Emergency takings.

• Author: Lee, Brian Angelo
• Position: Compensation for government confiscated private property to address emergencies - Abstract through III. Justifying Noncompensation B. Shifting Responsibility 2. A Special Case: Inevitable Destruction, p. 391-420

Takings law has long contained a puzzle. The Fifth Amendment to the U.S. Constitution requires the government to pay "just compensation" to owners of private property that the government "takes. " In ordinary circumstances, this requirement applies equally whether the property is confiscated or destroyed, and it also applies to property confiscated in emergencies. Remarkably, however, courts have repeatedly held that if the government destroys property to address an emergency, then a "necessity exception" relieves the government of any obligation to compensate the owner of the property that was sacrificed for the public good. Although the roots of this startling principle stretch back for centuries, existing literature offers neither a systematic analysis of the justifications that have been offered for the principle nor a developed normative account of what the correct approach should be. This Article seeks to remedy both of these significant gaps in the current understanding of takings law. The Article identifies three pivotal but commonly overlooked distinctions and explains how they interact to provide a general theory of compensation for emergency takings. First is a distinction among different roles that compensation may play in any given situation. Second is a distinction between two different types of "necessity," each of which has a different normative implication. Third is a distinction among amounts of compensation that might be owed. Recognizing these distinctions in turn reveals why the main justifications of the necessity exception are unpersuasive, why courts nevertheless so often have been inclined to endorse that exception, and what the correct approach to emergency takings actually is: when the need to destroy property in an emergency is accompanied by grave constraints on the ability to pay compensation, then an obligation to pay "just compensation" for the destroyed property remains, but the amount of that compensation changes. Under such circumstances, what justice requires is partial compensation.

TABLE OF CONTENTS INTRODUCTION I. DESTRUCTION IN ACTION A. Conflagrations B. Wartime Destruction C. Crime, Disease, and Floods II. UNDERSTANDING NECESSITY A. Compensation's Varied Roles B. Two Types of Necessity C. Partial Compensation III. JUSTIFYING NONCOMPENSATION A. Incentives for Efficient Decisions B. Shifting Responsibility 1. The Threatening Condition Is Responsible 2. A Special Case: Inevitable Destruction 3. The Property Owner Is Responsible for a "Nuisance" C. Compensation Is Superfluous 1. Implicit Ex Ante Compensation 2. Private Insurance as Substitute for Public Compensation 3. Little Risk of Opportunism D. Alternative Sources of Authority 1. "Natural" Private Rights of Destruction 2. Military Necessity and the "Fortunes of War" IV. HISTORY IN CONTEXT CONCLUSION INTRODUCTION

Takings law has long contained a puzzle. The Fifth Amendment to the U.S. Constitution explicitly requires the government to compensate owners of property that the government "takes" for public use. (1) Ordinarily this requirement applies equally whether the government confiscates the property through eminent domain or destroys the property without taking possession of it. (2) This consistent requirement to pay compensation is unsurprising, since the owner's loss is the same whether the government destroys the property or puts it to some other use. (3) Even if a crisis gives rise to extraordinary circumstances, the government still owes compensation to owners of private property that the government confiscated and used to address the emergency. (4) One naturally would expect, therefore, that the same rule would apply when the government destroys private property to address an emergency. Remarkably, however, courts have repeatedly held that if the government responds to an emergency by destroying private property altogether, instead of merely confiscating and using it, then the owner ceases to be entitled to any compensation. (5) Although the government has directly inflicted a potentially enormous loss on the innocent and unfortunate property owner in order to benefit others in the community, the government owes the owner nothing. Many courts at many different levels have affirmed this exemption from paying compensation, which, for convenience, one might call the "noncompensation principle." (6) Indeed, courts and scholars have said that the noncompensation principle has been well-established law for centuries. (7)

Nevertheless, on its face, this noncompensation principle is quite puzzling. From the property owner's perspective, there is no significant difference between the government's confiscating the property to use it and the government's destroying the property. In both cases, the effect on the property owner is the same--she is deprived of the property that she once had. And yet despite this fundamental equivalence, in one case the government must compensate her for her loss, and in the other it need not.

Others have recognized the puzzling nature of this principle. For example, the authors of the Second Restatement of Torts, while acknowledging the rule's existence, assert that "the moral obligation to compensate the person whose property has been damaged or destroyed for the public good is obviously very great, and is of the kind which should be recognized by the law." (8) Some academic commenters have expressed similar sentiments. (9)

These scattered criticisms, however, have not offered any systematic analysis of the justifications that have been offered for the noncompensation principle, nor made any attempt to explain why courts so often have endorsed that principle despite its apparent incompatibility with other key features of takings law. These deficiencies, in turn, have prevented existing literature from being able to offer a rigorously grounded foundation for an alternative approach.

This gap in the current understanding of takings law is particularly unfortunate in light of the noncompensation principle's influence on other contested areas of property law, especially regulatory takings. For example, both the majority and a dissent in Lucas v. South Carolina Coastal Council, a seminal regulatory-takings case, cite emergency-destruction cases in support of their respective analyses. (10) Moreover, the principle's potential practical implications are growing. Today the scope of government emergency destruction has expanded beyond classic paradigms of urban fires and wartime emergencies to include activities as diverse as law enforcement, storm and flood mitigation, and disease eradication. (11) (This last category's significance may continue to grow as governments around the world increasingly seek to avert deadly global pandemics by destroying potential vectors, such as poultry and livestock, that may incubate and transmit new infectious diseases. (12))

Hence, a comprehensive analysis of the government's obligations with respect to emergency takings is long overdue. This Article aims to fill this gap, both by providing a detailed critical examination of the main arguments that courts and commentators have offered over the past two centuries in defense of the noncompensation principle and by developing an account of what the correct approach should be.

Accomplishing these tasks, this Article argues, requires recognizing three crucial distinctions that both courts and commentators have overlooked.

First, this Article distinguishes between the different roles that compensation can have in any given interaction. Discussions of emergency takings routinely assume that the purpose of requiring the government to pay compensation for takings is to serve as restitution for the wrong done to owners by inflicting a property loss on them. (13) Under this assumption, establishing that destruction in emergencies is not wrongful would be sufficient to show that no compensation is owed. This Article argues, however, that rectifying wrongs is only one role that compensation may play. The role that compensation actually does play in takings generally, and in emergency takings specifically, is importantly different.

The second pivotal distinction is between two different types of "necessity." Defenses of denying compensation to owners of destroyed property commonly rely heavily on assertions that the destruction was "necessary" under the circumstances. The underlying assumption is that the presence of "necessity" eliminates any obligation to compensate those who suffered the costs of that destruction. (14) Such arguments overlook a crucial distinction between two different types of necessity--"destruction necessity" and "noncompensation necessity." While the former type of necessity is relevant for determining whether destroying property without the owner's consent may be permissible, only the latter type is relevant to answering the separate question of whether compensation is owed for that destruction. This Article argues that recognizing the distinction between these two forms of "necessity" provides the key to understanding two pieces of the emergency-takings puzzle: it unlocks the ability to understand both how the noncompensation principle diverges from the correct approach to emergency-takings compensation and why, nevertheless, courts and commentators have so often found that principle appealing.

When both destruction necessity and noncompensation necessity are present, the third overlooked distinction becomes relevant. A common assumption in many areas of law, including discussions of emergency destruction, is that the amount of compensation owed in any given case must be either full compensation (if the plaintiff prevails) or zero compensation (if the defendant prevails). Between those two extremes, however, lies an entire spectrum of potential intermediate amounts of compensation, and this Article argues that when noncompensation necessity is present in the aftermath of an emergency...