[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
STATE OF PROPERTY RIGHTS IN AMERICA TEN YEARS AFTER KELO V. CITY OF NEW
LONDON
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HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION
AND CIVIL JUSTICE
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JULY 9, 2015
__________
Serial No. 114-37
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Printed for the use of the Committee on the Judiciary
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Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
LAMAR S. SMITH, Texas ZOE LOFGREN, California
STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas JUDY CHU, California
JIM JORDAN, Ohio TED DEUTCH, Florida
TED POE, Texas LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------
Subcommittee on the Constitution and Civil Justice
TRENT FRANKS, Arizona, Chairman
RON DeSANTIS, Florida, Vice-Chairman
STEVE KING, Iowa STEVE COHEN, Tennessee
LOUIE GOHMERT, Texas JERROLD NADLER, New York
JIM JORDAN, Ohio TED DEUTCH, Florida
Paul B. Taylor, Chief Counsel
James J. Park, Minority Counsel
C O N T E N T S
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JULY 9, 2015
Page
OPENING STATEMENTS
The Honorable Trent Franks, a Representative in Congress from the
State of Arizona, and Chairman, Subcommittee on the
Constitution and Civil Justice................................. 1
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Subcommittee on the
Constitution and Civil Justice................................. 3
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 4
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 5
WITNESSES
Dan Alban, Attorney, Institute for Justice
Oral Testimony................................................. 8
Prepared Statement............................................. 10
John M. Groen, Principal Attorney, Pacific Legal Foundation
Oral Testimony................................................. 21
Prepared Statement............................................. 23
John D. Echeverria, Professor of Law, Vermont Law School
Oral Testimony................................................. 34
Prepared Statement............................................. 36
Brian Seasholes, Director, Endangered Species Project, the Reason
Foundation
Oral Testimony................................................. 52
Prepared Statement............................................. 54
APPENDIX
Material Submitted for the Hearing Record
Response to Questions for the Record from John D. Echeverria,
Professor of Law, Vermont Law School........................... 82
STATE OF PROPERTY RIGHTS IN AMERICA TEN YEARS AFTER KELO V. CITY OF NEW
LONDON
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THURSDAY, JULY 9, 2015
House of Representatives
Subcommittee on the Constitution
and Civil Justice
Committee on the Judiciary
Washington, DC.
The Subcommittee met, pursuant to call, at 2:26 p.m., in
room 2141, Rayburn House Office Building, the Honorable Trent
Franks (Chairman of the Subcommittee) presiding.
Present: Representatives Franks, Goodlatte, DeSantis, King,
Jordan, Cohen, and Conyers.
Staff Present: (Majority) Zachary Somers, Counsel; Tricia
White, Clerk; (Minority) James J. Park, Minority Counsel;
Veronica Eligan, Professional Staff Member; and Alayna James,
Law Clerk.
Mr. Franks. The Subcommittee on the Constitution and Civil
Justice will come to order. And without objection, the Chair is
authorized to declare recesses of the Committee at any time.
And I'll begin with my opening statement. We welcome all of you
here this afternoon.
Ten years ago last month, the Supreme Court handed down its
now infamous decision Kelo v. City of New London. In that
decision the Court held that the government may use its power
of eminent domain to take property from homeowners and small
businesses and to transfer it to other private entities for
economic development purposes.
In Justice O'Connor's words, the Kelo decision pronounced
that, ``Under the banner of economic development, all private
property is now vulnerable to being taken and transferred to
another private owner, so long as it might be upgraded.''
``Nothing is to prevent a State from replacing any Motel 6 with
a Ritz-Carlton, any home with a shopping center, or any farm
with a factory.''
The Kelo decision was resoundingly criticized from across
all quarters. In the aftermath of the decision, the House voted
to express grave disapproval of the decision and overwhelmingly
passed the Private Property Rights Protection Act to attempt to
legislatively reverse the harmful effects of that decision.
Last Congress, the House once again passed this legislation
with 353 Members voting in favor and only 65 Members voting
against. Hopefully, during this Congress the Private Property
Rights Protection Act will finally become law.
Too many Americans have lost homes and small businesses to
eminent domain abuse, forced to watch as private developers
replace them with luxury condominiums and other upscale uses.
Congress must act to restore Americans' faith in their ability
to build, own, and keep their property without fear that the
government will take it and give it to someone else.
Unfortunately, the Court's decision in Kelo is not the only
threat to property rights in America today. In addition to
eminent domain abuse, Americans' property rights are regularly
threatened by regulatory actions and land use restrictions that
deprive them of the use of their property, often without
providing any compensation at all.
These so-called regulatory takings limit property owners'
use of their property to such a degree that the regulation
effectively takes away most of the value of the property. Yet,
unlike in many eminent domain cases, in regulatory takings
cases the government rarely volunteers to compensate for the
full financial impact the regulatory taking has on the value of
the property. Property owners are then forced, often at great
expense, to go to court to attempt to vindicate their property
rights.
Of additional concern is a series of Supreme Court
decisions that have effectively barred the Federal courthouse
doors to virtually all takings claims involving State and local
governments. Because of these precedents, it is nearly
impossible for property owners to file suit in Federal court
alleging that a State or local government effected a taking of
their property in violation of the Federal Constitution.
I can think of no other instance in which American citizens
are denied access to the Federal courts to vindicate their
Federal constitutional rights. It's disconcerting that property
rights claims are singled out to be confined to State court.
These are but a few of the issues that property owners face
in America today. Although there have been several property
rights victories in the Supreme Court since Kelo was decided,
including the Court's recent holding that the government must
pay just compensation when it takes personal property, just as
when it takes real property, property rights in America remain
at risk despite the Constitution's clear protections for these
important rights.
As Chief Justice Rehnquist observed over two decades ago,
there is ``no reason why the Takings Clause of the Fifth
Amendment, as much a part of the Bill of Rights as the First
and Fourth Amendments, should be relegated to the status of a
poor relation.''
So we've called today's hearing to examine the current
state of property rights in America 10 years after the Kelo
decision. I hope the witnesses can help inform us of how
property rights are faring in the courts and in the face of
increasing government regulation.
The protection of property rights lies at the foundation of
American government. John Adams wrote over 200 years ago that
property must be secured or liberty cannot exist. Thus, if our
children are to live truly in a free society, we must now work
to substantially undergird and secure the critical property
rights guaranteed to all Americans by the United States
Constitution.
And with that, I will now yield to the Ranking Member for
his opening statement.
Mr. Cohen. Thank you, Mr. Chair.
The Latin word for city is civitas. Civitas it also is also
the root word for civilization, and there is good reason for
that. Cities are where civilization happens. It is in cities
that we have vibrant hubs of commerce, finance, and trade. It
is in cities where people from different backgrounds, people
from different regions of a country, immigrants from all over
the world meet to do business and get to know each other. It is
in cities where media, entertainment, creativity, and artistic
expression meld to form both popular culture and high culture.
In our own country, city are where the supreme expressions
of American ideals and optimism happen, the melting pot, John
Winthrop's shining city upon a hill, which Ronald Reagan used
on occasion.
Yet American cities have not fared well since the Second
World War. For decades they suffered from White flight, where
White residents fled as racial integration threatened
exclusively White neighborhoods. Over time, White flight became
wealth flight, as people of all backgrounds and races with the
means to leave the city did so, leaving cities with financially
poor populations, rising crime, and shrinking tax basis, which
led to further flight by those who had the financial means to
leave, which led to further disinvestment.
As a result of decades of this vicious cycle, our cities
are hurting. Given the central role of cities as the engines of
commerce and fonts of culture and ideas, it is important that
we bring cities back, and the use of eminent domain for
economic redevelopment is one potentially important tool for
doing so.
