Property Rights Foundation of America®
Founded 1994

Magna Carta's Importance for America

Roger Pilon, Ph.D., J.D.
Vice President for Legal Studies, & Director of the Center for Constitutional Studies
Cato Institute, Washington, D.C.

Nineteenth Annual National Conference on
Private Property Rights
October 17, 2015
The Century House, Latham, N.Y.

 

Well, thank you very much, Carol, for that kind introduction and it's great to be back. What Carol did not say is that I grew up not far from here in a little town called Galway in Saratoga County. I'm glad to see that one of my classmates, Kurt Kilmer, is here as well and it's good to be home.

In any event, I live in Washington, now, because that's where the Cato Institute is. I put out on the table a couple of things that are there for the taking so please feel free to do so. A copy of our pocket Declaration of Independence and Constitution which has a foreword by me which relates the two documents according to their fundamental principles and every member of Congress has one of these. Occasionally you will see them hold them up for a picture that will appear on page one of the Washington Post. I only wish they read it. The other item out there is a recent Cato's letter that came out in the summer when we held a conference on Magna Carta and I'm going to be drawing from this in my remarks today.

We held a conference on June fifteenth which is, at least alleged to be as best we know from the history, the day in which King John attached his seal to the document that was put to him by the barons and clergy at Runnymede in 1215 which means, of course, that we are celebrating this year the eight hundredth anniversary of Magna Carta. And when Carol saw that publication she got on the phone and said, "Could you come up and talk to us about it?" And I said, "I'd be delighted to do so." And here I am. And so, I'm going to talk about Magna Carta for the first part of my remarks and then I'm going to talk about some of the implications of it for property rights and the protection of property rights or the demise of property rights, more accurately, which is, of course, why we're all here. And then I'm going to open it up to questions.

Now, if I understand we've got about an hour. Is that right, Carol? Okay, good. I'll try to leave considerable time for questions when I'm through. Again, this is the eight hundredth anniversary and this is when most important of all the rule of law was established through a document in England. And quite apart from all the rights that instantiate that rule of law, it's the underlying principle of the king being under the law and not above the law which is something when you read about what's going on in Washington today, is a constant struggle to preserve. In any event, we in this country tend to be of the view that in 1776 America sprang whole cloth, ex nihilo, and that is not entirely correct. There is some element of truth to that to be sure but, at a deeper level we owe a great deal to the people in England from whom we separated ourselves two hundred twenty-nine years ago for giving us the notion of law that is part and parcel of our situation today.

Now, earlier before the break for lunch you heard an excellent presentation about the shenanigans that are going on of a political sort from Jim Streeter and the bleak prospects that are potentially in the offing given the outlook for the Senate owing to the way the seats are opening up in this particular election. Then before that we heard from Matt Norfolk on what can only be described as the corruption of the legal and administrative system. I'm going to speak of a more happy situation, namely the evolution of Magna Carta but I need to, before I do so, make it clear that there is really nothing that can be done if corruption takes over your legal system. It's one thing to secure the legal system, but when it becomes corrupt with those who administer it you're in a whole different world. All we have to do is look around the world and see countries where corruption is the rule rather than the exception and there is a good case that can be made that we are moving in that direction today, if you saw the debates earlier this week. But I digress.

The inherence that we got from the English begins with the common law. That is the law that judges make when they decide cases that are brought before them. One individual against his neighbor. It is judge-made law and it is the origins of the theory of rights that stands behind the Declaration of Independence today. As they're adjudicating cases, one case at a time, gradually they developed a theory of rights starting with property rights and then going to contract rights which are the two fundamental building blocks of the law that we have inherited from the English. That took place in the third quarter of the Twelfth Century under King Henry I who was the father of King John who was brought to account at Runnymede. And indeed, in his classic Harvard Law Review essay The "Higher Law" Background of American Constitutional Law we see that Edward Corwin, the author of that seminal work brings out how it was that this development of the common law was so crucial because it and the rights that it set forth is what was drawn together at Runnymede in the form of Magna Carta.

So, a half century after this began Magna Carta incorporates much of that private law unless we get the rule of law in the form of a written document brought into being not by an enactment but by a compact, a political act. Notice that it's not a legal act. It is a political act that then becomes a legal document. And the hint of a future parliament is even reflected in the Magna Carta in the idea of the king's ruling in consultation with the common council of the realm as in Chapter Twelve's taxation provisions. And so we have even here an adumbration of the separation of powers as early as the Thirteenth Century.

