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Woops, They Did It Again (Bad Supreme Court! Bad! Bad!) (Mises, 2005)

From Mises blog. Archived comments below.

See also “A Libertarian Defense of Kelo and Limited Federal Power” and links therein.

Woops, They Did It Again (Bad Supreme Court! Bad! Bad!)

TAGS Legal SystemPrivate Property


The Supremes rules today (Kelo v. New Londonrelated article) “that local governments may seize people’s homes and businesses against their will for private development.”

As I’ve noted, the conservative Justices are generally much better than the liberals, on both Constitutional interpretation and economic and civil liberties, Justices O’Connor, Scalia, Thomas, and Rehnquist dissented. The case concerned

some Connecticut residents whose homes are slated for destruction to make room for an office complex. They had argued that cities have no right to take their land except for projects with a clear public use, such as roads or schools, or to revitalize blighted areas. As a result, cities now have wide power to bulldoze residences for projects such as shopping malls and hotel complexes in order to generate tax revenue.

But in truth, from the libertarian point of view (which I take it favors decentralization generally, and honest interpretation of the Constitution in accordance with its original understanding), the dissent is mixed. The conservative Justices are correct, I believe, that the Fifth Amendment permits only takings for public use, not for private use; and that the type of taking concerned is best viewed as a taking for private use. However, the dissent is incorrect, in my view, in agreeing with the established precedent that the Fifth Amendment applies to the states. It originally limited only the feds. A state “taking” that was uncompensated, illegal, or for private use might have been prohibited under the state’s constitution, but did not violate the Fifth Amendment. The Fifth Amendment was held to apply to the states by “incorporating” it into the Fourteenth Amendment in 1897.

As I’ve argued elsewhere, the incorporation doctrine of the Fourteenth Amendment is flawed. All nine Justices mistakenly see the Fifth Amendment as applying to the States. So in this respect, Thomas et al. are no worse than the liberals; they all make the same error. But given this assumption, the conservatives have be better legal analysis of the Fifth Amendment.

Had I been Justice, I would have refused to overturn the state law–although I agree it is a taking for private use–because the federal Constitution primarily limits the feds and not the states, because the Fifth Amendment does not limit the states, and the Fourteenth Amendment–neither its Due Process clause nor its Privlieges or Immunities clause–meant to “incorporate” the substantive provisions of the Bill of Rights.

So the liberal majority got it right in its conclusion, but not its reasoning; and the conservative dissenters were right about the analysis of the Takings Clause itself but failed to recognize that it should not be applied to the states in the first place.

My views on this are elaborated in this post, Libertarian Centralists. (See further discussion of this on the Liberty & Power blog here, including many of my comments elaborating on some of the points made above.)

Archived comments:

Comments (52)

  • NCA
  • Welcome to the USSA
  • Published: June 23, 2005 11:46 AM

  • iceberg
  • Damn, I’m still feeling sick from this decision, but more so from the glee coming from the mayor in my neighboring town of Long Branch, NJ

    According to jerks like him, cities and towns have “no other choice” to combat the low property taxes that citizens currently enjoy. For example he pointed to several homes near Applied Development’s “Pier Village” which were appraised for $60,000 – $90,000 and which are now in the $500K-$600K range.




  • Published: June 23, 2005 11:49 AM

  • Yancey Ward
  • My own home and land in Connecticut costs me $6400/year in property taxes, or $533/month. This rent, and I have no other word to describe it, is in perpetuity- and increasing faster than my own pay. This court decision only confirms what is becoming clearer to me by the day- we really don’t own anything- the state owns it all and rents it to us.
  • Published: June 23, 2005 12:25 PM

  • Voice of Reason
  • So is there a ‘takings clause’ in the Connecticut state constitution? If not, and the constitution limits what the government may do, wouldn’t the (dissenting) justices still be correct to overturn the state decision? Or wait – the existence of the mall could affect interstate commerce (people out of state could shop there), thus our beloved SCOTUS is still able to rule on this issue!I don’t know, I feel it’s foolish to pretend that most parasites working in DC care what the Constitution says. So to rule against a private homeowner being able to keep his land from pillagers, because of the intent of the fifth amendment applying only to federal government, is just giving our elected mafia even more freedom to trample over us.
  • Published: June 23, 2005 12:47 PM

  • Manuel Lora
  • Do you think that perhaps it would have been better for the Supreme Court to have passed on the case?It seems to me that in the long run, every decision that uses the incorporation doctrine (which today are most of them) ends up having a centralizing effect. Therefore, it surely is better for them to not take any case at all these days. This would help slow down the federal homogenization of the states. Once writ is granted, it’s already too late. Every decision (good or bad) will bind the states.


  • Published: June 23, 2005 1:15 PM

  • Stephan Kinsella
  • Yancey– you are right, the state does own our property. I have noted this before in this law review article (endnote 59 or 60),

