Compensation for Takings: How Much Is Just
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Once a court has determined that the government has "go[ne] too far" in changing or restricting existing property rights, and that a "taking" has, therefore, occurred, the Fifth Amendment requires that the government provide "just compensation" to the individual whose property it has taken. In defining the measure of compensation mandated by the Constitution, the Supreme Court has consistently explained that an individual is entitled to "a full and exact equivalent" for the taken property, and to be "put in as good [a] position pecuniarily as he would have been if his property had not been taken." Yet, behind the facade of these seemingly clear legal standards lurks an underlying division between those who would require the government to provide a more generous measure of compensation and those who would require the government to provide less.5 As has been the case with respect to the issue of whether a taking has occurred, the Court has tried to pretend that its decisions regarding the proper measure of compensation are consistent with one another--a suggestion that, despite the frequency with which it is made, is no more plausible here than it is when made with respect to the Court's rulings on whether a taking has occurred. This continuing uncertainty on whether compensation should be required, and if so, how much compensation is due, can be traced to a continuing tension between two competing views of the constitutional compensation requirement. The first view sees the compensation requirement as a necessary and desirable check on the potential misuse by the legislature of its authority over property rights. Proponents of this view generally argue for a broader interpretation of whether a taking has occurred, and a more generous measure of compensation that seeks to ensure equitable treatment for the individual whose property the government has taken. The second view sees the compensation requirement as an unnecessary obstacle that, if enforced too often, would act to block or overturn desirable government action. Proponents of this view generally argue for a narrower interpretation of whether a taking has occurred, and a less generous measure of compensation that "balances" the individual's constitutional compensation right against society's desire to pay as little as possible to achieve its goals. Because these competing views of the compensation requirement suggest different answers to the questions of when compensation should be required, and if so, how much should be provided, courts have had trouble providing a consistent answer to either question. This Article focuses on how courts have and should answer the second question: if compensation is required, how much is just? Section I will begin the discussion by setting out the basic rules the Supreme Court has established for determining the appropriate amount of compensation. While the basic rules will appear relatively straight-forward, this appearance is deceptive, as some aspects of the issue have proven difficult for courts to resolve consistently. Section II will introduce and discuss two aspects of the calculation of compensation that have proven particularly troublesome: (1) how the interaction of government authority, property rights and value should affect the determination of just compensation; and (2) whether a property owner's reasonable expectations, even if not recognized as formal property rights, should be considered in measuring compensation. On each of these issues, courts have reached somewhat inconsistent conclusions. These inconsistencies are not, however, simply the result of careless reasoning or inadequate advocacy. Instead, they reflect a fundamental dispute over the proper role for, and the true purpose behind, the constitutional compensation requirement. Identifying the appropriate answer in each case requires, therefore, a more thorough understanding of the purpose that is served by the compensation requirement-an examination undertaken in Section III. In view of the purpose behind the compensation requirement, Section IV identifies the appropriate standards by which just compensation should be measured and applies those standards to suggest the proper resolution of the two gray areas discussed in Section II.