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Kelo and Regulatory Takings:

A post by Mark Tushnet on a lawprofs' discussion list led me to wonder how the Kelo dissents' theory would deal with regulatory takings.

Two background items: First, under the Takings Clause, there are two kinds of takings, (1) "physical takings" in which the title to the property is actually taken, and (2) "regulatory takings," in which the owner keeps the formal title but loses the right to use the property in certain ways, the right to exclude people, the right to sell the property, the right to leave it in a will, or what have you. Generally speaking it takes a lot of interference with the owner's rights to make regulation qualify as a "regulatory taking" (at least outside the special context of regulations that require landowners to let people onto their property, which are on the way to being physical takings, and which I will set aside for purposes of this post). Still, the Court has held that, for instance, banning virtually all development on a parcel, and thus rendering its value nearly nil, would qualify as a taking even if the owner still owns the parcel. See Lucas v. South Carolina Coastal Council (1992).

Conservatives are generally bigger fans of the regulatory takings doctrine than are liberals; Lucas, for instance, was written by Scalia, and joined by Rehnquist, O'Connor, Kennedy, and Thomas; libertarians tend to like it, too. Some liberals believe that regulatory takings should almost never be found, or even that the doctrine shouldn't exist, and that no regulation short of taking of title (or possibly interference with the right to exclude) should be considered a "taking."

Second, the debate in Kelo can be seen as pitting two different interpretations of "public use" in "nor shall private property be taken for public use, without just compensation": (1) "Public use" means "continuous public ownership or access," for instance if the government keeps the property or sells it to a common carrier (and access simply means the ability to go on the property, as for instance when the government takes land and sells it to a private railroad, but the railroad is required to let the public ride). (2) "Public use" means "public benefit," which may be derived by the government's selling it to a private developer whose development will (the government thinks) help the public.

So here's the question: Which reading of "public use" is most consistent with the generally conservative-libertarian notion that regulation can become a "regulatory taking"? When regulations deny you all right to use your land, for instance, and you claim that the government has "taken your property" -- in the sense of taken your right to exploit the property, which is part of your proprty rights -- "for public use," which meaning of "public use" would you be using?

It seems to me that the answer is not "public ownership or access." The government, after all, isn't taking the property so that the public can own it or access it. Nor is it taking it so that some private third parties can own it or access it. The only person who owns it or can access it is still you. Under the "continuous ownership or access" model, the regulation is neither a taking for public use nor a taking for private use. It sounds like it's not a taking at all, and you're thus entitled to no compensation.

But the "public benefit" model fits regulatory takings well. If the government stops you from developing your parcel in order to serve public environmental or esthetic goals, then it's taking your right to exploit the property in order to provide a public benefit, and thus you're entitled to compensation. Lucas in fact took this very view: Such regulations should be seen as takings because they "carry with them a heightened risk that private property is being pressed into some form of public service" (emphasis added).

So it seems to me that if the regulatory takings theory is sound, and regulations that make land nearly worthless should be treated as similar to physical takings, "public use" in the Takings Clause needs to be read as "public benefit." The question then becomes: Is it proper to read "public use" as "public benefit" for one kind of takings, and "continuous public ownership or access" for another?

Perhaps the answer is yes: Maybe the regulatory takings theory isn't really a textual interpretation of the Takings Clause, but rather a necessary backstop developed in order to avoid end-runs around the Clause; since its role is functional rather than textual, then some of the textual limitations on the Clause may be dispensed with. Or perhaps the answer is that the critics of regulatory takings doctrine (mostly liberal, I think) are right, and regulation should never be seen as a taking (again, perhaps unless it interferes with the right to exclude the public), even if it strips the owner of nearly all the value of his land.

Or perhaps there's some other explanation still. But it seems to me that if one does support the regulatory takings doctrine as part of the broader takings doctrine, and one thinks that it should be read consistently with the text of the clause -- which is to say that the text of the clause should be read consistently for regulatory takings and possessory takings -- then it seems to me that the Kelo majority's "public benefit" model is stronger than the dissents' "continuous public ownership or access" model.

