SANDEFUR ON TAKINGS, OR, WHY YOU MIGHT CARE ABOUT THE ARGUMENT THAT RECENT LANDMARK TAKINGS CASES HAVE BEEN WRONGLY DECIDED

It's not every day that I get to trade posts with someone who actually writes (or helps write? or sits next to people who write?) amicus briefs in ongoing, cutting edge takings cases such as San Remo. So I'm grateful that Timothy Sandefur has responded so speedily and directly to my somewhat incoherent and admittedly incomplete post from this afternoon.

Let me sum up his response; I'll italicize what I take to be his views. Police powers are properly restricted to protecting rights. The provision of public goods, however, is not a proper exercise of police powers, although "the left" (and once again I'm an honorary member!) makes the error of confusing these two basic categories. When government provides public goods, it "must" "pay compensation" to those individuals whose property is taken in order to provide that good.

This clean distinction between the exercise of police powers and the provision of public goods does not have a firm basis in current takings law, as Mr. Sandefur acknowledges. Indeed, it is part of the agenda of people like the Pacific Legal Foundation to make this distinction part of takings law; as far as I can tell from my admittedly limited reading in this area, Justice Brown is right smack in the middle of the ranks of those who would advance this kind of argument, although, as always, the devil is in the details and I don't want to make precise claims about the positions of PLF or Justice Brown in this area when I don't have the facts at hand.

Why is this distinction important? Let's consider two cases that Mr. Sandefur believes are wrongly decided (indeed, he calls the second of them "utterly unprincipled"): Penn Central and Tahoe-Sierra. In Penn Central, the owners of Grand Central Station in New York wanted to plant a multistory office complex on top of the building. You can get a sense of the plans from the thumbnail at this page. NYC's historic preservation ordinance requires owners of designated buildings to get prior approval for plans to alter the existing building (among other things). There is a procedure by which the owners can contest the designation of a building as an historical landmark but the owners of Grand Central did not avail themselves of that option. The historic preservation board turned down the renovation plans. The owners of Grand Central sued, claiming that their property had been "taken" because they could not profit from contracts entered into in the planning phase of the office complex. The Supreme Court did not accept that there was a taking here for a variety of reasons, including the fact that the company still retained lucrative transferable development rights and could still earn a reasonable return on the investment in the property through ongoing uses. In addition, the majority opinion contains the following lines that I'm sure make Mr. Sandefur's blood pressure rise:

Unless we are to reject the judgment of the New York City Council that the preservation of landmarks benefits all New York citizens and all structures, both economically and by improving the quality of life in the city as a whole - which we are unwilling to do - we cannot conclude that the owners of the Terminal have in no sense been benefited by the Landmarks Law. (135-6)

In other words, not only did the owners of the Grand Central terminal retain substantial economic benefit from their property; they also benefited from the historic preservation ordinance in the same fashion as all other citizens. In a footnote, the Court also mentioned but did not explore in detail the idea that much of the value of Grand Central Station -- and thus at least some of the profit that the owners gained from the station -- was actually "publicly created"; I mean, it's New York City, after all, a common project of all citizens of New York across the ages. My sense of things is that this idea of publicly created value is part of our cultural understandings of property rights and the obligations that landowners of landmark buildings, at least, have to the public.

But Mr. Sandefur presumably would have us believe the following about NYC's historic preservation law: whenever the law is applied so that it prevents an economically lucrative use of the property desired by the owners, New York City has "taken" that part of the property and must compensate the owners. This would presumably be true regardless of other economically viable uses that the owners retain. As long as one economically viable use is desired by the owners -- and, essentially, as long as a majority of judges on a given court are not persuaded that the exercise of the police powers here aim to protect "rights" rather than merely provide a public good -- then those owners deserve compensation. Finally, courts should enforce such a compensation rule as a constitutional principle, rooted, presumably, in some understanding of text, structure, and perhaps a reading of original intent (although I'm unsure on the precise basis that Mr. Sandefur prefers).

In the real world, this means: Bye-bye, historic preservation laws. Oh well! It's only a "public good," and one that is likely not to have a high priority during hard economic times.

In what sense has NYC "taken" the property owned by Penn Central Corp? It hasn't occupied the property; it has merely prohibited certain uses of it. The example that Sandefur gives of the government taking your house to build a post office (or, more colorfully, stealing the bed from the room in which you are engaging in private, consensual acts of sodomy) is pretty far away from this issue. Folks like Justice Brown (and Sandefur) want to blur the difference. Seems like a shell game to me, albeit one that is done through the means of an interesting theoretical account of the issues at stake.

