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Lucas: a small step in the right direction.

I am a little uncomfortable here. I'm not used to having Ed Sullivan so close to me on the left,(1) and I am certainly not used to having Michael Blumm on my right.(2) I am also a little confused by the rules of this panel discussion. The chairman, whom I assume to be an authoritative source, proclaimed that we would each have ten minutes to speak, but the precedent established by the prior speakers tells me that I should have twelve or thirteen minutes.

My dilemma is not unrelated to the topic of this panel discussion. The Constitution sets forth a clear requirement of compensation when the government takes private property.(3) Over the last several decades, the U.S. Supreme Court has ignored that clear language while making an absolute mess of takings jurisprudence. Don Large is surely right when he says that it is a pointless enterprise for Justices Scalia and Blackmun to try to make sense of that jurisprudence.(4) Judges, lawyers, and academics have been trying to make sense of the Supreme Court's takings decisions for a century without success. So we ought to start over. In that sense, Lucas(5) is not a very good opinion because it does not start over. It tries to make sense of the existing law. But, there is some interesting language in Lucas that has promise from the point of view of those interested in maintaining a coherent system of property rights, not to mention those interested in complying with the Constitution.

Basically, the problem we face is to be blamed on Justice Holmes. Holmes said in Pennsylvania Coal that a regulation works a taking if it goes "too far."(6) That is absolutely the most useless statement one could make on this subject. It provides no guidance whatsoever to those who would seek to know the extent of their property rights. Nor does it provide any guidance to those who would seek to know the limits of their regulatory powers. If our definition of property rights is dependent upon whether a regulation goes too far, investors will be skeptical and regulators will be ambitious. So, we can blame it on Holmes, but that does not help us to solve the problem.

The Lucas case is significant because it insists that the relevant question is; what rights does the property owner have?(7) This is precisely the question every prospective property owner asks, via a title search, prior to acquisition. Surely it is an even more important question, from the point of view of the property owner, once property is acquired. What rights did the property owner acquire and what rights does the property owner have? It is certainly possible to have a property system in which rights are subject to arbitrary imposition of limitations and regulations, but the resultant properties will be of little value. Thus, the Lucas majority's emphasis on nuisance law as part of the definition of property rights puts them on the right track. They are finally asking the right question.

Unfortunately, the Court seems to have back peddled by applying its new per se taking rule only where there is a total taking, a total loss of value.(8) I understand why the Court limited its new rule in this manner; ours is, after all, a system of stare decisis. But limiting the new per se taking to total deprivations is difficult to rationalize in relation to any plausible purposes for having the takings clause in the Constitution. Is it somehow more offensive and damaging to me as a property owner - or more damaging to the economy - to allow the uncompensated taking of 90% of my property but to provide full compensation if the government takes 100%. The only difference between a 90% taking and a total taking is 10%. But under the new per se rule, that 10% is the difference between compensation and no compensation at all. The Court has asked the right question, but it has provided the wrong answer.

One may find the logic of the correct answer in one of Bill Funk's four queries that he says will determine the significance of Lucas.(9) What defines the relevant property? Is property severable for the purposes of takings jurisprudence as it is in real life? Or, is it a whole, all of which the government must take before compensation is required? In my judgment this is the central question in takings jurisprudence. On this question, Holmes had it right in Pennsylvania Coal. The coal which could not be mined because of the subsidence regulation was a severable estate in property for which the state of Pennsylvania had to compensate.(10) In the same vein, recent decisions of the U.S. Claims Court have concluded that regulations which result in total deprivation of value of a portion of a larger property are a taking.(11) This is the correct view if we are interested in a property system which will facilitate the wise and efficient allocation of scarce resources. It is not, however, a view which conforms to the Supreme Court's modern takings jurisprudence as demonstrated by the opinion in Penn Central.(12)

The Penn Central case involved historic preservation zoning in New York City, specifically the protection of Grand Central Station. Penn Central owned the station and wanted to build a high-rise structure above it. New York City's historic preservation ordinance, however, prohibited the construction. Part of the Court's rationale for upholding the ordinance was that Penn Central still had the use of Grand Central Station for trains and shops and so forth.(13) In addition, the Court noted, Penn Central owned some other properties in Manhattan.(14) The Court failed to note the equally irrelevant fact that Penn Central also owned property in Pennsylvania and a lot of other places. Justice Blackmun's dissent in Lucas perpetuates this nonsense by asserting the relevance of Lucas' prior financial involvement in the larger development in which the two parcels at issue in Lucas are located.(15)

Imagine that Penn Central, in its public spirited generosity, donated the air space above Grand Central Station to Mother Theresa. Assume that New York City administrators deny Mother Theresa a permit to construct a high-rise structure for the purpose of leasing space to fund her activities on behalf of the poor. Would the Court respond differently to her situation? She owns no other properties in Manhattan or even Pennsylvania. Surely it is a taking of Mother Theresa's property, and thus it must have been a taking of Penn Central's property. There is no principle, aside from that practiced by Robin Hood, which can explain why taking from Mother Theresa requires compensation but taking from Penn Central requires no compensation. The state may well have good reasons for the redistribution of wealth, but under constitutional government it must rely upon constitutional means.