    It is interesting to note one (only apparent, as will be seen below) theoretical difference between the civilian and common law conception of real property ownership, concerning the right of the sovereign (king or state) to ultimate ownership of land. In Louisiana, “Ownership is the right that confers on a person direct, immediate, and exclusive authority over a thing. The owner of a thing may use, enjoy, and dispose of it within the limits and under the conditions established by law.�? CC 477. Lands in the thirteen original American colonies were held in tenure, however, with the king as the ultimate lord and owner of the land. CORNELIUS J. MOYNIHAN, INTRODUCTION TO THE LAW OF REAL PROPERTY, 7-8, 22 (2d ed. 1988); see also ROGER A. CUNNINGHAM, WILLIAM B. STOEBUCK, AND DALE A. WHITMAN, THE LAW OF PROPERTY, Chapter 1 (West 1984). “The American Revolution clearly ended any tenurial relationship between the English king and American landholders. Some of the original thirteen states adopted the view that the state had succeeded to the position of the English king as ‘lord’ and that tenure continued to exist, while other states enacted statutes or constitutional provisions declaring that land ownership should thenceforth be ‘allodial,’ or otherwise declaring that tenure was abolished.�? Cunningham, et al., at 25 (footnotes omitted). However, “In the remaining states it would seem that lands are still held in tenure of the state as overlord.�? Moynihan, at 23. “Throughout the rest of the United States, it seems clear that tenure never existed.�? Cunningham, et al., at 25 (footnote omitted).However, despite this theoretical difference between civilian and common law ownership, at least in some states such as Pennsylvania and South Carolina, Moynihan, at 23, “Even in the states where tenure may theoretically still exist
    between the state and one who owns land in fee simple, tenure would appear to have little or no practical significance. For all practical purposes, one who owns land in fee simple anywhere in the United States has ‘complete property’ in
    (full ownership of) the land.�? Cunningham, et al., at 25 (footnotes omitted).

    It must be pointed out that, in reality, in none of the 50 United States do nominal “landowners�? really have “complete property�? in “full ownership of�? “their�? land. To say that land is owned “allodially�? is a fiction. For land is
    subject to expropriation by way of eminent domain. See, e.g., La. Civil Code 2626 [now La. R.S. 9:3176]:

    The first law of society being that the general interest shall be preferred to that of individuals, every individual who possesses under the protection of the laws, any particular property, is tacitly subjected to the obligation of yielding it to the community, wherever it becomes necessary for the general use.

    Article 2627 [now La. R.S. 9:3177] further provides:

    If the owner of a thing necessary for the general use, refuses to yield it, or demands an exorbitant price, he may be divested of the property by the authority of law.

    Furthermore, it cannot truly be said that one “owns�? property which is subject to divestment if annual “rents�? (i.e., property taxes) must be paid to the sovereign for the privilege of retaining possession of one’s property. Tenure, then, exists after all, in all fifty states, and the theoretical difference pointed to above is not really a difference at all.

  • Published: June 23, 2005 1:16 PM

  • Stephan Kinsella
  • Manuel:”Do you think that perhaps it would have been better for the Supreme Court to have passed on the case?”

    Sure. Or take it and say they have no jurisdiction. Either way.

  • Published: June 23, 2005 1:17 PM

  • Manuel Lora
  • How common has it been for the court to take cases and say that they have no jurisdiction?Regarding land and other property: is there nothing in the US that is owned allodially at all by anyone? Though if there is tenure in all fifty states, then the concept of a “property tax” is no longer (and never was) and oxymoron since it would be, as you say, just a rent.
  • Published: June 23, 2005 1:27 PM

  • Stephan Kinsella
  • Manuel: Well, I don’t mean to justify property tax. Just describing the legal situation accurately. The state is the real owner, but it is a criminal organization and has no *right* to be an owner. So it has no right to charge rent. It has the de facto power, however.
  • Published: June 23, 2005 1:44 PM

  • Stephan Kinsella
  • Voice:

    So is there a ‘takings clause’ in the Connecticut state constitution? If not, and the constitution limits what the government may do, wouldn’t the (dissenting) justices still be correct to overturn the state decision?

    Connecticut’s Constitution says, in Sec. 11: “The property of no person shall be taken for public use, without just compensation therefor.” Connecticut’s own courts should have overturned the expropriation under Sec. 11. Why they did not, I don’t know. But State Courts are, from the federal perspective, the final interpreter of state laws. The Feds should have no say so in it at all, IMHO.

    The Supreme Ct. decision indicates “the [Connecticut Supreme Court] held that such economic development qualified as a valid public use under both the Federal and State Constitutions.” Now, in my view, the feds ought o have no power to review Connecticut’s courts’ intepretation of its own state constitutional provisions. And the federal Constitution does not and should not place restrictions on Connecticut in this regard anyway.

    I don’t know, I feel it’s foolish to pretend that most parasites working in DC care what the Constitution says. So to rule against a private homeowner being able to keep his land from pillagers, because of the intent of the fifth amendment applying only to federal government, is just giving our elected mafia even more freedom to trample over us.

    The initial choice is to rule either that the Supreme Court and the feds do, or do not, have jurisdiction or power over these type of state matters. To hold that they do not is not ruling “against” the homeowner. If a Chinese citizen sued China in US court, and the US court properly dismissed the case, would this be ruling “against” the Chinese citizen?

  • Published: June 23, 2005 2:11 PM

  • Manuel Lora
  • Voice:Though it is certainly too late now, had the feds not gotten into state matters, we’d have something I can only call “state anarchism” where individual states, left free from federal invasions, could in a sense compete with others around it for population and businesses. Who knows what kinds of legal experiments they could have tried.

    I am not supporting government at all, but the way it was supposed to be (time to get nostalgic now, bring in the violins) would have kept the central government away. Voting with your feet, moving to another state would have enabled people to find better places to live and work. Decentralism does not eliminate government, but to a certain extent reduces its influence in that it gives us a chance to hop from jurisdiction to jurisdiction.


