- [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 Lawrence 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 Penalver is the Allan R. Tessler Professor
and Dean of Cornell Law School.
So Prof. Epstein can you give us a little background?
Just what is the taking 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 the 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's 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.
It's, 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 takes 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, is in fact,
now 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 the 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 was possibly motivation to make clear
that if in future scenarios
if the government wanted to take your property
it would have to, it would have to compensate you.
And I think 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 call limited government.
And so the takings clause, essentially says, is
"yes, we need your land for a fort,
"and it's really very important.
"But if we're gonna take it and use it for a 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,
but pretty apparent today.
Is if the government can take something
and not pay you compensation, it's gonna overtake.
So your land is worth $100,000 as a farm,
but if you're gonna use it for a fort
it's only worth $10,000.
If you don't have to pay the $100,000,
well you may take it because you get $10,000 worth of gain.
But if you have to pay the fellow a 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,
or does regulate, 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 as a requirement
that the government bargain 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 would aid 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 hold-out
and I just really don't want the government to get my land?
What happens then?
- [Eduardo] Well, you can litigate 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,
then 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 a 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 litigate."
And others make you go, you know,
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 back end.
But the public use, if the use is found not to be public,
what you win is, you got 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.
(laughs)
- [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.
So 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
which 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 acquire.
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 substance of 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 happened
of 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. Hirsch
and it's a very close five to four decision.
But they sustain on the grounds that it's a war time,
a temporary two year statue 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 govern
situations in which your property
was not appropriated by the government.
So what we called the Regulatory Takings Doctrine
which started in, with the case
of Pennsylvania Coal versus Mahon in the 1920s
and then has now become much more,
it was sort of dormant for a while,
would 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 was a pretty, 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.
Modern commentators, especially Libertarians
want a very narrowly drawn account of public use
and disagree with the breadth of the doctrine
as I described it to you.
And so there's a lot of activism around that.
There's been some state laws 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 many 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 confiscation.
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 Centers
interactive constitution and Khan Academy's resources
on U.S. government and politics.