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EXECUTIVE
SUMMARY
Working most effectively through a pair of little-known federal
courts, conservative and libertarian legal activists have
run a highly successful 15-year campaign to overthrow two
centuries of legal precedent interpreting the Fifth Amendment's
"Takings Clause." From the outset, this campaign
has been expressly intended to prevent local, state and federal
governments from enforcing land use and environmental laws
by completely upending the long-standing body of case law
that balanced the rights of owners with those of the community.
The history of this campaign, the "Takings Project"
(borrowing a term coined by President Reagan's Solicitor General
Charles Fried), is outlined for the first time in this Report.
It starts with the creation of the Court of Federal Claims
and Federal Circuit Court of Appeals by the Reagan Administration.
The two courts, through which nearly all federal takings cases
must pass, were packed with the highest concentration of ideological
loyalists of any federal bench. With the simultaneous placement
of conservative activist justices such as Antonin Scalia on
the Supreme Court, the stage was set for a successful constitutional
litigation campaign to reinterpret the Takings Clause.
Onto this stage has stepped a group of conservative benefactors
- most notably Richard Mellon Scaife, President of both the
Sarah Scaife and Carthage Foundations, and William Simon,
President of the Olin Foundation - whose money has fueled
an intensive program to further takings cases. These benefactors
have maintained a nationwide network of non-profit law firms
to do the litigation work at the same time they are paying
for all-expenses-paid seminars in resort locations for federal
judges, including the authors of every important Federal Circuit
opinion that expands the rights of developers.
The campaign has been startlingly effective. In a series
of watershed rulings, the Court of Federal Claims and the
Federal Circuit have ignored procedural rules and made significant
leaps in the face of precedent to upend the prevailing interpretation
of the Takings Clause. In some cases, the findings conflict
even with recent rulings by the Supreme Court - where the
justices have so far confined important takings rulings to
relatively narrow legal grounds - setting the stage for an
important showdown.
Meanwhile, Congress is moving to consolidate the authority
of these two courts by advancing legislation that would allow
developers to bypass their local courts in favor of these
activist judges. Ironically, the charge is being led by Utah
Senator Orrin Hatch, the most vocal Congressional opponent
of judicial activism. The House passed its version of the
bill (H.R. 992) on March 12th; a nearly identical measure
awaits floor action in the Senate after clearing the Judiciary
Committee on February 26th.
While the political roots of the Takings Project run deep,
its legal and scholarly foundation is tenuous at best. The
novel interpretation behind the Takings Project conflicts
with the Framers' plain language, the Framers' intent and
a well-developed, 190-year body of Supreme Court rulings.
In its entirety, the Takings Clause reads: "nor shall
private property be taken for public use, without just compensation."
Until the 1980's, the Supreme Court's interpretation of the
clause was governed by three simple, long-standing rules.
First, government actions that physically expropriated property
from owners always required compensation; regulatory
impositions rarely did, and then only if their character
and impact were so severe as to be akin to a physical expropriation.
Finally, the Court gave governments broad latitude to regulate
under a "nuisance" exemption; these rules protecting
community health and safety could never be considered "regulatory
takings."
In the landmark 1978 case, Penn Central Transportation
Co. v. City of New York, the Supreme Court set forth a
balancing test for "regulatory takings" that considered
the economic impact of a regulation, its interference with
"distinct investment-backed expectations," and the
character of the government action. Under the test, no factor
alone was determinative, and most regulations were permitted
without compensation so long as they served the common good
and did not completely destroy the value of a parcel of property.
While not always simple to apply, the Penn Central test
hewed to the text and original meaning of the clause. The
opposite is true of the approach advocated by the Takings
Project. According to Richard Epstein, the Project's leading
theorist, virtually any government limit on land use is a
taking that must be compensated "no matter how small
the alteration and no matter how general its application."
Epstein himself notes enthusiastically that his interpretation
of the Takings Clause renders "constitutionally infirm
or suspect many of the heralded reforms and institutions of
the twentieth century zoning, rent control, workers' compensation
laws, transfer payments [and] progressive taxation."
Epstein's extreme theory was rejected by legal scholars on
both the left and the right. But thanks to aggressive cultivation
by Takings Project participants, it lives on and is quietly
but surely starting to thwart community and environmental
protections.
To CHAPTER 1:Introduction
To Table of Contents for The
Takings Project: Using Federal Courts
To Attack Community and Environmental Protections
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