pattern for the United States." Because the value of the property can be diminished by governmental action short of actual seizure, Madison's reference to indirect infringement indicates a generous understanding of the taking clause to encompass more than just the physical takings of property.20 Madison recognized that lawmakers might be tempted to achieve indirectly, by regulating private owners, a result that would require compensation if accomplished directly by formal acquisition. Such a step would represent a transparent end run around the constitutional protection of property owners embedded in the Fifth Amendment. CONCLUSION The most vexing problem in modern takings jurisprudence is whether governmental actions, short of formal condemnation or physical intrusion, effectuate a taking for which compensation is required. Commentators of all persuasions concur that current taking analysis is confusing. The Supreme Court has contributed to this muddle by handling takings cases in an essentially ad hoc manner. The justices have found it difficult to formulate meaningful standards to determine whether there has been a regulatory taking. As a result, there are few clear guidelines for property owners or regulators. To be sure, there have been several important Supreme Court cases in recent years which have sought to clarify the parameters of takings law and to put some teeth into the takings clause.21 However, there is clearly room for improvement. Against this background of judicial uncertainty, a legislative response seems appropriate. The proposed Private Property Rights Act offers several advantages: (1) to provide a degree of certainty and consistency in the application of takings doctrine by establishing a legislative definition of what governmental actions amount to a compensable taking; (2) to ensure that the burdens of public policy are spread equally and not unfairly heaped on individual property owners; (3) to cause governmental officials to weigh more carefully actions that infringe the use of private property; (4) to enhance democratic accountability since government officials would now be compelled to address openly the financial cost of land use controls rather than disguise the cost through regulations. Moreover, the proposed law is fully congruent with the values implicit in the takings clause and the vision of the framers of the Constitution. This proposal strengthens the vital place of private property in our constitutional polity and extends protection to individual owners who have scant realistic chance to gain redress through the political process. I hope that you will give the proposed law serious consideration. Mr. CANADY. Thank you, Professor. Next, Professor Byrne. STATEMENT OF J. PETER BYRNE, PROFESSOR OF LAW, Mr. BYRNE. Thank you for requesting my views today. I want to direct my remarks at title IX of H.R. 9, and in particular at the broad principle that the bill embodies; namely, that a property owner should receive compensation for any nonnegligible reduction in the market value of his property caused by otherwise lawful final agency action. In brief, I believe that it would be difficult to denounce H.R. 9 with sufficient vehemence. It is profoundly stupid and deeply cynical. American law is based on a wide respect for property rights. Our property law both enhances the efficiency of our economy and pro 20 "Property" in Robert A. Rutland and Thomas A. Mason, eds., The Papers of James Madison, vol. 14 (Charlottesville, Va., 1983), 266-268. 20 E.g., Nollan v. California Coastal Commission, 483 U.S. 825 (1987); Lucas v. South Carolina Coastal Council, 112 Sup. Ct. 2886 (1992); Dolan v. City of Tigard, 114 Sup. Ct. 2309 (1994). For a discussion of the judicial move to infuse vitality into the takings clause see James W. Ely, Jr., "The Enigmatic Place of Property Rights in Modern Constitutional Thought," in David J. Bodenhamer and James W. Ely, Jr., eds., The Bill of Rights in Modern America: After 200 Years (Bloomington, 1993), 87, 92–99. vides property owners with a secure basis for personal security and autonomy. The fifth amendment had long been a symbol of the respect afforded private property by all branches of the Federal Government. But property law necessarily limits an owner's rights in order to preserve the rights of neighboring owners, visitors, and the general public. Just as property law doesn't give owners the right to use their property to injure the interests of others, so the fifth amendment does not prohibit or condition the reasonable regulation of property rights to protect the public health, safety, and welfare. These principles lie deep in our legal tradition. H.R. 9 would destroy them. It would guarantee owners the dollar value of antisocial property uses against otherwise lawful efforts of the Federal Government to protect the public health and safety and the property rights of neighbors. One could best understand the radical and destructive nature of H.R. 9 by contrasting it with what the Constitution actually provides. Recall that for the first 130 years of the Republic, Federal courts consistently rejected arguments that the fifth amendment required compensation for any losses in property values caused by regulation. This is not surprising as the fifth amendment says nothing about regulation, but mandates compensation