Why takings law matters

TAKINGS TALK

Why, you might ask, is takings law important enough to warrant a monthly column on the subject, let alone the stream of court decisions that seems unceasing? Let's start with the fact that it deals with property, a subject that touches us all in one way or another. Are you a homeowner whose neighbors object to the way you want to enlarge your house beyond the general size of homes in the neighborhood? Are you one of the neighbors who fears the "mansionization" of your neighborhood with its possibly negative impact on the value of your own home? Do you want to develop an "infill" parcel, i.e., an empty lot in a generally developed area? Do you object to someone putting a subdivision on a nearby plot of land that has been vacant for many years? Do you consider that land your, or your kids', playground? These issues hit us, one might say, where we live. And the resulting litigation will involve takings law.

The constitutional takings clauses (the Fifth Amendment to the U.S. Constitution and Art. I, Section 19 of the California Constitution) establish bedrock protection for the owners of property. As the California Supreme Court once put it, property rights were "equated by the constitutional draftsmen with the cherished personal protections against self-incrimination, double jeopardy, and the guarantee of due process of law." Agins v. City of Tiburon, 23 Cal. 3d 605 (1979). In other words, property rights were intended to be taken seriously.

In the realm of protecting constitutional rights of all kinds, no pronouncement stands taller than Marbury v. Madison, 1 Cr. 137 (1803), which established at least these two precepts: (1) There must be a remedy for every right that is transgressed, and (2) our system of remedies must be stringent enough to keep government within the bounds of the law. Each of these has been critical to the development of takings law.

The first precept has been particularly important - in the United States generally, but specifically in California. Californians lived for years under a legal regime holding that the only remedy for a regulation that had the effect of taking private property for public use was to invalidate the regulation. First, you might wonder how a mere regulation can take private property. The answer lies in the impact. If the impact of a regulation is to preclude all, or substantially all, beneficial or productive use of property then the property has been effectively taken. There may have been no title transfer, and there certainly has been no payment, but the impact of the regulation is to take the property by rendering it unusable by the nominal owner.

What is a property owner to do? Sue, of course. But for what? There were two evident (yet divergent) possibilities: invalidate the regulation or obtain compensation for the effect of the regulation. The California Supreme Court (in the Agins case) was content to establish a system under which the only remedy available was to seek invalidation. What about the period of time that the property was held in non-use by the regulation while its validity could be tested in court? No relief, no matter how long the litigation took, and it sometimes took many years. The Agins rule allowed vast amounts of valuable property essentially to be confiscated - at least on a temporary basis, until a court could invalidate the regulation - without any compensation.

That situation eventually brought the second precept into play: The system had to be adequate to hold the government in check. On numerous occasions the U.S. Supreme Court had proclaimed that the whole purpose of the Bill of Rights was to protect individuals against the government. Purporting to provide a remedy that in fact provided no relief is no remedy at all. Not only did it provide no relief to the damaged property owners, it provided no incentive to government agencies to act otherwise. The only consequence was the mild slap on the governmental wrist administered by an opinion telling the government it had behaved shabbily.

The U.S. Supreme Court eventually solved the problem by holding that mere invalidation was no remedy, and provided no check on invalid government action. Any property owner subject to regulation could have told them that. That was nearly 30 years ago, at the onset of the Scalia era, and that body of law continued to solidify and strengthen over the last three decades.

The importance of maintaining this body of law can be seen in the pages of any major metropolitan newspaper. Government is constantly being besieged by opposing demands. On the one hand, it is being asked to do more so that it might protect the interests being championed by one group of constituents or another, whether that interest is the preservation of open spaces, protection of bodies of water, or curbing the impact of unpopular land uses (like solid waste disposal sites, oil refineries, airports, and the like). On the other hand, the populace wants all this done without spending any money. Hence, the regulatory solution. If government can simply deal with an issue by passing a law, then it resolves both the substantive problem and the fiscal one, as well.

And that is why takings litigation persists. None of the regulatory solutions is a zero sum game. There is always a cost and it must be borne by someone. To the extent that government seeks to foist the cost onto innocent landowners, the takings clauses of our constitutions will stand as a bulwark. And that is why takings law is important.