The Season of Private Property Law

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The Supreme Court's season could be a milestone for extending (or, of course, further restricting) property rights against government action. The Court announced that it will hear a case that, if the 9th Circuit is upheld, could severely damage government's ability to impose rent control. What's at issue, from The New York Times report:

The case is an appeal by the state government of Hawaii, where a federal court ruled unconstitutional a law limiting the rent that oil companies can charge to independent dealers who lease its service stations. The district court in Honolulu, in a decision upheld by the United States Court of Appeals for the Ninth Circuit, in San Francisco, held that expert testimony on the economic effect of the regulation had failed to prove that it would "substantially advance a legitimate state interest."
…….
The importance of this issue to government officials was underscored in briefs filed on Hawaii's behalf by New York, California, Connecticut and 16 other states….It has implications not only for rent-control laws like Hawaii's, but for environmental, health and safety rules as well as for the zoning and land-use regulations that have been the focus of the courts' concerns about the Fifth Amendment's "takings" clause.

The Fifth Amendment provides that private property shall not be "taken for public use without just compensation." In the case the Supreme Court accepted late last month, Kelo v. City of New London, No. 04-108, the question is whether private economic development that will add to the city's tax base is an appropriate "public use" for which a city can exercise its power of eminent domain to condemn property of lower economic value.

The new case, Lingle v. Chevron U.S.A. Inc., No. 04-163, presents a related but distinct question: whether the challenged rent regulation is a taking in the first place. The Supreme Court's precedents make clear that the government does not have to physically acquire property in order to "take" it and incur the obligation to pay for it. A regulation can be a taking if it strips the property of much of its economic use.

The whole story, which lays out the arguments Chevron and Hawaii made in arguing over this law, is worth reading.

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  1. Out here in Washington, the Seattle environmentalists who run the King County Council have passed an ordinance that states that rural land owners must leave 60% of thier property in its “natural” state, and that they can only build on 10% of thier property. So, essentially, the government has decided to simply steal 90% of the rural land in King County.

  2. While I’m not familiar with details of the Chevron case, it’s clearly different from Kelo in one important regard. The Kelo case involves human beings and their personal property, which deserve the highest level of protection.

    Chevron is a corporation. Corporations are no more than a set of government-granted privileges (limited liability, access to publicly-funded courts to protect its interests, etc.) Any claims to “constitutional rights” by Chevron should be dismissed out of hand. Our Constitution never mentions corporations — assigning them “rights” (corpoprate personhood)is an act of extreme judicial activism that ultimately undermines individual rights in multiple realms.

  3. I think I’d rather see the federal government stay out of state rent-control laws entirely.

  4. So, Luisa, when individuals act in concert, by setting up a firm, they lose their constitutional rights? Feh! I guess we don’t have to respect the rights of any political group that is incorporated, or any religious group.

    I suppose we could demand that all enterprises other than sole proprietorships be set up as full-liability partnerships or joint stock companies. That would be a good way to scare all but the deepest pockets from participating in the national, let alone international economy.

    The shareholders of corporations ARE people, and it is their rights that are violated when our governments treat corporations as whipping boys.

    Kevin

  5. The Court will use the case to raise the level of scrutiny of housing. Below is a link to an article showing how that is to be done:

    Ryskamp, John, “Kelo v. New London: Deciding the First Case Under the New Bill of Rights” . http://ssrn.com/abstract=562521

    And here is one of the first amicus brief, which incorporates some of the argument:

    http://www.rutherford.org/PDF/2004.11.22.PDF

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