While I do not necessary endorse or oppose eminent domain
as the best means for revitalizing the cities, I also think it
is appropriate for the Supreme Court in Kelo v. City of New
London to leave it to States and localities to make that call
for themselves. This is because States and local governments
are in the best position to understand local conditions and
local needs. This is also why in a vast continental-size
country like ours we have a Federal system that leaves many
policy judgments up to State and local governments.
In criticizing the Kelo decision many people have
inappropriately and unhelpfully blurred the distinction between
two different questions: Whether using eminent domain for
economic development is a good idea or a bad idea on the one
hand and whether courts or an elected legislature at the
Federal, State, or local level should make the decision as to
the first question on the other.
Relying on decades of precedent, Kelo appropriately held
that a city could use eminent domain for the public purpose of
economic redevelopment. I am sensitive to the fact that eminent
domain can be abused. For instance, historically it had been
used to target minority communities. So happens minority
communities are often those in the cities where the development
would be taking place.
But eminent domain for economic development can help some
of the very same marginalized communities as urban ills fall
disproportionately on those communities. And in Kelo itself,
the Court made clear that there are constitutional limits to
the use of eminent domain. But eminent domain is a longstanding
governmental power, and the Court appropriately reviews
exercise of such power deferentially.
Finally, those that would deny the use of eminent domain
for economic redevelopment have an obligation to support
funding for measures that will help revitalize our cities. We
need increased investment in mass transit, including new light
rail and bus rapid transit system, and we need those
improvements now. We need improvements to existing
transportation infrastructure like bridges, tunnels, and roads,
and we need them now.
We need stronger enforcement of fair housing laws to ensure
equal housing opportunity for urban residents, and we need that
now. We need more funding for our public schools so that
children can get a good education without forcing families out
of the cities, good public education now. To help cities
improve their economies and to restore their central role in
American life we must do all we can to ensure that
revitalization.
And I yield back the balance of my time.
Mr. Franks. I thank the gentleman.
And I would now yield to the Chairman of the full
Committee, Mr. Goodlatte from Virginia.
Mr. Goodlatte. Thank you, Mr. Chairman.
Private ownership of property is vital to our freedom and
our prosperity and is one of the most fundamental principles
embedded in the Constitution. The Founders realized the
importance of property rights by enshrining property rights
protections throughout the Constitution, including in the Fifth
Amendment, which provides that ``private property'' shall not
``be taken for public use without just compensation.''
However, despite the Constitution's robust protection for
private property rights, today Federal, State, and local
governments trample on Americans' property rights every day in
countless ways. Local governments exact exorbitant fees from
developers in exchange for permits, increasing Federal and
State regulations prohibit Americans from using their property
as they traditionally have, and after the Kelo v. City of New
London case, the government is free to seize homes, small
businesses, and family farms, and transfer the land to others
for private economic development.
The Kelo decision in particular was met with widespread
criticism across the political and socioeconomic spectrum. This
controversial ruling expanded the ability of State and local
governments to exercise eminent domain powers to seize property
under the guise of economic development when the public use is
as incidental as generating tax revenues or creating jobs.
As the dissenting justices observed, by defining public
uses so expansively the result of the Kelo decision is
``effectively to delete the words 'for public use' from the
Takings Clause of the Fifth Amendment . . . The specter of
condemnation hangs over all property . . . The government now
has license to transfer property from those with few resources
to those with more. The Founders cannot have intended this
perverse result.''
In the wake of this decision, State and local governments
can use eminent domain powers to take the property of any
individual for nearly any reason. Cities may now bulldoze
homes, farms, churches, and small businesses to make way for
shopping malls or other developments.
Hopefully, in this Congress we will finally be able to
enact legislation to reverse the harmful affects of the Kelo
decision. No one should have to live in fear of the government
snatching up their home, farm, or business so that another
richer, better-connected person may live or work on the land
they used to own.
Eminent domain abuse is not the only troubling aspect of
the state of property rights in America today. Regulatory
takings--takings in which rather than physically invading a
property owner's land, the government accomplishes the
equivalent by severely restricting the use of property--are
also wrongfully depriving owners of their property. As Federal,
State, and local regulations increase both in scope and number,
regulatory takings will only become more of a problem for
property owners.
Under current law it is exceedingly difficult for property
owners to recover the losses that result from regulatory
takings, and thus property owners must bear the full costs of
any public benefits that these regulations may create. However,
as the Supreme Court has observed, the Just Compensation Clause
is designed to ``bar government from forcing some people alone
to bear public burdens which in all fairness and justice should
be borne by the public as a whole.''
Unfortunately in the vast majority of regulatory takings
cases, the property owner ends up receiving no compensation for
the taking. In fact, according to one study, property owners
prevailed in less than 10 percent of all regulatory takings
cases. These are troubling statistics given the fundamental
nature of property rights under our Constitution.
I look forward to the witnesses' testimony on this
important subject. The Supreme Court observed in a 1795 opinion
that ``possessing property and having it protected is one of
the natural, inherent, and unalienable rights of man . . . The
preservation of property then is the primary object of the
social compact.''
I hope the witnesses can provide their insight into whether
this primary object of the Constitution is being met in America
today.
Thank you, Mr. Chairman.
Mr. Franks. And I thank the gentleman.
And I now yield to the Ranking Member of the Committee, Mr.
Conyers, for his opening statement.
Mr. Conyers. Thank you, Mr. Chairman.
And welcome to all of the witnesses.
In the wake of the Supreme Court's decision in Kelo, I
expressed concern that States and municipalities could use this
decision to use their power of eminent domain, intentionally or
not, to the detriment of those who are the least politically
powerful, namely, the poor, the elderly, and minority
communities.
While the power of eminent domain can and historically has
been abused, we should allow the States to craft their
responses rather than impose potentially awkward and one-size-
fits-all Federal legislative responses. Nonetheless, we should
keep the following in mind as we consider property rights and
the Constitution this afternoon.
To begin with, abuse of the eminent domain power has a long
and shameful history of disproportionately impacting minority
and other politically marginalized communities. Urban
neighborhoods that lacked institutional and political power
were often designated as blighted areas, slated for
redevelopment through urban renewal programs.
And properties were condemned and land was turned over for
private parties, sometimes for what seemed like primarily
private benefit. In Detroit, for example, a vibrant working
class neighborhood called Poletown was condemned in order to
build an automobile plant that was later shut down only a few
years after opening, demonstrating firsthand how eminent domain
can lead to bad outcomes.
This underscores why it is important that we continue to
monitor the facts on the ground to determine whether Federal
action is warranted. If the States do not continue to act to
protect citizens, Congress should remain ready, willing, and
able to do so.
Having said this, it's important to respect principles of
federalism before Congress intervenes in eminent domain
decisions, an area traditionally reserved to States and
localities.
In Kelo, the Supreme Court made clear that States are free
to revise their laws accordingly to restrict the use of eminent
domain and most have done so. I'm encouraged that at least 43
States have followed that advice and taken steps to limit their
own powers of eminent domain to guard against potential abuse.
For example, in 2006 Michigan voters approved an amendment to
their State constitution to preclude takings for economic
development or tax enhancement, among a number of other
protections for property owners and tenants.
Given the fact that our system of federalism appears to be
working and that most States, by and large, have acted to
prevent potential abuse in response to Kelo, Federal
intervention is unnecessary and inappropriate at this time. And
it's also for this reason that I voted against legislation
considered only in the last Congress that would have imposed
draconian penalties on States and localities for exercising
their eminent domain power for economic redevelopment.
And finally, with respect to the issue of regulatory
takings, I note that courts have generally and appropriately
made it very difficult for property owners to prevail in such
types of cases, for any other result would make it
exceptionally difficult for government to regulate. I suspect
that's precisely the result that most who oppose government
regulation generally and environmental regulation in particular
might want. And perhaps they can take solace in the fact that
the last four Takings Clause decisions by the Supreme Court
came out in favor of the property owner.
