Friday, July 08, 2005

A Proposed Kelo Amendment

I earlier described the desirability of adding to the U.S. Constitution an Amendment XXVIII to correct the holding of Kelo v. City of New London, (No. 04-108, slip op. (June 23, 2005)). I held off suggesting language for that amendment, however, as I wanted first to set up the problem and to invite comments. I got some good ideas from you readers about how to word a Kelo Amendment. Now I'll take a shot at it, too.

In very brief, we need to clarify that "public use" in the Fifth Amendment does not mean merely "public benefit." Kelo, adopting that broad view, essentially upheld the forced transfer of property from one private party to another. (I say "essentially" because the Court makes some largely ineffectual noises about how the takings must advance a "carefully considered" development plan and not evince an intent simply to benefit one private interest at the expense of another.) That violates the original meaning of the Fifth Amendment, the plain meaning of the Fifth Amendment, and sound public policy.

It will not suffice to simply add an Amendment XXVIII saying, "In the Fifth Amendment, 'public use' really does means 'public use.' And we mean it, this time!" It's too late for that, given the long and sad train of precedents that has slowly eroded the proper meaning of "public use."

Nor will it suffice to say that the public must have access to any property taken under the Fifth Amendment. Takings for prisons or military installations surely qualify as constitutional no less than takings for highways or parks. And we cannot demand public improvements unless we want to rule out takings for the preservation of natural resources.

Jim Lingren's insightful Volokh Conspiracy post, pointing out that the law does a quite able job of distinguishing between taxable private enterprises and nontaxable charitable ones, suggests that we might import into Takings doctrine distinctions already used in the tax code. We might, in other words, adopt an amendment that says something like, "Any 'public use' in the Fifth Amendment must qualify as tax-exempt." The relative instability of the tax code renders it ill-suited as a foundation for constitutional law, however. Better that we should simply take Jim Lingren's point for what it is worth: A very convincing proof that the Kelo Court erred in claiming, "There is . . . no principled way of distinguishing economic development from the other public purposes that we have recognized." Tax law shows that the Court could have made that vital distinction.

Co-blogger Glen Whitman and I have independently toyed with the idea of an amendment imposing a fixed term of years before any property taken for public use can be transferred to a private party. Glen suggested ten years; I was thinking of twenty. That approach offers a bright-line rule that, if effective, would largely obviate the public choice problems created by Kelo. Still, though, I worry even that would not suffice to prevent abuses.

Consider this legal hack: Government agents could take private property from its rightful owner, hold fee simple title in the public's name, and offer a 99-year lease to a hotel developer. The public would own the property and have the right to use it. True, that use would come at a price. But is Yosemite National Park non-public because it charges an entry fee? No. It remains public because the government owns title and because it must give access to anyone willing to pay the requisite fee—just like the hotel in the legal hack I've described.

When I first approached this problem, some months ago, I put it this way: "[T]he Fifth Amendment's 'public use' requirement means that government officials must actually turn taken property into a public park, a public highway, a government office, or similar facility dedicated to public purposes." Putting that idea into solid legal language proves tricky, though. To close loopholes such as the one I described above, I think we need to resort to some legalese. I thus offer a Kelo Amendment invoking the common law definition of an interest in property, a notion sufficiently broad to cover ownership in fee simple and a leasehold estate (among other forms of ownership):

Amendment XXVIII: No taking of private property shall qualify as "for public use" under Amendment V if another private party obtains an interest in the property within twenty years of its taking.

This amendment would plainly rule out the sort of shenanigans upheld in Kelo. It would also rule out legal hacks of the sort I worried about earlier, wherein the government takes title but offers a private party a long-term lease. Note that this Amendment deliberately says nothing to affect the theory of regulatory takings, pro or con. Nor does it specifically limit itself to real property; takings of private chattel or intellectual property would win the same protections. The reference to "another private party" allows the party who originally suffered the taking to regain it, while still enjoying the "just compensation" guaranteed under Amendment V. I settled on twenty years because it seems easily long enough to avoid public choice problems and because that same span sometimes measures the term necessary to establish adverse possession in the law of real property.


Gil said...

What impact is there from defining "public use" in terms of what can't happen in the future?

How can the government predict the future?

Does it mean that they can't have a current plan to transfer it within that time? Does it mean that they are forbidden from transferring it to a private party within 20 years even if that wasn't the original plan, but it now seems like the best use of resources?


Tom W. Bell said...

I take it you ask about the remedy for a violation of the proposed Amendment. Suppose, for instance, that San Clemente took my property for a supposed public use, but within five years of the taking transfered title to a 7-11. In that event, the taking would have been unconstitutional because not for a public use, as defined by Amendment XXVIII. Title would revert to me or my heirs. Query whether the city would have a right to have its compensation returned; I should think not.