in terms only for taking understood at the time, and for 130 years, to mean only expropriation or permanent physical occupation. The Supreme Court accepted the proposition that regulation could work a taking only in 1922 in the case of Pennsylvania Coal v. Mahon. Two facts stand out about that case. First, the Court insisted that each case must be decided on its own particular facts. As Justice Holmes stated, "government can hardly go on if to some extent if values incident to property could not be diminished without paying for every such change in the general law." By contrast, compensation arguably would be due under H.R. 9 whenever a Federal agency restrained any use of land no matter how noxious. In these circumstances, government couldn't hardly go on, but that, of course, is the purpose of H.R. 9. The regulatory takings doctrine the Supreme Court has developed is nuanced and fact-specific. In my testimony I go on and discuss the various factors in the constitutional analysis and show the fact, as the gentleman from the Justice Department said, that they are not followed in H.R. 9 in any sense. Professor Ely said that there is a confused state of current takings law. I want to suggest that it is confused because it reflects the real tensions in our society between the desire to accommodate reasonable regulations and the desire to protect private rights. The proposed bill in no way enhances constitutional rights. It effects a radical new departure in the concept of property rights. The rights are shorn of responsibilities. The victim must pay the polluter not to harm her. Accommodation of conflicting uses is precluded. Government is disabled. The very existence of the community and the public interest is denied. The argument will be advanced that I have overstated the effect of H.R. 9 by ignoring its qualifications that compensation will not be given unless the property use is otherwise lawful. Presumably, this phrase refers to ancient common law of nuisance and we know it applies, as well, to other State zoning ordinances. But the body of nuisance law provides wholly inadequate protection for the public health and safety and would constitute a bizarre outward limit on land use regulation that the Federal Government may impose without paying compensation. Nuisance is a confused and stunted area of law. Dean Prosser commented that "there is no more impenetrable jungle in the law than that which surrounds the word, 'nuisance."" Second, America's early turned to legislation and regulation because nuisance was so woefully inadequate in an industrial economy. When the Congress began to enact public health, civil rights, and environmental laws, no one claimed that the common law was adequate to deal with such complex problems. Finally, employing nuisance as a touchstone inappropriately inverts the role of the State courts over elected Federal officials in accommodating the various interests of the American people. Congress will have numerous occasions to debate the goals of environmental laws. There is a lot of room for improvement. But H.R. 9 in itself is a contemptible attempt to avoid the very debate about specific bills by pretending to enforce the Constitution while frustrating the Constitution's commitment of the resolution of disputes about land use and other social issues to people acting through their elected representatives. Rejection of this poorly conceived bill may help prepare Congress for a more mature consideration of complex national issues. [The prepared statement of Mr. Byrne follows:] PREPARED STATEMENT OF J. PETER BYRNE, PROFESSOR OF LAW, GEORGETOWN UNIVERSITY LAW CENTER Thank you for requesting my views on legislative proposals to enhance protection against unconstitutional invasions of property rights. I will direct my remarks at Title IX of H.R. 9, as the principal vehicle proposed for protecting private property rights. It is important to address the broad principle that the bill embodies, namely, that a property owner should receive compensation for any non-negligible reduction in the market value of his property caused by otherwise lawful, final federal agency action. I offer these remarks as a law professor who has taught Property and Land Use for several years and given extensive thought to the constitutional relation between public regulation and private ownership of land. In brief, I believe that it would be difficult to denounce H.R. 9 with sufficient vehemence. It is profoundly stupid and deeply cynical. American law is based on a wide respect for property rights. our property law both enhances the efficiency of our economy and provides property owners with a secure basis for personal security and autonomy. The Fifth Amendment has long been a symbol of the respect afforded private property by all branches of the federal government. But property law necessarily limits an owner's rights in order to preserve the rights of neighboring owners, visitors, and the general public. Just as property law does not give owners a right to use their property to injure the interests of neighbors, tenants, and others, so the Fifth Amendment does not prohibit or condition the reasonable regulation of property rights to protect the public health, safety and welfare. These principles lie deep in our legal tradition. H.R. 9 would destroy them. It would