The Fifth Amendment - takings clause

- [Kim] Hi, this is Kim from Khan Academy. Today we're learning more about the takings clause of the Fifth Amendment. In another video, we'll discuss the other clauses of the Fifth Amendment, those that deal with self-incrimination and due process of law but in this video, we're concentrating on just the last few words of the Fifth Amendment which forbid the government from taking private property for public use without just compensation. To learn more about the takings clause, I sought out the help of two experts. Richard Epstein is the Laurence A. Tisch professor of law and director of the Classical Liberal Institute at NYU law. He's also a senior fellow at the Hoover Institution. Eduardo Penñalver is the Allan R. Tessler professor and dean of Cornell Law School. So Profess Epstein, can you give us a little background, just what is the takings clause? - [Richard] Well there's a rule in constitutional law that the shorter the provision, the more difficult the interpretation and this is a very short petition. It says, "nor shall private property be taken for public use "without just compensation," and the first thing to understand about the clause is that it's in the passive voice so it doesn't tell you who's taking it and early on, since this was part of the Bill of Rights, it was said to apply only to congress and not to the states and then after the Civil War through the 14th Amendment, it was said to apply to the states. So now it applies to both the states and to the federal government. - [Eduardo] Many constitutions don't have an explicit property protection clause but there is a fairly strong norm around compensating owners of private property when you essentially commandeer their property for public purposes and that seems to have been the motivation. I think the clearest reading of it is that it's a provision of the Constitution that makes clear that when the federal government takes your property or when the states take your property for some public use that they have to make you whole by giving you just compensation. - [Richard] Private property's a pretty comprehensive term. Everybody understands that it means land and the things you build on land. They also understand that it tends to cover chattels, that is things like books and baseballs that you happen to own and wild animals but it's also, it's much broader than that. It covers all sorts of intangible rights like patents, copyrights, trade secrets. These are very complicated and generally speaking, the government doesn't have any obligation to create a patent but once it gives you the patent, it just can't take it from you because the patent, after conferred, it is in fact a property right and then it also may or may not cover other kinds of intangibles like good will which is the value associated with a business knowing that your past customers may come back to you in the future. - [Eduardo] On the motives of the framers for including this, talk about things like the confiscation, mostly of personal property during the Revolutionary War by the British government that that was possibly a motivation to make clear that if in future scenarios, if the government wanted to take your property, it would have to compensate you. Most historians don't think there was a real problem being addressed by this, a problem of uncompensated taking of property by colonial governments during that period or by the state governments during the Articles of Confederation. - [Richard] The framers wanted a system of what we'd call limited government and so what the takings clause essentially says is yes we need your land for fort and it's really very important but if we're gonna take it and use it for fort, that's a public use, we're gonna pay you compensation for the fair market value of the land before the fort was put on and this is in order to make sure that you can't pick and choose your victims and it's a way of assuring government regularity. That's the first. Second thing is more economic, less apparent at the time of the framing, pretty apparent today, is that the government can take something and not pay you compensation, it's gonna overtake. So your land is worth 100 thousand dollars as a farm but if you're gonna use it for a fort, it's only worth 10 thousand dollars. If you don't have to pay the 100 thousand dollars, well you may take it 'cause you get 10 thousand dollars worth of gain but if you have to pay the fair market value of the property interest taking, you won't do it. So essentially what it does is it makes sure or at least improves the odds that when the government does take property, what does regular, it will in fact improve overall social welfare. So you have a political function dealing with singling out and you have an economic function dealing with the overall improvement of government behavior from an economic point of view. - [Kim] Okay so say I had a piece of land and the government decided that they wanted it for some purpose, what would be the legal process for the government to go about acquiring my land? - [Eduardo] Well the process for eminent domain really varies by state but typically there's some notice that the government gives you that it intends to take your property. The government goes to court and gets an order of condemnation to take title of the property and then often there's a requirement that the government bargained with you about the value of the property. It will tell you what it thinks the value is, the fair market value is the standard that we use for just compensation, that's the value that a willing buyer would pay to a willing seller for the land. It doesn't include things like your sentimental value or anything like that so it's just the market value of the property. There's some back and forth through this required bargaining. If the government and the property owner can't reach an agreement then the government can go to court and get the court to specify the value of the property that will be paid in compensation and then the payment is made and the deed is transferred and the government becomes the owner of the property. - [Kim] Interesting, so the government has gone through this process to try to acquire my land, what if I'm a real holdout and I just really don't want the government to get my land, what happens then? - [Eduardo] Well you can litigate