any government "public policy" claim to satisfy the public use criterion. This unlimited deference to government policy determinations is justified only if one believes that the public use requirement is met whenever government claims that benefits (no matter how indirect or speculative) are being conferred on the public. A more limited conception of “public use" might find that "public benefits" are present only when some attribute of the property being taken is made available to the general public on nondiscriminatory terms. Thus, under this test, a public use exists when land is taken for creation of a privately-administered park, as long as all members of the public who pay an entrance fee are allowed in. Similarly, the taking of land to allow the installation of cable television wires passes muster when all members of the public who pay a fee can subscribe to cable television. On the other hand, the transfer of property from landlords to tenants would not meet this test; such a transfer would not make property available on a non-discriminatory basis to members of the public. This "nondiscriminatory availability" test is a rather attractive, easily applied principle. Nevertheless, it cannot be claimed that this principle is uniquely derivable from original meaning. Accordingly, we cannot assert indusputably as a matter of constitutional principle that this test should displace the extremely broad "government determination of public benefits" standard currently applied by the Supreme Court. With regard to the appropriate quantum of compensation, those decisions that focus on a market value standard, based on what the owner has lost (see Boston Chamber of Commerce), are on the right track. Unfortunately, however, the Court unnecessarily has confused the compensation issue by suggesting that case-by-case, “equitable principles of fairness" must be relied upon to set the total amount of compensation. It is not always clear whether this vague language refers to market value, or instead to a more restrictive standard of compensation. Even worse, a number of holdings have denied the payment of any compensation, despite significant reductions in the value of legally-protected property rights (see, for example, Euclid). Thus, the Court at times appears to have ignored the principle that all substantial diminutions in value of legally-protected property rights including temporary diminutions -require the payment of full compensation, either explicitly or implicitly. - Accordingly, in order to be faithful to original meaning, we believe that judicial analysis would have to be modified in several respects. The courts would have to: (1) recognize that a taking occurs whenever government action directly and measurably diminishes the value of property rights; (2) eschew reliance on an unprincipled balancing test in Appendix B Recent Commentaries on the Just A number of commentators recently have advocated that the just compensation clause be interpreted to increase compensation for private individuals who are harmed by government-inspired confiscations. Important contributions to this research are summarized below.' I. Richard Epstein's Comprehensive Analysis Richard Epstein would apply a four-part test in interpreting the reach of the just compensation clause. He would ask: (1) was there a taking of private property?; (2) was it for a public use?; (3) was the taking justified by the state's police power?; and (4) if not, was proper, implicit or explicit compensation paid? First, Epstein views a government enactment as constituting a taking if "before the enactment the claimant was in exclusive possession of the property in question, while afterward that possession rested, in whole or in part, in some other private individual." Thus partial interferences in property rights (as in Penn Central and Loretto) would amount to takings. Second, Epstein argues that a taking satisfies the "public use" requirement if it generates a "public good" in which the entire public shares, such as a public park. A taking that transfers property to benefit a private party satisfies the 1 'Some scholars have gone beyond mere pleas for enhanced compensation and have advocated that the government rely less on explicitly confiscatory measures and more on private market solutions to achieve desired "public policy" goals. See, e.g., B. Siegan, Land Use Without Zoning (1972) (advocating market-oriented alternatives to confiscatory zoning); B. Siegan, Other People's Property (1976) (analyzing failures of zoning); Kmiec, Deregulating Land Use: An Alternative Free Enterprise Development System, 130 U. Penn. L. Rev. 28 (1981) (advocating "free enterprise development system" instead of zoning; this system would allow private decisions to determine the desired type, location, and design of land development); Kmiec, New Federalism is not Enough: The Privatization of Non-Public Goods, 7 Harv. J. L. & Pub. Pol'y 321 (1984) (advocating renewed federalism as only the first step to the eventual privatization of all municipal services). 2See Epstein, Not Deference, But Doctrine: The Eminent Domain Clause, 1982 Sup. Ct. Rev. 351. 