The Armstrong principle, the narratives of takings, and compensation statutes.

• Author: Treanor, William Michael
• Position: Defining Takings: Private Property and the Future of Government Regulation

INTRODUCTION

The Takings Clause of the Fifth Amendment(1) is famous for inspiring disagreement. More than one hundred years have passed since the Supreme Court departed from the original understanding of the clause and interpreted regulations as potentially falling within its ambit.(2) Although the passage of time has established the principle that regulations can run afoul of the Takings Clause, the Court has been unable to offer a coherent vision of when compensation is required.(3) Academic commentators also have failed to reach agreement on the issue, offering an enormous range of solutions to the takings question.(4) The newest field of controversy involves compensation statutes.(5) In a few short years, the property rights movement's demand that both state and national legislatures provide compensation when government regulations diminish property value has won widespread support, which, since 1994, has begun to translate into legislative success.(6) The Contract with America provides that "property owners [are] to receive compensation . . . for any reduction in the value of their property" greater than ten percent.(7) Shortly after the 104th Session of the House of Representatives began, its members passed an act requiring compensation when certain regulations decreased the value of land by more than twenty percent.(8) Five state legislatures have passed statutes directing that property owners be paid for losses that they suffer as the result of governmental regulations.(9)

The success of the property rights movement, however, has provoked a powerful response. Academic criticism has been sharp,(10) and political opposition has been intense.(11) Property rights legislation already has been repealed by referendum in Washington state(12) and rejected in an Arizona referendum.(13) President Clinton has threatened to veto any federal property rights bill.(14) Opponents of compensation statutes accurately have seen in both the proposed and enacted statutes a direct threat to the continued existence of the regulatory state: by requiring compensation for regulations these statutes will make the imposition of many regulations too costly.

Given the extraordinary diversity of opinion about when compensation is owed, it would be only natural to expect that an equal lack of agreement would exist about what purpose the Takings Clause serves. The reality, however, directly contradicts that expectation. Justice Black crisply stated his view of the purpose of the Takings Clause in Armstrong v. United States:(15) The Takings Clause is "designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."(16) Justice Black's view has received a remarkable degree of assent across the spectrum of opinion.(17) The Armstrong principle has become, according to Professor Glynn Lunney, a part of the "ritual litany" employed in takings decisions.(18) The principle has been embraced repeatedly by Chief Justice Rehnquist and by Justice Scalia, the judicial champions of a broad reading of the Takings Clause,(19) as well as Florida's compensation statute.(20) It is contained specifically in the text of, and invoked in support of, various property rights proposals recently introduced in the Senate.(21) The champions of a narrow reading of the clause, Justices Brennan, Blackmun, Marshall, and Stevens have espoused the Armstrong principle with equal fervor.(22)

At one level, this striking unanimity results from Justice Black's broad language. His language avoids confrontation of the hard question: What do fairness and justice require? People with very different ideas about fairness can accept the Armstrong principle while diverging sharply as to what it means. Nonetheless, cultural conventions exist to give the principle meaning.

Bruce Ackerman has offered the leading scholarly treatment of cultural conventions concerning the Takings Clause in his book Private Property and the Constitution.(23) Ackerman develops what the Takings Clause means to "Layman"(24) by examining "Ordinary language"(25) in order to reveal what would "be called takings in ordinary life."(26) He argues that Layman understands the word "property" to refer, most fundamentally, to tangible, physical possessions and the word "take" to refer, most fundamentally, to physical seizures.(27) Thus, when the government physically seizes his property and uses it for some purpose, Layman would say that his property has been taken. Similarly, using "standard English," Layman would also describe his property as having been taken when the government destroys it.(28) Finally (and most problematically), when government renders something useless, Professor Ackerman argues that Layman again would say that that thing has been taken from him because "the principal point of property talk is to permit Layman to identify some things in his environment that he may exploit to his advantage without incurring adverse social sanction."(29) To say that an individual still owns something that no longer has any value is to "exhibit[ I either a bad sense of humor or a complete ignorance of the point of property-talk in American society."(30)

Ackerman's primary analytic tool is linguistic. Rather than drawing on any empirical data indicating when lay people believe property has been taken and compensation owed, he focuses on what the relevant terms mean in everyday speech. The claims he makes have an intuitive appeal: they seem to capture common understanding. Moreover, the categories of situations he identifies as being ones in which the layperson believes her property to have been taken--ones in which the property is physically seized, or destroyed, or stripped of all value--are the ones that courts treat as easy cases for compensation (even though scholars often disagree with this result).(31) Judicial practice thus supports the existence of cultural conventions.

In this Essay, I argue that there is an additional category of cases in which there is a cultural convention that fairness requires compensation. This category consists of cases in which unanticipated regulations destroy a significant portion of the total assets of a property owner. From a legal vantage point, these cases are very different from those situations Ackerman discusses: courts will not necessarily order payment to be made to these property owners nor will they necessarily invalidate the regulations. Courts will not always order compensation because judicial takings inquiries typically focus on the harm to the property, not on the actual harm to the property owner. If a regulation equally affects the value of Blackacre and Whiteacre, courts will analyze the cases of the owners of Whiteacre and Blackacre identically. The courts will treat the cases in similar fashion even if the owner of Whiteacre also owns many other properties that are not affected by the regulation, and the owner of Blackacre owns nothing else and thus is deprived of most of the value of her total assets by the regulation.

As a matter of constitutional interpretation and the institutional role of the courts, this result is the correct one. The fact that courts will not direct compensation, however, does not mean that legislatures should not provide it. In this Essay, I argue for compensation statutes at the state and national level designed to ensure compensation in the final category of cases described above, those in which the total net worth of a property owner is dealt a disproportionate blow as a result of a newly instituted government regulation.

At the outset, the limited goals of this Essay should be made clear. It is an initial, but admittedly partial, attempt to sketch out a new kind of compensation statute. It begins from the twin premises that takings law and compensation practices should reflect the Armstrong principle--the principle that individuals should not bear an unfair share of public burdens--and that this principle should be substantiated through cultural conventions. In other words, I start from the assumption that compensation is due in at least those cases in which there is a consensus that it should be provided and then offer a model compensation statute designed to provide compensation in those cases. My claim is not that there are no additional cases in which compensation should be paid; only that compensation statutes should, at a minimum, cover this category of cases. Neither will I attempt to offer a full defense of the legitimacy of these premises. They seem to me, however, to be obviously correct. A democratic government should not treat its citizens in a way that is generally thought to be unfair.(32)

The enterprise of this Essay is important, in part, for prudential reasons. Though critics of the property rights movement's compensation statutes effectively have revealed a range of those statutes' shortcomings,(33) they have not offered an alternative vision for what compensation statutes should look like. As a political matter, this is a mistake. The absence of an alternative makes the property rights movement's proposals significantly more attractive to many people. Although many individuals may find these statutes too broad, the statutes offer the only mechanism available to help those who, despite being greatly harmed by regulation, have no hope of judicial redress. My proposal seeks to remedy unfairness without simultaneously making regulation impossible.

In addition, statutes of the kind I propose here are necessary if the Takings Clause is to reach its appropriate role in the constitutional framework. In the past few years, process theories about the Takings Clause have achieved prominence in scholarly debates regarding the clause.(34) These theories are, to quote Professor James Krier, the "latest fad in the field."(35) Most proponents of process theories (myself included) believe that courts should defer to the...