But if you thought that only historic preservation laws were at issue here, then take a look at Tahoe Sierra from last year, a case that Mr. Sandefur calls "utterly unprincipled." The issue in the case was whether or not a temporary development moratorium was a "per se" taking, meaning that no additional factual information would be necessary for the courts to determine that a taking had occured, and that, as the summary puts it, the Court should announce a rule that "any deprivation of all economic use, no matter how brief, constitutes a compensable taking." Note again that we're not in the realm of the government taking away your bed; instead, we're in the realm of government issuing a development moratorium that was temporary, in place in order for the relevant environmental authorities to do such things as determine the best way to preserve Lake Tahoe's pristine clarity from the effects of development.

Again, presumably Mr. Sandefur would argue that because no one's "rights" are being protected by the planning agencies (although the catalogue of rights would be important here, I suppose) developers are entitled to be compensated for the temporary deprivation of economic value that they suffer when they can't build on their land during a period of a few years. Instead, because the planning agency is merely protecting the public good of Lake Tahoe's pristine clarity, it should have to pay those developers for the privilege of stopping development that they want to pursue.

In real world terms: bye-bye Lake Tahoe as we know it. Oh well! The lake's clarity only a public good, anyway. One tactic with respect to this case is to argue that the moratoria really wouldn't prevent harm to the lake's clarity, simply as an empirical issue; but the basic argument would have to hold even if it were the case that the lake lost its clarity, unless you can develop an account of "rights" that include "a right to enjoy a clear Lake Tahoe," something that I might be happy with but I doubt Mr. Sandefur would be!

Note in particular that we are not just talking about whether or not government desires to physically occupy your property for some vague purpose not rooted in the language of rights and doesn't want to compensate you for it. Instead, we're talking about the attempt by PLF and other pressure groups to create a body of takings law that can be used by corporations to threaten localities with expensive, time-consuming, fact-intensive lawsuits if they try to engage in land-use planning that the corporations think will reduce the returns on their investment.

I think that there are a lot of really interesting issues here, and clearly Mr. Sandefur knows more about these cases than I do and has a crisper theoretical account of the boundaries of the police powers. I prefer historical accounts. That's part of the reason why I have no problem with saying that it used to be the case that state power was used systematically to mark heterosexuality as the preferred sexual orientation, but that this is largely no longer the case now in what we call the civilized world. I would say that instead of putting the burden of proof on me to say why state criminal prohibition of sodomy is different from temporary development moratoria for the purposes of engaging in sensible environmental regulation, or historical preservation ordinances designed to protect our most famous city's architectural heritage, the burden of proof should be on those who say that these things are the same in the decisive respect, namely, that they represent a use of state power to curtail the rights of the individual. I mean, just read this last sentence once again and tell me straight up whether or not the comparisons suggested by Mr. Sandefur pass the smile test. If I'm wrong, have a drink of good Kentucky bourbon and then return to the issue. If I'm still wrong, come to Oswego and I'll buy you a bourbon and we can chat about it.

That doesn't mean I won't think about it in the meantime and maybe give a better answer. It does mean that I'm admitting that I'm basing my reactions primarily on my intuitions about the nature of various goods that people pursue in life. If that's too fuzzy, at least it has the virtue of picking up the texture of existing goods actually pursued by government (and actually recognized in the broad outlines of constitutional law) instead of flattening them into contestable categories that are then made into the basis for a broad jurisprudential reform program that will have consequences entirely unidesired by many citizens.

MORE: There's no good late night post without a neologism or spelling mistake, and the last line of this post contains both in the same word! I meant, "entirely undesirable for many citizens."

MORE: Mr. Sandefur has promised a longer response, but lays down one principle:

For now, I will add only this: It is not a valid argument against the Constitutional requirement of just compensation to say “But we can’t afford to pay people for the things we take from them!”

Fair enough, as long as we are clear on the terms (and haven't hidden anything interesting in the term "requirement" and "take"). The mere fact of some dimunition of value is also not a sufficient argument to show that there has been a taking in a constitutional sense, either. Comparing a temporary development moratorium to a permanent physical occupation is an attempt to evade the important threshold issues -- as if government's saying that you can't put your bed on your roof and subject your neighbors to the sight of your (now no longer private) sex acts is equivalent to taking away your bed entirely. In the free speech context, such a comparison would be like describing a time, place and manner restriction as a ban on speech. Meaningful distinctions -- and the relationship between the rights holder and other rights holders -- would be lost.