We should, however, be very wary of courts undermining
implementation of environmental laws and other public health,
safety, and welfare regulations by giving an overly broad
interpretation of the Takings Clause to require compensation in
any but the most extreme and rare circumstances.
And so I welcome this discussion this afternoon. And I
yield back the balance of my time.
Mr. Franks. And I thank the gentleman. And all other
Members' opening statements, without objection, will be made
part of the record.
So let me now introduce our witnesses. Our first witness is
Dan Alban, an attorney at the Institute for Justice, a
nonprofit public interest law firm that represents people whose
rights are being violated by the government. In 2005, the
Institute for Justice represented Susette Kelo in her Supreme
Court challenge of the taking of her home in New London,
Connecticut. Mr. Alban litigates cases protecting free speech,
property rights, economic liberty, and other individual
liberties in both Federal and State courts.
Glad you're here, sir.
Our second witness is John Groen, an attorney at the
Pacific Legal Foundation, the country's oldest public interest
legal organization that litigates for property rights, limited
government, and free enterprise. Mr. Groen has extensive
experience in public policy litigation before all levels of
Federal and State courts. He has been directly involved in many
of the leading appellate decisions that have shaped land use
law in State of Washington and has significant experience
before the U.S. Court of Federal Claims in takings cases
against the Federal Government.
Welcome, sir.
Our third witness, John Echeverria, a professor of law at
Vermont Law School, where he teaches property, public law, and
a wide range of environmental and natural resource law courses.
Prior to joining the Vermont Law School faculty in 2009, he was
for 12 years the executive director of the Georgetown
Environmental Law and Policy Institute at Georgetown University
Law Center. Professor Echeverria has also served as general
counsel of the National Audubon Society and general counsel and
conservation director of American Rivers.
Welcome, sir.
Our final witness is Brian Seasholes, director of the
Endangered Species Project at Reason Foundation, a nonprofit
foundation that produces nonpartisan public policy research on
a variety of issues and publishes the critically acclaimed
Reason magazine. Mr. Seasholes worked deals with wildlife and
land use issues, especially the Endangered Species Act,
property rights, wildlife conservation, the effects of wind and
energy on wildlife and oil sands. Mr. Seasholes' writing have
appeared in Forbes, National Review, The Christian Science
Monitor, and the Washington Times.
Each of the witnesses' written statements will be entered
into the record in its entirety, and I would ask each witness
to summarize his or her testimony in 5 minutes of less.
And to help you stay within that time there is a timing
light in front of you. The light will switch from green to
yellow indicating that you have 1 minute to conclude your
testimony. When the light turns red, it indicates that the
witness' 5 minutes have expired.
Now, before I recognize the witnesses, it is the tradition
of the Subcommittee that they be sworn. So if you would please
stand to be sworn.
Do you solemnly swear that the testimony that you are about
to give will be the truth, the whole trust, and nothing but the
truth, so help you God?
You may be seated.
Let the record reflect that the witnesses answered in the
affirmative.
So now I would recognize the our first witness, Mr. Alban.
And, sir, if you'll make sure that microphone is turned on.
TESTIMONY OF DAN ALBAN, ATTORNEY,
INSTITUTE FOR JUSTICE
Mr. Alban. Thank you, Chairman Franks and the Ranking
Members. I appreciate the opportunity to testify regarding
eminent domain abuse, an important issue that has received
significant national attention as a result of the Supreme
Court's infamous decision 10 years ago in Kelo v. City of New
London.
My name is Dan Alban, and I'm attorney at the Institute for
Justice, a nationwide, nonprofit public interest law firm that
represents people whose constitutional rights are violated by
the government. Among the cases we litigate are cases where
homes or small businesses are taken by the government through
the power of eminent domain and transferred to another private
party who is usually wealthier or better connected.
I have represented property owners across the country, from
a nonprofit youth boxing center in National City, California,
to an elderly piano tuner in Atlantic City, New Jersey, all of
whom are fighting this abuse of the eminent domain power.
Perhaps most notably, we represented the homeowners in Kelo
v. City of New London, the notorious 2005 case in which the
U.S. Supreme Court ruled 5-4 that eminent domain could be used
to transfer perfectly fine private homes and businesses to a
private developer based simply on the promise of increased tax
revenue for the city.
But 10 years later, and after $80 million in taxpayer money
was spent, the Fort Trumbull neighborhood where Susette Kelo's
little pink house once stood is a barren field that is home to
nothing but feral cats. The developer abandoned the project,
while Pfizer, the intended beneficiary, closed its plant and
left New London.
On Kelo's 10th anniversary in late June, law professors and
legal observers described the decision as ``truly horrible,''
``one of the most destructive and appalling decisions of the
modern era,'' and ``the worst Supreme Court decision of the
21st century.'' Overwhelming majorities in every major poll
taken after Kelo have condemned the result, and it continues to
be wildly unpopular 10 years later.
In the wake of Kelo, 44 States reformed their eminent
domain laws, but these State-level reforms vary greatly. Some
States did little or nothing to reform their laws, and Kelo
opened the flood gates for eminent domain abuse, which tripled
in the year after the decision was issued. That's in part
because Federal law still allows Federal funds to be spent for
condemnations for the benefit of private developers, which
continues to encourage widespread eminent domain abuse, as I
detail in my written testimony.
The Federal Government should not be complicit in an abuse
of power already deemed intolerable by most States. Congress
should take action to prevent Federal tax dollars from funding
projects that abuse the power of eminent domain by taking
private property from one person to give to another private
party.
Unfortunately, Congress' previous efforts to restrict the
use of Federal funds for eminent domain have been ineffective.
Immediately after Kelo was decided in 2005, Senator Christopher
Bond introduced an appropriations bill amendment which stated
that Federal dollars could not be spent on any project where
eminent domain is used for economic development that primarily
benefits private entities. This language continues to appear in
appropriations bills, including the currently pending bill.
But the Bond amendment has no enforcement mechanism, and
thus relies on agencies and grant recipients to police
themselves. There is no way for individuals to enforce the
spending restriction, and it doesn't appear that any agency has
ever investigated or enforced a violation of the spending
limitation.
Funding restrictions like the Bond amendment will only work
if they can be enforced. Any Federal reform must include an
enforcement mechanism to halt Federal funding if the funds are
used for a prohibited purpose, as well as a private method of
enforcement so that homeowners, tenants, or small business
owners who are threatened by the abuse of eminent domain can
take action to prevent the misuse of Federal funds.
Reform at the Federal level would not only reduce funding
for eminent domain abuse nationwide, but it also would send an
important message to the American people. When the power of
eminent domain is used so that a richer, better-connected
person can live or work on the land you used to own, it tells
everyday Americans that their hopes, dreams, and hard work do
not matter as much as money and political influence.
Commercial developers everywhere need to be told that they
can only obtain property through private negotiation, not
government force, and that the Federal Government will not be a
party to these forced private-to-private transfers of property.
This Committee is to be commended for continuing to examine
this misuse of government power, which violates the property
rights of many Americans. I encourage you to enact legislation
that would put teeth in the funding restrictions to ensure that
Federal funds are not used to support the abuse of the eminent
domain power.
Again, thank you for the opportunity to testify on this
important issue.
[The testimony of Mr. Alban follows:]
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__________
Mr. Franks. Thank you, sir.
Mr. Groen, am I pronouncing your name correctly, sir.
Mr. Groen. You have done it very well.
Mr. Franks. All right. Make sure that microphone is on,
sir.
TESTIMONY OF JOHN M. GROEN, PRINCIPAL ATTORNEY,
PACIFIC LEGAL FOUNDATION
Mr. Groen. Chairman Franks, honorable Members, thank you
for the opportunity to be here and to provide testimony to you
on this important subject.
