Tag: property rights

I Heard It Through the Grapevine That the Government Was Violating Property Rights

This blogpost was co-authored by Cato legal associate Kathleen Hunker.

Property owners shouldn’t be made to suffer a needless, Rube Goldberg-style litigation process to vindicate their constitutional rights. Yet that is exactly what the U.S. Department of Agriculture seeks to impose on independent raisin farmers Marvin and Laura Horne when they protested the enforcement of a USDA “marketing order” that demanded that the Hornes turn over 47 percent of their crop without compensation.

The marketing order—a much-criticized New Deal relic—forces raisin “handlers” to reserve a certain percentage of their crop “for the account” of the government-backed Raisin Administrative Committee, enabling the government to control the supply and price of raisins on the market. The RAC then either sells the raisins or simply gives them away to noncompetitive markets—such as federal agencies, charities, and foreign governments—with the proceeds going toward the RAC’s administration costs.

Believing that they, as raisin “producers,” were exempt, the Hornes failed to set aside the requisite tribute during the 2002-2003 and 2003-2004 growing seasons. The USDA disagreed with the Hornes’ interpretation of the Agricultural Marketing Agreement Act of 1937 and brought an enforcement action, seeking $438,843.53 (the approximate market value of the raisins that the Hornes allegedly owe), $202,600 in civil penalties, and $8,783.39 in unpaid assessments.

After losing in that administrative review, the Hornes brought their case to federal court, arguing that the marketing order and associated fines violated the Fifth Amendment’s Takings Clause. Having litigated the matter in both district and appellate court, the government—for the first time—alleged that the Hornes’ takings claim would not be ripe for judicial review until after the Hornes terminated the present dispute, paid the money owed, and then filed a separate suit in the Court of Federal Claims.

The San Francisco-based U.S. Court of Appeals for the Ninth Circuit proved receptive to the government’s about-face. Relying on Williamson County v. Hamilton Bank (1985)—the Supreme Court case that first imposed ripeness conditions on takings claims—the court ruled in a revised opinion that the Tucker Act (which relates to federal waivers of sovereign immunity) divested federal courts of jurisdiction over all takings claims until the property owner unsuccessfully sought compensation in the Court of Federal Claims. In conflict with five other circuit courts and a Supreme Court plurality, the Ninth Circuit also concluded that the Tucker Act offered no exception for those claims challenging a taking of money, nor for those claims raised as a defense to a government-initiated action.

The ruling defies both law and common sense. It stretches the Supreme Court’s ripeness rule beyond its moorings and forces property owners to engage in utterly pointless, inefficient, and burdensome activities just to recover what should never have been taken in the first place.

Cato has thus filed an amicus brief, joined by the National Federation of Independent Business, Center for Constitutional Jurisprudence, and Reason Foundation, supporting the Hornes’ request that the Supreme Court take the case and correct the Ninth Circuit’s overbroad reading of Williamson County. We argue that an unjustified monetary order is inherently a taking without just compensation and that a ruling to the contrary imposes a pointless burden on property owners, particularly when the government initiated the original proceeding.

We also encourage the Court to reconsider Williamson County, noting that the text and history of the Takings Clause don’t permit the government to defer compensation—that indeed the most natural reading of the Takings Clause demands that compensation be offered as a prerequisite to government action. Just as the Court wouldn’t permit the government to seize property without some prior “due process of law,” it shouldn’t permit the government to seize property without prior “just compensation.”

The Court has no reason to treat takings claims with less deference than rights anchored in other constitutional provisions. It will decide this fall whether to address that issue in the case of Horne v. U.S. Dept. of Agriculture.

On the Perils of Single-Issue Politics – Breastfeeding Edition

Earlier this week I wrote about the perils of the NRA’s single-issue politics. Now it’s breastfeeding moms in the crosshairs – different issue, same principle.

In the NRA case, it seems that they’re going after a Tennessee state legislator – a long-time NRA member and supporter, no less – who opposed a bill that would have allowed employees to keep guns in their cars while parked in their private employers’ parking lots. The principle at issue there could not be simpler or more basic to a free society: individuals, including private employers, should have a right to determine the conditions on which others may enter their property. The NRA’s mistake is in asking the state to restrict that right in the name of the Second Amendment, which of course applies only against governmental, not private, restrictions.

The breastfeeding moms make a similar mistake. We learn from NPR this morning that a number of them have just gathered en masse and staged a “Great Nurse-In” at the U.S. Capitol. Their aim is to secure “federal protection of breastfeeding everywhere.” Everywhere? In my home, my business?

Don’t get me wrong: I’m no more against the right to breastfeed than I am against the right to keep and bear arms. That’s not the point. Rather, the point is that, in a free society, the property right is fundamental, starting with your property in your person and your liberty, which you can exercise only to the extent that you respect the equal rights of others. Property rights set the lines that determine where one person’s rights end and the next person’s begin, which is why getting those lines right is so crucial to a society that aspires to protecting equal rights.

