The Kelo Amendment -- Pandora's Box
Kelo v. City of New London, (No. 04-108, June 23, 2005), upheld the exercise of the power of emininent domain to take private property for redevelopment. The Court construed the Fifth Amendment, which allows government takings for "public use," to permit private use and development of the property taken if it serves a public purpose.
Cato Institute Associate Scholar and Chapman University Law School Professor, Tom W. Bell proposes the "Kelo Amendment" to "correct the holding" of Kelo:
Bell describes "the common law definition of an interest in property" as "a notion sufficiently broad to cover ownership in fee simple and a leasehold estate (among other forms of ownership)." Sufficiently broad? Hell, next to "an interest in property," drawing the contours of "commerce ... among the several states" looks like a piece of cake. "The common law definition of an interest in property" covers a lot of ground; it varies from state to state.
Which sticks qualify as property for purposes of the 28th Amendment must also be a federal question.
If we're not going to let quaint quirks of state property law -- like joint tenancy by the entirety -- frustrate the taking of private property to sell at public auction for some fraction of its value in aid of federal tax collection, then we sure can't have the 28th Amendment defeated by state property laws that allow the taking of private property for "just compensation" in aid of economic redevelopment.
It bears noting here that Linda Davis, a real estate broker with 28 years experience in southern Connecticut, including the New London area, advises that "Susette Kelo bought her house in 1997 for $56,000," and "was offered $123,000 in late 2000." According to Davis, "this was an extremely fair offer - a very very generous offer. She would never have received that price if the house was listed." Kelo lost and may have to settle for a 100% return over three years (actually, if you figure a 10% down payment the return was closer to 2000%). Let's back it up and replay it under the 28th Amendment. Possible outcomes:
1. The redevelopment project is strangled in its crib because the government needs a global settlement with all the property owners, and one of them won't settle for double the value of her property, and the government can't afford to triple it.
2. The government takes the property subject to the 28th Amendment, and the development of the still unwritten federal common law of property. Let's assume the Kelo Amendment is enforceable and Kelo and her neighbors have standing to demand injunctive relief or rescission -- in either case, for all practical purposes, a big fat settlement.
We have work to do; we need a federal common of property; and let us not forget: "It is a constitution we are expounding" -- not some federal tax law.
Plainly, the construction of a new riverfront baseball stadium for the Washington Nationals could be halted by a single homeowner who wants $30 million for his quarter acre -- unless the city owned the stadium, collected the gate, ran the hotdog stands, hired the beer vendors, and paid the team to play, instead of leasing the stadium to the team. Hey, no problem. If they can run a Metro system... well, as long as we build a stadium without escalators we should be fine. But under federal common law, could the city lease sky-boxes, or even sell season tickets, and would either of those be transferable by sale or devise? Orioles owner Peter Angelos got the Nationals' broadcast rights in return for agreeing to let the Nationals move in next door to Baltimore, but how much is that worth if he can't deliver exclusive use of the broadcast booth? Hey Tom, the D.C. Corporation Counsel is on the phone -- he wants to know if they can sell the naming rights for the stadium.
Will the federal common law prohibit the use of debt financing subject to a security interest "obtained" by the lender to pay for the taking and the construction of a public facility. Can the general contractor "obtain" a mechanics lien under federal common law if the government doesn't pay his bill?
Would federal common law prohibit the sale of landing rights and lease of hangar facilities to Southwest Airlines at a municipal airport? How about the lease of retail space to Starbucks at the same airport.
The federal Randolph-Sheppard Act (20 U.S.C. 107) was enacted in 1936 to give preference to blind persons for operating vending stands on federally controlled property. Several states have "mini-" R-S Acts. Are they all unconstitutional as applied to public facilities built on property taken by eminent domain? Can anyone operate a concession in the first floor lobby of city hall, or does the city have to own and operate its own Kinko's franchise?
Can cities license newspaper stands on public sidewalks along roads built on property taken by eminent domain?
You have to figure that the courts will hold that the right to park for an hour if you put four quarters in the meter is not an "interest in property," but I bet it gets to the Court of Appeals before the Supreme Court denies cert.
This one gets to the Supreme Court: Can cities grant franchises to cable companies, allowing them to use the public right-of-way to bury their cable in return for 5% of gross revenues; or is Title VI of the Communications Act, which requires them to provide PROW access to cable companies, unconstitutional as applied to PROW acquired by eminent domain. After considering some comments, Tom amended his amendment to exempt property interests obtained by common carriers "on grounds that common carrier doctrine ensures that the public retains non-discriminatory access to the private property so taken." The FCC is going to have to revisit its decision, upheld in Brand X just four days after Kelo, that cable modem service is not a common carrier service.
If the government acquires property subject to a state common law easement by necessity, allowing access to otherwise inaccessible adjacent property, the easement survives the Kelo Amendment because the neighbor didn't "obtain" it after the taking; but could a subsequent purchaser of the neighbor's property "obtain" the easement that runs with the neighbor's property?
Can Congress define "an interest in property" (under the Commerce Clause?) to exclude an exclusive right to use or occupy public property for particular purposes (let's say coffee shops and shoe-shine stands and cable franchises), or is "an interest in property" necessarily a question of constitutional construction and judicial invention of federal common law?
Cato Institute Associate Scholar and Chapman University Law School Professor, Tom W. Bell proposes the "Kelo Amendment" to "correct the holding" of Kelo:
Amendment XXVIII: No taking of private property shall qualify as "for public use" under Amendment V if another private party obtains an interest in the property within twenty years of its taking.
