The quiet Takings Project is trespassing on democracy

  • Professor Richard Epstein

    photo courtesy of the University of Chicago
  • John Locke, rebel


WASHINGTON, D.C. - In a modern brick building across Lafayette Park from the White House, on a one-block street called Madison Place, several judicial officers of the United States government are engaged in a ... in a ... well, in what seems to be a conspiracy to subvert it.

Not doing a bad job of it, either.

Now, just a dad-burned minute, I hear you say. A conspiracy to overthrow the government from within? And United Nations troops in black helicopters are about to descend from the skies.

But paranoia is no proof that someone isn't out to get you. And just to add to the intrigue, there are connections between this conspiracy, if such it is, and the one that so recently failed to impeach the president of the United States.

What is going on in this brick courthouse threatens to overturn established legal interpretation and almost a century of American governance, especially when it comes to protecting the natural world.

It begins with Charles Fried, solicitor general under President Ronald Reagan and Attorney General Edwin Meese. A loyal soldier in the "Reagan Revolution," Fried was nonetheless disturbed by a few of the hotter heads around him. In his book about his government service, Order and Law (Simon and Schuster, 1991), Fried wrote that "Attorney General Meese and his young advisers - many drawn from the ranks of the then fledgling Federalist Societies and often devotees of the extreme libertarian views of University of Chicago law professor Richard Epstein - had a specific, aggressive, and, it seemed to me, quite radical project in mind: to use the takings clause of the Fifth Amendment to put a severe brake upon federal and state regulation of business and property.

"The grand plan was to make government pay compensation as for a taking of property right - limiting the possible uses for a parcel of land or restricting or tying up a business in regulatory red tape. If the government labored under so severe an obligation, there would be, to say the least, much less regulation."

Thus began, in the early 1980s, what attorney Douglas Kendall called "The Takings Project." Kendall, a lawyer for the liberal Community Rights Counsel, has written a report on the subject from which some of the information herein is taken, though not without checking it out.

As described by Fried, the project's design was as simple as its ambitions were grand. The Justice Department would arrange for the appointment of judges who were radical "libertarians' influenced by Professor Epstein. Most of them were members of the Federalist Society. Among others, this describes a lawyer named Kenneth Starr.

The policy affected all the federal courts, but none as sweepingly as the Court of Federal Claims and its appellate master, the Federal Circuit Court of Appeals, housed in that brick building on Madison Place.

Never heard of these courts? Well, neither have most folks. Reporters seldom visit them. Their cases tend to be technical and impersonal, unrelated to Washington's obsessions with race and sex. For the Takings Project, this quasi-anonymity is an advantage. Revolutions are best begun out of the spotlight.

The Court of Federal Claims was created in 1982, and, until quite recently, all 16 of its judges were appointed by Presidents Reagan and Bush. It has sole jurisdiction over any claim of more than $10,000 against the United States government, many of which concern "takings."

That's what happens when the city, county, state or federal government takes someone's land for a park, highway, airport or prison, for which said government must pay "just compensation" to the owner. So says the Fifth Amendment to the Constitution.

Over the years, the U.S. Supreme Court has determined that on rare occasions a government regulation can amount to a taking, but only if it all but eliminates the economic potential of property. "Mere diminution in value of property, however serious, is insufficient to demonstrate a taking," said the high court.

But that was before the Takings Project, before Richard Epstein's assertion that "all regulations, all taxes, and all modifications of liability rules are takings of private property prima facie compensable by the state," and before the current Court of Federal Claims began making rulings under Epstein's influence.

Recently, a Nevada rancher brought a seemingly absurd case seeking compensation because elk re-introduced on national forest land were taking water away from his cattle grazing on the public land. The government, not surprisingly, sought a summary judgment dismissal. Chief Judge Loren Smith of the Court of Federal Claims - Federalist Society member and frequent guest at seminars sponsored by the Foundation for Research on Economics and the Environment (FREE) at a Montana resort (HCN, 7/6/98) - denied it and conducted a trial. Considering that Smith seems never to have met a government action he could tolerate, the rancher may well win his case.

Over the past few years, judges on the Court of Federal Claims and the Federal Circuit Court of Appeals have issued a series of pro-plaintiff decisions that would have been unthinkable earlier. Unlike Supreme Court decisions, these cases do not set broad precedent. But they do have consequences.

One reason the Interior Department decided to compromise with timber baron Charles Hurwitz in the dispute over California's Headwaters Forest was Hurwitz's threat to file a takings challenge. According to the generally accepted interpretations of takings law, he would have had no case. According to the Claims Court's current thinking - Professor Epstein's thinking - he would have a strong case. The Clinton administration decided not to take the risk.

At this point, then, we must interrupt our historical-political account and turn to the realm of philosophy, to examine precisely what Richard Epstein says. This is not easy. Epstein's book, Takings: Private Property and the Power of Eminent Domain (Harvard University Press, 1985), is, to put it politely, not distinguished by its felicitous use of language. But it is not indecipherable, and Epstein's argument may be summarized as follows:

* The Constitution was written when "The Lockean system was dominant," (p. 16), and "draws on the basic theory developed by Locke" (p. 31), so constitutional interpretation must be consistent with the philosophy of John Locke, who held that "the preservation of property (is) the end of government."

* The takings clause of the Fifth Amendment must be interpreted "in the way these words are used in ordinary discourse by persons who are educated in the normal social and cultural discourse of their time," (p.20), meaning 1787;

* Those persons must have defined "private property" as an absolute right because English jurist Sir William Blackstone said, "The third absolute right ... is that of property, which consists in the free use, enjoyment, and disposal of all (the owner's) acquisitions ..."

