OREGON ZONING: A COMPENSABLE PARTIAL TAKING? LUCAS, CORBIN

One of the things I like about Constitutional Law is that it's all around you. 

As though sitting under a ripe fruit tree, all you have to do to find an apt example is to reach up and pluck an apple, peach, or orange, and take a bite.

Or just sit there and one will fall into your lap.

Yesterday I wrote about an economics professor who wrote about how the first Thanksgiving was given in thanks for the triumph of unrestricted capitalism over Communism.  The triumph of something he called "freedom of contract" and the freedom to "spend our money as we like," he called it. Labor unions and abusive eminent domain were the two examples he used.  (See "Thanksgiving Nonsense and Propaganda," 11/24/04).

I saw through his argument and noted that he was really arguing for a return to the dreaded Lochner era. 

What he really favored was the demise of labor unions, and the repeal of worker protections such as minimum wage, maximum hours, workers compensation for job-related injuries, worker-safety, and laws against child-labor.

As for his eminent domain argument, I pointed out that this issue is a darling of the conservative right, landowners, basically, who want to be compensated for state and federal laws that, they claim, diminish the value of their property; zoning laws for example.

Providentially, like the apple falling from the tree, today's New York Times brings brings an article here directly in point, written by the felicitously named Felicity Barringer. 

The State of Oregon has one of the strictest land-use planning laws in the country, protecting open space by restricting the right of the owners of that land from building condominium developments, strip malls, office buildings, mega-homes, mini-homes and the like.  Those are restricted to the cities.  The land-owners don't like this.  They can't turn their land into cash or credit.  They're stuck with it, poor dears.  "Land-use planning" is just another term for "theft," to them.

So the property owners are fighting back.

Which is as you might expect.  Land barons have been doing that since before Magna Carta at Runnymede, 1215.  We owe them a lot. We owe them the idea of Due Process of Law, for example.  That's our term for their "the law of the land." 

I quote it, and ours, in the banner headline, above, so we don't forget.

Property owners in Oregon have thus introduced a ballot measure requiring government to compensate  property-owners who can prove that environmental or zoning laws have hurt the value of their investment.

That could get pretty expensive for Oregon in a hurry, because every environmental and zoning law limits the usability of someone's property and costs them money.  Investors in land know going in, when they make their investments, that they are subject to general laws protecting the environment and zoning.

Traditionally these reductions in value for the individual land-owner have not been considered 'takings' within the Compensation Clauses of the 5th (Federal) and 14th (State) Amendments.

Under Lucas v. South Carolina Coastal Commission  505 US 1003 (1992), unless there was a total taking of one's property, or all of its economic value, no compensation was due. The state doing the taking owed the land-owner nothing.  There are two typical ways that a government might "take" property.  The first was the usual one where the property-owner's property was expropriated or "condemned" for a public use.  The second, the one that gave rise to the Lucas case was where there was no condemnation proceeding, but the effect on the landowner was the same. 

In Lucas, the Coastal Commission simply prohibited beachfront owners from using their property, such as a ban on building to protect the shore.  There was a total taking.  Because there was a total deprivation of use, the owner couldn't put up a shack, much less a mansion, there was a total deprivation of fair market value.  That was too much of a taking for even the U.S. Supreme Court to stomach, and so Lucas is authority for the proposition that a regulation which has the effect of a total taking is compensable.  However, the Court clearly said, a partial taking is not.  This struck at least one dissenter as a little much.  Suppose there were a partial "taking" amounting to 99% of the value because of a development restriction?  Wouldn't that count?  Not under Lucas.  Maybe some other case, but that wasn't part of the facts of Lucas where the taking was said to be total.

Partial takings are no takings.  That's the rule of Lucas.  Or one of the ways of expressing the rule of Lucas.  You can describe an idea, or parts of ideas in different ways.  That's why we tell constitutional law student they'll be better off if they try to understand things, not words.

"Think things, not words," is the expression. 

This statement is attributed by Dennis J. Hutchinson, White's biographer, to Prof. Arthur Corbin of Columbia Law School, whose students included Byron R. White, later Justice White, for Contract Law.  According to Hutchinson, Corbin taught students to see "patterns of results, regardless of how the outcomes were explained by the Courts."

I don't think Corbin was saying that courts and judges lie, exactly, but they may overstate and sugar-coat to help controversial doctrines go down a little easier.

Each law writer comes up with different ways of describing the idea that exists in his head according to his understanding.  The students' problem is to get the idea into their heads so they can write and talk about it intelligently, even apply it to a new and seemingly strange fact situation, without leaving out some important component. 

We all have an idea in our heads of what an automobile, truck, or airplane is, as complex as those machines are. 