guarantee owners the dollar value of anti-social property uses against otherwise lawful efforts of the federal government to protect the public health and safety, and the property rights of neighbors.1 1In June 1994, some 128 law professors, including myself, wrote to Congress to oppose somewhat less radical property rights bills then pending. Because I thought that the Committee might find that letter useful for its current deliberations, I have attached it to my current testimony. One can best understand the radical and destructive nature of H.R. 9 by contrasting it with what the constitution actually provides. Recall that for the first_130 years of the republic, federal courts consistently rejected arguments that the Fifth Amendment required compensation for any losses in property values caused by regulation. This is not surprising, as the Fifth Amendment says nothing about regulation, but mandates compensation in terms only for "taking," understood to mean expropriation and permanent physical occupation. The Supreme Court accepted the proposition that regulation could work a taking only in 1922, in the famous case of Pennsylvania Coal Co. v. Mahon. The meaning and wisdom of that case have been debated ever since. But two facts stand out. First, the Court insisted that each case must be decided on its own peculiar facts, because, as Justice Holmes stated, "Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law." Second, the Supreme Court did not strike down another regulation on the use of land that did not involve a permanent physical occupation until 1992. By contrast, compensation arguably would be due under H.R. 9 whenever a federal agency restrained any use of land, no matter how noxious. In these circumstances, government could hardly go on, but that, of course, is the purpose of H.R. 9. The regulatory takings doctrine that the Supreme Court has developed is nuanced and fact-specific. Unless a regulation destroys all economic value of a parcel or mandates a permanent physical occupation, compensation is required only if a review of several independent factors leads a court to conclude that the regulation has gone "too far." H.R. 9 extraordinarily eliminates all consideration of these factors. The pernicious imbecility of the bill can be amply seen by reviewing each factor and considering the consequences of requiring compensation without regard to them. The first factor that the Supreme Court instructs us to consider is the character and purpose of the government action. H.R. 9 mandates indifference to the gravity and probability of the harms that an unregulated property use may impose on the public health or safety, or on invaluable natural or cultural resources. This is no benefit to most property owners (including nearly all homeowners), who depend on government enforcement of reasonable regulations on others to preserve the value of their property. For example, a property owner may be using an effective pesticide that the Environmental Protection Agency reasonably concludes causes cancer to farm workers, consumers, or neighbors. H.R. 9 requires that if prohibition of the use of the pesticide makes an owner's farm less profitable, and therefore his land less valuable, that the EPA must compensate the owner for not endangering others. Another example: federal law imposes height limitation on buildings in the District of Columbia. If the responsible agency denied an owner a permit to build a 100 story building at 3d and A Streets, S.E., H.R. 9 would require the agency to compensate the owner for the limitation on the value of his land attributable to the height limitation. Neither limit on property use violates the Constitution because of the importance of the government interest involved and the measured character of the regulation. H.R. 9 would cripple the ability of federal agencies to protect interests of the public that most would concede are legitimate. The second factor that the Court weighs is the extent to which the agency action destroys distinct investment-backed expectations. Here, the Court concerns itself with unfair surprise that change in law sometimes works when a property owner invests resources in a lawful use that a new statute or regulation suddenly prohibits. H.R. 9 requires compensation even when an owner invests in a use fully expecting that a responsible agency will conclude that his use is unlawful. For example, property owners have sometimes been awarded compensation by lower courts when the Corps of Engineers has denied them permission to fill wetlands for commercial development, but in every case the owner bought the wetland before the 1977 Clean Water Amendments, which stiffened standards. H.R. 9 would not only require compensation for any owner of wetlands, even those who purchase with full knowledge of applicable legal requirements, it perversely would give a major economic incentive to everyone to buy wetlands and seek a permit to fill them, because denial of the permit means free money from the federal treasury. In fact, I might well buy a wetland on the Virginia Eastern Shore cheap, request a permit to fill, get potentially massive compensation under H.R. 9, pay off my mortgage, and have enough left to build a house on the dry land and retire on the interest. One does not need a Ph.D. in Economics to understand that laws should not give people economic incentives to engage in socially costly behavior. But that is what H.R. 9 does. The third factor the Supreme Court considers is the degree of economic loss that the owner has suffered. The Court has denied compensation in several case where the owner lost over half his market value, and Justice Scalia acknowledged in the Lucas case that a particularly vital regulation could diminish an owner's value by 95% without requiring compensation. 