My name is John Groen. I am an attorney with Pacific Legal
Foundation, as you know, a nonprofit public interest law firm,
but my background really is as a litigator. I'm an attorney
that works in the trenches, arguing these cases.
Justice Ginsburg wrote a few years ago in the Arkansas Fish
and Game case that there is ``nearly an infinite variety of
ways'' that government interference can result in a taking.
Whether we're dealing with wetlands regulation under the Clean
Water Act or spotted owl protection under the Endangered
Species Act or conversion of abandoned rail lines into public
hiking trails under Rails-to-Trails, all of those scenarios and
so many more all impact thousands of property owners in an
infinite variety of ways. And the result is that takings claims
are not going away.
And this is not because those laws or other laws of local
and State governments are bad policy, but it's because we
cannot overlook what Justice Holmes reminded us, that we cannot
achieve the public good through a shorter cut than the
constitutional way of paying for the change. That's what it is
about. That is why the Takings Clause is there, to provide that
balance of protection between the power of government and the
need to protect individual rights and property. And so the
Takings Clause and your focus on it is critical.
I have been asked to address issues other than Kelo, and in
my paper I get into a variety of issues dealing with regulatory
takings. And I'm going to focus on one in particular, and that
is what we call the relevant parcel issue.
In takings law, and I've given you a brief background in my
materials, there's a number of tests that are applied by
lawyers and courts, and ultimately we are primarily dealing
with what we call the Penn Central multifactor takings
analysis. Basically, the attorneys on both sides will marshal
all of the facts that they can, all the relevant circumstances,
the factors that are discussed by the U.S. Supreme Court,
marshal those together and try to show how in fairness and
justice the burden of that regulation should be borne by the
public as a whole.
And I appreciated the quotation from Chairman Goodlatte
from Armstrong v. United States that it is about this shift in
the burden. That is what the Takings Clause is meant to
protect. Who should bear that burden, the individual, or is it
something that in fairness and justice ought to be borne by the
public as a whole? That's the whole Penn Central claim. We also
have the Lucas style claim, a categorical taking, where there
is a denial of all economically viable use, and you go in a
court, you try to prove that up.
Well, in both of those scenarios what is happening is you
have to analyze the economic impact of the governmental
interference. So the question is, well, what property interests
do you measure the private loss against? And the answer that is
always provided is, well, you measure it against the parcel as
a whole. And that simply begs the question, what is the parcel
as a whole?
The Supreme Court has not answered that question, and the
lower courts are in disarray. The Supreme Court has made it
clear that the rhetorical force of that language is less
precise than its application.
So let me tell you about a family in Wisconsin. This is the
Murr family. And I provide some detail in my materials. But
basically, in 1960 the parents bought a parcel on the St. Croix
River, and this was a subdivision, over an acre, they built a
cabin. They liked it so much, the family had such a good time,
they bought another parcel right next door and they hung onto
it for investment purposes.
In the 1970's the regulations changed, and while all the
other parcels have been developed, they still had their vacant
parcel. But now, under the new regulations, that parcel is
considered substandard. There is still a half-acre available
for development, but under the new regulations there has to be
a full acre available for development and that's not allowed
under these regulations.
So what has happened? They applied for their permits, they
were denied, brought their suit for a takings claim, and the
Wisconsin Supreme Court has now ruled that because the Murrs
own two parcels, side by side, they have common ownership, the
parcel as a whole must be both parcels, rather than the two
separate, discrete parcels, each bought as regular subdivision
lots. The Wisconsin court said that there is a rule that a
contiguous property owner under common ownership is considered
as a whole, regardless of the number of parcels contained.
That strikes right at the concept of fairness and justice.
And Pacific Legal Foundation is trying to get that case before
the United States Supreme Court in a petition in August and to
propose the rule that I provided in the materials from John Fee
on how to address this parcel as a whole concept, which
destroys many valid regulatory takings claims.
Thank you.
[The testimony of Mr. Groen follows:]
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__________
Mr. Franks. Thank you, Mr. Groen.
I would now recognize our third witness, Mr. Echeverria.
Is that the correct pronunciation?
Mr. Echeverria. That's correct.
Mr. Franks. And make sure you have got your microphone on,
sir.
TESTIMONY OF JOHN D. ECHEVERRIA, PROFESSOR OF LAW, VERMONT LAW
SCHOOL
Mr. Echeverria. Mr. Chairman, Ranking Member Cohen, and
Members of the Subcommittee, thank you for the opportunity to
testify today. As the Chairman mentioned, I'm a professor of
law at Vermont Law School, where I teach property, including
the law of takings. And I have frequently written on the topic
of takings and property rights. I have had the privilege of
representing parties and amici curiae in takings cases at all
levels of the Federal and State court systems. I am honored to
be here today.
In the interest of time, I will confine my remarks to the
eminent domain issue, but I will be happy to address any
questions you may have about regulatory takings during the Q&A.
Congress has so far refrained from adopting one-size-fits-
all national legislation governing the use of eminent domain
for economic development. I submit to you that Congress should
mark the 10th anniversary of the Kelo decision by maintaining
that wise course.
The judicious use of eminent domain is essential for
overcoming the holdout problem that impedes important
redevelopment activity. In older communities, the division of
land ownership into smaller parcels prevents the assembly of
useful, economically viable redevelopment areas through
voluntary market transactions. Without eminent domain, a few
individual owners can derail redevelopment projects by refusing
to sell at any price or by seeking an judicial windfall.
In my view, the Supreme Court in the Kelo case wisely
refused to embrace novel interpretations of the public use
requirement of the Takings Clause that would have made it
harder for State and local governments to address the holdout
problem. Not only is the Kelo decision good legal policy, but
it is consistent with over 100 years of U.S. Supreme Court
precedent interpreting the meaning of the phrase ``public
use,'' and therefore, contrary to what you've heard previously
this afternoon, it is in my view a model of traditional
restraint.
Today, 10 years after the Kelo decision, the case for
Congress not proceeding with national eminent domain
legislation has only gotten stronger. While the Kelo decision
upheld the use of eminent domain for economic development, the
court recognized ``that the necessity and wisdom of using
eminent domain to promote economic development are certainly
matters of legitimate public debate.''
The court, in effect, invited the States to consider
imposing their own State-level restrictions on the use of
eminent domain, and the States have responded to that
invitation with great enthusiasm. Over 40 States have adopted
different types of reform legislation. A number of States have
also adopted through their judiciaries new restrictive
interpretations of the public use requirements in their own
takings clauses.
Naturally, given the diversity of our States, the States
have adopted very different approaches to the issue of
reforming the use of eminent domain in the aftermath of Kelo. I
noted in the testimony of the first witness that he observes
that every single State that has addressed the Kelo question
has addressed it in a different fashion. In other words, we
have over 40 distinctive approaches to Kelo reform in the State
legislatures.
In my view, it would be both unwise and destructive for
Congress to pass legislation contradicting all this good work
in the States. Not only have the States acted, but they have
acted in a wide variety of different ways that reflect the
specific values, interests, and redevelopment challenges in the
individual States. New Mexico, to pick one example, has
essentially abolished the use of eminent domain to promote
economic development. New York, by contrast, has declined to do
that. And in between those two positions many other States have
adopted a wide variety of other reform approaches.
National legislation would trump all this State lawmaking
activity, wasting all this State effort and overriding the
considered judgements of elected State officials about what
uses of eminent domain are appropriate in their States.
Lawmakers in Washington, D.C., would improperly substitute
their wisdom for that of the leaders of the States, the
laboratories of democracy, by passing national legislation
addressing the use of eminent domain at the local level.
For all these reasons, I respectfully submit that Congress
should continue to stay its hand on the eminent domain issue.
Thank you again for the opportunity to testify. And as I
said at the outset, I would be happy to respond to any
questions, including any questions about the regulatory takings
issue. Thank you.