  • Published: June 23, 2005 2:28 PM

  • billwald
  • No economic system at least since the Reformation has stopped the flow of assets from the working people to our invisible owners.
  • Published: June 23, 2005 2:52 PM

  • Ashish Hanwadikar
  • Eminent domain abuse
  • Published: June 23, 2005 3:51 PM

  • Mike D.
  • Stefan:The state has always had the right to take private property for public use. What is pernicious about this decision is that it allows the state to condemn the property on behalf of a private developer. The ramifications of this are very far reaching. I can think of several scenarios in the Bay Area where I live.

    Certain houses in the Fremont Hills are on 1 acre lots. The houses were built several years ago and are assessed in the $1million range. The city would prefer to take these lots and build houses 6-8 to an acre at $750,000 each to obtain the extra revenue.

    In the Hayward hills, there is a valley that has many small farms. The area is currently zoned for farming. Local developers have been trying for years to get the area re-zoned so that several thousand cracker-box housing developments can be built. With Alameda County strapped for cash, this area now becomes a prime target for condemnation.

    No municipality wants a church/synagogue/mosque built in a business or residential area since they are exempt from property taxes and generate no taxable revenue.

    Many private developments such as shopping centers, if sponsored by the municipality, qualify for tax exempt financing. The muni-bonds are then paid off by the residents or businesses, depending on how the bonds are classified. This amounts to subsidizing the development, creating a moral hazard and the possibility of mal-investment.

    This is troublesome. When the Raiders came back to Oakland, the renovation of the Coliseum was funded by muni bonds. At the time there were a lot of complaints that the scenario for paying back the bonds was not feasible. This turned out to be the case. In the S&L; scandal, the president of Bell Savings and Loan went to jail for making loans that had little or no chance of being paid back. However, none of the Oakland Board of Supervisors was ever called to task, even though they were warned in advance that the financing was suspect.

    Local government officials, in general, are notorious for the abuse of zoning regulations for personal gain. I fear that this ruling will open the flood gates, and that unscrupulous developers and corrupt public officials will see this as a golden opportunity to profit at property holder’s expense.

    As libertarians, we no longer need to be concerned about property rights – after this ruling, we don’t have any!


  • Published: June 23, 2005 3:57 PM

  • Stephan Kinsella
  • Mike D:

    The state has always had the right to take private property for public use. What is pernicious about this decision is that it allows the state to condemn the property on behalf of a private developer.The use of “allow” presupposes they have the right to not permit it. Look. The Connecticut court refused to stop it, right? They “allowed” the taking to proceed. So then, it was appealed to the fed courts–which also “allowed” it, by your reasoning.

    Now, suppose the losing plaintiff appeals the US Supreme Court decision to, say, Canada’s high court, or that of Iraq, or perhaps, the local chamber of commerce’s arbitration committee, or, maybe, the UN’s World Court. Or maybe they file a brief with you, Mike–you get it in the mail, asking you to rule against the US Supreme Court and overturn its decision. Now EACH of these entities will just dismiss the complaint (well, you might not, but who cares what you say). Why? Not because they are “allowing” Connecticut to take property. If China says, “ummm, this is none of our business, we have no jurisdiction over the US” or the World Court or Iraq or the local Justice of the Peace says the same thing–are they “allowing” the taking? Do they have the right to stop it? No!

    So for you to complain the feds are allowing it, is to presupupose the feds have the right and authority and jurisdiction to stop it. But that is begging the question; they do not. No more than Canada does.

    When you say, “As libertarians, we no longer need to be concerned about property rights – after this ruling, we don’t have any!”, you are presupposing the feds are the only defender of our rights. This is silly. First, they are our biggest rights invader, not defender. Second, the states, still, are the biggest defender of rights, and this is how it was always meant to be. That is why the states have general legislative power and outlaw murder, robbery, etc., while the feds may not pass a general law outlawing murder. In fact, it is NOT a federal crime to commit murder. I suppose this means the feds “allow” murder?

  • Published: June 23, 2005 4:09 PM

  • tz
  • Amazing how they can find State’s rights when it is the State v.s. the citizen.
  • Published: June 23, 2005 4:34 PM

  • Adam Martin
  • I wonder if the Georgists are happy about this ruling…
  • Published: June 23, 2005 4:59 PM

  • J Henderson
  • Taking someone’s property and giving it to someone else, while keeping a slice for the govt, is clearly a public use. This is the very definition of public good as the governing elite sees it. If these people couldn’t steal they would have to work.
  • Published: June 23, 2005 5:13 PM

  • perrosuelto
  • Dear friends, many times here i insisted that, a part the facial freedom of US, you are obliged to obey the law of socialism under “superior interest of state or government”. The individual right (of property) are both legally and factually void. A projet: take compensation money and back to some forests in central-south america, be finally free and heavely armed, work as anyone like hunter-gathering or writing, do not be submitted to time: wake up,commute, hard hours of work, back home (if not freezed during the day) sleep 7 hours, than retire with SS money and dye. Enjoing the life, be better off phisic and mind: in one word a community of free men, but really free not rethorically from the high of the power, both corporate (Pfizer) AND politic.
  • Published: June 23, 2005 5:17 PM

  • Dennis Sperduto
  • Stephan and others have excellently summarized why this Supreme Court decision is so negative from a libertarian and property rights viewpoint. From a related perspective, I can only add that the court ruling and the Connecticut law that was under review clearly illustrate why our government has little, if any, moral authority.
  • Published: June 23, 2005 7:55 PM

  • David Heinrich
  • Stephan,I agree that decentralization is a good thing from a libertarian perspective.

