What made the project “quite radical” is that the takings clause, in a straightforward reading, simply prohibits the government from “tak[ing] private property for public use without just compensation.” This language seems to stand for the uncontroversial proposition that the government should compensate property owners when it uses its power of eminent domain to seize private property for public projects. But the conservative legal movement has aimed to expand the interpretation of the clause by treating certain limitations on owners’ freedom of action as the equivalent of a “taking,” hoping in the process to constrain the government’s power to regulate private businesses. Even though the Constitution says that the legal remedy for a “taking” is simply the payment of just compensation, litigating the taking question itself (and, if successful, what counts as just compensation) provides a pathway for well-financed landowners to gum up the works of government regulation.
Ilya Somin: America’s weak property rights are harming those most in need
The takings-clause project enjoyed some early successes. In a series of cases in the ’80s, the Supreme Court found that a regulation automatically constitutes a taking of property when it has the effect of depriving owners of all economically viable uses of their property, such as a zoning law that renders a lot totally unsuitable for development, or when it authorizes a “permanent physical occupation” of private property, such as a law requiring building owners to allow an energy company to install solar panels on their roofs. In all other cases, however, the Court has applied a test first articulated in the 1978 case of Penn Central Transportation Co. v. City of New York, which calls on courts to carefully weigh the nature and extent of the regulatory interference with private-property rights to determine whether a taking has occurred. The takings-clause project seemed to run out of steam in the early 2000s, when the Supreme Court began turning away from bright-line rules and steadily expanding the reach of Penn Central. Today, emboldened by Senate Minority Leader Mitch McConnell’s success in packing the federal courts, property-rights activists hope to harness the Supreme Court’s conservative majority to revive the project.
Much of Monday’s argument focused on the question of which test to apply—Penn Central’s highly contextual analysis or the bright-line rule that automatically deems a “permanent physical occupation” to be a taking. Property-rights advocates have long been critical of the Penn Central approach, in part because it puts the burden on landowners to demonstrate that the challenged government regulation has materially harmed them by imposing significant economic losses, singling them out for uniquely unfavorable treatment, or impinging on their ownership rights in a particularly intrusive way. Under the bright-line test, however, a landowner need only establish that the government regulation authorizes a “permanent physical occupation.” The only question that would then remain is how much compensation is due. Plaintiffs have been very creative in trying to shoehorn their claims into the “physical occupation” category. A cable-television company, for example, once tried to argue that being required to carry a particular channel constituted an “occupation” of its lines by the electronic signals flowing through them. The courts have historically rejected these sorts of efforts to expand the reach of the test, choosing to construe it narrowly and literally. After all, the consequences of letting the test get out of hand could disrupt wide swaths of regulations that most people view as both uncontroversial and important.