Tag: property rights

Likely Supreme Court Tie Would Be a Loss to Property Owners

Today, the Supreme Court heard argument in Stop the Beach Renourishment v. Florida Department of Environmental Protection, which is a Fifth Amendment Takings Clause challenge involving beachfront property (that I previously discussed here).

Essentially, Florida’s ”beach renourishment” program created more beach but deprived property owners of the rights they previously had – exclusive access to the water, unobstructed view, full ownership of land up to the “mean high water mark,” etc. That is, the court turned beachfront property into “beachview” property.  After the property owners successfully challenged this action, the Florida Supreme Court – “SCOFLA” for those who remember the Bush v. Gore imbroglio – reversed the lower court (and overturned 100 years of common property law), ruling that the state did not owe any compensation, or even a proper eminent domain hearing.

As Cato adjunct scholar and Pacific Legal Foundation senior staff attorney Timothy Sandefur noted in his excellent op-ed on the case in the National Law Journal, “[T]he U.S. Constitution also guarantees every American’s right to due process of law and to protection of private property. If state judges can arbitrarily rewrite a state’s property laws, those guarantees would be meaningless.”

I sat in on the arguments today and predict that the property owners will suffer a narrow 4-4 defeat.  That is, Justice Stevens recused himself – he owns beachfront property in a different part of Florida that is subject to the same renourishment program – and the other eight justices are likely to split evenly.  And a tie is a defeat in this case because it means the Court will summarily affirm the decision below without issuing an opinion or setting any precedent.

By my reckoning, Justice Scalia’s questioning lent support to the property owners’ position, as did Chief Justice Roberts’ (though he could rule in favor of the “judicial takings” doctrine in principle but perhaps rule for the government on a procedural technicality here).  Justice Alito was fairly quiet but is probably in the same category as the Chief Justice.  Justice Thomas was typically silent but can be counted on to support property rights.  With Justices Ginsburg, Breyer, and Sotomayor expressing pro-government positions, that leaves Justice Kennedy, unsurprisingly, as the swing vote.  Kennedy referred to the case as turning on a close question of state property law, which indicates his likely deference to SCOFLA.

For more analysis of the argument, see SCOTUSblog.  Cato filed an amicus brief supporting the land owners here, and earlier this week I recorded a Cato Podcast to that effect. Cato also recently filed a brief urging the Court to hear another case of eminent domain abuse in Florida, 480.00 Acres of Land v. United States.

More Trade News

My colleague Dan Griswold pointed out yesterday some unfortunate editing in the Washington Post. Here are a couple of other trade-related items in the news recently:

  • Sen. Max Baucus (D, MT and Chairman of the Senate Finance Committee) has seemingly thrown his weight behind the idea of “border measures” (i.e., carbon tariffs).  After paying the semi-obligatory lip service to the United States’ obligations under international trade law – and I say only “semi-obligatory” because some U.S. lawmakers appear not to care about it at all – Baucus goes on to deliver this rhetorical gem:

    I think often the United States has to lead,” Baucus said, noting that what lawmakers come up could be used as a model for other countries to copy.

    So the U.S. would saddle its consumers with higher prices in exchange for little benefit environmentally and in the process risk retaliation and alienating countries who it insists are necessary for global cooperation on climate change?

    Some leadership.

    And it may well be that the Chinese have the jump on the United States here, in any case. They’re proposing to introduce a carbon tax of their own, to prevent double-taxation in the form of carbon tariffs by the developed countries (banned under WTO rules) and to keep the carbon tax revenue – collected, remember, from U.S. consumers! – for themselves, all while seeming to play nice on climate change. I bet those who proposed carbon tariffs are sorry they spoke out now. (HT: Scott Lincicome)

  • Brazil has published a list of over 200 mostly consumer and agricultural goods that would be subject to retaliatory tariffs as part of the on-going dispute over U.S. cotton subsidies (an excellent backgrounder to that dispute is available here).

    I note with sorrow that the list also contains intermediate goods, which of course would mean saddling Brazilian manufacturers with higher prices. Even if the Brazilian government isn’t too concerned about  burdening its consumers with extra taxes, rarely a concern of politicians apparently, you’d think they would hesitate to impose higher costs on manufacturers, who employ people.

