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Property Rights Win a Dramatic Victory

Property Rights Win a Dramatic Victory

8 Mins
July 10, 2019

As Democratic presidential candidates debate their competing promises to voters, without the slightest reference to the concept of property rights, the new “Trump” Supreme Court recently handed a stunning victory to defenders of property rights.

On June 21, the U.S. Supreme Court, voting 5:4, with the majority including Trump appointees Neil Gorsuch and Brett Kavanaugh, flatly reversed a 34-year-old Court decision that had stripped Fifth Amendment protection from property owners in the so-called “takings” cases.

Guess which four justices dissented from the majority decision? Justice Elena Kagan, joined by Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor. In other words, the justices were aware of exactly how important this decision could be in upholding the fundamental requirement of a free market. And the ideological enemies of capitalism lost in this case, because of the two new Trump appointments to the Court.

The Takings Clause

The Fifth Amendment is packed with protections of individual rights, including protection against self-incrimination—as are the other nine amendments in the Bill of Rights. To understand what the Court did last week, you must know that government violations of all those individual rights can be challenged in federal court.  But, since 1985, that has not been true for a violation of the takings clause: the guarantee that government cannot take an individual’s property without just compensation.

And, since 1985, organizations committed to the defense of liberty have been arguing that that left property owners virtually helpless against a tidal wave of local government ordinances, regulations, and actions—most especially those having to do with “protecting” the environment: “wilderness,” “open space,” “wetlands,” “public access” and such. More recently (and another reason why the Court’s decision is a triumph) such regulations have deprived property owners of their mineral rights (including oil and gas) by prohibiting fracking.

The Court’s decision last week represents a stunning, long-overdue reversal of the string of anti-property victories won by environmental organizations such as the Sierra Club and the Natural Resources Defense Council.

The kudos go to the Pacific Legal Foundation for paying the full freight for legal representation of the plaintiff in the winning case: Knick v. Township of Scott, that finally had its triumphant day in court. If media reporting reflected objectively the importance of national developments, the Court’s decision in Knick v. Township of Scott would have headlined newspapers and the nightly news. Let us just say, instead, that it has not gone entirely unreported because Court decisions routinely get covered somewhere.

The Williamson Precedent

Here is the story in brief:

In 1985, the Court, in what is known as its Williamson precedent, ruled that landowners must bring their “takings” claims against local governments to state courts first. Then, if turned down in state court, they might proceed to federal court. (“Williamson” is short for Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City.)

It was a ridiculous decision. In the opinion last week that overturned it, Chief Justice John Roberts wrote: “Williamson County was not just wrong.” Its “reasoning was exceptionally ill-founded” and inconsistent with the court’s earlier takings clause cases.

The contradiction had come to full flower after a subsequent Court ruling (San Remo Hotel, L.P. v. City and County of San Francisco) that a person whose just compensation claim was rejected by the state courts could not relitigate that issue. The state court decision was final.) Yes, only lawyers could create this kind of Through the Looking Glass parody of “reasoning.”

The upshot was that federal courts must defer to a state court’s resolution of a claim for just compensation. Williamson says the property owner must go first to state court before proceeding to federal court. But the federal court must defer to the state court’s decision on compensation. Obviously, Williamson had created a Catch-22.

And that is what Chief Justice Roberts pointed out in his ruling last week: “The takings plaintiff thus finds himself in a Catch-22. He cannot go to the federal court without going to the state court first; but if he goes to the state court and loses, his claim will be barred in federal court. The federal claim dies aborning.”

Knick v. Township of Scott

As is not infrequently the situation, a rather “small-time” case became the occasion for a landmark decision. Rose Mary Knick owns a 90-acre property in Scott Township, western Pennsylvania. It is suspected or alleged that ancestors of some of her neighbors might have been buried somewhere on what is now her land. Scott Township, under who knows what influence, designated Rose Mary Knick’s property a cemetery. Furthermore, there is a town ordinance requiring that cemeteries “be kept open and accessible to the general public during daylight hours.”

Because the locations of the graves are not known, the entire property must be open to anyone and everyone all day who might be searching for or visiting one of the elusive graves. The Township added that there would be a fine of $600 a day until and unless the ordinance was carried out.

If I may make an entirely personal observation, here: This is one of the idiotic decisions about property that have become almost definitional of local governments as the reality of property rights has dimmed in the American mind.

At the very least, one would hope, the constitutionality of a blatant property right violation could be challenged in federal courts, which are charged with upholding the U.S. Constitution. But Knick and her attorney, deciding that the township’s ruling constituted a “taking” of part of the value of the property which should be compensated, tried to take her claim to federal court. The court, citing Williamson, directed her to the state court. Catch-22.

This was not Bill Gates or Jeff Bezos challenging the law. The case never could have proceeded to the Supreme Court without the continuing financial support of the Pacific Legal Foundation (PLF), which specializes in cases of this kind. PLF Attorney Dave Breemer, who represented Knick in the case, said in a statement: “The Court’s decision sends a message that constitutionally-guaranteed property rights deserve federal protection just like other rights.”