    However, if I was on the USSC, and I had the power to prevent a State government from stealing someone’s property, I would do so. Is this compartmentalizing the problem?

  • Published: June 23, 2005 9:05 PM

  • Manuel Lora
  • Ah, but the issue here is that the USSC does not have that power and jurisdiction.
  • Published: June 23, 2005 9:41 PM

  • David Heinrich
  • Manuel Lora,Do they really not have the power? Power is irrelevant of law and constitution. They have the power to do almost anything they want, or rather anything that someone else will enforce (at gunpoint) for them. Hence, they have the power to stop said emminent domain.
  • Published: June 23, 2005 9:54 PM

  • Stephan Kinsella
  • Dave, I would prefer, ifI were on the court, to try to set an example of adherence to the limits on my and my government’s jurisdiction. Rather than set the example that constitutional limits are meaningless.
  • Published: June 23, 2005 10:18 PM

  • David Calderwood
  • This decision continues the 20th century erosion of the protection of private property and is no real surprise. As we know, a key difference between the wealth of the U.S. and the poverty of Latin America is the difference in the sanctity of property. Unsecure property has less value, period. We’re regressing to the mean.
    What’s interesting is that real estate as an asset class is due for a very sharp decline. This has been forecasted for at least 10 years by Bob Prechter and his group in Georgia. It’s always amazing to see how public policy lines up to deliver the conditions that are forecasted using Elliott Wave theory. Ditto with the new bankruptcy law; the credit boom is ending and a credit collapse is likely. Government adds another log to the bonfire every time the sun comes up.
  • Published: June 23, 2005 10:29 PM

  • P.M.Lawrence
  • DH, for the very reason that power is not the same as authority they do not have the power to stop eminent domain. There will be those that come later who will have power, and they will not be stopped. The only safeguard is when power itself is channelled so that it only follows authority (whatever that is), and then things like precedent have real force over it. That’s just moving the problem back, I know, but it may make it easier to see what’s going on.
  • Published: June 23, 2005 11:17 PM

  • Sudha Shenoy
  • Stephan:Just a few niggles: 1. “Allodium” = land _not_ held of anyone — king or any other lord.

    2. “Fee simple”: land is still held of the king, but that is all: the land may be inherited freely, disposed of as one pleases, etc. De facto complete ownership.

    3. “Land held in tenure” — what _kind_ of tenure? This term requires an adjective. In England & Wales nowadays (& for some few centuries), landowners are technically ‘tenants-in-chief’ of the Crown. That is, they all hold directly of the Crown with no intermediate lords. In practice, meaningless: Passing governments are _not_ the Crown — heaven forfend. Politicos have to use specifically political doctrines legitimising officials’ seizure of people’s property.

    When you Americans revolted against a German king, you wound up identifying the State with whichever transient govt held power for the moment. At least we Brits still have some notion that the govt is a temporary thing — quite separate from the Crown.

  • Published: June 24, 2005 12:11 AM

  • Stephan Kinsella
  • Sudha–thanks for your corrections. I don’t understand your “allodium” niggle; as far as I can see, I used it in this way.My point was this. The standard legal view–which, as far as I can see, you are adopting here–is that although formally the state is overlord in some states, for all practical purposes this concept is moot. That’s why I quoted Moynihan: “Even in the states where tenure may theoretically still exist between the state and one who owns land in fee simple, tenure would appear to have little or no practical significance.”

    But my main point, as I next noted, is that we really have the state as an overlord still–not b/c ofthis ancient history, but because the state can extract property tax. The very fact of property tax means we are NOT “de facto” owners. It means we are de facto tenants, renting from our lords.

    In my view, “ownership” means the “right to control.” If we are speakaing of the de facto or legal situation, legal ownership means the legal right to control. States have the power to take our property–and to make us pay an annual fee to keep it. It seems to me that states are still overlords, despite the lack of signficance of the remnant English feudal terms.

    I happen to agree w/ your implicit point–that it was arguably a mistake for the colonies to rebel in 1776, leave the traditional monarchy, and establish a new, invented, utopian construct that was doomed to failure.

  • Published: June 24, 2005 12:20 AM

  • Sudha Shenoy
  • Stephan:A couple of clarifications. 1. When we pay rates [local property taxes] in England, we pay them to the (local)_govt_ — which justifies this by various political arguments. We do _not_ pay the Crown — & the govt most definitely _cannot_ (& does not) use the notion that we are tenants-in-chief of the Crown as the basis for taxing us.[Shudder]. The govt is _not_ the Crown. Govts are separate — & temporary. Reverence for a merely temporary holder of office seems weird to Brits.

    2. I agree that land taxation means, de facto, that the taxer is the final owner. But in England at least, we sheet home the the tax to the right perpetrator — the govt now in power. Because the Crown is separate from politics, the damage is placed where it belongs: on the govt, ie, politicos. It is the govt — politicos — who tax us. The existence of the Crown means politicos cannot pretend to be some grand overarching fabulous entity, the State.

