The Volokh Conspiracy

Asset forfeiture laws in many states allow the police to seize property that has supposedly been used to commit a crime, and then keep the proceeds for themselves. Often, these laws victimize people who have not been convicted of any crime, and indeed did not even know that their property might have been misused. They also often give the owner little or no opportunity to challenge the seizure, thereby flagrantly violating the Due Process Clause of the Fourteenth Amendment. Needless to say, such perverse incentives lead to many abuses, as documented in a 2010 report by the Institute for Justice.

Two excellent recent articles by George Will and Radley Balko describe some particularly egregious examples.

Here is Will:

Russ Caswell, 68, is bewildered: “What country are we in?” He and his wife, Pat, are ensnared in a Kafkaesque nightmare unfolding in Orwellian language….

In the lawsuit titled United States of America v. 434 Main Street, Tewksbury, Massachusetts, the government is suing an inanimate object, the motel Caswell’s father built in 1955. The U.S. Department of Justice intends to seize it, sell it for perhaps $1.5 million and give up to 80 percent of that to the Tewksbury Police Department, whose budget is just $5.5 million. The Caswells have not been charged with, let alone convicted of, a crime. They are being persecuted by two governments eager to profit from what is antiseptically called the “equitable sharing” of the fruits of civil forfeiture, a process of government enrichment that often is indistinguishable from robbery….

Since 1994, about 30 motel customers have been arrested on drug-dealing charges. Even if those police figures are accurate — the police have a substantial monetary incentive to exaggerate — these 30 episodes involved less than 5/100ths of 1 percent of the 125,000 rooms Caswell has rented over those more than 6,700 days. Yet this is the government’s excuse for impoverishing the Caswells by seizing this property, which is their only significant source of income and all of their retirement security.

The government says the rooms were used to “facilitate” a crime. It does not say the Caswells knew or even that they were supposed to know what was going on in all their rooms all the time. Civil forfeiture law treats citizens worse than criminals, requiring them to prove their innocence — to prove they did everything possible to prevent those rare crimes from occurring in a few of those rooms. What counts as possible remains vague. The Caswells voluntarily installed security cameras, they photocopy customers’ identifications and record their license plates, and they turn the information over to the police, who have never asked the Caswells to do more.

Balko describes an equally ridiculous case:

When the Brown County, Wis., Drug Task Force arrested her son Joel last February, Beverly Greer started piecing together his bail….

“The police specifically told us to bring cash,” Greer says. “Not a cashier’s check or a credit card. They said cash.”

So Greer and her family visited a series of ATMs, and on March 1, she brought the money to the jail, thinking she’d be taking Joel Greer home. But she left without her money, or her son.

Instead jail officials called in the same Drug Task Force that arrested Greer. A drug-sniffing dog inspected the Greers’ cash, and about a half-hour later, Beverly Greer said, a police officer told her the dog had alerted to the presence of narcotics on the bills — and that the police department would be confiscating the bail money.

“I told them the money had just come from the bank,” Beverly Greer says. “We had just taken it out. If the money had drugs on it, then they should go seize all the money at the bank, too. I just don’t understand how they could do that….”

It took four months for Beverly Greer to get her family’s money back, and then only after attorney Andy Williams agreed to take their case. “The family produced the ATM receipts proving that had recently withdrawn the money,” Williams says. “Beverly Greer had documentation for her disability check and her tax return. Even then, the police tried to keep their money….”

Civil asset forfeiture is based on the premise that a piece of property — a car, a pile of cash, a house — can be guilty of a crime. Laws vary from state to state, but generally, law enforcement officials can seize property if they can show any connection between the property and illegal activity. It is then up to the owner of the property to prove in court that he owns it or earned it legitimately. It doesn’t require a property owner to actually be convicted of a crime. In fact, most people who lose property to civil asset forfeiture are never charged. …

Although Mrs. Greer was able to recover her money, authorities in Wisconsin and elsewhere continue to seize cash based on “alerts” by drug-sniffing dogs, that can be extremely misleading:

But even in the odd world of asset forfeiture, the seizure of bail money because of a drug-dog alert raises other concerns. In addition to increasing skepticism over the use of drug-sniffing dogs, studies have consistently shown that most U.S. currency contains traces of cocaine. In a 1994 ruling, for example, the U.S. 9th Circuit Court of Appeals cited studies showing that 75 percent of U.S. currency in Los Angeles included traces of narcotics. In 2009, researchers at the University of Massachusetts analyzed 234 bills collected from 18 cities, and found that 90 percent contained traces of cocaine….

Stephen Downing, a retired narcotics cop who served as assistant police chief in Los Angeles, says it isn’t surprising that a drug dog would alert to a pile of cash, since it usually has traces of drugs.

“I’d call these cases direct theft. They’re hijackings,” says Downing, who is now a member of Law Enforcement Against Prohibition, an organization of former police and prosecutors who advocate ending the drug war.

Downing says he recently consulted a medical marijuana activist in California who was told to bring his bail money in cash, despite the fact that state law allows payment with a cashier’s check, a registered check or a credit card. “It makes me wonder if this seizing of bail is a new idea getting shopped around in law enforcement circles.”

While the details of these abuses vary, the underlying problem is the same: an asset forfeiture system that allows law enforcement agencies to seize the property of the innocent and then keep the loot for themselves. This predictably leads to a situation where many take the property first and only ask questions later – if at all. As Balko points out, low-income property owners are particularly likely to be victimized, because they often lack the funds to hire a lawyer to contest the seizure and state law often does not pay for a public defender in these cases.

CONFLICT OF INTEREST WATCH: I have done pro bono work on other cases for the Institute for Justice, which is representing the property owner in the Tewksbury case.

UPDATE: I wrote this post before noticing Jonathan Adler’s earlier post on the same subject. I am leaving this post up because it goes into much more detail. Also, I disagree with Jonathan’s statement that this sort of abuse is “constitutional.” The Supreme Court ruled that it was in Bennis v. Michigan. But I think the dissenters in that case (a cross-ideological coalition of Justices Kennedy and Stevens) got it right.

Moreover, Bennis held merely that the seizure of innocent owners’ property does not automatically violate the Due Process Clause. It did not rule on the Due Process Clause issues that arise when the authorities seize the property with little or no evidence that it actually was used in a crime, or when they fail to give the owner a meaningful and prompt opportunity to challenge the seizure in court. In a 2009 case, the Supreme Court planned to address the latter issue, but ended up dismissing the case as moot.

UPDATE #2: In an update to his post, Jonathan clarifies that he too is sympathetic to many of the arguments made by the Bennis dissenters. For my part, I agree with him that not every morally objectionable forfeiture practice is necessarily unconstitutional.

Radley Balko reports on fairly severe asset forfeiture abuse in Wisconsin. In short, after a woman’s son was arrested, the police told her she had to pay for his bail in cash (which was untrue). Then, when she showed up with the money, most of which she had just withdrawn from ATMs, the police seized the money under the state’s asset forfeiture law because a drug-sniffing dog detected traces of drugs on the money. Even with the help of an attorney, it took four months for the woman to get her money back. It’s bad enough that this sort of abuse is constitutional. It’s even worse that Wisconsin law enforcement would act this way.

UPDATE: Speaking of asset forfeiture abuse, George Will had a column last week on another disturbing case.

SECOND UPDATE: Given Ilya’s post above, I thought I’d add a slight clarification. When I wrote that asset forfeiture is “constitutional” as currently practiced, I meant this as shorthand for “constitutional under existing Supreme Court doctrine.” Like Ilya, I am quite sympathetic to the dissenters in Bennis v. Michigan, and suspect much civil asset forfeiture would transgress a proper application of the due process clause, though I have not delved sufficiently deeply into this area to have a more fully-formed view on the limits the due process clause places on asset forfeiture. That many current practices are outrageous does not necessarily mean that they are unconstitutional.