Eric Rasmusen (mail) (www):
Neat idea. My thinking goes along the same lines and then comes to the opposite conclusion: from Kelo, we see that public benefit is *not* public use, and so we should count very few things as regulatory takings (which is, in fact, current doctrine, right?).

Or, making the doctrine consistent the opposite way: the liberal majority in Kelo ought to vastly expand the regulatory takings doctrine, since most regulations (a) are for public benefit, but (b) hurt some people.

There is a different dimension, though, which matters a lot: takings are things the government does with a very narrow adverse impact, on just one or a few people, whereas taxes are things that hurt a large class. Most regulations are like taxes in this respect, but some are like takings.
6.30.2005 1:41pm
Eric Rasmusen (mail) (www):
p.s.-- the Thomas dissent is very compatible with Eugene Volokh's idea: "public use" is not the same as "the police power". Government can regulate broadly-- and without compensation-- but it cannot take so broadly, and when it does it must pay compensation.
6.30.2005 1:43pm
Tom W. Bell (mail) (www):
The Kelo majority does not err in reading "public use" in the Fifth Amendment to mean "public benefit." That broad reading of the Takings Clause jibes with the more restricted reading pressed by the dissents. Indeed, all plausible interpretations of the clause comport with the notion that a taking must benefit the public; that alone can justify the seizure of private property for public use.

The Court's interpretation of "public use" errs because that phrase clearly disallows "private use." We can understand that textual limitation as a means of ensuring that takings in fact promote the public good by way of institutional design, setting things up to avoid dire public choice problems. But we don't have to get into the theory behind the text, given its plain meaning.

If, contrary to the Kelo majority, we understand "public use" to exclude "private use," what does that say about regulatory takings? Not much. A regulatory taking does not transfer title to a private party. Rather, it erodes the scope of rights enjoyed by an extant owner. So while the Kelo majority might embrace the theory that regulations can effectuate takings, the Kelo dissenters can do likewise. Saying that "public use" excludes "private use" does not bar you from also saying that regulations take private property.

By the way, I think that it inadequate to frame the interpretation of "public use" as a choice between "public ownership forever" versus "private ownership immediately." It is consistent with the dissents' view to allow a government entity to take private property, put it to public use for some years, and then eventually sell it to a private party. The question is whether, during that period of public ownership, the public actually gets to use to property. I blogged on that point prior to the Kelo decision; see .
6.30.2005 2:09pm
Rob Lyman (mail) (www):
It strikes me that there are two different questions here, and very odd that they should be conflated in this way.

In regulatory takings, the question is, "Is this a taking?" If so, compensation must be paid. No one suggests that the government effect an A to B transfer without compensation on the grounds that it isn't for "public use." The power to "take" isn't in question, the status of the taking is. Thus the definition of "public use"--which concerns the power to take--is irrelevant.

In Kelo, the question was, "Is this public use?" Here, the property owners challenge the very power to take, but the city most assuredly did not challenge the requirement of just compensation or try to claim it wasn't a taking.

The only way to manufacture inconsistency is to say that regulatory takings are constitutional as public use but Kelo-style takings are not. Is anyone actually making that argument? I doubt it. Conservatives who are "fans" of regulatory takings doctrine applaud it not because it permits beneficial regulations but because it deters excessive regulation by requiring payment.

Perhaps the Kelo dissenters should declare regulatory takings unconstitutional. That theory does not appear to have been argued in Lucas. So I cannot see how this issue arises at all.
6.30.2005 2:43pm
John Jenkins (mail):
Maybe what we should be asking is whether "Regulatory Takings" aren't regulations under the police power but really are takings. Private property does not extend merely to land, but to other things as well. Part of the "bundle" of rights is the right to exclude (excluded here by hypothesis), but other parts are the right to use as you see fit, and the right to alienate, etc.

Isn't the limiting of one of those other rights a "taking" of a right in property (remembering from our 1L property classes that property is a set of rights, not a thing), no matter what the government wants to call it (regulation or condemnation)?