Your idea probably includes an engine.  Same with legal ideas.  We can stick them into our heads if we can envision them, not forgetting, the defining parts, like the engine that enables them to move, or in the case of airplanes, the wings and tail that enable them to fly.

It is this idea of uncompensable partial takings of Lucas that Oregon property owners are seeking to correct through the ballot process, which is their right. 

This may raise economic, social, and political issues but does not, by itself, seem to present an issue of constitutional law.  But that's only because I haven't thought enough about it.  Stay tuned.

Now I've thought about it a bit.  Just a bit, though, not enough to mean much.  But what I've asked myself is the quintessential Constitutional Law question. 

Would you like to take a scientific wild-ass guess as to what the No. 1 Con-Law question is?

Izzit Constitutional?

Unless you ask whether something, some act or practice, law or rule, is constitutional, you're not even on the path to finding out.  This one puts you on your way towards thinking of an answer, yes or no.

How could a ballot proposition, let's say after it passes, that require government to pay for partial takings be unconstitutional, be unconstitutional?

Off the bat, I have no idea.  But what occurs to me is this. 

Suppose such a rule were to threaten to bankrupt government such that no legislature could pass laws, say, prohibiting landowners or their tenants from from discharging toxic waste into the air, water, or ground, for fear of having to compensate owners for reductions in value. 

Costs that the state tried to make the landowner bear would have to be borne by the state.  The state could try to make it up in increased taxes on certain landowners.  A vicious cycle would ensue, conceivably. 

There's evidence of this happening in Oregon, as I read the NYT article below. 

If challenged, Oregon might argue to the Court that this measure effectively handcuffs states from enacting reform legislation. 

If held constitutional, it would provide too much deference to property interests and not enough to the states as they perform their duty of protecting the general population.  This, it seems, is the underlying point on which the Lucas decision rests.

Oregon would argue that this initiative requiring compensation for partial takings violates the rule of Lucas.  Why didn't I think of that right off the bat?  Because it takes awhile for ideas to percolate through one's brain in a way that different ideas relate to one another in a meaningful way. 

Sometimes we add 2 + 2 and they equal four in a flash, because we're used to seeing 2 + 2, perhaps, and sometimes we go through a more laborious thinking process that takes a few moments longer.  Albert Einstein could probably have told us a thing or two about this.

So maybe there is a constitutional challenge brewing from such an initiative.  We'll see, won't we.

At any rate, this is an example of Con-Law thinking, or how it is done.  Start with Question No. !, Izzit Constitutional, and then start scratching your head.  Sometimes we forget to ask this question, and then we're in trouble, just as though we never looked at Constitutional Law at all.  You've got to ask that question of yourself. 

This is why virtually all Con-Law exams ask a question that amounts to "Discuss whether such-and-such (described in the facts above) is constitutional." 

In real life you have to ask this of yourself when you see a new situation, not yet decided by the Supreme Court, since that is our ultimate arbiter in such questions.

It helps ask this key question first and then take a nap.

It's amazing what your mind can do when it has a chance to regroup.

This advice about taking a nap is not useful when taking Con-Law exams, however.  Sorry.

Conservatives and their legal watchdog groups are watching Oregon's initiative with interest.

You can read the article on the continuation below by clicking on the highlit hotlink. 

And don't forget to subscribe to or buy your copy of the NYT.  I say that because I've borrowed their article and feel I should repay them with an endorsement. 

I think this is "fair use," don't you? 

I certainly hope the Times does.

