The Measure of Just Compensation
New York University School of Law
UC Davis Law Review, Vol. 41, No. 1, 2007
NYU Law School, Public Law Research Paper No. 07-17
NYU Law and Economics Research Paper No. 07-36
This article is a response to a little-noticed aspect of the reaction to the U.S. Supreme Court's 2005 decision in Kelo v. City of New London: the renewed discussion that the case has prompted about how much compensation homeowners should be paid when governments take their houses.
Since Kelo, there have been many proposals to increase the compensation that governments have to pay when they take property. These proposals are aimed at deterring governments from taking property in the first place and increasing the compensation that takees receive. In light of questions that three justices asked during the oral argument of Kelo about compensation for eminent domain, some observers have predicted that the Supreme Court might take a case about compensation for eminent domain.
I argue that the current debate about compensation for eminent domain is being conducted within too narrow a framework because many of the existing proposals start from the same assumption about the appropriate measure of takings compensation. Many of these proposals, like current compensation law, assume that takings compensation ideally should leave takees subjectively indifferent to a taking. I critique the idea that takings compensation should aim to leave takees subjectively indifferent to a taking. I argue instead that we should aim to leave takees objectively indifferent to a taking. Furthermore, I sketch an objective compensation measure that contrasts with the subjective ideal that underlies existing takings compensation law and many of the current reform proposals.
Number of Pages in PDF File: 50Accepted Paper Series
Date posted: September 3, 2007 ; Last revised: February 9, 2008
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