Judicial Takings or Due Process?

Eduardo M. Peñalver & Lior Jacob Strahilevitz

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In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, a plurality of the U.S. Supreme Court concluded that the Takings Clause of the U.S. Constitution prohibits the judiciary from declaring that “what was once an established right of private property no longer exists” unless the property owner in question receives just compensation.1 Stated this baldly, the doctrine would be far-reaching and might potentially prevent courts from updating property doctrines where doing so would have the effect of reallocating property from one private party to another.

In this Article, we try to spell out in more precise terms the proper boundaries of the judicial takings doctrine. We do this by attending to the boundaries between a “taking” and a violation of the Constitution’s due process protections. The result is a judicial takings doctrine that is narrower and more coherent than the one suggested by Stop the Beach.

Our argument proceeds in two parts. The first is a conceptual section that explains the distinction between the interests protected by the Takings Clause and the Due Process Clause. In our view, where the state intentionally seizes private property to achieve a legitimate public end, the Takings Clause is the appropriate framework for evaluating the constitutionality of the State’s action. The state acts with the necessary intent to appropriate where it takes private property for itself. But, even when it merely shifts property among private parties, it acts with the intent to appropriate where it seeks to pursue some public end by reallocating private property from one private party to another. On the other hand, where the reallocation of property from one private party to another is merely an incidental consequence of a legal change, and where the reallocation itself serves no public purpose, the requisite intent to appropriate is lacking. This is true even where the reallocation is in some sense foreseeable.

The Due Process Clause is the more appropriate doctrinal pathway for cases in which the state does not intend to appropriate a private owner’s property. A state “deprivation” of property violates the Due Process Clause where the diminution of private property rights results from a judicial action that serves no legitimate public purpose or where the state imposes the deprivation without providing adequate procedural safeguards. The Takings Clause presupposes that the state is acting for a legitimate public purpose. Consequently, it merely requires just compensation when the state takes private property for public use. Conversely, the Due Process Clause marks the outer limits of the state’s power to act at all.

By clarifying the boundaries between takings and due process violations, we narrow the potential scope of the judicial takings doctrine. In our view, judicial takings claims are only appropriate where a court has changed the state’s background property law—that is, where a court is acting as a lawmaker. In addition, as the foregoing discussion of the distinction between the Takings and Due Process Clauses makes clear, not every loss of property that results from such a change in the law of property gives rise to a viable “judicial taking” claim. The judicial takings rubric is only appropriate where an owner loses property because of a judicial change undertaken with the intent to appropriate. In addition to clarifying and limiting the potential scope of judicial takings, our discussion also helps to shed light on the constitutional foundations for numerous state-court doctrines concerning the retroactivity of new property rules.

The second section articulates a novel functional argument, which suggests that creating liability for judicial takings may cause litigants to underinvest in high-quality legal representation, which will, in turn, increase the likelihood of judicial mistakes and contribute to the destabilization of existing entitlements. This phenomenon prompts us to argue that cases in which the underinvestment incentives are most pronounced should be litigated under the Due Process Clause, but cases where repeat play or the government’s involvement as a litigant mitigates the underinvestment problem represent more appropriate vehicles for judicial takings treatment.

What rides on the correct distinction between judicial takings and due process violations? Doctrinally, the traditional answer has been remedial. In the property context, ongoing Due Process violations must be enjoined. In contrast, the Constitution permits the payment of “just compensation” when property is taken for a public use. Our functional analysis helps to explain why judicial takings cases should be (a) easier to win than due process cases, (b) more likely to result in damages remedies than injunctive remedies, and (c) more amendable to attractive “comparative fault” inspired solutions.

Acknowledgments:

Eduardo M. Peñalver, Professor of Law, Cornell University.

Lior Jacob Strahilevitz, Deputy Dean & Sidley Austin Professor of Law, University of Chicago.

This article is based on Eduardo M. Penalver & Lior Jacob Strahilevitz , Judicial Takings or Due Process?, 97 CORNELL L. REV. 305 (2012).

  1. 130 S. Ct. 2592 (2010).

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