the various pieces of this and again, it depends a little bit on the state law. So some states put more procedural hurdles in the way of the government. Other states make it easier for the government but under the Constitution, there are really only two ways you can resist the taking of your property through eminent domain. One is by arguing that the use that the government plans to make of your property doesn't count as legitimate public use because the clause says, "nor shall private property be taken for public use "without just compensation," and that public use language has been interpreted to be a limitation on the power of eminent domain and then you can argue, the second thing you can argue is that what the government is offering you in terms of just compensation is not adequate compensation. And you can litigate those through the courts and that can slow the process down quite a bit. Some states make it easier for the government by saying well the government can actually just take title while you're litigating and others make you go... Allow you to stop the condemnation process and litigate in advance but there's often what's called a quick take procedure which allows the government to move more quickly and put the litigation on the backend but the public use, if it's found, if the use if found not to be public, what you win is an actual prohibition on the taking itself. You keep your property. If you win on the just compensation side, all you get is more money, they still take your property. - [Kim] So you mentioned public use. What counts as public use? - [Eduardo] Well under the current law, any use that generates a public benefit is really a public use. The way the court has put it is anything the government, any purpose the government can pursue through any other means, it can pursue through eminent domain. So if the government wants to create jobs or if the government wants to beautify or if the government wants to remove blight, all those things are things that we think it's legitimate for the government to try to do. If it can do those things, it can do them through the use of the eminent domain power. - [Kim] One thing that strikes me as interesting is just the fact that this clause is in the Fifth Amendment among things like double jeopardy or self-incrimination so why do you think the framers included this particular clause here as opposed to elsewhere in the Bill of Rights? - [Richard] Well that's a great question to which there's no obvious answer but the one clause that is pretty close to it is the due process clause in the Fifth Amendment that says, "nor shall any person be deprived of life, "liberty or property without due process of law." So if you start with the procedural stuff, somebody's gonna say well how do we know that the procedures aren't fair? And if it turns out that the government uses a set of procedures that don't give you adequate notice, you're always going to end up short on the amount of compensation that you're gonna require. So bad procedures tend to lead to bad outcomes which tend to lead to property being taken at less than full market value. So what happens is is therefore very close linkage between the procedures used under the due process clause and the substantive protection that you have under takings. - [Kim] Any changes in the interpretation of the takings clause by the Supreme Court over time? - [Richard] Well there's been a huge kind of switch up and down and let me put it the following way. In the beginning, there wasn't much of anything that was done with respect to the takings clause. The first federal case to deal with it was called Barron against Baltimore in 1833 or so and it just simply said that the clause does not allow for protection of Mr. Barron against the city of Baltimore because it only binds the federal government, it doesn't bind the state. After the Civil War, two things happen, a real distinction, the first thing is you start getting comprehensive regulation of the railroads and the rates they can charge and then public utilities and the rates that they can charge. And then in 1921, there's a case called Block v. Hersch and it's a very close 5-4 decision but they sustain on the grounds that it's a wartime, a temporary two year statute that limits the rents that can be charged in Washington D.C. at the end of the first World War. - [Eduardo] One of the biggest changes in the interpretation of the takings clause was the extension of the takings clause to government situations in which your property was not appropriated by the government. So what we call the regulatory takings doctrine which started in with the case of Pennsylvania Coal versus Mayhon in the 1920s and then has now become much more, it was sort of dormant for a while but become much more active since the 1980s, that's a doctrine that says, "if the government regulates your use of property "excessively, then the courts can treat that "in effect as a confiscation of your property "and require the payment of just compensation." That's maybe the most significant change in the interpretation of the clause in its history. So there continues to be controversy about the public use doctrine on modern commentators, especially libertarians, who want a very narrowly drawn account of public use and disagree with the breadth of the doctrine as I described it to you. So there's a lot of activism around that. There's been some state law that's been enacted to try to raise the floor there. The federal definition of public use is just a floor and states can go beyond that and restrict the power of eminent domain more forcefully if they want to and they have. - [Kim] So we've learned that the takings clause of the Fifth Amendment prevents both federal and state governments from taking private property for public use without just compensation but there are a lot of questions about what counts as private property, public use or just compensation. In recent years, debate over the takings clause has centered on whether government regulations about how a private individual can use land also constitute a form of compensation and the extent of acceptable public uses for which the government can seize property. To learn more about the Fifth Amendment, visit the National Constitution Center's interactive constitution and Khan Academy's resources on U.S. government and politics.