But the story of Magna Carta was the story of ups and downs over the ensuing centuries, especially during the reign of the Tudors and Henry VIII in particular. The story of Magna Carta's travel abroad, including to the United States, begins early in the Seventeenth Century but in the mother country with the document's reemergence from its eclipse under the Tudors with the uses to which the great English jurist Sir Edward Coke would put the charter in his struggles against the Stuarts and somewhat less with Parliament itself.

Those struggles would unfold just as English colonists began settling in America and it was a fortunate act of history that the struggles did unfold as they did in England. Thus, the charter of the very first of those settlements in Virginia in 1606 declared that the colonies and their posterities and I quote here, as English subjects were to enjoy "all liberties, franchises and immunities" to the same extent "as if they had been abiding and borne" in England. Language that we later see in the charters of Massachusetts Bay in 1629 all the way up to the Georgia charter in 1732.

Meanwhile back in England over this period, these developments did not go unnoticed in the colonies. The 1628 Petition of Right, the 1679 Habeas Corpus Act, and the 1689 Bill of Rights in the wake of the Glorious Revolution of 1688 each of which drew on Magna Carta's "ancient rights" thus William Penn having survived his 1670 trial in England for preaching his Quaker beliefs looked to Magna Carta when drafting the 1682 blueprint for Pennsylvania. A year later the colonies' assembly enacted laws drawing on both Magna Carta and Lord Coke's writing on the charter.

But as relations with England deteriorated in the second half of the Eighteenth Century, Magna Carta came back to the fore, first as the basis for our pleas to Parliament, and then to inform state bills of rights and constitutions. Virginia led the way when its legislature protested the Stamp Act of 1765 citing the ancient constitution and the rights of English subjects not to be taxed without their consent. And, of course, the right to trial by jury as well. With the several Townshend Acts that began in 1767 relations grew considerably worse culminating in the so-called Intolerable Acts of 1774. That's Parliament's reaction to the Boston Tea Party of the year before. And still when the Continental Congress met in September of 1774 to draft a set of resolves to send to Parliament, the delegates rested their cause not only on the appeal to natural law but even more on the principles of the English Constitution charters and compacts.

Their petition to Parliament went unanswered save by, and here I'm going to quote John Quincy Adams later writing about this, their petitions to Parliament unanswered save by "fleets of armies, the blood of Lexington and the fires of Charlestown and Falmouth." The colonists prepared to sever their ties with the mother country. Yet documents that both preceded and followed independence continued to draw on the principles first set forth in Magna Carta as did the Declaration of Independence itself with its catalogue of grievances not unlike those that gave rise originally to the charter. From the Virginia Declaration of Rights to the new constitutions of South Carolina, Virginia and New Jersey, all drafted prior to the Declaration of Independence, to the constitutions of Delaware, New York and Massachusetts which were drafted during the Revolution, we find provisions first found in Magna Carta: Trial by jury; no taxation without consent; no excessive fines or punishments; no depredation of life, liberty or property without due process by the law of the land; no taking property without compensation; and no having to pay for justice. All of this can be found in these state constitutions all of which were drawn from Magna Carta itself.

But Magna Carta's influence did not end with the Revolution. It continued on to the Constitutional Convention of 1787 which gave Congress the power to tax, not the executive, as in thirteenth-century England but then rested the origination of that power in the House. The body that is closest to the people reflecting Magna Carta's prohibition on taxation without the "common counsel of the realm." And two years later, Magna Carta's influence was especially evident, of course, in the first Congress, when it drafted the Bill of Rights.

Now, a few examples of that from the Bill of Rights will suffice for our purposes here. Chapter 1 hardly reflects our modern view of the separation of church and state, but neither did the First Amendment's original applications. Yet by assuring that the king could not interfere with church elections, it surely foreshadowed those understandings. Chapter 20 requires that fines and punishments fit the wrong at issue, so anticipates our Eighth Amendment protections against excessive fines and cruel and unusual punishments. Chapters 28, 30, and 31 prohibit the taking of grain or other chattels without just compensation. That's a clear precursor, of course, of the Fifth Amendment's Takings Clause which I'm sure all know. And it's a clear precursor of a principle just reaffirmed last term by the Supreme Court in the Horne v. Department of Agriculture case. You may recall if you saw that case, it involved the Agriculture Department taking up to forty-seven percent of a farmer's crops in order to keep the prices for the farmer up. And, of course, the prices up for those who consume the products of the farmer. It was one of these classic New Deal's schemes that is still out there and fortunately the Supreme Court in its last term found it to be unconstitutional as a taking of the property that belonged to the farmer.

