A Two-Front Battle For Property Rights

CONGRESS next term will face increased pressure from property-rights advocates for legislation upholding the constitutional requirement that laws and government regulations not "take" private property without paying for it. Proponents of private-property rights have been invigorated by two significant events this summer.

The first and most significant victory for private-property rights was the Supreme Court's decision in Lucas v. South Carolina Coastal Council, handed down last June. In that case an owner of beachfront property in South Carolina demanded compensation from the state when coastal-protection regulations prevented him from building a planned house. The Supreme Court rejected the state's contention that to achieve laudable objectives, government can regulate - as long as it doesn't actually seize - private p roperty without paying just compensation.

As the noted "takings" scholar Richard Epstein has observed, many environmentalists have adopted the "orange rind theory" of property rights. They want to take all of the juice, pulp, and seeds from the orange and leave owners with the worthless rind - that is, merely bare title to their property. Over the past decades environmentalists have accomplished their objectives by the enactment of complex and intrusive regulatory schemes that often leave property owners in that situation. Courts have continued this process by acquiescing in or even extending the reach of such laws and regulations.

The ordinary property owner is not in favor of fouled air and polluted water and is willing to contribute to the achievement of important environmental goals. Most owners are not content, however, to be left holding an empty bag after all the value of their property has been removed by overreaching environmentalists. Some environmentalists seem to have forgotten that the Constitution expressly guarantees private ownership of property irrespective of the goals that the government may be seeking to achieve .

That the Supreme Court has not forgotten was underscored in the Lucas decision. Now government regulations that leave the property owner holding a "white elephant" will be subject to a presumption of unconstitutionality. To overcome that presumption the government must prove that restrictions on property use are justified on the basis of background principles of common-law nuisance and traditional land use.

Also important is the tenor of Justice Antonin Scalia's majority opinion. There is a sense that the court relied on the roots of traditional Anglo-American property law and values. These were the premise of the Constitution's Just Compensation Clause, and they have shaped our common understanding of and respect for the importance of private-property rights in an ordered and free society.

There is little in the Lucas opinion for opponents of private-property rights to be happy about. At best, they can note that Mr. Lucas will not be paid immediately for his loss owing to South Carolina's coastal-zoning regulations, since the Supreme Court remanded the case to the trial court on the nuisance issue. The state had relied so heavily upon the ipse dixit that "it is a nuisance because I say it is," the Supreme Court could not as a matter of law say whether a nuisance in fact existed.

Justice Scalia gave the government a final jolt when he underscored in the last paragraph of the opinion just how heavy is the burden now facing the South Carolina Coastal Council: "We emphasize that to win its case South Carolina must do more than proffer the legislative declaration that the uses Lucas desires are inconsistent with the public interest."

The second salvo for property rights advocates came in August, when Sen. Steven Symms (R) of Idaho introduced the "Progressive Endangered Species Act of 1992." The Endangered Species Act of 1973 (ESA), which has come up for reauthorization, represents one of the clearest examples of the "orange rind theory."

The rules that implement the act are so inflexible and rigid that almost any improvement to private property where an endangered-species habitat is located can subject the property owner to substantial civil and criminal fines and penalties. The ESA makes it unlawful for any person to intentionally or unintentionally "harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in such conduct" with respect to any endangered species in any context.

The goal of Senator Symms's bill is to protect rare species from extinction without destroying aspects of our economy and society in the process. Most significantly for private-property rights advocates, the proposal recognizes the need to use property rights and market forces to recover endangered species and requires compensation for takings that result from implementation of the bill.

Backed by the recent Lucas decision, proposals such as the Progressive Endangered Species Act of 1992 that attempt to achieve environmental objectives while preserving constitutionally protected property rights should garner some serious attention.