November 26, 2004   Property Rights Law May Alter Oregon Landscape   By FELICITY BARRINGER     ORTLAND, Ore., Nov. 20 - Over the past three decades, Oregon has earned a reputation for having the most restrictive land-use rules in the nation. Housing was grouped in and near the cities, while vast parcels of farmland and forests were untouched by so much as a suburban cul-de-sac. Environmentalists and advocates for "smart growth" cheered the ever-growing list of rules as visionary, while some landowners, timber companies and political allies cried foul. But in a matter of days, the landowners will get a chance to turn the tables. Under a ballot measure approved on Nov. 2, property owners who can prove that environmental or zoning rules have hurt their investments can force the government to compensate them for the losses - or get an exemption from the rules. Supporters of the measure, which passed 60 percent to 40 percent, call it a landmark in a 30-year battle over property rights. "I've been getting calls from California, Idaho, Washington, Alaska and Wisconsin," said Ross Day, a Portland lawyer for the conservative group Oregonians in Action who co-wrote the law, Ballot Measure 37. "They all want to find out what our secret recipe was to get it passed." Whatever the benefits of Oregon's land-use rules, Mr. Day added, "the people paying the cost are property owners." "If Enron does something like this, people call it theft," he said.  "If Oregon does it, they call it land-use planning." Richard J. Lazarus, a professor at the Georgetown University Law Center who specializes in environmental law, called the measure a blunt instrument that could undermine all zoning and environmental protections and undercut land values. "If you can build a little Houston anywhere, or a gravel pit or a shopping center next to your home, you don't have maximization of property values," Professor Lazarus said. "If you fail to regulate now, you're reducing property values for future Oregonians," he continued. "A lot of what government is doing in environmental protection is at least trying to balance the needs of present and future generations." The new law, Professor Lazarus said, "is one of those very simple solutions, but, boy, did they open a can of worms." Conservatives across the country have championed the idea of compensation for aggrieved landowners since at least the mid-1990's and the 1994 Republican "Contract With America." Four states have laws dating from that period that provide some compensation for affected property owners. "In Oregon, they're serious," said Michael M. Berger, a partner in the Los Angeles law firm of Manatt, Phelps & Phillips. "It helps make people sit up and take notice that this is something they have to deal with. This is a big shock to the body politic - it's a very red-state thing to do, and Oregon is very blue, so this shows it cut across everyone." Both sides expect the measure to survive judicial scrutiny, and the state and local governments are to start fielding claims on Dec. 2. If claims are found to be valid and the government will not or cannot pay, it must instead waive any restrictions that went into force after the owners - or their parents or grandparents - acquired the land. Some fear that the state will be unable to pay and that hillsides in the Cascades now bristling with fir trees and pear orchards could sprout a crop of McMansions, Wal-Marts or resort condominiums in a few years. The supporters of the new law successfully depicted the current plight of property owners in a campaign with a decidedly populist edge. One advertisement showed a woman penalized for cutting blackberry bushes - potential wildlife habitat - in her backyard in Portland. Another woman, Dorothy English, 92, was a fixture on drive-time radio advertisements in the final week of the campaign. Ms. English bought land in the hills west of Portland in 1953 and is still fighting for the right to carve several lucrative building lots out of the 20 acres she has left. "They've made fools of people in this state," she said last Wednesday. "I've always been fighting the government and I'm not going to stop." The Hood River Valley, 60 miles east of Portland and the source of more than a third of the nation's Bosc pears, is one of the places that could be most affected. Many of the farmers are the third or fourth generations of their families to work the same land. Most land-use regulation came after their families did, so their claims could be extensive and expensive. The valley nestles along the Columbia River Gorge, a strong draw for windsurfers; the development pressure is strong. Sitting in their living room in the town of Hood River, overlooking fields newly planted in cherries, John Benton and his wife, Julie, both 57, said that their income was eroding and that their 100-acre farm had "barely supported us." The Bentons, whose family ownership dates to 1910, said that orchard farmers like themselves could not make a living without an infusion of cash from selling land for home construction. By contrast, their neighbor Fritz VonLubken, who is 69 and bought his orchards from a grandfather who came to the area in 1912, said he believed that farmland needed to be preserved. "You zone for industrial districts," Mr. VonLubken said. "Well, farming is an industry. It needs to be protected. We're a high-value business, and this is the best location for us." Mike McCarthy, whose 250 acres scattered on the northeastern apron of Mount Hood produce a plentiful crop of pears, said, "These are the most productive soils in Oregon," and, as such, were irreplaceable. The success of the ballot measure has led advocates of planning to do some soul searching. It won a majority in all 35 of the state's counties except the one that encompasses Corvallis and Oregon State University and got a thin majority even in the progressive city of Portland. "It definitely calls into question a lot of the mechanisms we have now," said David Bragdon, the president of the Metro Council, which sets the growth parameters for 460 square miles in three metropolitan Portland counties. "And it undermines the mechanisms we have." Mr. Bragdon added, "There is a resentment in rural areas of urban policy makers and the urban elite." The long-used planning philosophy is wryly called "timberland, farmland and ring around the city." Each county has established "urban growth boundaries" around its cities and has tried to keep most development to areas within them. On farmland, houses can be built only under strict conditions - for instance, the buyer must show that he can generate $80,000 in annual gross income from farming for a period of years before he can build. Nonfarm dwellings are allowed only in areas with poor soil. In return, farmers receive substantial property tax breaks; their land may be assessed at as little as 0.5 percent of land where development is encouraged. Even if they succeed, farmers who fight to have the urban growth boundary extended to their lands must pay a one-time tax amounting to perhaps 7.5 percent of the land's new value - in addition to federal and state capital gains taxes on the sale of the property. Thanks to such tight policies, suburban sprawl has been largely banished in Oregon. Gov. Theodore R. Kulongoski, a Democrat who opposed the compensation measure, said last week that he would push to have claims paid rather than tear holes in the state's land-use system. But, like many other states, Oregon is strapped. To pay the claims, some pro-planning forces suggest setting high taxes on the profits on newly developable land. If, instead, the government grants exemptions to land-use rules, many property owners might want to sell for the ready profit. Mr. VonLubken, like Professor Lazarus, said he believed that the first wave of farmland sales would be the most lucrative and that those new residents, having paid a premium for bucolic splendor, would support regulation to help keep a second wave of newcomers away. The state's population grew 20.4 percent in the 1990's, to about 3.4 million people in 2000. The federal government, largely through the Forest Service, is the largest landowner in Oregon; state, tribal and federal lands constitute about 55 percent of the state's total acreage. Of the remaining 27.7 million acres of privately held land, 56 percent is farmland. Others states that allow for compensation for aggrieved property owners are Florida, Texas, Louisiana and Mississippi. But they set a threshold, for instance a 25 percent reduction in a property's value, and will pay only for losses caused by new land-use rules. The retroactive feature of the Oregon law could affect many more people. Until the claims start, though, no one will hazard a guess at just how much land will be affected, and at what cost. "It's no coincidence that they passed this Measure 37 in a state that has prided itself on having the most extensive planning and regulatory scheme for rural lands," said J. David Breemer, a staff lawyer with the Pacific Legal Foundation, a conservative advocacy organization. "This type of initiative and legislation will be more common now." The planners, however, are still flying their flags. "Quality of life is something that is shared," said Robert Liberty, a former president of 1,000 Friends of Oregon, an ardent pro-planning group, who was just elected to the board of the Portland regional planning agency. "A golf course is not. A four-car garage is not. One of the best things about the planning process is that it makes a better community for everyone, regardless of income."   Copyright 2004 The New York Times Company | Home | Privacy Policy | Search | Corrections | RSS | Help | Back to Top