Chapter 38 prohibits prosecutions based on a bailiff's say-so alone, without "faithful witnesses," while Chapter 40 promises neither to sell nor deny nor delay justice, thus anticipating several guarantees our Sixth Amendment affords to defendants in criminal prosecutions. And Chapter 39, which is the one that's most important in this room, is the famous "law of the land" provision. It's a clear precursor of our Fifth and Fourteenth Amendment Due Process of Law Clauses. Meant originally to protect only "freemen," it reached many others over the years, much as with our own Constitution.

Well now, with this brief canvass of Magna Carta's influence on American law, let me return to the point with which I began. Although America did not spring fully formed ex nihilo in 1776, there are nonetheless important differences and basic differences between legal developments in America and in England, going to the very theory underlying the two regimes. To be sure, the late Eighteenth Century struggle in America, like that at Runnymede, began as an effort to wrest rights from the power in place — and in both cases in the name of the ancient rights as loyal subjects. And in both cases. But the English nobles were rebelling against the king, whereas we rebelled against the acts of Parliament, albeit enforced by the king, which explains why, in the Declaration you find it in the name of the king and his "long Train of Abuses." Note, too, how sovereignty in England moved gradually, and often uncertainly, from crown to Parliament, never fully to the people. Moreover, to this day even, England has nothing like our separation of powers. Its High Court only recently was separated from the House of Lords, whereas, we have the Supreme Court as a separate, third branch of government.

But the differences are deeper. Now here I'm going to come to a very important institutional difference that goes beyond the institutional differences that I just mentioned.

In America, a radical shift unfolded between 1774 and 1776, culminating in the Declaration of Independence. There we addressed not the king or Parliament but "a candid World," justifying our independence not in the name of our ancient English rights but in the universal rights of all mankind. That is a fundamental difference between the English tradition and our own.

As the Declaration plainly states, we dissolved the political bands that connected us to England and instituted new government, and here I quote from the Declaration, "by the Authority of the good People of these Colonies." Where did we get that authority? From no one, save our "Creator." We were born with it — born free, with natural, unalienable rights to rule ourselves. Thus, the Declaration of Independence becomes America's Magna Carta, drawing, ironically, from the writings of an Englishman, John Locke, whose ideas infused political thought in America, I elude to the Second Treatise of Government which was published in 1690 in Holland where Locke had fled to escape oppression from the English crown. We grounded political legitimacy on the consent of the governed but only if Constitutionally limited, leaving us otherwise free. And when we constituted ourselves eleven years later we returned to those principles, stating clearly in the new Constitution's Preamble that sovereignty rests with "We the People." We constitute and empower government—by right. Government does not give us our rights: we give government its powers. And that's the fundamental difference between the English approach and our approach. All power starts with the people in the United States.

England had its Glorious Revolution, but it never led to so fundamental a break, and to reconstituting the polity from the ground up, beginning with the moral order, from which the political and legal orders would be derived. Nor did it lend, operationally, to the kind of judicial review that Lord Coke adumbrated in 1610 in his famous dictum in Dr. Bonham's Case.

Today, of course, this elegant theory of legitimacy the Founders left us has been largely lost, particularly after Progressives effectively rewrote the Constitution exactly 150 years after it was actually written. In the aftermath of that rewrite — which reversed the presumption from "all that is not given is reserved" to "all that is not reserved is given to the government" — we're practically back in the fields of Runnymede today, repeatedly pleading to the government for relief from its assumption of plenary power. And it isn't untethered executive power — arbitrary rule by the king or the president — that worries us so much as arbitrary executive power arising from majoritarian democracy — or, more realistically, from special-interest politics.

So, I want to conclude on a somewhat positive note in this celebratory year, that although Magna Carta began as a distinctly English statement, its sheer endurance and fecundity over time has served to distinguish it not only as a touchstone of English and American liberties but as a symbol of the liberties of all mankind. It was a major step in the advance toward liberty, and an inspiration for the Founders as they created the United States. Thus it remains a document worthy of our continued celebration.

And now I'm going to move over to how these insights and these principles manifest themselves in the theory of rights that underpins the theory of property that is at the heart of the Constitution. There are, of course, two provisions in the Constitution that pertain to property rights straightforwardly, quite apart from the idea that the federal government has only those powers that we have given it, which, of course, is today effectively a dead letter

Those two provisions, the due process clauses of the Fifth and Fourteenth Amendments, the Fifth applying to the federal government, the Fourteenth to the state governments, and the Takings Clause, which is in the Fifth Amendment and is incorporated by inference in the Fourteenth Amendment against the states. The Due Process Clause says that no the government shall not deprive you of life, liberty, or property without due process of law. The Takings Clause: nor shall private property be taken for public use without just compensation.