What is the answer to the impossible disarray in takings law? The answer was in a book by Richard Epstein which has presumably been banned from the Senate Judiciary Committee. During the Clarence Thomas confirmation hearings, Senator Joe Biden waved Epstein's book, Takings: Private Property and the Power of Eminent Domain,(16) before nominee Thomas and asked: "You don't believe in this do you?" Of course, Mr. Thomas knew the correct answer to Mr. Biden's question, but we can hope that he told just a little white lie in denying any allegiance to Epstein's faith. Epstein says that if we read only the language of the takings clause, which is not asking a lot of the Court, we will see that it says the government shall not take private property for public use without just compensation. This language poses three questions according to Epstein.(17) First, has there been a taking of private property? Second, if there has been a taking, was done for a public purpose? Third, if it was done for a public purpose, was just compensation paid? Those are three separate and distinct questions. Therefore, when the Court concludes that there has not been a taking because the government has awarded the property owner some transferable development rights(18) as compensation or because the government had a really important, even compelling, purpose,(19) the Court is totally scrambling the issue. In Epstein's view, virtually everything government does is a taking.(20) This worries people like Joe Biden, even though Epstein recognizes that implicit compensation often exists.(21) Implicit compensation comes in the form of what Holmes usefully described as "average reciprocity of advantage" in the Pennsylvania Coal case.(22) Many regulations impose relatively equal burdens and benefits on everyone affected. But this does not mean that the regulations do not impose a taking. There is still a taking, but the courts may still sustain them because the regulations implicitly compensate the affected.

This sort of careful analysis would contribute immensely to the development of a coherent takings jurisprudence. Unfortunately the Supreme Court prefers to dump all of the facts which might be relevant to these distinct queries into a single brew, a sort of Cuisinart jurisprudence which characterizes the ubiquitous balancing approach of most modern constitutional law. This results in case law which is impossibly confused.

The most obvious question, as Bill Funk suggested(23) (so I am not all that uncomfortable with Bill on my right, at least for the moment), is: Why not pay? Why shouldn't the government pay? Government regulators and advocates of regulation view the takings clause as an unfortunate obstacle to the pursuit of the government's important business, but it does not in any way prevent us from protecting endangered species or saving wetlands or preventing pollution. We can do anything we want; we just have to pay. Somebody's going to pay. These are real costs. If we impose the cost of regulation on Lucas, it will be real cost to him and real impact on the economy. So it is only a question of who pays. Why should Lucas pay? Is there any principle of justice that says Lucas ought to pay to protect a beach in which all of us are interested? I think the answer is clearly no, and as Bill Funk very astutely points out, if we make the government pay then it will realize the costs that are associated with various kinds of regulations.(24) We might, as a consequence, have much more effective regulation.

I was disappointed in the Lucas decision in some respects, and I am not optimistic that the Court will eventually adopt the prescription I have just suggested, largely because most of the "conservative" justices and judges throughout the federal judiciary are more committed to the principle of judicial restraint than they are to the principle of individual liberty. AS a consequence, they are finding it very difficult to make decisions in the takings area that do not try to make sense of all of the confused precedent. Adherence to precedent is, after all, what a judicially restrained judge does. But if there is hope that these judicially restrained conservatives will do something in the interest of individual rights, including property rights, it maybe in the takings area. The language of the Constitution is clear, which distinguishes the takings issue from any other constitutional issues. However, I remain pessimistic. In fact, I expect, and fear, that the views which will prevail are those we are about to hear from my good, but confused, friend, Professor Michael Blumm.(25)

(1.) See Edward J. Sullivan, Lucas and Creative Constitutional Interpretation, 23 Envtl. L. 919 (1993). (2.) See Michael C. Blumm, Property Myths, Judicial Activism, and the Takings Clause, 23 Envtl. L. 907 (1993). (3.) "[N]or shall private property be taken for public use, without just compensation." U.S. Const. amend. V. (4.) See Donald W. Large, Lucas: A Flawed Attempt to Redefine the Mahon Analysis, 23 Envtl. L. 883, 884 (1993). (5.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992). (6.) Pennsylvania Coal v. Mahon, 260 U.S. 393, 415 (1922). (7.) See Lucas, 112 S. Ct. at 2899-01. (8.) Id. at 2901. (9.) See William F. Funk, Revolution or Restatement? Awaiting Answers to Lucas' Unanswered Questions, 23 Envtl. L. 891, 892 (1993). (10.) Pennsylvania Coal, 260 U.S. at 414. (11.) See Loveladies Harbor, Inc. v. United States, 21 Cl. Ct. 153 (1990); Florida Rock Indus. v. United States, 21 Cl. Ct. 161 (1990). (12.) See Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978). (13.) Id. at 136. (14.) Id. at 115. (15.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2905 (1992) (Blackmun, J., dissenting). (16.) Richard A. Epstein, takings: Private Property and the Power of Eminent Domain (1985). (17.) See id. at 198. See also James L. Huffman, A Coherent Takings Theory at Last: Comments on Richard Epstein's Takings: Private Property and the Power of Eminent Domain, 17 Envtl. L. 153, 156 (1986) (book review). (18.) See Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 137 (1978). (19.) See, e.g., Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 490-92 (1987). (20.) See Epstein, supra note 16, at 281. (21.) Id. at 195. (22.) Pennsylvania Coal v. Mahon, 260 U.S. 393, 415 (1922). (23.) See Funk, supra note 9, at 892. (24.) Id. at 892. (25.) See Blumm, supra note 2.
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Title Annotation:A Colloquium on Lucas
Author:Huffman, James L.
Publication:Environmental Law
Date:Jul 1, 1993
Previous Article:Revolution or restatement? Awaiting answers to Lucas' unanswered questions.
Next Article:Property myths, judicial activism, and the Lucas case.

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