In the recent case of Bowlby v. City of Aberdeen, the Fifth Circuit Court of Appeals just ruled that Fourteenth Amendment Due Process Clause property rights claims can be filed in federal court, despite the fact that the Supreme Court’s 1985 Williamson County decision bars many Takings Clause property rights claims from federal courts.

Robert Thomas of the Inverse Condemnation blog has a good summary of the relevant issues:

If you tried to explain the practical results of Williamson County’s ripeness requirements to someone not familiar in the last 30 years of regulatory takings jurisprudence, they would probably think you were joking….

[U]nder Williamson County, a property owner alleging a violation of her express federal constitutional right prohibiting takings without just compensation cannot bring that federal constitutional claim in a federal court. Instead, she is first required to present her state claim for compensation to a state court before she can even think of a federal action. And if she loses in state court, she will be deemed to have also litigated the federal claim, even if she expressly did not. Williamson County’s rationale was that there is no violation of the Fifth Amendment by a state or local government unless and until the property owner could both show that there was a taking, and that the state had denied compensation. So, you see, you have to lose your state takings claim to ripen your federal takings claim….

Williamson County gets particularly bizarre when courts extend it beyond the takings clause, since what thin justification exists for the rule is grounded in the language of the Fifth Amendment. Yet, the lower federal courts regularly apply it to Equal Protection and Due Process Claims, somehow transforming Williamson County from a limited takings requirement to a full-blown bar to the federal courthouse door for any plaintiff alleging a property-related claim….

Well, in Bowlby v. City of Aberdeen, No. 11-60279 (May 14, 2012), the U.S. Court of Appeals for the Fifth Circuit provided a different view, and injected a modicum of reality into the strange world of Williamson County. We won’t go too far into the case’s details, except to say that the plaintiff had a business permit, which the City summarily revoked. She sued in federal court for a taking and for procedural due process and equal protection violations, and the court promptly dismissed her complaint under Williamson County. She did not pursue an appeal of the takings dismissal, but asserted that Williamson County’s state litigation requirement of that case did not require dismissal of the due process or equal protection claim…..

The Fifth Circuit reversed, concluding that Williamson County is applicable only to takings claims, and not due process or equal protection [property rights] claims.

The Fifth Circuit is correct in ruling that there is precedent indicating that Takings Clause claims are treated differently from Due Process Clause and equal protection claims (see pp. 10-11 of the opinion). On the other hand, the logic of Williamson County is broad enough to cover not only other types of property rights cases, but nearly all constitutional rights claims against state and local governments. For example, if a state government tries to suppress an individual’s freedom of speech, we could require him to sue in state court because the government action might turn out to have been illegal under state law, or a violation of the state constitution. The same goes for any action by state or local government that might violate the federal constituion: there’s always a chance that a state court might strike it down as a violation of state law. Williamson County ruled that this possibility requires takings claims to be litigated in state court and then (in most cases) barred from federal court even if the property owner loses her state case. But the same “logic” readily applies to most other constitutional cases against state and local governments.

As I explained here, this arbitrary singling out of takings cases is one more example of the second class status of property rights in modern constitutional jurisprudence. In the 2005 San Remo case, four justices – including Justice Kennedy and Justice O’Connor, joined Chief Justice William Rehnquist’s concurring opinion arguing that the Court should reverse Williamson County and allow Takings Clause cases the same access to federal courts routinely extended to citizens asserting other violations of other constitutional rights:

The Court.. remark[s], that state courts are more familiar with the issues involved in local land-use and zoning regulations, and it suggests that this makes it proper to relegate federal takings claims to state court. Ante, at 23. But it is not apparent that any such expertise matches the type of historically grounded, federalism-based interests we found necessary to our decision in Fair Assessment. In any event, the Court has not explained why we should hand authority over federal takings claims to state courts, based simply on their relative familiarity with local land-use decisions and proceedings, while allowing plaintiffs to proceed directly to federal court in cases involving, for example, challenges to municipal land-use regulations based on the First Amendment….

Williamson County’s state-litigation rule has created some real anomalies, justifying our revisiting the issue. For example, our holding today ensures that litigants who go to state court to seek compensation will likely be unable later to assert their federal takings claims in federal court….

I joined the opinion of the Court in Williamson County. But further reflection and experience lead me to think that the justifications for its state-litigation requirement are suspect, while its impact on takings plaintiffs is dramatic.

Hopefully, the Supreme Court will eventually change its position on this issue, much as Rehnquist did.

UPDATE: Joshua Thompson of the Pacific Legal Foundation has more information about the case here. PLF filed an amicus brief supporting the property owner, which was extensively relied on by the Fifth Circuit in its decision.

UPDATE #2: Since property rights issues often split jurists along ideological lines, it is perhaps worth noting that all three judges on this panel were Democratic appointees.

UPDATE #3: I should briefly explain why it matters that these cases be able to go forward in federal court rather than state court. In many cases, state judges will protect federal constitutional rights just as well as federal courts do. In some situations, however, that will not be the case, either because the state judges are less competent than their federal counterparts or because they are less willing to uphold claims against the state government that they serve. The latter is particularly likely in cases where state judges (many of whom are elected) are part of the same political coalition as the state officials whose actions are being challenged as unconstitutional. As the Supreme Court explained in the famous case of Martin v. Hunter’s Lessee (1816):

It is… argued, that no great public mischief can result from a construction which shall limit the appellate power of the United States to cases in their own [federal] courts…. [A]dmitting that the judges of the state courts are, and always will be, of as much learning, integrity, and wisdom, as those of the courts of the United States, (which we very cheerfully admit,) it does not aid the argument. It is manifest that the constitution has proceeded upon a theory of its own…. The constitution has presumed…. that state attachments, state prejudices, state jealousies, and state interests, might sometimes obstruct, or control, or be supposed to obstruct or control, the regular administration of justice. Hence, in controversies between states; between citizens of different states; between citizens claiming grants under different states; between a state and its citizens, or foreigners, and between citizens and foreigners, it enables the parties, under the authority of congress, to have the controversies heard, tried, and determined before the national tribunals.

Richmond Times-Dispatch columnist A. Barton Hinkle recently published this piece on a case of eminent domain abuse in Virginia:

As a general rule, progressives do not get worked up about property rights the way conservatives do. This is a mistake — as a case out of Norfolk shows.

To the progressive eye, property is bound up with materialism and wealth and greed and other yucky things. But property is also bound up with some things progressives hold dear. And even progressives were outraged when, in its 2005 Kelo decision, the Supreme Court said governments could take property from the poor and give to the rich.

That is what has been happening in Norfolk, where the city’s Redevelopment and Housing Authority has been using eminent domain to take dozens of pieces of private property for resale to a foundation run by Old Dominion University. The housing authority has been collecting commissions on the sales; the foundation has then been turning the property over to developers for their use as part of a swanky new University Village.

Among those properties is the building that houses Central Radio, whose story was detailed here back in May 2010. Some years ago, Norfolk offered to buy the property for a lowball price of $700,000 (more than a decade before, a developer had offered more than $1 million). Central Radio’s president, Bob Wilson, turned the city down. So the city slapped a spurious designation of “blighted” on the property and condemned it.

Norfolk couldn’t get away with that today. Virginia’s General Assembly has sharply curtailed such abusive use of eminent domain, precisely because of cases such as this one and others like it….