I'm going to give you four scenarios in which a government action effects a property owner and in the fourth of those divided into four other scenarios and show you how it is that if the theory of rights that underpins the Constitution were, in fact, enforced today, how it is that the law would play out.

The first of those examples is where government takes an action that effects a property owner often reducing the value of his property. Let us say it closes a military base in a town or a school in a community near where you live. Or let's say the government builds a new road a mile from where you have a motel or a restaurant. All of these actions will result in a reduction of the value of your property. And so, the question is does the government owe you compensation for that? And the answer is, "No." In a private matter of that kind you wouldn't be entitled to compensation. For example, if you had a Mom and Pop grocery store and then a giant supermarket came across the street from you, doubtless the trade would move from your Mom and Pop store — at least a good part of it — to the supermarket which can buy in high numbers and lower prices and so, you might even be driven out of business. But the reason you don't have a claim is because nothing was "taken" from you that you own free and clear. You don't own the value in your property. You own only the property and all of the uses that rightly go with it. So there you wouldn't have a claim based straightforwardly on the classic theory of rights.

The second scenario is where the government prohibits you from using your property in certain ways that violate the rights of your neighbor, Nuisance or risk, for example, prohibits the use of a property that is too risky to your neighbor or that is nuisancesome, is wafting particulate matter or noise or vibrations or odors or what have you. There, too, you wouldn't be entitled to compensation if the nuisance exceeded a certain level which is sometimes set by public law. You can't make noises on your property that are so extensive that your neighbor can't sleep, for example. So, those kinds of uses can be prohibited and no compensation would be owing for that.

Now, the next two uses are the ones where compensation is properly owing. The first is regulatory takings. That is to say, where you are prohibited from using your property in a certain way that is otherwise legitimate because it's not a nuisance. It doesn't cause a risk to anybody else but your being prohibited because the government wants to have a lovely view that runs over your property, let us say, or make of it historic preservation and prohibit you from doing what you want with it. And so on and so forth. These are the kinds of things that fall under the so-called regulatory takings category and they are rampant all across the country and often you do not get compensation even if the value of your property is reduced to almost uselessness you still are not able to get compensation. I'll give you an example when I come back to this in just a minute because it is the most egregious area of abuse of property rights today.

The fourth case is the full case of eminent domain. The third one that I just talked about was effectively the use of eminent domain to condemn uses. You keep the title of the property but you can't use it in the way you had been using it before. But here they claim the whole property. They literally take title for a public use and you get, supposedly, just compensation. I'm going to give you four scenarios of that version.

The first one is the classic use where the government needs to build a road or a military base or a school or a sewer line, or a water line, what have you, and they need to take your property or a portion of your property. Here it's for a public use. So, that part of the Takings Clause is satisfied and you get just compensation, if you do. The problem today, of course, is that just compensation means market value. The fact that that is not just compensation is indicated simply by the fact that you don't have your property on the market. That fact alone tells you that it's worth more to you than it will fetch on the market. And so, if all you get in the way of just compensation is market value, you haven't gotten just compensation. Ideally, you should be given as much as is necessary to leave you indifferent as to whether you keep the property or get the compensation. Now, every man has his price, as we say, so there is some price at which you say, "Yeah, I'll take the money and you can have the property at that price." So, that's the kind of just compensation that there should be. But other than that, this is a perfectly legitimate use of eminent domain because it is recognized in the Constitution as available to the government. Now, that doesn't mean it's per se legitimate. There are deeper theoretical issues I won't go into about the justification of eminent domain as such.

But in any event, now let's go to the second category. That's the case where the eminent domain is exercised by a private party, the power having been conveyed to that party by the government. And it deals with such things as laying a cable or a railroad or a telegraph line or what have you, where they have to establish or secure property in a long line and you're always faced with a holdout, who can, as we say, extract "monopoly rents" from the person who decides not to sell and then, therefore, you can ask for an infinite price as a result of that. Here, this is legitimate insofar as it is for a public use, let's say that a sewer line or a water line or what have you. And even though it is being exercised by a private party, otherwise you would have to have all of this done by the government. Usually, it's better to have it done by a private party because they can run the program more efficiently than government does. Government is notorious for being inefficient. And so, that will be perfectly legitimate.

Now I'm going to come to the two areas of these last four subcategories where you do run into problems.

One is blight reduction. The other is economic development.

