PROPERTY E SLIDES

PROPERTY E SLIDES 2-12-13

Chapter 2: The Eminent Domain Power & the Public Use Requirement • Federal Constitutional Background • Deference, Rational Basis, Heightened Scrutiny • The Fifth Amdt., Eminent Domain & Public Use • Federal Public Use Standards • Midkiff • Kelo • State Public Use Standards • Poletown • Hatchcock

Chapter 2 : Eminent Domain: Some Policy Concerns • DQ31: Where Os Receive FMV & Democracy & Budgets Limit, Why Do We Need Other Limits on EmDom? • FMV Not Always Adequate Compensation • Problems with “Democracy & Budgets” as Limits on EmDom

Chapter 2 : Eminent Domain: Some Policy Concerns • Problems with Democracy & Budgets as Limits on Eminent Domain • Tendency to Select Land of Politically Weak • Placement of Sewage Disposal/Hazardous Waste • Fedl Interstate Highway Exchanges in Cities • Situations When Budgets Not at Issue • E.g., Federal Funds • E.g., Cross-Bronx Expressway • E.g., $$$ Not Coming from Govt(Midkiff & Kelo)

Chapter 2 : Eminent Domain: Some Policy Concerns Limits on Eminent Domain Power • Just Compensation • Democracy: Politics & $$$ • Public Use Requirement • DQ32: Addresses Concern About Govt Handing Out Prizes to Favored Individuals • Big Issue w British Monarchy

Chapter 2 : Eminent Domain: Some Policy Concerns Public Use Requirement: Meaning UNCLEAR: Use BY Public v. Use FOR Public • Easy Cases: Both true (schools, roads, post offices) • Harder Cases: One or the other • Use by public (but not for): E.g., Private theme park • Use for public (but not by): E.g., Military Base

Chapter 2 : Eminent Domain: Some Policy Concerns Public Use Requirement: Meaning UNCLEAR: Use BY Public v. Use FOR Public • 5thAmdt originally limited feds not states; seems unlikely that using EmDom for military bases would violate • Note that states interpreting own Constitutions can limit themselves more. E.g., can choose to adopt a “use by public” standard

Chapter 2 : Eminent Domain: Some Policy Concerns Public Use Requirement (DQ32) Ultimate Q: When OK for Govt to Force Sales? • Maybe “Public Use” Simply Trying to Ensure Benefit isn’t Personal or Corrupt • Maybe Since EmDom is Big Interference w Property Rights, Only Can Use If Really for Benefit of Public QUESTIONS?

Hawaii Housing Authority v. Midkiff • Background: Berman v. Parker • Challenged Hawaii Program • Analysis: Adoption of Rational Basis Standard

Background to Midkiff: Berman v. Parker • DC “Urban Renewal” Project: • Fixing “Blighted” N-hood • Forced Sales of Buildings to Redevelopers

Background to Midkiff: Berman v. Parker • DC “Urban Renewal” Project • US SCt. approves as “Public Use” transfer of land from one private party to another • Gives deference to US Congress plan • Once purpose w/in Congr authority, Congr. can choose means to implement (incl. EmDom) • Essentially reads “public use” to mean “benefits the public”

Midkiff: Challenged Program Perceived Problem: Market for Land Skewed • Immense landholding by few owners (S18) • Yields high prices; few transactions • Many lease who want to buy • Govtpartly responsible: tax consequences discourage sales

Midkiff: Challenged Program Perceived Problem: Market for Land Skewed • Immense landholding by few owners (S18) • State Wants More Active Land Market • Affects Labor Market • State Prefers Owners to Renters • Usually More Investment/Upkeep • Usually Greater Ties to Community

Midkiff: Challenged Program & DQ33 Program Designed to Aid Land Market • Forced Sale of Land: Landlords to Tenants • In practice, funds come entirely from lessees. • Requirements/Limitations • Sufficient # of tenants apply from same residential development • Public Hearing re furthering purpose of program • Eligibility Requirements for Buyers to prevent misuse by commercial developers

Midkiff: Challenged Program & DQ33 • Forced Sale of Land: Landlords to Tenants • DQ33: Relation to Purposes of Eminent Domain & Public Use? • (1) Avoids Transaction Costs • Breaks negotiation deadlock • Allows sales that might take place if no tax consequences

