Saturday, June 25, 2005

The Road Not Taken

The Supreme Court's Kelo v. New London case, decided Thursday, provoked much wailing and gnashing of teeth. Most of the outrage and alarm comes from fellow conservatives and conservative media, calling the case "a devastating blow" to property rights, an endorsement of "Soviet-style planning."

As a service to our Martain readers, a bit of background. The Fifth Amendment forbids governmental (including state government) seizure of private property except where "taken" for a "public use," returning "just compensation" to the property holder. Kelo considered a New London, Connecticut, scheme to redevelop and revitalize 90 acres declared a “distressed municipality" 15 years ago. The city-approved plan transferred municipal eminent domain authority to a non-profit corporation, which condemned, and compensated, property plots and committed to build (both by itself and by leasing some parcels to for-profit companies) the "small urban village" (hereinafter, SUV) detailed in the plan. The SUV specs are so hip and groovy, they're confined to small-print footnotes.1

Anyway, some owners were equally unimpressed: declining to take the money and run, they sought a state-court injunction that the condemnation rewarding private individuals, was not a lawful "public use." Intrigued by hip and groovy SUVs for his can't-happen-soon-enough retirement, Justice Stevens authored the 5-4 majority opinion blessing the plan as a Fifth Amendment "public use."2

Alarmists say Kelo's a communitarian assault on the sanctity of property;3 a communist infiltration of our homes; a starter-gun for class warfare and income redistribution; another unconstitutional amendment to the supposedly "living Constitution." Now, I've got season tickets for DC's perpetual production of "No, No, Anthony!". Occasionally the role of Kennedy is performed by an understudy, including Souter, Stevens, O'Connor, Breyer or (occasionally) Rehnquist and Scalia. I yield to none in admiration of Justice Thomas and contempt for instigators of our "Gumby Constitution." I've no doubt Mark Levin's correct that, "This has been one of the most miserable Supreme Court terms in years." And I turned conservative in part because of Amendment Five/property rights/law & econ/Hernando De Soto,4 etc. Damn proud of it too.

Yet Kelo don't bother me. I expected the outcome, am not overly troubled by its rationale, and don't anticipate significant deterioration of property rights, for three reasons:
  1. Text: In brief, one could read "public use" as narrower than, for example, "public purpose," requiring either municipal ownership, or continuous public access. Justice Thomas does just that, arguing it's the "most natural reading of the Clause." Thomas, of course, is a process-oriented Constitutional "originalist," which is to say a near-libertarian. Not that there's anything wrong with that--I've applauded his approach before. In some ways, Justice O'Connor's Kelo dissent one-ups Thomas, saying a state's announced and legitimate decision to foster economic development, thus encouraging growth, thus increasing the tax base, and attracting new visitors and residents can't qualify as a "public use" if new private owners exclude the public from even a sliver of once-condemned land.

    But I depart from Thomas and O'Connor, for three reasons. First, I'm unconvinced the words compel such a restricted reading. If the Constitution imposes the law of the excluded middle, eminent domain property could suddenly, repeatedly, but unpredictably oscillate between outlawed and OKed. For example, why should "public" mean "all members of the public?"--does that disqualify a state owned and operated payroll building unless it allows anyone access to the safe? How about a girls-only High School? Is a municipally owned Ferris wheel unconstitutional by virtue of a "you must be taller than" sign? Why does "use" necessitate continuity?--even city parks close at dusk. Why must "use" imply perpetuity?--there's no evidence of restraints on who can lease, bid or purchase commercial or residential space in the completed SUV. Why read the Fifth Amendment to block housing assistance programs from using increasingly preferred vouchers just because a low-income project was initiated via eminent domain?

    Second, Justice Thomas' impressive history is somewhat inapposite. His examples mostly predate the advent of truly private corporations, much less the modern and extensive version. And, obviously, this interpretation is not easily squared with the long-standing judicial approval of private entities in the eminent domain process, discussed below.

    Finally, Thomas' approach departs from essentially all prior takings decisions, as he forthrightly acknowledges:
    Our cases have strayed from the Clause’s original meaning, and I would reconsider them. . .

    When faced with a clash of constitutional principle and a line of unreasoned cases wholly divorced from the text, history, and structure of our founding document, we should not hesitate to resolve the tension in favor of the Constitution’s original meaning.
    Of course, impracticality cannot excuse unconstitutionality. Still, everyone concedes incorporation's unsupported and unoriginal, but few would fix it.5

    Jonathan Adler, NRO contributing editor and associate professor at Case Western Reserve University law school, School of Law, wouldn't launch a takings crusade, "while I would like to read 'public use' as a strict limitation on government use of eminent domain for a small set of purposes, there is little warrant for this interpretation in either the ratification history or the court's jurisprudence of the past 100 years or so." Thomas' Fifth Amendment originalism could occupy a hundred Supreme Court clerks at a hundred word processors for the next hundred years.6 Is it wrong to suggest conservative resources are better deployed elsewhere?


