and “regulatory takings” (defined here as regulatory restrictions on the use of property that do not involve a physical invasion). Proving that a physical invasion qualifies as a taking is generally easier than proving that a regulation that does not include a physical invasion does so. I have therefore removed “regulatory” from the title of this post in order to avoid any confusion on this point. In any event, what matters here is whether a taking has occurred, not whether it was a “regulatory” taking or some other kind of taking. And, in this case, there pretty clearly was a physical invasion, since the Corps did flood the Commission’s land repeatedly.

UPDATE #2: A commenter points out that the issue of why the Takings CLause applies to public property is briefly addressed in a footnote on Pg. 24 of the Game and Fish Commission’s brief:

Just as it guarantees protection of private property of citizens, the Takings Clause protects the property of States and their
subdivisions from appropriation by the Federal Government without “just compensation.” United States v. Carmack, 329 U.S.
230, 241-42 (1946); cf. California v. United States, 395 F.2d 261, 263-64 & n.4-5 (9th Cir. 1968) (holding that the Fifth Amendment protects property from appropriation without just compensation “even when the property has been dedicated by the State to public use”).

A closer look at United States v. Carmack shows that it does indeed briefly state that the federal government must pay compensation when it condemns state government property:

The Fifth Amendment to the Constitution says “nor shall private property be taken for public use, without just compensation.” This is a tacit recognition of a preexisting power to take private property for public use, rather than a grant of new power. It imposes on the Federal Government the obligation to pay just compensation when it takes another’s property for public use in accordance with the federal sovereign power to appropriate it. Accordingly, when the Federal Government thus takes for a federal public use the independently held and controlled property of a state or of a local subdivision, the Federal Government recognizes its obligation to pay just compensation for it, and it is conceded in this case that the Federal Government must pay must compensation for the land condemned.

Carmack was mainly concerned with the question of whether the federal government could use eminent domain against state property devoted to a “public use” at all, and only briefly discusses the compensation issue, which the feds had conceded in any case. What it does say isn’t entirely persuasive. Even if the power to take private property for public use is “preexisting,” the requirement of just compensation comes from the Fifth Amendment, and that amendment seems to apply it only to takings of private property. That said, Carmack is at least a relevant pronouncement by the Supreme Court, and the federal government doesn’t seem to be contesting the issue in this case either. Moreover, a little research reveals that the 1893 case of City of St. Louis v. Western Union Tel. Co. 148 U.S. 92, 101 (1893) addressed the issue more clearly:

No one would suppose that a franchise from the federal government to a corporation, state or national, to construct interstate roads or lines of travel, transportation, or communication, would authorize it to enter upon the private property of an individual, and appropriate it without compensation. No matter how broad and comprehensive might be the terms in which the franchise was granted, it would be confessedly subordinate to the right of the individual not to be deprived of his property without just compensation. And the principle is the same when, under the grant of a franchise from the national government, a corporation assumes to enter upon property of a public nature belonging to a state. It would not be claimed, for instance, that under a franchise from congress to construct and operate an interstate railroad the grantee thereof could enter upon the statehouse grounds of the state, and construct its depot there, without paying the value of the property thus appropriated. Although the statehouse grounds be property devoted to public uses, it is property devoted to the public uses of the state, and property whose ownership and control is in the state, and it is not within the competency of the national government to dispossess the state of such control and use, or appropriate the same to its own benefit, or the benefit of any of its corporations or grantees, without suitable compensation to the state.

Like Carmack, Western Union does not really explain why the just compensation requirement applies to takings of state government property, despite the clear text of the Fifth Amendment, which says it only applies to “private property.” The Court seems to assume that it’s just obvious that if the United States can’t take private property without compensation, it can’t take state property either. But it is a longstanding precedent, and no one seems to be challenging it.

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 decided not to hear Harmon v. Kimmel, an important case addressing the question of whether rent control can ever amount to a taking requiring compensation under the Fifth Amendment. I previously blogged about the case in this post, where I urged the Court to consider the issue, and rule that rent control can be a taking, at least in a case like this one where the property owner is required to continue renting the property indefinitely, even if he or she would prefer to devote the land to a different use. I also pointed out that there are other ways of providing affordable housing for the poor that are much more effective than rent control, and create fewer harmful side effects.

The case had been relisted by the Court, which suggests that at least some of the justices were taking an interest in it. Hopefully, the Court will revisit this issue in the future.

