Tag: Property Rights

The Best of Lee: Kelo Anniversary

Ten years ago today, the Supreme Court issued out of the worst ruling in their history: Kelo v. City of New London, in which justices Kennedy, Souter, Ginsberg, Breyer and Stevens decided that it was “public use” for a government to force a citizen to sell his property to a rich developer. Because taxes.

Here’s some choice quotes from the wonderful dissents of Clarence Thomas and Sandra Day O’Connor. Thomas first:

This deferential shift in phraseology enables the Court to hold, against all common sense, that a costly urban-renewal project whose stated purpose is a vague promise of new jobs and increased tax revenue, but which is also suspiciously agreeable to the Pfizer Corporation, is for a “public use.”

I cannot agree. If such “economic development” takings are for a “public use,” any taking is, and the Court has erased the Public Use Clause from our Constitution, as Justice O’Connor powerfully argues in dissent.

The consequences of today’s decision are not difficult to predict, and promise to be harmful. So-called “urban renewal” programs provide some compensation for the properties they take, but no compensation is possible for the subjective value of these lands to the individuals displaced and the indignity inflicted by uprooting them from their homes. Allowing the government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economically beneficial goal guarantees that these losses will fall disproportionately on poor communities. Those communities are not only systematically less likely to put their lands to the highest and best social use, but are also the least politically powerful.

O’Connor:

Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded–i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public–in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings “for public use” is to wash out any distinction between private and public use of property–and thereby effectively to delete the words “for public use” from the Takings Clause of the Fifth Amendment.

Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms. As for the victims, the government now has license to transfer property from those with fewer resources to those with more. The Founders cannot have intended this perverse result.

The irony is that the deal with Pfizer fell through and Kelo’s former home is still an empty lot.

Lee’s comment was short and brutal:

Personally, I would love to see one of the homes of these justices earmarked for demolition because some douchebag on a city council somewhere has decided that the revenue from a new Wal-Mart Supercenter is more important to the community than the property tax being paid on the land that has been in your family for six generations. Simply disgusting. When the highest court in the land wipes its ass on a concept as fundamental to human liberty and dignity as the right of property there is something seriously wrong with our government.

The government’s assault on property rights has only gotten worse. Yesterday, SCOTUS pushed back a little. But it will not really begin until the Court repudiates Kelo.

Raisins in the Sun

This morning saw the Supreme Court hand down four more decisions. All were important to some degree but the most significant was one I blogged about earlier: Horne v. Department of Agriculture. The Court decided, correctly, that the government taking part of someone’s raisin crop to ostensibly raise the price of raisins was indeed a “taking” under the Constitution and they are entitled to compensation.

Somin:

The Court ruled in favor of the property owners by an 8-1 margin on the most significant issue at stake: whether the government’s appropriation of the raisins is a taking. Only Justice Sonia Sotomayor dissented.

This is an extremely important result, because it rejects the government’s dangerous argument that the Takings Clause offers less protection for personal property than for real property (the legal term for property in land), which had been embraced by the Ninth Circuit lower court decision. For reasons elaborated in detail in an amicus brief I joined along with other constitutional law and property scholars, the government’s position on this issue was deeply at odds with the history and original meaning of the Takings Clause. Indeed, as the Court notes, the Clause was adopted in part as a reaction to abusive British confiscation of personal property during the colonial era and the Revolutionary War.

The government argued that it wasn’t really a taking because if they later sold the raisins, the Hornes would get some of the proceeds. This was clearly nonsense. If I steal your car and later give you a cut of what I got from the chop shop, that doesn’t mean I didn’t steal it in the first place. The justices were a little more divided on how to compensate the Hornes.

This is a big case, though. Somin again:

The ruling also calls into question a number of other similar agricultural cartel schemes run by the federal government. In addition to property owners, consumers of agricultural products are likely to benefit from the decision, if these cartel schemes can no longer operate. Freer competition between producers in these agricultural markets will increase the amount of goods sold, and thereby lower prices. Lowered food prices are of particular benefit to poor and lower-middle class consumers, who generally spend a higher proportion of their income on food than the affluent do.

A few years ago, Robert Levy published a fine book called The Dirty Dozen, detailing some of the worst Supreme Court decisions of the last century. One of them was Wickard v. Filburn, in which a unanimous Court decided that a man growing wheat on his own farm for his own use was intrinsically “interstate commerce”. Wickard is the basis not only of our idiotic farm policy, but the basis of the Court’s expansive view of the commerce clause, including the vile Raich decision.

