The Fifth Amendment - takings clause | US government and civics | Khan Academy

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 Alan R. Tesler Professor and Dean of Cornell Law School.

So, Professor Epstein, can you give us a little background? Just what is the Takings Clause?

Well, there's a rule in constitutional law that the shorter the provision, the more difficult the interpretation. This is a very short petition. It says, "Nor shall private property be taken for public use without just compensation." 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. Early on, since this was part of the Bill of Rights, it was said to apply only to Congress and not to the states. 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.

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. That seems to have been the motivation. I think 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 take your property for some public use, they have to make you whole by giving you just compensation.

Private property is 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 much broader than that; it covers all sorts of intangible rights like patents, copyrights, and 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. It may or may not cover other kinds of intangibles like goodwill, which is the value associated with the business knowing that your past customers may come back to you in the future.

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 a motivation to make clear that if, in future scenarios, if the government wanted to take your property, it would have to compensate you.

I think most historians don't think there was a real problem being addressed by this, you know, a problem of uncompensated taking of property by colonial governments during that period or by the state governments during the Articles of Confederation. The framers wanted a system of what we call limited government. What the Takings Clause essentially says is, "Yes, we need your land for a fort, and it's really very important. But if we're going to take it and use it for a fort, that's a public use; we're going to pay you compensation for the fair market value of the land before the fort was put on." 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.

The second thing is more economic, less apparent at the time of the framing but pretty apparent today. If the government can take something and not pay you compensation, it's going to overtake. So, your land is worth a hundred thousand dollars as a farm, but if you're going to use it for a fort, it's only worth ten thousand dollars. If you don't have to pay the hundred thousand dollars, well, you may take it because you get ten thousand dollars worth of gain. But if you have to pay the federal fair market value of the property interest taken, you won't do it. Essentially, what it does is ensure, or at least improve 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.

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?

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 to the property. Then, often, there's 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, you know, 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 will be paid in compensation. Then, the payment is made, and the deed is transferred, and the government becomes the owner of the property.

Interesting! So, the government has gone through this process to try to acquire my land. What if I'm a real holdout and I just really don't want the government to get my land? What happens then?

Well, you can litigate various pieces of this, and again, it depends a little bit on the state law. Some states put more procedural hurdles in the way of the government. Other states make it easier for the government. 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." That public use language has been interpreted to be a limitation on the power of eminent domain.

The second thing you can argue is that what the government is offering you in terms of just compensation is not adequate compensation. 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, you know, allow you to stop the condemnation process and litigate in advance.

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. If the use is found not to be public, what you win is an actual prohibition on the taking itself, right? You keep your property. If you win on the just compensation side, all you get is more money; they still take your property.

So, you mentioned public use. What counts as public use?

Well, under the current law, any use that generates a public benefit is really a public use. The way the court has put it is anything the government can pursue through any other means; it can pursue through eminent domain. If the government wants to create jobs or beautify or 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.

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?

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 is going to say, "Well, how do we know that the procedures aren't fair?" 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 going to 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, therefore, a very close linkage between the procedures used under the due process clause and the substantive protection you have.

Any changes in the interpretation of the Takings Clause by the Supreme Court over time?

Well, there's been a huge kind of switch up and down. 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 around 1833, and it just simply said that the clause does not allow for the 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 happen 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. Then, in 1921, there's a case called Block v. Hirsch; it's a very close five-to-four decision, but they sustain on the grounds that it's a wartime, a temporary two-year statute that limits the rents that can be charged in Washington, D.C. at the end of the First World War.

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. This is what we call the regulatory takings doctrine, which started in 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 and has 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.

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. There's a lot of activism around that. There's been some state law that's been enacted to try to raise the floor. The federal definition of public use is just the floor, and states can go beyond that and restrict the power of eminent domain more forcefully if they want to, and many have.

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 Center's interactive constitution and Khan Academy's resources on U.S. government and politics.