    Again, it is important to draw a distinction here between the mercantalist political logic of retaliatory tariffs and the economic insanity of increasing costs to your own people in “retaliation” for the harm another country’s policies have done to you. (And no, I don’t count the “game-theory” argument as an “economic” one here. That is a fancy way of saying that in an international relations, i.e. political, sense, retaliation can bring about the desired change.  I’m talking about the fact that costs to consumers from tariffs – whatever their rationale – far outweighing the benefits that producers derive from protection). But this latest development is a sign that Brazil is serious about getting the U.S. to reform its agricultural policies, something it should be doing anyway.

    Brazil was, it should be noted, given permission from the WTO to suspend intellectual property rights protections as a form of retaliation, a new but increasingly attractive way of exacting retribution, but only after a certain amount of damages had been collected the usual way.

  • Thursday Links

    • Cato’s David Rittgers debates troop build up in Afghanistan.

    Due Process Case to be Decided on Procedural Grounds

    Yesterday I went to the Supreme Court to watch the argument in Alvarez v. Smith, a case about civil forfeiture in which Cato filed an amicus brief

    Civil forfeiture, the practice in which the police seize cars, money and other kinds of property that they say has some connection to crime, can raise various of legal and policy issues – from property rights to due process.  The question in Alvarez is the basic one of whether people seeking to get their property back are entitled to a prompt hearing before a judge. 

    Illinois’ forfeiture law allows the State to wait as long as six months before having to prove the legitimacy of the seizure, which proceeding may then be delayed indefinitely for “good cause.” The six plaintiffs in Alvarez — three of whom were never charged with a crime — had their cars or money seized without a warrant for months or years without any judicial hearing, and sued the state and city authorities for violating their rights to due process. The Seventh Circuit found the Illinois law to be unconstitutional because of the delay between the seizure and the forfeiture proceeding and ruled that the plaintiffs must be afforded an informal hearing to determine whether there is probable cause to detain the property. The Supreme Court agreed to review the case at the request of the Cook County State Attorney.

    Cato’s brief, joined by the Goldwater Institute and Reason Foundation, supports the individuals whose property was seized. Written by David B. Smith, who previously supervised all forfeiture litigation for the Department of Justice and is now the nation’s leading authority on civil and criminal forfeiture, the brief makes three arguments: 1) Because the Illinois law, unlike the federal Civil Asset Forfeiture Reform Act of 2000, is stacked in favor of law enforcement agencies and lacks protections for innocent property owners, the Court should apply the due process analysis from Mathews v. Eldridge, rather than the more lenient test the State proposes; 2) What has become known as a Krimstock hearing has proven to be an effective and not overly burdensome means of preventing government delay and a meaningful opportunity to contest seizure; and 3) the State’s comparison of the time limits in CAFRA with those in its own law is misleading.

    Unfortunately, though some justices appeared at argument inclined to rule that at least some prompt process was due – many other states require that the police quickly come before a judge to make a showing equivalent to the one necessary to get a search warrant – several seemed to want to avoid the due process question for another day because Alvarez was procedurally flawed, so to speak.  That is, Justice Scalia pointed that none of the six plaintiffs have a live claim any more – three have had their cars returned, two defaulted on their claims, and the State reached agreement with one – so the case was “moot.”  And Justice Stevens noted that the appellate court left it to the trial court to determine the details of the hearing to which the plaintiffs were entitled.  (Of course, if the latter “problem” ends up being the key to the case, the Court will simply dismiss the appeal and let the Seventh Circuit’s ruling stand, which is good news – but only for people in Illinois, Indiana, and Wisconsin.)

    For more on the case, see George Mason law professor and Cato adjunct scholar Ilya Somin’s oped, and his related blog post at the Volokh Conspiracy.

    A New Court Term: Big Cases, Questions About the New Justice

    Today is the first Monday in October, and so is First Monday, the traditional start of the Supreme Court term.  The Court already heard one argument – in the Citizens United campaign finance case – but it had been carried over from last year, so it doesn’t really count.

    In any event, continuing its trend from last term, the Court has further front-loaded its caseload – with nearly 60 arguments on its docket already.  Fortunately, unlike last year, we’ll see many blockbuster cases, including:

    • the application of the Second Amendment to state gun regulations;
    • First Amendment challenges to national park monuments and a statute criminalizing the depiction of animal cruelty;
    • an Eighth Amendment challenge to life sentences for juveniles; a potential revisiting of Miranda rights;
    • federalism concerns over legislation regarding the civil commitment of “sexually dangerous” persons;
    • a separation-of-powers dispute concerning the agency enforcing Sarbanes-Oxley;
    • judicial takings of beachfront property; and
    • notably in these times of increasing government control over the economy, the “reasonableness” of mutual fund managers’ compensation.

