Takings and Kelo and the Souter Hotel
Reading Kelo again and having lunch at the law school, I learned a few new things:
1. Law profs are dubious that The Souter Hotel would be a legitimate taking under Keo, but I found most of their reasons unpersuasive.
a. New London used a comprehensive development plan to do its taking and had lots of hearings. Well, The Souter Hotel project can do the same.
b. New London had a quasi-government nonprofit do the taking, and said it did not know in advance which private parties would benefit. The Souter Hotel project can do the same, and, moreover, doesn’t care which private parties benefit, since its backers will be happy if Souter loses his house, even if no private party gains anything and all the benefits go to the town.
c. The project’s motive is malicious. That is irrelevant– it is only the town government’s motive that matters under Kelo, not the developer’s.
d. New London took lots of people’s property and was going to sell it to lots of other people. That was never mentioned in the reasoning of Kelo, though in a dictum the opinion says, without explanation that its reasoning wouldn’t apply if As property were taken to give to B.
e. Souter has other defenses besides the Taking Clause. He could appeal to Equal Protection or Freedom of Speech.
Every taking violates equal protection in this sense, so I don’t see how that helps.
Freedom of Speech is the one reason I do find somewhat persuasive. Souter’s property would not be taken if he had not been part of the Kelo opinion, because it’s value as a hotel in this project is based on his having authored that decision.
On the other hand, this being bad goes back to the motives. The developer’s motive is irrelevant, and if the town’s motive is public benefit rather than any criticism of Kelo, why should the fact that Kelo has made the property valuable matter? One can just as well say that to apply Kelo to Souter violates his freedom of speech because if he hadn’t supported Kelo he wouldn’t be losing his freedom from takings for private use. By analogy, we couldn’t raise the income tax of a senator who voted to raise income taxes, because that would be to punish him for having voted a certain way.
Other things I learned:
2. I was wrong about having to remand Kelo back to the lower court to determine whether the case was motivated by a desire to benefit private parties. The majority opinion says that the trial judge has already ruled that it was not.
3. I am left unclear on how old the Takings for Public Benefit (as opposed to Public Use) doctrine is. Apparently it goes back to the 1930’s and urban renewal. Going back further, there are lots of cases of takings for common carriers such as railroads, and it turns out that grist mills are similar because anybody could go to one and have his grain ground. Someone said that the old rule was that if an enterprise could be regulated, then it had enough of a public component that property could be taken on its behalf. A public utility would fit that.
There’s an old Holmes case about a coal mine that got away with having aerial buckets going over a neighbor’s property. I have’t seen it, though, and it sounds like that is not a takings case at all. Rather, one private party was allegedly infringing on another’s property rights, and the court ruled that the act was not really infringement. It sounds to me like the same kind of ruling that now allows airplanes to fly over private property, violating the old from-hell-to-heavens rule of property rights.
4. Suppose you think that we should get rid of the public use requirement altogether, perhaps revising the “just compensation” requirement at the same time to truly give just compensation. Why not then get rid of the government’s role completely, except for judging whether compensation is just? Kelo says that the city can take Arthur’s property and sell it to Bob, perhaps having to write a plan, hold hearings, and do other busywork first. Why not cut out the city? Let the rule be that Arthur can go to a court and take Bob’s property if he gives just compensation. Arthur won’t do it unless the property is worth more to him than to Bob, if we have fixed up compensation to truly be just.
5. I’ve forgotten the details of the Hawaii Midkiff case, but it sounds truly appalling. I think it’s this: The US Supreme Court held unanimously that if one of the 30 or so big landholders in Hawaii refused to sell a property to his tenant, then the state could condemn the property and sell it to the tenant, as a means to reduce land ownership concentration.
I will accept reduction in land concentration as a legitimate government goal. It’s not that far from antitrust law. But as with antitrust, it should be done by a law, not by takings. The law could be that nobody can own more than a certain amount of land, for example, and anybody currently owning more would have to sell some.
Moreover, the Hawaii law wasn’t even a rational way to achieve the goal of deconcentration. If no tenants wanted to buy, it would have no effect. If 10% did, the reduction in concentration would still be small.
There’s some interesting tax story about Midkiff too, though–something like that the landowners actually liked being taken from because that made the sale involuntary and freed them from capital gains taxes. If true, that is an example of how this kind of takings can be abused to benefit private parties.
6. Justice O’Connor authored the Midkiff opinion, and authored the dissent in Kelo. She tries to reconcile the two. Why can’t she just say,”We ought to overturn existing precedent, because it is clearly wrong. I know I voted for it when it first came out, but I made a big mistake.” Has a judge ever said that?
July 25th, 2005 at 8:35 am
I hope Souter loses his property. I think his ruling concerning goverment stealing individual property is anti american. Rand was right on. Joe