Texas Court Rules For Eminent-Domain Critic
Good news from Texas, where a state appeals court has handed a major win to investigative journalist Carla Main, whose book Bulldozed: ‘Kelo,’ Eminent Domain, and the American Lust for Land took a critical look at the seizure of private land under eminent domain laws for purposes of urban redevelopment. Dallas developer H. Walker Royall didn’t like what Main wrote about his involvement in a Freeport, Texas marina project and proceeded to sue her, publisher Encounter Books (which I should note is also my own publisher on Schools for Misrule), and even liberty-minded law professor Richard Epstein over a dust jacket blurb Epstein had given for the book. (Earlier coverage of the suit here and here.)
A trial court had declined to dismiss Royall’s claims on summary judgment, but yesterday Judge Elizabeth Lang-Miers reversed in substantial part, ruling that Royall had failed to make the requisite showing that key passages in Bulldozed had in fact defamed him. The case is not yet over, but Institute for Justice senior attorney Dana Berliner, who argued for the defense, is understandably jubilant: “Walker Royall has failed in his attempt to use this frivolous defamation lawsuit as a weapon to silence his critics,” she said. Moreover, outrage at Royall’s suit contributed to Texas’s enactment this summer (joining 26 other states) of strong “anti-SLAPP” legislation aimed at curbing lawsuits intimidating speech. You can read the opinion here, and early coverage at Gideon Kanner’s blog, the Dallas Observer and D Magazine.
March Madness: Eminent Domain Abuse Goes Coast-to-Coast
This is a big week for private property rights. Two epic eminent domain struggles are playing out on opposite sides of the country.
First, National City, California, is ground zero for eminent domain abuse. City officials declared several hundred properties blighted even before conducting a blight study that was riddled with problems. The city wants to seize and bulldoze a youth community center (CYAC) that has transformed the lives of hundreds of low-income kids, so a wealthy developer can build high-rise luxury condos:
CYAC has numerous volunteers, including local law enforcement officers, providing free mentoring in boxing as well as academics. The gym is famous for getting kids off the street and back into school. As Rick Reilly explained in a feature in Sports Illustrated (boy, how I miss his inside-back-page column):
You know what, Mayor? National City doesn’t need more luxury condos. It needs good men like the Barragans teaching kids respect for neighbors and property, manners you could use a little of yourself.
And if you kick the Barragans out so some slick in Armani can buy a bigger yacht, I hope your car stereo gets jacked—weekly—by a kid who would’ve otherwise been lovingly coached on their jabs and their math and their lives.
Question: Can you declare politicians blighted?
This week, the gym’s battle is in trial before the Superior Court of California. Represented by the Institute for Justice (who else?), a victory will help protect private property far beyond National City and clarify the use and misuse of blight designations.
Second, moving to the other side of the country, we go to Mount Holly, New Jersey:
Mount Holly is another classic case of “Robin Hood-in-Reverse.” Officials have been dismantling a close-knit community known as the Gardens for the last decade so a Philadelphia developer can bulldoze the area and build more expensive residential properties.
Homeowners in the Gardens are primarily minorities and the elderly. The row-style houses are being torn down while still attached to occupied homes, and officials refuse to offer the remaining homeowners replacement housing in the new redevelopment. Further, owners are being offered less than half the amount it would cost to buy a similar home blocks away.
Here, IJ just launched a billboard campaign and did a study that concludes the eminent domain abuse project may result in a loss of a million taxpayer dollars a year, or one-tenth of the Township’s budget.
I previously wrote about eminent domain shenanigans here and you can read more from Cato on property rights here.
Cato Unbound: Property, the State, Libertarians, and the Left
Talk between libertarians and the left usually follows one of two scripts, each of which frustrates me.
In the first script, both sides find things that they can safely dislike together — war, eminent domain, small business licensing — while carefully avoiding all the contentious areas. They’re a lot like that recently divorced couple at the Christmas party you’ve just attended, chattering as much as they dare… but mostly about the weather.
In the second script, someone yells “Taxation is theft!” or “You hate the poor!” and it’s not long before someone gets a drink thrown in their face. Perhaps also like that Christmas party you’ve just attended.
If I may say so myself, this month’s Cato Unbound has been quite different. The disagreements have been sharp, but well-informed and polite. (Even the libertarians are disagreeing among themselves; it’s a good sign that our movement isn’t just a set of dogmatic propositions, as some have claimed.)
