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Published online by Cambridge University Press: 04 December 2018
A norm of equal treatment is cited regularly in the American jurisprudence of property “takings” under the Fifth and Fourteenth Amendments to the Constitution, as a benchmark of fair treatment of owners. According to an increasingly prevalent version of this equality norm, courts should look to parity of treatment among property owners in investigating whether particular regulations “take” property. This essay argues, however, that such an equality norm is misplaced, and that courts should judge fairness by the criterion of expectation—including reasonable expectations of regulation.
A norm of equality becomes problematic in the face of the economic theory of the evolution of property. This theory posits that as resources become more congested, their uses carry increasing common pool costs or “externalities”—a scenario that should predictably result in more stringent resource management—up to and including the establishment of regulatory regimes as well as property rights themselves. This evolutionary pattern, however, places earlier and later resource users in different positions vis-à-vis both common pool externalities and regulatory responses, and their different temporal positions fragment the meaning of equal treatment and destabilize it as a jurisprudential norm. This essay argues that while equal treatment may be a benchmark for special or invidious cases, like those relating to civil rights, the great bulk of takings cases involve regulatory responses to congesting resources, where a norm of equal treatment breaks down. Thus, in seeking fair treatment, takings jurisprudence should downplay equality and instead look to the understanding of property as a basis of expectations—but those expectations should include the anticipation of reasonable regulatory responses to resource congestion.
1 The phrase is usually attributed to Caldwell v. Texas, 137 U.S. 692 (1891), where it was slightly longer: “equal and impartial justice under law.”
2 See, for example, Karkkainen, Bradley C., “The Police Power Revisited: Phantom Incorporation and the Roots of the Takings ‘Muddle,’” Minnesota Law Review 90 (2006): 826–913.Google Scholar
3 Armstrong v. United States, 364 U.S. 40, 49 (1960). For the frequent citation of the case, see Treanor, William Michael, “The Armstrong Principle, the Narratives of Takings, and Compensation Statutes,” William and Mary Law Review 38 (1997): 1151–1176, at 1153;Google Scholar see also Davidson, Nestor, “The Problem of Equality in Takings,” Northwestern University Law Review 102 (2008): 1–54, at 21.Google Scholar
4 Davidson, “Problem of Equality,” 20–22; Dana, David A. and Merrill, Thomas W., Property Takings (New York: Foundation Press, 2002), 33–34.Google Scholar
5 Ibid., 37–49. Technically, takings cases fall under the “due process” clauses of the Fifth and Fourteenth Amendments, rather than the Equal Protection clause of the Fourteenth Amendment.
6 Dana and Merrill, Property Takings, 33–34.
7 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922); cf. Karkkainen, “Police Power,” 862–63, identifying earlier cases finding regulatory takings.
8 Reinman v. Little Rock, 237 U.S. 131 (1915).
9 City of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926).
10 “Public trust” has a long history but recent state court decisions have extended both its geographical and functional reach; see Rose, Carol M., “The Comedy of the Commons,” University of Chicago Law Review 53 (1986): 711–81;CrossRefGoogle Scholar Klass, Alexandra B., “The Modern Public Trust Doctrine,” Notre Dame Law Review 82 (2006): 699–754.Google Scholar
11 St. Louis Gunning Advertisement Co. v. City of St. Louis, 137 S.W. 929 (Mo. 1911).
12 Welch v. Swasey, 214 U.S. 91, 107 (1911).
13 Maher v. City of New Orleans, 516 F.2d 1061 (5th Cir. 1975), cert. denied 426 U.S. 905 (1976).
14 Penn Central Transportation Co. v. New York City [PC], 438 U.S. 104 (1978).
15 Richards v. Washington Terminal Co., 233 U.S. 546. [Washington Term] (1914).
16 The New York Court of Appeals took this broad view: 366 N.E. 2d 1271 (N.Y. 1977).
17 Demsetz, Harold, “Toward a Theory of Property Rights,” American Economic Review 57 (1967): 347–59;Google Scholar Anderson, Terry and Hill, P. J., “The Evolution of Property Rights: A Study of the American West,” Journal of Law and Economics 18 (1975): 163–80;CrossRefGoogle Scholar Krier, James E. and Ursin, Edmund, Pollution and Policy (Berkeley: University of California Press, 1977).Google Scholar
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27 Huber v. Merkel, 94 N.W. 354 (Wisc. 1903).
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29 State v. Michels Pipeline Construction Co., 217 N.W. 2d 339 (Wisc. 1974)
30 See, for example, Schiffler, Manuel, The Economics of Groundwater in Arid Countries (London; Portland, Oregon: Frank Cass, 1998), 4.Google Scholar
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33 Libecap, Contracting for Property Rights.
