Due Process and the Nature of Property


Types of Property:

1. Contract-based, market-based, investment style property

2. Non-commodified/inalienable property (things people often assume cannot be traded or exchanged: e.g. people, heirlooms, national parks, human/intellectual capital)

3. The commons, which is usually not legally protected (owned by no one/everyone: e.g. air, oceans, culture)

1. CLT notions are deeply embedded in our legal history

2. It has tangible qualities; property has longevity; a tendency to confer civic status and other responsibilities; treatment of ownership as RIGHT (which the gov't must protect/refrain from infringing upon)

3. Role of the property owner: may do as he pleases with what he owns

4. The right to exclude is fundamental to ownership and security of property

5. Property serves to protect the individual from an unfriendly or unwelcome majority or government

6. Government largesse is charity and not property

Realist (FUNCTIONALIST) Arguments and Concepts on Property (Emphasis on blurring of public/private distinction)

1. Property is a creature of the state. It is about relations between people and people - not relations between people and things

2. If the gov't extends protection, then it's property. No distinction between process and substance. If it's protected, then protection can't be taken away without there being a takings issue. (Rehnquist's dissent in Loudermill)

3. Role of the property owner: person's right to property is not absolute; it must be balanced against human values (like freedom of association and speech) -ownership now embodies an ingredient of stewardship

4. The right to exclude (prevent trespass) could be construed as a remnant of paternalism and feudalism-therefore, it can be limited (see Shack) if it reduces the rights of those on your land to communicate and associate

5. Property serves to bring people together and/or reinforce the power of the under-represented (See Johnson's Great Society Speech)

6. Government largesse is LIKE property (see Brennan in Goldberg) b/c it's created by state and offers its recipients security and some liberty (means to live)

1. Property is what the rules say it it is (White's argument from Loudermill: the legislature is institutionally competent to determine whether public employment is a property right)

2. The judicial branch is not meant for balancing economic interests between parties. That's the job of the legislature. (See Black's dissent in Goldberg). -Rejoinder to above: Sometimes procedure isn't enough to justify the judicial system and its decisions (you can't divorce procedure from substance)

PART II Brief Summary of relevant Articles and Cases

Charles Reich: The New Property The article that appears in the anthology is broken into three parts, summarized below: III. The advent of government largess creates difficulties in determining how the individual can remain independent. Specifically, if the bill rights can be “bypassed by purchase,” and the government continues to extend itself to the point that it may be called a “public interest state,” then upon what base can people stand and “assert their individuality and claim their rights?” IV. Reich takes a functionalist view of property, stating that it is not a natural right but rather a social construct that exists to protect minority rights and civil liberties: “property represents a general, long range protection of individual and private interests, created by the majority for the ultimate good of all” (139).

The article then discusses the origin of the conflict between property and liberty, tracing the origin of the regulatory state to the abuse of property rights and the countervailing reform movement (for the benefit of the public interest). In the process of reforming property rights, power was transferred from private owners to government. The result of this transfer was that government now claimed “a managerial power as great as that which the capitalists claimed.” The error of the public interest state, therefore, is that it assumed an identity between the public interest and the interest of the majority: “Liberty is the right to defy the majority, and to do what is unreasonable” (140).

Reich then attempts to define what the reformers intended the “public interest” to be, and what it really is: “government largess may be denied or taken away if this will serve some legitimate public policy. A contract may be denied if this will promote fair labor standards. A television license may be refused if this will promote the policies of the antitrust laws…” As a result, “the public interest may unwittingly destroy some values” including “the independence of the individual.” He concludes this section by stating that “regulation must take account of the dangers of dependence” and by advocating “a property base for civil liberties.” (141)

V. The article then begins to define new property. First, it attempts to show that all real and personal property was and is created by law (examples include North American lands given by Kings, the Homestead Acts, and eventually all property: “laws ‘give’ the property to one who performs certain actions”). Second, as with government “largess, real and personal property were also originally distributed under conditions, and were subject to forfeiture if the conditions failed” (142). Reich then concludes that all property is in one way or another government largess and asks the question of why largess and traditional conceptions of property are not regulated in the same manner. The remainder of the article is “a search for guiding principles.”

