Property Law Developments—Joseph William Singer

The Supreme Court held in Horne v. Dep’t of Agric., 133 S.Ct. 2053, — U.S. — (2015), that the takings clause applies to physical takings of personal property (like cars) as well as to real property. Thus a government program designed to shore up the price of raisins by requiring farmers to hand over a certain percentage of the raisin crop to the government effected a categorical physical taking of personal property.

The limit on supply of raisins for sale was intended to increase the price farmers receive for the raisins they sell, thus promoting the profitability of their businesses. The expropriated raisins are given away or sold by the government and if any profits remain they are returned to the farmers. The Court held any economic benefits farmers received from increased raisin prices or moneys from sales of the raisins turned over to the government do not affect the question of whether a taking has occurred. When physical property is seized by the government, a taking has occurred even if it is is personal property and just compensation is due.

The Court also held that the government cannot condition participation in a price-support program on the condition that the farmer turn over a portion of the crop to the government.

At the same time, the Court made a sharp distinction between physical taking of personal property and regulation of its use. The takings clause does not prohibit regulation of personal property; nor does it prevent the state from prohibiting creation or possession of certain dangerous forms of property such as drugs like heroin. Thus it would not be a per se or categorical taking to limit the production of raisins (although it might be a regulatory taking). But it is a per se or categorical taking for the government to force the owner to hand the raisins over to the government. Justice Sotomayor dissented on the ground that this is a distinction without a difference.

Justice Thomas concurred on the ground that the taking was not for “public use.”

Justice Breyer concurred along with Justices Ginsburg and Kagan on the ground that a remand should have been ordered to determine if any compensation would have been due had the owner complied with the regulation. Breyer noted that the takings clause does not prohibit takings; it just requires just compensation when property is taken for public use. There was therefore a question of whether compliance with the government’s mandate would have resulted in just compensation being paid and if so it is not clear why a constitutional violation occurred since the obligation is to compensate not to refrain from taking. Part of the complication is that the requirement of handing over some raisins to the government effectively raises the price of those that are kept by the farmer. If that amount is sufficient to compensate for the value of the raisins handed over to the government then no more compensation should be due.

Once again a federal court has held that the Civil Rights Act of 1866 (as amended in 1991) provides no relief to a store customer who was subjected to racial insults while trying to buy merchandise. The First Circuit held, in Hammond v. Kmart Corp., 2013 WL 5763267 (1st Cir. 2013), that the “right to contract” protected by 42 U.S.C. §1981 only protects the ability to enter a contract; it provides no relief for racially disparate treatment when one is in a store. Because the customer was able to complete the transaction (laying away merchandise), the store did not prevent her from “contracting.” Being subjected to “racial slurs and insults” as she was engaged in the transaction did not deter her from completing the transaction.

The ruling oddly protects those who are deterred from completing the sale but not those who insist on going through with it despite the discriminatory treatment. It also fails to consider the wording of §1982 which protects the “right to purchase personal property.” Nor does it comprehend that treatment while in the store is part of the contractual process; contracting does not happen at a discrete magic moment.

The federal public accommodations law, 42 U.S.C. § 2000a, does not cover retail stores so with no §1981 remedy, the plaintiff found herself wholly unprotected by federal statutes. The plaintiff did make a state common law claim of infliction of emotional distress, although it was not clear why she did not also make a claim under the state public accommodations statute, Mass. Gen. Laws ch. 272, §98 which provides: “Whoever makes any distinction, discrimination, or restriction on account of race…relative to the admission of any person to, or his treatment in any place of public accommodation…shall be liable to any person aggrieved thereby…”

Kentucky had a law declaring unused traveler’s checks to be abandoned property if they are not used after a period of fifteen years; such property escheated to the state. When the legislature reduced the period from fifteen to seven, the change was challenged as a violation of due process of law. The Sixth Circuit held that the legislation was consistent with the due process clause on the ground that substantive due process requires only that the legislation be rationally related to a legitimate government interest. In this case, the legislation shortening the period from fifteen years to seven was a legitimate revenue-raising measure. American Express Travel Related Services Co. v. Kentucky, 641 F.3d 685 (6th Cir. 2013). The court refused, however, to rule on the question of whether the law effected an unconstitutional taking of property without just compensation, unconstitutionally impaired American Express’s contractual obligations, or was unconstitutionally retroactive in application.

The Rhode Island legislature passed a statute likely to be signed by the Governor called the “Homeless Bill of Rights.” The act amends Rhode Island’s fair housing law by adding “housing status” to the list of prohibited kinds of discrimination and defines housing status to mean “the status of having or not having a fixed or regular residence, including the status of living on the streets or in a homeless shelter or similar temporary residence.” It guarantees access to public spaces (including sidewalks and public buildings) on the same terms as others and grants a certain amount of protection for the personal property of the homeless. The law also ensures that public services are available to homeless persons. The bill is S 2052 Substitute B (2012) and it will amend R.I. Gen. Laws ch. 34 by adding §§34-37.1-1 to 34-37.1-5 and amending §§34-37-1 and 34-37-3.

Rare coins, possibly stolen: does the current possessor have the burden of showing that they were obtained legally or does  the prior owner (the United States) have the burden of showing that they were stolen? A court rules that possession, indeed, is 9/10 of the law.  read article