A Stitch in Haste

As most folks know, tomorrow the Supreme Court will hear oral arguments in the critical Fifth Amendment case Kelo v. New London. Libertarians are hoping that the court will ride the crest of the Hathcock decision in Michigan, in which that state's supreme court reversed the "Poletown Doctrine." That monstrous case held that the government can, via eminent domain, seize private property, not to build roads, bridges or courthouses, but simply to give it to other private parties in the hope of generating more tax revenues.

The blogosphere is overflowing with posts on Kelo; my archive is available below. But what many may not know is that another Takings case, Lingle v. Chevron, is also being heard tomorrow, one that could be almost as important as Kelo itself.

I blogged about Lingle back in November; given the imminent oral arguments, I am reproducing it here. (SCOTUSblog also has a very good summary of the case and its posture; links to the Kelo and Lingle briefs available here.)

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All libertarian eyes are focused on the pending Supreme Court case Kelo v. New London, where the Court will address the issue of just what "public use" means with respect to the Fifth Amendment's Takings Clause.

But there's another important Takings Clause case being considered by the Court, Lingle v. Chevron, which gives the Court the opportunity to end another travesty against property rights: rent control.

Professor Vikram David Amar summarizes the facts of the case over at FindLaw's Writ:

Worried about the high retail price of gasoline in the Hawaiian islands, the state legislature passed a law that offers a creative solution: rent control. The statute places a ceiling on the maximum rent that oil companies can charge gas station operators who lease oil-company-owned service stations. Subject to some small adjustments, the law limits the rent that an oil company can charge to 15% of the dealer's profit derived from gas sales and 15% of the dealer's gross sales on products other than gasoline.

Chevron (i.e., the landlord) is suing, claiming that the rent control constitutes an unconstitutional taking of their property (i.e., the gas stations that it rents to dealers).

Now, there are several different issues bouncing around in this case, not all of which are necessarily of interest to libertarians per se (e.g., What is the proper standard of review for economic regulation? How far should courts go in second-guessing studies used by the legislature in enacting laws?). Stuff that typically put me to sleep in my Statutory Interpretation class in law school.

Still, the case, at its core, is about rent control and the Fifth Amendment. The constitutional argument goes something like this: It's one thing to restrict property use (e.g., by zoning), even if it diminishes the property's value. But if the restriction creates a permanent transfer of wealth from the property owner to another private party (i.e., the tenant), then the regulation becomes a taking subject to Fifth Amendment strictures.

Framed that way, the case begins to look a lot like Kelo! Perhaps the Court will decide the two cases together and hand down linked decisions like they did in the Michigan affirmative action cases.

The Hawaii ordinance arguably created such a permanent transfer of property (i.e., from landlord to tenant) and is being challenged on those grounds, among others (compare and contrast: even New York City's monstrous rent regulations are, at least nominally, temporary and do not create an overt wealth transfer from landlord to tenant).

Still, wouldn't it be delicious if the Court decided not only to wipe the slate clean regarding private versus public takings via Kelo but also to use Lingle as an opportunity to revisit the whole concept of regulatory takings -- declaring all rent control, or even all restrictive use laws, as "takings" requiring "just compensation"?

Hey, a guy can dream, can't he?

Related Posts:
Eminent Domain: Are We Seeing a Paradigm Shift?
"Kill Poletown, Vol. 2"
But What About "Reverse-Poletown"?
New York's Embrace of "Reverse-Poletown" -- Part One
New York's Embrace of "Reverse-Poletown" -- Part Two