[The testimony of Mr. Echeverria follows:]
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__________
Mr. Franks. Thank you, sir.
And I would now recognize our fourth and final witness, Mr.
Seasholes.
And, sir, if you'd make sure your microphone is on too.
Mr. Seasholes. I think it is.
Mr. Franks. Yes, sir.
TESTIMONY OF BRIAN SEASHOLES, DIRECTOR, ENDANGERED SPECIES
PROJECT, THE REASON FOUNDATION
Mr. Seasholes. All right. Good to go.
Chairman and Committee Members, thank you for the
opportunity to testify. My testimony today focuses on
endangered species conservation, specifically landowners and
their concerns, which include property rights and values,
because they are the linchpin for the conservation of this
country's biodiversity, particularly endangered species. And
the main reason for this is that private landowners own most of
the habitat for endangered species.
Over the past several decades, however, it has
unfortunately become apparent that the Endangered Species Act
is doing enormous harm to endangered species, because its
penalty-based approach works against landowners by infringing
on their property rights and negatively impacting their
property values and the ability to earn income from their land.
Due to this penalty-based approach, the Endangered Species
Act discourages landowners from harboring endangered species,
as well as from allowing scientists and researchers onto their
land, and encourages landowners to rid their property of
endangered species, and the habitat necessary to support them,
as well as keep quiet and hope the presence of endangered
species on their land is not noticed by regulatory authorities,
as well as groups that support the Endangered Species Act.
Regrettably, pressures on landowners and the
anticonservation incentives they create are in the process of
getting much worse due to a number of factors.
First, the number of listed species is increasing
dramatically as a result of a 2011 lawsuit settlement.
Second, most of the species covered under the lawsuit
settlement are based in freshwater aquatic habitats, which
means entire watersheds, not just discrete parcels of land, may
well be subject to the Endangered Species Act's regulations, as
one of the groups involved in the lawsuit settlement has
indicated.
Third, the recent expansion of the Clean Water Act under
the Waters of the United States rule is likely to create a
regulatory nexus with the Endangered Species Act.
Fourth, the Administration's recent efforts to expand the
Endangered Species Act, particularly under the critical habitat
rule and definition.
And lastly, very aggressive groups that excel at litigation
but don't do any real conservation work have been driving the
agenda.
In order to address these problems, substantive reform is
necessary. Various reforms over the past two decades have
proven ineffective because they leave intact the penalties that
cause harm to species and landowners. Substantive reform starts
with eliminating these penalties.
Fortunately, an answer for a new successful approach to
conserving endangered species is hidden in plain sight and has
been around for over 100 years. It is called cooperative
extension. It exists in every State and provides technical
assistance and information to help farmers, ranchers, forest
owners, and others improve their land use and natural resource
practices.
There is a reason why landowners voluntarily pick up the
phone and call their local cooperative extension office. But
most landowners would not dream of calling the U.S. Fish and
Wildlife Service if they thought they had an endangered species
on their property. The reason is that cooperative extension
comes with technical help, some financial assistance, and it is
voluntary. By comparison, endangered species result in fear,
intimidation, compulsion and reduced property values.
The incentive-based approach of cooperative extension
stands in stark contract to the penalty-based approach of the
Endangered Species Act.
This beautiful country of ours is blessed with an
incredible diversity of species, but the conservation of these
species depends on the good will and willing cooperation of
America's landowners. America has a long and proud tradition of
private conservation, which is very much a part of the spirit
of volunteerism, civic-mindedness, and patriotism that are
hallmarks of American culture.
As the success of cooperative extension shows, America's
private landowners are ready, willing, and able to conserve
this country's land, water, and wildlife so long as they are
not punished, their property rights and values are not
threatened, and they are shown the open hand of friendship, not
the closed fist of regulation.
While there are enormous problems with how this country
goes about conserving endangered species, there that are larger
opportunities to fix these problems by charting a new course
for endangered species conservation that respects landowners
and their property rights.
This concludes my remarks, and I would be happy to answer
any questions.
[The testimony of Mr. Seasholes follows:]
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__________
Mr. Franks. Well, thank you, sir, and thank you all for
your testimony. We'll now proceed under the 5-minute rule with
questions. I'll begin by recognizing myself for 5 minutes.
Mr. Alban, I'll start with you, sir. Ten years have passed
since the Kelo decision was handed down, and during that time
the House has three times passed legislation on a broad
bipartisan basis to address that decision. Most States have
also enacted legislation, at least in part, that addresses the
problem. Is there still a need for Congress to pass legislation
to address Kelo further or would such an effort be a waste of
time or redundant, in your mind?
Mr. Alban. Thank you very much for the question.
Yes, there is still a strong need for Congress to take
action because, as I detail in my written testimony, there are
countless examples of Federal funding still being used for
projects that engage in eminent domain abuse, taking private
property from one person and transferring it to another private
person.
The Federal funding that is available is not stopped by
many of the State reforms that have been passed after Kelo.
There has been a very wide variety of reforms. And in some
cases, such as Alabama, the reform that they passed after Kelo
has since been repealed.
So there have been some States that have taken very good
action and effectively ended eminent domain in their States,
but there have been other States, such as New York, that have
taken no action at all, and other States that have taken
actions, legislative reforms that do very little to protect the
property rights of property owners. And I think it's important
that Federal taxpayers not fund these continued abuses of
eminent domain.
Mr. Franks. Well, thank you, sir.
And, Mr. Groen, I'd like to ask you two interrelated
questions. First, if property owners were more fairly
compensated for regulatory takings of their property, would
this somehow threaten the ability of government to function?
And second, given your experience in representing property
owners, do you believe that the clients that you represent were
out to impede the government's ability to operate or were they
essentially just seeking to be compensated for the burdens that
government has put on their ability to use and enjoy their
land?
Mr. Groen. Thank you for the question.
The answer from my perspective is very simple: The Takings
Clause and the enforcement of it by landowners does not in any
way impede the ability of government to function and to make
policy choices with regulation.
What it does require is that the cost of those regulations
not be borne exclusively by the people who are subject to them.
When there are situations where the Armstrong principal that we
discussed, in fairness and justice those burdens should be
borne by the public as a whole.
And so the Takings Clause and the constitutional command of
just compensation does not preclude government from acting, but
what it does do is require the payment of compensation when
that action is so severe on impacting private owners that the
result is a taking. That does not limit government, but it
conditions the exercise of the governmental power by the
constitutional balance of the Just Compensation Clause.
Mr. Franks. Mr. Seasholes, could you give us an example,
sir, of an endangered or threatened species that has been
harmed by how the Endangered Species Act treats property
owners? And explain how a more broad, more balanced approach
that protects both property rights and the environment would
better serve that species than this current approach.
Mr. Seasholes. Sure. I'd be happy to.
There's been, over the past several decades as this issue
has become more prominent, there has emerged in the scholarly
literature a number of species, one of which is the red-
cockaded woodpecker, which inhabits the pine forests of the
southern United States. There have been several empirical
research projects that have been published in the literature
showing several things. One, landowners destroying property
preemptively to try to preclude woodpeckers from moving in.
Also, not replanting property or planting with species that may
be unfriendly to the woodpeckers. And there are a number of
others detailed in my testimony.
In terms of evidence for how a more incentive-based
approach would work better, I'd just like to call your
attention to, and it's my written testimony, over the past
decade there have been a number of landowner surveys into the
factors that encourage and discourage landowners from
conserving endangered or potentially endanger species. And
these landowner surveys have shown a number of things. One
thing is landowners want to be compensated, they don't like to
be regulated, they don't like permanent conservation easements.
And so what these landowner surveys kind of give shape to
is, I think, a really new approach that would be more effective
that points towards, as I said, the cooperative conservation or
cooperative extension approach that has been very successful.