  2. Precedent: Why was Kelo a shock? Not universally of course; some weren't surprised. But most called Kelo "statist," contrary to historical evidence, an assault on "innocent homeowners," proof it's not our land. Are they right?

    No. As Justice Thomas documents, the Court's repeatedly upheld state laws resulting in actual or potential economic loss--classifying them as less invasive than a taking thus sanctioning economic loss without compensation. For example, the Justices historically OKed un-compensated municipal zoning ordinances so long as reasonably crafted to enhance the general welfare. Village Of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365, 389-90, 395 (1926). Further, the Justices routinely endorse regulations generating unequal loss or benefits -- even those compelling a business to close -- again without compensating property owners. Miller v. Schoene, 276 U.S. 272, 279 (1928) ("[When] making a choice between the preservation of one class of property and that of the other . . . the state does not exceed its constitutional powers by deciding upon the destruction of one class of property in order to save another which, in the judgment of the legislature, is of greater value to the public."). By contrast, the Kelo Petitioners opposed the plan despite their unquestioned entitlement to compensation.

    Kelo's also consistent with takings precedent. Berman v. Parker, 348 U.S. 26, 34 (1954) approved delegating authority to private corporations:
    The public end may be as well or better served through an agency of private enterprise than through a department of government - or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects.
    And, most relevantly, a unanimous Court7 in Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), found "private-to-private" takings consistent with the "public use" clause so long as "rationally related to a conceivable public purpose."

    In sum, Kelo's mostly a combination of prior rulings. The outcome shouldn't startle. Indeed, the only astonishment is Justice O'Connor's dissent because, as Nicole Garnett observes, she wrote Midkiff: "The surprise is the stridency of the O'Connor dissent, in light of her questions at oral argument, her Midkiff opinion, and the language of Lingle."


  3. Federalism: Kelo critics see a slippery, authoritarian slope. Kevin concludes America's "Sprinting towards despotism." Andy McCarthy sees a new Star Chamber: "Though safe from the government in their homes, the homes themselves are not." "Tyranny," says Tran. And MaxedOutMama predicts "oligarchy":
    A developer pays to do a study confirming that the property it wants to develop could be more profitable to the community, it presents the study, and the municipality condemns the property and gives it to the developer. This ensures that the developer doesn't have to undertake the arduous and expensive route of actually negotiating with the property owners.
    M_O_M also believes Kelo "laid the foundation for an overwhelming incursion of federal power upon state's rights and individual's rights."

    The critics have it backwards. Kelo upholds states rights. Conservatives support states rights Federalism, to counteract over-centralization, to authorize state-by-state experimentation and competition, to devolve authority to the smallest possible (and thus most representative) unit of government. Kelo vindicates local and elected officials at the expense of anti-majoritarian judicial whim.

    Sure, Kelo marginally increases property rights uncertainty--though I think it still safe. And Midkiff begat massive income redistribution in the socialist republic of Hawaii, including "Peter-to-Paul" transfers with minimal governmental participation. I doubt either program will fulfill the hype. But I now know to avoid a Connecticut or Hawaii domicile. Forewarned is forearmed -- and Federalism.

    This tempest is telling. Apparently, conservatives found Kelo so unnerving they're now anxious about corporate control and fearful of the local Mayor. For the past 48 hours, the Right temporarily turned liberal, as their own rhetoric demonstrates: Many, longstanding and reliable conservatives -- including the handful infiltrating the MSN -- object in a style indistinguishable from anti-Bush, anti-war leftists. But Kelo isn't the devouring commerce clause of Gonzales v. Raich, nor is a redeveloped SUV a harbinger of Zimbabwe. Most alarmingly, normally sober conservatives sound like the nonsensical "blame-Wal-Mart-first" crowd.

    Relax; take a deep breath; exhale. Sure, some developers are Music Man frauds; some local government officials on the take. But the law doesn't presume criminality; criminals are deterred and punished under state criminal laws.

    At bottom, Kelo's both conservative and Federalist. Discarding current takings law would void Midkiff's refusal to "substitute its judgment for a legislature's judgment as to what constitutes a public use" and its reminder that "debates over the wisdom of . . . socioeconomic legislation . . . are not to be carried out in the federal courts." 467 U.S. at 241-43. Overturning Lingle v. Chevron U.S.A., No. 04—163 (May 23, 2005), would erase its determination to avoid "scrutiniz[ing] the efficacy of a vast array of state and federal regulations–a task for which courts are not well suited [and] empower–and might often require–courts to substitute their predictive judgments for those of elected legislatures and expert agencies." The Constitution's already too "living" to waste Berman's insistence that "the legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation." 348 U.S. at 32.