As readers may already know, the December issue is about the role of property rights in social democracy. Discussants Daniel Klein, David D. Friedman, Ilya Somin, and Matthias Matthijs are arguing about whether social democracy entails the concept of overlordship — that is, the idea that the state must be the final, true owner of all property in a social democracy. If it’s not explicitly and by declaration, then at least it’s implicitly and by inference from its actions.
Klein shows that social democrats were once quite explicit on the point, and did indeed portray themselves as would-be overlords. Today they have to be cagier, but the claim remains logically implicit, he says.
Friedman argues that property has existed without the state, and perhaps even before the dawn of the human race. The state might claim any number of things, but we should judge it by what it actually accomplishes.
Somin suggests that today’s social democrats aren’t really overlords; they’re pragmatists without much in the way of theoretical principles at all.
And Matthijs actually is a social democrat. A proud one, by the look of it. He’s even European! Rights aren’t meaningful unless something enforces them, he argues, and the state does the work we all depend on. In this sense, all rights are artificial; all rights are created by the state. And he’s gamely defending his claims against a barrage of libertarian criticism.
Is your blood boiling? Or are you giggling behind your hand? Either way, grab yourself another egg nog, promise not to throw it at anyone, and go read the discussion for yourself.
More on Columbia’s Abuse of Property Rights
Six weeks ago, Cato filed an amicus brief supporting a challenge to Columbia University’s strong-armed attempt to condemn and take over certain land in Upper Manhattan. Tomorrow, the Supreme Court will consider the cert petition our brief supports, with a decision on whether it hears the case expected Monday.
In what is probably not a coincidence, then, the Columbia Spectator today came out with a lengthy feature story examining the story behind the dispute, controversial “blight” designations and all. This is excellent student journalism — heck, excellent journalism, period — and here are some key excerpts (full disclosure: the author interviewed me for the piece):
Since it proposed the expansion, Columbia has rapidly made deals with property owners and gained control over nearly every lot in the zone — except for two who have fought to hold on to their land….
And Columbia has repeatedly said that those parcels, which represent a total of around nine percent of the expansion zone, are vital to the vision.
Eminent domain — the process by which the state seizes private property for the “public good,” providing just compensation for the owner — officially came into the picture in 2004, when the University asked the state to consider condemnation.
And here’s the crux of the legal dispute:
Some neighborhood tenants and owners — most no longer in Manhattanville as Columbia continues to break ground and demolish properties — have strongly contested this blight label.
Nuss remembers a community vibrant enough to support his improvisational group — the No-Neck Blues Band — local businesses, and his family. He raised his daughter in the Hint House….
But it’s sometimes hard to believe Nuss is talking about the same area as other residents who say they agree with the determination of blight….
This disparity in views on Manhattanville’s conditions touches upon a fundamental question when evaluating the process that paved the way for Columbia’s expansion: Was the neighborhood really blighted, and given the process by which the criteria of blight were determined, was the state’s designation of blight an appropriate justification for the use of eminent domain for a private university?
My sense is that whatever ”blight” there is was caused by Columbia itself:
“It’s akin to the kid who kills his parents and begs the court’s mercy for being an orphan,” says Ilya Shapiro, senior fellow with the Cato Institute, which filed an amicus brief to the U.S. Supreme Court supporting the Manhattanville property owners. “You’re creating your own blight. It doesn’t pass the smell test.”
Ballot Initiatives Provide Underappreciated Election-Night Victories
Last week, I highlighted nine ballot initiatives that were worth watching because of their policy implications and/or their role is showing whether voters wanted more or less freedom. The results, by and large, are very encouraging. Let’s take a look at the results of those nine votes, as well as a few additional key initiatives.
1. The big spenders wanted to impose an income tax in the state of Washington, and they even had support from too-rich-to-care Bill Gates. The good news is that this initiative got slaughtered by a nearly two-to-one margin. I was worried about this initiative since crazy Oregon voters approved higher tax rates earlier this year. In a further bit of good news, Washington voters also approved a supermajority requirement for tax increases by a similar margin.
2. Nevada voters had a chance to vote on eminent domain abuse. This is an initiative that I mischaracterized in my original post. The language made it sound like it was designed to protect private property, but it actually was proposed by the political elite to weaken a property rights initiative that the voters previously had imposed. Fortunately, Nevada voters did not share my naiveté and the effort to weaken eminent domain protections was decisively rejected. This is important, of course, because of the Supreme Court’s reprehensible Kelo decision.