Blight reduction, as in the famous Berman v. Parker case of 1954 where a whole area of Washington, D.C., was bulldozed in order to improve it. This is a classic case of abuse of eminent domain. I'm reminded of the scene in 60 Minutes where Ed Bradley was talking to the mayor of this small suburb outside of Cleveland and she was defending her suburb's use of eminent domain. And he said, "But this is being rationalized by blight. What are the criteria for blight?" "Well," she said, "If you've got a one-car garage or only one bathroom in your house and so forth." "Well," he said, "You know, that's your house." "Oh." And so there was a real gotcha moment that Ed Bradley put to her that her house was also subject to eminent domain under those criteria. This is abused over and over again and, of course, the people who suffer most are the people who don't have power or money to fight it.

The fourth is the Kelo case. And the Kelo case is a classic example of transferring eminent domain power to a private party so that you can extract more tax from the upscale work that is being done. Kelo is a fascinating case because what you've got is — and you probably know some about Kelo. It was the Pfizer pharmaceutical company that wanted to build a new plant and all the structure around it in the New London, Connecticut, area. It turns out they had just come up with a new drug, namely Viagra. So, in any event, things were looking up, so to speak, so they were planning to build this plant. Well, then the market took a dive. They took all this property, destroyed it, and today it's a fallow land roaming with cats that is just left there. Meanwhile, Susette Kelo lost her home as a result. This is the kind of thing that you see, again, over and over across the country: deals between large developers and the city council members to usually create a new tax base, improve the town, and the people who suffer are the people who are least able to fight it.

So, these are the two areas where you see the most abuse today. Ilya Somin at George Mason Law School has just come out with a new book that goes through great detail on the Kelo case. It's called The Grasping Hand: Kelo v. City of New London and the Limits of Eminent Domain and you can just go online and get that.

Now, let's go back to that regulatory takings case and I'm going to conclude with that because it just captures so perfectly what's going on in these cases.

David Lucas was a developer in Charleston, South Carolina, who bought two parcels of land on the Outer Banks of South Carolina, and paid nearly a million dollars for them with the idea of building a home for himself on one and a home to sell on the other. There was nothing extraordinary about what he was planning to do — there were homes on either side of his two lots and between the two lots. So, between the time he bought them and the time that he was about to commence building, the South Carolina legislature passed the Beachfront Management Act, to promote tourism and to allegedly protect certain flora and fauna, the effect of which was to reduce the value of his land to virtually nothing. He had paid almost a million dollars for these two parcels. Now, he could use it for picnicking. He could use it for tenting. It was a very expensive tenting and picnicking spot, for sure, but that was it. So, he did what every red-blooded American would do: he sued. And he won at trial. But the South Carolina Supreme Court reversed him 3-2. And so there he was out completely a million dollars. So, he appealed to the Supreme Court and wouldn't you know, they took the case, which was rare, and they reversed it 5-4. Now let's figure that out. There are four votes here saying this is perfectly fine to take all the uses that go with this property and leave him, as it were, with an empty title.

The problem in the decision, which was written by Antonin Scalia for the five-member majority, is that he said if this is a complete wipeout then you're entitled to compensation. Well, the problem with that is that most regulatory takings are not a complete wipeout. Indeed, there was probably some value — a few thousand dollars as a picnicking spot — that this land still had. And so, what Scalia has done is got it exactly backwards. The Takings Clause requires you to be compensated not when the last dollar is taken but when the first dollar is taken. If someone were to come along, and say a mugger said, "Your money or your life," and you bargain him down to half your money so you can have bus fare to get home, no one would, for a moment, say anything but that the thief had taken half of your money. But if that thief happens to have a badge that says "State of South Carolina" or "Federal Government," they can get away with it. That's what's wrong with our regulatory takings law today. It allows you to get compensation only if there's been a physical invasion; if there is no rationale, whatsoever, that can be justified for the taking; or if you have a complete wipeout. And the remedy to that is to have the law revisited such that you are entitled to compensation if your property is worth a hundred thousand and the regulation takes an otherwise legitimate use and it's reduced in value to fifty thousand you should be entitled to that fifty thousand.

All right. That's the theory of the matter. This is the way it should be when it comes out when you have a case before the court. It is not the way it is. And I haven't even gone into the procedural problems that you're up against. The Williamson County case (Williamson Cty. Planning v. Hamilton Bank) where in 1985 you have to get a final judgment form the state officials that are taking your property and as we know those officials can bleed you to death. They can tell you, "Come back and give us a new plan." You come back with a new plan for development. They say, "No, this isn't good enough. Here's what you need to do." You came back with that. "No, that's not good enough." We have cases, The Lake Tahoe case (Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 122 S.Ct. 1465 (2002)) that went before the Supreme Court about a decade ago had seven hundred plaintiffs. By the time the Supreme Court got the case a third of those had died. That's the situation that you're up against as a property owner. And it is, of course, as was said on one of the previous sessions, they have all the money, you have to finance this yourself. And most people don't have the wherewithal to do that. David Lucas, fortunately, did. He was a developer. But mostly your average person doesn't and so the government officials know that and they will drag it out because they know that there are limited resources on your side and they will bleed you to death until you go away.