A. Constitutional Limits (bottom of 142) The government should not be permitted to use its role as dispenser of wealth to gain power in general or to deny constitutional rights and protections in particular. For instance, the government cannot hold that invocation of a right against self-incrimination is grounds for denial of government largess, as occurred in In re Anastaplo, 366 U.S. 82 (1961), where a man was denied admission to the Illinois bar for his refusal to answer questions about his affiliation with the Communist Party; the Supreme Court upheld the denial of admission by the Illinois bar (137-138).

B. Procedural Safeguards (top of 143) Procedure has long served as a safeguard against the arbitrary exercise of power; “The grant, denial, revocation, and administration of all types of government largess should be subject to scrupulous observance of fair procedures” (143). Hearing and contest, subject to judicial review, ought to be present any time a privilege or benefit is denied, and neither undisclosed reasons nor a combining of the functions of legislator, prosecutor, and judge and jury should be tolerated.

C. From Largess to Right (second half of 143) Reich believes that certain types of largess, including professional licenses, unemployment insurance, public assistance, and old age insurance, should be considered rights. He believes this is necessary because of three principles he identifies: “first, the growth of government power based on the dispensing of wealth must be kept within bounds. Second, there must be a zone of privacy for each individual beyond which neither government nor private power can push…Finally, it must be recognized that we are becoming a society based upon relationship and status – status deriving primarily from source of livelihood” (143).

CONCLUSION On the road to Utopia (for which Reich asserts great certitude of attainability), provisions must be made for individual man. The article is an attempt to begin the process of devising a system that will function, like property, to protect the individual against the collective (a collective which Reich asserts is both inevitable and abundantly beneficial); thus he concludes that “We must create a new property.” My take on the article: The article is certain to show up on the test, both because of its relevance in establishing a new boundary for what we consider property.

My take on Reich: Reich envisioned a grand welfare state emerging and wanted to protect the rights of the individual (but without so much as questioning whether this welfare state is worth having; to Reich, it is a self-evident truth). He wishes to create for this new order an institution which will protect the individual in the same way that property protected the individual in the previous (and now defunct) liberal economic order: “An effort to return to an earlier economic order would merely transfer power to giant private governments…If individualism and pluralism are to be preserved, this must be done not by marching backwards, but by building these values into today’s society.” His new conception of property was an attempt to salvage individualism and its virtues but without sacrificing his immanentization of the eschaton.

Presidential Papers of Lyndon B. Johnson, 1963-1964 The part of Johnson’s Great Society program that is most relevant is the emphasis on living “the good life” in urban America. He discusses new experiments that are ongoing and urges the next generation to ensure that the time honored values of community remain alive in an increasingly urban America. The relevance of this article is to show the historical context of the sharp changes in property rules, especially regarding the concept of new property discussed in Reich.

Cases Goldberg v. Kelly Holding: A pre-termination evidentiary hearing is required before welfare benefits may be discontinued. Analysis (for purposes of final exam): In footnote 8, Justice Brennan suggests that welfare entitlements may more realistically be regarded as “property,” but that is not necessary. What does seem to be well-established, however, is that a procedure is necessary before a government benefit can be terminated. As seen in other cases, the deluxeness (perhaps deluxity?) of the process depends on the composition of the Supreme Court and the particular “largess” being denied. For our purposes, I don’t imagine a question about the particular form of process will be asked, but I think it would be wise to cite the Reich article and footnote 8, as both suggest a public employee would fall under the umbrella of “new property” which Reich and the Goldberg court seem generally willing to protect.