3. California voters were predictably disappointing. They rejected the initiative to legalize marijuana, thus missing an opportunity to adopt a more sensible approach to victimless crimes. The crazy voters from the Golden State also kept in place a suicidal global warming scheme that is driving jobs out of the state. The only silver lining in California’s dark cloud is that voters did approve a supermajority requirement for certain revenue increases.
4. Nearly 90 percent of voters in Kansas approved an initiative to remove any ambiguity about whether individuals have the right to keep and bear arms. Let that be a warning to those imperialist Canadians, just in case they’re plotting an invasion.
5. Arizona voters had a chance to give their opinion on Obamacare. Not surprisingly, they were not big fans, with more than 55 percent of them supporting an initiative in favor of individual choice in health care. A similar initiative was approved by an even greater margin in Oklahoma. Shifting back to Arizona, voters also strongly rejected racial and sexual discrimination by government, but they narrowly failed to approve medical marijuana.
6. Shifting to the local level, San Francisco, one of the craziest cities in America rejected a proposal to require bureaucrats to make meaningful contributions to support their bloated pension and health benefits. On the other hand, voters did approve a proposal to ban people from sleeping on sidewalks. Who knew that was a big issue?
7. Sticking with the ever-amusing Golden State, voters unfortunately eliminated the requirement for a two-thirds vote in the legislature to approve a budget, thus making it even easier for politicians to increase the burden of government spending. The state almost certainly is already on a path to bankruptcy, and this result will probably hasten its fiscal demise. Hopefully, the new GOP majority in the House of Representatives will say no when soon-to-be Governor Brown comes asking for a bailout.
8. The entire political establishment in Massachusetts was united in its opposition to an initiative to to roll back the sales tax from 6.25 percent to 3 percent, and they were sucessful. But 43 percent of voters approved, so maybe there’s some tiny sliver of hope for the Bay State.
9. Louisiana voters approved an initiative to require a two-thirds vote to approve any expansion of taxpayer-financed benefits for government employees. With 65 percent of voters saying yes to this proposal, this is a good sign that the bureaucrat gravy train may finally be slowing down.
At the risk of giving a grade, I think voters generally did a good job when asked to directly make decisions. I give them a solid B.
Eminent Domain Shenanigans
Five years ago, in the landmark property rights case of Kelo v. New London, the Supreme Court upheld the forced transfer of land from various homeowners by finding that “economic development” qualifies as a public purpose for purposes of satisfying the Fifth Amendment’s Takings Clause. In doing so, however, the Court reaffirmed that the government may not “take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit.”
State and federal courts have since applied that pretext standard in widely differing ways while identifying four factors as indicators of pretext: evidence of pretextual intent, benefits that flow predominantly to a private party, haphazard planning, and a readily identifiable beneficiary. Moreover, since Kelo, 43 states have passed eminent domain reform laws that constrain or forbid “economic development” condemnations.
While many of these laws are strong enough to curtail abuse, in at least 19 states the restrictions are undercut by nearly unlimited definitions of “blight.” The state of New York has seen perhaps the most egregious examples of eminent-domain abuse in the post-Kelo era, and now provides the example of Columbia University’s collusion with several government agencies to have large swaths of Manhattan declared blighted and literally pave the way for the university’s expansion project. In this brazen example of eminent-domain abuse, the New York Court of Appeals (the highest state court) reversed a decision of the New York Appellate Division that relied extensively on Kelo’s pretext analysis and thus favored the small business owners challenging the Columbia-driven condemnations. The Court of Appeals failed even to cite Kelo and ignored all four pretext considerations, instead defining pretext so narrowly that even the most abusive forms of favoritism will escape judicial scrutiny.
Cato joined the Institute for Justice and the Becket Fund for Religious Liberty in a brief supporting the condemnees’ request that the Supreme Court review the case and address the widespread confusion about Kelo’s meaning in the context of pretextual takings. Our brief highlights the need for the Court to establish and enforce safeguards to protect citizens from takings effected for private purposes. We argue that this case is an excellent vehicle for the Court to define what qualifies a taking as “pretextual” and consider the weight to be accorded to each of the four criteria developed by the lower and state courts.
The Supreme Court will decide whether to hear the case later this fall. The name of the case is Tuck-It-Away, Inc. v. New York State Urban Development Corp and you can read the full brief here (pdf). You can read more from Cato on property rights here.
Nine Key Ballot Initiatives to Watch
While everyone is focused on the battle to see which party will control the House and/or Senate, there are several issues that voters will directly decide that deserve close attention. Here are nine initiatives that I’ll be watching next Tuesday.
