PRIVATIZATION, PUBLIC COMMONS, AND THE TAKINGSIFICATION OF ENVIRONMENTAL LAW.

• Author: Ryaw, Erin

INTRODUCTION 620 I. PUBLIC COMMONS, PROPERTY RIGHTS, AND POLICY ENTRENCHMENT 625 A. Public Natural Resource Commons 627 B. Property Rights as a Tool of Policy Entrenchment 630 C. Public and Private Law Stickiness in Constitutional History 635 D. Takingsification in American Property Law 640 II. THE PRIVATIZATION PARADOX IN ACTION: SALTING PUBLIC COMMONS WITH PRIVATE RIGHTS 646 A. Offshore Oil and Gas Leasing on Public Lands 651 B. Private Leasing in the Arctic National Wildlife Refuge 659 C. National Monuments and Hard Rock Mining 663 D. Commercial Fishing and Aquaculture 669 1. Commercial Fishing in Protected Marine Sanctuaries 671 2. Aquaculture and Mariculture 673 E. Private Rights to Dredge and Fill Public Waterways 678 III. THE LIMITS OF PRIVATE INTERESTS IN PUBLIC COMMONS 683 A. Overprivatization as a Problem of Property Theory 684 B. The Dynamic Continuum of Public and Private Interests in Property 688 1. The Contested Category of Public Resource Commons 688 2. Conventional Autonomous Rights 690 3. The Dynamic Bundle of Sticks 693 C. Private Rights in Public Commons: Water and Grasslands 696 1. Property Theory in Context: Water Takings in Oklahoma 700 2. Water Takings and the Public Trust Doctrine 704 3. Grazing Takings 707 D. Takings and Natural Resource Commons Paradigms 715 IV. A MODIFIED REGULATORY TAKINGS TEST FOR PUBLIC COMMONS 718 A. A Note on Physical Takings in Natural Resource Commons 720 B. Reimagining Regulatory Takings Balancing in Commons 725 1. Economic Impact Prong 727 2. Investment-Backed Expectations Prong 729 3. The Character of the Government Action 730 4. The Proposal and Precedent: It Was There All Along 732 C. The Next Purposeful Step in Takings Evolution 738 D. Objections: Private Rights, Limiting Principles, and Stewardship 741 1. The Underprotection of Private Rights 742 2. "Just Pay for It" 743 3. Cumulative Impacts and Limiting Principles 745 4. Property Rights vs. Stewardship 747 5. A Too-Modest Proposal? 749 CONCLUSION 750 INTRODUCTION

This project explores the critical but undertheorized question of how to balance private and public interests in public natural resource commons from which private rights may be subdivided. It is a long exploration, but it makes three basic points. First, it describes a novel strategy for privatizing these commons efficiently, in which environmental regulations are lifted, enabling the creation of new private interests in the deregulated commons that complicate resumed regulation by later policymakers. Second, it argues that this strategy gains support from the ascendancy of a property theory paradigm that overprotects weaker private interests in commons property by inappropriately analogizing them to stronger private interests in more autonomously held forms of property. Finally, as one way to begin resolving these problems, it suggests a reform to regulatory takings law that would require a more balanced assessment of both the public and private property interests at stake in contested natural resource commons.

The strongest forms of conventional private property confer relative autonomy on their owners, enabling them to control many of the proverbial sticks in the bundle of rights associated with property, including rights of exclusion, possession, use, and transfer. (1) In contrast to these strong forms of autonomously held private property, the public commons that are the subject of this Article are common pool resources jointly held by all members of a community, though many have been regulated to manage the governance problems associated with open commons. (2) Many of our most important public commons are natural resources, including air, water, public lands, energy reserves, and biodiversity resources, all of which are prone to different forms of diminution by private exploitation. However, two built-in legal biases that favor private rights in these resources could impact their protection, at a time when environmental law has already proven politically vulnerable.