34 See, e.g., Libecap, Contracting for Property Rights; Hsu, “Fairness versus Efficiency”; Huber, “Transition Policy.” Another factor could be a psychological “endowment effect” according to which people weigh prospective losses more heavily than gains; see Kahneman, Daniel, Thinking Fast and Slow (New York: Farrar, Straus and Giroux, 2011), 289–99.Google Scholar
35 Hsu, “Fairness versus Efficiency,” 359; Merrill, Thomas W. “Explaining Market Mechanisms,” University of Illinois Law Review 275 (2000): 275–98;Google Scholar Dana, David and Koniac, Susan, “Bargaining in the Shadow of Democracy,” University of Pennsylvania Law Review 148 (1999) 478–560, at 483–84,CrossRefGoogle Scholar note 24, and sources cited therein.
36 Bruce Huber, “Transition Policy”; Huber, Peter, “The Old-New Distinction in Risk Regulation,” Virginia Law Review 69 (1983): 1025–1108, at 1075;CrossRefGoogle Scholar Serkin, Christopher, “Existing Uses and the Limits of Land Use Regulation,” New York University Law Review 84 (2009): 1222–91.Google Scholar
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40 “Property, Utility, and Fairness: Comments on the Ethical Foundations of Just Compensation Law,” Harvard Law Review 80 (1967): 1165–1258, at 1213 and 1241.
41 Takings jurisprudence in this area now includes a branch called “unconstitutional conditions,” originating with Nollan v. California Coastal Commission, 483 U.S. 825 (1987).
42 For the traditional tests, see Delaney, John J. and Gordon, Larry A., “The Needs-Nexus Analysis: A Unified Test for Validating Subdivision Exactions, User Impact Fees and Linkage,” Law and Contemporary Problems 50 (1987): 139–166, at 146–57.CrossRefGoogle Scholar
43 Koontz v. St. Johns River Water Management District, 133 Sup. Ct. 2586; compare Justice Kagan’s dissent, as well as Nolan, Sean F., “Bargaining for Development Post-Koontz: How the Supreme Court Invaded Local Government,” Florida Law Review 67 (2015): 171–219, at 203.Google Scholar
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45 Nectow v. City of Cambridge, 277 U.S 183 (1928) [Nectow].
46 In practice, Nectow ushered in a system of variances and other small-scale local zoning changes that caused much consternation in the planning community, though it is arguable that this system has legitimate advantages. See Rose, Carol M., “Planning and Dealing: Piecemeal Land Controls as a Problem of Local Legitimacy, California Law Review 71 (1983): 848–912, 857–63, 882–93.CrossRefGoogle Scholar
47 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) [Lucas].
48 Edwards Aquifer Authority v. Bragg, 421 S.W. 118 (2013; Tex. Ct. App, 4th Dist.); see also Gibbons, Brendan, “Edwards Aquifer Authority Must Shell Out to Pecan Farmers,” San Antonio Express-News, Feb. 22, 2016;Google Scholar Malewitz, Jim, “State Supreme Court Punts on Major Water Case,” Texas Tribune, May 1, 2015.Google Scholar
49 See, for example, Belza, Joseph, “Texas Takings Trap: How the Court in Edwards Aquifer v. Bragg Fell Into a Dangerous Pitfall of Takings Jurisprudence,” Boston College Environmental Affairs Law Review 43 (2016): 211–20.Google Scholar
50 Levmore, Saul, “Just Compensation and Just Politics,” Connecticut Law Review 22 (1990) 285–322, at 309,Google Scholar and sources cited therein. A related issue comes up in international relations, where outside investors fear being targeted by local politicians; here as a practical matter, restraints on uncompensated takings may allow developing countries to attract foreign investment by giving credible assurances to outside investors. For a somewhat critical analysis, see Sykes, Alan O., “Public versus Private Enforcement of International Economic Law: Standing and Remedies,” Journal of Legal Studies 34 (2005): 631–66.CrossRefGoogle Scholar
51 For “blindsiding,” see Cordes, Mark W., “The Fairness Dimension in Takings Jurisprudence,” Kansas Journal of Law and Public Policy 20 (2010): 1–57, at 39;Google Scholar for varied functions of property, see Rose, Carol M., “Property as the Keystone Right?” Notre Dame Law Review 71 (1996): 329–65.Google Scholar
52 Bentham, The Theory of Legislation, Civil Code, Ogden ed. (New York: Harcourt Brace, 1939), Part 1, chaps. 7–9.
53 Rose, Carol M., “Surprising Commons,” BYU Law Review (2013): 1257–82.Google Scholar
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56 Hadacheck v. Sebastian, 239 U.S. 394 (1915).
57 Lucas, 505 U.S. 1035 (Kennedy, concurring); Cordes, “Fairness Dimension,” 38–40.
58 Karkkainen, “Police Power,” 905–909; for a different view, Dreher, Robert G., “Lingle’s Legacy: Untangling Substantive Due Process from Takings Doctrine,” Harvard Environmental Law Review 30 (2006): 371–406.Google Scholar
59 Serkin, “Existing Uses,” 1251–52, citing several cases that focus on reasonable expectations about the future rather than the past.