Taking Property and Just Compensation.

Which regulations of property are takings that require just compensation under the Fifth Amendment of the U.S. Constitution and which are not? The Supreme Court does not appear to have a clear answer to this question. At best Court opinions are confusing, at worst they are contradictory. In this volume editor Nicholas Mercuro sets out to discover if there is order in the Court's collage of decisions. To this end Mercuro selected six landmark rulings and a Presidential Executive Order concerning regulations and takings and asked representatives of six different schools of thought to analyze them. The result is interesting and insightful reading, not so much because an answer was found but because contrasting the views of the writers highlights the different ways an answer can be framed.

The cases are all modern: Penn Central Transportation Company v. The City of New York, 1978 in which a requirement that the historic appearance of New York's Grand Central Terminal be maintained and plans for a remodelled terminal and office tower are refused is found not to be a taking; Keystone Bituminous Coal Association v. DeBenedicitus, 1987 in which a requirement that the coal company leave behind enough coal to support the land above it despite the fact that surface owners had sold the fight of subsidence to the coal company was found not to be a taking; Hodel v. Irving, 1987 in which Section 207 of the Indian Land Consolidation Act, 1983 was declared a taking because it denied individuals the right to control disposition of their property at death; First English Evangelical Lutheran Church of Glendale v. The County of Los Angeles, California, 1987 in which a "temporary regulatory taking" is found when the county delays the re-construction of a building destroyed by a fire that denuded the land and made it flood prone; Nollan v. the California Coastal Commission, 1987 in which a requirement that the Nollan's provide lateral access between two public beaches was declared a taking; Pennell v. City of San Jose, 1988 in which rent controls were found not to be a taking; and Executive Order 12630 that required government officials to be sensitive to regulations that might take property and require compensation.

The case reviewers view the interaction of law and economics from different perspectives: Susan Rose-Ackerman is a legal reformist, Stephen G. Medema is an institutionalist, Charles K. Rowley is from the public choice school, Gary Minda is a postmodernist, Thomas S. Ulen represents the new law and economics, and Robin Paul Malloy adopts the classical liberal perspective. Needless to say they do not all agree.

The gist of the book is this. Rowley says that all too often the Supreme Court is staffed with second-rate judges who behave unlawfully. They were sworn to uphold the Constitution which forbids taking property without just compensation and yet they permit it to happen. That these cases represent takings is clear, just read the Federalist Papers. Of course, he concedes, they do what they do because Court decisions and especially Court appointments are political events subject to special interest pressures.

Wait just a minute, says Medema, nothing is that clear. Rules and the application of rules are subject to the process of "naming and framing" in which selective perceptions are inevitable. Of course these decisions are shaped by political and ideological pressures but they are not criminal or even wrong, they are the reflection of the Court's collective perceptions of the law.

No matter what the reasons, say Rose-Ackerman, these rulings are inconsistent and that is reason for concern because inconsistency creates uncertainty. We need a hard and fast rule, not subject to selective perceptions, that promotes efficient takings, efficient private investment and minimizes government created uncertainty while, at the same time, protecting the little guy from heavy-handed government.

I've got it, cries Ulen, a two-part test for the application of eminent domain: requiring that government pay just compensation and demonstrate a public goods reason for the taking.

Wait a minute, you're all wrong, shouts Minda. There is no ideal set of conceptual solutions, no way to remove ideology and political influence and to insure efficient taking because the entire framework is built on the contradiction of private property somehow being coupled with collective decision making. Contradiction always creates chaos.

Well I know this much, concludes Malloy, this country is drifting toward a statist ideology. The long-term trend is clearly away from individualism and toward communitarianism.

Wow, says this reader, economists don't agree. Er, what about that Wetlands Act?

Philip K. Porter University of South Florida