the Law, the Universe, and Everything 

Search

Concurring Opinions is a
general-interest legal blog
operated by Concurring
Opinions LLC, a Pennsylvania
Limited Liability Corporation.

Yale University Press

ad-logo5.jpg

Our Podcast

Subscribe to Law Talk

Law-Rev-Forum-2.jpg

law-rev-contents2.jpg

Law-Prof-Blog-Census.jpg

Categories

Administrative Announcements
Administrative Law
Admiralty
Advertising
Agricultural Law
Anonymity
Antitrust
Architecture
Articles and Books
Bankruptcy
Behavioral Law and Economics
Bioethics
Blogging
Book Reviews
Capital Punishment
Civil Procedure
Civil Rights
Conferences
Constitutional Law
Consumer Protection Law
Contract Law & Beyond
Corporate Law
Criminal Law
Criminal Procedure
Culture
Current Events
Cyberlaw
DRM
Economic Analysis of Law
Education
Empirical Analysis of Law
Employment Law
Environmental Law
Family Law
Feminism and Gender
First Amendment
Food
Google & Search Engines
Health Law
History of Law
Humor
Immigration
Insurance Law
Intellectual Property
International & Comparative Law
Interviews
Jurisprudence
Law and Humanities
Law and Inequality
Law and Psychology
Law Practice
Law Professor Blogger Census
Law Rev (Boston College)
Law Rev (Boston University)
Law Rev (California)
Law Rev (Chicago)
Law Rev (Columbia)
Law Rev (Cornell)
Law Rev (Duke)
Law Rev (Emory)
Law Rev (Fordham)
Law Rev (Georgetown)
Law Rev (GW)
Law Rev (Harvard)
Law Rev (Illinois)
Law Rev (Indiana)
Law Rev (Michigan)
Law Rev (Minnesota)
Law Rev (Northwestern)
Law Rev (Notre Dame)
Law Rev (NYU)
Law Rev (Penn)
Law Rev (S Cal)
Law Rev (Stanford)
Law Rev (Texas)
Law Rev (UCLA)
Law Rev (Vanderbilt)
Law Rev (Virginia)
Law Rev (Wash U)
Law Rev (Yale)
Law Rev Contents
Law Rev Forum
Law School
Law School (Hiring & Laterals)
Law School (Law Reviews)
Law School (Rankings)
Law School (Scholarship)
Law School (Teaching)
Law Student Discussions
Law Talk
Legal Ethics
Legal Theory
Media Law
Movies & Television
Philosophy of Social Science
Politics
Privacy
Privacy (Consumer Privacy)
Privacy (Electronic Surveillance)
Privacy (Gossip & Shaming)
Privacy (ID Theft)
Privacy (Law Enforcement)
Privacy (Medical)
Privacy (National Security)
Property Law
Race
Religion
Reparations
Science Fiction
Securities
Social Network Websites
Sociology of Law
Supreme Court
Tax
Teaching
Technology
Tort Law
Web 2.0
Weird
Wiki
Wills, Trusts, and Estates

Recent Comments

Alan on Eminent domain, equity and efficiency, and subjective values

adam on Eminent domain, equity and efficiency, and subjective values

Archives

May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
August 2005
July 2005
June 2005

 

« Law School Rankings vs. Parent University Rankings | Main | Corporate College Presidents and Super-Sized Endowments »

November 13, 2007

Eminent domain, equity and efficiency, and subjective values

posted by Kaimipono D. Wenger

Over at Volokh, Ilya Somin highlights an interesting WaPo article about takings. The U.S. Army wishes to expand its training ground in Colorado, and this will require taking land from several ranchers. The WaPo piece discusses rationales for the taking, as well as various property-holder objections. In his own take, Somin seems quite doubtful of the propriety of this particular taking. He writes,

As a legal matter, there is no doubt that this potential use of eminent domain is constitutional . . . However, the fact that the Army's plan is constitutional doesn't necessarily mean that it is equitable or efficient.

