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THE ENDANGERED SPECIES ACT, REGULATORY TAKINGS, AND PUBLIC GOODS

Published online by Cambridge University Press:  24 June 2009

N. Scott Arnold
N. Scott Arnold
Affiliation:
Philosophy, University of Alabama at Birmingham
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Abstract

The Endangered Species Act (ESA) can impose significant limitations on what landowners may do with their property, especially as it pertains to development. These restrictions imposed by the ESA are part of a larger controversy about the reach of the “Takings Clause” of the Fifth Amendment, which says that private property shall not be taken for public use without just compensation. The question this paper addresses is whether these restrictions require compensation. The paper develops a position on the general question of compensation for regulatory takings and applies it to the ESA. The main argument concludes that compensation should be paid. It is based on the proposition that the goods provided by regulatory takings are typically public goods, and on a principle of fairness, which holds that compensation should be paid when those who benefit from a regulatory taking pay virtually nothing and those who pay receive hardly any benefit. It is argued that this principle is implicit in many of the Court's rulings on regulatory takings.

Type
Research Article
Information
Social Philosophy and Policy , Volume 26 , Issue 2 , July 2009 , pp. 353 - 377
Copyright
Copyright © Social Philosophy and Policy Foundation 2009

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References

1 Exceptions include those made for scientific purposes, to ensure the survival of a species, or to enhance the propagation of a species (16 U.S.C. sec. 1539[a][1][A] [2008]). Also included are incidental takings carried out pursuant to an approved habitat conservation plan (16 U.S.C. sec. 1539[a][2] [2008]). There are also hardship exemptions, exemptions for Alaskan natives, and a variety of other minor exemptions, all of which are detailed at 16 U.S.C. sec. 1539 (2008).

2 For a listing of these amendments, see http://www.fws.gov/laws/lawsdigest/ESACT.html.

3 Prior to the 1978 amendments, the FWS had been informally designating critical habitat, though it was mostly a matter of drawing lines on maps and informally advising government agencies and landowners what they could and could not do. Personal communication from FWS biologist John Fay, July 11, 2008.

4 Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978).

5 Id. at 187.

6 How one weighs the “economic and social benefits” against the “biological consequences” of the project is pretty mysterious. Interestingly, the “God Committee” voted against completing the Tellico Dam, but it did so on the mundane grounds that the economic benefits of the dam did not outweigh its (economic) costs, a necessary but not sufficient condition for the committee's approval. The dam was built anyway after Tennessee senator Howard Baker attached an amendment to a public works bill requiring its completion. See Paul, Ellen Frankel, Property Rights and Eminent Domain (New Brunswick, NJ: Transaction Publishers, 1987), 30Google Scholar.

7 The summary of changes that follows in this and subsequent paragraphs is drawn from Burgess, Bonnie B., Fate of the Wild: The Endangered Species Act and the Future of Biodiversity (Athens: University of Georgia Press, 2001), 13–19Google Scholar.

8 Palila v. Hawaii Department of Land and Natural Resources, 471 F. Supp. 985 (D.Haw. 1979); Palila v. Hawaii Department of Land and Natural Resources, 639 F.2d 495 (9th Cir. 1981); Palila v. Hawaii Department of Land and Natural Resources, 649 F. Supp. 1070 (D.Haw. 1986) Palila v. Hawaii Department of Land and Natural Resources, 852 F.2d 1106 (9th Cir. 1988).

9 50 C.F.R. 17.3.

10 Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687 (1995).

11 Chicago, Burlington and Quincy R.R. v. City of Chicago, 166 U.S. 226 (1897).

12 Paul, Property Rights and Eminent Domain, 103.

13 Usage of the term “police power” is inconsistent in this context. Sometimes, if an act of government is held to be an exercise of the police power, compensation is ipso facto denied. But sometimes the claim that a state has exercised its police power leaves open the compensation question, especially when exercise of the police power is justified by appeal to the general welfare. For example, in his dissent in San Diego Gas and Elec. Co. v. San Diego, 450 U.S. 621, 658 (1981), Justice Brennan wrote: “[T]he constitutional rule I propose requires that, once a court finds that a police power regulation has effected a ‘taking,’ the government entity must pay just compensation for the period commencing on the date the regulation first effected the ‘taking,’ and ending on the date the government entity chooses to rescind or otherwise amend the regulation.” See also Justice Holmes's use of the term “police power” in Mahon, quoted immediately below in the text. Perhaps the best way to resolve this ambiguity is to stipulate that exercise of the police power does not require compensation when the rationale is “health, safety, and morals,” but when the rationale is “the general welfare,” the question of whether compensation is required is left open.

