Public Pension Reform and the Takings Clause

Of the many current issues facing state and local governments, perhaps one of the most pressing is public pension reform. According to the U.S. Census Bureau, there are nearly 4,000 public pension systems in the United States, the vast majority (3,742) of which are administered by local governments. As of 2014, these systems had more than 19,000,000 members and more than 9,000,000 beneficiaries receiving periodic payments. But many of these systems are in serious financial trouble, collectively facing unfunded liabilities that, by some estimates, equal approximately $4.7 trillion. In light of these shortfalls, many states have enacted a variety of reform measures to stave off fiscal collapse, and these reforms have drawn numerous legal challenges from public sector employees and retirees. One of the challenges often asserted by these plaintiffs is that changes to public pension plans violate the Takings Clause of the federal constitution or one of its state constitutional counterparts. Despite the frequency with which they are raised, however, these claims seldom receive engaged analysis by the courts, and they have been given a sort of second class treatment by most legal scholars. On one level, this treatment is not all that surprising. Because most public pension plans are deemed to create contract rights in their participants, the Contracts Clause seems the more obvious provision under which to analyze pension plan changes. As a result, takings challenges are often overshadowed by challenges brought under the Contracts Clause, with many courts and commentators viewing them as largely duplicative. Additionally, even when takings challenges are treated independently, the number of troublesome issues and the general messiness of takings doctrine make meaningful analysis difficult. Even so, I contend that the short shrift given to the Takings Clause in this context is unwarranted. As an initial matter, the notion that public pension plans create contracts between government employers and employees is not universally accepted. A handful of states explicitly reject that approach, holding instead that such plans create property interests. In these “property states,” the Contracts Clause clearly provides no protection against plan changes but the Takings Clause might. Far from being duplicative, in these jurisdictions, takings claims form the most viable constitutional challenge to reform. But the Takings Clause has significance even in the majority of states that accept the contract view. As interpreted by the Supreme Court, the Contracts Clause would only prohibit impairments to those plans that were not “reasonable and necessary to serve an important public purpose.” No such justification attends a Takings Clause analysis, however, which focuses on the effects of a regulation rather than its purposes. Indeed, the Supreme Court has held that a focus on the government’s purpose or motive “has no proper place in our takings jurisprudence.” As such, it is possible that a law might be upheld under the Contracts Clause but nevertheless amount to an unconstitutional taking. Again, rather than merely duplicating the Contracts Clause, in the right case, a takings challenge could achieve an entirely different result. And, given that fact, it is all the more important to consider the issues that a takings claim would raise. This Article seeks to fill the gap left open by previous judicial and scholarly treatment and begin a more robust conversation about the role of the Takings Clause in public pension reform litigation. In service of that larger objective, this Article has two primary goals. The first, advanced in Parts I and II, is to make the case for taking the Takings Clause seriously in this context. Because a takings claim depends upon the existence of a cognizable property right, Part I addresses the legal status of public pension benefits. Although a small number of states view such benefits as gratuities, most states regard them as creating either contract or property rights in plan participants. As such, public pension benefits are subject to certain constitutional protections — namely, those afforded by the Contracts Clause, the Due Process Clause, or the Takings Clause. Part II addresses the particular significance of the Takings Clause, distinguishing it from the other two provisions and demonstrating its potential value for plan participants under both the “property view” and the “contract view” of public pensions. The second goal, more modest but equally important, is to consider (although not necessarily resolve) some of the legal issues that any serious evaluation of a takings claim must confront. Part III begins this consideration, focusing on how courts might go about determining whether a particular reform measure effects a taking of property in the first instance. This task requires fitting challenges to public pension reform within the Supreme Court’s analytical framework for regulatory takings, which in turn necessitates a choice about the appropriate test to apply. Assuming that a reform measure is deemed to effect a taking, Part IV turns to the constitutional requirements of “public use” and “just compensation,” with particular emphasis on the thorny questions raised by the latter

More Questions Than Answers: Situating Judicial Takings Within Existing Regulatory Takings Doctrine

In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, a four-member plurality of the Supreme Court endorsed the idea that certain judicial action, as well as action by other branches of government, might effect a taking of private property. In explaining its theory of judicial takings, however, the plurality did little to explain how such takings fit within the larger doctrinal and analytical framework for regulatory takings. This Essay evaluates whether the plurality’s discussion of judicial takings is consistent with the preexisting takings framework and how it might impact takings cases in the future. Ultimately, the plurality’s discussion of judicial takings raises more questions than answers and backtracks on the promises of clarity made in the Court’s most recent prior takings decision

The World of Deadwood: Property Rights and the Search for Human Identity

The year is 1876. Gold has been discovered in the fledgling camp of Deadwood, bringing hordes of new arrivals each day seeking to strike it rich. The allure of wealth is coupled with the allure of complete autonomy. There is no law. Although part of the United States, Deadwood is unaffiliated with any existing territorial government. It is free. Or is it? From this backdrop, HBO’s highly-acclaimed drama Deadwood springs forth. Series creator David Milch is frank about his mission behind the story: to explore how order arises from chaos. The assignment and protection of property rights play central roles in this journey from anarchy to law. In the world of Deadwood, where ownership of land can be worth millions, law’s promise and law’s pitfalls are both on full display. The stakes are high; the lessons are many. Stories are powerful teaching tools because they marry information and context. Film and television also supply a picture of law in action, marshalling the power of the visual to make law more real, less abstract. Because of its rich complexity and invocation of ancient debates over what property is and who rightly can be deemed to own it, the three-season run of Deadwood provides fertile ground for this type of interdisciplinary study. Deadwood demonstrates that the interrelationship between property and law is complex, with many moving pieces and many valid points and counterpoints. Property has both naturalist and positivist attributes, it both pre-exists and coexists with the state, it is about economic power and personal identity, it supports both an individualist and communitarian mindset. Accounting for all of these strands in a balanced way is a lot to ask of legal institutions, especially inasmuch as the strands often are in competition with one another. Deadwood suggests that, while law is certainly a component piece in the puzzle of human relations, it alone cannot do all that we ask of it. And therein may lie the ultimate lesson: Law can be a blessing, but the human condition requires more

Public Utilities, Eminent Domain, and Local Land Use Regulations: Has Texas Found the Proper Balance?

Using Texas as a case study, this article reviews the relevant Texas law on the subject and (expanding on the reasoning employed by the recent federal decision) argues that Texas law in fact provides a constructive balance between a utility\u27s interests and those of the local government. Moreover, the balanced approach established by the Texas cases provides a model for other jurisdictions due to the incentives it provides for bargaining between the utility company, the local government, and community leaders

From “Preferred Position” to “Poor Relation:” History, Wilkie v. Robbins, and the Status of Property Rights Under the Takings Clause

This article discusses the status of constitutional property rights in light of the Supreme Court’s 2007 decision in Wilkie v. Robbins. In Wilkie, the Court rejected a property owner’s claim that he had been retaliated against by federal officials for exercising his right to resist an uncompensated taking of his property, notwithstanding its prior precedents recognizing similar claims in the context of other constitutional rights. This article suggests that Wilkie reveals an attitude among the Justices that property rights are less worthy of judicial protection than other rights guaranteed by the Constitution. Moreover, the article contrasts this attitude with that of the early American legal culture, which gave property rights the preferred position among constitutional liberties and viewed the judiciary as a bulwark against the encroachment of those rights by the political branches of government. The article concludes by noting the importance this change in judicial attitude may have for constitutional rights generally. If rights as central to early constitutional understandings as those relating to property can be relegated based on shifting judicial preferences, then other rights would appear equally vulnerable