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The Landscape of Constitutional Property

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The Landscape of Constitutional Property Columbia Law School Scholarship Archive Faculty Scholarship Faculty Publications 2000 The Landscape of Constitutional Property Thomas W. Merrill Columbia Law School, [email protected] Follow this and additional works at: https://scholarship.law.columbia.edu/faculty_scholarship Part of the Constitutional Law Commons, Intellectual Property Law Commons, and the Property Law and Real Estate Commons Recommended Citation Thomas W. Merrill, The Landscape of Constitutional Property, 86 VA. L. REV. 885 (2000). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/357 This Article is brought to you for free and open access by the Faculty Publications at Scholarship Archive. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Scholarship Archive. For more information, please contact [email protected]. VIRGINIA LAW REVIEW VOLUME 86 AUGUST 2000 NUMBER 5 ARTICLE THE LANDSCAPE OF CONSTITUTIONAL PROPERTY Thomas W. Merrilr INTRODUCTION ................................................................................... 886 I. FOUR FLARES IN THE DARKNESS .................................................. 895 A. Phillips v. Washington Legal Foundation .............................. 895 B. Eastern Enterprises v. Apfel ................................................... 900 C. College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board ....................................................... 908 D . D rye v. U nited States ............................................................... 914 II. BOARD OFREGENTS V. ROTHAND THE REIGN OF PURE PosrrIVISM ...................................................................................... 916 A. Roth and the Emergence of Pure Positivism ......................... 917 B. The PositivistTrap .................................................................... 922 C. Searchingfor a Solution ........................................................... 926 D . Too M uch Property.................................................................. 931 E. The Takings Clause and the Positivist Trap ........................... 934 III. BEYOND POSITIVISM: THE NEED FOR A FEDERAL PATTERNING DEFINITION ............................................ 942 A . N aturalProperty ....................................................................... 943 B. Pure Positivism.......................................................................... 949 C. The PatterningDefinition ......................................................... 952 IV. DELINEATING APPROPRIATE PATTERNING DEFINITIONS ...... 954 A. The Need for Three Definitions............................................... 955 * John Paul Stevens Professor of Law, Northwestern University. The author would like to thank Michael Abramowicz, Barbara Armacost, Robert Bennett, Daryl Levin- son, Elizabeth Magill, Mary Offerdahl, James Ryan, Jim Speta, Paul Stephan, Amy Wax, and the participants in faculty workshops at the Minnesota, San Diego, Virginia, and William & Mary law schools for helpful suggestions about earlier drafts. 885 886 Virginia Law Review [Vol. 86:885 B. ProceduralDue Process:Property-as-Entitlement ................ 960 1. E ntitlement ............................................................................. 961 2. M onetary Value .....................................................................964 3. Term ination........................................................................... 965 4. An Assessment of the Definition .........................................967 C. Takings. Property-as-Ownership............................................. 969 1. The Right to Exclude ............................................................970 2. D iscrete A ssets .......................................................................974 3. Irrevocable Right ..................................................................978 4. An Assessment of the Definition .........................................979 D. Substantive Due Process:Property-as-Wealth ....................... 982 1. Dropping The Discrete-Assets Limitation.......................... 983 2. A Right to Exclude Without Discrete Assets? ....................985 3. A Different D irection............................................................ 987 V. CONTRACTS AS CONSTITUTIONAL PROPERTY ...........................990 CONCLUSION .......................................................................................996 INTRODUCTION T HE Constitution contains two clauses that protect persons against governmental interference with their property. The Due Process Clause provides that "No person shall.., be deprived of life, liberty, or property, without due process of law."' The Tak- ings Clause adds, "nor shall private property be taken for public use, without just compensation."2 Both provisions appear to im- pose a threshold condition that a claimant have some "property" at stake before the protections associated with the Clause apply. Thus, under the Due Process Clause, it would seem that a claimant must have an interest in "property" (or in "life" or "liberty") be- fore we move on to ask whether the state has "deprived" such a person of this interest without "due process of law." And the Tak- ings Clause appears to require that a claimant have "private property" before we proceed to ask whether this interest has been I U.S. Const. amend. V. A substantively identical provision appears in the Fourteenth Amendment. Id. amend. XIV, § 1. 2 Id. amend. V. The Supreme Court has held that the Takings Clause applies to the States through the Fourteenth Amendment. See, e.g., Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 122 (1978) (citing Chicago, Burlington & Quincy R.R. Co. v. Chicago, 166 U.S. 226,239 (1897)). 2000] The Landscape of ConstitutionalProperty "taken" by the government for a "public use" without the payment of "just compensation." The Supreme Court has not always been attentive to the "prop- erty" threshold under these clauses. During a brief period in the early 1970s, it spoke as if procedural due process applies to any in- terest that is "important," whether or not such an interest can be properly categorized as "property" (or "life" or "liberty").3 In addi- tion, cases from the 1960s and early 1970s seem to say that the substantive due process requirement of minimum rationality4 ap- plies even if a claimant has no liberty or property interest. Starting in 1972 with its landmark decision in Board of Regents v. Roth,5 however, the Court has become increasingly insistent that persons seeking protection for economic interests under either the Due Process or Takings Clauses must establish they have "prop- erty" if they are to avoid dismissal of their lawsuit. This understanding is most securely established in Roth's own area- procedural due process. The Court has rendered numerous deci- sions in the wake of Roth reaffirming the idea that property is a precondition of procedural due process protection.6 In the takings context, the understanding that a claimant must demonstrate the existence of a property interest is reflected in older federal eminent 3 The period lasted from Goldberg v. Kelly, 397 U.S. 254 (1970), to Board of Regents v. Roth, 408 U.S. 564 (1972); in other words, about two years. The case that seems to most clearly adopt the "important interest" threshold is Bell v. Burson, 402 U.S. 535, 539 (1971) (explaining that the automatic suspension of a driver's license when an uninsured motorist has an accident triggers due process because it "involves state action that adjudicates important interests of the licensees"). 4 See Richardson v. Belcher, 404 U.S. 78, 81--84 (1971) (rejecting the claim that Social Security benefits are analogous to property for purposes of substantive due process protection, but considering whether a change in benefit levels violated the minimum rationality requirement of due process); Cafeteria & Restaurant Workers Union v. McElroy, 367 U.S. 886, 898 (1961) (finding that the exclusion of petitioner from a government facility implicated no liberty or property interest, but "assum[ing]" that she could not constitutionally be excluded for reasons "patently arbitrary or discriminatory"); Flemming v. Nestor, 363 U.S. 603, 611 (1960) (holding that, although claimant had no property right in accrued Social Security benefits, the interest "is of sufficient substance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause"). 5408 U.S. 564 (1972). 6 See, e.g., American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 59 (1999) ("The first inquiry in every due process challenge is whether the plaintiff has been deprived of a protected interest in 'property' or 'liberty."'). 888 Virginia Law Review [Vol. 86:885 domain decisions,7 and thus antedates Roth. Nevertheless Roth clearly has had a major impact here as well. In several regulatory takings cases decided after Roth, the Court has pointedly asked whether a claimant has a cognizable interest in property before proceeding to consider whether this interest has been taken.8 And in making this threshold inquiry, the Court has generally followed the method prescribed by Roth.! Substantive due process is the one area in which the Court until recently had remained silent about the need for a threshold identi- fication of an affected property interest. No doubt this is because substantive due process protection of property has been modest throughout the post-World War II era.0
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