But the legislature’s changes to eminent-domain law included a grandfather clause, allowing Norfolk to proceed. Wilson is naturally cheesed off. He has vented his frustration by putting up on the side of his building a protest banner. (“50 years on this street,” it reads. “78 years in Norfolk. 100 workers. Threatened by eminent domain.” The words “eminent domain abuse” are surrounded by a red circle with a slash through it.)

But Norfolk officials apparently feel it is not enough to take away Wilson’s property. They also are trying to take away his right to free speech, by insisting that his banner violates the city’s sign ordinance….

Hinkle correctly notes that this is just one of several recent cases around the country in which local governments and influential developers not only engaged in dubious takings, but also tried to prevent property owners from speaking out against them. As he also points out, Virginia is one of a minority of states that has enacted strong post-Kelo eminent domain reform that will constrain abusive condemnations in the future. But as I documented in this article, in many other states reform still has a long way to go. Even in Virginia, eminent domain reform will not be fully secure in the long run until it has been incorporated into the state constitution, as well as statutory law.

Because blight and “economic development” takings tend to victimize the poor and politically weak for the benefit of the wealthy and politically powerful, they have generated widespread opposition on the left as well as the right. We will need greater cross-ideological cooperation on this issue to fully address the problem.

The New York Times has an article describing how the TransCanada corporation is using eminent domain to forcibly acquire property to build the Keystone oil pipeline:

When the TransCanada men first came, Julia Trigg Crawford said, they were polite. They offered money. Seven thousand dollars to let the Keystone XL pipeline cross her family’s 600-acre farm on its way from the Alberta tar sands to the refineries on the Gulf Coast….

Ms. Crawford, 52, who serves as the farm’s manager, called the rest of the family. They agreed to sign. “We thought that at least if we signed we’d have some say in what happened,” she said.

They called the TransCanada representative. “He told us that if we could come up with a contract that worked for both parties, they wouldn’t condemn the land,” Ms. Crawford said…..

“I fully expected them to counter,” she said. “There were about five or six things we wanted, and we would have been happy to take one or two.”

Then, she said, TransCanada “went full radio silence.” The Crawfords never heard back from them — until October, when they got a letter saying their land had been condemned and a lease awarded to TransCanada.

But as the Crawfords discovered, when voluntary compensation agreements are not reached, Texas law allows certain private pipeline companies to use the right of eminent domain to force landowners to let pipelines through. This was true even for TransCanada, which has yet to get State Department permission to bring the Keystone XL across the Alberta border.

The article notes TransCanada’s claim that it has acquired the overwhelming majority of the property they needed for the pipeline through voluntary land sales. This may be true, but it is misleading. Like the Crawfords, these owners agreed to sell their land under the threat of eminent domain if they refused. Some might well have refused to sell for the price offered by the firm if eminent domain were off the table. The voluntariness of land sales undertaken in the shadow of threats of condemnation is dubious at best.

Back in 2006, co-blogger Jonathan Adler and I published an article explaining the environmental dangers of allowing the use of eminent domain for private economic development projects, as the Supreme Court ruled in the Kelo case. At the time, some environmentalists pooh-pooed the article, and one group even declared our article the environmental “outrage of the month” (it must have been a slow month for actual pollution). Ironically, as Jonathan explained here, several environmental groups are now trying to use post-Kelo reform laws restricting economic development takings to block the Keystone takings.

Such efforts are unlikely to succeed in Texas. As I described in this article, Texas is one of many states that have passed post-Kelo reform laws that pretend to constrain economic development takings without actually doing so. They might have a better chance in one of the other states through which the pipeline must pass.

Even if Kelo had been decided the other way, some pipeline takings might still be constitutional. The Constitution permits takings for “public use,” and even under the traditional definition of public use advocated by Kelo’s critics, condemnations for public utilities or common carriers that the general population has a legal right of access to are often permissible. However, pipeline takings would be subject to tougher constitutional constraints than under Kelo, and the government would at least have to prove that the pipelines in question really are public utilities or common carriers open to the general public.

Regardless, as Jonathan points out, the controversy over Keystone has led “some environmentalists… to recognize that allowing the government to seize private property for the purpose of encouraging private economic development can facilitate environmentally undesirable projects.”

UPDATE: In a response to this post, Mark Kleiman claims that Jonathan Adler and I “don’t seem interested in the fact that none of their friends on the side of inalienable property rights seems to have any problem with the use of eminent domain to build Keystone (any more than they objected to George W. Bush’s use of it to enrich himself and his business partners in the Texas Rangers by seizing private property to build, not merely a stadium, but a shopping mall).” Actually, people who are genuinely “on the side of inalienable property rights” are likely to be opposed to the use of eminent domain for this project. But if Kleiman means to refer to the GOP, I thought the fact that most Republicans support the pipeline is too well-known to require dwelling on. By contrast, (some) environmentalists’ change of heart on eminent domain is a development that is much less widely appreciated.

I have, however, criticized eminent domain abuses advocated by Republicans in many previous posts, such as here and here. In this 2006 post, I noted the inadequacy of the Bush administration’s response to Kelo. Few if any opponents of Kelo approve of the use of eminent domain to build sports stadiums. George W. Bush’s exploitation of it, of course, occurred many years before Kelo thrust the issue of eminent domain into the limelight, and few nonexperts remember it today.

Although I’m a strong advocate of property rights, I agree with most of what Georgetown political philosopher Jason Brennan says on the subject at the Bleeding Heart Libertarian blog:

The left believes that libertarians believe:

Property Rights No Matter What: People are self-owners. Respecting their self-ownership requires a particular kind of laissez-faire property-rights regime. We should have that regime no matter what, even if it immiserates the poor and systematically leads to widespread poverty.

In fact, hardly any self-described libertarians believe this. Instead, in one way or another, most believe that a system of property rights is supposed to solve real human problems and make our lives better. Most libertarians advocate free markets and property right in large part because they think this will tend to make people’s lives go better.

The left wants us to have a debate over whether “property rights no matter what” is true. They’ll win that debate.

What we’re trying to say in this blog is that if you look carefully at what the (smart) left means by “social justice”, almost all us classical liberals and self-described libertarians count as caring about social justice.

At least as a matter of moral theory, it’s a bad idea for libertarians to defend absolute property rights regardless of consequences. Doing so is both intellectually weak and unlikely to persuade anyone not already strongly sympathetic to libertarianism. The defender of absolute property rights will have to face painful hypotheticals such as the following:

What if redistributing a tiny fraction of George Soros or Rupert Murdoch’s fortune is the only way to save 1000 innocent people from starvation through no fault of their own? What if the only way to save the world from an asteroid strike is to violate the property rights of some misanthropic individual who doesn’t care if civilization is wiped out?

As I have pointed out previously, libertarian property rights absolutists are not the only ones who face such problems. The same issue arises with any theory of absolute rights:

Let’s say you believe that torture is always wrong. Then you would not resort to it even in a case where relatively mild torture of a terrorist is the only way to prevent a nuclear attack that kills millions. What if you think that it’s always wrong to knowingly kill innocent civilians? Then you would oppose strategic bombing even if it were the only way to defeat Nazi Germany in World War II. How about absolute rights to freedom of political speech? If you are committed to them, that means you oppose censorship even if it’s the only way to prevent Nazi or communist totalitarians from coming to power and slaughtering millions.

But the fact that advocates of other ideologies run into similar problems when advocating absolute rights is no reason for libertarians to replicate their mistakes.