This doesn’t attack Wickard but it’s the first pushback on agricultural policy in a long time, at least recognizing some limits to the power of the Department of Agriculture. Hopefully, it’s the first in a series of decisions.

More from Mataconis and from McArdle, who cautions against optimism:

However, don’t get too excited, because it doesn’t do too much to limit eminent domain where compensation is offered, or “regulatory takings” in which government rules make your property practically worthless, but not quite so worthless that it has to pay you for the lost potential uses.

Indeed. Our federal government has a tremendous amount of power that has goen well beyond its Constitutional limits. Today, a little bit got pushed back. That’s a good day.

Court Season

The Supreme Court is set to issue a number of landmark ruling this month (saving them for the end of the session, as usual). You can read Doug Mataconis or Evan Bernick for good conservative takes. I’ll do quick hits with how I think the Court will rule and how I think the should rule. And, of course, as each ruling comes down, I’ll put up a post.

The thing about the Roberts Court is that they are very conservative. Not in the political sense, but in the temperamental one. They prefer not to make broad sweeping decisions that upend masses of law and precedent. They tend to defer to legislatures. They like to rule narrowly and specifically. Roberts works very hard to build consensus (see last year’s slew of 9-0 decisions). They have been slow to defend civil liberties except for the First Amendment. So while I expect some landmark decisions, I don’t expect any that will radically reshape the law.

I do expect, however, to hear the losing side of several cases scream that the Court has exercised unprecedented power, set fire to the Constitution and brought plagues of locusts. Whichever side they oppose will be acting in a purely partisan fashion while their side are zealous defenders of the faith. You can decide if that hysteria is warranted.

Read more… »

Another Kelo Atrocity

Kelo v. City of New London is one of the worst Supreme Court decisions of my lifetime (and that’s saying a bit). Once the Court decided that people could be forced to sell their homes to wealthy interests, the gloves were off for developers all over the country. The Institute for Justice — have I said recently how awesome they are? — has the details on the latest atrocity:

Charlie Birnbaum’s is a classic American story. His parents—both immigrants and survivors of the Holocaust—left him many things: a love of this country, a deep passion for music and a home right near the boardwalk in Atlantic City. That home—his parents’ foothold in their adopted country—has been a source of love, tragedy and renewal to the Birnbaum family for the past 45 years. Charlie keeps the ground-floor apartment as a piano studio devoted to the memory of his parents; the top two floors are given over to longtime tenants who pay below-market rents. Charlie lovingly maintains the historic brick home—which was built in 1921—keeping it in excellent condition.

Unfortunately, a state agency, the Casino Reinvestment Development Authority (CRDA), is trying to change all that. New Jersey’s CRDA is trying to use eminent domain to seize Charlie’s property as part of a “mixed-use development” project to complement the recently-bankrupt Revel Casino. The trouble is that CRDA has no concrete plans to do anything in particular with Charlie’s property—other than get rid of it. CRDA does not actually need Charlie’s property to develop the surrounding neighborhood. Instead, CRDA is just trying to take Charlie’s home because it thinks it can.

There’s hope here: the New Jersey Superior Court has previously sided with home-owners against this kind of bullshit. The specific bullshit was soi disant conservative Donald Trump trying to seize people’s homes to build a parking lot for limousines. Let’s hope they stomp down on this again.

Theft By Any Other Name

This story is simply unbelievable. It’s got it all: incompetent city government, crony capitalism and stealing a marine’s home for an overdue $134 tax bill:

On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.

Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.

All because he didn’t pay a $134 property tax bill.

The retired Marine sergeant lost his house on that summer day two years ago through a tax lien sale — an obscure program run by D.C. government that enlists private investors to help the city recover unpaid taxes.

For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.

But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.

As the housing market soared, the investors scooped up liens in every corner of the city, then started charging homeowners thousands in legal fees and other costs that far exceeded their original tax bills, with rates for attorneys reaching $450 an hour.

Here’s the short version: Coleman is a 76-year-old retired Marine who owned his $197,000 home free and clear. He also has been showing signs of dementia and, at one point, forgot to pay a $134 tax bill. His son eventually paid the bill — plus $183 in interest in penalties. But it was too late. The lien had been sold to a private company that demanded $5000 in legal fees. The son couldn’t come up with the money and court foreclosed. The Maryland firm that bought the house sold it for $71,000.

