IMPERFECT TAKINGS.

• Author: Stern, Shai

Introduction 131 I. The Power to Take Private Property: Importance and Inherent Concerns 135 II. The Triangular Safeguard Mechanism of Takings Law 138 III. Imperfect Takings: A Non-Utopian Model for Takings Law 144 IV. Rethinking Old Conventions 148 A. Kelo Reconstructed: Compromising Public Use 149 B. Emerging Takings: Compromising Procedures 153 C. Budgetary Constraints: Compromising Compensation 157 Conclusion 160 INTRODUCTION

Takings law, the power of the government to acquire property from unwilling property owners to further its citizens' needs and interests, is well-rooted in American property jurisprudence. (1) Through this power, the government aims to overcome obstacles threatening its ability to fulfill the essential needs of its citizens, such as sidewalks, roads, educational institutions, medical institutions, and workplaces. These essential needs of society often require the purchase of land for their implementation. For example, if the government aims to build a new highway, it must purchase the land on which the highway is to be built. Clearly, it is desirable to realize these essential goals in an agreed upon manner, through voluntary acquisition of the land from the owners. However, there are situations where such a voluntary acquisition is not possible. One of the main obstacles governments face in providing for society's needs is market imperfection. Market failures, such as holdouts and free riders, may prevent the government from purchasing land voluntarily and may therefore threaten government's ability to meet society's needs. (2) The government's power to forcefully take private property, therefore, is considered an essential instrument that allows it to realize its underlying purpose--fulfilling society's needs. (3)

However, while this power can be useful to the government in overcoming obstacles that may prevent it from meeting the needs of its citizens, its use raises three primary concerns. First is corruption: the government might improperly use its power to take private property even when there is no justification for doing so. Second is fairness: government taking of private property raises concerns about the fair allocation of burdens among society members, particularly where one property owner is forced to sacrifice for the benefit of the community. This concern raises questions about the scope and scale of the obligations that owners have toward their communities (4) and the fairness of forced reallocation of burdens when the beneficiaries include other individuals. Third is inefficiency: the government's use of its takings power--which, because of its coercive nature, operates outside the boundaries of the free market--raises concerns about potential inefficiencies involved in realizing the public need. Specifically, use of the takings power raises two fundamental questions: Whether the government will be able to internalize the social costs involved in realizing the public project for which the property was taken, and how the investment policy of current and prospective landowners will be affected. (5)

These concerns shape current takings law, which aims to address each of these issues by incorporating three safeguards. First is a procedural safeguard, manifested by the government's duty to provide owners with due process to reduce concerns of governmental misuse of takings power. (6) Second is the fairness safeguard, which requires that the taken property be used only for public needs; this sketches the boundaries of owners' obligations to their communities and prevents governments from using their takings power to improperly redistribute property among private individuals. Third is the efficiency safeguard, actualized by the duty Of the government to compensate owners for the taken property, (7) which prevents ineffectiveness in the execution of the public project for which the property was taken. These three safeguards provide triangular protection against the three inherent concerns that arise from the government's takings power. However, what happens when none of these safeguards can be fully realized? Can governments use their takings power to confiscate private property even when doing so might compromise due process, the publicness of the use, or just compensation? If so, under what circumstances can such a compromise be legitimized?

This Article contends that takings law cannot be blind to imperfect circumstances. Emergencies, crises, and budgetary limitations are an undeniable part of everyday reality, and ignoring them may result in situations where the underlying good that governmental taking can promote is overshadowed by the harms that arise in such imperfect circumstances. By the same token, insisting on the full realization of all the safeguards implicated by takings law, regardless of the circumstances, may harm the government's ability to make use of its power, leaving society's needs unfulfilled.

This Article demonstrates that, although each of the safeguards in takings law provides protection against a particular concern, each one simultaneously provides ancillary protection against the other two concerns as well. In this sense, each of the three safeguards incorporated in takings law protects against each of the three concerns inherent in confiscation of private property. These overlapping protections provided by the safeguards allow for an interplay between them. Governments can ease the implementation of one safeguard as circumstances require, while still maintaining an adequate level of protection against all three inherent concerns. This interplay between takings law's safeguards reduces the need for all safeguards to be fully implemented in every circumstance--even when one of the safeguards is not fully implemented, it is still possible to provide adequate protection against the concern it was originally intended to assuage. Indeed, since each safeguard protects against all three of takings law's inherent concerns to some degree, even if the government compromises on one of the safeguards, the interplay identified here will still provide proper protection against all three concerns. Another important aspect of the interplay model is the application of safeguards in a nonbinary manner, such that each of the safeguards can be applied in several different ways. At bottom, by recognizing and implementing this flexible interplay model, decision-makers, legislators, and courts have a predictable framework for adjusting takings law to imperfect circumstances.

With these insights in mind, any compromise on takings law's safeguards must be contingent on two conditions. First, only one of the safeguards can be compromised at any given time, and even then, the safeguard cannot be completely relinquished. This means that even though imperfect circumstances may require a softening in the realization of one of the safeguards, they can never serve as an excuse for governments to ignore or waive that safeguard completely. Second, when one of the safeguards must be compromised, and so is only partially realized, the other two safeguards should be implemented in a stricter manner.

This Article proceeds in four parts. Part I discusses in detail the concerns inherent to governments' use of takings power: governmental abuse of its power, unfair distribution of burdens, and inefficiency in the project's implementation. Part II demonstrates how takings law incorporated three safeguards to address these concerns. The procedural safeguard (through the requirement of due process) is meant to mitigate against governmental corruption; the fairness safeguard, by requiring that expropriation be done only for public use, is meant to ensure a fair distribution of burdens; and the efficiency safeguard, through the compensation requirement, aims to ensure economic efficiency in the exchange being facilitated. Part III identifies the interplay between takings law's three safeguards, which is based in the recognition that although each of them provides primary protection against a certain concern, they all provide secondary protection from the other two as well. This Part continues to discuss the implications of the interplay model, which provides a platform for legitimate takings even in imperfect circumstances. Part IV shifts the proposed interplay model from theory to practice and provides an explanation of takings jurisprudence that seemingly stands at odds with current takings law. This allows a rethinking of old conventions in takings jurisprudence.

1. THE POWER TO TAKE PRIVATE PROPERTY: IMPORTANCE AND INHERENT CONCERNS

   Many governments possess the power to acquire property from unwilling property owners to further the general welfare. This power, which interferes with owners' property rights, is legitimate in most Western legal jurisdictions and is often used by governments to overcome market failures that prevent the efficient implementation of public needs. (8) Compulsory acquisition of private property, however, also gives rise to concerns that are inherent in governmental actions that take a coercive form. Three such inherent concerns have shaped current takings law: governmental abuse of power, unfair distribution of burdens, and inefficiency.

   One of the fundamental premises underlying governmental expropriation powers is that a government will likely encounter difficulties when attempting to provide various social needs to its citizens. Some of the most significant challenges include, for example, the supply of public goods, or overcoming inherent market failures such as holdouts and free riders. (9) However important the takings power is to governments, it must be carefully exercised and executed --indeed, governments' ability to expropriate private property raises a familiar concern: that corruption, greed, or inattentiveness might lead to misuse of this power. (10) That is, authorities who can legally take property through coercion might use this...