I don't see how the language I've proposed could possibly condone the government "changing its mind"; it is flatly forbidden to given any private party an interest during the twenty year span.

Anonymous said...

Three thoughts:

1. By setting the 20 year period for transferring taken property to private parties, will you have effectively given the constitutional green-light to all such takings? Would this wipe out the last remaining check (part of a larger economic development plan, etc.) left over from Kelo? Even if you argue that there isn't much left after Kelo, wouldn't this amendment undercut any case IJ or others could make on the state and local level? Couldn't the government just whip out the "20 year intent" clause to justify any taking?

2. With a 20 year cooling off period, local governments would be encouraged to get off the dime and take property now that they see playing a role in the long term development of their communities. If they have to wait 20 years, they had better get the clock started as soon as possible.

3. What if the government decides to take the property, lease it to the original owner for 20 years, then sell it to the highest bidder?


Tom W. Bell said...


I don't think the wording would support an interpretation leading to the first problem you describe. The proposed Amendment is entirely restrictive; not permissive. All extant jurisprudence would remain in force.

Regarding your second point, that's a concern, granted, but one greatly mitigated by the long time line. If you're not convinced, you might prefer a longer period. At some point, surely, the problem would disappear.

The same might be said about your last concern, too, though I must credit you with a very creative legal hack! Here as with regard to your second point, though, you must keep in mind the sort of public choice problem created by Kelo: It encourages a private party to buy favors from local governments, encouraging them to use the takings power for private ends. Putting twenty (or thirty, or more, if you insist) years between the request for a favor and the payoff largely obviates that concern.

Gil said...

Sorry, but it doesn't make sense to me to call a taking unconstitutional if other people choose to do something else with the property in the future. The taking was constitutional at the time, but the weird definition of a term renders it invalid at some later time?

I think laws should be written so that one can know whether or not he is violating it, right now. We shouldn't have to wait twenty years to find out whether the taking was constitutional.

It seems that your change will stop takings with the intent to transfer property to other private parties; but, it will also be an obstacle to privatizing taken property for twenty years, even though such privatization is in our best interest (assuming the original owner is unavailable or unininterested in it anymore).

Wouldn't it be ok if the property were sold, with adequate public notice, to the highest bidder (with the profit reverting to the original owner, or his heirs)?

Tom W. Bell said...


Since you think the twenty-year term is too long, and other commentators think it too short, I must have hit a happy middle.

Seriously, I must agree that it would hinder privatization. But that's simply a cost of avoiding the public choice hazards of Kelo.

I don't see why a post-hoc determination of constitutionality is so strange. Indeed, takings law already works that way, given that determinations of whether compensation is constitutionally just often come only after protracted litigation.

What you propose about forcing sales on unwilling owners might be OK to you, Gil, but not to a lot of people. And for good reason; the Fifth has nothing to do with maximizing the liquidate value of property.

Gil said...



I'm not proposing forcing sales on unwilling owners. I wasn't saying that there should be no "public use" restriction, I'm just worrying about bad consequences that trying to tinker with bad law in this way might generate.

If it were up to me, my new amendment would extend the Fifth Amendment to deny eminent domain entirely, rather than try to clarify what isn't "public use". Maybe change "without just compensation" to "involuntarily".

If it's so important to the "public", the public should pay what a willing seller wants for it.

Otherwise, tough.

I can't force unwilling sellers to give me their property at a price I choose (and even if I could I wouldn't) even if I have really really great plans for it, why should the state be able to? Lots of major projects that require acquisition of property are done every day by private companies in spite of our pesky anti-theft laws.

It seems to me that all other paths are likely to lead to more costs than benefits.

As we're seeing.

Anonymous said...

I don't think you're going to be able to work all the way around this problem with simple changes of wording and time periods. Creative definitions of "interest", clever schemes of quasi-leasing, and the like will be built. Even if these are not done, booming towns will take the hint and start seizing property right and left in the hopes of having something valuable at the 20-year cutoff.

Might it not simply be easier to say that takings must be compensated at, say, twice their value, and that the valuation must ignore any legislative or zoning restrictions that reduce the property's value? That would take all the profit out of using eminent domain to transfer land, and would quash the currently popular shennanigans used to make compensation trivial, but would preserve real public uses of which the compensation costs are typically only a small fraction of the total costs.

Greg Morrow said...

The language I came up with here was:

Property taken for public use shall not be sold or let to any private individual or foreign government for a period of five years, or for such longer period as set by Congress.

Eric Mack said...

Unless "obtaining an interest" has a clear and narrow legal meaning, I foresee the following sort of problem: There is a taking that is allowed under the spirit of this amendment, e.g., for a public building or park. But the restriction on any private party obtaining an interest then precludes private concession operators, private maintenance contracts, etc.