  • Published: June 24, 2005 1:34 AM

  • Walt D.
  • Stefan Kinsella wrote: In fact, it is NOT a federal crime to commit murderHmm? What about:
    Murder related to the smuggling of aliens. (8 U.S.C. 1342)

    Destruction of aircraft, motor vehicles, or related facilities resulting in death. (18 U.S.C. 32-34) )

    Murder committed during a drug-related drive-by shooting. (18 U.S.C. 36) )

    Murder committed at an airport serving international civil aviation. (18 U.S.C. 37) )

    Retaliatory murder of a member of the immediate family of law enforcement officials. (18 U.S.C. 115(b)(3)[by cross-reference to 18 U.S.C. 1111] ) )

    Civil rights offenses resulting in death. (18 U.S.C. 241, 242, 245, 247) )

    Murder of a member of Congress, an important executive official, or a Supreme Court Justice. (18 U.S.C. 351 [by cross-reference to 18 U.S.C. 1111] ) )

    Death resulting from offenses involving transportation of explosives, destruction of government property, or destruction of property related to foreign or interstate commerce. (18 U.S.C. 844(d), (f), (i)) )

    Murder committed by the use of a firearm during a crime of violence or a drug trafficking crime. (18 U.S.C 930) )

    Murder committed in a Federal Government facility. (18 U.S.C. 924(i)) )

    Genocide. (18 U.S.C. 1091) )

    First-degree murder. (18 U.S.C. 1111) )

    Murder of a Federal judge or law enforcement official. (18 U.S.C. 1114) )

    Murder of a foreign official. (18 U.S.C. 1116) )

    Murder by a Federal prisoner. (18 U.S.C. 1118) )

    Murder of a U.S. national in a foreign country. (18 U.S.C. 1119) )

    Murder by an escaped Federal prisoner already sentenced to life imprisonment. (18 U.S.C. 1120) )

    Murder of a State or local law enforcement official or other person aiding in a Federal investigation; murder of a State correctional officer. (18 U.S.C. 1121) )

    Murder during a kidnaping. (18 U.S.C. 1201) )

    Murder during a hostage-taking. (18 U.S.C. 1203) )

    Murder of a court officer or juror. (18 U.S.C. 1503) )

    Murder with the intent of preventing testimony by a witness, victim, or informant. (18 U.S.C. 1512) )

    Retaliatory murder of a witness, victim or informant. (18 U.S.C. 1513) )

    Mailing of injurious articles with intent to kill or resulting in death. (18 U.S.C. 1716) )

    Assassination or kidnaping resulting in the death of the President or Vice President. (18 U.S.C. 1751 [by cross-reference to 18 U.S.C. 1111] ) )

    Murder for hire. (18 U.S.C. 1958) )

    Murder involved in a racketeering offense. (18 U.S.C. 1959) )

    Willful wrecking of a train resulting in death. (18 U.S.C. 1992) )

    Bank-robbery-related murder or kidnaping. (18 U.S.C. 2113) )

    Murder related to a carjacking. (18 U.S.C. 2119) )

    Murder related to rape or child molestation. (18 U.S.C. 2245) )

    Murder related to sexual exploitation of children. (18 U.S.C. 2251) )

    Murder committed during an offense against maritime navigation. (18 U.S.C. 2280) )

    Murder committed during an offense against a maritime fixed platform. (18 U.S.C. 2281) )

    Terrorist murder of a U.S. national in another country. (18 U.S.C. 2332) )

    Murder by the use of a weapon of mass destruction. (18 U.S.C. 2332a) )

    Murder involving torture. (18 U.S.C. 2340) )

    Murder related to a continuing criminal enterprise or related murder of a Federal, State, or local law enforcement officer. (21 U.S.C. 848(e)) )

    Death resulting from aircraft hijacking. (49 U.S.C. 1472-1473) )

    Stefan, you’re the lawyer – please explain.
    Incidentally, while I agree in general with your analysis, from a practical point of view, now that the Supremes have ruled, I think its going to be open season on property rights. It’s only been two weeks since the Medical Marijuana ruling and the DEA Schutzstaffel have already begun kicking down doors in San Francisco. At least in this case they did not invoke the Interstate Commerce clause! Nobody argued that the city might need to confiscate private property to build a Greyhound bus terminal! 🙂


  • Published: June 24, 2005 2:15 AM

  • gene berman
  • Like you all, I’m dismayed. But not at all surprised. The entire discussion misses the point: the courts, but even more particularly the local officials are nothing more than mandataries with the balls to carry out–in the light of day–the “will of the people”.: And if the people have a different kind of will, they’ll have a different kind of official (quickly) and a different kind of court (less quickly). The real threat emanates from your neighbor(s), whether next door or not. The entire matter is just a different form, another expression of the
    widespread (and government-schooling-inculcated) belief in an underlying socialistic interpretation of human existence. And, unfortunately, there is never a shortage of ambitious enterprisers ready to fashion a “public benefit” whose value is clearly demonstrable to the majority whose support they require in order to arrogate the property of some to that majority (while taking their “split” in the form of profit). It’s no different than ag subsidies, tariff protection, “progressive” taxation, welfare and health-care programs, blah, blah, ad nauseam. It’s not even clear that the aggrieved disagree in principle–only that it should happen “somewhere else” than where their own interest is concerned.If I were to find a siver lining in this particular cloud, it would be its visibility–its clear, resentment-engendering, political potential. Where there are interests, there are opposing interests which may be aroused to (sometimes) thwart the pillagers. Maybe even a celebrated berserker shooting or two–who knows?

    Personally, I am persuaded that almost the only matter of overwhelming importance to those anxious for liberty and sound economy is that of monetary affairs. No matter how long it can be held off, monetary collapse is
    the inevitable outcome of past and present policies and the record of the past in dealing with such occurrences holds little in the way of hope of Misesians for greater (and growing) liberty. The rest is attention-grabbing but ultimately diversionary.