Rejecting absolute rights as a matter of moral theory does not mean we should always reject them as a matter of policy. Political realities such as slippery slope problems, interest group power, and knowledge limitations might justify absolute prohibitions against some types of behavior even though there may be rare instances where it is actually justified. For example, while I recognize that there are rare cases where Kelo-style “economic development” takings cause more benefit than harm, I am skeptical that real-world governments subject to interest group lobbying are likely to confine their use to these unusual cases. For that reason, I favor an absolute ban on economic development condemnations in the real world, even though I would prefer a different policy if we had a completely benevolent government with perfect information. Similarly, one can favor an absolute ban on torture on the grounds that cases where it is the best way to prevent massive terrorist attacks are extremely rare, and real-world governments are unlikely to confine its use to those cases if given the opportunity to engage in it.

Rejection of absolutist rights theories also does not require us to be pure utilitarian consequentialists. While I would be willing to sacrifice free speech or property rights in order to stave off disaster, that doesn’t mean I have to sacrifice property rights for small increases in economic efficiency or free speech to protect oversensitive people from the psychic pain of exposure to opinions they find highly offensive – even in cases where potential offended listeners derive greater utility from censorship than the would-be speakers would from expressing their views.

Finally, while I agree with Jason’s major point, I’m only partially convinced by his characterizations of both libertarians and left-liberals. As he recognized earlier in his post, there are some “hard libertarians” who do support absolute property rights completely independent of consequences, or at least claim to do so. On the left, there are many who define “social justice” in terms of a broad ideal of economic equality that goes far beyond attention to utilitarian considerations, and concern for the plight of the innocent poor. Even if liberals and libertarians agreed on empirical issues, the differences between the two ideologies wouldn’t disappear completely. But they would surely decrease by a lot. Regardless, a libertarianism that eschews absolute rights theory is both sounder and more likely to win converts than one that is indifferent to consequentialist considerations.

Famed property scholar Richard Epstein recently wrote an interesting post on an important Just Compensation Clause case that the Supreme Court is now considering whether to take:

[W]hen government [condemns private property] … it must pay just compensation to the landowner for the value of the property taken. That guarantee will, however, surely be eviscerated if the state is free to set compensation below actual value. To avert that evasion, the United States Supreme Court held in 1893 that in condemnation cases, “the compensation must be a full and perfect equivalent for the property taken.” In an 1878 decision, the Court had previously elaborated on this standard as follows: “The inquiry in such cases must be what is the property worth in the market, viewed not merely with reference to the uses to which it is at the time applied, but with reference to the uses to which it is plainly adapted; that is to say, what is it worth from its availability for valuable uses.”

The point here is simple enough. The value of property in all circumstances depends on the future uses to which it can be put. It is those potential uses that determine its value. To measure property values in ways that neglect that future development is to allow the government to take property at bargain prices….

Unfortunately, this lesson has been lost on the New York courts in River Center, LLC v. Dormitory Authority of the State of New York (DASNY) (2010). A petition for certiorari seeking to revisit the restrictive interpretation of the just compensation requirement in that case was filed by Harvard Law Professor Laurence Tribe. To show the broad nature of the appeal, that petition was supported by separate amicus briefs, one signed by former Attorney General Edwin Meese and a second by myself. This is an issue on which liberal, conservative and libertarian all see eye to eye.

The River Center dispute arose out of the condemnation of a valuable one-block site located in New York City several blocks south of Lincoln Center on New York City’s bustling West Side for a new dormitory for John Jay College… As Tribe wrote in his petition: “The developer at the time of the condemnation had invested years of work and many millions of dollars above the secured debt. By its legal rulings the New York Court has permitted all of this value and all of this investment in a rising market to be taken without compensation. . .”

The technique used to work this governmental sleight of hand was simple. The New York state courts treated this prime real estate site in active development as though it were “vacant land” on the ground that the arduous development progress would not come “to fruition in the near future….”

The New York courts dismissed as “speculative” all of the developer’s work in securing permits, preparing the site, obtaining interim financing and developing a viable marketing plan. That argument might make sense in those cases where there was no market indication of present value. But the real estate market is active in New York City and projects like this are always attractive to private investors who see risky, but large, returns down the road.

One of the few issues on which takings scholars across the political spectrum mostly agree on is that the Just Compensation Clause of the Fifth Amendment requires the government to at least pay market value for condemned property. There is disagreement over whether it should have to pay more than market value to compensate owners for loss of “subjective value” they attach to the property above its market price. But there is a broad consensus that the state should at least pay the market value. That’s why Richard Epstein, Laurence Tribe, and Edwin Meese all agree on this case.

And the market value of any property surely includes expected future uses, including uses that may not be 100% likely to occur. To be sure, the lower the likelihood of the future use, the less the possibility of it happening will add to the market value of the land in question. But that is no justification for excluding potential future uses from the market value calculation entirely.

If New York officials are allowed to get away with such shenanigans, they will be able to strategically time condemnations in order to lowball owners with potentially valuable future projects that have not yet come to fruition.

The Supreme Court today decided not to hear Harmon v. Kimmel, an important case addressing the question of whether rent control can ever amount to a taking requiring compensation under the Fifth Amendment. I previously blogged about the case in this post, where I urged the Court to consider the issue, and rule that rent control can be a taking, at least in a case like this one where the property owner is required to continue renting the property indefinitely, even if he or she would prefer to devote the land to a different use. I also pointed out that there are other ways of providing affordable housing for the poor that are much more effective than rent control, and create fewer harmful side effects.

The case had been relisted by the Court, which suggests that at least some of the justices were taking an interest in it. Hopefully, the Court will revisit this issue in the future.

In this recent Wall Street Journal op ed, historian David Beito and economist Daniel Smith explain how respect for property rights enabled the city of Joplin, MO to recover from a devastating tornado much faster than similarly stricken Tuscaloosa, Alabama, which severely restricted property rights in order to pursue a “top-down” redevelopment plan:

Last April 27, one of the worst tornadoes in American history tore through Tuscaloosa, Ala., killing 52 people and damaging or destroying 2,000 buildings. In six minutes, it put nearly one-tenth of the city’s population into the unemployment line. A month later, Joplin, Mo., suffered an even more devastating blow. In a city with half the population of Tuscaloosa, a tornado killed 161 and damaged or destroyed more than 6,000 buildings….

n Joplin, eight of 10 affected businesses have reopened, according to the city’s Chamber of Commerce, while less than half in Tuscaloosa have even applied for building permits, according to city data we reviewed. Walgreens revived its Joplin store in what it calls a “record-setting” three months. In Tuscaloosa, a destroyed CVS still festers, undemolished. Large swaths of Tuscaloosa’s main commercial thoroughfares remain vacant lots, and several destroyed businesses have decided to reopen elsewhere, in neighboring Northport.

The reason for Joplin’s successes and Tuscaloosa’s shortcomings? In Tuscaloosa, officials sought to remake the urban landscape top-down, imposing a redevelopment plan on businesses. Joplin took a bottom-up approach, allowing businesses to take the lead in recovery….

The Alabama city’s recovery plan, “Tuscaloosa Forward,” is indeed state-of-the-art urban planning—and that’s the crux of the problem. It sets out to “courageously create a showpiece” of “unique neighborhoods that are healthy, safe, accessible, connected, and sustainable,” all anchored by “village centers” for shopping (in a local economy that struggles to sustain current shopping centers). Another goal is to “preserve neighborhood character” from a “disproportionate ratio of renters to owners.” The plan never mentions protecting property rights.

In Joplin, the official plan not only makes property rights a priority but clocks in at only 21 pages, compared with Tuscaloosa’s 128. Joplin’s plan also relied heavily on input from businesses (including through a Citizen’s Advisory Recovery Team) instead of Tuscaloosa’s reliance on outside consulting firms. “We need to say to our businesses, community, and to our citizens, ‘If you guys want to rebuild your houses, we’ll do everything we can to make it happen,’” said Joplin City Council member William Scearce in an interview.

