Ultra Vires takings.

AuthorZinn, Matthew D.
PositionUnauthorized state action taking private property for public purpose

INTRODUCTION

When does legislative or administrative regulatory action "go[ ] too far" and effectively amount to an appropriation of private property for which the Fifth Amendment requires just compensation?(1) This question has turned out to be one of the thorniest in American constitutional law.(2) The Supreme Court has identified several circumstances in which one can expect to find a regulatory taking,(3) but its numerous pronouncements on the subject give no clear rule to distinguish compensable takings from noncompensable interference with property rights.

Notwithstanding its volume, the commentary on the Takings Clause by and large addresses only proper governmental action that rises to the level of a taking. Commentators have bypassed the question of what the Clause demands of regulatory restrictions that suffer from other legal flaws, such as being without statutory authority or being arbitrary and capricious. This Note suggests there are compelling reasons that one such flaw -- the action's being unauthorized, or ultra vires(4) -- should be fatal to takings claims directed against state governments. Whether these particular takings must be compensated remains to be determined conclusively.

This issue may be presented in several procedural postures. A property owner might bring both a takings claim and an administrative law claim complaining that the regulation is ultra vires. The court might then enjoin the regulatory action on the latter basis,(5) converting what would have been a permanent taking into a temporary taking.(6) The issue also arises when a court has enjoined the regulation in a previous action and a property owner later seeks just compensation for the duration of the enjoined action.(7) In any event, because courts enjoin unauthorized actions, such flawed regulations can, at most, amount to temporary takings.(8)

Consider the following example.(9) A state agency requires that a property owner obtain a permit to develop her property. The agency denies the owner the permit, leaving the owner with no economic use of the property. The owner sues the agency, claiming that the agency lacked statutory authority to demand that the owner obtain the permit in the first instance and also that the denial effected a taking of the property. After severing the claims for trial, the court decides that the agency altogether lacked authority to regulate the property, and it mandates that the agency not stand in the way of the development. In so doing, the court transforms the plaintiff's permanent takings claim into a temporary takings claim because the owner may now proceed with her intended use of the property. Must the court now award just compensation for the economic loss suffered while the regulation was in effect?

Courts have not conclusively decided whether state and local governments must pay just compensation under the Takings Clause for agency actions that are invalidated by a court as ultra vires.(10) These cases might be adequately addressed under the normal tests for regulatory takings; that is, ultra vires takings might be compensable like any other action that meets the courts' definition of "taking." Indeed, several courts have approved such claims against state agencies with little or no attention given to the fact that the action was ultra vires.(11) To the contrary, however, the courts that most frequently exercise jurisdiction over claims brought against the federal government -- the Court of Federal Claims(12) and its predecessors,(13) the Federal Circuit Court of Appeals,(14) and the U.S. Supreme Court(15) -- have almost unanimously held that unauthorized federal agency actions cannot give rise to takings liability.(16) A handful of courts have similarly rejected ultra vires takings claims leveled at state agencies expressly because the implementing agency lacked authority.(17) Both the federal and state cases rejecting ultra vires takings claims are notable for their myriad rationales(18) and for their often perfunctory discussion of those rationales.(19)

Reading the literature on the Takings Clause, one might think that once an action has been characterized as a taking -- for instance, because it deprived a property owner of all economically beneficial use of her property -- the court's liability inquiry is finished and all that remains to be decided is the amount of compensation due. On the contrary, that a "taking" has occurred is only one of the Clause's demands. For instance, the taking must have been of "private property," and the parties might dispute whether the interest taken was in fact within the plaintiff's "bundle."(20) Similarly, the action must be that of the government and it must serve a "public use." In short, under the plain language of the Takings Clause, to call an action a "taking" says nothing about whether it is a compensable taking.(21)

This Note relies on the latter two requirements to argue that courts hearing claims against state administrative agencies should follow the federal rule and refrain from holding those agencies liable under the Takings Clause for unauthorized actions.(22) Part I maintains that ultra vires takings violate the state action requirement of the Takings Clause, as the law of agency indicates that ultra vires actions are not the actions of the sovereign. Part II argues that the "public use" requirement of the Takings Clause limits payment of just compensation in inverse condemnation cases(23) to those circumstances in which the legislature has found that the taking will serve a public purpose. Because unauthorized agency actions by definition do not advance public uses, Part II concludes that such actions do not demand just compensation under the Clause. Finally, Part III contends that the intuition of fairness underlying the Takings Clause does not counsel against the arguments made in the first two Parts. Part III concludes that due process, tort, or legislative remedies might be available to an aggrieved property owner, but just compensation under the Takings Clause is not. This Note concludes that the Takings Clause is intended to compensate property owners only for "otherwise proper"(24) government actions that take private property, and ultra vires actions are not such "proper" actions.

  1. STATE ACTION AND AGENCY PRINCIPLES

    A takings claimant must demonstrate that her injury is the result of government action if the government is to be held accountable therefor. This Part argues that where a government agency lacks statutory authority for its action, the action cannot be attributed to the government and thus the government cannot be liable; the agency does not act as an agent at all. Section I.A maintains that the principle of authority well established in the law of agency indicates that ultra vires agency actions cannot be compensable under the Takings Clause and that the doctrine of apparent authority cannot save these claims. That section demonstrates that several Supreme Court cases have applied this rationale to reject ultra vires takings claims leveled at federal agencies. Section I.B argues that because the position of the responsible government agency in the federal system is irrelevant to the agency principles used in the Supreme Court cases, those cases and principles should be applied to reject ultra vires takings claims directed at state regulatory actions as well as their federal siblings.

    1. Authority and State Action

      Like most of the Constitution's provisions, the Takings Clause requires that a plaintiff allege governmental action to state a claim,(25) though the Clause's use of the passive voice obscures the actors to whom the Clause is directed: "nor shall private property be taken for public use, without just compensation."(26) As an "incident of sovereignty," the taking power must be exercised by the sovereign or its delegate.(27) Where the sovereign is not responsible for a taking, the taking cannot be compensable under the Constitution's Takings Clause.

      Section I.A.1 argues that, under the common law of agency, an agency's lack of authority means that the sovereign cannot be held liable for the agency's actions. The section maintains that the Supreme Court has rejected takings liability for federal agencies on this basis. Section I.A.2 contends that the doctrine of apparent authority is consistent with this outcome.

      1. Authority

      The principle of authority applied in the common law of principal-agent relations indicates that ultra vires actions do not satisfy the state action requirement. In general, principals cannot be subject to vicarious liability for the acts of their agents where those agents have acted without authority,(28) Applying this principle to public officers, when government officials -- public agents -- have acted without statutory authority, their acts cannot be considered to be acts of the government -- the public principal. While the responsible officers may be seen as acting in their individual capacities, they cannot be seen as acting as agents of the state. As a result, the state action component necessary to a takings claim is lacking and the government need not provide compensation to affected property owners. On this basis, albeit without invoking agency law by name, the Supreme Court has rejected ultra vires takings claims directed at federal agency actions.(29) The lower federal courts have also applied the Court's doctrine in many cases to reject just compensation liability.(30) To be sure, the Court's rejections of ultra vires takings claims have been more frequent than its perfunctory discussions of the agency rationale therefor.

      The Court stated the agency-based rule most clearly in Hooe v. United States,(31) where the plaintiff landowner sought just compensation for the Civil Service Commission's occupation of more office space in plaintiffs building than was provided for in the Commission's lease.(32) The Court rejected the takings claim, holding that:

      If...

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