Takings as tort: what is the optimal level of public theft?

By public theft, I mean the common practice of all governments, small or large, to grab a chunk of our incomes (via taxes) or interfere with our property rights (via zoning and myriad regulations). Of course, the optimal level is not zero. At the very least, we need police to protect our safety and courts to protect our rights, and cops and judges do not usually work for free.

Moreover, the optimal level of public theft, whatever it is, is probably even higher when there is a “global pandemic.” But at the same time, the optimal level cannot be complete and indiscriminate confiscation, especially when face masks are readily available, right? I have been blogging about the takings clause in the coronavirus age since March of this year, and in reply to one of my posts, my good friend and legal colleague Salvador J. Antonetti makes the following excellent point (ellipsis in the original):

“Conceptually, the problem is that ‘government’ means all of us, so yes, we’d be paying ourselves, but then getting the funds to make those payments by … levying taxes on ourselves. All of us would be on both ends of the process. It’d be an endless circle that ends in a wash. I’m betting that no court will find that that’s what the Takings Clause requires.”

This conceptual argument offers the best refutation of my takings theory by far, but couldn’t the same be said about the trillions of dollars the Congress is currently spending to provide partial relief to non-essential business firms and employees? (Again, this is not a rhetorical question!) My deeper point is that if we are going to close down certain places in the name of public health, then the owners of those places are legally and morally entitled to just compensation—not as a matter of charity or loans or bailouts but as a matter of right.

Consider, for example, the following thought experiment. What if a government had issued a lockdown order in normal (non-pandemic) times? Would anyone doubt that such an order constituted a taking? So, why should the presence of a health emergency change our analysis of the takings clause?

To conclude, consider a different conceptual model of these pandemic lockdowns, one based on the case of Vincent v. Lake Erie Transportation Co., a famous torts case that is known to all first-year law students. The facts of this famous case are as follows: The crew of a steamship had tied their vessel against a private dock to avoid a bad storm. Although they were able to save their ship, it damaged the dock during the storm. The owner of the dock then sued the steamship owner to recover the damages to the dock, and the court ruled for the dock owner.

Conceptually speaking, how are the facts in this classic case any different from what local and state governments are doing to “non-essential” business firms when they close them down completely to stop the spread of a contagious virus? The government is, in essence, inflicting enormous economic losses on these firms for the greater good, right? Notice that I am not questioning the cost-benefit logic of these lockdown orders, and like a good Bayesian, I am willing to admit I might be wrong, so change my mind!

How do you lose property rights over something

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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