The Liberty Amendments: Restoring the American Republic (17 page)

SECTION 1: When any governmental entity acts not to secure a private property right against actions that injure property owners, but to take property for a public use from a property owner by actual seizure or through regulation, which taking results in a market value reduction of the property, interference with the use of the property, or a financial loss to the property owner exceeding $10,000, the government shall compensate fully said property owner for such losses.

I
NFLUENCED BY LUMINARIES SUCH
as John Locke and William Blackstone, the Founders understood that the fundamental right to own and maintain property was an essential element in a functioning civil society. In
The Second Treatise of Government
, which was hugely popular during the American founding and
heavily relied on by Thomas Jefferson in drafting the Declaration of Independence, Locke asserted:

[The government] cannot take from any man any part of his property without his own consent. For the preservation of property being the end of government, and that for which men enter into society it necessarily supposes and requires, that the people should have property, without which they must be suppos’d to lose that by entering into society, which was the end for which they entered into it, too gross an absurdity for any man to own.
¹

In his celebrated
Commentaries on the Laws of England
, Blackstone also extols the right to property:

So great . . . is the regard of the law for private property, that it will not authorize the least violation of it; no, not even for the general good of the whole community. If a new road, for instance, were to be made through the grounds of a private person, it might perhaps be extensively beneficial to the public; but the law permits no man, or set of men, to do this without consent of the owner of the land.
²

Blackstone added that “the public good is in nothing more essentially interested, than in the protection of every individual’s private right, as modeled by the municipal law.”
³

Owning and preserving property free from oppressive government intrusion serves as one of the fundamental building blocks for a prosperous republic. James Madison noted, “Government is instituted no less for protection of property than of the persons,
of individuals.”
⁴
In short, property rights are unalienable rights. “The rights of property are committed into the same hands with the personal rights. Some attention ought, therefore, to be paid to property in the choice of those hands.”
⁵
Gouverneur Morris, a widely influential Founder, observed that enshrining property rights in a civil society was a necessary antecedent to any concept of a functioning community. “Without society property in goods is extremely precarious. There is not even the idea of property in lands.”
⁶
Like Madison, Morris believed that an elemental purpose of any legitimate government was the preservation of property. “Conventions to defend each other’s goods naturally apply to the defense of those places where the goods are deposited. The object of such conventions must be to preserve for each his own share.”
⁷
Thus, “property is the principal cause and object of society.”
⁸

George Mason declared in the Virginia Declaration of Rights, the precursor to the Declaration of Independence, that “all men are by nature equally free and independent and have certain inherent rights . . . namely the enjoyment of life and liberty, with the means of acquiring and possessing property. . . . ”
⁹

Perhaps John Adams put it best when he wrote:

Suppose a nation, rich and poor, high and low, ten millions in number, all assembled together; not more than one or two millions will have lands, houses, or any personal property; if we take into the account the women and children, or even if we leave them out of the question, a great majority of every nation is wholly destitute of property, except a small quantity of clothes, and a few trifles of other movables. Would Mr. Nedham be responsible that, if all were to be
decided by a vote of the majority, the eight or nine millions who have no property, would not think of usurping over the rights of the one or two millions who have? Property is surely a right of mankind as really as liberty. Perhaps, at first, prejudice, habit, shame or fear, principle or religion, would restrain the poor from attacking the rich, and the idle from usurping on the industrious; but the time would not be long before courage and enterprise would come, and pretexts be invented by degrees, to countenance the majority in dividing all the property among them, or at least, in sharing it equally with its present possessors. Debts would be abolished first; taxes laid heavy on the rich, and not at all on the others; and at last a downright equal division of every thing be demanded, and voted. What would be the consequence of this? The idle, the vicious, the intemperate, would rush into the utmost extravagance of debauchery, sell and spend all their share, and then demand a new division of those who purchased from them. The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If “Thou shalt not covet,” and “Thou shalt not steal,” were not commandments of Heaven, they must be made inviolable precepts in every society, before it can be civilized or made free.
¹⁰

The right to private property—that is, the fruits of an individual’s physical and intellectual labor—was known to be a keystone to a free society’s foundation. It is a natural right, protected by natural law. In this there was no divergence between the Federalists and Anti-Federalists.

Given the primacy of property rights, the Framers insisted that certain safeguards must be incorporated in the Constitution to protect against excessive government intrusion. Therefore, as part of the Bill of Rights, the Fifth Amendment provides explicitly, “. . . nor shall private property be taken for public use without just compensation.”
¹¹

Referred to in legal circles as the “Takings Clause,” this provision obligates the government to compensate the property owner when the government takes private property for some putative public good. However, much debate surrounds the issue of what actually constitutes a “taking.” Those who insist on the all-encompassing power of government claim a taking occurs only when the government physically seizes property. Those who, like the Founders, extol the indispensable value of property rights in preserving a civil society recognize that a taking occurs also when the government—by an act of Congress, state legislature, or administrative regulation—effectively destroys or substantially diminishes the market value of private property. These “regulatory takings,” as they are called, are often indistinguishable from actual, physical takings. These types of governmental actions may not constitute an actual physical appropriation of property. Instead, they impose significant restrictions on the owners’ use of the property. Consequently, the property owner can suffer severe economic damages should the restriction prevent the economic development or private use of the property.

