The Constitutional Law Of Property - Property

Rules

1. Background principles. The constitutional law of property is divided into two camps, illustrated by the opinions of Justices Chase and Iredell in Calder v. Bull.

   1. Chase. Property is a pre-political right that is protected by not only the Constitution, but reason itself.

      1. Legislatures bound by first principles. “An act of the legislature (for I cannot call it a law), contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority.”

      2. Constitution not only set of requirements. “It is against all reason and justice for a people to intrust a legislature with [a power that “takes property from A, and gives it to B”].... The legislature... cannot punish innocence as a crime; or violate the right of an antecedent lawful private contract; or the right of private property. To maintain that our federal or state legislature possesses such powers, if they had not been expressly restrained, would, in my opinion, be a political heresy altogether inadmissible in our free republican governments....”

      3. Positive law governs management of property. Nevertheless, “the right, as well as the mode, or manner, of acquiring property and of alienating or transferring, inheriting, or transmitting it, is conferred by society...and is always subject to the rules prescribed by positive law....”

   2. Iredell. Regardless of whether property is a natural right, a court is limited to evaluating whether a law is constitutional.

      1. Court has no power to overrule legislature re: natural justice. “It is true...that a legislative act against natural justice must, in itself, be void; but I cannot think that, under such a government any court of justice would possess a power to declare it so.”

      2. Constitutions are only restraints. “In order, therefore, to guard against so great an evil,” Americans have adopted constitutions “to define with precision the objects of legislative power, and to restrain its exercise within marked and settled boundaries.”

      3. No standard for natural justice. If a legislature passes a law “within the general scope of their constitutional power, the court cannot pronounce it to be void, merely because it is, in their judgment, contrary to the principles of natural justice. The ideas of natural justice are regulated by no fixed standard;...[only constitutional] fundamental law...must be our guide, whenever we are called...to determine [its] validity.”

2. The Ex Post Facto Clause (art. I, §9). This prohibits only retroactive criminal laws, not civil regulations or benefits, such as pardons. Calder. But see Eastern Enterprises.

3. The Due Process Clause (amend. XIV).

   1. Lochner Era. The Fourteenth Amendment prohibits states from depriving an individual of life, liberty, or property—including the liberty to purchase or sell one’s labor. States’ inherent “police powers,” however, authorize them to protect their citizens’ safety, welfare, and morals. So long as an economic regulation has a “direct relation” to a “legitimate” end, it is okay. Lochner. But economic laws that require someone to accept personal services of another on terms to which he did not assent violate the 14th Amendment. Coppage.

      1. Holmes’ dissents. Only when “fundamental principles” are at stake should a Court overrule a legislature; the Constitution tolerates many different theories of “natural rights”; “The 14th Amendment does not enact Mr. Herbert Spencer’s Social Statics.” Lochner. Instead, it authorizes legislatures to establish an equality of position between reasonable bargainers. Coppage.

   2. New Deal Era. 14th Amend. “demands only that the law not be unreasonable, arbitrary, or capricious. Nebbia. “[R]egulation which isreasonable in relation to its subject and is adopted in the interests of the community is due process.” W. Coast Hotel.

   3. Eastern Enterprises. Justice Kennedy in his concurrence, infra, wrote that a severe retroactive liability violates the Due Process Clause because of the minor fit between justification and means. Justice Thomas wrote that such a liability might violate the Ex Post Facto Clause. E. Enters.

Analysis

1. Due Process Clause.

   1. Lochner Era. The Lochner Court observed that “it must, of course, be conceded that there is a limit to the valid exercise of the [police power]. Otherwise states would have “unbounded power.” If one accepts that “freedom of contract” is a “fundamental” liberty, then a state should not be able to violate it by just calling any act a “police power.” This should satisfy both Chase and Iredell. Lochner.

      1. Holmes’s dissent. Holmes took an Iredellian position that Court may only overrule actions explicitly prohibited by the Constitution.

   2. New Deal Era. “[N]either property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows....Equally fundamental with the private right is that of the public to regulate it in the common interest.” Nebbia. “[T]here is no closed class or category of business affected with a public interest.” Nebbia; cf. Error! Reference source not found..

