Privatization, Public Commons, and the Takingsification of Environmental Law

Abstract

This project takes on the critical but undertheorized question of how to balance private and public interests in critical natural resource commons, including air, water, public lands, energy, and biodiversity resources, all of which are prone to forms of diminution by private exploitation. It identifies a set of legal biases, which we might call “the privatization paradox,” that effectively create a one-way ratchet toward privatization at the expense of environmental values in public natural resources. This one-way conversion of public resources into private interests can survive policy transitions after elections, because it relies on private law norms—such as property and contract law tools—that are more enduring than public regulatory norms.

During the Trump Administration, many laws protective of public environmental values were weakened and public resource commons were made more available for private claims. This Article explores the means by which these efforts to privatize public resources not only succeeded in the present but were also entrenched into the future through two subtle but vital trends that link environmental and property law. In the first one, the strategic creation of private rights in newly relaxed public commons threatens to privatize public commons by both direct and indirect means. Private interests carved out during periods of deregulation directly erode the underlying resource as a commons, but indirectly, they also serve as a foil against future regulatory efforts to protect environmental values—a tool for “salting the land” against resumed environmental protection—by encumbering those efforts with potential property, administrative, and political liabilities.

Demonstrating this phenomenon, the Article reviews the recent proliferation of private rights in public commons for the extraction of oil and gas resources, minerals, timber, fish, and water resources—all complicating future lawmaking with potential claims that will make it harder for future leaders to reinvigorate relaxed environmental protections. Binding environmental policy-making discretion through the creation of durable private rights in public commons—some constitutionally protected under the Takings Clause—is a powerful strategy for weakening environmental conservation even after more conservation-oriented leadership takes office. The deterring potential for takings, administrative, and political liability in these contexts—collectively, the “takingsification” of environmental law—can weigh heavily on natural resources management, impeding the later resumption of legal protections. The strategy is especially noteworthy in the current era of policy instability, in which natural resource commons have been serially regulated and deregulated, and protected and then opened for business once again, complicating the relationship between public and private interests in these resources.

Even so, the potential for takings claims in these instances is only viable by virtue of the second legal bias—an accelerating paradigm of property law theory that uncritically equates personal interests in conventional forms of private property, such as a family home, with the more circumscribed private interests created in public natural resource commons, such as public lands, air, and water resources. Protecting private claims in public commons with equivalent force as a private home misunderstands the complex relationship between public and private interests at stake, and that are especially pronounced in public commons. More importantly, it threatens the public environmental values in natural resource commons that are already so vulnerable to overexploitation. These two troubling legal asymmetries, which make it easy to confer and then protect private rights in public commons, but harder to reclaim or protect competing public interests in the same commons, effectively lock-in privatization at the expense of public environmental values in critical public natural resources.

Recalling the Supreme Court’s incremental recognition of important distinctions between related private and public law forms in other constitutional arenas, such as its early Contract Clause jurisprudence, the Article proposes a modification to its regulatory takings jurisprudence to better account for the balance of public and private rights in the context of natural resource commons.

Keywords: Takings, Natural Resources, Property Theory, Policy Entrenchment, Public Commons, Public Lands, Private Property, Privatization, Regulatory Takings, Oil and Gas Leasing, Mining, Aquaculture, Mariculture, Fishing, Clean Water Act Section 404, Wetlands, Water Rights, ANWR, Bears Ears, Grand Staircase