    We got what we wanted--deference to state authority and limits on public interest busybodies or NIMBY neighbors. So why is everyone acting like we lost?
Conclusion: Like me, NRO's Jonathan Adler disfavors governmental interference with property rights. And like me, he calls for consistency, "If conservatives are to be taken seriously when they call for judicial restraint, we have to be willing to accept decisions that allow state legislatures to get away with idiotic things -- such as the use of eminent domain at issue in Kelo." On balance, Adler properly supports stare decisis over judicial restraint:
[T]he fact remains that state and local governments have a fair amount of power under our constitution to enact either. We often tell folks on the left that not every social ill should be cured by the courts, and that should apply no less when "conservative" interests are at stake.
Unrestricted eminent domain would be unconstitutional. But Kelo demands no such thing. Rather, it bolsters a bit of judicial deference commonly confined to the legal endangered species list.

I refuse to assume the sky is falling. At most, the Kelo case may foster increased civic attention to, and participation in, state and local government decision-making. Which is no bad thing--and better than bowling alone.

__________________

1 Caution--Affix Shades Before Reading The plan includes a waterfront conference hotel, restaurants and shopping, recreational and commercial marinas, a pedestrian “riverwalk,” approximately 80 new residences, a new U.S. Coast Guard Museum, 90,000 square feet of research and development office space, and other “office and retail space [and] parking.” The plan was spurred, in part by the pharmaceutical company Pfizer’s decision to build a $300 million research facility immediately adjacent to the newly planned 90 acres. In addition to creating jobs, generating tax revenue, and helping to "build momentum for the revitalization of downtown," the city predicted redevelopment would enhance its attractiveness. Slip op. at 3.

2 "You know what that means!"--Kelo confirms in Connecticut, it "takes" a village. (The best I could do; suggestions welcome.)

3 In the absence of contrary facts, the Court assumed the Petitioners weren't Connecticut Hillbillies, and the properties at issue were neither "blighted or otherwise in poor condition" but "condemned only because they happen to be located in the development area." Slip op. at 4.

4 A law school prof claimed my copy of the Bill of Rights printed Amendments 3, 4, 6, 7, and 8 in invisible ink. I said his version left out 2, 10 and the word "property." (I'm not making this up.)

5 National Review's Ramesh Ponnuru certainly is brave--probably because he's not a lawyer:
If good originalists are supposed to ignore 100 years of bad precedent, and incorporation amounts to a series of bad precedents, then shouldn't good originalists be trying to undo incorporation too? You argue that it is "too late in the day to argue" against incorporation either in general or even in the specific case of the Takings Clause. If so, why is it not too late in the day for Thomas to argue against these other precedents?
6 The advantages of secreting a hundred additional Law Review editors for a century suddenly seem compelling.

7 O'Connor's Midkiff majority was 8-0; interestingly, Thurgood Marshall did not participate because his wife's family held leases the law would convert to fee simple ownership, presumably at a higher value.

5 comments:

Anonymous said...

Well done. I've been thinking along the same lines, though far less comprehensively. I thought Midkiff was a close case (I saw it argued in the 9th Circuit in Honolulu). I was wrong. And what's the difference between Midkiff and Kelo except for the identity of the takers (SUV v. single family homowners)and takees (single family homeowners vs. Bishop Estate for the benefit of poor Hawaiians)? The public use test shouldn't turn on that. Good job. Doug J.

Carl said...

DJ:

I saw Midkiff argued at the Supremes. I thought it a close case. I was wrong.

Hawaii's crazy. And, sure, the Fifth Amendment still must provide some limits. But it can't be true that every monetary loss is a taking. And though the SUV here plainly was a taking, I'm not willing to assume my town council -- if I lived in a town -- in composed of idiots or crooks.

RiverRat said...

Hopefully the states and municipalities will focus more on the "just compensation" clause which to me represents the bigger issue; especially with residential property.

Fair markey value just doesn't cut it in my opinion. Statutes that contemplate "replacement and displacement costs" would go a long way towards ameliorating the impact on property owners of such takings.

Boomr said...

Believe it or not, I actually agree with Carl, in that this decision (and the line of precedent before it) should have been seen as a relative victory for conservative supporters: it upholds states' rights, it has the effect of allowing states to generate more revenue without new taxes, and it spurs capitalism.

The posts (especially that of MaxedOutMama) decrying the decision as an increase in socialism are missing the point, I think. How can a government taking PRIVATE property and giving it to a PRIVATE corporation be interpreted as the state consolidating its control over everything? It can't. This is an extremely pro-capitalism doctrine.

We'll see whether the effects of the opinion are worthwhile -- I suspect that they may be, given time. I was initially reacting against the decision as an intrusion into private property rights, but now I'm not so sure that it's such a bad thing. Like RiverRat said, the main issue is the amount of compensation provided.

Good post, Carl.

Richard G. Combs said...

I vehemently disagree. See Don't Count on Conservatives.

And I'm just appalled by boomr's contention that this is pro-capitalist. Just appalled.