  • Published: June 24, 2005 6:42 AM

  • Jim Bradley
  • The property taken should be revalued upward to reflect the “new value” of the “better use” … I expect the states to attempt to forcibly “buy” the land at the old price and hand it off to the new developers at the higher value. Watch for the lawsuits on that … Something similar happend in San Diego when by eminent domain the government forced people to sell to make way for a stadium (the Padres apparently are sufficient “public purpose” — it’s just entertainment for Pete’s sake) and then wanted to charge the existing landowners for “toxic cleanup” when it was found that the land didn’t comply with current environmental laws!!
  • Published: June 24, 2005 8:08 AM

  • dearieme
  • Now that we no longer need “totalitarian” to refer to Soviet or Nazi regimes, it is free for use to mean “that end-state to which decisions like this are taking us”. By “us” I mean citizens of the US, UK, Canada, EU etc – the trend is international. And there’s no sign that a written constitution, a la the USA, is a better defence that convention, history and habit, a la the British Crown.
  • Published: June 24, 2005 9:07 AM

  • Doug McKnight
  • Many state condemnation laws are explicit in excluding the additional value derived from subsequent use for which a property is condemned. When this is not the case, competent appraisers will take this additional value into consideration.A practical means of taking advantage of this ruling would be to introduce it in property tax appeals. The greater the threat of condemnation, the lower the property value. The possibility of condemnation is addressed in most commercial leases, indicating that it is taken into consideration by the market.
  • Published: June 24, 2005 9:53 AM

  • Chris
  • So do they compensate you for your displacement at all, or just take your property outright? This hardly seems fair.
  • Published: June 24, 2005 10:14 AM

  • Stephan Kinsella
  • Sudha: I understand that property tax in some states might be paid to local jurisdictions. For me, as a libertarian, that is just a detail; in this case, the local gov’t can be viewed as the overlord. But I would think in most cases they are at least partly in cahoots with the higher levels of government. The gov’t is not the Crown, okay, fine.

    I agree that land taxation means, de facto, that the taxer is the final owner. But in England at least, we sheet home the the tax to the right perpetrator — the govt now in power. Because the Crown is separate from politics, the damage is placed where it belongs: on the govt, ie, politicos. It is the govt — politicos — who tax us. The existence of the Crown means politicos cannot pretend to be some grand overarching fabulous entity, the State.

    Good point. I did not mean to write anything to imply otherwise.

    Walt D:

    Stefan Kinsella wrote: In fact, it is NOT a federal crime to commit murderHmm? What about:
    Murder related to the smuggling of aliens. (8 U.S.C. 1342) […]

    Stefan, you’re the lawyer – please explain.

    Walt, I regard your long laundry list as pettifogging. I am of course aware that federal law does prohibit some types of murder. These are always murder-plus-something-else, like murder of someone with some connection to interstate commerce (which Congress claims jurisdiction over), or murder of a federal officer, etc. But plain-jain murder is NOT a federal crime, and cannot be (without totally abrogating the Constitution). Only murder-plus-something-else. Unless there is a special federal connection, it’s just not a federal crime to murder someone.

    Incidentally, while I agree in general with your analysis, from a practical point of view, now that the Supremes have ruled, I think its going to be open season on property rights. It’s only been two weeks since the Medical Marijuana ruling and the DEA Schutzstaffel have already begun kicking down doors in San Francisco.

    You are right to some extent, but not completely. Unfortunately, states have bought into and accepted the notion that the Supreme Court is the final arbiter of the Constitution and its legal standards, and that these standards do apply to the states. Therefore, if the Supremes say that “public use” can include the types of uses in question, then perhaps it will influence state courts and agencies to construe even their own constitutional limitations similarly.

    In other words, technically a state could have in its constitution a similar provision to that in the 5th amendment. And technically they could say that a commercial-use type taking is okay under the 5th amendment, but not under their own–it’s perfectly constintutional for states to provide for MORE rights in their own constitutions than the federal one does. But if the provisions are worded similarly and if the state provision is modeled after the federal one’s language, which is often the case, yes, then I agree, this decision by the feds is unfortunate.

    The right decision would have been to dismiss the case on the grounds that the 5th Amendment simply does not apply to the states–perhaps with dicta added that the taking in question is probably not a public use, anyway.

    I don’t agree though that this decision means it’s “open season” on property rights at all. Municipalities and cities and states are still responsive to some degree to bitching by their constituents, so even if they have the power to take something there will be pressure not to abuse it too much. Further, the states still have to pay for what they take. That is another disincentive.

    Frankly, as I wrote in the posts linked above, I don’t really think the public-use/non-public-use distinciton makes mcuh sense. Why is it worse to take a shopping center than a home, or vice versa, etc. What’s the difference? Why is it worse to take property and let the government own it, than to take it and let a private company own it? What’s the difference?

    Some states privatize. Some states do functions that in other state are handled privately. Imagine a country where railroads and roads are run by the state. The state takes your property to widen the road. That’s allegedly a public use. But what about a country with a minimal state where the roads are private. But the public/private use distinction, the state here cannot take property to sell it to a private road builder. Why not? Why should the state that at least allows private roads be penalized? If the state cannot expropriate property to give it to a private road builder, why can the state take it and give it to a criminal public agency that runs roads? The latter is two evils, no? Why should the state that does the WRONG thing–socializes a given field–be rewarded by being allowed to expropriate for itself? The point is that something is public if the state takes it over. That means it’s not an objective category or classification in the nature of things; it’s just descriptive of what the state is, and does. Which means: the public-private distinction boils down to this: the state is permitted to take your property and keep it. But it is not permitted to take it and give it or sell it to a private user. Why is this rule so sacrosanct? Once my property is stolen, why do I care who it is given to? I care primarily that I either get it back, or get paid for it. The rule actually sets up an incentive for the state to expand its domain, so that more things are “public” and thus more takings would be “for public use.”

