[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

=======================================================================

                                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

                               __________

         Printed for the use of the Committee on the Judiciary

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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

                              ----------                              

                              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

                              ----------                              


                         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:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                               __________
    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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