PROPERTY D SLIDES2-10-14

Monday Feb 10 Music: Stevie Nicks: Bella Donna (1981)

I’ll update assignment sheet after class today

PROPERTY D: 2/10

As Valentine’s Day As Valentine’s Day Approaches: Approaches:

Too Much Too Much

Part TwoPart Two

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Previously in Property DPreviously in Property D• Right to Exclude & Parcels Open to Public• Brooks & Traditional Owners’ Discretion (Limited by Civil Rights Statutes)

• JMB & First Amendment Access to Malls

• Introduction to Lawyering Qs

Previously in Property DPreviously in Property D• Introduction to Chapter 2

• Federal Court Deference to State Legislation & the Rational Basis Test

• The Eminent Domain Power & Its Limits• Takings Clause of 5th Amdt• Just Compensation as a Limit• Democracy as a Limit• Possible Need for Additional Limits When Money Not at Issue & We Don’t Trust Democratic Process

Chapter 2 : Eminent Domain: Some Policy Concerns

Limits on Eminent Domain Power1. Just Compensation2. Democracy: Politics & $$$3.“Public Use” Requirement

a. DQ2.03: Addresses Concern About Gov’t Handing Out Prizes to Favored Individuals

b.Big Issue w British Monarchy

Chapter 2 : Eminent Domain: Some Policy Concerns

Public Use Requirement: MeaningUNCLEAR: Use BY Public v. Use FOR Public

•Easy Cases: Both true (schools, roads, post offices) •Harder Cases: One or the other• Use by public (but not for): E.g., Privately-Owned Theme Park• Use for public (but not by): E.g., Military Base

Chapter 2 : Eminent Domain: Some Policy Concerns

Public Use Requirement: MeaningUNCLEAR: Use BY Public v. Use FOR Public

•5th Amdt originally limited feds not states; seems unlikely that using EmDom for military bases would violate•Note that states interpreting own Constitutions can limit themselves more. E.g., can choose to adopt a “use by public” standard (See City of Seattle)

Chapter 2 : Eminent Domain: Some Policy Concerns

Public Use Requirement (DQ2.03)

Ultimate Q: When OK for Govt to Force Sales?•Maybe “Public Use” Simply Trying to Ensure Benefit isn’t Personal or Corrupt•Maybe Since EmDom is Big Interference w Property Rights, Only Can Use If Really for Benefit of Public

QUESTIONS?

Chapter 2: The Eminent Domain Power Chapter 2: The Eminent Domain Power & the Public Use Requirement& the Public Use Requirement

•Federal Constitutional BackgroundFederal Constitutional Background•Deference, Rational Basis, Heightened Scrutiny

• The Fifth Amdt, Eminent Domain & Public Use

•Limited Federal Review Under Berman & Midkiff

•State Public Use Standards

•Kelo & Beyond

Hawaii Housing Authority v. Midkiff

1.1. Background: Background: Berman v. ParkerBerman v. Parker2. Challenged Hawaii Program3. Analysis: Adoption of Rational Basis

Standard

Background to Midkiff: Berman v. Parker

1. DC “Urban Renewal” Project: a. Fixing “Blighted” N-hood b. Forced Sales of Buildings to Private Redevelopers

Background to Midkiff: Berman v. Parker

1. DC “Urban Renewal” Project2. US SCt. approves as “Public Use” a transfer of land

from one private party to another• Gives deference to plan of US Congress• Once purpose w/in Congr. authority, Congr. can choose means to

implement (incl. EmDom) • Essentially reads “public use” to mean “benefits the public”

Hawaii Housing Authority v. Midkiff

1. Background: Berman v. Parker

2.2. Challenged Hawaii ProgramChallenged Hawaii Program3. Analysis: Adoption of Rational Basis

Standard

Midkiff: Challenged Program

Perceived Problem: Market for Land Skewed•Immense landholding by few owners (S20)• Yields high prices; few transactions• Many lease who want to buy

•Govt partly responsible: tax consequences discourage sales

Midkiff: Challenged Program

Perceived Problem: Market for Land Skewed•Immense landholding by few owners (S20)•State Wants More Active Land Market• Affects Labor Market• State Prefers Owners to Renters• Usually More Investment/Upkeep• Usually Greater Ties to Community

Midkiff: Challenged Program & DQ2.04

Program Designed to Aid Land Market •Forced Sale of Land: Landlords to Tenants•In practice, funds come entirely from Tenants.•Requirements/Limitations• Sufficient # of tenants apply from same residential development• Public Hearing re furthering purpose of program• Eligibility Requirements for Buyers to prevent misuse by commercial developers