The other case is when you finally do get into federal court, if you do, it's called res judicata. They say it's already been decided at the state level. There's the San Remo case in 2005 that addressed that kind of issue with respect to the full faith and credit, also. But I don't want to get into these technicalities because the eyes glaze over once you start doing that.

So, let me stop now and take you questions. Yes, sir?

Audience member: I have two questions and possibly a follow-up.

Mr. Pilon: Sure.

Audience member: The injunctive relief in these two particular situations, what's the practicality for it?

Mr. Pilon: Well, injunctive relief would solve the whole problem. The practical, no. I mean, if you're talking about eminent domain there they got the power. So, there's no enjoining. It's just a matter of whether they carry it out in the right way. So, that won't get you.

Audience member: The other question. What about the aspect of alternatives?

Mr. Pilon: The aspects of alternatives by which you mean what?

Audience member: In other words, it's my understanding that before they can take it part of what they're is supposed to do is show that they have no other viable alternatives to proffer.

Mr. Pilon: That is what should be done. Indeed, eminent domain should be the last resort rather than the first resort. Rarely do you get that. The judiciary is more deferential to government on property cases than any other area except taxes. If you've got a tax case you can almost forget about it. But no. These considerations are just not — and especially here in New York State. You have the worst. You know, after Kelo forty-one or -two states reformed their eminent domain laws some just cosmetically, others seriously, some sometimes by legislature, sometimes by constitutional amendment, sometimes by court decision, as in Ohio, for example, and Michigan. But New York was not among those states. It's one of the worst in the country. Kurt?

Kurt: If I may take just a moment, Roger, while we're talking about me and my wife, are a member of the Magna Charta. King John did not sign that, of course. He put his stamp on it. And if anyone in the audience is that interested feel free to ask me. I have it right here on my chest. Thank you, Roger.

Mr. Pilon: You're quite welcome. Yes?

Audience Member: I'm familiar with the Kelo case. I had worked with Susette on that. But today, what is the Kelo case instead of being a [Unintelligible] by a foreign company coming into the United States called Keystone Pipeline and many people are successfully, hopefully, fighting that. Do you have any thoughts on that? I mean, is that a precursor of something coming.

Mr. Pilon: The fact that it's a foreign company should have no bearing, whatsoever. Foreign companies if they come into the United States are subject to — in their actions to — federal and state law just like domestic companies are. So that it's foreign has no bearing whatsoever.

Audience Member: Well, right. But the Keystone Pipeline is attempting to take people's property through eminent domain, correct?

Mr. Pilon: Yes. And there's one of the classic examples where it's legitimate because you are establishing a chain like a railroad or a cable or a sewer line and so forth, for the public use.

Audience Member: By a company not originating here in the United States…

Mr. Pilon: That has no bearing on it whatsoever, as long as the public use criterion is satisfied. Yes?

Audience Member: I had the federal government file lawsuit against me on the Clean Water Act in 1987 under the Tucker Act.

Mr. Pilon: The Tucker Act Shuffle, as it's called.

Audience Member: I had sixty-eight million dollars in fines before they finally assumed it for a hundred and some thousand dollars. It's been a twenty-eight-and-a-half-year ordeal. And we talk about the rule of law. You've mentioned the rule of law and we won at the federal level after seven years and a half million dollars. The Third Circuit overruled that without the rule of law or the facts. Consequently, we have five hundred thousand farms in this country today that can't farm their land in the way they should because you can't change one use to another. I guess I'm still under thw Third Circuit's thumb and we have after about ten years finally at the end of the trial in 2006. Judge Allegra heard that trial, was one [that determined if] Third Circuit was right or wrong and it was determined that, everyone agreed the Third Circuit was wrong and this case should have been modified. That will be ten years this coming January. As of yet, the EPA was on our property this Spring. It had to cost thirty thousand dollars because of justice department attorneys and there was about ten different people from the government. But these are the things that are happening out there and right now I paid to have a consulting come in there and verify what I have said for the last thirty years. It's so unbelievable, unbelievable that we haven't been able to make Congress understand, in my mind, the need to do something with this. Now, the Sackett case didn't change the Tucker Act. We have the right to sue the government but like we're saying your money runs out. And even if you have the money, we shouldn't be pursuing these kinds of situations. But I had to bring that out because, you know, Congressman Reed, I think maybe he walked in there. I think he's right over there. He and I, I think, see together. I've never met the man but he's trying to get people to understand that these are major problems throughout the continental United States. But right now I'm waiting for the EPA to decide whether or not they're going to do what they should do, and that would be to put this property back. But I signed a consent decree and that, in my mind, and what I believe what Judge Allegra said that a consent decree is no more than compliance with the law. But the thirty acres… they're still trying to put me in jail.