    Cato has filed amicus briefs in many of these cases, so I will be paying extra-close attention.

    Perhaps more importantly, we also have a new justice – and, as Justice White often said, a new justice makes a new Court.  While Sonia Sotomayor’s confirmation was never in any serious doubt, she faced strong criticism on issues ranging from property rights and the use of foreign law in constitutional interpretation to the Ricci firefighters case and the “wise Latina” speeches that led people to question her commitment to judicial objectivity.  Only time will tell what kind of justice Sotomayor will be now that she is unfettered from higher court precedent – and the first term is not necessarily indicative.

    Key questions for the new Court’s dynamics are whether Sotomayor will challenge Justice Scalia intellectually and whether she will antagonize Justice Kennedy and thus push him to the right.  We’ve already seen her make waves at the Citizens United reargument – questioning the scope of corporations’ constitutional rights – so it could be that she will decline to follow Justice Alito’s example and jump right into the Court’s rhetorical battles.

    In short, it’s the first day of school and I’m excited.

    Sixty Years On, China Has Prosperity, Still Needs Freedom

    China’s rise from an isolated state-controlled economy in 1949 to the world’s third largest economy with a vibrant nonstate sector is something to celebrate on the 60th anniversary of the founding of the People’s Republic of China.

    Under Deng Xiaoping, China’s transition from plan to market began in earnest in December 1978. For more than 30 years now, China has gradually removed barriers to a market system and increased opportunities for voluntary exchanges. Special economic zones, the end of communal farming, the rise of township and village enterprises, and the massive increase in foreign trade have enabled millions of people to lift themselves out of abject poverty.

    Economic freedom has increased personal freedom, but the Chinese Communist Party has no intention of giving up its monopoly on power. China’s future will depend to a large extent on the path of political reform. Further strengthening of private property rights, including land rights, would create new wealth and a growing voice for limiting the power of government. It is doubtful that in another 60 years there will be single-party rule in China.

    Washington Legal Foundation Opposes GBS Deal

    Via James Grimmelmann, the Washington Legal Foundation, a group known for its defense of property rights, filed an objection to the Google book deal earlier this month focusing on concerns related to those I raised in my posts earlier this week.

    WLF points out that the Supreme Court has mandated that plaintiffs seeking to certify a class must make a diligent effort to notify all affected class members. According to the high court’s Shutts decision, this effort must include—at a minimum—sending a letter to every identifiable member of the class. In this case, this would mean sending a letter to every address in the US Copyright Office’s database of authors. WLF questions whether this was done; the foundation reports that it never received notification related to any of the books for which it holds the copyrights.

    Now, it might be objected that this process would be prohibitively expensive. But if the class is so large that it’s impractical to notify all of its members, then the class is certainly too large to expect a judge to verify that the interests of all class members is being served by the settlement. If the class is too large to notify, then it’s too large to certify.

    WLF also points out that the sprawling and heterogeneous class of plaintiffs makes it unlikely that the plaintiffs’ lawyers can fairly represent all parties who would be bound by the settlement:

    For example, only those class members whose works have already been copied by Google are entitled to cash payments under the Settlement Agreement. Thus, the financial interests of those whose works have been copied diverge from the interests of class members whose works have not been copied. The former have an interest in maximizing cash payments, while the latter would prefer to see a smaller portion of the settlement pot allocated to those cash payments and a larger portion allocated to compensation for copying to be performed by Google in the future.

    Another distinction among class members involves orphan works – that is, works whose owners are difficult (if not impossible) to ascertain. The owners of orphan works (who may not even know that they hold any ownership interests) have an obvious interest in ensuring that a large portion of settlement funds is dedicated to identifying the ownership of orphan works. On the other hand, the owners of works whose ownership is readily identifiable have an interest in holding down such search costs. If less money is devoted to such search efforts, a correspondingly greater percentage of settlement funds will be available to provide compensation
    to them.

    The point here isn’t that the amount allocated to orphan works searches is too high (or too low), or that more (or less) should be allocated to pay for previously-scanned books. The point is that a settlement involving millions of plaintiffs will inevitably enrich some plaintiffs at the expense of others. This isn’t a problem that can be solved by changing the details of the settlement. It’s a problem that can only be solved by limiting the scope of the settlement to parties whose interests are actually represented by the plaintiffs’ attorneys.