And landowners across the country engage it, I'm sure many of
your constituents perhaps even, they like it, they have very
good relationships with State-based, Federal even, from U.S.
Department of Agriculture extension agents. It is very
different, the relationships they have with the Fish and
Wildlife Service, which tend to be very negative.
Mr. Franks. Well, thank you, sir.
And I would now recognize the Ranking Member for his
questions for 5 minutes.
Mr. Cohen. Thank you, Mr. Chair.
Mr. Alban, your group is Institute for Justice, that's who
you work with. Is that correct?
Mr. Alban. Yes, sir.
Mr. Cohen. Does the Institute for Justice generally favor
local governments, State governments, or Federal overreach and
control?
Mr. Alban. The Institute for Justice generally favors
people's constitutional rights being respected by any level of
government.
Mr. Cohen. I know that. That's not the question I asked.
And you're a very smart man, you can respond to a question.
Does the Institute for Justice have a preference for local
and State decisionmaking, grassroots, or Federal, Washington,
one-size-fits-all programs?
Mr. Alban. I don't think the Institute for Justice has a
general position on that. I think in some cases, obviously,
local and State governments are more informed about what's
going on, and in other cases the Federal Government is more
prepared to act.
Mr. Cohen. And why do you think in this case that the
Federal Government should act and not local governments when it
deals with local property rights?
Mr. Alban. Well, because the proposal that I'm suggesting
is not, in fact, the Federal Government acting. It's the
Federal Government saying that Federal tax dollars cannot be
used for eminent domain abuse. So it is not a one-size-fits-all
solution. New York, which has not passed any eminent domain
reforms, could still continue to engage in eminent domain
abuse, it just couldn't use Federal taxpayers dollars to do it.
Mr. Cohen. Well, I would disagree with your analysis of
that, because I think really what you're saying is it would be
one Federal policy with Federal tax dollars and it's the
Federal Government determining through the tax dollar
measurement whether or not they can do it or not. But I would
disagree.
Mr. Groen, you work with Pacific Legal Foundation. What are
the principal sources of the Pacific Legal Foundation?
Mr. Groen. The principle sources of funding?
Mr. Cohen. Yes, sir.
Mr. Groen. Primarily from individuals.
Mr. Cohen. And who are your largest three individuals,
financially, not by weight?
Mr. Groen. I have no idea.
Mr. Cohen. You have no idea?
Mr. Groen. I do not.
Mr. Cohen. Koch brothers? Koch brothers?
Mr. Groen. I have no idea.
Mr. Cohen. You have no idea.
And how about the same thought, do you think local
government is the better place to make these decisions or
Federal?
Mr. Groen. Well, when you say these decisions, I'm not sure
what you're talking about. Certainly there is regulation that
takes place at the local level, State level, and at the Federal
level, all of which impact property owners.
The key is that we have a Constitution that governs all
levels of government, and it is important and necessary in our
system that that constitutional provision be properly enforced.
And that's the focus that I'm coming from.
Mr. Cohen. Mr. Seasholes, the Reason Foundation is easier
to determine. We know David Koch is a member of your board, is
that not right?
Mr. Seasholes. I believe so. I've been there about a year
and a half, so I'm kind of still learning the ropes.
Mr. Cohen. And the Koch family foundations provide much of
your funding, do they not?
Mr. Seasholes. I do not know. I'm sorry. It's a bit above
my pay grade.
Mr. Cohen. Well, it's interesting how agnostic folks are
about who funds their salary.
Mr. Seasholes. I'm not agnostic, Mr. Cohen. I don't know.
I've been there for about a year and a half.
Mr. Cohen. Well, that's kind of the same thing, is not
knowing, not caring. I don't mean agnostic as distinguished
from religious.
Mr. Seasholes. I may be ignorant, but I don't necessarily
not care.
Mr. Cohen. Okay. Well, I would care.
Mr. Echeverria, tell us what your responses would be to the
testimony of these gentlemen concerning the Kelo decision.
Mr. Echeverria. Well, there's so much to say. Let me
respond to some of the comments on regulatory takings. I think
it's just simply not correct to say that an unconstitutional,
unhistorical, expansive reading of the Takings Clause would not
interfere with government's ability to operate. Justice Holmes
famously remarked in the Mahon case that government could
hardly go on if government had to pay every time it imposed a
piece of general legislation.
Charles Fried, a very distinguished professor at Harvard
Law School, wrote a book recounting his experiences in the
Reagan administration where this novel, expansive theory of
regulatory takings was first developed, and he was very
explicit in saying, from his perspective, as the number three
person in the Justice Department, that the regulatory takings
agenda was designed to impede regulatory action.
So if the law were changed and established precedent were
altered and government were required to pay for every kind of
regulatory restriction, the fact of the matter is that
government would grind to a halt. And I suggest to you that is
the objective of groups like the Reason Foundation, the Pacific
Legal Foundation, and the Institute for Justice.
Mr. Cohen. Thank you, sir. I appreciate it.
Mr. Franks. I thank the gentleman.
I would now recognize the Chairman, Mr. Goodlatte, for his
questions.
Mr. Goodlatte. Thank you, Mr. Chairman.
Mr. Echeverria, I'm not going to ask you what liberal
organizations might have contributed to Vermont Law School. I'm
going to assume that you do your work based upon what you think
is right and that your intellectual----
Mr. Echeverria. Many hard-working students contribute to
our support.
Mr. Goodlatte. Right. Absolutely. And I'm sure you have
donors as well as and that you, like other organizations, pride
yourself on your intellectual integrity. And I'm sure----
Mr. Echeverria. I'm not being paid to be here by any
institution.
Mr. Goodlatte. I'm sure that these other gentlemen pride
themselves on their intellectual integrity as well.
But I do want to ask you about your defense of the Kelo
decision. It appears that the economic development that brought
about the takings in Kelo was a failure. And I wonder if you've
seen other failed economic development takings where owners
were forced out of their homes only to have the redevelopment
plans fail.
In previous hearings we've had Susette Kelo here
testifying. It's a very heartwrenching and compelling thing to
have someone have their home taken away from them, not for the
pipelines and so on that are referred to in your statement,
where obviously in order to move electricity or natural gas or
whatever the case might be, water, you need to have some things
that transit property lines. But her property was entirely
taken, not for a governmental purpose, but for a private
economic development purpose. And the real basis for it was
that there would be new higher tax revenues generated for that.
So I'm wondering if you have other examples like that
where----
Mr. Echeverria. I can't offhand. I mean, I wouldn't doubt
that there may be some.
I think it is important to emphasize, you mentioned
infrastructure facilities, that pipelines and highways can be
as destructive to homeowner interests as any other form of
eminent domain.
Mr. Goodlatte. Sure. Absolutely. But they connect people
and they have a long history of doing that. But shopping malls
don't have as long a history of using eminent domain powers to
take private property from one individual and give that private
property to another individual or corporation for the purpose
of building something bigger and grander and more glorious than
that person's home.
Mr. Echeverria. I don't think that makes any difference to
the homeowner. The representative of the National Association
of Colored People who spoke at a recent Cato anniversary
celebration argued that if Congress were to address the
question of eminent domain, Congress----
Mr. Goodlatte. Let me interrupt you because my time is
limited.It may not make a difference to the homeowner, but it
does make a difference in terms of establishing where the line
is on when government can take property and when they cannot.
There are certain types of things that have historically been
deemed to be appropriate for government to take for the broader
public good and there are certain places where they have not.
And that line, I think, was completely breached by the Kelo
decision.
Do you disagree with the dissenting opinion that the public
purposes aspect of the Fifth Amendment was nullified by the
Kelo decision?
Mr. Echeverria. I was simply trying to share with you the
advice----
Mr. Goodlatte. Answer my question.
Mr. Echeverria. Can I answer the question, the first
question?
Mr. Goodlatte. You already did.