Perhaps the "just compensation" for so limiting is less than the full value of the property (the alienation of all of one's rights) but the limiting should still be compensated.
6.30.2005 2:54pm
Anonoymous (mail):
I suspect Thomas and Scalia would say that the zoning laws are takings not for public use and thus unconstitutional even with just compensation. However, the public use issue is never litigated in the context of precedents that say that virtually everything is a public use, so they never get a chance to decide on it.
6.30.2005 3:06pm
Ezi (mail):
Part of the problem for Scalia and Thomas is that they are taking an originalist (or more originalist) approach to "public use," whereas the Takings Clause did not originally encompass regulations of property at all, as Scalia admitted in Lucas. So what would have been no problem under a purely originalist Takings Clause jurisprudence becomes a mess under the hybrid jurisprudence of Scalia and Thomas.

Interestingly, if Volokh's analysis is correct, there might be a perverse result should the Court ever adopt the Scalia and Thomas view. In any case that would constitute a regulatory taking, the State would actually need to seize the land in order to have the taking be considered "public use."
6.30.2005 3:25pm
David M. Nieporent (www):
Eugene,

It seems to me that you're conflating two different debates. The "regulatory taking" debate is over the definition of taking. The Kelo debate is over the definition of public use; the libertarian/conservative critique of the New London action is not that it wasn't a taking, but that it wasn't a justified taking.


Contrariwise, the libertarian/conservative critique of the South Carolina Coastal Council's action is not that it wasn't for public use -- in which case the "proper" court finding would have been that the S.C.C.C. couldn't regulate at all -- but rather that it was a taking -- and hence the S.C.C.C. had to compensate Lucas.

In other words, I don't think that the lib/con view of these two cases requires different readings of "public use" at all. The "public use" requirement does not act to narrow the definition of "taking." It acts as a limitation on the application of the Taking power.
6.30.2005 3:25pm
David M. Nieporent (www):
Doh! After posting that, I see that Rob Lyman made my exact point. Teach me to post before reading all the comments.
6.30.2005 3:27pm
Lani Rowe (mail):
It seems to me that this post is missing the point. The debate is not between a "public benefit" model and a "public ownership" model. The question is really about the elimination of the principle of "public harm" from the "public benefit" model. That is, Lucas demonstrated that government intervention in private property to prevent public harm cannot simply be considered "regulation" when private property has been effectively rendered economically unviable (this, in my opinion, is consistent with an appreciation of the implicit right of private property to be productive). The dastardly Kelo ruling basically eliminated the principle of "public harm" as a precedent of interpretation established to restrict the application of the broader "public benefit" model when determining constitutionality under the Takings Clause. To quote Justice O'Conner in the dissent: "The Court's holding in Berman and Midkiff were true to the principle underlying the Public Use Clause. In both those cases, the extraordinary, precondemnation use of the targeted property inflicted affirmative harm on society-in Berman through blight resulting from extreme poverty and in Midkiff through oligopoly resulting from extreme wealth…Thus a public purpose was realized when the harmful use was eliminated…Here, in contrast, New London does not claim that Susette Kelo's and Wilhelmina Dery's well-maintained homes are the source of any social harm. Indeed, it could not so claim without adopting the absurd argument that any single-family home that might be razed to make way for an apartment building, or any church that might be replaced with a retail store, or any small business that might be more lucrative if it were instead par to a national franchise, is inherently harmful to society and thus within the government's power to condemn." Basically, Kelo expanded government's ability to confiscate and redistribute private property it deems to be insufficiently productive. Broadly interpreting the Public Use Clause to promote public determination of private property's productiveness absent "public harm" is a gross distortion of the Takings Clause and effectively eliminates the cardinal principle of reasonable productive self-determination from private property.
6.30.2005 3:59pm
Gene Vilensky (www):
I'm not a lawyer, but I play one on TV. I only discovered that the idea of regulatory takings exists, about a year ago. But let me take a mathematical stab at this.

It seems to me that some commenters are conflating the question themselves. As I understand Prof. Volokh, he is saying:

If you define a taking for public use as something that has public benefit (the approach adopted by Stevens, et al.), then you're with the conservatives in saying that then, you should be compensated for regulatory takings since then, a regulatory taking is a subset of the set of takings for public use (since it's done for public benefit) and so the just compensation clause comes into effect.