      1. Institutional justification. “We refuse to sit as a ‘super-legislature to weigh the wisdom of legislation.” Ferguson.

Major Cases

1. Calder v. Bull (U.S. 1798) (Supp. V, 1)

   1. (Chase, J.) Conn. ct. declared will void. Legislature told court to set judgment aside. According to natural justice, this is okay retrospective law.

   2. (Iredell, J., concurring) No constitutional prohibition against what Conn. did.

2. Lochner v. New York (U.S. 1905) (Supp. V, 5)

   1. (Peckham, J.) N.Y. passed law imposing 10 hr/day maximum and provided for inspections of facilities. Since law is “a labor law, pure and simple,” the link to police powers is too “shadowy” to be Constitutionally authorized.

   2. (Harlan, J., dissenting) Court should vest discretion in the legislature; the burden is on Δ to prove there is no real connection to health/safety/welfare. Plus, baking is dangerous, so law does promote health.

   3. (Holmes, J., dissenting) Court should not interpret “liberty” in 14th Amendment as an economic theory that contradicts the will of a majority.

3. Coppage v. Kansas (U.S. 1915) (Supp. V, 11)

   1. (Pitney, J.) Kan. prohibited employers from requiring employees to sign non-union agreements. Δ fired employee who would not sign. This violates freedom of contract.

4. Nebbia v. New York (U.S. 1934) (Supp. V, 25)

   1. (Roberts, J.) N.Y. set prices of milk. Since regulation is not arbitrary or capricious, and industry is “affected with a public interest,” okay.

5. W. Coast Hotel v. Parrish (U.S. 1937) (Supp. V, 29)

   1. (Hughes, J.) Wash. min wage law for women/minors in public interest.

   2. (Sutherland, J., dissenting) This changes the meaning of the Constitution.

6. Ferguson v. Skrupa (U.S. 1963) (Supp. V, 33)

   1. (Black, J.) Kan. law forbidding non-lawyers from consolidating debt okay.

   2. (Harlan, J.) “[R]ational relationship to a constitutionally permissible objective.”

Rules

1. Eminent domain (amend. V). The Fifth Amendment reads, “nor shall private property be taken for public use, without just compensation.” This is a “tacit recognition of a pre-existing power” of government to transfer property from owners to itself. United States v. Carmack (U.S. 1946). Still, “the sovereign may not take the property of A for the sole purpose of transferring it to another private party B.” Kelo.

   1. Just compensation. Government typically negotiates to purchase or makes deposit based on fair market value (not, e.g., sentimental value).

   2. Public use in the Supreme Court. The main issue in ED cases is whether the law was for public use. “For the power of eminent domain is merely the means to the end.” Berman. The Court defines “use” broadly as “purpose,” having “long ago rejected any literal requirement that the condemned property be put into use for the general public.” Kelo.

      1. Police power. “The ‘public use’ requirement is...coterminous with the scope of a sovereign’s police powers.” Hawaii Hous.

      2. Private developer. “We cannot say that public ownership is the sole method of promoting the public purposes.” Berman. However, “A purely private taking could not withstand the scrutiny of the public use requirement.” Kelo.

      3. Unsuccessful plan. “[W]hether in fact the provision will accomplish its objectives is not the question: the [requirement] is satisfied if ... the ... state Legislature rationally could have believed that the [Act] would promote its objective.” Hawaii Hous.

      4. Plan as “whole.” The Constitution does not force the government to purchase on a “structure-by-structure basis.” “Once the question of the public purpose has been decided, the amount and character of the land to be taken for the project...rests in the discretion of the legislative branch. Berman.

   3. Public use in state courts. State courts, however, have been more restrictive; many include a “heightened scrutiny” when private developers are involved. Poletown.

      1. Mich. “means/ends” test. Three types of public use for private developers: (1) “public necessity of the extreme sort otherwise impracticable” (e.g. highways, railroads, etc.)(means/ends); (2) “when the private entity remains accountable to the public in the use of that property” (ends); (3) “on the basis of ‘facts independent of public significance,’” (e.g. slum clearance) (ends). Cnty. of Wayne.

Analysis

1. Eminent domain. Three historical justifications: (1) sovereign states have original and absolute ownership over all land (see, supra,...