  • Published: June 24, 2005 10:16 AM

  • gene berman
  • Doug:I agree that the market is continually discounting the potential for adverse occurrences (along with favorable ones). Whether or not it discounts properly is quite another thing, however. The market’s allowances can be ” ‘way off base” when the
    experience core forming it has been accustomed to another sort of property-recognition climate and is suddenly surprised by abrupt change. And, though the wealthy might avoid the direst consequences through diversification of assets, there are a-plenty of folks prone to have in their “basket” not much else but the single “egg” represented by their home. Of course, I fully agree that, to the extent that the type of practice of which we speak becomes general and more to be expected, a rearrangement of the very values assigned by the market will become ever more accurate and commonplace–to the detriment of nearly all–not much different than the fall-off in productivity concomitant with the tax-penalization of such productivity. In the final analysis, almost all such authoritarian interference tends toward the production of results almost diametrically opposite those originally sought by the interference. But the fact that the pillagers are ultimately unsuccessful does little to assuage the discomfort of those deprived while hardly ever serving as an object lesson for the mistaken (even those motivated by ideas of public service rather than private aggrandizement).

    What else is new?

  • Published: June 24, 2005 10:30 AM

  • Manuel Lora
  • People and states no longer have any teeth. Mr. Kinsella is correct when he mentions that states assume that the Supreme Court is, well, supreme. The states bow to this foreign court, and that’s usually the end of that. It need not be that way. I am reminded of the recent lectures by Thomas Woods, particularly then one titled “The State’s Rights Tradition Nobody Knows.” An excellent historical recap of things like the Virginia and Kentucky resolutions.If I could have any political power (ugh, sounds so bad I know), I’d be tempted to go with governor as opposed to anything at the federal level. That way, I could nullify everything that goes against the federal constitution and anything that would also endanger the rights of the citizens of my state.
  • Published: June 24, 2005 10:58 AM

  • George Gaskell
  • First they took our right to secede from the Union, and I did not speak out–
    because I was not a Southerner;
    Then they came to take our money and instead issue only paper, and I did not speak out–
    because I did not have very much gold;
    Then they came for a tax on our incomes, and I did not speak out–
    because I was not wealthy;
    Then they came to socialize my retirement and health care, and I did not speak out–
    because I was going to be old one day;
    Then they came for my property–
    and there was no one left to speak out for me.
  • Published: June 24, 2005 11:10 AM

  • Mark Stromberg, Sacramento
  • Goodbye America! The Supreme Court now claims that states and localities have a constitutional right to violate property rights for the purpose of grating property access to the largest political contributors to legislators, commissioners and council members. It won’t be long until our states and localities start behaving like Zimbabwe’s Robert Mugabe, where any undesirables, that lack political connections, will have their property demolished and their families left homeless.
  • Published: June 24, 2005 12:46 PM

  • Vache Folle
  • We need Billy Jack more than ever.
  • Published: June 24, 2005 1:05 PM

  • tz
  • No, it would be “I have no place left to speak from”. But they will come for you one day – perhaps through omission when you are both forced to use only the medicare system, and they declare you too old, or a “life unworthy of life”. Think Denmark today – it doesn’t matter if you want to live, a doctor might think that is not a rational decision and euthanize you anyway.Unborn – check.
    Disabled – check.
    Sick – only in some states.
    Elderly – being worked on.
    Political opposition …

    In the battle for liberty, libertarians find they have a problem because the institutions often will only provide liberty by doing something which they probably ought not do if things were in their proper state.

    The Supreme Court ought not override the states, but if the states are corrupt, is it better for them to override such corruption or be true to original intent?

    Sometimes the Dragon burns it’s own brood. I think this is a good thing. And this is not a matter of a lesser evil, Bush v. Kerry decision (where I voted for neither) – the court and case are what they are in the environment they are in.

    The optimal outcome for liberty may not be the optimal outcome in a pure sense. But we’ve departed so far from principle. One more boy pissing into a sewer won’t make it stink noticably worse. But one candle makes a big difference when it is the only light.

  • Published: June 24, 2005 1:07 PM

  • Vardaman
  • It seems that the case, while horrible, at least has the salutary effect of increasing class consciousness (in a libertarian sense) against the state (apparatus and allies), while not entirely having the detriment that it appears to have relative to the past that is, inasmuch as “public works” projects have always been designed for some or another special interest anyway.
  • Published: June 24, 2005 1:58 PM

  • Walt D.
  • Stephan:It was not my intention to be flippant – I was very surprised to find 40 Federal Death Penalty offenses and thought that it was worth sharing, if for nothing else to emphasize the extent to which the Federal government has encroached. What is interesting is that most of these statutes are very recent. As someone pointed out to me, when JFK was assassinated, the FBI had no authority to get involved since at the time, assassinating the President was not a Federal offense.

    Also, as you point, most of these crimes could (and in fact, from a constitutional point of view should) be prosecuted under state law. So it would seem that the purpose of most of these laws was so that the Federal juggernaut could override state jurisdiction.

    I seem to recall a case of a drug related murder in Massachusetts, where the Feds took jurisdiction so that the death penalty could be imposed, even though Massachusetts has no death penalty.