Mr. Echeverria. No, I never got my chance.
Mr. Goodlatte. No, you said you didn't know of any other--
--
Mr. Echeverria. You asked another question, you raised
infrastructure, and I was trying to respond to that part of
your question.
Mr. Goodlatte. Well, I didn't ask you a question about
that. I just told you that I knew the difference between
infrastructure and others and asked you if you could draw the
line.
Mr. Echeverria. And I just was trying to tell you that many
people do not see a distinction there and do not think that
Congress should draw such a distinction.
On the question of the----
Mr. Goodlatte. Let me ask Mr. Alban if he knows of other
examples, other than the Kelo decision, where private property
was taken and transferred for other private purposes and then
nothing happened, the whole thing was a failure.
Mr. Alban. Sure. I'll give three fairly local examples.
The Berman v. Parker decision took all of Southwest D.C.
via eminent domain, and many areas in Southwest D.C. are still
being revitalized now, 60 years later. There are large swaths
of Southwest D.C. that were never replaced with the proposed
developments.
In the testimony by Mr. Echeverria that he submitted, there
is an example, the Skyland shopping center in Southeast D.C.,
in Anacostia, where the land was taken, and they're still
searching for an anchor tenant that would be able to allow the
property to go forward.
There's also a development in Baltimore.
Mr. Goodlatte. Those people have been displaced from their
homes in the meantime.
Mr. Alban. Homes and businesses, yes.
Mr. Goodlatte. They've lost their homes.
Mr. Alban. Their businesses for the most part, yes.
Mr. Goodlatte. Thank you.
Mr. Groen, the Supreme Court has made it difficult, if not
impossible to bring Fifth Amendment taking claims against State
and local governments in Federal court. Can you think of any
other situations in which a fundamental right written in our
Constitution is left up to State courts to decide whether or
not to enforce?
Mr. Groen. I cannot. From my experience, it is a very
unique situation where the Williamson County decision forces
people with Federal takings claims to bring their cases in
State courts.
We're working on that right now, there's a case heading to
the Fourth Circuit called Perfect Puppy v. City of Rochester,
to try and make inroads on that doctrine. I discuss that
briefly in my materials.
The only other situation that I can think of also involves
the Takings Clause, and that is the Court of Federal Claims
requires that if you're bringing a takings case against the
United States Government for over $10,000, you cannot bring it
in Federal district court, you bring it in the Court of Federal
Claims, which does not have article III judges with life tenure
and security of no diminution in pay. And so that is the only
other situation, and again, it is a Takings Clause situation.
The Federal constitutional protection of citizens' rights
and property, the Federal courthouse doors should be open for
them to litigate in their communities, in their Federal
district court.
Mr. Goodlatte. Thank you.
My time has expired. Thank you, Mr. Chairman.
Mr. Franks. I thank the gentleman.
I would now recognize Mr. King for his questions.
Mr. King. Thank you, Mr. Chairman.
I thank the witnesses for your testimony and interaction
with the questions that have been asked.
I would state first that I have this dj vu feeling. It's
been 10 years since the Kelo decision. I recall some of the
debate on the floor of the House of Representatives when we
brought a resolution of disapproval on the Kelo decision. And I
remember I was queued up to speak right behind Mr. Barney Frank
of Massachusetts, and I sat down in the front row with my
notepad anticipating that I would take notes on my anticipated
rebuttal.
Barney Frank and I had exactly the same position on the
Kelo decision, which was an usual thing. And I made the
statement then, not having read any of the dissent, that I
believe that it struck three words out of the Fifth Amendment,
``for public use,'' which was the point of the question Mr.
Goodlatte asked a moment ago. And I go back and read that Fifth
Amendment today, and today it reads, ``nor shall private
property be taken without just compensation.''
That's an appalling thing to me, and this Congress rose up
and rejected that decision. And so I wanted to pose this
question, I think first to Mr. Echeverria.
Our Founding Fathers gave us the means to amend the
Constitution, and I don't think they actually anticipated
Marbury, but it's here and it's a couple of centuries behind
us. And so with that in mind, an appropriate way to address
this, at least from a technical but not a practical
perspective, would be to draft an amendment if we wanted to
restore the property rights as understood prior to Kelo. And
I'd ask if you could give us some counsel on how one might
write such an amendment to restore the property rights as
understood before the Kelo decision.
Mr. Echeverria. Well, I would be loathe to do that because
I think Kelo reaffirmed 100 years of precedent. Can I explain
why I think----
Mr. King. Well, I'd just as soon not, given my clock is
burning down, but I want to rather instead, if I could just
start from a left, if anyone has a recommendation on how we
might draft an amendment to put the property rights back
together that existed and were drafted into the Fifth Amendment
prior to the Kelo striking the three words out, ``for public
use.'' How would we write that? Would we write the same thing
or was there another way to say it more firmly such as, ``for
public use and we really mean it?''
What would you recommend, Mr. Alban.
Mr. Alban. Well, I think it's actually the role of the
courts to properly interpret the Constitution and those words,
``public use.'' So I don't think it needs amendment. I think
the courts need to give those words the actual meaning they
have.
But if you're looking for language that excludes this
expansive definition of public purpose, I think you can look to
the Bond amendment or to the Private Property Protection Act,
which both describe the sorts of takings that are permitted and
the sorts of takings that are not permitted.
Mr. King. Thank you.
Mr. Groen.
Mr. Groen. I think the easier solution is that the public
use requirement is limited to ownership controlled by the
Federal Government. What was particularly disturbing about the
Kelo decision is the transfer of title to a private entity,
from one private person to another private person, and that is
an appropriate place for drawing the line. Otherwise, public
use can be read fairly extensively, but not to the point of
transferring property from private person to another private
person.
Mr. King. And in your narrative that you discussed, Mr.
Groen, of the property that was a half-acre that it was
adjacent to, I would just state it this way, and I'd ask if
you'd agree with me. Up until Kelo, when a person bought a
piece of property, we had an expectation that we could utilize
that according to the law in a lawful manner for the duration
of our lifetime. And so the Kelo decision that's allowed now
for the--that's brought about the State legislation, has that
altered the expectation nationally and made it an undecided
circumstance where if you buy property today, you can't know
what kind of decision might come back upon that because of
public officials that would use the condemnation?
Mr. Groen. Well, I think that there is certainly some
uncertainty for property owners. With respect to the Wisconsin
example that I mentioned in the paper, that is not so much a
public use issue as it is a problem with the combination of
separate and discrete parcels where there is a longstanding
history, as you mention, where individuals do have an
expectation that they will be able to use each of those
separate and discrete parcels and not have them forced to be
merged together by government regulation and be declared as a
parcel as a whole for the purpose of eliminating their right to
compensation.
Mr. King. Thank you, Mr. Groen.
If I might just conclude with the Chairman here, is that it
did not trouble me and it does not trouble me if I see a
residential home sitting in the middle of an asphalt parking
lot at a shopping mall out of respect to the Fifth Amendment
and the property rights. That says something about a pillar of
American exceptionalism that I think was seriously damaged by
Kelo.
Thank you, and I yield back.
Mr. Franks. I thank the gentleman.
I now recognize Mr. DeSantis from Florida for his
questions.
Mr. DeSantis. Thank you, Mr. Chairman.
Mr. Alban, the Kelo decision, do you view that as being
broader than the Hawaii Housing Authority v. Midkiff decision,
broader in a sense of not protecting private property rights?
Mr. Alban. Absolutely, because it clarified that now
property could be taken for the explicit purpose of economic
redevelopment for the benefit of a private developer who the
only public benefit that was being promised was additional tax
dollars in the city's coffers.
Mr. DeSantis. So that's a significant departure from the
historical understanding?
Mr. Alban. Absolutely it is, yes.
