Making Something Out of Nothing: The Law of Takings and 'Phillips V. Washington Legal Foundation'

17 Pages Posted: 15 Sep 1999 Last revised: 17 Nov 2017

See all articles by Michael Heller

Michael Heller

Columbia University - Columbia Law School

James E. Krier

University of Michigan Law School

Date Written: 1999

Abstract

Phillips v. Washington Legal Foundation, 118 S Ct 1925 (1998), held that interest generated by the Texas Interest on Lawyers Trust Account (IOLTA) program is the "private property" of the clients who handed over the principal; the Court did not decide whether the IOLTA program worked a "taking," or, if it did, what "just compensation" was due. The debates among the justices about the meaning of private property, argued in terms of contextual and conceptual severance, are unlikely to prove fruitful. We elaborate a better approach that looks to the underlying purposes of just compensation: efficiency and justice are best served by uncoupling matters and methods of deterrence from matters and methods of distribution.

Note: A companion article, "Deterrence and Distribution in the Law of Takings," appears at 112 Harv. L. Rev. 997 (1999). Reprints of both articles are available from the authors.

JEL Classification: K1

Suggested Citation

Heller, Michael and Krier, James E., Making Something Out of Nothing: The Law of Takings and 'Phillips V. Washington Legal Foundation' (1999). Supreme Court Economic Review, Vol. 7, pp. 285-301, 1999, Available at SSRN: https://ssrn.com/abstract=176567

Michael Heller (Contact Author)

Columbia University - Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
United States

James E. Krier

University of Michigan Law School ( email )

625 South State Street
1039 Legal Research Building
Ann Arbor, MI 48109-1215
United States
734-764-4701 (Phone)
734-764-8309 (Fax)

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