14 Pennsylvania Coal Company v. Mahon, 260 U.S. 393 (1922).

15 The volume of coal constituting the columns or pillars was about one-third of the coal in the veins. See Fischel, William, Regulatory Takings: Law, Economics, and Politics (Cambridge, MA: Harvard University Press, 1995), 19–20Google Scholar.

16 Mahon, 260 U.S. at 413.

17 Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).

18 Id. at 1007.

19 Id. at 1016. For the Agins case, see note 37 below.

20 Pumpelly v. Green Bay Co., 80 U.S. 166 (1871).

21 United States v. Causby, 328 U.S. 256 (1946).

22 Loretto v. Teleprompter Manhattan CATV Corp., 458 US 419 (1982).

23 Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926).

24 Id. at 388.

25 Id. at 390–95. In fact, a close reading of the state court decisions the Court cites in support of this point reveals no such thing. These cases involved a narrow police-power rationale. Quoting one of these cases, the Court wrote: “[T]he Supreme Court of Louisiana, in State v. City of New Orleans, supra, pages 282, 283 (97 So. 444), said: ‘in the first place, the exclusion of business establishments from residence districts might enable the municipal government to give better police protection. Patrolmen's beats are larger, and therefore fewer, in residence neighborhoods than in business neighborhoods. A place of business in a residence neighborhood furnishes an excuse for any criminal to go into the neighborhood, where, otherwise, a stranger would be under the ban of suspicion. Besides, open shops invite loiterers and idlers to congregate; and the places of such congregations need police protection.’ … ‘Aside from considerations of economic administration, in the matter of police and fire protection, street paving, etc., any business establishment is likely to be a genuine nuisance in a neighborhood of residences. Places of business are noisy; they are apt to be disturbing at night; some of them are malodorous; some are unsightly; some are apt to breed rats, mice, roaches, flies, ants, etc….’” (Ambler Realty, 272 U.S. at 393).

26 Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978).

27 Id. at 123. This passage is italicized in the original. I have omitted the italics.

28 Id. at 125–26, 131.

29 Id. at 123, 127.

30 Id. at 130.

31 Palazzolo v. Rhode Island, 533 U.S. 606 (2001).

32 Epstein, Richard, “The Ebbs and Flows in Takings Law: Reflections on the Lake Tahoe Case,” Cato Supreme Court Review 1 (2001-2002): 22–23Google Scholar.

33 Penn Central, 438 U.S. at 133–34.

34 Id. at 135.

35 Id. at 136.

36 Id. at 137.

37 Agins v. Tiburon, 447 U.S. 255 (1980).

38 Id. at 260. Later, the Court repudiated this general principle. See Lingle v. Chevron U.S.A., 544 U.S. 528 (2005).

39 Agins, 447 U.S. at 262.

40 Id. at 262–63.

41 This criterion was mentioned twice by Brennan (Penn Central, 438 U.S. at 123, 127), perhaps as a gloss on his notion that the ordinance does not “prevent Penn Central from realizing a reasonable return on its investment.”

42 Considerations of fairness are central to the argument of Frank Michelman's seminal essay on this topic. See Michelman, Frank, “Property, Utility, and Fairness: Comments on the Ethical Foundations of ‘Just Compensation’ Law,” Harvard Law Review 80, no. 6 (April 1967): 1165–1258CrossRefGoogle Scholar.