Instead of encouraging businesses to rebuild as quickly as possible, Tuscaloosa enforced restrictive zoning rules and building codes that raised costs—prohibitively, in some cases. John Carney, owner of Express Oil Change, which was annihilated by the storm, estimates that the city’s delays and regulation will cost him nearly $100,000. And trying to follow the rules often yielded mountains of red tape, as the city rejected businesses’ proposals one after another….

Joplin took a dramatically different approach. According to interviews with local business owners, right after disaster struck the city council formally and informally rolled back existing regulations, liberally waving licensing and zoning mandates….

The owner of one Joplin construction company told us that when it came to regulations, the “city just sort of backed out. . . . We had projects that we completed before we got building permits.” Said another Joplin resident: “When you have the magnitude of that disaster, really the old ways of doing things are suspended for a while until you create whatever normal is. . . . The government was realistic to know that there is a period of time when common sense, codes and laws that are in place to protect people are suspended for the sake of the greater good.”

UPDATE: In the original version of this post, I accidentally omitted the name of one of the co-authors of the WSJ op ed: economist Daniel Smith. I have now corrected the mistake.

This Thursday at 4 PM, I will be speaking on “Property Rights Since Kelo” at Tulane Law School. Thanks to the Tulane Federalist Society for inviting me.

Much has happened on both the legislative and judicial fronts in the last few years. Considerable progress has been made in protecting property rights against abusive takings, but much work remains to be done in many states. I intend to give the audience a bird’s-eye survey of the good, the bad, and the ugly alike!

Scott Johnson (PowerLine) reports on this very interesting case (United States v. $35,131.00 in United States Currency (S.D. Tex. Apr. 2, 2012)). I’m not sure whether the opinion is legally sound — this is far from my area of expertise — but I thought I’d pass it along, and I’d love to hear what others who know this area of the law have to say:

1. Introduction.

At the airport, federal officers confiscated $35,131 from a family flying to Ethiopia. They said that the couple intentionally attempted to evade the reporting requirements for taking money outside of the United States. The citizens clearly had no intention to violate the rules, and the government must return their money and pay for their attorney’s fees and costs of court.

Continue reading ‘“Opinion on Void Seizure”’ »

Among this morning’s cert grants was Arkansas Game & Fish Commission v. United States, which asks whether temporary yet repeated flooding can constitute a compensable taking under the Fifth Amendment.  I blogged about this case last week here.

Among the cases up for consideration at the Supreme Court’s conference on Friday is Arkansas Game & Fish Commission v. United States, which seeks review of an interesting takings case out of the U.S. Court of Appeals for the Federal Circuit.  In short, the case concerns whether the temporary flooding of property can constitute a taking for which compensation is required under the Fifth Amendment.  A divided panel of the Federal Circuit said no, holding that flooding can only effect a taking if it constitutes “an actual permanent invasion of the land, amounting to an appropriation of and not merely an injury to the property.”  As the petitioners and various amici notes, and Judge Newman argued in dissent, this is a difficult holding to square with prior Court decisions that temporary takings can be compensable.

Environmentalist groups are not  usually very sympathetic to takings claims.  Most such groups adamantly oppose compensation for regulatory takings, often out of fear that a compensation requirement would make environmental regulation too costly.  Environmentalists have also been late to consider the potential environmental consequences of eminent domain.  This case, however, presents a clear example of how enabling the federal government to evade the Fifth Amendment’s compensation requirement can facilitate environmental harm, and it does so without raising the sorts of regulatory takings claims that typically give environmentalists such fits.

The substantive argument in this case is that the flooding of land is the sort of physical occupation that can constitute a taking, even if it is only temporary.  The land at issue in this case is a wildlife management area.  The repeated flooding of this land by the U.S. Army Corps of Engineers has caused substantial damage and destroyed valuable wildlife habitat. Were the flooding recognized as a taking — albeit a temporary taking — the Army Corps might be less quick to flood such lands in pursuit of other policy goals.  Undeveloped land, such as wildlife habitat, is already more vulnerable to governmental expropriation than is more developed land because it’s cheaper.  But if the government does not have to pay for the temporary occupation of such land at all, it’s cheaper still.  The Court does not often agree to hear takings cases from the Federal Circuit, but given all the patent cases its heard in the past few years, perhaps it’s time for a slight change of pace.

The Supreme Court today issued a unanimous decision in favor of the property owners in the important case of Sackett v. EPA [HT: GMU law student Matthew Roberts]. The opinions in the case (an opinion for the court and two concurring opinions by Justices Ginsburg and Alito) are available here. Justice Alito’s concurring opinion includes a particularly clear description of what was at stake:

The position taken in this case by the Federal Government—a position that the Court now squarely rejects—would have put the property rights of ordinary Americans entirely at the mercy of Environmental Protection Agency(EPA) employees.

The reach of the Clean Water Act is notoriously unclear. Any piece of land that is wet at least part of the year is in danger of being classified by EPA employees as wetlands covered by the Act, and according to the Federal Government, if property owners begin to construct a home on a lot that the agency thinks possesses the requisite wetness, the property owners are at the agency’s mercy. The EPA may issue a compliance order demanding that the owners cease construction, engage in expensive remedial measures, and abandon any use of the property. If the owners do not do the EPA’s bidding, they may be fined up to $75,000 per day ($37,500 for violating the Act and another $37,500 for violating the compliance order). And if the owners want their day in court to show that their lot does not include covered wetlands, well, as a practical matter, that is just too bad. Until the EPA sues them, they are blocked from access to the courts, and the EPA may wait as long as it wants before deciding to sue. By that time, the potential fines may easily have reached the millions. In a nation that values due process, not to mention private property, such treatment is unthinkable.

The Court bases its decision on statutory grounds, ruling that the property owners are entitled to judicial review of their case under the Administrative Procedure Act. It therefore did not reach the issue of whether such review is also required by the Due Process Clause of the Fifth Amendment, which states that the government may not deprive individuals of life, liberty, or property without due process of law. The scope of the decision is therefore limited. And, as Justice Alito goes on to explain, “the combination of the uncertain reach of the Clean Water Act and the draconian penalties imposed for the sort of violations alleged in this case still leaves most property owners with little practical alternative but to dance to the EPA’s tune.” He urges Congress to clarify the scope of the CWA so that property owners will at least have a clearer indication of the scope of EPA authority over their land. Despite these limitations, the decision is a significant victory for property rights, and a rare case of unanimity on an important property rights issue.

I leave it to others to debate whether it is appropriate for a Supreme Court justice to urge Congress to clarify the law in one of his opinions. But it’s worth noting that this is not the first time such a thing has happened. Justice Ruth Bader Ginsburg famously urged Congress to reverse the Court’s interpretation of Title VII of the Civil Rights Act in her dissent in the Lily Ledbetter case.

UPDATE: As co-blogger Orin Kerr pointed out in this 2007 post, Justice Ginsburg later stated that one purpose of her dissent in Ledbetter was “”to attract immediate public attention and to propel legislative change.”

This Thursday at noon, I will be speaking at the University of North Carolina Law School on “Property Rights Since Kelo.” Much has happened on both the legislative and judicial fronts in the last few years. Considerable progress has been made in protecting property rights against abusive takings, but much work remains to be done in many states. University of North Carolina law professor Carol Brown – a leading expert on the impact of eminent domain on low-income and minority communities – will comment on my talk, which is sponsored by the UNC Federalist Society.

This may be one of the few events at UNC Law School over the next few days that does not involve either the NCAA tournament or the individual mandate litigation!

