As some readers may have noticed, I have been engaged in a running dialogue with Optimistic Patriot regarding the meaning and application of the Fifth Amendment’s “takings clause,” to wit:

“[n]or shall private property be taken for public use, without just compensation.”

The debate has arisen (it comes as no surprise) in the context of the Supreme Court’s recent decision in KELO V. CITY OF NEW BRITAIN, where the Court upheld the eminent domain power of the City to take private properties in the context of a “economic development plan” in which some private property was to be given over to other private parties for development.

Pat (as I have endearingly referred to him) takes what I would call (I hope he thinks fairly) a “strict constructionist” approach to the meaning of the term “public use,” calling upon the immortal words of Justice Chase uttered in 1796:

An act of the Legislature (for I cannot call it a law) contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority … . A few instances will suffice to explain what I mean… . [A] law that takes property from A. and gives it to B: It is against all reason and justice, for a people to entrust a Legislature with such powers; and, therefore, it cannot be presumed that they have done it.” Calder v. Bull, 3 Dall. 386, 388 (1798) (emphasis deleted).

Interestingly, the case in which Justice Chase’s words appeared had nothing to do with the power of eminent domain – in fact the Congress did not enact a federal statute governing the federal government’s practice until 1888. Act of Aug. 1, 1888, ch. 728, 25 Stat. 357. See 1 Nichols’ The Law of Eminent Domain Sec. 1.24 (J. Sackman, 3d rev. ed. 1973). Consequently, Justice Chase’s remarks constitute what is called “dicta,” made for the purpose of articulating broader principles at issue in that case (which involved the power of the state of Connecticut to enact an “ex post facto” law), but without any particular legal effect. And lacking any particular set of facts against which the language is applied, it is impossible to discern what is was that Justice Chase abhorred.

Another interesting fact (about which I am certain Pat will vehemently disagree), articulated in the very first Supreme Court case that dealt with the subject, is that “the right of eminent domain, that is, the right to take private property for public uses, appertains to every independent government. It requires no constitutional recognition; it is an attribute of sovereignty.” MISSISSIPPI & RUM RIVER BOOM CO. v. PATTERSON, 98 U.S. 403 (1878).

Applying the sovereign right of eminent domain to the states, “The clause found in the Constitutions of the several States providing for just compensation for property taken is a mere limitation upon the exercise of the right. When the use is public, the necessity or expediency of appropriating any particular property is not a subject of judicial cognizance.” Id.

And, according to the PATTERSON case, this power does not limit the sovereign to exclusive ownership of the property so taken:

“The property may be appropriated by an act of the legislature, or the power of appropriating it may be delegated to private corporations, to be exercised by them in the execution of works in which the public is interested.” Id.

The question whether a particular intended use is a public use is clearly a judicial one, CITY OF CINCINNATI V. VESTER, 281 U.S. 439, 444 (1930), but the Court has always exercised a high degree of deference to the legislative determination. So, when Congress created the Tennessee Valley Authority (a private entity) and gave it authority to take private property for its mammoth dam project, the Supreme Court upheld Congress’s determination that such was a public use. U.S. EX REL. TENNESSEE VALLEY AUTHORITY v. WELCH, 327 U.S. 546 (1946).
Accord, BERMAN V. PARKER, 348 U.S. 26 (1954): ”Once the object is within the authority of Congress, the means by which it will be attained is also for Congress to determine. Here one of the means chosen is the use of private enterprise for redevelopment of the area. Appellants argue that this makes the project a taking from one businessman for the benefit of another businessman. But the means of executing the project are for Congress and Congress alone to determine, once the public purpose has been established. 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.” Id. at 33-34.