Mr. Pilon: I don't know the facts of your case, obviously. Did you file a cert petition with the Supreme Court?

Audience Member: Yes, we tried, twice.

Mr. Pilon: It's always a long shot.

Audience Member: Hank Ingram, who was my attorney, we worked with [Unintelligible] Ingersoll and that's where we won the first go-around in federal court. And that's where the half million dollars came from. And then we tried to go to the Supreme Court saying the Third Circuit was completely wrong on this. They turned their back to the local court and that's when we applied several times and finally got to trial in 2006. It was a four-day trial and like you were saying there he spelled it out in there. Like you'd mentioned in California, they could take eighty or ninety percent of your property [Unintelligible] called a taking. But you know right now that most people don't understand what "waters of the US" are, and how entwined it is. But I'm just beside myself as so many other people are and I guess [Unintelligible] to get along worse.

Mr. Pilon: Okay. Congressman Reed was over at the Cato Institute and we chatted over there. And he's doing yeoman's work in Congress. There's just so much that Congress can do though, because most of these abuses are state and local abuses. That's the long, hard truth of the matter except when you get into EPA and all the environmental regulations then it's a completely different affair.

With respect to — what was it that she mentioned — oh yes, just a quick history of how it is that we got into a situation. You remember in my Magna Carta part I mentioned the [Unintelligible] as where all hell broke loose to put it in plain English. And that is where there was a fundamental shift in the climate of ideas. Whereas the founding and subsequent generations saw a government as a necessary evil, the Progressives, at the end of the Nineteenth and early Twentieth Century saw government as an engine of good, an instrument through which to accomplish all kinds of good things in their mind. Right? Of course, done by elites working in bureaucracies that they would create. There are over three hundred such agencies right now in Washington like the EPA.

Now, how did they do this? During the early decades of the Twentieth Century you had several decisions from the Supreme Court with respect to property. Pennsylvania Coal Co. v. Mahon in 1922 Where the sainted Justice Oliver Wendell Holmes, the great Progressive, said that if a regulation goes "too far," it constitutes a taking and therefore requires compensation. Well, there's a nice bright line. If it goes "too far." Right? And, of course, the courts have been struggling to make sense of that ever since, invariably deferring to the agency's understanding of what "too far" is. Okay? Then you had the zoning decision, Euclid v. Ambler Realty Co. in 1926 whereby the owner who brought the case suffered a loss of three quarters of the value in his property and then lost before the Supreme Court. In the New Deal you had after the landslide reelection of Roosevelt in 1936, he unveiled his infamous court-packing scheme, his threat to pack the court with six new members. Well, there was an uproar over that. Not even Congress would — which was 4-1 Democrat — would go along with that. Nevertheless, the court got the message. And there was the famous "switch in time that saved nine." And it began rewriting the Constitution without benefit of Constitutional law. And it did that in three main steps. It eliminated the Doctrine of Enumerated Powers, which says that Congress has only eighteen enumerated powers. There are only eighteen areas in which Congress can regulate or redistribute. That went out the window. So, now the floodgates were open.

In 1938 it bifurcated the Bill of Rights and distinguished two levels of judicial review. If a law implicated a fundamental right like speech or voting or later on certain personal liberties then the court would apply strict scrutiny. The government would have to have a compelling justification and the means it employed would have to be narrowly tailored to serve that. And then in 1943, now we're getting over here, because now the other part of that bifurcation is that if a law implicated non-fundamental rights like property rights, economic liberty, contract freedom, ordinary commercial relations, the court would apply the so-called "rational basis test," which means that if Congress or the state legislature has some reason, some conceivable reason, if you can conceive a reason that would justify the statute, that's good enough. So, it's no test at all. And that's the substantive basis.

