Property
Class Notes
The
only way you can stop eminent domain is if what the government does is actually
illegal, as in beyond their statutory authority. Absent some statutory restriction on the eminent
domain power, pretty much anything is going to satisfy the “public purpose”
requirement. It’s probably not worth the
cost and expense of trying to litigate it.
Loretto
v. Teleprompter Manhattan CATV Corp. et al.
This
is a much more complicated issue: whether something has been taken at all. We’ll have a difficult time defining
property, and thus we’ll have a hard time saying whether property has been
taken.
What
happened in Loretto?
What
does the statute say? The statute says
that the landlord must tolerate this intrusion by a third party, in this case,
the cable TV company in
Here
we have a service that we would group in with “public utilities”. Why are public utilities given the power of eminent
domain? Is it that these companies
function for the public good? Hospitals
don’t have the power of eminent domain, so this isn’t the rule.
The
thing about public utilities is that they need to be everywhere. If you don’t
have the power of eminent domain, you’ll be subject to being held up by
individual property owners. That can get
to be expensive! You may have to pay
more than what the land is worth just to get the right to cross over a piece of
land. These public utilities only have a
limited power of eminent domain. But it’s
necessary for them to have it.
So
we have wires and little boxes being placed on Mrs. Loretto’s
apartment building. She objects, saying
it’s unconstitutional. How does the
Court go about analyzing her argument? Has
there been a taking of Mrs. Loretto’s property? If there has been one, it’s certainly been
small. The Court concludes that this is
a taking, and this goes against what the Court of Appeals of
What
is this case really about? What is Mrs.
Loretto really unhappy about? It’s money!
The deal used to be that the landlord could charge either the cable
company or the tenant for the right to wire up the building. This statute takes the money from the landlord
and puts it in the pocket of the cable company.
She was able to get 5% of the revenue before!
The
Court doesn’t analyze it that way. They
conclude that there has been a taking, but why?
In
this case, we find that permanent physical occupation constitutes “per se”
taking. Why?
·
It deprives the owner of the power to exclude.
·
It deprives the owner of the power to control.
·
The right to alienate is deprived of value.
·
It’s more severe than regulation because there is no control over the
timing, extent or nature of the invasion.
·
The rule has a low administrative cost because it’s easy to prove and
doesn’t depend on the extent of the occupation.
If
it’s permanent, if it’s physical, and it occupies a portion of
the complainant’s land, then it’s a taking.
The
Court starts out with the metaphor that property is a “bundle of sticks”…property
isn’t just one right, but a series of
rights. Not just one “stick” has been
taken in this case. Instead, the Court
claims that this taking “slices” through the whole bundle.
The
Court goes through and defines what this bundle of rights is. First, it’s the power to exclude: an important part of ownership of which Mrs. Loretto has
been denied in relation to the cable company.
Next, there’s the power to possess:
to physically occupy and control the property that you own. The Court says that at least in a trivial way
she has lost the power to control or to “use and enjoy” her property.
Then
the Court says: “Clearly, one important ‘stick’ in the bundle is the right to sell (‘alienate’) property. She still has the right to sell, but the
value of the property has been eliminated of
all value.” Braunstein thinks this
is pretty weird. Installing cable
service might actually increase the
value of this property (it’s “cable-ready”).
Could
Loretto sell her whole building? Sure,
and the price wouldn’t be decreased by much at all, especially if cable is
desirable for tenants. While she can’t
charge the tenants for the cable service, the apartments themselves may become
more valuable anyway because they’re “cable-ready”.
Has
Mrs. Loretto lost value? To answer this
question, you must ask “compared to what?”
Note
that if Mrs. Loretto gets out of the landlord business, she can rip out the
cable at her pleasure.
Private
individuals cannot trespass on your property.
However, what we’re talking about here is the government having the power to regulate. That’s the power that’s being exercised
here. Loretto brings the lawsuit
claiming that this power has been abused.
Has the government just regulated
what she can do with her land, or have they deprived
her of her interest in the land?
So
we have a pretty good working definition of what property is. It’s the right to exclude, control (or use and enjoy) and alienate (sell). If we
accept what the Court says, then Mrs. Loretto certainly has lost a property
right in this case. Do we accept,
however, that she has lost all these rights that the majority says she has?