The breastfeeding moms might well object if they were forced to allow people to carry guns into their businesses, just as the gun owners might object to being forced to allow breastfeeding in theirs. And it isn’t that some values are better than others. We can argue over that all day and get nowhere. With rights, by contrast, there’s a good possibility of agreement. In fact, the nation is based on a live-and-let-live principle we largely agreed on at the outset – and lived by, for the most part, until we started asking government to impose our values on others, leading to the war of all against all that we see all about us today and to the politicization of everything, including parking lots and breastfeeding.

‘Temporary’ Takings That Cause Permanent Damage Still Require Just Compensation

This blogpost was co-authored by Trevor Burrus.

The Arkansas Game and Fish Commission owns and operates 23,000 acres of land as a wildlife refuge and recreational preserve; the preserve’s trees are essential to its use for these purposes. Clearwater Dam, a federal flood control project, lies 115 miles upstream. Water is released from the dam in quantities governed by a pre-approved “management plan” that considers agricultural, recreational, and other effects downstream.

Between 1993 and 2000, the federal government released more water than authorized under the plan. AGFC repeatedly objected that these excess releases flooded the preserve during its growing season, which significantly damaged and eventually decimated tree populations. In 2001, the government acknowledged the havoc its flooding had wreaked on AGFC’s land and ceased plan deviations. By then, however, the preserve and its trees were severely damaged, so AGFC sued the government, claiming damages under the Fifth Amendment’s Takings Clause.

The district court awarded $5.8 million in lost timber and reforestation costs based on the substantiality of the government’s flooding and the foreseeability of the damage it caused. The U.S. Court of Appeals for the Federal Circuit reversed that decision, holding that flooding can never be a taking unless that flooding is permanent. It further held that, in determining whether the government’s flooding was permanent or temporary, courts must focus on the character of the policy behind the intrusion rather the effects of the intrusion itself. A taking cannot have occurred here because each deviation from the plan constituted a “temporary” policy, the court concluded, so AGFC had no constitutional remedy.

In December, Cato joined the Pacific Legal Foundation on an amicus brief urging the Supreme Court to take the case, which it did. Now Cato again joins the Pacific Legal Foundation, as well as the Atlantic Legal Foundation, on a new brief urging the Court to uphold the Fifth Amendment rights of property owners whose land is destroyed by the federal government.

We argue that the length of time of the government’s physical invasion of property should not be used to determine whether a taking occurred, but rather only for calculating how much damage the taking caused. We further argue that the Federal Circuit’s focus on the “intent” of the government action—whether the flooding resulted from a “permanent or temporary policy”—is likewise irrelevant to whether a taking occurred. Instead, the inquiry should be whether the government caused permanent damage and, if so, how much. The lower court erroneously created a rule—that so long as it might be “temporary,” no government flooding can be remedied under the Fifth Amendment—that runs afoul of a constitutional provision meant to compensate property owners for government intrusions on their land.

The Supreme Court will hear the case of Arkansas Game & Fish Commission v. United States in October or November.

Cato’s Amicus Brief Helps Persuade Supreme Court to Protect Private Property Rights

This blogpost was co-authored by Cato legal associate Anna Mackin.

Today, the Supreme Court agreed to hear Arkansas Game & Fish Commission v. United States, the Fifth Amendment Takings Clause case whose cert petition Cato supported with an amicus brief. In that brief, we joined the Pacific Legal Foundation in urging the Court to preserve a remedy long-recognized in American courts: compensation for government destruction of private property.

Over a year ago, the Federal Circuit blithely ignored this constitutionally guaranteed protection, ruling that so long as it might be characterized as “temporary,” no government flooding of private land can constitute a Fifth Amendment violation. If upheld, this sweeping opinion could prevent recovery for the destruction of private property whenever the government characterizes its own actions as “temporary,” without any assurances of the length of this “temporary” loss.

Notable Supreme Court commentators saw the importance of this case early on, and our amicus brief was featured on SCOTUSblog’s “petition of the day” page. Many thanks to Brian Hodges at PLF for working with Cato on the brief – one of just four filed in the case. Congratulations also and especially to Matthew Miller & Julie Greathouse of Perkins & Trotter, who represent AGFC, for their successful legal strategy.

It is gratifying to see the Court snap up this opportunity to protect private property rights – it is more likely than not that it will reverse the lower court – implicitly validating the position Cato and PLF advanced in this case. We’ll now be filing a brief on the merits that will urge the Court to maintain constitutional protections against government intrusions on private property. The Court will hear the case next term, probably this fall, with a final decision expected by early 2013.