Midkiff: Challenged Program & DQ2.04• Forced Sale of Land: Landlords to Tenants•DQ2.04: Relation to Purposes of Eminent Domain & Public Use?• (1) Avoids Transaction Costs• Breaks negotiation deadlock• Allows sales that might take place if no tax consequences

Midkiff: Challenged Program & DQ2.04• Forced Sale of Land: Landlords to Tenants•DQ2.04: Relation to Purposes of Eminent Domain & Public Use?• (1) Avoids Transaction Costs• (2) How “Public Use”?• End Users Private Individuals • Not Everyone Eligible; Relatively Few Directly Benefit• Public Can’t Actually Use Parcels in Q

Midkiff: Challenged Program & DQ2.04• Forced Sale of Land: Landlords to Tenants• DQ2.04: Relation to Purposes of Eminent Domain & Public Use?• (1) Avoids Transaction Costs

• (2) How “Public Use”?• End Users Private Individuals • Not Everyone Eligible; Relatively Few Directly Benefit• Public Can’t Actually Use Parcels in Q• BUT: Arguably All Hawaiians Benefit Indirectly from BUT: Arguably All Hawaiians Benefit Indirectly from Improved Land MarketImproved Land Market

Midkiff: Challenged Program & DQ2.06

• “After the American Revolution, the colonists in several States took steps to eradicate the feudal incidents with which large proprietors had encumbered land in the Colonies. Courts have never doubted that such statutes served a public purpose.” --FN5• DQ2.06: Assume Justice O’Connor (OCR) got this info from the briefs

of the State of Hawaii or of one of the Amicus Curiae supporting the state. Why would the lawyers use valuable space in briefs to give the Court a history lesson?

Midkiff: Challenged Program & DQ2.06

DQ2.06: Why would lawyers use valuable space in briefs to give the Court a history lesson?

•Meaning of “Land Reform” in 1984• Practice of Leftist Gov’ts in Latin America • Redistributing Land Rights from Large Owners to Peasants/Small

Farmers• Generally Opposed by Reagan Administration

Midkiff: Challenged Program & DQ2.06

DQ2.06: Why would lawyers use valuable space in briefs to give the Court a history lesson?

•Cf. Latin American “Land Reform” in 1984•Lawyers Providing Another Way for SCt to See Program•Evidence that OCR Buys Characterization• (S19 2d para): “feudal land tenure system”• (S22 middle para): “The people of Hawaii have attempted, much as the

settlers of the original 13 Colonies did, to reduce the perceived social and economic evils of a land oligopoly traceable to their monarchs.”

Midkiff: Challenged Program & DQ2.06

(S22 middle para): “The people of Hawaii have attempted, much as the settlers of the original 13 Colonies did, to reduce the perceived social and economic evils of a land oligopoly traceable to their monarchs.”

Statue of King Kamehameha

Hawaii Housing Authority v. Midkiff

1. Background: Berman v. Parker2. Challenged Hawaii Program

3.3. Analysis: Adoption of Rational Basis Analysis: Adoption of Rational Basis StandardStandard

Midkiff: Adoption of Rational Basis Test•Upholds Hawaii Program; Again Interprets “Public Use” to Simply Mean Benefit to Public• Extends/Explains Berman v. Parker in Two Ways

1. Same deference given to states as feds2. Govt never has to possess land itself• No apparent limit to public use given for either 1 or 2

•Makes very clear it doesn’t want to assess wisdom of program. • Role for reviewing court is “extremely narrow”• Clear use of Rational Basis test

Midkiff: Adoption of Rational Basis Test: Key Language

• “Court … will not substitute its judgment for a legislature’s judgment as to what constitutes a public use ‘unless the use be palpably without reasonable foundation.’” (S20: top para)

• “[W]here the exercise of the eminent domain power is rationally related to a conceivable public purpose, the Court has never held a compensated taking to be proscribed by the Public Use Clause.” (S20: first full para)

Midkiff: Adoption of Rational Basis Test: Key Language

Rationally Related = Very Deferential Standard•“Of course, this Act, like any other, may not be successful in achieving its intended goals. But ‘whether in fact the provision will accomplish its objectives is not the question: the [constitutional requirement] is satisfied if ... the ... [state] Legislature rationally could have believed that the [Act] would promote its objective.’” (S22: last para)

Midkiff: Adoption of Rational Basis TestBACK TO DQ2.05: Why shouldn’t the Supreme Court strike down a state exercise of Eminent Domain that is unlikely to achieve

its stated ends? •“[T]he weighty demand of just compensation has been met” (S24)•Reasons for Deference We’ve Already Discussed: “[T]he legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation, whether it be Congress legislating concerning the District of Columbia ... or the States legislating concerning local affairs.... This principle admits of no exception merely because the power of eminent domain is involved....” --(S21 first block quote from Berman)

SHENANDOAH (DQs 2.07-2.08)

APPALACHIAN TRAIL

(Shenandoah) Application of Rational Basis Test…DQ2.07(a): … to Facts of Midkiff

•Purpose of Program?•Legitimate? (Connected to Health, Safety, Welfare, Morals)•Program Rationally Related to Purpose?

