Supreme Neglect: How to Revive Constitutional Protection for Private Property.

• Author: Treanor, William Michael
• Position: Book review

SUPREME NEGLECT: HOW TO REVIVE CONSTITUTIONAL PROTECTION FOR PRIVATE PROPERTY. By Richard A. Epstein. Oxford and New York: Oxford University Press. 2008. Pp. xiv, 169. $19.95.

INTRODUCTION

Since his classic book Takings (1) appeared in 1985, Richard Epstein's (2) ideas have profoundly shaped debate about the Fifth Amendment's Takings Clause (3) to a degree that no other scholar can even begin to approach. His broad, original, and stunningly ambitious reading of the clause has powerfully influenced thinking in academia, in the judiciary, and in the political arena. The firestorm of controversy that followed the Supreme Court's recent decision in Kelo--in which the Supreme Court upheld the constitutionality of a municipal urban renewal plan that displaced long-time homeowners and conveyed their land to developers (4)--is in critical part a testament to the way in which the intellectual framework and normative arguments pioneered and championed by Professor Epstein have entered, not just the mainstream of legal thought, but the mainstream of politics.

In Supreme Neglect, Epstein has produced a clear and elegant synthesis of his lifetime of thinking about the Takings Clause and, more broadly, about the role of property in our constitutional system. In a book consciously aimed at a popular audience (p. xvii), Epstein advances his view that strong protection for private property must be a core value of our constitutional system because that was the conception of the Framers, because the constitutional text dictates such protection, and because strong protection for private property safeguards liberty and advances general economic well-being. For Epstein, the Takings Clause is the Constitution's primary mechanism for protecting private property against government overreaching. He argues that, if courts read the clause correctly, they will not only invalidate much land-use regulation, the area involved in most takings litigation today, but also the statutory regimes that create the modern regulatory state. In essence, for Epstein, the Takings Clause bars government from acting in ways that diminish the value of private property (with the exception of a highly constrained category of police-power regulations).

Under modern Supreme Court caselaw, the Takings Clause constrains government actions in two ways. First, it bars the government from physically "taking" private property (as when it uses the power of eminent domain to acquire property for schools or roads) unless compensation is provided (5) and unless the taking is for a public benefit. (6) Second, it prevents "regulatory takings"--regulations that go "too far" (7) in diminishing the value of private property without providing compensation. Although Supreme Court decisions do not reflect a consistent position on precisely when regulations go so "far" in diminishing value as to constitute a taking, only dramatic diminutions in value have been found to go "too far." (8)

Epstein sees the clause as a dramatically more powerful limitation on government. According to Epstein, the Takings Clause is a "twelve-word distillation of social contract political theory" (p. 34). The just compensation principle that the clause embraces ensures that the individual will not suffer when his or her property is taken. Central to Epstein's position are the notion that "[t]he use of compensation ... prevents any single individual or small group from being 'singled out' for special adverse treatment, for the cash paid is meant to be a perfect equivalent of the property surrendered" (p. 32) and his belief that "forced transactions" resulting from "the use of state power ... should yield proportionate gains to all individuals" (pp. 32-33). This principle of proportionate gain accords with "intuitive grounds of fairness" (p. 33). It also promotes efficiency, a point on which Epstein places great stress:

Forcing the government to supply proportionate gains necessarily shrinks the level of factional intrigue.... [S]truggles [to win a disproportionate share of the gain from governmental actions] cost a lot of time and money to wage, generating backstabbing and conflict along the way. The combined effect of these political maneuvers is to eliminate much of the ... gain that the social project originally promised. The proration requirement offers an effective way to counter that risk.... (p. 33) Epstein applies this principle of proportionate gain to a wide range of doctrinal areas. He would, for example, carefully scrutinize government actions to determine whether they satisfy the "public use" requirement of the Takings Clause, rather than applying the deferential standard of review of "public use" reflected in the Court's decision in Kelo. Even when compensation is provided, takings to advance an urban renewal project would pass constitutional muster "only when the loss in subjective value is small and the locational necessities are great" (p. 85). He argues that rent control is unconstitutional, as well, because of its disproportionate impact, benefiting current renters while disadvantaging everyone else (p. 73). The Supreme Court's determination in Village of Euclid v. Amber Realty Co. (9) that zoning is constitutional similarly runs afoul of the proportionate-advantage rule, since the zoning ordinance that the Court upheld made some property owners big winners and others big losers (pp. 117-19). Endangered species legislation also runs afoul of the Takings Clause because such legislation "converts the discovery of any valuable species on private lands from a source of new wealth to its owner into a mortal threat to the land's productivity" (pp. 133-34). To take yet another example, progressive taxation (definitionally) also fails to pass muster under the principle of proportionate gain (pp. 167-68).

Epstein's vision of the Takings Clause thus narrowly circumscribes governmental action. He allows government to prevent property owners from engaging in common law nuisances since common law nuisance law reflected the principle of reciprocity: "each person will gain more from these restrictions imposed on others than he will suffer when like restrictions are imposed on him" (p. 23). Thus, the regulation is permissible because it benefits property owners in general. He also allows rate regulation to the extent it is necessary to end monopoly profits: rate regulation permissibly limits "the natural monopolist [such as the railroad owner] to competitive prices" (p. 151). Here, regulation is permissible to the extent it addresses a situation of market failure. In general, however, compensation is mandated if the individual has not gained proportionally from governmental action, and the strict public-use requirement bars some governmental actions even when compensation is paid.

The real question posed by the book, however, is not what the proportionate-gain approach entails, but whether it is constitutionally mandated. Epstein makes two arguments here. One argument is historical: he claims that the Takings Clause should be understood to embody the Founders' conception of the inviolability of private property. The second argument is textual: he contends that a proper reading of the words of the clause would lead courts to the view that government cannot diminish property value (except in very limited circumstances). The remainder of this Review will be devoted to these arguments. I will argue that proper regard for the Framers' conception and constitutional text--the two primary anchors of Epstein's theory--leads to a limited amount of judicial protection for private property; original understanding and constitutional text indicate that the purpose of the Takings Clause is simply to provide compensation in cases of government seizure of property, a position dramatically different from Epstein's. More broadly, if one were to apply the text according to the original meaning of the words or to follow the concrete understanding of the founding generation, one would reject not only Epstein's approach to the clause, but the entire modern regulatory-takings doctrine.

1. HISTORY AND THE TAKINGS CLAUSE

   With respect to history, Epstein's account is a story of decline. The subtitle itself, "How to Revive Constitutional Protection for Private Property," embodies the notion that we have lost what we once had--adequate protection for private property--and that we must recover what we have lost. The halcyon days were the days of the Framers, the moment in which we departed from the original understanding was the New Deal, and the culprit was...