Midkiff: Challenged Program & DQ33 • Forced Sale of Land: Landlords to Tenants • DQ33: Relation to Purposes of Eminent Domain & Public Use? • (1) Avoids Transaction Costs • (2) How “Public Use”? • End Users Private Individuals • Not Everyone Eligible; Relatively Few Directly Benefit • Public Can’t Actually Use Parcels in Q

Midkiff: Challenged Program & DQ33 • Forced Sale of Land: Landlords to Tenants • DQ33: Relation to Purposes of Eminent Domain & Public Use? • (1) Avoids Transaction Costs • (2) How “Public Use”? • End Users Private Individuals • Not Everyone Eligible; Relatively Few Directly Benefit • Public Can’t Actually Use Parcels in Q • BUT: Arguably All Hawaiians Benefit Indirectly from Improved Land Market

Midkiff: Challenged Program & DQ35 • “After the American Revolution, the colonists in several States took steps to eradicate the feudal incidents with which large proprietors had encumbered land in the Colonies. Courts have never doubted that such statutes served a public purpose.” --FN5 • DQ35: Assume Justice O’Connor got this info from the briefs of the State of Hawaii or of one of the Amicus Curiae supporting the state. Why would the lawyers use valuable space in briefs to give the Court a history lesson?

Midkiff: Challenged Program & DQ35 DQ35: Why would lawyers use valuable space in briefs to give the Court a history lesson? • Meaning of “Land Reform” in 1984?

Midkiff: Challenged Program & DQ35 DQ35: Why would lawyers use valuable space in briefs to give the Court a history lesson? • Meaning of “Land Reform” in 1984 • Practice of Leftist Gov’ts in Latin America • Redistributing Land Rights from Large Owners to Peasants/Small Farmers • Generally Opposed by Reagan Administration

Midkiff: Challenged Program & DQ35 DQ35: Why would lawyers use valuable space in briefs to give the Court a history lesson? • Cf. Latin American “Land Reform” in 1984 • Provides Another Way to See Program • Evidence that OCR Buys Characterization • S17: “feudal land tenure system” • S20: The people of Hawaii have attempted, much as the settlers of the original 13 Colonies did, to reduce the perceived social and economic evils of a land oligopoly traceable to their monarchs.

Midkiff: Adoption of Rational Basis Test • Upholds Hawaii Program; Again Interprets “Public Use” to Simply Mean Benefit to Public • Extends/Explains Berman v. Parker inTwo Ways • Same deference given to states as feds • Govtnever has to possess land itself • No apparent limit to public use given for either 1 or 2 • Makes very clear it doesn’t want to assess wisdom of program. • Role for reviewing court is “extremely narrow” • Clear use of Rational Basis test

Midkiff: Adoption of Rational Basis Test: Key Language • “Court … will not substitute its judgment for a legislature’s judgment as to what constitutes a public use ‘unless the use be palpably without reasonable foundation.’” (S20) • “[W]here the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensated taking to be proscribed by thePublic Use Clause.” (S20)

Midkiff: Adoption of Rational Basis Test: Key Language Rationally Related = Very Deferential Standard • “Of course, this Act, like any other, may not be successful in achieving its intended goals. But ‘whether in fact the provision will accomplish its objectives is not the question: the [constitutional requirement] is satisfied if ... the ... [state] Legislature rationally could have believed that the [Act] would promote its objective.’” (S20)

Midkiff: Adoption of Rational Basis Test DQ34: Why shouldn’t the Supreme Court strike down a state exercise of Eminent Domain that is unlikely to achieve its stated ends? • “[T]he weighty demand of just compensation has been met” (S21) • Reasons for Deference We’ve Already Discussed: “[T]he legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation, whether itbe Congress legislating concerning the District of Columbia ... or the States legislating concerning local affairs.... This principle admits of no exception merely because the power of eminent domain is involved....” (S19 quoting Berman)

ApplyRational Basis Test to Facts of Midkiff Application of Rational Basis Test • Purpose of Program? • Legitimate? (Connected to Health, Safety, Welfare, Morals) • Program Rationally Related to Purpose?

