Galveston Economic Report
David Stanowski Publisher
City Council and the Constitution?
by David Stanowski
06 October 2009
Does the City Council need to consider the U.S. Constitution and the Texas Constitution before they decide to enact new laws? What if they think that they have a great idea, but it appears to be unconstitutional? The new no-smoking ordinance appears to violate the 5th Amendment's "Takings Clause", as well the Texas Takings Statute.
The Founding Fathers believed that private property rights were the foundation of a stable, prosperous, and free society. This is the reason that they addressed them in the Bill of Rights; in the 5th Amendment's so-called “Takings Clause”. It says that if the government “takes away” someone's private property, for the good of the community as a whole, the government must compensate them for their loss.
This is most often done, on a permanent basis, through the exercise of Eminent Domain, but if the government interferes with a business owner’s ability to conduct his business, in a manner that allows him to maximize his income, the government must compensate him for his loss!
The principle works this way: If the Galveston City Council believes that banning smoking in bars and restaurants, including outdoor decks and patios, is the right thing to do, for the "greater good", then the cost of bestowing this benefit on the City should not fall upon the owners of local bars and restaurants; the taxpayers should pay for it!
In “Private Real Property Rights Protection Act Guidelines” Texas Attorney General Greg Abbott comments on the Texas Takings Statute:
a) The Fifth Amendment to the United States Constitution (the "Takings Clause") provides: "; Nor shall private property be taken for public use, without just compensation." The Takings Clause applies to the states by virtue of the Fourteenth Amendment.
(b) Article I, §17 of the Texas State Constitution provides as follows:
No person's property shall be taken, damaged or destroyed without adequate compensation being made, unless by the consent of such person; and, when taken, except for the use of the State, such compensation shall be first made, or secured by a deposit of money .
(c) The Act, §2007.002(5)(B), sets forth a new statutory definition of "taking." Essentially, if a governmental entity takes some "action" covered by the Act and that action results in a devaluation of a person's private real property of 25% or more, then the affected party may seek appropriate relief under the Act. Such an action for relief would be predicated on the assumption that the affected real property was the subject of the governmental action.
Furthermore, the State of Texas provides for the need to compile and complete a "Takings Impact Assessment" (TIA) in situations where a Takings action is highly probable.
§1.13. Governmental actions undertaken pursuant to these Guidelines that compel the need to promulgate "Takings Impact Assessments" (TIAs) must ensure that information regarding the private real property implications of governmental actions are considered before decisions are made and actions taken. This information and analysis must be accurate, concise, and of high quality. TIAs must concentrate on the truly significant real property issues. No need exists to amass needless detail and meaningless data. The public is entitled to governmental conformance with legislative will, not a mass of unnecessary paperwork. Nevertheless, the public is entitled to more than mere pro forma analyses by the governmental entities covered by the Act. TIAs shall serve as the means of assessing the impact on private real property, rather than justifying decisions already made.
It is time for local bar and restaurant owners to insist that the City perform a Takings Impact Assessment as set forth in State law, before any final decisions are made about how to proceed. In this way, the City can quantify the revenue that will most likely be lost by these business owners. Then if the no-smoking ordinance remains as it is, bar and restaurant owners will receive just compensation for any losses.
A sample letter has been drafted to get the process started. click here
U.S. Constitution, 5th Amendment
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
The Takings Clause of the Fifth Amendment is one of the few provisions of the Bill of Rights that has been given a broader interpretation under the Burger and Rehnquist courts than under the Warren Court. It is a clause near and dear to the heart of free market conservatives.
Only certain types of takings cases present serious interpretive questions. It is clear that when the government physically seizes property (as for a highway or a park, for example) that it will have to pay just compensation. It is also clear that serious, sustained physical invasions of property (as in the case of low overflying aircraft, for example) require payment of compensation equal to the difference between the market value before and after the invasion. The difficult cases are generally those where government regulations, enacted to secure some sort of public benefit, fall disproportionately on some property owners and cause significant dimunition of property value.
The Court has had a difficult time articulating a test to determine when a regulation becomes a taking. It has said there is "no set formula" and that courts "must look to the particular circumstances of the case." The Court has identified some relevant factors to consider: the economic impact of the regulation, the degree to which the regulation interferes with investor-
backed expectations, and the character of the government action. Still, as our cases suggest, there is a lot of room for argument as to how these various factors should be weighed.
from University of Missouri at Kansas City School of Law
''When . . . [the] power [of eminent domain] is exercised it can only be done by giving the party whose property is taken or whose use and enjoyment of such property is interfered with, full and adequate compensation, not excessive or exorbitant, but just compensation.'' Backus v. Fort Street Union Depot Co., 169 U.S. 557, 573 , 575 (1898).
The issue whether one's property has been ''taken'' with the consequent requirement of just compensation can hardly arise when government institutes condemnation proceedings directed to it. Where, however, physical damage results to property because of government action, or where regulatory action limits activity on the property or otherwise deprives it of value, whether there has been a taking in the Fifth Amendment sense becomes critical.
A later formulation was that ''property is taken in the constitutional sense when inroads are made upon an owner's use of it to an extent that, as between private parties, a servitude has been acquired either by agreement or in course of time.'' 242 United States v. Dickinson, 331 U.S. 745, 748 (1947).
It was thus held that the government had imposed a servitude for which it must compensate the owner on land adjoining its fort when it repeatedly fired the guns at the fort across the land and had established a fire control service there. In two major cases, the Court held that the lessees or operators of airports were required to compensate the owners of adjacent land when the noise, glare, and fear of injury occasioned by the low altitude overflights during takeoffs and landings made the land unfit for the use to which the owners had applied it. Eventually, the term ''inverse condemnation'' came to be used to refer to such cases where the government has not instituted formal condemnation proceedings, but instead the property owner has sued for just compensation, claiming that governmental action or regulation has ''taken'' his property.
... but the Court in 1922 established as a general principle that ''if regulation goes too far it will be recognized as a taking.'' Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). See also Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2895 (1992) (a regulation that deprives a property owner of all beneficial use of his property requires compensation, unless the owner's proposed use is one prohibited by background principles of property or nuisance law existing at the time the property was acquired).
''... no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective.''
... the Court frequently reminds us, is to vitalize the Fifth Amendment's protection against government ''forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'' Armstrong v. United States, 364 U.S. 40, 49 (1960). For other incantations of this fairness principle, see Penn Central, 438 U.S. at 123-24; and Andrus v. Allard, 444 U.S. 51, 65 (1979).
from Find Law
Takings: Private Property and the Power of Eminent Domain
Kelo v. City of New London
Western Seafood v. City of Freeport, Texas
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