ARBITRARY PROPERTY INTERFERENCE DURING A GLOBAL PANDEMIC AND BEYOND.

• Author: Raffish, Brett

INTRODUCTION

"Where an excess of power prevails, property of no sort is duly respected." (1)

Governments interfered with private property (2) and crushed American businesses (3) to stymie COVID-19's spread. Despite interfering with many Americans' property rights, states and localities have consistently prevailed on Fifth Amendment takings claims arising out of pandemic-related public health orders. (4) In fact, no property owner appears to have prevailed on the merits of a pandemic-related regulatory takings claim in federal court through 2021, (5) well over a year since California enacted the "first statewide mandatory" closure order. (6)

Lower courts' treatment of pandemic-related takings claims disquietingly suggests that the Takings Clause may presently fail to adequately thwart arbitrary property interference in the partial regulatory takings context when the government claims that it is acting in the name of public health or safety. (7) Although courts and scholars have long considered due process a chief safeguard "against arbitrary [state] action[,]" (8) this Note expands on existing literature and details how due process may, in some cases and in conjunction with the regulatory takings doctrine, fail to prevent the government from arbitrarily interfering with private property. (9) Because the Court has assumed that arbitrary interference is non-compensable, (10) it has not crafted a robust regulatory takings doctrine that might stymie arbitrary interference in situations in which a due process inquiry may not do so on its own; (11) namely, when the government claims that it is acting in the name of public health or safety. Finally, this Note contends that the aforementioned phenomenon is highly detrimental to "individual liberty" and "the rule of law." (12)

To promote principled lawmaking, this Note urges state legislatures to adopt laws that resemble the Texas Private Real Property Rights Preservation Act ("the Texas Act"). (13) Like the Texas Act, laws should: (14) (1) mandate compensation when a regulation produces a diminution in value that meets or exceeds a legislatively calibrated threshold; (15) and (2) excuse compensation for police power deprivations only when the government's actions satisfy a statutorily imposed form of heightened scrutiny. (16) To anticipatorily address concerns that the law may stifle government action in situations in which inaction may be catastrophic, this Note also proposes that laws should include provisions permitting the government to seek immunity from the law's stringent requirements if a government can demonstrate: (1) exigent circumstances; (2) that necessitate government action to avoid catastrophe; and (3) that the government possesses such limited information that would prevent it from carrying out its duty to the public without incurring potentially ruinous takings liability. By awarding compensation for deprivations, this solution may adequately incentivize principled lawmaking and thwart potentially arbitrary action. (17)

In Part I, this Note discusses the Founders' view of property rights and regulatory takings' doctrinal evolution. In Part II, this Note explains how the substantive due process and takings doctrines weakly thwart arbitrary governmental interference. In Part III, this Note recommends that states adopt laws that resemble the Texas Act.

1. THE PURPOSE AND FUNCTION OF THE TAKINGS CLAUSE

   1. Property & Democracy

      To John Locke, people inherited property rights from God, (18) meaning that when people voluntarily submitted to a sovereign, their property remained secure. (19) Many Founders felt similarly and believed that "civil society" depended on private property's preservation. (20) For example, Justice James Wilson held that "property ought to be inviolable" because "no one would toil to accumulate what he could not possess in security." (21) Like Locke, Wilson viewed property as "highly important to the existence ... of civilized life." (22) John Adams shared Wilson's sentiment, and once remarked that "[p]roperty [wa]s surely a right of mankind as ... liberty." (23) To Adams and Hamilton, like Wilson, property secured "republican government[.]" (24) James Madison felt similarly and boldly argued that "protect[ing] property" was "the end of government[.]" (25) He believed, like others, that property was "necessary" for "free government." (26)

      If government failed to adequately protect or preserve property rights, some Founders postulated that "tyranny" and despotism would result and society would collapse. (27) John Adams once remarked that "[t]he moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence." (28) Madison appeared to share Adams' view and cautioned in Federalist 10 that democratic governments that failed to respect or preserve property were "as short in their lives as they have been violent in their deaths." (29)