From there, Somin makes two arguments. First, he argues that taking of private land should be avoided where other options exist:

There remains the question of whether a facility of comparable quality could be built without resorting to condemnation. The U.S. government already owns hundreds of millions of acres of desert property in the Western states, much of which is not being used. Perhaps the Pentagon could build a new training facility on land the federal government already owns; if so, that would be far preferable to displacing private property owners.

Second, he suggests that, where property is taken, property owners (these owners in particular) should receive over-market compensation intended at least in part to make up for loss of subjective property value:

Market value compensation often fails to fully replace the owners' losses. If they valued the land at the market price or less, they presumably would have sold it already; their decision to hold onto it is an implicit signal that they place a "subjective value" on the property above its market price. In this case, subjective value concerns are particularly serious. Many of the owners' families have lived on the land for generations, and would lose most of their livelihood if forced to move. Even if the Court is right to hold that fair market value compensation is all the Constitution requires, this is one case where the feds should pay more.

In a number of areas, Somin's analysis seems problematic.

First, Somin is not clear about how to employ the factors of equity and efficiency. He writes, "as a legal matter, there is no doubt that this potential use of eminent domain is constitutional . . . However, the fact that the Army's plan is constitutional doesn't necessarily mean that it is equitable or efficient. " This implies that equity or efficiency or some combination of the two ought to be a factor in takings decisions.

This argument potentially has some merit; after all, it may make sense to force government actors to act efficiently or equitably or both, and it is easy to criticize actions that are neither. However, it is also clear that any such test would require elaboration. How _much_ should equity and/or efficiency weigh in the decision? Should only one be required, or both?

And such an approach is not without its own costs. For example, a strong rule could be articulated to include both of Somin's suggested factors, along the lines of, "no exercise of eminent domain is permitted unless the government can show that the action is both equitable and efficient." That would give weight to both of Somin's factors. It would also seriously limit government ability to act. That may be a consequence that Somin or other commenters view as positive, but it would probably not be universally viewed as a positive result.

So, an initial question relates to Somin's implied endorsement of an equity/efficiency test of some sort. Just what kind of implied test is Somin proposing, and how does it work? (As we'll see, this matters for the analysis.)

(As an aside, Somin seems rather cavalier about the analysis of efficiency in this case. In particular, he hints that this taking may be inefficient and that other property may be equally amenable to this particular use. Yet, his blog post (which cites other portions of the WaPo piece) does not mention the multiple statements in the WaPo article about the proximity of _this_ land to a major military base that is one of the largest training hubs in the Western U.S. Even if that is not dispositive, it seems like relevant information in any calculus of efficiency.)

A second critique relates to Somin's apparent articulation of a rule favoring use of existing government property.

There remains the question of whether a facility of comparable quality could be built without resorting to condemnation. The U.S. government already owns hundreds of millions of acres of desert property in the Western states, much of which is not being used. Perhaps the Pentagon could build a new training facility on land the federal government already owns; if so, that would be far preferable to displacing private property owners.

Somin does not explicitly set out a reason why this would be preferable. His statement suggests an interesting potential rule: If the government already owns land which could be put to a particular use -- an acceptable substitute -- then it should not condemn private land for that use.

Again, that seems inuitively sensible -- why take private land for a use, if an acceptable substitute in public land is available? But again, it seems the devil may be in the details. For one thing, this rule seems to invite disagreement about the definition of acceptable substitute.

For instance, suppose that the government wants to build a road from Point A to Point B; that private land lies directly between A and B; and that a circuitous, snaking chain of government land could also be used to connect A to B. Should the government be required to use government land and the indirect route rather than taking private land for the direct route? Would this apply even if the result was a winding and difficult (possibly dangerous?) road, or the creation of extra miles of difficult driving? If it creates extra road-building expense? Is it really an acceptable substitute to build on government land if that means a road from Times Square to Rockefeller Center, via Queens?

The difficulty of deciding on acceptable substitutes ties in to a broader point: A general rule of using government instead of private land every time could itself be highly inefficient. Should the city really be proscribed from condemning my $100 acre of rural property to build its power plant, and instead forced to build that plant on a high-value ($2000) city-owned acre downtown? We're where the rubber hits the road (and back to question 1, really) -- what matters more here, equity or efficiency? If we truly force a rule of "use public land first" in all cases, aren't we giving a kind of subsidy (failing to take) to certain property owners, at the expense of the general public?