While all of the attention has been paid to Kelo recently, perhaps the most dramatic example of the Court’s involvement in the public-private issue came over twenty years ago in HAWAII HOUSING AUTHORITY v. MIDKIFF, 467 U.S. 229 (1984). Here is a description of the statutory scheme involved in that case:

To reduce the perceived social and economic evils of a land oligopoly traceable to the early high chiefs of the Hawaiian Islands, the Hawaii Legislature enacted the Land Reform Act of 1967 (Act), which created a land condemnation scheme whereby title in real property is taken from lessors and transferred to lessees in order to reduce the concentration of land ownership. Under the Act, lessees living on single-family residential lots within tracts at least five acres in size are entitled to ask appellant Hawaii Housing Authority (HHA) to condemn the property on which they live. When appropriate applications by lessees are filed, the Act authorizes HHA to hold a public hearing to determine whether the State’s acquisition of the tract will “effectuate the public purposes” of the Act. If HHA determines that these public purposes will be served, it is authorized to designate some or all of the lots in the tract for acquisition. It then acquires, at prices set by a condemnation trial or by negotiation between lessors and lessees, the former fee owners’ “right, title, and interest” in the land, and may then sell the land titles to the applicant lessees.

In a unanimous opinion, the Court held

The Act does not violate the “public use” requirement of the Fifth Amendment. Pp. 239-244.

(a) That requirement is coterminous with the scope of a sovereign’s police powers. This Court will not substitute its judgment for a legislature’s judgment as to what constitutes “public use” unless the use is palpably without reasonable foundation. Where the exercise of the eminent domain power is rationally related to a conceivable public purpose, a compensated taking is not prohibited by the Public Use Clause. Here, regulating oligopoly and the evils associated with it is a classic exercise of a State’s police powers, and redistribution of fees simple to reduce such evils is a rational exercise of the eminent domain power. Pp. 239-243.

(b) The mere fact that property taken outright by eminent domain is transferred in the first instance to private beneficiaries does not condemn that taking as having only a private purpose. Government does not itself have to use property to legitimate the taking; it is only the taking’s purpose, and not its mechanics, hat must pass scrutiny under [467 U.S. 229, 231] the Public Use Clause. And the fact that a state legislature, and not Congress, made the public use determination does not mean that judicial deference is less appropriate. Pp. 243-244.

It is entirely ironic that Justice O’Connor penned the HHA unanimous opinion, and twenty years later wrote the dissent in Kelo, reciting Justice Chase’s words from 1796. She says:

“To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings ‘for public use’ is to wash out any distinction between private and public use of property–and thereby effectively to delete the words “for public use” from the Takings Clause of the Fifth Amendment.”

Justice O’Connor rejected out of hand the notion that “economic development” could be legitimately determined by a state legislature to serve a public purpose (even, one must assume, if the land taken were to be designated as public parkland in the scheme of the surrounding private development?), but was comfortable with the “public purpose” to be served in the HHA case:

In Midkiff, we upheld a land condemnation scheme in Hawaii whereby title in real property was taken from lessors and transferred to lessees. At that time, the State and Federal Governments owned nearly 49% of the State’s land, and another 47% was in the hands of only 72 private landowners.

Concentration of land ownership was so dramatic that on the State’s most urbanized island, Oahu, 22 landowners owned 72.5% of the fee simple titles. Id., at 232. The Hawaii Legislature had concluded that the oligopoly in land ownership was “skewing the State’s residential fee simple market, inflating land prices, and injuring the public tranquility and welfare,” and therefore enacted a condemnation scheme for redistributing title. Ibid.

There is the basis for the “public use” – to remedy the skewing of the residential fee simple market and its effect on land prices.

If that is indeed a legitimate public use, it seems to me that an urban redevelopment scheme may be based upon the exact same principles.

In earlier back-and-forth between us, Pat closed his opinion with the simple statement that giving private property to Marriott for a hotel cannot in any circumstances be a public use.

But I want to test the foundation of his position.

What if, for instance, the private property taken were highly desirable waterfront property in an urban location upon which the public currently had no right of access, and the economic development scheme required the private developer to incorporate a significant public park area which would open up the land to public use? It seems to me that is at least as legitimate a determination of public use as O’Connor found appropriate in HHA.

What is clear is that there is over a hundred years of precedent that, contrary to Justice Chase’s apparently simplistic denouncement, recognizes that “public use” does not equal “public fee ownership,” and the determination of what is “public use” is a legislative one, not a judicial one.

And that, my friends, is how it should be, in my humble opinion.

Archived in: Congress, Connecticut, Constitution, Eminent Domain, Hawaii, Housing, Supreme Court, Welfare