LOGISTICS • Overall Sequence of Course Altered • Timing of Tested Chapter (Estates & Future Interests) • Need to do test before week of Passover/Easter • Tentative Test Date Thurs. March 21 • I’ll Let You Know ASAP • To Set Up Tested Chapter: • Intestacy & Wills Next • Do Adverse Possession & Landlord-Tenant After EFI

LOGISTICS • Long Mondays through March 18 (= 4 More) • Because I can’t run long on Tues & Thurs, Need 6 x 30 minutes extra to make up MLK + Passover • Seems best to do long class/extra material on day w/o other classes • Can bring food, etc. if need energy/focus to get through

LOGISTICS • Tighter Info on Daily Assignments • I’ll Update Assignment Sheet Tomorrow • I’ll Post on Course Page After Each Class: • How far we got • Anticipated Coverage for Next Class • Today: As much of Kelo as time allows • Thursday: Finish Kelo; Do Poletown; Start Review Problem 2B

ACADIA: Public Use & DQ36-38Rational Basis Test; KeloMajority & Concurrence Acadia Sunrise

ACADIA: Public Use & DQ36(a)ApplyRational Basis Test to Rev Prob 2A • “Texan Virtues” = Courage, Forthrightness and Moral Strength (Q for you: What are “Texan Vices”) • TX Legislature creates Virtuous Texan Commission • Chooses 3 Texans/Yr who best embody Texan Virtues. • Winners choose private property in TX worth up to $500,000 (more value in 1989 when I wrote Problem) • TX purchases chosen land for them at market value. • Problem designed to push even Rational Basis Test

ACADIA: Public Use & DQ36(a)ApplyRational Basis Test to Rev Prob 2A Application of Rational Basis Test • Purpose of Program? • Legitimate? (Connected to Health, Safety, Welfare, Morals) • Program Rationally Related to Purpose?

ACADIA: Public Use & DQ36(b)ApplyRational Basis Test to Facts of Kelo Application of Rational Basis Test • [Describe Program] • Purpose of Program? • Legitimate? (Connected to Health, Safety, Welfare, Morals) • Program Rationally Related to Purpose?

KELO : Majority OpinionHolding Appears Narrow • Upholds Specific New London Development Plan • Reaffirms Berman & Midkiff • Rejects Plaintiffs’ Claim that There Should Be Blanket Exception to Public Use Deference when EmDom Used for Economic Development

KELO : Majority OpinionHolding Appears Narrow • Reiterates points from earlier cases • Judge plan as a whole; don’t look at Individual Parcels • Ending up in private hands not absolute bar to Public Use • Private Ownership may be good way to accomplish goals • No requirement that public actually use

ACADIA: Public Use, Kelo Majority & DQ37 • Kelo majority gives legislatures “broad latitude in determining what public needs justify the use of the takings power.” • Remind Us re Deference in this Context: • Arguments Supporting Deference • Dangers of Deference

Public Use, Kelo & DQ38 • Kelo majority gives legislatures “broad latitude in determining what public needs justify the use of the takings power.” • What limits might there be to its deferential approach to public use? • I’ll go through points from Majority, then from Kennedy Concurrence • Apply Thurs  Mon in Review Problem 2B

DQ38: KELO Majority OpinionPossible Limits on Deference Include: • If purpose is purely private benefit, not OK (P182)

DQ38: KELO Majority OpinionPossible Limits on Deference Include: • If purpose is purely private benefit, not OK • Transfer from one citizen to another of one parcel b/c will put to more productive use: suspicious if outside integrated development plan (1st full para. P186)

DQ38: KELO Majority OpinionPossible Limits on Deference Include: • If purpose is purely private benefit, not OK • Transfer from one citizen to another of one parcel b/c will put to better use: suspicious w/o plan • Helpful Kelo facts listed (top P185): (could read as suggesting case might be problematic w/o)

DQ38: KELO Majority OpinionPossible Limits on Deference Include: • If purpose is purely private benefit, not OK • Transfer from one citizen to another of one parcel b/c will put to better use: suspicious w/o plan • Helpful Kelo facts listed (top P185): • State statute authorizing Eminent Domain to promote econ. development (not local gov’t making up “need”)

DQ38: KELO Majority OpinionPossible Limits on Deference Include: • If purpose is purely private benefit, not OK • Transfer from one citizen to another of one parcel b/c will put to better use: suspicious w/o plan • Helpful Kelo facts listed (top P185): • State statute authorizing • Comprehensive plan • Thorough deliberation

KELO : Majority Opinion QUESTIONS ON MAJORITY OPINION?

PROPERTY E SLIDES