On Tuesday, the U.S. Supreme Court will be faced with the following question: Under what conditions, if any, can the government take property from you or your business for the public good? Although the question sounds straightforward enough, its answer will have profound, complex -- and terribly important -- consequences for the future of American social policy.
Under current law, the government can take your house or land. In order to do so, it must merely show that the property is being taken for a legitimate "public use," and it must pay a fair compensation. That's the law of "eminent domain." It can also, under certain circumstances, take money out of your business or limit the amount of money you can take out of your business, if it has a good, publicly beneficial reason to do so.
But although these are the rules under which our government has operated for the last 85 years, they're not making everyone happy. In the first of two obscure cases coming before the court on Tuesday, Kelo vs. City of New London, the city of New London, Conn., took property from homeowners in order to build an economic development area that was presumably going to give the city desperately needed funds. The homeowners said the government might have had the right to take the land if it had become a slum, or if it was in some way blighted, but not for a purely profit-making enterprise -- even if they were provided fair compensation. The owners argued that the community they had lived in for many years, with their friends and family surrounding them, and the property itself, could not be replaced by dollars. Why, the landowners argued, should they arbitrarily and capriciously be singled out to help the entire community get income? The Connecticut Supreme Court, however, upheld the city's right to take the land.
In the second case, Lingle vs. Chevron, Chevron challenged a Hawaii law limiting the maximum rent that oil companies could collect from dealers who leased company-owned service stations. The state had passed the law in order to hold down gasoline prices, but the federal appeals court agreed with Chevron that the rent control regulations were unconstitutional because the government had no right to, effectively, "take" rent that dealers had been prepared to pay to Chevron.
Chevron, in its brief before the Supreme Court, argued that the government could not arbitrarily take from the company profits that would otherwise be shared by its stockholders.
