One of the purposes of the Fifth Amendment is to protect private property from usurpation by government, declaring “nor shall private property be taken for public use, without just compensation.” Under the law of eminent domain, the state can compel a property owner to sell his property to the government, but is required to justly compensate him for the loss. However, there are other ways in which the state can usurp private property rights without actually taking title to the property. When the state imposes regulations that deprive a citizen of the rights associated with private ownership of some or all of his property, it’s known as a “regulatory taking.”
In 1992, the U.S. Supreme Court found (Lucas v. South Carolina Coastal Council) that the state is only required to provide just compensation under the Fifth Amendment for regulatory takings when the regulations deprive the owner of “all economically beneficial uses of the property.” That means the state can legally deprive a property owner of over 90% of the value of his property without owing any compensation. The “categorical rule,” as this has come to be known, is a boon for any state desiring to usurp control of private land without the burden of having to compensate the lawful owners.
Rarely can it be demonstrably proven that a property has been rendered devoid of all economic value. Nevertheless, in those rare cases where that actually can be proven, the U.S. Supreme Court has granted the states yet another loophole to exempt them from having to compensate property owners for their loss. The Court ruled that, even if the regulations imposed deprive the property owner of all economically beneficial use of the property, the state is not required to provide compensation if the regulatory restrictions can be justified by “background principles of nuisance or property law.”
Under common law, nuisance is understood to be an activity or condition that unreasonably interferes with the right of other property owners to the “quiet enjoyment” of their property, or interferes with public health or safety. However, the reference to “background principles of property law” is much more ambiguous, as these background principles vary from state to state. Each state defines its own property law, and the “background principles” are often implicit assumptions that have never been explicitly spelled out until they’re claimed by the state, challenged, and settled in court. Then they become established law.
One of these background principles is the “public trust,” which we discussed at length in Private Property vs. Public Trust. Between the categorical rule and the blanket exemption for background principles of state property law, the Supreme Court has begotten a brave new form of eminent domain that enables the states to completely bypass the just compensation protection set forth by our founding fathers in the Fifth Amendment. Some states, like Oregon, are taking full advantage of that, quietly and methodically working on a number of different fronts to lay a strategic foundation of “background principles” that expand their legal bases for usurping control of private land.
What sort of long-term agenda might a state have for establishing a legal framework for unprecedented regulatory takings without compensation? The answer may lie in the influence of the rich and powerful environmental lobbies, whose agenda is to prevent as much development, timber harvesting, mining, or any exploitation of natural resources as they possibly can. Some people think that’s a good thing. But, apparently, not enough to achieve the goals of the environmental lobby without establishing government control of any resource in which they have an environmental interest. Some people are OK with that. After all, the government must know what’s best for the people, and will always act in their best interest. Therefore, it stands to reason that the government should own all natural resources (including land, air, and water) and/or control how they’re used.
The concept of government versus private control is at the core of the ideological conflict between Marxism and capitalism. Private property is a fundamentally capitalistic concept, and that is what is under attack. So, the next time you hear about some new land grab by the state, and you think it’s somebody else’s issue because it doesn’t directly affect you, consider that there’s more at stake in this game than just land.
Government is Not Your Daddy 