An empirical study of implicit takings.

• Author: Krier, James E.
• Position: Abstract through II. State Implementation of Supreme Court Doctrine C. Findings 2. Regulatory Takings Claims That Fall Outside Categorical Rules a. The Overall Picture, p. 35-66

ABSTRACT

Takings scholarship has long focused on the niceties of Supreme Court doctrine, while ignoring the operation of takings law "on the ground"--in the state and lower federal courts, which together decide the vast bulk of all takings cases. This study, based primarily on an empirical analysis of more than 2000 reported decisions over the period 1979 through 2012, attempts to fill that void.

This study establishes that the Supreme Court's categorical rules govern almost no state takings cases, and that takings claims based on government regulation almost invariably fail. By contrast, when takings claims arise out of government action other than regulation, landowners enjoy modest success. In particular, when government actions are taken by officials who are not politically accountable, state courts are more likely to scrutinize those actions.

This pattern is consistent with what we believe to be the courts' basic project in this area: to develop doctrine that acknowledges the importance of property rights while also accommodating the needs of an activist state. By and large, political processes, not judicial doctrine, are left to serve as the primary check on government activity.

TABLE OF CONTENTS INTRODUCTION I. SUPREME COURT DOCTRINE A. Categorical Rules B. Ad Hoc Balancing C. Wrinkles in the Doctrine 1. The Denominator Problem and Conceptual Severance 2. Counting Benefits that Ameliorate Regulatory Impact 3. The Effect of Purchase with Knowledge of Government Imposition D. Exactions E. Remedies F. Ripeness and Preclusion II. STATE IMPLEMENTATION OF SUPREME COURT DOCTRINE A. Methodology B. Categorization C. Findings 1. Per Se Rules a. Permanent Versus Temporary Physical Intrusion b. Wipeouts 2. Regulatory Takings Claims that Fall Outside the Categorical Rules a. The Overall Picture b. Disparities Among Regulatory Takings Claims 3. Exactions 4. Government as Enterpriser 5. Condemnation Blight 6. Identity of the Claimant 7. The Federal Courts (the Supreme Court Aside) D. State Legislation III. A THEORETICAL PERSPECTIVE A. The Historical Tension Between Private Property and State Power B. The Impact of the Tension on Takings Jurisprudence 1. The Limited Force of Per Se Rules a. Permanent Physical Occupations b. Wipeouts 2. The Futility of Term Central Claims 3. The Limited Impact of Other Property-Friendly Rules 4. The Role of the States INTRODUCTION

When the government sues to condemn private property under its power of eminent domain, taking the property is the admitted purpose of the suit. But as sketched in Part I below, a long line of Supreme Court decisions establishes that takings can also arise from other governmental activities that trigger the protections afforded by the Constitution's Takings Clause, (1) notwithstanding the government's insistence that no taking has occurred. The resulting body of doctrine sets a "constitutional bottom." (2) States must protect property at least as much as the Court's rules decree, but they are free in principle to protect it more. However, state courts are also able, at least in practice, to protect it less, because the Supreme Court has developed ripeness and preclusion rules that limit the ability of lower federal courts to oversee the work of state courts, (3) and because the Court can review only a fraction of takings cases in any event.

An obvious implication of these observations is that the law of takings announced by the Court might significantly differ from the law of takings actually implemented by the states. Yet state implementation has been virtually ignored in the literature, in favor of a preoccupation with Supreme Court doctrine. (4) A consequence is that we have little sense of how the law from on high works out in practice on the ground.

Hence Part II of this Article, the first comprehensive analysis of takings decisions by state and lower federal courts. (5) We studied more than 2000 cases decided over the thirty-three-year period between 1979 and 2012. (6) Our review indicates that in certain circumstances state courts tend to provide less protection to private property than Supreme Court doctrine requires, though they, and some state legislatures, occasionally provide more. An apt generalization about state court decisions is that they regularly reflect ignorance of--or indifference to--Supreme Court teachings, which in any event place virtually no significant constraints on state activities regarding property.