This is not an isolated incident. You really must read the whole thing if you have the time. Private companies now hold liens on thousands of properties and have foreclosed on hundreds, frequently over very small amounts of money (after inflating them to unpayable sums with often undocumented legal fees). Poor neighborhoods, already hurt by the recession, are being devastated by these seizures. And these are not people who bought homes to flip them or bought homes they couldn’t afford. These are people trying to be responsible who have, for various reasons, missed a tax payment. Or in many cases, haven’t but had liens put on their homes by mistake.

One 65-year-old flower shop owner lost his Northwest Washington home of 40 years after a company from Florida paid his back taxes — $1,025 — and then took the house through foreclosure while he was in hospice, dying of cancer. A 95-year-old church choir leader lost her family home to a Maryland investor over a tax debt of $44.79 while she was struggling with Alzheimer’s in a nursing home.

Other cities and states took steps to curb abuses, such as capping the fees, safeguarding houses owned by the elderly or scrapping tax sales altogether and instead collecting the money themselves.

Moreover, there is no supervision. Many of these private companies have already been prosecuted in other states for breaking laws and rigging bids. And the DC tax office has sold nearly 2000 liens by mistake.

A 48-year-old math teacher paid his taxes in 2007, but the tax office took his $1,400 payment and applied it to the wrong house, crediting an entirely different taxpayer.

A 58-year-old bank employee almost lost her house in 2010 because the tax office mistakenly sent bills and notices to a wooded lot across from a strip shopping center in Virginia — 12 times.

A 69-year-old hat designer was given the wrong payoff amount and ended up in court to save her property, owned by her family since 1943.

Those homeowners found out about the mistakes in time to fight. Ninety-five-year-old Daisy Dolsey, living in a nursing home and struggling with Alzheimer’s, wasn’t so lucky: She lost her $300,000 house over a $44.79 tax debt even after she paid her taxes.

This is an appalling scandal. This should be national news and the DC Council should be getting pilloried for refusing to address the issue. And it’s only a microcosm of government farming out duties to private companies — which might be defensible enough in a vacuum — but not holding those companies to any standard of behavior or any limitations on their authority. And for the companies it’s a gold mine — the Post reports that $5 million in suspiciously organized and unsupervised bids bought liens on 2/3 of a million in properties. They then charged the owners thousands in administrative and legal fees and foreclosed on the homes if the homeowners couldn’t cough it up

This is theft, plain and simple. This is government, industry and lawyers conspiring to rob people and not giving a fig what it does to the city.

And while I’m on my horse about property rights and corrupt government, the problem of asset forfeiture is only getting worse:

Leino is one of thousands of Philadelphia residents who each year find themselves facing the seizure of their possessions — cars, cash and real estate — via “civil asset forfeiture,” a legal construct that lets law-enforcement agencies seize property linked to crime and keep the proceeds. In Pennsylvania, civil forfeiture is carried out primarily under state drug laws. The Philadelphia DA brings 300 to 600 real-estate forfeiture cases per year, and thousands of cases against small amounts of cash seized in police stops that sometimes, but not always, result in arrests — together bringing nearly $6 million into its coffers annually.

In a series of reports for City Paper [“The Cash Machine,” Nov. 29, 2012] and ProPublica, this reporter has documented how the Philadelphia DA has made civil forfeiture into a vast, unaudited revenue stream, profiting from an upside-down legal process through which the DA has the power to bleed property owners dry of financial resources and imperil homeowners with minimal or no evidence of criminal wrongdoing.

Long before the forfeiture action against her house would be completed, and without a judge or jury ever seeing her face, Leino would be forced from her house and made homeless along with her three children. She would lose her most precious possessions, and ultimately be deprived of her family’s most valuable asset — all without Leino ever being accused of any crime.

Her husband, Sam, was accused. On Feb. 22, 2010, police officers arrived at the family’s house, at 2729 Orthodox St. in Bridesburg, to arrest Sam on charges of selling prescription pills. The officers would later testify that they observed Sam handing over small objects in exchange for money outside the house. After executing a search warrant, police recovered various painkillers. (Sandra Leino says her husband was partially disabled from a truck accident and took the painkillers himself, legally, for his pain.)

Sandra Leino and her three children were not accused of any crime; nowhere in police reports is there even a hint that any of them had done anything wrong.

That didn’t stop the DA from filing a motion to seize the Leino’s house that May — and then, for reasons that remain unclear, kicking them out of it the same month. (The DA’s Office responded to inquiries with a short statement describing the forfeiture action, but would not explain why Leino and her family were made to leave). Leino, her husband (out on bail awaiting his trial), and their children were forced from their home with nowhere to go. They stayed in a motel for one week.