3 Epstein, id., 1982 Sup. Ct. Rev. at 360. Epstein also states the test for what constitutes a taking as "Would the government action be treated as a taking of private property if it had been performed by a private party?" R. Epstein, Takings 36 (1985) (emphasis in the original). Epstein believes that these two formulations are functionally equivalent. public good requirement if the party receiving the benefit is obliged "to extend its services in the manner of any traditional common carrier to all the individuals that come within its service territory, here at nondiscriminatory rates."4 Under this standard, the transfer to the private common carrier cable television firm in Loretto was for a public use. This standard means that the "public use requirement is not met where the power of eminent domain is given to a company that retains the usual prerogatives of a private party to exclude members of the public at will." Third, Epstein argues that a taking is justified by the state's police power only if there is a reasonable fit between the means the state employs to accomplish the taking and the ends the state seeks to advance. Thus "there is no reason whatsoever to allow the taking of private property to accomplish an end that could to revert to a familiar constitutional theme -- be accomplished by far less restrictive means." Fourth, Epstein maintains that sufficient implicit in-kind compensation for restrictions constituting a taking has been provided only if: (1) parallel restrictions are placed upon the property of others; and (2) those restrictions provide the property owner a benefit that at least matches the cost of the restrictions. Epstein also points out that explicit compensation (determined by the market value of property, not its cost) may be required for a taking that does not at first blush appear to lower tangible property's market price, if the taking confers benefits to the government or to a private party for which the property owner would have had to be paid 4Epstein, supra, 1982 Sup. Ct. Rev. at 368 (citation omitted). 5 Id. at 369. 'Id. at 371. The use of broad means may indicate that the state is pursuing the impermissible goal (ends) of transfering wealth between rival producer groups. R. Epstein, Takings 144 (1985). Another author argues that, as a point of strict moral theory, the "police power" authorizes an uncompensated taking only at "the point at which the execise of one man's property uses starts to take another man's property rights." Pilon, Property Rights, Takings, and a Free Society, 6 Harv. J.L. & Pub. Pol'y 165, 194 (1983) (emphasis in the original and citation omitted). Pilon's approach begins not with a positive theory of propery rights but with a descriptive, "natural" theory of property Locke's "Lives, Liberties, and Estates," including all the uses that can be made of "estates" and then develops a normative, natural rights theory of property rights. Thus the government may take "property" (or uses) not held (or exercised) by right, for which the "just compensation" is zero, since the holder of those uses had no right to exercise them in the first place. 7See R. Epstein, supra note 6, at 373–74. had no police power authority or eminent domain proceeding been invoked." Epstein supports general application of the just compensation clause to a wide variety of takings effected through taxation and regulation. According to Epstein, when taxation or regulation takes property (Epstein argues that taxation by its very nature involves a “taking”), “the disproportionate impact of a tax or regulation functions as an indirect measure of the adequacy of compensation." 10 Epstein states that Within rough practical limits, the prohibition against disproportionate impact is designed to insure that no one will be able to obtain benefits that exceed costs without extending these same benefits to all other individuals who are also subject to the regulation. The rule therefore helps prevent creation of a situation in which the pro ponents of a tax or regulations enjoy benefits in excess of costs while others are made to bear costs in excess of benefits. 11 Epstein employs the "disproportionate impact" standard to argue that property unconstitutionally was taken without just compensation through laws implementing the federal Black Lung Compensation Program, the federal windfall crude oil profits tax, and Montana's 30 8 See id. at 378-380. Thus in Loretto the cable company would have paid the property owner royalty fees for the use of part of his building if there had been no taking. Even though the taking did not reduce the property's value, the property owner should have been compensated for the value of those foregone fees. In short, a closer analysis reveals that the taking actually did diminish property's value, by striping the owner of the right to receive royalty payments. "The Supreme Court has long recognized what common sense dictates -- that property includes the right to possess, use, and dispose of a given thing. An award that ignores the value of exclusion in essence says that if the state pays for possession and use, then it may have the right of disposition for free." Id. at 379 (citation omitted). Loretto's right to royalty fees absent a taking arose from his right to exclude the cable company from his building. Epstein also argues that explicit compensation should be tendered for consequential damages and that the market value of the property taken, not its costs, sets the standard for explicit compensation. See id. at 182-194 (1985). - "See Epstein, Taxation, Regulation, and Confiscation, 20 Osgoode Hall L.J. 433 (1982) (emphasis added). 10 Id. at 438. 11 Id. |