Constitutional Law Foundations 7 - Takings Clause
Takings Clause
Overview
The Takings Clause is found in the Fifth Amendment of the U.S. Constitution: "nor shall private property be taken for public use, without just compensation."
It restricts the government's power to take private property.
The Takings Clause is a limitation on the government's power, not a source of power.
Eminent domain is a common law doctrine that gives the government the power to take private property.
The Fourteenth Amendment applies the Takings Clause to state and local governments.
Three Big Questions for Takings Issues
Is there a taking of private property?
Is it for public use?
Was just compensation paid?
Is There a Taking of Private Property?
Property Definition:
Includes real property (land).
Includes personal property (e.g., tumblers, retirement savings accounts).
Includes intangible property (e.g., patents).
Categories of Takings:
Actual or Possessory Takings:
The government physically takes or occupies property.
Applies even to small amounts of property.
A taking can occur even if the government transfers the property to another private party.
Regulatory Takings:
Restrictions on the use of property.
If a regulation denies a landowner all economically viable use of their land, it's a taking.
Regulations that merely decrease the value of property are generally not takings if they leave an economically viable use for the property.
***Balancing Test for Regulations That Decrease Value:
Used when a regulation nearly decreases the economic value of land but doesn't leave it worthless.
Three factors considered:
Interests at issue (e.g. preserving history).
The economic impact on the owner.
Whether the regulation substantially interferes with the owner's distinct investment backed expectations.
Focus on specific plans backed by actual funds, not speculative dreams.
Example Scenario (Gina and the Inn):
Gina buys land to build a restaurant but is prevented from tearing down an old inn due to historical preservation.
Analysis:
Government interests: Preserving history is important.
Economic impact: Gina needs to demonstrate a significant reduction in land value.
Investment-backed expectations: Gina has a stronger case if she had specific plans and invested based on those expectations.
Is it for Public Use?
A taking is for public use if the government acts out of a reasonable belief that the taking will benefit the public.
The public use requirement is liberally construed.
The taking must be rationally related to a legitimate public purpose.
Examples:
Condemning dangerous building near a school after kids were found playing there? Public safety. Public use.
Seizing a hideous bright orange building on Main Street to replace it with something that better fits the town's vibe? Aesthetics count. Public use.
Taking private property to revitalize a struggling area is considered a public use.
Taking property just for the mayor's personal view is not a public use.
Was Just Compensation Paid?
The government must pay just compensation when it takes private property.
Typically, just compensation is the property's fair market value at the time of the taking.
Just compensation is measured in terms of the loss to the owner, not the gain to the taker.