The Public Use Question as a Takings Problem

Abstract:     
Government officials regularly use the power of eminent domain to benefit private entities, and just as regularly justify their actions with post hoc assertions about the need to promote "economic development." In Hawaii Housing Authority v. Midkiff, the Supreme Court reaffirmed that the Fifth Amendment demands broad deference to a government's decision to exercise the power of eminent domain. Midkiff makes clear that "public use" challenges are subject to rational basis review; so long as a taking can be justified by some conceivable public purpose, it will be upheld. Yet in recent years, a number of courts have put the government to its proof-requiring a demonstrated connection between the challenged taking and the particular purpose used to justified it. In so doing, these courts refused to allow the government to avail itself of the "conceivability" safety valve provided by rational basis review, a standard that requires approval of any taking that might serve the public interest in some theoretically possible way.

In other words, these cases may have been wrongly decided. A central conclusion of this Article, however, is that they were not wrongheaded. This Article will show that the courts' instincts were sound, and that Midkiff needs to be supplemented with precisely the kind of means-ends scrutiny employed in these recent cases. This conclusion proceeds from an analogy to a different kind of "takings" claim. While the public-use limitation on the takings power has been widely regarded as a dead letter at least since Midkiff (notwithstanding the abovementioned surprises), standards for evaluating so-called "regulatory" takings have evolved substantially. Importantly, after Nollan v. California Coastal Commission and Dolan v. City of Tigard, the government may not demand that a property owner cede title to property in exchange for regulatory approval unless it establishes that the exaction demanded is "roughly proportional" to the impact of the proposed development.

Although the exactions cases did not overrule Midkiff, they may have something important to say about the public use problem. One federal court of appeals judge has suggested that "considerable tension" exists between the deference required in public use cases and the heightened scrutiny of exactions. Recent public use cases provide real-world evidence of this tension. Despite the fact that current law precludes inquiry into whether a compensated taking is calibrated to advance its asserted purpose, each these courts took pains to distinguish Midkiff so as to require the government to establish a means-ends connection similar to that demanded by Nollan and Dolan. This Article examines whether this jurisprudential move should be formalized - that is, whether a version of the means-ends review required of exactions should extend to public use cases. Specifically, it explores (1) whether the justifications for heightened means-ends scrutiny of exactions are present when the government acquires land by eminent domain, and, (2) what such scrutiny might look like in a public use case.

Keywords: property, takings, eminent domain, economic development

JEL Classifications: K12, R52

Accepted Paper Series