Mr. DeSantis. The economic development that was promised in
Kelo actually turned out to be a failure. Have you seen other
instances of where you had economic development takings and yet
people forced out of their homes while the plans end up
failing?
Mr. Alban. Yes, there have been a number of examples. As I
was mentioning earlier, in Southwest D.C., almost the entire
area was taken through eminent domain, and it is still being
transformed and there are still promises about what's going to
be done there.
There's the Skyland development in Anacostia. And in a case
that I'm handling currently in Atlantic City, New Jersey, there
is redevelopment takings around the Revel Casino, which has
twice filed for bankruptcy and now closed its doors, but the
State redevelopment agency there is still trying to take
people's homes for no particular purpose whatsoever. They just
want to acquire land around what is now a failed casino.
Mr. DeSantis. And some will say, well, gee, if you
interpreted the Fifth Amendment the way you're suggesting, it's
going to be more difficult to have economic development. And I
guess my question is, if a constitutional, explicit
constitutional protection does create some inconvenience in
other parts of American life, has that ever been deemed
sufficient to simply write it out of the Constitution and
ignore it?
Mr. Alban. No, certainly not, and there are great
inconveniences on homeowners and small business owners when
their properties are taken through eminent domain, particularly
when it's taken to give to another private party for that
private party's personal profit.
Mr. DeSantis. Mr. Groen, let me ask you. With the Supreme
Court's posture in this, it's very difficult to go into Federal
court and bring a Fifth Amendment claim if your property's been
seized in violations of the Takings Clause. Are there any other
situations in which a right that's fundamental that's
explicitly protected in the Constitution is simply just left to
kind of the State courts to decide whether they want to enforce
or not?
Mr. Groen. None that I'm aware of. As I mentioned earlier,
the only other situation is where litigants suing for over
$10,000 for a taking are forced to the Court of Federal Claims,
and that raises an article III question.
This situation for parties being forced into State court is
a result of the 1985 Williamson County decision by the Supreme
Court, and that is simply a requirement that has to change. And
we're working on that through litigation, but it's been since
1985, and we're still working on it. Help from Congress is
always welcomed.
Mr. DeSantis. Well, it's really strange. I mean, I think
that if you go back when the Constitution was ratified, I mean,
the right of private property, and that was a major, major
right, and in fact, infringing on that right, that was what
they viewed was probably the most direct threat to liberty. And
then here we are now, it's almost like people have got to beg
to have these rights enforced in Federal court.
Now, Professor Echeverria contends that if the requirement
to provide compensations under the Takings Clause is not
limited to extreme circumstances, it would be very difficult
for kind of the modern state to function. In your opinion,
could the government continue to function if courts enforced
the Taking Clause in a more robust way?
Mr. Groen. I'm really glad you asked me that, because
Professor Echeverria cited to the Mahon case Justice Holmes,
where he did say that if the government had to pay for every
change in the law it could hardly go on. But he continued in
that case and said, ah, but if regulation goes too far, then it
is a taking and we have to obey the constitutional command of
compensation. It is a balance.
The Takings Clause--not every interference with property
rights is going to be a taking. It simply isn't. And government
has vast room to regulate and diminish property values without
becoming a taking. But when it crosses that line, when it goes
too far, it is the duty of the courts to obey the command of
just compensation, and that is where the difficulty has been in
the regulatory takings arena.
We have made a lot of progress, but as interference
continues and grows through ever-increasing regulations, we
continue to have to litigate these cases and have a vigorous
defense of the Takings Clause.
Mr. DeSantis. Thank you. My time has expired. I yield back.
Mr. Franks. And I thank the gentleman.
And I apologize to the gentleman from Ohio, Mr. Jordan, for
skipping over him.
Mr. Jordan. Not a problem.
Mr. Franks. I now recognize him for 5 minutes.
Mr. Jordan. Yeah. For Mr. DeSantis, it's fine.
Thank you, Mr. Chairman, and I apologize for missing part
of it. I had to get back to my office for a meeting.
But thank you all for being here.
The title is ``The State of Property Rights in America.'' I
would say ``The State of Rights in America.'' We've got the
Kelo decision and the takings, we've got what the Chairman has
brought up about regulatory takings, but, I mean, I point to
things even more recent. When the bondholders at Chrysler were
told to take the deal back during the auto bailout, that is, in
my judgment, a fundamental violation of people's rights.
People's religious liberty rights under ObamaCare, people's
First Amendment free speech rights under the IRS targeting
groups for exercising that very right, their free speech rights
to speak out against the government.
So I was curious, Mr. Alban, Mr. Groen, if you could
comment on not just this takings issue, but a broad--people
right here in the District of Columbia, I think in many ways,
denied their Second Amendment rights.
We're obviously concerned about the takings issue, but I
think, in a broader sense, just people's fundamental liberties
under the Constitution as Americans and the impact we're seeing
from government policies on the broader question.
Mr. Alban, your thoughts?
Mr. Alban. Yes, I think that's right. I don't know how much
of it is directly connected to the Kelo decision, but there has
certainly been a severe erosion of rights. We litigate cases
involving people's economical liberty, the right to earn a
living that is being severely repressed all over the country.
And something that does fall under the scope of property
rights that's been a severe problem for people has been the
growth of civil forfeiture, where folks have had their property
taken without being charged with a crime. So that's another
example that we're actively litigating where----
Mr. Jordan. And, frankly, told not to talk about it, right?
Mr. Alban. In some cases, yes.
Mr. Jordan. Some of the John Doe investigations we have had
some people write about in Wisconsin that took place over the
last few years.
Mr. Groen.
Mr. Groen. Your question reminds me of what Justice Holmes
talked about in Pennsylvania v. Mahon in 1922. He recognized
that when you're dealing with the police power, the power of
government to regulate, he said the natural tendency is for
there to be more and more and more regulation until at last--
and he was in the context of property--until at last private
property disappears. That's the natural tendency.
The barrier to stop that is the Constitution. And so I
think you're right, that natural tendency we see playing out in
all kinds of rights.
The other aspect that I would emphasize is we talk about
property rights, but it was pointed out by Justice Stewart that
property does not have rights. People have rights.
Mr. Jordan. Well said.
Mr. Groen. And the right to enjoy property.
Mr. Jordan. Uh-huh.
Mr. Groen. As well as all your other civil rights. They're
interrelated. And if you eliminate rights in property, then you
threaten all your other liberties as well. That is the big
picture that I think is at stake. We see it played out in
property rights, but if that natural tendency is allowed to
grow more and more and you don't have the police power balanced
by the constitutional protection, then our rights disappear.
Mr. Jordan. It's one of the reason you've seen the Members
up here in this Committee, and particularly the Chairman, focus
so much on this--and I'm changing the subject a little bit, but
to your point--so much on the fact that you had an agency with
the power of the Internal Revenue Service systemically and for
a sustained period of time target groups for exercising their
most fundamental right under the First Amendment, their right
to speak out against the government. And we should be able to
do that and not be harassed for doing it. But that's exactly
what the Internal Revenue Service did.
So when you couple that with the takings issue, the
regulatory takings that are taking place, people's religious
liberty, I mean, it's why this Committee is so concerned about
what we see happening in our great country.
And I appreciate you all being here.
And with that, I yield back, Mr. Chairman.
Mr. Franks. And I thank the gentleman.
And certainly thanks to all the witnesses for attending. It
was worth the hearing to me today to be reminded that property
does not have rights, people have rights, and the diminishment
of the people's rights in one area is a diminishment of their
rights in other areas as well. And so we are grateful that you
were here.
Without objection, all Members will have 5 legislative days
to submit additional written questions for the witnesses or
additional materials for the record.
And once again I thank all of the Members, the witnesses,
and the people who attended today. And this hearing is
adjourned.
[Whereupon, at 3:45 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record
Response to Questions for the Record from John D. Echeverria,
Professor of Law, Vermont Law School
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