But, if you say that by definition, a taking for public use is only a taking, for say, a highway, to which the public has access, then clearly a regulatory taking does not fit this definition, and so therefore the just compensation clause does not come into play. So, you should not receive compensation from the gov't if its regulations deprive your property of substantial value.


That is indeed, a very good point. However, it does a run around the issue. I agree that a regulatory taking is indeed, not a taking for public use in the "public access" sense of the term (as the Kelo dissenters would have it). Therefore, it seems to me, that if it is a taking, it should be prohibited since it is not for public use! Not that one ought to receive compensation for it, but that it ought to be banned outright.

Prof. Volokh's objection is a lot like Orin Kerr's question a while back "if public takings need to be compensated, can't you have private takings that are not compensated since those are not outright prohibited?" Clearly, this is counter to the original public meaning of the Constitution. It's much less clear whether regulatory takings (by regulatory takings, I mean the practice not the term) are counter to that allowable by the original public meaning of the Constitution.

So in that sense, I do think that either regulatory takings ought to be prohibited outright (if they are found to be counter to what the original public meaning would have allowed Congress to do), or if they are permissible, then they do not deserve just compensation. Does this make sense to anyone else but me?
6.30.2005 4:06pm
DK:
I disagree with Eugene's claim that the "public benefit" model fits "environmental or esthetic goal[s]" better than the "ownership and access" model. If I let my cow drink from your stream, I am accessing your property. If the feds require you to allow migratory waterfowl to drink from the same stream, it is still access. Likewise, if your forest filtered the water I drink and the air I breathe, I am not merely benefited from your forest, I am using it.

IMHO, the real problem with the regulatory takings doctrine is not the public use/public benefit distinction, but the "tragedy of the commons" -- i.e. the difficulty of valuing and defending common goods such as clean air, clean water, and wildlife.
6.30.2005 4:40pm
cathyf:
Suppose the EPA prohibits MTBE in gasoline. Could this be considered a "private regulatory taking" from the oil industry because it creates a market for the (private) ethanol industry which otherwise would not exist?

cathy :-)
6.30.2005 5:02pm
Ari (mail):
Regulatory takings are for public use under the "public ownership" prong of Justice Thomas' definition, as opposed to the "continuous access" prong. It's an "or" - ownership or access. After all, the public has no right to continuous access if the government takes land in order to build a new headquarters for the CIA, but that's still for "public use" because the government continues to own the land and use it for government purposes.

In a regulatory taking (for example, one that prohibits development) the government now owns the right to do, on your land, what you used to have the right to do before the government took it from you. The government now owns the right to decide whether to develop your land, and has exercised that right in deciding not to do so. It has taken that right from you, because it now owns it.

Or, maybe regulatory takings are not for public use, and are therefore wholly unconstitutional. For many libertarians, that may be even better.
6.30.2005 5:36pm
DaveJ (mail):
IANAL, but it seems to me that a lot of Takings discussion goes on as if only land is property.

For example, the Lingle v. Chevron U.S.A. case clearly has the state placing a limit on the use of the land, 'taking' a portion of the value of the lease and giving that value to the lessee. To claim, as Mr Adler did, that "the landowner's property was not "taken" in any meaningful sense of the word.", denies that money or any other value is property. This is obviously nonsense.

The point of regulatory takings is that rather than take the whole property (compensating the owners), the various levels of government have started taking portions of the property without compensation. No revision of original intent is needed here, just the honest acknowledgement that in the founders day the takings were more direct in approach. When I regulate away your right to build, to log, or to access your property, I have taken from you something of value. I may not have your land, but I have taken private property, and should comensate you.

The whole point of the Takings clause is not that takings for private use may be uncompensated, but that the necessary and proper takings allowed by the powers granted to Congress require compensating the owners. Taking for private use is not granted anywhere.
6.30.2005 10:48pm
Gordon:
In a regulatory taking, the gov agency involved vigoruosly denies a taking has happened until ordered to recognize it by a court. Once it is determined that a taking has happened, the gov either officially "takes" and must compensate or has to change the offending regulation. They never admit to using private property for public purpose. Reg taking cases would be a lot easier if they did.
7.1.2005 10:46pm