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Friday, August 23, 2013

The Supreme Court Rediscovers Property Rights: Six Recent Decisions

Robert Meltz
Legislative Attorney

In 2010, the Supreme Court ended a five-year period when it accepted no property rights cases, granting certiorari in no less than six such cases between 2010 and 2012. This large number of cases suggests a renewed interest by the Court in property rights, and particularly in the Fifth Amendment Takings Clause at issue in four of the cases. The Takings Clause is the Constitution’s principal protection of property rights, promising just compensation when property rights are “taken” by government for a “public use.”

The first case, decided in 2010, was Stop the Beach Renourishment, Inc. v. Florida Dep’t of Environmental Protection. There, a four-Justice plurality endorsed the idea that courts, just as other branches of government, could be subject to takings liability. This question of “judicial takings” often arises when courts articulate new principles of common law that extinguish existing property rights.

The next two cases were decided during the Court’s 2011-2012 term. In PPL Montana LLC v. Montana, the Court fleshed out its test for “title navigability”—important because title to only streambeds under “navigable” waters passes to a state upon its admission to the Union. In Sackett v. Environmental Protection Agency, enforcement of the wetlands permitting program in the Clean Water Act was at issue. The holding was that when property owners receive an order from the Environmental Protection Agency (EPA) under the act, they have a right to “pre-enforcement review”—that is, a right to judicially challenge the order right away, before EPA seeks to enforce it and impose potentially large penalties. The number of other federal programs that, due to this decision, must now afford pre-enforcement review of agency orders is unclear.

Finally, the Court decided three takings cases during its 2012-2013 term. In Arkansas Game & Fish Comm’n v. United States, the Court jettisoned its long-standing rule that when a government project induces flooding of private property, only flooding that is continual or at least “intermittent but inevitably recurring” can result in takings liability. Temporary flooding, the Court now says, may also subject the government to such liability. In Horne v. Dep’t of Agriculture, the Court held that penalties imposed under a Depression-era statute for the support of agricultural commodity prices may be challenged on the ground that they punish a person’s refusal to accede to an unconstitutional taking. Broad issues radiate from this narrow ruling— such as the availability of takings defenses in enforcement actions generally when the compensation remedy has been withdrawn. In Koontz v. St. Johns River Water Management District, the Court addressed its previously announced test for when exaction conditions on landdevelopment permits constitute takings. The Court clarified that this test—viewed as more favorable to property owners than the alternative—applies even when the landowner refuses the exaction conditions imposed and, as a result, the permit is denied. It also covers not only landdedication exactions, the context in which the test was originally articulated, but purely monetary exactions as well.

Typically, one can only speculate why the Supreme Court takes a case; the Court’s reasons generally are not easily discerned. Still, an informed guess can be made that the six cases discussed in this report point to a reawakened interest by the Court in property rights. In all six cases, the decision below had been against the property owner, suggesting that the Justices (or some of them) are looking anew for circumstances where property rights are unfairly burdened. And indeed, in five of the six decisions rendered by the Court, the private property owners were vindicated. Decisions yet to be rendered on remand, however, may not necessarily go their way.

Date of Report: August 6, 2013
Number of Pages: 20
Order Number: R43005
Price: $29.95

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