Comments

[rs]

F-84 writes:

"...Thus, we're cool with land use regulations. But if a wealthy state like Oregon wants open space, then it should go buy some."

***

Well, not everybody is cool with land use regulations.

Direct takings, compensable under due process, are not the cutting edge constitutional problem under Lucas, because they've been compensable for years.

The private property owners of Oregon who are moving the controversial initiative in question (they're ALL controversial otherwise they wouldn't be initiatives) are objecting to IMPLIED takings, not direct.

Their beef isn't necessarily with the proposition as F-84 states it, namely that if the people of Oregon want open space they can buy the acreage from the owners. That's a direct taking and property owners are not challenging classic eminent domain direct, total, and compensated, takings.

It's the other kind that has their dander up, the implied, partial, and uncompensated takings.

There's more than open space at issue here. There are other kinds of land use planning regulations that deprive an owner of real fair market value.

Protecting endangered species is one. Prohibiting discharge of pollutants to air, water, and ground is another.

Rules in these areas can kill a housing development or a manufacturing plant, dead.

Mr. Property Owner is still owner of his plant, it's just that he might have to turn it into a museum, because he's no longer going to be able to use that big smoke-stack in the backyard. This fellow wants compensation.

Oregon says we're just protecting the people and the fish from asthma and the acid rain that kills fish. And we're not going to compensate you because we don't have to under Lucas.

The Oregon initiative looks like a way to overrule, in effect, Lucas.

Last I heard, oh, say, since Gibbons v. Ogden, having something to do with steamboats on the Hudson around 1824, local law had to give way to federal law on Supremacy grounds.

Wouldn't Oregon argue that Lucas, being Constitutional law, outweighs the Oregon initiative, assuming it passes?

Wouldn't Oregon be right?

[Federalist No. 84]

RS writes: "As for his eminent domain argument, I pointed out that this issue is a darling of the conservative right, landowners, basically, who want to be compensated for state and federal laws that, they claim, diminish the value of their property; zoning laws for example."

Hmmm... I don't know anyone who argues that eminent domain is per se bad. Hell, it's constitutional, since the Fifth Amendment wouldn't make much sense unless it presupposed this power.

What folks like me want is a return to an original understanding of "public use" and when there is a public use requiring eminent domain, then we want just compensation.

We say that if the people of Oregon want open space, they should purchase the property. This would cause the burden to be shared equally. Instead, too many states and muncipalities want me to subsidize open space for all. That's not fair to require me as a landowner (that's a HYPOTHETICAL *me* since I'm a renter) to bear the burden for you and yours.

Thus, we're cool with land use regulations. But if a wealthy state like Oregon wants open space, then it should go buy some.