Hence, concludes Epstein, "all regulation ... falls within the eminent domain clause," (p.102) and requires compensation. Candidly, Epstein acknowledges (or proclaims) that his interpretation means that almost all the social, environmental, health and tax laws now on the books are unconstitutional. And he urges judicial activism, precisely what most conservatives abhor, to get rid of those laws.

There is only one problem with Epstein's argument: Every one of his points is wrong.

John Locke was arguably the single greatest influence on the Founding Fathers. But to call the U.S. Constitution a "Lockean" document would astonish many an American historian, including Carl Van Doren, whose highly regarded history of the Constitutional Convention, The Great Rehearsal (Viking, 1948), mentions the English philosopher once. Furthermore, Locke had mixed feelings, based on religious convictions, about individual property ownership. So Epstein "corrects' him, creating a "Lockean" system that Locke would have opposed. Just as he corrects Blackstone by dismissing the great (but flawed) jurist's qualification that property rights could be limited "by the laws of the land."

Absent from Epstein's constitutional interpretation is any awareness that some of the Founders agreed with then-40-year-old Jeremy Bentham that the very concept of property was created by law, meaning by government; that the need for a uniform system of taxation was one major reason for adopting the Constitution; and that another was a government strong enough to "provide for general benefits, such as regulation of interstate trade (and) development of national works," in the words of the first resolution adopted by the Constitutional Convention.

That included regulation of private property, which the states were then practicing. The guys who wrote the Constitution were not doofuses. When they said "take," they did not mean "alter" or "diminish." They meant "take."

In short, Epstein's case is not simply weak; it is a-historic and absurd, nothing a grownup need take seriously. Even a political soulmate, former Judge Robert Bork, said Epstein's conclusions "are not plausibly related to the original understanding of the takings clause."

Money rules the movement

Why, then, has Epstein influenced so many seemingly smart folks? His disciples include graduates of law schools at Harvard, Yale and University of Chicago (Epstein's employer). As credentials go, these are not chopped liver, and the mystery of their motivation is unsolvable in this space.

But here is a political rule of thumb that applies to movements left and right: Beware the Process Fraud. Whenever someone says, "This is the preferred way of going about things," he is really saying, "This is the way of going about things that will benefit the folks I want to benefit." The real goal is not the method, but the desired result.

Who benefits if governments, unable to pay all that compensation, cannot regulate? Property owners, of course, and since most of us are property owners, doesn't that mean most of us?

No. A very small percentage of the people own most of the property. And it is not the owners of hundred-foot-front lots, or even quarter-acre lots, who would benefit if Epsteinism were to triumph. It is owners of thousands of acres and millions of dollars. The Takings Project pursues an upward redistribution of income.

Otherwise, in some bow to consistency, its advocates would discuss "givings' as well as takings, and the restaurateur who had to be compensated by the state for its imposition of a hygienic code would have to compensate the state for the highway that brought him his customers.

Then, consider the sponsorship. Epstein's book was published by Harvard University Press. But it was supported, as he acknowledges in his preface, by a grant from the Institute of Educational Affairs. IEA was founded in 1978 by former Treasury Secretary William Simon, now president of the Olin Foundation, which helps fund the Federalist Society.

Both the Society and the Institute have also received money from foundations controlled by Richard Mellon Scaife, who also helped fund the "investigators' who concluded that Vince Foster was murdered. Scaife's foundations also help finance those seminars in Montana. At least 10 of the claims-court judges have attended the seminars, where relaxation is combined with lectures by property-rights champions, including Richard Epstein, who are paid for their services.

Two questions remain, one operational, one conceptual: First, why doesn't the government appeal these bizarre claims-court decisions to the Supreme Court?

Simple. The Takings Project has made some headway there, too, and no one can be sure an Epsteinian decision would not be upheld, thereby creating a broad precedent. Justices Clarence Thomas and Antonin Scalia are almost certain pro-plaintiff votes, with Chief Justice William Rehnquist and Justice Anthony Kennedy likely to concur. That would make Sandra Day O'Connor the decisive swing vote. O'Connor has been a responsible conservative jurist. But by herself, she is a thin reed.

The second, larger, question is: When did money become a freedom? Not just Epstein but all the "libertarian" or "property-rights' advocates proceed on the assumption that under our system of government an individual has the "right" to as much money as he can amass in the same way that he has the right to speak, publish, assemble, and worship (or not) as he pleases.

Well, maybe he does. But where in the Constitution does it say, or imply, that restrictions on economic activity are identical, or even comparable, to restrictions on expression, belief, or personal behavior? In general, our legal tradition says the opposite.

Yes, money is important. And some personal rights - including the right to buy, sell, and occupy property - involve economic activity. But that does not convert all economic activity into personal rights. Unless Epstein and his disciples can make the case that there is some constitutional right to all the money you can make regardless of the consequences, the rest of us will have to assume that the poor souls think far too much of money.

Or worse. There is a qualitative difference between, on the one hand, preventing the general community from interfering with the personal and intellectual lives of individuals, and on the other, preventing the general community from doing anything to protect itself, its neighborhoods and the natural world around it. Whatever one calls that second alternative, one cannot call it democracy.

Perhaps Professor Epstein and his followers on the Court of Federal Claims are not merely materialist extremists, but the cadre of a well-financed anti-democratic army. If so, one need not be a political paranoid to wonder whether a subversive conspiracy has established a beachhead on Madison Place.

Jon Margolis haunts Washington, D.C., from a small town in Vermont.

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