While the family navigated a homelessness imposed on them by the District Attorney’s Office, the DA asked the city’s Department of Licenses & Inspections to conduct a “clean and seal” operation on the Leinos’ house. City officials arrived at the house shortly after the forfeiture motion had been filed (not granted) and began throwing out the Leinos’ possessions — among them pictures of the Leinos’ children growing up, antiques they had collected together as a hobby and a 5-gallon jar of pennies the family had filled as a way to save money.

The house was foreclosed on by the bank. Leino was convicted of a single felony charge. Oh, and the officers who brought the charges against Mr. Leino? Four of them were found to be part of drug-dealing ring within the Philadelphia police. Nearly 300 of the cases they brought have been dropped.

I highlight these two stories specifically because they involve people who are working class, not the rich folks that defenders of asset forfeiture and foreclosure corruption always insist are the real targets of the laws. Whenever you give government this kind of gangster power, it will be turned on everyone, but especially on those who do not have the resources for lawyers and publicity. These are poor and working class people, mostly minorities. The only crimes they have committed are missing a tax bill or low-level drug dealing (or living with someone who has done those things). And they are being robbed blind to stuff the coffers of police departments in one case and rich speculators in the other.

This is what happens when you don’t respect property rights and when you give the government authority to just take people’s possessions. You won’t see Donald Trump having his home sold to speculators. You won’t see a rich politician kicked out onto the street if her husband is dealing pain pills (according to four corrupt cops). Michael Bloomberg’s stop-and-frisk wasn’t used on Wall Street execs. Our War on Drugs imprisons lots of poor people but sees rich drug users as “having a problem”. Our War on Prostitution thinks Eliot Spitzer should run for comptroller while survival-level sex workers should be imprisoned and raped.

Arbitrary government power is always turned against the powerless. There are some things we need government to do, but that power should always be supervised, constrained, reviewed and never allowed to play to the personal benefit of the rich and powerful. The nation has forgotten this lesson. But thank God for the Wapo, for the IJ and for independent journalists who are determined to make sure that this abuse and criminality does not go unnoticed.

The Norfolk Tyranny

This one has it all:

Central Radio Company, which first opened 78 years ago and has been at its current location of 1083 West 39th Street for 50 years, is currently under siege. First officials at the Norfolk Redevelopment and Housing Authority attempted to seize their property in order to transfer it to Old Dominion University, which currently has no specific site development plan for Central Radio’s property. The owners of the company, Bob Wilson and Kelly Dickinson, rightfully objected to the eminent domain proceedings. They then commissioned a 375-square-foot banner (left) and hung it on their building to protest the taking.

So what happened next? In response to the ensuing outcry by the citizenry, the city … found some ordinance forbidding banner over 60 feet in size and threatened to fine them $1000 a day. CRC is not taking his sitting down; they’re fighting it.

Oh, yeah. I found this out through the people defending them — the eeeevil libertarian organization Institute for Justice, who are making a habit of fighting both tyrannical governments and business monopolies.

Sackett Wins

I’m really liking SCOTUS these days:

The Supreme Court handed down a major win for both property rights and due process rights today in the case of Sackett v. Environmental Protection Agency. At issue was the EPA’s use of so-called administrative compliance orders, which are government commands that allowed the agency to regulate the use of private property without also subjecting its actions to judicial review. In a 9-0 ruling, with the majority opinion written by Justice Antonin Scalia and separate concurring opinions filed by Justice Ruth Bader Ginsburg and Justice Samuel Alito, the Supreme Court declared that these EPA actions must be subject to judicial review.

Here is Reason’s documentary.



Basically, the EPA decided the Sacketts land was a wetland without presenting any evidence that it was. They decreed that the Sackett’s had to “return” their land to its “natural” state. But since no fines were actually issued right away, the Sacketts could not challenged this in court. They had to either comply with the EPA demands or refuse to comply, incur millions in fines and then challenge it. And, stunningly, lower courts were fine with this.

SCOTUS just struck a gigantic blow for property rights. EPA and other agencies will now be accountable.

Enjoy your property, Mike and Chantelle Sackett. You’ve challenged the EPA’s tyranny and won. That doesn’t just make you winners; it make you patriots.

(PS – Alito’s concurring opinion is very good. The more time passes, the more I think Roberts and Alito are going to be the best things that came out of the Bush II Administration.)