Damon Root has an interesting article discussing a potentially important takings case that the Supreme Court is now deciding whether to hear:

The handsome five-story brownstone located at 32 West 76th Street in Manhattan doesn’t look like it belongs at the center of a contentious legal struggle. But that impression changes when you learn about the recent activities of its owner, 68-year-old James D. Harmon Jr.

Harmon … has filed a powerful legal challenge asking the U.S. Supreme Court to strike down New York City’s four-decades-old rent stabilization law. At first, New York officials thought so little of Harmon’s challenge that they waived their right to file an opposing brief with the Supreme Court. But those officials got a rude awakening when the Supreme Court asked them to respond to Harmon’s petition anyway, signaling that somebody at the Court took the legal challenge seriously…..

[T]he Supreme Court has also said that government regulations may sometimes count as a taking [under the Fifth Amendment], which means that they too require the payment of just compensation. As Justice Oliver Wendell Holmes remarked in the 1922 case of Pennsylvania Coal Company v. Mahon, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” How far is too far? In the 2010 case of Stop the Beach Renourishment, Inc. v. Florida, the Supreme Court declared that at a minimum, “it is a taking when a state regulation forces a property owner to submit to a permanent physical occupation.”

New York City’s rent stabilization law (RSL) meets that test. In Harmon’s case, three of the six rental units in his building—which has been in the possession of his family since 1949, when his immigrant grandparents first bought it—feature rent-stabilized tenants whose occupancy can only be described as both physical and permanent.

Not only do these rent regulated tenants pay government-set rates that are 59 percent below-market, they have the option of remaining in their apartments for life. Harmon essentially has no choice but to keep renewing their respective leases every few years. The tenants even have the right to name their own successors to the apartments.

When I first heard about this case, my reaction was that it was probably precluded by the Supreme Court’s 1992 decision in Yee v. Escondido, which ruled that a California statute imposing rent control on mobile home parks was not a taking, even though state law allowed tenants to renew the rent-controlled leases indefinitely even against the will of the owners. I am no fan of the Yee decision, but the Court is unlikely to overrule it in the near future.

However, there is a crucial difference between Harmon’s case and Yee. In the latter, the Court emphasized that there was no permanent physical occupation of the owners’ property because “the Mobilehome Residency Law provides that a park owner who wishes to change the use of his land may evict his tenants” so long as he then uses the property for something other than a mobile home park. By contrast, as Root describes, the New York City rent control law does not allow Harmon and other landlords to evict their tenants even if they do wish to use the property for something other than rental housing. Effectively, therefore, this is a government-imposed permanent physical occupation of property.

In its belated response to the cert petition, New York argues that the law allows the Harmons to not renew the leases if they choose to live in the rent-controlled apartment themselves or if they demolish the building in question. However, as the Harmon cert petition points out, the former option requires the Harmons to find other, comparable housing for the tenants at the same rent, while the latter is precluded by the fact that the building in question is a legally designated landmark that by law cannot be destroyed. Regardless of these points, reducing the owners’ options to demolition and personal occupation is far more severe imposition on property rights than that in Yee, where any use of the land other than mobile home park was enough to allow the owner to decline renewal of a lease.

One of the best-established principles of takings law is that such a government-mandated permanent physical occupation automatically qualifies as a taking even if the intrusion imposed by the state is fairly minimal. In the classic case of Loretto v. Teleprompter, the Supreme Court found a taking even though the owner was only required to place a television cable and two boxes on the roof of her apartment building. This makes good sense. Whatever else might be considered a taking, there pretty obviously is one when the government compels a physical occupation of your property, thereby preventing you from using it yourself.

The physical invasion inflicted on Harmon and other New York landlords is obviously much more severe than that in Loretto, since they are forced to accept unwanted tenants essentially forever. Even if the tenant dies or moves out, he has the right to pass the rent-controlled lease onto a successor of his choosing if he has lived there for more than a minimal period of time.

As Root points out, many of the beneficiaries of New York’s rent control law are far from poor. One of Harmon’s tenants, for example, is a wealthy executive. There are far better ways to increase the availability of low-income housing, such as dismantling some of the zoning regulations that artificially restrict the stock of housing in the city and help make it one of the most expensive in the country. Economists overwhelmingly agree that rent control exacerbates housing shortages and usually fails to redistribute wealth to the poor. But if the City prefers to conscript unwilling landlords’ apartments in perpetuity, it should have to pay “just compensation” for the privilege, as required by the Fifth Amendment.

UPDATE: Richard Epstein commented on the case here, and George Will in this column.

The Fordham Urban Law Journal City Square website has posted a debate between NYU Professor Roderick Hills and myself on the the New York Court of Appeals controversial decisions upholding “blight” condemnations in the Atlantic Yards and Columbia University cases. In my 2011 symposium article “Let there Be Blight,” I argued that these takings violated both the New York state and federal constitutions. I especially emphasized the incompability between the court’s decision defining blight so broadly that virtually any area could qualify with the New York state constitutional provision limiting blight condemnations to “substandard and unsanitary areas.” Hills has written a critique of my analysis. My reply is available here.

Hills is one of the leading property and federalism scholars out there, and I always learn from our exchanges. As I explain near the end of my reply, in this case there may be more areas of agreement between us than initially meet the eye.

Some critics of Cato’s stance in the Cato v. Koch dispute claim that it is inconsistent for libertarians to criticize the Koch brothers’ exercise of their rights. After all, libertarians support property rights, so how they can criticize anyone’s use of their property? Such claims are misguided. They are the equivalent of arguing that if you are committed to freedom of speech, it is inconsistent for you to criticize anything anyone says.

In both cases, there is no inconsistency in saying that you have the right to do X, but you nonetheless should not exercise that right. For example, I believe that bloggers have the right to promote racist conspiracy theories. But I also believe that they should not actually do so. I oppose government efforts to censor racist conspiracy-mongering. But that does not mean I can’t criticize it when it occurs. Similarly, if the Kochs are legally entitled to take control of Cato (which is disputable), I would not want the government or anyone else to use force to take away their rights. As far as I know, none of the Kochs’ libertarian critics are advocating any such thing.

But there are many situations where it is unwise or even immoral for us to make use of our rights, whether they be property rights, free speech rights, or others. In this case, the Kochs’ exercise of their rights is ill-advised because it would damage Cato and the cause of libertarianism with little or no offsetting benefit. For that reason, I believe they should drop their lawsuit even if their position on the disputed legal issues is completely correct.

A more subtle version of the inconsistency argument holds that the real problem here is not property rights as such but libertarians’ supposedly unjustified defense of the right of wealthy people to spend money on political causes. However, if the Kochs prevail here, it will not be because they have somehow “bought” Cato with their wealth. For many years now, they have only provided a tiny proportion (about 4-8 percent) of Cato’s funding. The Institute could easily continue its work even if the Kochs never give it another dime. If the Kochs prevail, it will be because the arcane details of Kansas corporate law support their legal position – not because Cato has somehow “sold out” for their money.

More generally, if we bar wealthy people from funding think tanks and advocacy organizations, the only realistic alternatives are either government funding or requiring these institutions to raise all their funds through small donations from many different donors. The government alternative creates obvious conflict of interest problems. A public policy research institute exclusively dependent on government funding is not likely to bite the hand that feeds it. Indeed, the problem is much more severe than in the case of institutes dependent on private funds. If one private donor withdraws, there are many other alternatives (as witness Cato’s ability to survive despite the Kochs’ reduction of support over the last 20 years, and the withdrawal of other donors who opposed Cato’s stance on the 1991 Gulf War). By contrast, government is a monopoly. If it withdraws its funding, there is no other government to turn to, though perhaps state governments can fund think tanks that have fallen out with the feds.