112 S.Ct. 2886, 2895 n.8. But H.R. 9 would require compensation for any loss in market value more than a trivial amount. Note that this would be true even for wholly unrealized losses. People frequently, for a host of good reasons, use their property for something less than its full market value. Under H.R. 9 someone with no intention to pursue a noxious use could provoke a permit denial, obtain compensation. and continue to use his land as he always had. This brief comparison of Fifth Amendment law and H.R. 9 demonstrates that the proposed bill in no way enhances constitutional rights, but effects a radical new departure in the concept of property rights. Rights are shorn of responsibilities. The victim must pay the polluter not to harm her. Accommodation of conflicting uses is precluded. Government is disabled. The very existence of the community and of the public interest is denied. The argument will be advanced that H.R. 9 does not preclude government from imposing any new regulation, but only requires it to compensate owners for the loss they have suffered. To be sure compensating owners on such a basis could cost the public untold billions. But the absence of any special fund from which to pay compensation under H.R. 9 contradicts any claim that its primary goal is compensation. The bill aims to emasculate government power. Presumably, each agency would need to pay compensation from its operating budget; therefore, each agency would forfeit the means for carrying out its mission through the very effort to do so. It makes nearly all regulation actionable, but limits owners to damages rather than an injunction. Although shrinking the size of government is an appropriate goal for legislation, H.R. 9 wields a meat cleaver that would produce consequences that no one can predict and few would relish. Some proponents plainly hope to destroy the regulatory state without debating the merits of specific legal protections that the public overwhelmingly supports. The bill is a monument to hypocrisy as well as stupidity. But some will contend that I have overstated the effect of H.R. 9 by ignoring its qualification that compensation will not be given unless the property use is "otherwise lawful." Presumably, this phrase refers to the ancient common law of nuisance. But this body of law provides wholly inadequate protection for the public health and safety and would constitute a bizarre outward limit on land use regulation that the federal government may impose without paying compensation. First, nuisance is a confused and stunted area of law. Dean Prosser once commented that there was "no more impenetrable jungle in the entire law than that which surrounds the word, 'nuisance,'" W.L. Prosser, Law of Torts, 571 (1971). Second, Americans early turned to legislation and regulation because nuisance was woefully inadequate in an industrial economy. When the Congress began to enact public health, civil rights, and environmental laws no one claimed that the common law was adequate to deal with such complex problems. Finally, employing nuisance as a touchstone inappropriately inverts the role of state judges over elected federal officials in accodating the varied interests of the American people. Even a brief review of nuisance cases would show overwhelmed judges eagerly looking to statutes and regulations to give their efforts any useful meaning. No doubt Congress will have numerous occasions to debate the goals and methods of federal regulations and what is due owners who are adversely affected. These debates may lead to reform of some provisions of specific acts. This is a wholly legitimate part of our ongoing national effort to reconcile environmental and economic objectives. But H.R. 9 is a contemptible attempt to avoid that very debate, by pretending to enforce the constitution while frustrating the constitution's commitment of resolution of disputes about land use to the people acting through their elected representative. Rejection of this poorly conceived bill may help prepare the Congress for more mature consideration of complex national issues. June 29, 1994. DEAR MEMBER OF CONGRESS: We are writing to express our serious concerns about proposed "takings" or "private property rights" legislation. As professors of constitutional, property, and environmental law, we view such legislation as flawed caricatures of constitutional rules that would impose wholly new and burdensome requirements on Congress and the federal agencies when they seek to protect private property and public health and safety. The Fifth Amendment to the Constitution requires the government to pay just compensation when it takes private property for public use. The courts have developed a complicated body of precedents governing when mere regulation of property use requires compensation. Generally speaking, these precedents commit courts to |