Property rights deserve as much protection as other rights

Jim Huffman Dean Emeritus, Lewis & Clark Law School
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Last week, the Supreme Court handed down its decision in Koontz v. St. Johns River Water Management District, one of the biggest property rights cases in years. The case was brought by Coy Koontz, a Florida man whose local water district blocked his attempt to develop his commercial property, which contains wetlands. The water district refused to grant Koontz a building permit unless he spent money restoring 50 acres of wetlands several miles from his property. Koontz argued that the requirement violated the Fifth Amendment’s Takings Clause, the part of the Constitution that prevents the government from seizing private property without fairly compensating the owner. The Court ruled that Koontz may be right, and remanded his case to a lower court.

In her dissenting opinion in the case, Justice Elena Kagan wrote that the majority’s holding “threatens to subject a vast array of land-use regulations, applied daily in states and localities throughout the country, to heightened constitutional scrutiny.” According to law professor John Echeverria, writing in The New York Times, the Court’s decision takes “a revolutionary and destructive step” that “cast[s] the burden on the government to justify … [land-use] mandates.”

So? What is revolutionary and destructive about subjecting alleged violations of constitutional rights to heightened judicial scrutiny, and placing the burden on government to demonstrate that it’s not violating those rights? American governments are instituted, after all, “to secure these rights.” Or so says the Declaration of Independence.

But we have come a long way since 1776 and, in the context of property rights, the Supreme Court has woven a tangled web — so tangled that Justice Alito’s opinion for the majority of the Court (including Scalia, Thomas, Roberts and Kennedy) struggles to find a comfortable fit within existing doctrine. That’s because existing doctrine makes it difficult to rule in favor of the property owner.

Professor Echeverria is half right. It would be revolutionary to burden government with respect for private property rights, though it would be destructive only of the abuse of government power.

At the heart of the tangled web of takings law is the idea that property rights and other economic liberties are different from constitutional rights like free speech and equal protection. In the past, courts have held that just about any public purpose can justify overriding economic liberties, while only compelling public interests justify impositions on other more “fundamental” liberties.

This bifurcation of rights has never made any sense, a fact underscored by Kagan’s argument in dissent.

She relies heavily on an earlier case, Eastern Enterprises v. Apfel, in which the government retroactively held a company financially liable for the health benefits of its former employees. In that case, the Court ruled that the government had violated the plaintiff’s constitutional rights. Four of the justices said that the health care requirement constituted a taking. They were joined by Justice Anthony Kennedy, who said the mandate was a violation of due process, not a taking, because only “a specific interest in physical or intellectual property” or “a specific, separately identifiable fund of money” could be taken by the government. Kagan argues that in Koontz there was no taking because the government was not demanding a specific piece of property or set of funds. She says that the government would have been satisfied getting the money from Koontz’s “wealthy uncle.”

In other words, if the government demands money from your savings account at a particular bank, it could be a taking; but if it demands the same amount of money from any and every source available to you, it cannot be a taking. This sort of analysis is not worthy of the Supreme Court and makes clear that at least some members of the Court have lost sight of the purpose of the Takings Clause and its integral connection to other constitutional rights. (Kennedy’s joining the majority in Koontz suggests he now recognizes the error of his Eastern Enterprises analysis.)

In Armstong v. United States, the Court ruled that the Takings Clause is “designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” That principle is as much about equal treatment as takings, and is violated whether the property owner is forced to give up his real estate, pay money from a specified account or borrow money from his uncle.

The Koontz decision is good news for property owners — and that’s good news for the public despite the pervasive view among land-use planners that only they know what’s best. But until the Court recognizes that its takings doctrine is hopelessly confused and starts afresh with a clear understanding that economic liberties are every bit as important to individual freedom and public prosperity as the other rights guaranteed in the Constitution, property owners and governments alike will face the uncertainties of weakly enforced property rights and ill-defined government powers.

Jim Huffman is the dean emeritus of Lewis & Clark Law School, the co-founder of Northwest Free Press and a member of the Hoover Institution’s De Nault Task Force on Property Rights, Freedom and Prosperity.