    Furthermore, the chances of being convicted in Federal Court are very much higher than in a state court – the rules of evidence, particularly on pre-trial disclosure, are different, making it more difficult to mount an effective defense. In the event of conviction, the appeals process is streamlined so that the execution can be carried out much more quickly.

    Unfortunately, states have bought into and accepted the notion that the Supreme Court is the final arbiter of the Constitution and its legal standards, and that these standards do apply to the states.

    This would appear to be the crux of the matter. People look to the Supreme Court to adjudicate state legislation. People assume that the Bill of Rights not only limits what the Federal Government can do, but also, where applicable, applies the same limits to State Government. (As you correctly emphasize, the states are free to grant more rights.)


  • Published: June 24, 2005 5:03 PM

  • Adam Martin
  • The land grabs have begun:http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20050625a1.htm
  • Published: June 25, 2005 10:51 AM

  • John Ryskamp
  • The Kelo homeowners can petition the Court for a rehearing “on the merits” (Rule 44). The Court will grant rehearings to consider “historical evidence” bearing on the Framers’ intent. Reid v. Covert, 352 U.S. 901(1956). The Kelo case is based on the Fifth Amendment. When James Madison presented it to Congress, he said that it “prevents every assumption of power in the legislative or executive.” When he said “every,” he meant a fact of the individual. A fact of the individual is a fact of human experience which does not change even when government seeks to destroy it. A fact of the individual is one in which government
    1. seeks to eliminate the fact;
    2. at best only succeeds or would, if allowed, only succeed, in eliminating incarnations of it;
    3. in the process violates other rights;
    4. brings to bear a disproportionate effort; and
    5. does not consider alternatives which could achieve the goal.
    Housing is such a fact:
    1. New London seeks to destroy this housing;
    2. New London itself has granted that these
    homeowners will have to, and will, seek other ousing;
    3. Association, speech and several other protected facts are sought to be destroyed by this eminent domain action;
    4. the Kelo eminent domain action is part of a
    nationwide, well thought-out plan between developers and politicians to use eminent domain to turn housing over to private developers;
    5. the Kelo eminent domain action is not narrowly tailored to achieve a compelling government purpose.
    If the Kelo homeowners present this argument to the Court, they will save their housing.
    See also Ryskamp, John Henry, “Kelo v. New London: Deciding the First Case Under the New Bill of Rights” . http://ssrn.com/abstract=562521
  • Published: June 25, 2005 1:46 PM

  • Adam Martin
  • Wrong link above…http://www.chron.com/cs/CDA/ssistory.mpl/metropolitan/3239024
  • Published: June 25, 2005 1:49 PM

  • K. Chris Caldwell
  • My concern with this ruling is that within a couple of years we will start hearing about rampant corruption in land seizures and there will be some tragic consequences.Local officials are now in a position to “partner” with developers and others to seize property practically unrestricted on behalf of the these developers. The local governments now stand to gain by way of taxes but also via capital gains as well. Capital gains, because the developer can utilize the eminent domain proceedings by the local government to acquire needed property at a lower price than they would have to pay the owners otherwise. The developer can then “purchase” the property from the local government at some agreed upon price above what the government paid and below what the developer would have had to pay.

    This is a situation loaded with the motivation for fraud and deceit, and this is just the transparent part of the transaction. Imagine what the individuals: the mayors, the council members, the clerks, etc., will be conjuring up behind the scenes.

    The ultimate result will be rampant corruption and tragic consequences.

    God help us!

  • Published: June 25, 2005 2:34 PM

  • sam
  • But when envirronmentalist were fighting for usa government not to search for oil in a natural reserves in alaska, libertarians were looking to slow down the oil price. Now there is a lack of confidence between the two groups that are the most politisized, big monopoly media are not speaking about these problems: They were born to make sure the market can grow faster, but now only cable and internet can give enough information to people, but both are not used where they are too expensive. This competition betweeen nationalist, between corporation was block by internationalist who hide their knowledge so they don’t lose grip to power. Go put some pressure to the builderburgers, they are the only groups that can overturn this..or make it worst.
  • Published: June 25, 2005 7:10 PM

  • Lowell R.
  • Mr. Kinsella — 

    When I first read your argument, the first thing I thought of was Justice Thomas’s dissent in Lawrence v. Texas — i.e., even though the law is “uncommonly silly,” there’s nothing in the Constitution granting the federal government jurisdiction. I was wondering if you saw his opinion in the same way.


    Also, I was wondering if I understand you correctly: under your jurisprudence, do you believe the only cases over which the Supreme Court has jurisdiction are those against the federal government and those between states?



  • Published: June 26, 2005 8:06 PM

  • Stephan Kinsella
  • Lowell– it seems to me Thomas’s reasoning in Lawrence would apply here. All 9 justices in this case seem to think it is settled that the 5th does apply to the states.”Also, I was wondering if I understand you correctly: under your jurisprudence, do you believe the only cases over which the Supreme Court has jurisdiction are those against the federal government and those between states?”

    No, there are other times too. Federal question and diversity are two of the main areas, and there are some cases against states that it could hear–those clearly contemplated by the 14th Amendment, for example.

  • Published: June 26, 2005 9:36 PM

  • Michael Hignite
  • Armed revolution will be the end result of this ruling. It’s only a long downhill slide from here.
    Successful people from here on out will only need to concern themselves with controlling city council. Bribe, blackmail, or kickback and any property can be yours. Hell, you won’t even have to do that. Just let it be known that you have pull at city hall, and you will never lack for friends or money.
    Just a soul.
  • Published: June 27, 2005 11:08 AM

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