The Fifth Amendment’s Takings Clause does not prevent the federal (or a state) government from taking private property. It merely sets as a condition that the government pay the owner “just compensation” for the taking. Precisely what constitutes just compensation, however, is a tricky matter. One method for determining just compensation is the “market-value” method, which requires the government to pay the owner the property’s market value. But where a taking is only partial, that is, where the government takes only a portion of private property, the property that remains with the owner may see an increase or decrease in its value. A line of Supreme Court cases suggests that these incidental benefits (or harms) should be set off from the ultimate amount the government pays.
In Horne v. Department of Agriculture, the Supreme Court adhered to the market-value method even though the regulation at issue required that raisin growers turn over only a portion of their raisin crop each year. Indeed, the program was specifically designed to stabilize prices and afford raisin farmers myriad market benefits. While adhering to the market-value standard provided the Court with a measure of expediency, this Note argues that the Court’s decision may spell trouble for future regulation. If regulators cannot consider incidental economic benefits to private property owners in determining costs, the government may be forced to pay artificially inflated prices for regulations that involve takings. Such a result would make regulation overall more costly, or worse, discourage it entirely.
Greg Seidner, Taking Stock: Why the Supreme Court’s Decision to Apply the Market-Value Standard in Horne II Further Complicates the Just Compensation Requirement, 15 U.N.H. L. Rev. 226 (2017), available at http://scholars.unh.edu/unh_lr/vol15/iss1/5