43 Mahon, 260 U.S. at 413.

44 Unless, of course, there is a narrow police-power rationale for the regulatory taking.

45 Mahon, 260 U.S. at 415; Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531 (1914).

46 Agins, 447 U.S. at 262.

47 Armstrong v. United States, 364 U.S. 40 (1960).

48 Id. at 49.

49 Penn Central, 438 U.S. at 134–35.

50 Id. at 136–37.

51 Id. at 137.

52 I owe this point to John Bolton, an attorney on the Penn Central case. Personal communication from John Bolton, March 5, 2008.

53 Ambler Realty, 272 U.S. at 388.

54 Just v. Marinette County, 56 Wis. 2d 7, 201 N.W.2d 761 (1972).

55 The court had previously discussed logging and hunting as “natural” activities, the prohibition of which would presumably require compensation.

56 Just v. Marinette County, 56 Wis. 2d at 17–18, 201 N.W.2d 761 (1972).

57 Sagoff, Mark, “Takings, Just Compensation, and the Environment,” in Scherer, Donald, ed., Upstream/Downstream: Issues in Environmental Ethics (Philadelphia, PA: Temple University Press, 1990), 170Google Scholar.

58 Mugler v. Kansas, 123 U.S. 623 (1887).

59 Id. at 627.

60 Id. at 669.

61 Richard Epstein makes a similar point. See Richard Epstein, Takings (Cambridge, MA: Harvard University Press, 1985), 130–31Google Scholar.

62 Simmons, Randy, “Fixing the Endangered Species Act,” The Independent Review 3, no. 4 (Spring 1999): 517Google Scholar.

63 Information in this paragraph comes from Rohlf, Daniel J., The Endangered Species Act (Stanford, CA: Stanford Environmental Law Society, 1989), 13–17Google Scholar.

64 Palila v. Hawaii Department of Land and Natural Resources, 639 F.2d 495 (9th Cir. 1981); Palila v. Hawaii Department of Land and Natural Resources, 852 F.2d 1106 (9th Cir. 1988).

65 Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687 (1995).

66 Simmons, Randy, “Who's Saving What?” The Independent Review 3, no. 3 (Winter 1999): 320–22Google Scholar.

67 Ibid.

68 Mann, Charles and Plummer, Mark, Noah's Choice: The Future of Endangered Species (New York: Alfred A. Knopf, 1995), 198–211Google Scholar.

69 Ibid., 208–9.

70 Jonathan Adler, Testimony before the Committee on Environment and Public Works, U.S. Senate, July 12, 1995.

71 Mann and Plummer, Noah's Choice, 208.

72 Ibid., 201–2.

73 See Adler, Jonathan, “Money or Nothing: The Adverse Environmental Consequences of Uncompensated Land Use Controls,” Boston College Law Review 49, no. 2 (2008): 321–22Google Scholar, for a discussion of at least six other cases in which perverse incentives led landowners to destroy habitat that might attract members of endangered species.

74 Lueck, Dean and Michael, Jeffrey A., “Preemptive Habitat Destruction Under the Endangered Species Act,” Journal of Law and Economics 46, no. 1 (April 2003): 27–60CrossRefGoogle Scholar. Michael and Lueck estimate the cost of maintaining habitat for one colony of RCWs to be a minimum of $200,000 in forgone timber harvests (ibid., 33 n. 27).

75 Brook, Amara, Zint, Michaela, and De Young, Raymond, “Landowners' Responses to an Endangered Species Act Listing and Implications for Encouraging Conservation,” Conservation Biology 17, no. 6 (December 2003): 1638–49CrossRefGoogle Scholar. See Adler, “Money or Nothing: The Adverse Environmental Consequences of Uncompensated Land Use Controls,” 326–30, for a discussion of this and other studies of habitat destruction.

76 For example, the loss of so-called keystone species (which occupy important ecological niches) or the loss of iconic species, such as the American bald eagle, would be just such special cases. Considerations of fairness, however, still require that the good of preserving these species should be paid for out of tax revenues.

77 Mahon, 260 U.S. at 415.

78 Lewis, William E. Jr., Wetlands Explained: Wetland Science, Policy, and Politics in America (New York: Oxford University Press, 2001), 42 n. 1Google Scholar.