Tom W. Bell said...


I'm sympathetic to your concerns, but I want to to work within the general outlines of takings law, correcting only Kelo (and some of the precedents on which it relies). I thus don't here consider the worthy suggestion that we get rid of takings.

I'm sorry if I misunderstood your proposal, but it still seems to me that if you allow post-takings resales to the highest bidder, with proceeds going to the prior owner, you effectively allow--indeed, encourage--coerced inter-private transfers. Granted, your approach might generally (but would certainly not always!) result in a higher price. But I don't think the private parties who borrow the takings power do so primarily to save money; they do so to force a transfer. Even if it does cost them appreciably more, they will undoubtedly get local authorities to make up the difference with a subsidy.

At the least, though, I would counsel you to call for the *greater* of just compensation or the highest price paid at an open auction. You wouldn't want a sole bidder to win title after offering to pay only $1.

Tom W. Bell said...

Hello Eric! Thanks for your comment. I'm not so worried as you, however, that courts will over-extend "an interest in the property," given that the phrase operates as a term of art in the law.

Michael Kochin said...


You are right that the constituional amendment approach is the right response to emasculating Kelo, and I think it becomes realistic if we think in terms of amending state constitutions.

But I, non-lawyer that I am, think that something can be done on "the public use" front.

Michael "fellow '91 HSF Summer Fellow" Kochin

Anonymous said...

It seems that your proposal would thwart takings for things such as railroads and electrical transmission lines, which, while owned, leased, or controlled by a private party, have traditionally been considered proper "public use." Do you think such takings unconstitutional? If not, how would a governmental entity accomplish such a taking under your proposal?

Bob Woolley

Sui Generic said...

Given the widespread political dissatisfaction with the result in Kelo, or at least its implications for future condemnations, what's the point of proposing an amendment? Surely statutes enacted in all 50 states allowing condemnation only for nuisance, etc., but not for economic purposes, would be the sensible way to approach this, no?

Too Many Jims said...

Intersting formulation. I have two concerns. First, as you noted before, this is a casualty of your approach but I think this is pretty serious. It ranges from the trivial (can you have a starbucks in the basement of your county courthouse) on up to manangement firms who run private toll roads. (Of course the restriction would only apply to land taken by ED and only apply (presumably) to land taken after the amendment.)

The greater concern I have is that it has the effect of encouraging state ownership. Let's say a city has a sports franchise. They no longer can use eminent domain to build a stadium and lease it to the franchise. The owner says he is going to sell to someone else who is going to move the team. What the city might decide to do in that case is buy the team. (Hey don't laugh Franklin County (Ohio) owns a AAA baseball team.) Admittedly the universe of types of businesses that might be state owned is kind of small (it's not likely that New London would have built a pharmacutical research facility) but a curious effect to me nonetheless.

cathyf said...

My city's municipal services are administered by a private company, Wouldn't the broadness of the "interest" language outlaw this private company administering truly public services on land that was taken?

John Noble said...

"[T]he common law definition of an interest in property" covers a lot of ground, and varies from state to state.

"A common idiom describes property as a 'bundle of sticks'--a collection of individual rights which, in certain combinations, constitute property. ... State law determines only which sticks are in a person's bundle. Whether those sticks qualify as "property" for purposes of the federal tax lien statute is a question of federal law." U.S. v. Craft, 535 US 274, 278 (2002). I assume construction of the 28th Amendment is also a federal question.

"By erasing the careful line between state laws that purport to disclaim or exempt property interests after the fact, which the federal tax lien does not respect, and state laws' definition of property and property rights, which the federal tax lien does respect, the Court does not follow Drye, but rather creates a new federal common law of property." Id., at 294 (Thomas, J. dissenting)

We can't have the 28th Amendment defeated by state common law definitions of "an interest in property." Towards the development of a federal common law....

Plainly, the construction of a new riverfront baseball stadium for the Washington Nationals could be halted by a single homeowner who wants $30 million for his quarter acre. Right? Or I guess the city could collect the gate, run the hotdog stands, hire the beer vendors, and pay the team to play -- but could the city lease sky-boxes, or even sell season tickets, and would either be transferable by sale or devise, under the federal common law?

Will the federal common law prohibit the use of debt financing, subject to a security interest "obtained" by the lender, to pay for the taking and the construction of a public facility. Can the general contractor "obtain" a mechanics lien if the government doesn't pay his bill under federal common law?

Would federal common law prohibit the sale of landing rights and lease of hangar facilities to Southwest Airlines at a municipal airport? How about the lease of retail space to Starbucks at the same airport.