Now, that meant the floodgates were open for the modern redistributive and regulatory state that we know and love so well today. And the government programs poured through. But, of course, the Congress could no longer oversee all of this. It was just too much. So, in 1943, the court jettisoned the non-delegation doctrine. That's the doctrine that comes from the very first word of Article 1, Section 1, which reads, "All legislative power herein granted shall be vested in a Congress." So, what did the non-delegation doctrine say? Congress can't delegate its lawmaking power to the agencies. In 1943, in the NBC case (National Broadcasting Co. v. United States) when the court jettisoned that doctrine it amounted to letting Congress delegate ever more of its power to the executive branch agencies in the form of regulation. Now, the line between regulation and law is pretty thin. All you need to do is look at how Obamacare has been carried out over the last few years. A vague statute comes out of Congress and then the IRS, HHS, and so on and so forth are all writing the regulations under it. It's rule by executive agency. So, that's what you are up against. And that's how we got to that state of affairs. A gradual unfolding of the original design through the ideas of the Progressives so that they could make the world safe for the modern executive regulatory and redistributive state. And if you want to see it in its pure form just rerun Tuesday night's debate. Listen to Bernie Sanders and you will see it writ large.

Audience Member: What a lot of people don't understand is that these are criminal offenses.

Mr. Pilon: Of course they are.

Audience Member: We all have John Paul [Unintelligible] Mills. Those people spend two years in jail.

Mr. Pilon: Sure.

Audience Member: And how do you make people understand these things. It's pretty tough.

Mr. Pilon: There was a question right back here.

Audience Member: I was just going to follow up on abuse from pipelines just to say that there was a case that came down recently in Kentucky. They were piping all of the natural gas overseas, and the judge in that case said no public use stopped the taking because he said it wasn't serving any of the public.

Mr. Pilon: That's how you can fight that on the terms of the statute or the terms of the Constitutional revision. Yes?

Audience Member: Are there any avenues for attacking EPA or any other regulatory agencies if their regulations are based on poor science. Specifically, I have a manufacturing facility in Delaware County, which is inside the New York City Department of Environmental Protection of Watershed regulation. The DEP has been purchasing conservation easements. Their original intent was to purchase land next to tributaries. What they've done over the last three years though, is they've grown their land acquisition program to purchase a level of developable land around all of the communities. This land now means that the smaller communities have no place to grow even if they wanted to. They've done this in the idea of protecting the water. But they've made that statement and they seem to some people intuitively obvious, or intuitively un-obvious. But there's no science behind that.

Mr. Pilon: The answer to your question is, "Yes, that should be available." But, to continue with the theme that I've been developing, as we've now moved into the administrative state — the modern executive state — the court has developed a series of doctrines about deference. Chevron deference, Auer deference, Skidmore deference. All of these are deference to the agencies. So, if they say the science is not on your side the court is not going to — other things being equal — second-guess the agency. You'll have exceptions where the courts will bite into the case and decide for themselves, but, by and large, today the courts are so deferential to the agencies that you really don't stand a good chance of fighting it. And that's, again, a result of the movement toward government by executive branch agencies…

Audience Member: The gold theory is to depopulate the watershed. The NYC DET [if asked] quietly they'll tell you that's their goal using conservation easements and other mechanisms is to induce that depopulation.

Mr. Pilon: Carol?

Carol LaGrasse: When you looked at Steven's decision like Tahoe and the subsequent writing of the decision in Kelo wasn't that what he basically did? He deferred to the judgement of the City of New London.

Mr. Pilon: Yes. It's not just in this area. The Fisher (Fisher v. University of Texas at Austin) case involving affirmative action is coming up before the Supreme Court this term that involved the Fifth Circuit. They send it back down and, once again, they deferred to the University of Texas as to whether… This is judges not doing their job. George, you had a question way back.

George: In Lucas v. South Carolina, after Lucas won, plus his court expenses, of course, he lost the property. It's pertinent to say that South Carolina suffered the loss and they sold those lots for house lots.

Mr. Pilon: It's even better than that, George. They sold those lots to another developer for $600,000. David Lucas got a million and a half, okay? Because by this time, with the passage of time, the million he invested plus his legal fees came to a million and a half, okay? They sold it to a developer for $600,000 so the taxpayers of South Carolina get stuck with a million dollars for… That's good government at work. Okay, yes, Fred?

Fred: I was surprised that one of the earlier presentation there was a flash momentarily came across the screen quoting Donald Trump who says, "I'm a hundred percent in favor of eminent domain," and I didn't hear a sound in this room.
Mr. Pilon: No. I know. He is… I hope we do better. He's been on all sides of most issues. And so, this, too, shall pass. Let's put it in Biblical terms. Any more questions? All right. Good. Thank you very much.

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