Bell describes "the common law definition of an interest in property" as "a notion sufficiently broad to cover ownership in fee simple and a leasehold estate (among other forms of ownership)." Sufficiently broad? Hell, next to "an interest in property," drawing the contours of "commerce ... among the several states" looks like a piece of cake. "The common law definition of an interest in property" covers a lot of ground; it varies from state to state.
"A common idiom describes property as a 'bundle of sticks'--a collection of individual rights which, in certain combinations, constitute property. ... State law determines only which sticks are in a person's bundle. Whether those sticks qualify as "property" for purposes of the federal tax lien statute is a question of federal law." U.S. v. Craft, 535 US 274, 278 (2002).
Which sticks qualify as property for purposes of the 28th Amendment must also be a federal question.
"By erasing the careful line between state laws that purport to disclaim or exempt property interests after the fact, which the federal tax lien does not respect, and state laws' definition of property and property rights, which the federal tax lien does respect, the Court ... creates a new federal common law of property." Id., at 294 (Thomas, J. dissenting)
If we're not going to let quaint quirks of state property law -- like joint tenancy by the entirety -- frustrate the taking of private property to sell at public auction for some fraction of its value in aid of federal tax collection, then we sure can't have the 28th Amendment defeated by state property laws that allow the taking of private property for "just compensation" in aid of economic redevelopment.
It bears noting here that Linda Davis, a real estate broker with 28 years experience in southern Connecticut, including the New London area, advises that "Susette Kelo bought her house in 1997 for $56,000," and "was offered $123,000 in late 2000." According to Davis, "this was an extremely fair offer - a very very generous offer. She would never have received that price if the house was listed." Kelo lost and may have to settle for a 100% return over three years (actually, if you figure a 10% down payment the return was closer to 2000%). Let's back it up and replay it under the 28th Amendment. Possible outcomes:
1. The redevelopment project is strangled in its crib because the government needs a global settlement with all the property owners, and one of them won't settle for double the value of her property, and the government can't afford to triple it.
2. The government takes the property subject to the 28th Amendment, and the development of the still unwritten federal common law of property. Let's assume the Kelo Amendment is enforceable and Kelo and her neighbors have standing to demand injunctive relief or rescission -- in either case, for all practical purposes, a big fat settlement.
We have work to do; we need a federal common of property; and let us not forget: "It is a constitution we are expounding" -- not some federal tax law.
Plainly, the construction of a new riverfront baseball stadium for the Washington Nationals could be halted by a single homeowner who wants $30 million for his quarter acre -- unless the city owned the stadium, collected the gate, ran the hotdog stands, hired the beer vendors, and paid the team to play, instead of leasing the stadium to the team. Hey, no problem. If they can run a Metro system... well, as long as we build a stadium without escalators we should be fine. But under federal common law, could the city lease sky-boxes, or even sell season tickets, and would either of those be transferable by sale or devise? Orioles owner Peter Angelos got the Nationals' broadcast rights in return for agreeing to let the Nationals move in next door to Baltimore, but how much is that worth if he can't deliver exclusive use of the broadcast booth? Hey Tom, the D.C. Corporation Counsel is on the phone -- he wants to know if they can sell the naming rights for the stadium.
Will the federal common law prohibit the use of debt financing subject to a security interest "obtained" by the lender to pay for the taking and the construction of a public facility. Can the general contractor "obtain" a mechanics lien under federal common law if the government doesn't pay his bill?
Would federal common law prohibit the sale of landing rights and lease of hangar facilities to Southwest Airlines at a municipal airport? How about the lease of retail space to Starbucks at the same airport.
The federal Randolph-Sheppard Act (20 U.S.C. 107) was enacted in 1936 to give preference to blind persons for operating vending stands on federally controlled property. Several states have "mini-" R-S Acts. Are they all unconstitutional as applied to public facilities built on property taken by eminent domain? Can anyone operate a concession in the first floor lobby of city hall, or does the city have to own and operate its own Kinko's franchise?
Can cities license newspaper stands on public sidewalks along roads built on property taken by eminent domain?
You have to figure that the courts will hold that the right to park for an hour if you put four quarters in the meter is not an "interest in property," but I bet it gets to the Court of Appeals before the Supreme Court denies cert.
This one gets to the Supreme Court: Can cities grant franchises to cable companies, allowing them to use the public right-of-way to bury their cable in return for 5% of gross revenues; or is Title VI of the Communications Act, which requires them to provide PROW access to cable companies, unconstitutional as applied to PROW acquired by eminent domain. After considering some comments, Tom amended his amendment to exempt property interests obtained by common carriers "on grounds that common carrier doctrine ensures that the public retains non-discriminatory access to the private property so taken." The FCC is going to have to revisit its decision, upheld in Brand X just four days after Kelo, that cable modem service is not a common carrier service.
If the government acquires property subject to a state common law easement by necessity, allowing access to otherwise inaccessible adjacent property, the easement survives the Kelo Amendment because the neighbor didn't "obtain" it after the taking; but could a subsequent purchaser of the neighbor's property "obtain" the easement that runs with the neighbor's property?
Can Congress define "an interest in property" (under the Commerce Clause?) to exclude an exclusive right to use or occupy public property for particular purposes (let's say coffee shops and shoe-shine stands and cable franchises), or is "an interest in property" necessarily a question of constitutional construction and judicial invention of federal common law?
posted by John Noble at 12:55 PM
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