Again, the Framers placed the highest importance on property rights, which they sought to protect from the government they were establishing. They would not have cared which branch of the federal government confiscated private property or whether it was confiscated outright or by way of diminished value or use. For
the Framers, private property was inviolable, protected expressly in the Fifth Amendment.

Today the Supreme Court, endlessly seeking ways to reinforce if not promote the growing powers of the federal government, and especially the extensive and growing tentacles of the administrative state, discounts both the nation’s history and heritage. It has limited severely the factors that constitute a regulatory taking that justify compensating the property owner.
¹²

The Court has issued a host of opinions addressing the application of the Takings Clause. In 1922, Associate Justice Oliver Wendell Holmes Jr. first recognized a regulatory taking in
Pennsylvania Coal v. Mahon
. He wrote, “[W]hile property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”
¹³
The imprecise standard of “too far” has confounded subsequent courts, which have attempted to apply a jumbled mass of tests and factors to determine whether a taking has occurred.

The Court has said that in certain limited instances, a regulatory taking will be considered a taking for purposes of the Fifth Amendment and the owner will be awarded “just compensation.” In cases where there is a deprivation of “all economically beneficial use” of a property, the Court has acknowledged that the Fifth Amendment mandates that the property owner be awarded just compensation. In these cases, the regulation has made the property completely worthless. For partial regulatory takings, instances where the regulation only partially affects the value of the property, the outcome is not so certain. In 1978, in
Penn Central Transp. Co. v. New York City
, the Court wrote that there is no “set formula” for determining whether a partial regulatory taking merits compensation, but there are “factors that have particular significance.”
¹⁴
These factors include “the economic impact of the
regulation, particularly the extent to which the regulation has interfered with distinct investment-backed expectations.”
¹⁵

In 1992, in
Lucas v. South Carolina Coastal Council
, even Associate Justice Antonin Scalia indicated that a regulation devaluing a property of 95 percent of its value may not constitute a taking and the property owner would not necessarily be eligible for compensation.
¹⁶
In 1993, in
Concrete Pipe and Prods. of Cal. v. Constr. Laborers Pension Trust for So. Cal.
, the Court held that the “mere diminution in the value of property, however serious, is insufficient to demonstrate a taking.”
¹⁷
It is not enough for a property’s value to decrease as a result of the regulation; the owner must pass some convoluted test to establish a regulatory taking. In 2005, in
Lingle v. Chevron U.S.A. Inc.
, the Court said it would also consider the “character of the governmental action . . . whether [the regulatory taking] amounts to a physical invasion or instead merely affects property interests ‘through some public program.’ ”
¹⁸

These tortured rationales and unnecessarily complex tests discount a seminal and underlying principle of property rights—that is, the right to own and control one’s property is a natural, fundamental right that should receive the highest level of legal protection. The burden should not fall to the individual to justify the government intrusion as one that meets a series of complicated and incoherent tests to qualify as a taking. Rather, the burden should be on the government to justify the appropriation as one necessary for the public interest. Then the onus rests with the government to compensate the individual for the negative economic effect the burden places on the owner’s property interest.

This is not to confuse the government’s role in preserving private property rights under its police powers with a taking. Well before the adoption of our Constitution, it was understood that
one neighbor did not have a right to interfere with the ownership and use of another neighbor’s property. For example, a property owner upstream does not have a right to use his property in a way that pollutes a stream flowing through the land of a property owner downstream, thereby destroying or diminishing the value of the downstream property. As such, the government is exercising its authority to protect private property rights, which also serves the societal good, not expand its power to confiscate or control private property for some asserted governmental purpose.

In the late 1980s, President Ronald Reagan issued Executive Order 12630, requiring federal agencies to consider the “taking implications” when an agency promulgated new regulations.
¹⁹
The order “was needed to protect public funds by minimizing government intrusion upon private property rights and to budget for the payment of just compensation when such intrusions were inevitable.”
²⁰
Although a noble acknowledgment of the importance of property rights, Executive Order 12630 lacked any enforcement mechanisms, because it did not provide a cause of action. Consequently, property owners could not use the agency finding in proving their claim that federal government action was considered a taking.

It is indicative that so extensive is the government’s taking practices that there is no reliable calculation on its aggregate costs to society—either its costs to property owners or the costs to government in those relatively limited cases in which it actually compensates property owners. Meanwhile, there is no question that regulatory takings are swelling as government itself swells.

•  •  •

The proposed amendment does a number of things. It acknowledges the crucial distinction between the government exercising its legitimate police powers to protect private property rights and its obligation to compensate property owners when government action—whether a statute, administrative regulation, or executive order—interferes with the ownership and use of private property for an asserted public interest. If the government action serves a public interest, then the public must assume responsibility for the cost and compensate the property owner who suffers a loss in excess of ten thousand dollars. The proposed amendment will force the government to make more extensive and comprehensive cost-benefit calculations when exercising its legal authority, given that the cost burden shifts from the individual to the government.