What
about mailboxes and fire extinguishers and stuff like that?
The
majority says that the difference between a permanent physical occupation and a
regulation is that a permanent physical occupation is more severe. They say it’s more severe because there’s no
control over the timing, extent and nature of the invasion.
If
the government says that your building is dangerous to the health and safety of
your tenants because you have no emergency stairs and they force you to build them,
that seems pretty severe. But the majority says that any permanent physical occupation is
more severe than any regulation. Is this so convincing?
The
Court also says that this rule has a low administrative cost. We know a permanent physical occupation when
we see one. That makes it easy to enforce
the rule. What’s more, we won’t inquire (initially)
as to the extent of the permanent
physical occupation. The Fifth Amendment
gets into play whenever there is the
least permanent physical occupation. You
still have to deal with the amount of just compensation, and at that point you’ll
have to consider how serious the interference is.
The
essence of property rules is that they can’t be taken from you from other
individuals. However, they can be taken from you by the sovereign. The Fifth Amendment limits the sovereign’s
power. The sovereign can delegate that power to another entity
like the cable company, phone company or power
company. If the cable company was not
granted this power, there would be no question that a trespass had occurred.
The
key to the case is that a physical
occupation by a third party is a
taking. But who is the third party? The first party is Mrs. Loretto, and the
third party is the cable company. We
probably mean “another party” other than Mrs. Loretto.
Nobody
has interpreted this case to be limited to delegated
power of eminent domain. It may be open
to that interpretation, though.
What
shall we do with mailboxes, fire extinguishers, fire escapes and the like? How are these items distinguished? If we force landlords to have fire escapes on
their building, is that a taking? It’s
argued that if you’re required to have a fire escape, you still have control
over when, where, and how you put up the fire escape. There is also no third party coming onto your
property. No one is invading your property or invading your right to exclude.
The
decision in this case seems to hold that the
An
aside: don’t get confused between “condemnation” in the property law sense and “unfit
for human occupation”-type condemnation.
If
we say an action is a taking, it doesn’t mean the government can’t do it, it
just means that the government must pay for.
The measure of just compensation is not the value to the taker, but the change in value to the
property in question.
It
turns out this is more of a procedural thing than a substantive thing. You can’t set a $1 standard for all
cases. You must take it on a case-by-case
basis. So Loretto actually
loses, even though she appears to win: she’s going to end up with pretty much
exactly what she would have had if she had never worked her way to the United
States Supreme Court.
The Loretto
dissent
The
dissent says that the per se rule is
too hard-edged, and that takings should be judged on a case-by-case basis
instead.
The
dissent says: not so fast! What is
permanent? In five billion years, the
Milky Way is going to collapse. So is
anything really permanent? The building
won’t be there forever. It also doesn’t
have to be used as an apartment building forever. It’s certainly going to last for a while, but
nothing’s permanent. And why shouldn’t a temporary physical invasion constitute a taking? The significance of permanence seems to be
hard to understand, and the definition of
permanence is hard to grasp.
The
dissent also claims that the involvement of a third party is not determinative. It’s not enough.
The
dissent also asks: What is an invasion? What
is a physical touching? How minimal of
an interference is going to trigger litigation?
The dissent says that no one of
these factors alone is enough. In
other words, you could have a permanent
invasion by a third party that
could still not have a physical touching that
would rise to the level of a taking.
Why
is it that we protect the owner and compensate them in trivial cases like this
while we don’t compensate landowners
for regulations that place a severe burden on them?
Two kinds of “takings” analysis
We’re
left with two different kinds of analysis.
One analysis has to do with per se
takings, which exist in three circumstances:
1. The garden-variety eminent
domain case – the government says that they want to acquire title to your land
or an easement to your land. The government
brings suit for the purpose of establishing just compensation and its right to
take the property.
2. A permanent physical
occupation, as in Loretto
3. Regulation depriving a
property owner of all use of property
– for example, vacant land that must stay
vacant
On
the other hand, there are regulatory takings.
We will go through a complex process to determine whether compensation is due.