Relying on small donations is also problematic. It makes it difficult for a research institute to survive if its ideas are unpopular or it is not well-known. Historically, many new ideas and causes have been successfully promoted by a small group of donors willing to buck conventional wisdom. Groups such as the NAACP and the ACLU were established in large part with funds provided by a few wealthy donors. The same goes for many more recently established organizations on both the left and the right.

Finally, it is simply not true that reliance on wealthy donors leads to a think tank market dominated by a monolithic “pro-corporate” agenda. Just looking at a few of the major think tanks located in Washington, DC, a very wide range of perspectives is represented: libertarian (Cato); conventional conservative (Heritage); neoconservative (AEI); moderate liberal (Brookings); conventional liberal (the Center for American Progress, the Economic Policy Institute, the Urban Institute, and others); radical left (the Institute for Policy Studies), and many think tanks addressing a narrower range of issues from a variety of viewpoints. Wealthy donors are a sufficiently diverse lot that we are in no danger of having a monolithic think tank market, even if think tanks were completely dependent on them for funding (which most are not). Indeed, there is considerably more ideological diversity among think tanks than in many parts of the academic world.

CONFLICT OF INTEREST WATCH: I have detailed my various ties to the parties in the Cato-Koch dispute here.

UPDATE: It’s not entirely clear to me whether AEI should be characterized as “neoconservative.” The organization has a number of scholars who fall into other conservative camps, and also a few libertarians. I think neoconservatism is probably the dominant strain of opinion there. But I can understand if others perceive the institution differently. In any event, whether AEI is distinctively neoconservative or a hodgepodge of different types of conservative and libertarian thought is not crucial to my broader point.

UPDATE #2: I have corrected the link in the third paragraph of this post. Thanks to readers for pointing out the initial error.

The Private Property Rights Protection Act of 2012 passed the House yesterday on an overwhelming voice vote. I wrote about the bill in this post. As I explained there, the PRPA is far from a panacea for eminent domain abuse. But it takes a modest step in the right direction by cutting off some types of federal subsidies from local governments that engage in Kelo v. New London-like economic development takings.

This is not the first time that the PRPA passed the House by an overwhelming margin. The same thing happened in 2005, when a previous version of the bill won a lopsided 376-38 vote in the House only to die in the Senate without ever getting to a floor vote. Hopefully, we can avoid a repeat performance this year. But the Senate rarely moves quickly in an election year, and there are plenty of organized interest groups that are likely to lobby the senators to drag their heels until the 112th Congress expires – thereby forcing the bill’s proponents to go back to square one.

In 2006, Ilya and I co-authored “The Green Costs of Kelo: Economic Development Takings and Environmental Protection,” in which we argued that allowing the use of eminent domain for economic development was bad for environmental conservation.  Environmentalist advocates responded with disbelief.  The Community Rights Counsel (the precursor to the Constitutional Accountability Center) went so far as to label our paper the “outrage of the month” and labeled our argument “a skewed view from the libertarian fringe.”   Six years later, however, it appears some environmentalist advocates are coming around to our point of view.

Yesterday, E&E News reported (subscription required) that several major environmental groups are looking to block the use of eminent domain for the construction of portions of the Keystone XL pipeline that are still slated for construction.  In particular, they plan to argue that the use of eminent domain for the pipeline will violate state rules that preclude eminent domain’s use for private economic development.

In a conference call with reporters today, representatives of four environmental organizations — Bold Nebraska, the Natural Resources Defense Council, 350.org and the Sierra Club — said they believe they have a strong legal case against the company on eminent domain issues. The company is seeking to use condemnation power against a north Texas farmer.

The groups’ main argument is that, as a nonpublic entity looking to build a project for profit, TransCanada does not qualify for eminent domain power in most states.

Whatever the merits of the pipeline, it appears that some environmentalists are beginning to recognize that allowing the government to seize private property for the purpose of encouraging private economic development an facilitate environmentally undesirable projects. Indeed, insofar as such efforts are successful at promoting economic growth, the use of eminent domain for economic development necessarily results in more development than would have occurred absent its use. In other words, the use of eminent domain for economic development results in more environmental harm than if the market were left alone. Further, as we noted in our paper, limiting the ability of governments to use eminent domain for economic development, whether through the Constitution or legislative reform, does not preclude most environmentally beneficial uses of eminent domain, such as the eradication of blight or the provision of public goods.

I’m not sure whether any of the environmentalist groups involved in this dispute acknowledge our work, but it’s nice to see them come around to our way of thinking, even if only on this one issue.

The recent incident in which pigeon hunters shot down a surveillance drone launched by animal rights activists has generated a great deal of commentary. Although this incident may have occurred over publicly owned land (at least according to the animal rights activists), co-blogger Ken Anderson asks what would happen if similar private drones took pictures over private property.

One can easily imagine such a thing happening, as drone technology spreads. Paparazzi could use them to try to take pictures of celebrities, businesses to spy on competitors, private investigators to collect evidence, and so on. However, property law does impose at least some constraints, especially with respect to low-flying drones.

Under the traditional common law, a landowner’s property rights extended infinitely up into the sky. This doctrine was largely abandoned after the invention of the airplane. However, as the Supreme Court recognized in the famous 1946 case of United States v. Causby, owners still retain the right to “exclusive control of the immediate reaches of the enveloping atmosphere,” which includes “at least as much of the space above the ground as he can occupy or use in connection with the land.” Neither the Supreme Court nor most state courts have ever explained precisely how far this “exclusive control” extends. But in most cases it surely covers at least 100 or so feet up, and sometimes more (in Causby, the Court ruled there was a taking of private property when government-owned planes regularly flew some 80 feet above the owner’s land).

Therefore, owners of low-flying surveillance drones that fly over private property could be liable for trespass. On the other hand, higher-flying drones are likely immune, unless they somehow “unreasonably” interfere with the owners’ use of the land below.

Of course property law is not the only constraint on private surveillance drones. Some states have invasion of privacy laws that restrict photography of unwilling subjects, such as California’s very broadly worded recent anti-paparazzi law. The California statute forbids “attempts to capture, in a manner that is offensive to a reasonable person, any type of visual image, sound recording, or other physical impression of the plaintiff engaging in a personal or familial activity under circumstances in which the plaintiff had a reasonable expectation of privacy through the use of a visual or auditory enhancing device, regardless of whether there is a physical trespass, if this image, sound recording, or other physical impression could not have been achieved without a trespass unless the visual or auditory enhancing device was used.” Presumably, this covers photos taken by drones as well as by human photographers. A surveillance drone surely qualifies as a “visual or auditory enhancing device.” If drone surveillance of private land becomes common, we may well see more such laws.

In the aftermath of the Supreme Court’s controversial Kelo decision, which allowed the condemnation of private property for economic development, some 44 states have passed eminent domain reform laws. Although many of those laws are likely to be ineffective, overall a good deal of progress has been made at the state level in curbing abusive condemnations, including by state courts enforcing the property rights provisions of their state constitutions.

Unfortunately, very little has been achieved at the federal level during that time. On the third anniversary of Kelo in 2008, I summed up federal reform efforts as follows:

…

…

[Insert sound of crickets chirping, grass growing, and paint drying].

Not much has changed since then. This is unfortunate because there is much that the federal government can do to prevent harmful takings. Many states have failed to pass effective reform laws, and federal funding often facilitates Kelo-like takings there.

Fortunately, as Christina Walsh of the Institute for Justice explains in this recent op ed, Congress now has another opportunity to rectify its previous omissions:

It has been demonstrated time and again that eminent domain is routinely used to wipe out black, Hispanic and poorer communities, with less political capital and influence, in favor of developers’ grand plans.