1. Imposing an income tax in the state of Washington - This is the one I’ll be following very closely. I have a hard time thinking that voters would be dumb enough to impose an income tax, but the Pacific Northwest is a bit crazy on these issues. Oregon voters, for instance, approved higher tax rates earlier this year.
2. Stopping eminent domain abuse in Nevada - This initiative is very simple. It stops the state from seizing private property if the intent is to transfer it to a private party (thus shutting the door that was opened by the Supreme Court’s reprehensible Kelo decision).
3. Marijuana legalization in California - Proponents of a more sensible approach to victimless crimes will closely watch this initiative to see whether Golden State voters will say yes to pot legalization, subject to local regulation. (David Boaz and Juan Carlos Hidalgo already have commented on the implications of this vote)
4. Strengthen rights of gun owners in Kansas - If approved, this initiative would remove any ambiguity about whether individuals have the right to keep and bear arms.
5. Protecting health care freedom in Arizona - For all intents and purposes, this is a referendum on Obamacare. I’m hoping that it will pass overwhelmingly, thus giving a boost to the repeal campaign. There’s apparently a similar initiative in Oklahoma, but it hasn’t gotten as much attention.
6. Reducing benefits for bureaucrats in San Francisco - If one of the craziest, left-wing cities in America decides to require bureaucrats to make meaningful contributions to support their bloated pension and health benefits, that’s a sign that the gravy train may be in jeopardy for bureaucrats all across the nation.
7. Making it easier to increase government spending in California - The big spenders want to get rid of the two-thirds requirement in the state legislature to approve a budget. This would pave the way for even bigger government in a state that already is close to bankruptcy.
8. Reducing the sales tax in Massachusetts - The entire political establishment is fighting this proposal to roll back the sales tax from 6.25 percent to 3 percent, and pro-spending lobbies are pouring big money into a campaign against the initiative, so you know it must be a good idea.
9. Controlling benefits for bureaucrats in Louisiana - The initiative would require a two-thirds vote to approve any expansion of taxpayer-financed benefits for government employees.
Frivolous Lawsuit Aimed at Silencing Critics of Eminent Domain Abuse
In Kelo v. City of New London, the Supreme Court ruled that a locality could use its eminent domain authority to seize private property to sell to private developers. Cato’s amicus brief opposing this abuse of the Takings Clause is available here, and an article on Kelo and other property law rulings of the 2004-2005 term by law professor James W. Ely, Jr. is available here.
One positive outcome of Kelo was the legislative restriction of eminent domain usage in state houses across the country. On the other hand, developers and localities have attempted to muzzle their critics with frivolous lawsuits. The Institute for Justice is currently litigating one of these actions in Texas:
Investigative journalist Carla Main wrote a book about eminent domain abuse in Freeport, Texas. The city is attempting to force out a generations-old family shrimp and marine supply business to make way for a luxury marina development that was to be owned and operated by Royall’s private company. When the victims of this eminent domain abuse complained, Royall sued them for defamation. Main’s book, Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land, tells the story of the Gore family’s generations-old shrimp business and how Royall and the city tried to take their land. Prominent law professor Richard Epstein (University of Chicago and New York University) contributed a blurb to the back cover of Bulldozed.
Royall sued Main, Epstein and Encounter Books (the publisher) for defamation over the contents of Bulldozed. He also sued two newspapers and a journalist who published reviews of Bulldozed. Royall is attempting to use the power of the courts to silence his critics.
A Dallas trial court ruled last year that the lawsuit was not barred by the First Amendment, even though Royall could not point to any statement in Main’s book that came close to the legal standard for defamation. The Institute for Justice is appealing the trial court’s decision. As Bill McGurn writes in today’s Wall Street Journal, this suit is one of the “high costs of Mr. Kennedy’s concurrence” in Kelo. Here’s hoping that rights protected by both the First and Fifth Amendments can prevail.
Susette Kelo, the owner of the Little Pink House at the center of the Kelo case, spoke at the Cato Institute about her ordeal, and her story is the subject of this Cato Institute video.
Mayor Bloomberg Loves Property Rights
A front-page story in today’s New York Times begins:
Michael R. Bloomberg is a former Wall Street mogul with a passion for the rights of a private property owner.
The story is about the not-really-at-Ground-Zero mosque, of course.
Bloomberg has a passion for property rights — except when the property owner wants to allow smoking on his own property or just wants to keep the property he owns even if a richer person wants it.