   2. Arbitrarily Interfering with Private Property

      Despite their steadfast positions concerning private property's position in a blossoming republic, the Founders declined to install a sweeping Constitutional guarantee that would place private property beyond a sovereign's reach. Indeed, the Fourth Amendment and Fifth Amendment Takings and Due Process clauses impliedly permit governments to deprive citizens of their property as long as the government meets certain procedural and substantive requirements. For example, the Takings Clause requires that deprivations be for "public use" and that the government "just[ly] compensate]" owners for losses. (30) Relatedly, the Fourth Amendment only proscribes "unreasonable ... [property] seizures," not all deprivations. (31)

      Although the government can interfere with private property, some Founders, Founding influencers, like Locke and Blackstone, and other "early writers[,]" like Samuel Pufendorf and Hugo Grotius, appeared to find arbitrary interference impermissible. (32) For example, Locke believed that people "would not quit the freedom of ... Nature" if they knew they would be subjected to "[a]bsolute arbitrary power" that left ambiguous "rules of right and property[.]" (33) James Madison also appeared to detest arbitrary deprivations, cautioning in an essay that "property [is in]secure ... where the property which a man has in his personal safety and personal liberty, is violated by arbitrary seizures of one class of citizens for the service of the rest." (34) Madison also warned that:

      property [is in]secure ... where arbitrary restrictions ... deny to part of its citizens that free use of their faculties, and free choice of their occupations, which not only constitute their property in the general sense of the word; but are the means of acquiring property strictly so called. (35) Consistent with the concerns voiced by those above, some have suggested that the Takings Clause operates as a prophylactic against arbitrary state action. (36) William Blackstone recognized this principle, and argued that governments could only meddle with private property if they paid owners for losses. (37) Indeed, Blackstone reasoned that "full indemnification" was owed to avoid "[s]tripping the [s]ubject of his property in an arbitrary manner[.]" (38)

      Blackstone's anti-arbitrariness theory is functionally identical to late Professor Joseph Sax's argument concerning compensation. Professor Sax argued that "compensation ... can satisfactorily serve ... [the Takings Clause's anti-arbitrariness] function to the extent that it immunizes existing values against ... risks by requiring the payment of compensation whenever loss is occasioned by exercise of the enterprise capacity." (39) Put differently, compensation guards against arbitrary deprivations by requiring the government to make property owners whole. (40) By requiring the government to indemnify owners, the government may only interfere with private property when "property ... is worth more to the government [or the public] than ... in the marketplace[.]" (41) Compensation thus provides the government with "[dis]incentive[s] to arbitrarily take the property of the populace by putting a price tag on it." (42)

      Although compensation can shield property against arbitrary state action, (43) this Note argues below how the regulatory takings doctrine presently excuses the government's compensation obligations where compensation is needed most. This Note now turns to recount the doctrine's origins and gradual impairment.

   3. Regulatory Takings, the Police Power, and Arbitrariness

      The Takings Clause requires the government to compensate property owners when it deprives them of property "for public use[.]" (44) When the government "physical[ly]" seizes property, it cannot excuse its indemnification duties--no matter how compelling its interests might be. (45) However, the government's compensation obligations are more ambiguous in the regulatory takings context. (46) Where a regulation "denies [an owner of] all economically beneficial or productive use of land[,]" the government must compensate the owner for his loss. (47) Likewise, the government is usually on the hook when it "permanently occupies physical property[.]" (48)

      Regulatory property interference that fails to trigger either of the aforementioned per se rules are often governed by a multi-factor test articulated in Penn Central Transportation Co. v. New York City, (49) which is notoriously deferential to government action. (50) As illustrated in this section, the inapposite logic that courts employ under Penn Central to excuse compensation transcends regulatory takings jurisprudence.

      i. Early Regulatory Takings Jurisprudence

      Inexplicitly arising out of the Tenth Amendment, (51) the police power vests states with "authority to protect the health, safety, and welfare of the public." (52) Courts and scholars have both narrowly and broadly defined...