And to apply that question to this case: If it would cost $10 million to take the privately owned Colorado land, and $20 million for a next-best option of building an equivalent infrastructure on available public land in Nevada -- should we really apply a strict rule of "use public land first" and simply pass the extra cost on to taxpayers? (What if the next-best option costs $40 million? $100 million?)

I'm really unconvinced that Somin's use-government-land-first approach makes sense as a broad rule. It has obvious flaws from an efficiency standpoint; and depending on the size of the subsidy, it may not make sense from an equity standpoint, either.

Finally, I was surprised by Somin's analysis of subjective values.

Of course, property owners often attach subjective value to their property, and thus the value to an owner is often greater than market value. That's why the property is still in the hands of _these_ owners, after all. Courts (including the Supreme Court) and commenters have discussed this matter, and it has come up in cases like Lutheran Synod. And in general, courts have _rejected_ (on workability grounds, among others) the idea of paying subjective values, instead keeping to the rule of fair market value. (The general rule is subject to exceptions, such as where the property value is unascertainable or where paying market value would result in manifest injustice.)

Is Somin saying that all property owners should be paid subjective value? He initially seems to be headed that direction, suggesting that these property owners deserve over-market compensation, and writing that "market value compensation often fails to fully replace the owners' losses. If they valued the land at the market price or less, they presumably would have sold it already; their decision to hold onto it is an implicit signal that they place a "subjective value" on the property above its market price."

If Somin is really arguing that compensation should generally be subjective, he's got his work cut out for him. That would be a major change in takings law, and would affect vast numbers of takings, since many property owners attach some subjective value to their property.

However, Somin then scales it back: "In this case, subjective value concerns are particularly serious. Many of the owners' families have lived on the land for generations, and would lose most of their livelihood if forced to move. Even if the Court is right to hold that fair market value compensation is all the Constitution requires, this is one case where the feds should pay more."

Okay, so only _these_ owners deserve extra compensation. Still, it's not completely clear why. Perhaps Somin is implicitly making a replacement-value argument by noting the loss of livelihood -- that is, an argument that fair market value would leave these owners unable to replace the property, and that they should be paid replacement value instead. Unfortunately, that approach would go directly against Supreme Court statements that replacement value is not the legal standard. Or perhaps Somin is making a more limited argument, that market value here would result in manifest injustice. That's probably a tough one to convince a court. (Or perhaps an argument that there really is no adequate market for this particular property?)

Somin may be right in his conclusions that this particular taking is a bad idea, or that extra-market compensation should indeed be paid. But I don't find his current analysis, as set out in his post, to be convincing support for those conclusions.

Posted by Kaimipono D. Wenger at November 13, 2007 02:14 PM

Trackback Pings

TrackBack URL for this entry:
http://www.concurringopinions.com/movabletype/mt-tb.cgi/2720.

Comments

I made the suggestion in the comments to Ilya's post that this seems to present a unique situation in that the land has a great deal of value for the government, but they can't use that land effectively without the to-be-condemned land.

That being the case, I think you could make an argument that the government shouldn't be considered one of the "private parties" here for the purposes of computing FMV -- since they'd have to buy the land if they couldn't use eminent domain -- and thus value the land at a premium based on its use as a military training grounds and the amount of value that it adds to the government's current training grounds, rather than just its use as ranchland. I don't see why "subjective value" has to enter into it at all.

Posted by: adam at November 14, 2007 03:58 AM


When we look at this question in the context of eminent domain law, what we are really talking about is the necessity aspect. As pointed out in the underlying blog post, the purported use is unquestionably a public use. The rest of the argument boils down to whether taking this particular piece of property is the most efficient and equitable option.

That question is by its nature legislative and, accordingly, the issue of necessity has always been treated with deference by the Courts. The condemning authority decides what property it wants to take and the Courts are poorly situation to step in and tell it no, that it should have taken other property instead. Thus, Courts will only deny a taking on the basis of lack of necessity where there is some showing of fraud or bad faith. The landowners only defense is generally political.