For more on AGFC v. United States, check the case’s SCOTUSBlog page or its Supreme Court docket page. Jonathan Adler also blogged about the case at the Volokh Conspiracy.

Why Hayek Would Have Hated Software Patents

In his famous essay “The Use of Knowledge in Society,” Friedrich Hayek argued that the socialists of his day falsely assumed that knowledge about economy could be taken as “given” to central planners. In reality, information about the economy—about what products are needed and where the necessary resources can be found—is dispersed among a society’s population. Economic policies that implicitly depend on omniscient decision-makers are doomed to failure, because the decision-makers won’t have the information they need to make good decisions.

In a new paper to be published by the NYU Annual Survey of American Law, Christina Mulligan (who drafted a recent amicus brief for Cato) and I argue that the contemporary patent debate suffers from a similar blind spot. A patent is a demand that the world refrain from using a particular machine or process. To comply with this demand, third parties need an efficient way to discover which patents they are in danger of infringing. Yet we show that for some industries, including software, the costs of discovering which patents one is in danger of infringing are astronomical. As a consequence, most software firms don’t even try to avoid infringing peoples’ patents.

Patents are often described as “intellectual property,” and patent law provides for harsh property-like remedies against patent infringers. But a property system that is so convoluted that ordinary firms can’t figure out who owns what isn’t a property system at all. Genuine property rights enhance economic efficiency by bringing predictability to the allocation of scarce resources and thereby promoting decentralized decision-making. Software patents retard economic efficiency by subjecting software firms to a constant and unavoidable threat of litigation for accidentally infringing the patent rights of others. Hayek would not have approved.

Our paper is available from SSRN.

EPA Actions Should Be Subject to Judicial Review

Michael and Chantelle Sackett bought some Idaho land and began placing gravel fill on the site to prepare for laying a foundation for their dream home. Then they got something from the EPA: a “Compliance Order,” declaring that they were in violation of the Clean Water Act, because their land had been deemed a “wetland” subject to federal jurisdiction.

By beginning construction without a federal permit, the Sacketts were breaking the law and exposing themselves to civil and possibly criminal penalties, according to the Order. The Order instructed them to stop their construction and restore the property to its “original state” – it even told them what type of shrubbery to plant on the site, and exactly where to plant it. If they failed to comply with the order, they were subject to $37,500 fines per day.

The Sacketts were, understandably, shocked: they had no reason to think their property was a wetland; their neighbors had been allowed to build homes, and there was no indication in their title documents that the land was subject to federal control. So they asked for a hearing – and that was when they learned that the Compliance Order process does not entitle them to a hearing. They must either comply with the Order immediately to avoid the fines, or play chicken with the EPA – waiting until the EPA decides to file an “enforcement action.” At that time, they would be allowed to present their arguments that the land is not actually a “wetland.” But of course, by that time, the fines would have accumulated to hundreds of thousands or millions of dollars.

Worse, these Compliance Orders are issued by a single EPA bureaucrat, on the basis of “any evidence.” That’s the language of the statute itself – and federal courts have interpreted “any evidence” to mean even an anonymous phone call or a newspaper story.

And a Compliance Order doesn’t just demand that you obey EPA’s orders or face fines – ignoring a Compliance Order is a separately punishable offense against federal law, aside from the liability for any environmental damage. In other words, you can face penalties for violating the Clean Water Act and also for ignoring a Compliance Order. Worse still, ignoring a Compliance Order can serve as the basis of a finding of “wilfulness,” and thus the basis of criminal charges.

Pacific Legal Foundation represents the Sacketts and argues that they should have their day in court – either under federal statutes like the Administrative Procedure Act or under the Due Process Clause – without having to face the possibility of devastating penalties.  PLF lawyer Damien Schiff argued the case today before the Supreme Court; while the justices were active in probing the weaknesses of both sides, the government’s lawyer didn’t do the EPA any favors.  So today may have ended being a very good day for the Sacketts, even if the New York Times editorial page took the alarmist stance that allowing them to seek pre-enforcement judicial review would be a ”big victory to corporations and developers who want to evade the requirements of the Clean Water Act.”

The case is Sackett v. EPA; read the argument transcript here and the briefs here.

This blogpost was coauthored by adjunct scholar Timothy Sandefur, who is a principal attorney at PLF and wrote about the case in Regulation magazine.

Obama’s Top 10 Constitutional Violations

That’s the topic of my latest op-ed, in the Daily Caller.  Here’s the list:

  1. The individual mandate
  2. Medicaid coercion
  3. The Independent Payment Advisory Board
  4. The Chrysler bailout
  5. Dodd-Frank
  6. The deep-water drilling ban
  7. Political-speech disclosure for federal contractors
  8. Taxing political contributions
  9. Graphic tobacco warnings
  10. Health care waivers

For descriptions of what makes these things so constitutionally bad, read the whole thing.