In the last half-century, a phalanx of environmental laws was enacted to protect public natural resources commons from ecological harms associated with private expropriation, extraction, congestion, and pollution. (3) More recently, stakeholders seeking to expand private access to these resources have targeted many of these laws for repeal or reduction. As the Trump Administration came to a close in 2021, about one hundred federal environmental rules and regulations had been reversed, revoked, or were in the process of being rolled back. (4) Many had protected public lands, waterways, aquifers, forests, fisheries, minerals, atmospheric resources, and other natural resource commons that provide critical ecosystem services. (5) The legal changes under the Trump Administration helped midwife a new generation of private interests that now compete with public environmental values associated with these underlying commons.

Yet private interests carved out during periods of environmental deregulation not only erode the underlying commons directly; they can also serve as a foil against resumed protection of impacted public values in the remaining commons--a tool for "salting the land" against future environmental law--by creating legal claims against new or resumed regulation. The proliferation of private rights in opened commons complicates future lawmaking by encumbering it with potential takings, administrative law, and political liabilities, making it harder for future legislators to reinvigorate weakened environmental laws. This potential for entrenched privatization is heightened by the failure of property law theory to properly balance the competing public and private interests in natural resource commons. The topic is especially important in the current era of policy instability, in which public natural resource commons have been serially regulated and deregulated, and protected and then opened for business once again, further obscuring the boundaries between public and private interests in these resources.

This Article isolates two troubling asymmetries in the law that effectively create a one-way ratchet toward resource privatization at the expense of public values in publicly-owned natural resources. Analyzing the first asymmetry, the Article traces the acceleration of private interests in various public natural resource commons and the potential takings and reliance problems that may arise when these policies are later reversed--only to be potentially revisited and reversed again (and then again)--as we have witnessed during the policy transitions that have taken place between the Clinton, Bush II, Obama, Trump, and Biden Administrations. (6) The acceleration of private rights during the Trump Administration was especially marked, and the changed priorities of the subsequent Biden Administration raise questions about legal claims to protect those private interests if they are threatened by new policies favoring public environmental values.

This dynamic shows how easy it is to carve private interests from public natural resource commons, and yet afterward, how hard it is to reassert the public interests that remain in the underlying commons without triggering legal claims and political friction. It is a pragmatic problem, and one that we might call the "privatization paradox" of the commons, because the pattern works in only one direction. The conversion of public natural resources into private interests survives policy transitions in what is so often a one-way journey, because private property law norms are stronger--and the rights they create stickier--than public regulatory law norms.

The privatization paradox is further revealed by the second asymmetry, which is the reinforcement of this pattern by a property theory paradigm that overprotects private interests in natural resource commons at the expense of competing public interests. Potential takings claims are especially viable in a paradigm that uncritically equates private interests in strong forms of conventional private property (such as a family home) with the more circumscribed and correlative private interests in public natural resource commons (such as public lands, air, and water resources). But protecting private claims in public commons with equivalent force as a family home misunderstands the complex relationship between the public and private interests that exist in all property, and that is especially pronounced in public commons. More importantly, it threatens the public environmental values in natural resource commons that are already so vulnerable to private overexploitation. (7) In some commons contexts, such as water law, whether a taking has even occurred remains an unsettled--and occasionally hotly debated--question. (8) Answers to these questions are of deep interest both to those who seek to extract from these commons and those who seek to protect them.

As environmental laws continue to be targeted for weakening, deregulation, and administrative streamlining, (9) this Article considers how such efforts not only succeed in the present but may be entrenched into the future through these subtle but vital trends that link environmental and property law. The strategic creation of private rights in deregulated public commons not only threatens to incrementally privatize public natural resources outright, but also inhibits resumed environmental protections by threat of takings litigation or other administrative actions. Binding environmental policymaking discretion through the creation of constitutionally and administratively protected private rights in natural resource commons--what this Article collectively refers to as the "takingsification" of environmental law--can be a powerful strategy for weakening environmental conservation even after future conservation-oriented leadership takes office.

This Article thus explores the implications of the privatization paradox and...