Damon Root has an interesting article discussing a potentially important takings case that the Supreme Court is now deciding whether to hear:

The handsome five-story brownstone located at 32 West 76th Street in Manhattan doesn’t look like it belongs at the center of a contentious legal struggle. But that impression changes when you learn about the recent activities of its owner, 68-year-old James D. Harmon Jr.

Harmon ... has filed a powerful legal challenge asking the U.S. Supreme Court to strike down New York City’s four-decades-old rent stabilization law. At first, New York officials thought so little of Harmon’s challenge that they waived their right to file an opposing brief with the Supreme Court. But those officials got a rude awakening when the Supreme Court asked them to respond to Harmon’s petition anyway, signaling that somebody at the Court took the legal challenge seriously.....

[T]he Supreme Court has also said that government regulations may sometimes count as a taking [under the Fifth Amendment], which means that they too require the payment of just compensation. As Justice Oliver Wendell Holmes remarked in the 1922 case of Pennsylvania Coal Company v. Mahon, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” How far is too far? In the 2010 case of Stop the Beach Renourishment, Inc. v. Florida, the Supreme Court declared that at a minimum, “it is a taking when a state regulation forces a property owner to submit to a permanent physical occupation.”

New York City’s rent stabilization law (RSL) meets that test. In Harmon’s case, three of the six rental units in his building—which has been in the possession of his family since 1949, when his immigrant grandparents first bought it—feature rent-stabilized tenants whose occupancy can only be described as both physical and permanent.

Not only do these rent regulated tenants pay government-set rates that are 59 percent below-market, they have the option of remaining in their apartments for life. Harmon essentially has no choice but to keep renewing their respective leases every few years. The tenants even have the right to name their own successors to the apartments.

When I first heard about this case, my reaction was that it was probably precluded by the Supreme Court’s 1992 decision in Yee v. Escondido, which ruled that a California statute imposing rent control on mobile home parks was not a taking, even though state law allowed tenants to renew the rent-controlled leases indefinitely even against the will of the owners. I am no fan of the Yee decision, but the Court is unlikely to overrule it in the near future.

However, there is a crucial difference between Harmon’s case and Yee. In the latter, the Court emphasized that there was no permanent physical occupation of the owners’ property because “the Mobilehome Residency Law provides that a park owner who wishes to change the use of his land may evict his tenants” so long as he then uses the property for something other than a mobile home park. By contrast, as Root describes, the New York City rent control law does not allow Harmon and other landlords to evict their tenants even if they do wish to use the property for something other than rental housing. Effectively, therefore, this is a government-imposed permanent physical occupation of property.

In its belated response to the cert petition, New York argues that the law allows the Harmons to not renew the leases if they choose to live in the rent-controlled apartment themselves or if they demolish the building in question. However, as the Harmon cert petition points out, the former option requires the Harmons to find other, comparable housing for the tenants at the same rent, while the latter is precluded by the fact that the building in question is a legally designated landmark that by law cannot be destroyed. Regardless of these points, reducing the owners’ options to demolition and personal occupation is far more severe imposition on property rights than that in Yee, where any use of the land other than mobile home park was enough to allow the owner to decline renewal of a lease.

One of the best-established principles of takings law is that such a government-mandated permanent physical occupation automatically qualifies as a taking even if the intrusion imposed by the state is fairly minimal. In the classic case of Loretto v. Teleprompter, the Supreme Court found a taking even though the owner was only required to place a television cable and two boxes on the roof of her apartment building. This makes good sense. Whatever else might be considered a taking, there pretty obviously is one when the government compels a physical occupation of your property, thereby preventing you from using it yourself.

The physical invasion inflicted on Harmon and other New York landlords is obviously much more severe than that in Loretto, since they are forced to accept unwanted tenants essentially forever. Even if the tenant dies or moves out, he has the right to pass the rent-controlled lease onto a successor of his choosing if he has lived there for more than a minimal period of time.

As Root points out, many of the beneficiaries of New York’s rent control law are far from poor. One of Harmon’s tenants, for example, is a wealthy executive. There are far better ways to increase the availability of low-income housing, such as dismantling some of the zoning regulations that artificially restrict the stock of housing in the city and help make it one of the most expensive in the country. Economists overwhelmingly agree that rent control exacerbates housing shortages and usually fails to redistribute wealth to the poor. But if the City prefers to conscript unwilling landlords’ apartments in perpetuity, it should have to pay “just compensation” for the privilege, as required by the Fifth Amendment.

UPDATE: Richard Epstein commented on the case here, and George Will in this column.