It also has been demonstrated that restrictions on eminent domain in no way inhibit economic growth, as the beneficiaries of eminent domain abuse would like you to believe….

Groups across the philosophical spectrum have recognized the need to limit this abuse of power to protect those who are defenseless against the seemingly unstoppable alliance of powerful, deep-pocketed developers and their politician friends. The diverse coalition has included the National Association for the Advancement of Colored People, the League of United Latin American Citizens, the National Federation of Independent Business and the Farm Bureau. It’s safe to say that the coalition also includes more than 80 percent of Americans, as demonstrated poll after poll taken after Kelo.

Despite the evidence that Americans are united against the misuse of eminent domain, Congress has yet to to take even a modest step. A bipartisan bill, H.R. 1433, making its way through the House would strip a city of federal economic development funding for two years if the city takes private property to give to someone else for their private use….

This bill undoubtedly will pass the House as it did in 2005, and likely will get stalled in the Senate Judiciary Committee, headed by Sen. Patrick J. Leahy, Vermont Democrat, where it has gone to die in years past.

It is tragic because this is exactly the kind of centrist reform – uniting minority advocates and small-business interests – where Republicans and Democrats should be able to work together.

Even if it passes, this bill would not end eminent domain abuse or even all federal funding for it. But it would be a valuable step on the right direction. Past history does not bode well for the bill’s prospects in the Senate. And it’s especially difficult to pass legislation during an election year. However, it’s possible that things will be different this time.

For those who worry that federal intervention in this field would undermine federalism, I have addressed that argument in considerable detail here.

My new article “What if Kelo v. City of New London Had Gone the Other Way?” is now available on SSRN. It is part of an Indiana Law Review symposium on “What if? Counterfactuals in Constitutional History.” Here is the abstract:

Kelo v. City of New London is one of the most controversial decisions in U.S. Supreme Court history. The Kelo Court held that the Public Use Clause of the Fifth Amendment allows government to condemn private property and transfer it to other private parties for purposes of “economic development.” This Article considers the question of what might have happened if the Supreme Court decided Kelo v. City of New London in favor of the property owners. Such counterfactual analysis may seem frivolous. But it is, in fact, useful in understanding constitutional history. Any assessment of the impact of a legal decision depends on at least an implicit judgment as to the likely consequences of a ruling the other way. Analysis can be improved by making these implicit counterfactual assumptions clear and systematically considering their implications.

Part I briefly describes the Kelo case and its aftermath, focusing especially on the massive political backlash. That backlash led to numerous new reform laws. However, many of them turned out to be largely symbolic. Part II discusses the potential value of a counterfactual analysis of Kelo. It could help shed light on a longstanding debate over the effects of Supreme Court decisions on society. Some have argued that court decisions have little impact, mostly protecting only those rights that the political branches of government would protect of their own accord. Others contend that this pessimistic view underrates the potential effect of Supreme Court decisions.

Part III considers the possible legal effect of a ruling in favor of the property owners. Such a decision could have taken several potential forms. One possibility is that the Court could have adopted the view advocated by the four Kelo dissenters: that economic development condemnations are categorically forbidden by the Public Use Clause. This would have provided strong protection to property owners and significantly altered the legal landscape. On the other hand, the Court could easily have decided in favor of the property owners on one of two narrower grounds. Such a ruling would have led to much weaker protections for property owners.

Part IV weighs the potential political impact of a decision favoring the property owners. Such an outcome might have forestalled the massive political backlash that Kelo caused. Ironically, a narrow ruling in favor of the owners that did not significantly constrain future takings might have left the cause of property rights worse off than defeat did. On the other hand, a strong ruling categorically banning economic development takings would likely have done more for property rights than the backlash did, especially considering the uneven nature of the latter. Furthermore, political movements sometimes build on legal victories, as well as defeats, as happened in the case of the Civil Rights movement in the wake of Brown v. Board of Education. It is possible that property rights advocates could have similarly exploited a victory in Kelo.

The California Supreme Court recently issued a ruling upholding the constitutionality of a law abolishing the state’s numerous redevelopment agencies:

The California Supreme Court ruled Thursday against redevelopment agencies, including San Diego’s, and said they cannot remain in business by paying the state a portion of their property tax receipts….

The court was dealing with two laws passed by the Legislature in June to help close the state budget deficit by tapping the redevelopment funds held by redevelopment agencies.

One, AB1X26, abolished the redevelopment agencies and set up a mechanism to shift the redevelopment taxes back to the cities, counties, schools and others.

The second, AB1x27, allowed the agencies to continue but required them to opt in but only by paying pay the state $1.7 billion from their tax revenues this year and about $400 million annually in the future or about 10 percent of their tax receipts….

The second law is unconstitutional, the court said, because the agencies do have a right under Proposition 22, passed last year, to retain local revenues.

“We largely uphold Assembly Bill 1X26 and invalidate Assembly BillX127,” the court said.

And so in an ironic twist of fate, the agencies won their argument that they can keep their money but lost their argument that they can continue to exist.

Although the bill abolishing the redevelopment agencies was adopted primarily for the purpose of alleviating the state’s dire fiscal problems, it also has the beneficial side effect of curtailing eminent domain abuse. As I explained in this post defending the new legislation before it passed, the redevelopment agencies routinely engaged in dubious takings that transferred property to favored interest groups and destroyed more value than they created.

The Institute for Justice – a leading libertarian public interest law firm specializing in eminent domain issues – addressed the property rights benefits of the ruling in this statement:

In a landmark victory for private property owners in the Golden State, the California Supreme Court today upheld a statute abolishing the nearly 400 redevelopment agencies across the state. The court also struck down a law that would have allowed these agencies to buy their way back into existence. The final outcome of the case is that, in 2012, California’s decades-long redevelopment nightmare will finally come to an end.

California redevelopment agencies have been some of the worst abusers of eminent domain for decades, violating the private property rights of tens of thousands of home, business, church and farm owners. The Institute for Justice has catalogued more than 200 abuses of eminent domain across California during the past ten years alone….

While the decision focused on specific provisions of the California Constitution, its practical effect represents a significant victory for California property owners. “Redevelopment in California has been a billion-dollar, state-subsidized boondoggle that has completely eroded private property rights through the abuse of eminent domain for private gain,” said Christina Walsh, the Institute’s director of activism and coalitions. “With the court’s decision, redevelopment has finally met its long-overdue end, and property owners who have been living in terror across the state can finally rest safe in what they’ve worked so hard to own.”

The ruling won’t necessarily end all eminent domain abuse in California. Other government bodies also sometimes engage in abusive takings, and it’s possible that the state legislature will give more condemnation authority to some of those agencies now that the redevelopment agencies are gone. Nevertheless, the abolition of those agencies is a major step forward for property rights in California, as well as for the state’s beleaguered taxpayers.

Proposed by a liberal Democratic governor and supported by a wide range of libertarian and conservative property rights advocates, the law upheld in this case is a good example of the kind of cross-ideological cooperation on property rights issues that we need to see more of.

I was going to write a post about the Institute for Justice’s important recent victory in the bone marrow case. However, I see that co-blogger Eugene Volokh has beaten me to the punch, and said most of what I would have wanted to say.

I would add only that the sale of organs and medically necessary body parts (including bone marrow) can save many lives. I answered some of the standard objections to organ markets here and here.

In some ways, bone marrow markets are even more defensible than organ markets. Unlike transplanted organs, transplanted bone marrow grows back, and the donor avoids even the very modest long-term health risks that kidney donors undertake.

CONFLICT OF INTEREST WATCH: I have had the privilege of working with IJ on a number of other cases, but had no involvement in this one.