Potential Response:The bold approach the Court took in Goldberg went too far. The Court would subsequently back off (Mathews v. Eldridge in Process), but pre-termination hearings (deluxe or run of the house) became the norm. Black attempted to argue that these hearings would make the life of the agency an impossible one with endless hearings and appeals; NOTE: Brennan, even with “deluxe” evidentiary hearings, does not extend process as far as the dissent suggests. Neither appeals nor judicial review is a necessary precondition for termination, and the length of time an individual is on welfare makes Black’s dissent seem as though it went overboard (Black plays out scenarios for years, welfare just doesn’t last that long). Cleveland Board of Education v. Loudermill (definitely on point)

Holding: The Supreme Court found that the essential requirements of due process are notice and an opportunity to respond. Tenured public employees are entitled to oral or written notice of charges against them, an explanation of the employer's evidence, and an opportunity to present their sides of the story. Analysis: In the case of Loudermill, the defendant was given a hearing after dismissal. The Court ruled that a hearing is not only required, but it must take place prior to the employee’s termination. The fact that Martha received no process at all makes it an obvious violation of the Court’s ruling. Also, it is important to note that Loudermill, like Martha, was dismissed because of a lie (in his case he said he had no felony, in her’s that she was married, which turned out not to be a lie anyway).

Finally, though I don’t think it relevant, Justice White and the Court ain’t lookin’ for deluxe process, just process that occurs pre-termination: “In general, “something less” than a full evidentiary hearing is sufficient prior to adverse administrative action.”

Response: White takes a legal process approach to defining property with great deference to the legislatures: property is what the rules say it is! Rehnquist, on the other hand, rejects this notion in favor of a CLS-type approach: indeterminacy of substance/process distinction; Rehnquist therefore advocates a takings approach: property is such when the government says it is, but thereafter it may not be denied without invocation of the takings clause of the Constitution as it possesses value from the moment of legal recognition onward. White is more narrow than Brennan but agrees as to the general principle; Rehnquist disagrees with both. (is Pruneyard relevant to any of the restrictions regarding the Yakama? Alger?)

State of New Jersey v. Shack and Tejeras Holding: A person’s right to property is not absolute; it must be balanced against human values. Owning property does not allow “dominion over the destiny of persons the owner permits to come upon the premises” (559). Here the owner may not prevent a worker from partaking in health and legal rights, so entry by defendants did not invade a possessory right of the owner and there was no trespass.

Analysis: the N.J. court reaffirms the theme of this section, which is the functional nature of property. Property is designed to serve a purpose and as such must accommodate necessity of both a public and private nature. The scope of social interests in the appropriation of property has grown from “he who owns may do as he pleases with what he owns, to a position which hesitatingly embodies an ingredient of stewardship” (560). This case may be useful in numerous areas where we are asked to address the nature of property and the role of the property owner; in terms of the due process case for Martha, I don’t think it needs to be mentioned.

Response: No trespassing is not simply a remnant of paternalism, as the majority opinion suggests, but rather involves a very important security consideration. The majority attempts to address this concern regarding security against trespassing, but it is insufficient. If the opinion of the court is to be taken seriously, there is virtually nothing that an owner of property can do to keep an unwanted individual away, unless that individual happens to be engaged in an act of commerce (the last page of the opinion exempts solicitors from the protection against trespassing laws).

Rather than demanding that government restrain itself from interfering with the operation of contracts, these newer results demanded that the government restrain itself from disturbing avenues of communication with your mind. Rather than enforcing contracts, the courts barred the use of contract law if it reduced your right to communicate with outsiders.” Shack represents a sharp contrast between the old property rules and the new ones. In new property, the purpose is quite different from what the natural right approach demanded. It no longer serves to protect the individual from an unfriendly or unwelcomed majority, but rather to bring people together was with Johnson’s Great Society speech. Shack very much follows the same logic throughout this section regarding functional approach to property rights and property rules. Committee for a Better Twin Rivers v. Twin Rivers Homeowners Assn.

Holding: The Constitutional rights of the Committee for a Better Twin Rivers were not violated by the Homeowner’s Associations restrictions on the posting of signs, the policy regarding the use of the community room, and the denial of equal access to the association’s monthly newspaper. Although N.J. protects the rights of free speech and association from interference by the owner of private property, it does so in accordance with a three-prong test: 1) the nature, purposes, and primary use of such private property, 2) the extent and nature of the public’s invitation to use that property, and 3) the purpose of the expressional activity undertaken on such property.

Analysis: In this very recent (and therefore very important) case, the high court of N.J. broke with several previous rulings in finding that Twin Rivers was not a “quasi-municipality” and thus not subject to the Constitutional protections sought by the Committee for a Better Twin Rivers.

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