Fifth Anniversary of Kelo v. New London
With all the property rights news coming out of the Supreme Court and New York Court of Appeals in the last week, I almost missed Wednesday’s fifth anniversary of the dreadful Kelo v. New London decision. Justice Stevens’s opinion in Kelo sanctioned a transfer of private property from homeowners to a big company in the name of (promised but, as we’ve seen, never realized) job creation and increased tax revenue.
This was a Pyrrhic victory for eminent domain abusers, however, given:
- 9 state high courts have limited eminent domain powers;
- 43 state legislatures have passed greater property rights reform;
- 44 eminent domain abuse projects have been defeated by grassroots activists;
- 88 percent of the public now believes that property rights are as important as free speech and freedom of religion.
To learn about these and other fascinating developments that turned a property rights lemon into at least some type of lemonade, see the Institute for Justice’s new report and video.
No One’s Property Is Safe in New York
Sad to say, but as expected, New York State’s highest court, the New York Court of Appeals, has just upheld yet another gross abuse of the state’s power of eminent domain, exercised by the Empire State Development Corporation on behalf of my undergraduate alma mater, Columbia University, against two small family-owned businesses, one of them owned by Indian immigrants. Details can be found in the press release just issued by the Institute for Justice, which filed an amicus brief in the case and has been in the forefront of those defending against such abuse across the country.
IJ has had success in obtaining eminent domain reform in over 40 states, but New York remains a backwater, where collusion between well-connected private entities and government is rampant, and the courts play handmaiden to the corruption by abdicating their responsibilities. Just one more example of why New York is an economic basket case, with a population that continues to flee to more hospitable climes. I’ve discussed the property rights issues more generally here.
Ground-Breaking Constitutional Theories
As Larry Solum notes and Randy Barnett seconds, Georgetown law professor and friend-of-Cato Nick Rosenkranz has just published a tremendous article in the Stanford Law Review. I saw an earlier version of it and can tell you that it offers one of those singular re-thinks of accepted learning. As Randy puts it, “It is one of those rare pieces that hits you between the eyes and causes you to reconsider how you think about the Constitution.” The article, entitled “The Subjects of the Constitution,” argues that all of us are going about our constitutional theorizing, at least with respect to judicial review, the wrong way. Here’s the first paragraph of the abstract:
Two centuries after Marbury v. Madison, there remains a deep confusion about quite what a court is reviewing when it engages in judicial review. Conventional wisdom has it that judicial review is the review of certain legal objects: statutes, regulations. But strictly speaking, this is not quite right. The Constitution prohibits not objects but actions. Judicial review is the review of such actions. And actions require actors: verbs require subjects. So before judicial review focuses on verbs, let alone objects, it should begin at the beginning, with subjects. Every constitutional inquiry should begin with a basic question that has been almost universally overlooked. The fundamental question, from which all else follows, is the who question: who has violated the Constitution?
In thinking about who violated (or allegedly violated) the Constitution, Rosenkranz contends, we get to a truer understanding of whether the Constitution was violated, and how. Fascinating stuff, which you can download here – and the sequel, titled “The Objects of the Constitution,” is coming soon to a legal journal near you (perhaps for next summer’s blockbuster law review article season). (Coincidentally, today the Supreme Court unanimously ruled against Nick in his first argument before the Court — a technical case regarding the award of attorneys fees under Employee Retirement Income Security Act (ERISA) — so we now know where his comparative advantage lies!)
And while I have you thinking about such high-fallutin’ theoretical matters, let me also direct your attention to a new article by an up-and-coming legal scholar, also a friend-of-Cato (and my sometime co-author), Josh Blackman. Josh argues that the Supreme Court’s relatively new “class of one” doctrine, by which a single person can present himself as a class discriminated against in violation of the Equal Protection Clause, should be used to challenge eminent domain abuse. That is, homeowners can establish a class of one (i.e., the person whose home the government takes) if their property is singled out for condemnation while other similarly situated properties are not. The singled-out homeowner(s) can thus challenge the arbitrariness of the government’s taking of their property.
Josh obviously hopes that some court will accept this novel strategy of borrowing equal protection jurisprudence to check rampant eminent domain abuse and vindicate property rights. Here you can download his article, which is titled “Equal Protection from Eminent Domain: Protecting the Home of Olech’s Class of One.” Coincidentally, two years ago Roger Pilon wrote an essay on the Supreme Court’s most recent “class of one” decision, which you can read here.
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