The federal Randolph-Sheppard Act (20 U.S.C. 107) was enacted in 1936 to give preference to blind persons for operating vending stands on federally controlled property. Several states have "mini-" R-S Acts. Are they all unconstitutional as applied to public facilities built on property taken by eminent domain? Can anyone operate a concession in the first floor lobby of city hall, or does the city have to own and operate its own Kinko's franchise?

Can cities license newspaper stands on public sidewalks along roads built on property taken by eminent domain? Can everyone park in my driveway on the easement between the curb-cut and my property line?

Can cities grant franchises to cable companies, allowing them to use the public right-of-way to bury their cable in return for 5% of gross revenues, or is Title VI of the Communications Act, which requires them to do so, unconstitutional as applied to PROW acquired by eminent domain.

If a post-amendment New London took all the same property, intending to sit on it for twenty years before developing it, but decided to settle with Ms. Kelo -- her house sitting smack in the middle of the taken properties -- could they grant her an easement so she could get in and out of her property in exchange for an option to buy it when she dies.

If the government acquires property already subject to a state common law easement by necessity that provides access to otherwise inaccessible adjacent private property, could a subsequent purchaser of the private property "obtain" the easement along with the private property it serves?

Can Congress define "property interest," preempting state laws, to exclude an exclusive right to use or occupy public property for particular purposes (let's say coffee shops and shoe-shine stands and cable franchises) from the definition of "property interest," or is the definition necessarily a question of constitutional construction and judicial invention of federal common law?

Tom W. Bell said...


Hello! I'm delighted to discover that you've found an academic home and hope all is well with you.

As regards amending state constitutions, I'm all for it. But it seems to me that it might prove quicker and easier to take care of the problem once, at the federal level. Besides, I think the Supreme Court needs a wake-up call.

Tom W. Bell said...

Sui Generic, please see my comments to Michael, just above.

Tom W. Bell said...

Cathyf: I don't think it would be a problem to give the private company access to city-owned, taken property under the proposed amendment. Giving the private company the exclusive right to access such property--giving it a leasehold estate--might, however. At all events, though, the city could simply move things around so that the company leases properties not taken after the effective date of the amendment. That shouldn't be hard.

Tom W. Bell said...


I think I'd have to just bite the bullet on the first problem. Starbucks can use a cart or open up shop next door. The tollroad poses a more serious matter, but I console myself that: 1) relatively few new tollroads are likely to get built and; 2) we can still have private parties *operate* publicly taken and owned roads.

I'm not sure that the proposed amendment would increase the likelihood, on net, of government agents taking title to private property. Recall that they can already take that property in Kelo-world. That doesn't change under the Kelo Amendment. Rather, it becomes less easy to take property because the public entity has to grapple with the prospect of retaining title to it.

Tom W. Bell said...

Greg Morrow: Thanks for the link. Great minds, man, great minds . . . .

Tom W. Bell said...

Bob Wolley: You ask a good question. I agree that the proposed Kelo Amendment makes takings for private tollroads, powerlines, railroads, etc., rather problematic. Traditionally, takings doctrine has excused those sorts of transfers on grounds that common carrier doctrine ensures that the public retains non-discriminatory access to the private property so taken. The proposed amendment thus goes a bit beyond Kelo to also cast doubt on the common carrier line of cases. I think we could live with that, but I also see why some people might prefer a variaiont along these lines:

Amendment XXVIII: No taking of private property shall qualify as "for public use" under Amendment V if another private party, other than a common carrier, obtains an interest in the property within twenty years of its taking.

Too Many Jims said...

"we can still have private parties *operate* publicly taken and owned roads"

How do you distinguish a 99 year lease of hotel facilities (as in your hack example) and a 99 year contract to "operate" hotel facilities?

With regard to the scond point you responded to, you are undoubtedly correct that the amendment would make it more diffilcult to acquire land via ED. My point (mistated though it may have been) is that the amendment would have the unintended consequence of government acquiring the assets to operate on the property rather than the property itself.

Tom W. Bell said...

John Noble (the one I know from Cyberia-L, I presume): You ask many good questions--too many, alas, for me to answer now. I can, at least, credit you with an interesting observation about whether the proposed amendment would require the development of federal common law. I think so, at least within the narrow field of defining "interest in property" in the context of takings. But I can live with that. We already effectively have federal common law in many, many areas. See, for instance, the antitrust jurisprudence that has (of necessity) grown up around the terse language of the Sherman Act. The Kelo Amendment would only incrementally add to that body.

Tom W. Bell said...

Jim: Simply put, a lease is an interest in property whereas a service contract concerning operating a store is not.

I agree with your observation about the amendment's effect, at the margin, on privatization. That's a bullet I think worth biting, though.

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