(Shenandoah) Application of Rational Basis Test…DQ2.07(b): … to Rev. Prob. 2A

• Texan Virtues” = Courage, Forthrightness and Moral Strength • (Q for you: What are “Texan Vices”?)

• TX Legislature creates Virtuous Texan Commission• Chooses 3 Texans/Year who best embody Texan Virtues.• Winners choose private property in TX worth up to $500,000 (more value in

1989 when I wrote Problem) • TX purchases chosen land for them at market value.

• Problem designed to push limits even of Rational Basis Test

(Shenandoah) Application of Rational Basis Test…DQ2.07(b): … to Rev. Prob. 2A

•Purpose of Program?•Legitimate? (Connected to Health, Safety, Welfare, Morals)•Program Rationally Related to Purpose?

(Shenandoah) Application of Rational Basis Test…DQ2.08: … to Facts of Poletown

•Remind us of key facts from Poletown•Purpose of Program?•Legitimate? (Connected to Health, Safety, Welfare, Morals)•Program Rationally Related to Purpose?

(Shenandoah) Application of Rational Basis Test…DQ2.08: … to Facts of City of Seattle

•Remind us of key facts from City of Seattle•Purpose of Program?•Legitimate? (Connected to Health, Safety, Welfare, Morals)•Program Rationally Related to Purpose?

Some Context

1981: Poletown, City of Seattle,

Pruneyard, & the Road to JMB

Chapter 2: The Eminent Domain Power Chapter 2: The Eminent Domain Power & the Public Use Requirement& the Public Use Requirement

•Federal Constitutional Background

•State Public Use StandardsState Public Use Standards•Poletown• City of Seattle

•Hatchcock

•Kelo & Beyond

Public Use Under State Constitutions• States often have stricter tests than feds:

• Already seen in JMB/Pruneyard re 1st Amdt

• Allows states to craft rules based on different balance of interests given forms of local govt, needs of state etc.

• As we’ll see, Kelo suggests that

• stricter state rules may be appropriate given local concerns

• great federal deference OK given that states can do more

Poletown Tests

Used if land ends up in private hands

(1)Public must be “primary beneficiary” & private benefit merely “incidental”

(2) Public benefit must be “clear and significant”

Michigan SCt in Poletown repeatedly says tests are met w/o much analysis

Significance of Poletown Tests

•Hatchcock overrules Poletown result & tests

•We’ll go through new Michigan tests later

•Poletown tests still used by other states

•Can still use Poletown facts as example of how tests from case could be applied

Poletown Tests

Used if land ends up in private hands

(1)Public must be “primary beneficiary” & private benefit merely “incidental”

Possible readings of “primary beneficiary” test:a. Quantitative weighing of public v. private benefit

b. Primary purpose

c. Who is driving the deal? (raised by Poletown dissent)

Poletown Tests

Used if land ends up in private hands

2) Public benefit must be “clear and significant”

Assume both words have meaning

• “Clear” as opposed to “speculative”

• “Significant” as opposed to “marginal”

SHENANDOAH (DQ 2.09)

APPALACHIAN TRAIL

DQ2.09 (Shenandoah): Apply Poletown Tests to Facts of Midkiff

(1)Public must be “primary beneficiary” & private benefit merely “incidental”

Possible readings of “primary beneficiary” test:a. Quantitative weighing of public v. private benefit

b. Primary purpose

c. Who is driving the deal? (raised by Poletown dissent)

DQ2.09 (Shenandoah): Apply Poletown Tests to Facts of Midkiff

Public benefit must be “clear and significant”

• “Clear” as opposed to “speculative”

• “Significant” as opposed to “marginal”

DQ2.09 (Shenandoah): Apply Poletown Tests to Facts of City of

Seattle(1)Public must be “primary beneficiary” &

private benefit merely “incidental”

Possible readings of “primary beneficiary” test:a. Quantitative weighing of public v. private benefit

b. Primary purpose

c. Who is driving the deal? (raised by Poletown dissent)

DQ2.09 (Shenandoah): Apply Poletown Tests to Facts of City of

SeattlePublic benefit must be “clear and

significant”

• “Clear” as opposed to “speculative”

• “Significant” as opposed to “marginal”