Viewpoint: A Blow to Property Rights

Eminent domain powers of states and municipalities have been augmented by a recent Supreme Court decision in the case of Hawaii Housing Authority v. Midkiff. At issue was a Hawaii "land reform" law authorizing the state to break up large landholdings. Ownership of land in Hawaii has tended to be concentrated in the hands of a few large landowners, and many homeowners have leased the land on which their homes were built. But the state passed a law under which it could condemn the lots and sell them to the homeowners.

The landowners challenged the state's land redistribution plan in court. They based their argument on the US Constitution's eminent-domain clause, which states that "private property shall not be taken for public use, without just compensation." Their property was not being taken for "public use," they contended, but for the benefit of certain persons—the homeowners.

The Supreme Court confronted two alternatives. It could follow the 1954 ruling in Berman v. Parker, which virtually read out of the Constitution the public-use requirement. Or it could continue the support of property rights evidenced in some recent cases and counter the Berman holding. Unfortunately, in a vote of 8–0, it took the first option.

This blow to property rights is quite surprising. In three cases over the last several years, the Court had seemed to be showing some concern for property protection.

The first such case was San Diego Gas and Electric Company v. San Diego in 1981. The case was decided against the owner on a technical legal issue by a 5–4 vote. However, as part of the dissent he filed for the minority of four, Justice William Brennan asserted that once an unconstitutional regulation of property has occurred, government should pay compensation to the owner for the period the illegal regulation is in effect. This was significant because previously, it was generally assumed that the only remedy for unlawful land-use regulation was to get the courts to declare the regulation invalid.

Justice William Rehnquist voted with the majority on the technical issue, but he implied in his concurring opinion that he supported the minority on the compensation issue. This suggested a majority position on the matter, and some state and federal courts have proceeded to follow Brennan's position.

The dissent in the San Diego case is one of the most important recent events in land-use law. Among its noteworthy comments is a rhetorical question: "After all, [if] a policeman must know the Constitution, then why not a planner?"

The second recent Court decision protective of property rights was in the 1982 case of Loretto v. Teleprompter Manhattan CATV Corporation. A 6–3 majority declared unconstitutional a New York law that allowed a private company to string a television cable across the roof of an apartment building without the owner's consent. The Court enunciated for the first time a rule that any state-directed permanent occupation of real property, even a small one, constitutes a taking of property that requires compensation, regardless of any public interest the action might serve.

The third positive case was Summa Corporation v. California ex rel State Lands Commission, decided earlier this year. In this case, the California Supreme Court had allowed the Los Angeles city government a "public trust" easement over land, enabling the city to control the property for environmental and recreational purposes. The US Supreme Court overturned this decision by an 8–0 vote. (The opinion was not based on any constitutional issue.) According to the Pacific Legal Foundation, the decision frees about 10 million acres of private land in California from the threat of state control under the "public trust" concept.

Unfortunately, the Hawaii decision bucks this trend. It also illustrates the double standard that has long existed on the Supreme Court. Thus, in the Hawaii opinion, Justice Sandra Day O'Connor declared that judicial deference to a legislature's public-use determination is required under existing precedent "unless the use be palpably without reasonable foundation." The Court is rarely so deferential to legislatures when intellectual and political rights, instead of material ones, are at stake.

Precedent in the law is obviously important, but it should not be conclusive when it conflicts with original constitutional meaning. When the Fifth Amendment, with its eminent-domain clause, was adopted, most political leaders and jurists were committed to the principle, enunciated by John Locke, that governments are instituted to protect every person's property from other people's depredations. Governments' taking land under eminent domain was considered an exception. Some labeled it the "despotic power," but it was viewed as necessary to obtain essential public facilities such as roads, fortifications, and lighthouses.

James Kent, the celebrated New York chancellor and commentator, warned in 1827 that the right of eminent domain "gives to the legislature the control of private property for public use, and for public use only." If it should "take the property of A and give it to B, the law would be unconstitutional and void."

Kent's perspective has been widely echoed, including by the Ninth Circuit Court of Appeals, which upheld the Hawaii landowners. Those who would have governments taking over football teams and blocking the relocation of factories now have one more weapon in their arsenal. Property rights merit more protection than they received from the Supreme Court in the Hawaii case.

Bernard H. Siegan is distinguished professor of law at the University of San Diego Law School. He is the author of Land Use without Zoning and Economic Liberties and the Constitution.