- The Washington Times - Saturday, April 16, 2005

Virtually unnoticed by the media, property rights have become the new, hot issue before federal courts.

This term, the U.S. Supreme Court has taken an unprecedented six property cases on questions ranging from what makes for a “public use” requiring compensation from government under the Fifth Amendment (Kelo v. City of New London) to defining protections for intellectual property (MGM v. Grokster, Ltd.).

Now the U.S. District of Columbia Circuit Court of Appeals is considering a full court, or en banc, review of a case (Stearns v. the United States) that could prove as pivotal as any before the highest court. In a recent ruling, a three-judge panel of the circuit gave the government an enormous loophole in the constitutional requirement for paying property owners when government takes their land. The question is, will the court — more often than not the final voice on takings cases — consider arguments for closing that loophole?

The stakes are huge. The three-judge panel opened the way, with the right legal tweaks, for the government to deny access, without compensation, of waterfront property-holders to the rivers and lakes they overlook, when government owns the beach or shoreline. It mapped how government may fix the law to shut off entire towns — like Woodstock, N.Y., for instance, or innumerable municipalities in Western states — that are in national or state forests or preserves without paying the owners a penny. No wonder an Interior Department official gloated, after the ruling was handed down, that, “From an agency perspective, this is probably the most significant ‘taking’ decision ever to come out of federal court.”

The case concerns the small, family-owned coal-mining Stearns Co. Nearly 70 years ago, it sold the government surface rights to 55 square miles of what is now eastern Kentucky’s Daniel Boone National Forest. It kept the mineral rights.

Like a beachfront homeowner’s right to cross the beach to the water or the right of people in town surrounded by a federal or state forest to have and use roads out, the company’s mineral rights ownership included an “easement,” the right to cross the government land to get to and from the mine head.

Forty years later, Congress passed the Surface Mining Act, prohibiting mining in national forests except by parties that already held property rights or received the interior secretary’s approval. Members of Congress who worked on the bill have said they meant to protect existing owners like Stearns. Yet the Interior Department issued regulations with technicalities that excluded the company.

Stearns sued in 1981. Three years ago, the U.S. Court of Federal Claims awarded them full compensation. Earlier this year, the three-judge appeals panel reversed that ruling. It said Stearns could not say its property had been taken and ask the courts for compensation until it had been rejected in an application for the Interior Department license.

Imagine what the panel’s decision means for owners of property that include easements involving government land. That guaranteed access can now be replaced by an option to apply for access. What does this mean? As the Court of Claims said in its Stearns decision, “The fact that my neighbor always lets me use his lawnmower does not mean that I own it.”

It is easy to see bureaucracies like the Interior Department pressing Congress or state legislatures to put provisions similar to the Surface Mining Act’s “permission option” in other laws, such as those dealing with beachfronts and towns in government-owned forests. And even if the government doesn’t then tell owners to tear down docks crossing its beaches or tell towns in the forest they would lose their access roads unless they got OKs, no one can doubt that the value of those properties would immediately sink, perhaps to zero.

The provisions governing easements are among the oldest in property law, and, even the government has a stake in closing the three-judge panel’s loophole. Who will buy — or even accept as a gift — land the government is trying to dispose of, such as military bases, if these basic guidelines are in doubt?

Over the next few weeks, the full appeals court must decide if it will review the ruling of its panel. With property protection suddenly at the top of the legal agenda, it is time for the court to recognize the threat the panel’s decision poses to property rights throughout the United States.

Nancie G. Marzulla is President of the Defenders of Property Rights.

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