Takings Exception

Maverick legal scholar Richard Epstein on property, discrimination, and the limits of state action

Steve Chapman from the April 1995 issue

(Page 3 of 6)

You need to have a way of talking about the relationship between constructive regulation and abusive bargaining to settle out the two components in the case. That is simply something which is not yet in the courts. What you need is a very strong and well-articulated theory which indicates that what you're trying to do is get the best of both possible worlds: to maximize the useful value of land and to minimize the amount of harmful pollution, so that when you sum up the positives and the negatives, you manage to get as many positives and as few negatives as is possible. That's what the policy of takings law should be.

Reason: Were you encouraged by the resolution of Dolan, if not the theory behind the decision?

Epstein: I was certainly encouraged by the higher level of scrutiny that they brought into it. I was encouraged by the fact that Justice Rehnquist intuitively knew that there was something fundamentally unfair about a situation in which everybody else who had land that fronted this river was paid if they were to surrender any portion of it and that this is the only guy who's going to be forced to give his land without compensation. The problem was that Rehnquist did not understand why it was that the particular practice that seems to be discriminatory and abusive was socially wasteful as well.

The only way you'll persuade the public to understand the urgency of the takings cases is to get people out of the frame of mind where they think that for every dollar that the public body wins, the individual loses a dollar. What typically happens is the public wins $1.00 and private owners lose $5.00 or $10. If you do that hundreds upon hundreds of times each year, you have a major drain on the social welfare of the community.

The way to understand property rights is as a system of rights designed to advance community welfare rather than to frustrate it. A coherent theory would allow you to understand that the
public interest is the sum of all private interests and that those private interests are properly arranged and organized in a world which respects property rights but allows the government to
take them so long as it compensates for the full extent of the losses.

Reason: How does your book, Bargaining with the State, address topics such as gun sweeps of public housing projects?

Epstein: The bargaining with the state problem is best understood by a reference to the discussion about Nollan and Dolan. It has to do with the situation in which the state conditions permits and licenses of one form or another on the willingness of individuals to play ball with some kind of reduction in land ownership. The police sweep question seems to be a straightforward Fourth Amendment kind of issue.

Normally, in a search situation, you require some kind of particular information about the places to be searched. People realize that if you're trying to look for guns and drugs in a public housing project, that particularization is not going to be possible. Yet there seems to be a strong impulse for trying to have the search nonetheless.

As a libertarian of sorts, I'm extremely nervous about having police sweeps that are done in unauthorized ways. Does this tie into bargaining with the state? Here's a possible answer: Suppose this was a private housing project and it turned out that the landlord said to all of the tenants, "Look, I'm willing to take you in, but there are so many guns around here that I'll never be able to keep my better tenants unless I protect them. So one of the rules that I'm going to require is that I can come in at any time with my private police force and inspect your premises and throw you out on your ear if it turns out that you have guns."

My attitude to that is, if some tenants don't like those terms, they can find another housing project and go elsewhere. Now let's suppose for the sake of argument that 100 percent of all privately owned and operated housing projects have these kinds of provisions. It would be very odd and idiosyncratic to say that the government couldn't include the same kind of provision in its leases.

But things become much more difficult if it turns out that the government wants to impose a set of conditions that private firms don't do, and the way they try to get your consent is to give you a public subsidy from other people's pockets so that you're willing to live in this place. It's the constant interplay between government subsidies being used to buy off resistance to constitutional ideals that is at the root of this problem.

In 1926, when this issue came up in a case called Frost and Frost Trucking v. the Railroad Commission of California, the question was whether or not California could say to a private carrier who just hauled his own goods to market, "We're not going to let you on the public highway unless you agree to the same rate regulation that we post on public carriers." One of the arguments that Justice Sutherland made when he struck down that particular condition was that we would never allow the government to say that you can only use the public highways so long as you're prepared to waive your rights against unreasonable search and seizure with respect to your private houses and apartments. I think that's absolutely correct. The dangers of government monopoly power are so enormous that some kind of constraint has to be imposed upon them.

Reason: Should the Chicago Housing Authority be able to make granting you a lease in public housing contingent on your not possessing guns or allowing searches of your apartment?

Epstein: The first part of your question is relatively non-problematic because it doesn't involve the search-and-seizure question. The other part is right there at the cusp and I would have to see what the provisions would be. I hate to sound professorial, but I haven't made up my mind about this on a concrete level. But let me give you two arguments.

One is that you clearly don't want to allow this thing to happen at all. It sets a precedent for the use of similar government powers, not only with respect to state buildings. Since the government is everywhere, they can say, "Well, we won't let you enter a national park unless you allow the government to inspect your private cars or homes for guns."