This was far from the first attempt to overturn Williamson. In 2002, the Institute for Justice, aided by legendary University of Chicago Professor Richard Epstein, filed an amicus brief in a Supreme Court case on takings. The Court decided the case on the narrowest possible technical grounds, avoiding even noticing the powerful brief on the fundamental constitutional issues at stake.

Leaving Property Owners Helpless

It takes a moment, and an act of imagination, to grasp the potential import of the Court’s decision to re-open the path to federal court justice for “takings” claims. Local governments, regional planning agencies, zoning boards, and literally thousands of other bodies with legal powers—and often under the thumb of sundry environmentalists and Leftist social engineers—cannot literally seize private property without compensation. They do not wish to do so. However, in exact parallel with the difference between Soviet-style socialism (public ownership) and German-style national socialism (government dictation to owners of nominally private property), local governments have elected the German fascist model. If they can control the use and disposal of property—effectively, the essence of property rights—they don’t need title to the property. And, under the Fifth Amendment takings clause, they would have to buy the property.

But a “taking” need not be literally of the property as such. It can be a taking of the economic value of the property. When a woman living on the edge of my father’s building development, who spent her time bird watching, saw that lots adjacent to hers might be developed, she prevailed on the town planning board to declare the property “wetlands.” They did.  Two one-acre lots became economically worthless in perpetuity. There was no compensation. If the town had been forced to recognize that a taking had occurred, and to pay for the lots, this would not have happened. (The woman should have been told to buy the lots and open a bird sanctuary.)

A town notices that a local lake is becoming popular for swimming. There is a road and a public beach, but people would like access to the other side of the lake, as well. An ordinance is passed to require a property owner on that side of the lake to permanently maintain a right of way through his land to the lake. The town does not buy the piece of land; it just decides upon its use and disposal.

As soon as the Knick case had been decided, commentators began calling attention to local government bodies trying to prohibit fracking within their domains. They don’t want to “own” the property and certainly don’t want to pay for it. They simply want to prevent the owner from realizing the economic value of the land’s mineral rights (oil and gas).

As the Court pointed out last week, Williamson had left property owners helpless to assaults by these little local Soviets. When a local government unit already had decided that a “taking” had not occurred, and no compensation would be paid, a state court was highly unlikely to reverse the decision. Indeed, one favorite trick of local government, apparently, was to urge the state court to refer the plaintiff to federal court (can you  believe this?), where the claim then had to be submitted—and inevitably turned down and sent back to state court. But by this time, plaintiffs had decided the legal expenses were unbearable. End of challenge.

Government Decisions on Fundamental Principles

In our time, genuinely momentous government decisions on fundamental principles are rare—to say the least. Individuals may make such decisions, of course, but as effective changes in how government will operate such decisions are almost unknown.

As Ayn Rand once pointed out, the U.S. Supreme Court is the last bastion of any hint of philosophical influence in America. The Court’s decision in favor of federal court protection of property against two-bit local dictators, “doing good” with property not their own, demonstrates what can be accomplished.

The Pacific Legal Foundation, the Institute for Justice, the Cato Institute, and other ideological “Minute Men”—self-constituted, privately supported, and quietly working daily in the cause of liberty—are the best manifestations of the new Objectivist/Libertarian “right.” If they do not make headlines daily, it is because their battles are philosophical—long-range, theoretical, and truly fundamental.

When they win, as they won in their Supreme Court last week, after decades of attention to the issue, the win is momentous.

Most Left-Liberals scarcely notice, but they are guaranteed to notice when they broach their next plan for disposal of the property rights of their neighbors and are informed: “That would constitute a multi-million-dollar taking.”

Send a check once in awhile to a nonprofit organization advocating for the principles of a free society. Most such organizations are still extremely limited in their budgets, as compared with multitudinous well-endowed enemies of free markets, free men, and free minds.

This article was originally published at The Savvy Street. It is reprinted with permission of the author.

Walter Donway


Walter Donway

Walter Donway was a trustee of the Atlas Society from its founding until 2010. He launched the organization's first publication, "The IOS Journal," and contributed articles and poems to all later publications. He is the author of poetry collections, novels, and works of nonfiction, including his book, "Not Half Free: The Myth that America is Capitalist," with a foreword by David Kelley. He analyzed the philosophical meaning of the 2016 presidential election, and the import of Donald Trump's election, in his book "Donald Trump and His Enemies.: How the Media Put Trump in Office." He is an editor and regular contributor to an online magazine, "Savvy Street," that presents current events in the context of Objectivism. He lives in East Hampton, New York, with his wife, Robin Shepard.


Walter Donway
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Walter Donway

"Walter's latest book is How Philosophers Change Civilizations: The Age of Enlightenment."

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