Regarding the subjective value of the property, I cannot see how the Constitution provides for that. In any event, landowners generally receive more pre-taking in land subject to condemnation than they can sell the property for in the marketplace. A condemning authority has incentive to pay more to avoid litigation.

Posted by: Alan at November 14, 2007 12:05 PM


Post a comment




Remember Me?

(you may use HTML tags for style)

Authors

Daniel J. Solove

Website
Understanding Privacy

Kaimipono Wenger

Website
SSRN Page

Dave Hoffman

Website
SSRN Page

Nate Oman

Website
SSRN Page

Frank Pasquale

Website
SSRN Page

Deven Desai

Website
SSRN Page


Guests

William Birdthistle
Elaine Chiu
David Fontana
James Grimmelmann
Dan Kahan
Sam Kamin
Anita S. Krishnakumar
William McGeveran
Michael O'Shea






ad-logo3.jpg

blawg100_winner2.jpg

Previous Guests

Michael Abramowicz
Michelle Adams
Robert Ahdieh
Michelle Anderson
Laura Appleman
Francesca Bignami
Jeremy Blumenthal
Bruce Boyden
Donald Braman
Al Brophy
Bill Burke-White
Scott Burris
Anupam Chander
Miriam Cherry
Jack Chin
Jennifer Collins
Allison Danner
Brannon Denning
Deven Desai
Mike Dimino
Christine Haight Farley
Kim Ferzan
Dan Filler
Amanda Frost
Timothy Glynn
Rachel Godsil
Eric Goldman
Craig Green
Jeffrey Harrison
Erica Hashimoto
Laura Heymann
Christine Hurt
Heidi Kitrosser
Adam Kolber
Russell Korobkin
Anita S. Krishnakumar
Greg Lastowka
Joseph Liu
Solangel Maldonado
Jason Mazzone
William McGeveran
Salil Mehra
Carrie Menkel-Meadow
Scott Moss
Eric Muller
Jaya Ramji-Nogales
Elizabeth Nowicki
Paul Ohm
Michael O'Shea
Rafael Pardo
Marcy Peek
Eduardo PeƱalver
Neil RIchards
Lori Ringhand
Alice Ristroph
Paul Secunda
Peter Smith
Charles Sullivan
Rick Swedloff
Steph Tai
Robert Tsai
Steve Vladeck
Sarah Waldeck
Melissa Waters
Alfred Yen
David Zaring
Timothy Zick
Jonathan Zittrain

Blogroll

Above the Law
ACS Blog
Althouse
Balkinization
Becker-Posner Blog
Beltway Blogroll
BlackProf
BoingBoing
Chicago Law Faculty Blog
Conglomerate
Convictions
CrimLaw
Crime & Federalism
CrimProf Blog
Crooked Timber
Discourse.net
Dorf on Law
Election Law
Emergent Chaos
Feminist Law Profs
43(B)log
Freakonomics Blog
Freedom to Tinker
Google Blogoscoped
How Appealing
Ideoblog
Info/Law
Instapundit.com
JD2B.com
Juris Novus
Jurisdynamics
Law and Letters
Legal Profession Blog
Legal Theory Blog
Legal Times Blog
Leiter Reports
Brian Leiter's Law School Reports
Lessig Blog
Madisonian
Mirror of Justice
National Security Advisors
Opinio Juris
Point of Law
Political Theory Daily Review
PrawfsBlawg
ProfessorBainbridge.com
Property Prof
Red Tape Chronicles
The Right Coast
Schneier on Security
SCOTUSBlog
Security Dilemmas
Sentencing Law and Policy
Simple Justice
Sivacracy.net
The Situationist
Susan Crawford
TalkLeft
Talking Points Memo
TaxProf Blog
Tech & Marketing Law
Truth on the Market
Volokh Conspiracy
WorkPlace Prof Blog
WSJ Law Blog
Wonkette
The Yin Blog

Pajamas Media BlogRoll Member