Part III turns from facts to theory; it aims to explain the pattern of Supreme Court doctrine and state implementation that we observed. It is an exercise in positive theory, as opposed to the normative theoretical arguments that have characterized the scholarly literature. We suggest that Supreme Court takings doctrine can be understood as the means to maintain and reinforce, in a very particular fashion, the tension between two conflicting commitments that have figured prominently throughout the Nation's history--strong property rights on the one hand, and the imperatives of an activist government on the other. The Court supports property rights with rhetoric of symbolic importance but little, if any, operational significance, (7) leaving it up to state lawmakers to go beyond the minimal requirements of the constitutional bottom if they wish. State courts, in turn, have mostly relied on state political processes--as opposed to judicial oversight--as the primary check on property rights abuse. State courts are most likely to find takings in cases in which the government actors responsible for harm to landowners are least likely to be politically accountable.

1. SUPREME COURT DOCTRINE

   Because our study involves comparing what the states do to what the Constitution requires and permits them to do, we need to have Supreme Court doctrine firmly in mind. Recall that the doctrine examined in this Article concerns takings that arise outside the context of eminent domain actions. These are conventionally referred to as "regulatory takings," but that label is misleading. Many so-called regulatory takings have nothing whatsoever to do with regulation, whether legislative or administrative, and regulation is not treated as a distinctive category of activity in the doctrine developed by the Supreme Court. (8) In short, takings by government regulation are just one member--although a substantial member--of a general class of all takings that arise outside the context of explicit takings by condemnation. We refer to this class as "implicit takings." (9) When we speak of regulatory takings, we mean those that arise specifically out of government regulation.

   The roots of implicit takings doctrine are found in two early Supreme Court cases, one decided in 1872 and the other a half century later in 1922, which extended constitutional takings doctrine beyond explicit takings and formal transfers of title and possession of land to the government. The first, Pumpelly v. Green Bay Co., concerned construction of a government-authorized dam that permanently flooded private land located in Wisconsin, although the submerged land itself was not formally "taken" by the government. (10) The second, Pennsylvania Coal Co. v. Mahon, arose from a challenge to state regulation of coal mining that diminished the value of property by requiring certain columns of coal to remain in place to prevent subsidence of the surface. (11) In each, the Court held that the consequences visited upon property owners were of such a nature or severity that they could be accomplished only by paying the just compensation required in formal condemnation proceedings. (12)

   Over the years, the law of implicit takings introduced by Pumpelly and Mahon has been considerably elaborated by the Supreme Court. The Court has developed several distinctive techniques to resolve implicit takings--using categorical, or per se, rules in some instances; an ad hoc case-by-case approach in others; and special, tailor-made tests in the particular case of exactions. The Court has also fashioned rules regarding remedies and access to federal judicial oversight of state takings decisions.

   1. Categorical Rules

      The Court has articulated two categorical takings rules. First, government action resulting in permanent physical occupation of private land is always a taking. (13) Pumpelly is probably the origin of the rule, but Loretto v. Teleprompter Manhattan CATV Corp. is its most prominent contemporary statement. (14) In Loretto, owners of apartment buildings challenged a New York statute permitting cable television companies to install connection facilities on apartment buildings without landlord consent. (15) The Court found a taking notwithstanding the statute's trivial impact. (16) Horne v. Department of Agriculture reinforced this rule and extended it to personal property. (17) In Horne, raisin growers challenged "marketing orders" requiring them to turn over a percentage of their raisins to the government in order to maintain stable markets for raisins. (18) The Court held that Loretto's "reasoning--both with respect to history and logic--is equally applicable to a physical appropriation of personal property." (19)

      The second categorical rule, established in Lucas v. South Carolina Coastal Council, is that government action "den[ying] all economically beneficial or productive use of land" is always a taking. (20) The South Carolina legislation involved in Lucas had the effect of barring Mr. Lucas from developing any permanent habitable structures on several island lots, and the state trial court found that the law rendered Lucas's lots "valueless." (21) This gives rise to an ambiguity in the reach of the categorical rule. The rule could apply in...