The Law and Economics of Cedar-Apple Rust: State Action and Just Compensation in Miller v. Schoene
William A. Fischel
Dartmouth College - Department of Economics
Dartmouth College Economics Working Paper
Miller v. Schoene, 276 U.S. 272 (1928), approved the uncompensated destruction of cedar trees that were alternate hosts to a fungus that damaged apple orchards but not cedars. Justice Stone's opinion implied that deciding for either cedar or apple growers would amount to action by the state, even though favoring cedars would have maintained what he saw as the status quo. Many scholars have claimed that Miller marked the demise of the public/private distinction and any coherent conception of a neutral, nongovernmental baseline in constitutional law. I present historical evidence to the contrary. At least since colonial times, a widely-accepted standard - higher commercial value - commonly decided whose interests should prevail in controversies involving heteroecious fungi like the cedar-apple rust. There was thus a widely-shared, nonlegal baseline to which legislators and judges could refer in choosing to protect the apple orchards.
The preference for apples over cedars in Virginia was widely shared. Most cedars were wild trees that grew in untended fields, and cutting these cedars did no harm to the value of the land and may have enhanced it. Most of the cutting was done without benefit of the law, which was intended mainly to deal with holdouts. Dr. Casper Otto Miller, the plaintiff in Miller v. Schoene, was a 1914 member of the Virginia House of Delegates that adopted the cedar-rust act under which his trees were later cut. The vote was 88-0, and Miller voted for it after successfully moving to amend the act.
Virginia's cedar rust act of 1914 was written by apple growers. Their debate about the act as well as the language of the statute shows that orchardists were willing to compensate those few cedar owners who, like Dr. Miller, valued them for ornamental purposes. Cutting of cedars was financed by a special tax on apple orchards, and compensation for cedar owners was to be financed exclusively from this tax. Apple growers eventually bridled at this tax because of the problem of moral hazard. Owners of cedars who actually lost nothing from the cutting of their trees feigned injury in order to collect compensation. The litigation in Miller v. Schoene was the culmination of an effort by the apple industry to stop the hemorrhage of their taxes to undeserving claimants.
My study concludes with an examination of the sole popular effort to halt cedar cutting. The circumstances of the 1929-30 revolt in Shepherdstown, West Virginia, are consistent with the idea that popular opinion favored cedar cutting only when it was clear that the sacrifice actually benefited the apple industry. Shepherdstown's geographic situation was such that cutting cedars in that vicinity did little good to apple orchards. In any event, the cutting of cedars anywhere was by 1945 made unnecessary by the development of effective fungicides to control the rust. The laws allowing cutting of cedars are still on the books in most states that had adopted them, but they have not been enforced for almost half a century.
Number of Pages in PDF File: 52
Keywords: Apple cedar rust, state action, just compensation, nuisance law, property rights
JEL Classification: K11, H23, N52, B25, K32
Date posted: April 6, 2004