How to Solve (or Avoid) the Exactions Problem

I. INTRODUCTION It is my great honor to deliver the Earl F. Nelson lecture for the year 2007. I have never met Mr. Nelson, but I have looked at the roster of distinguished people who have spoken in this lecture series, and I am pleased to have my name added to such an august list. I would also like to add my tribute to Dale Whitman, to whom this Conference has been dedicated. I regard him as a one-man version of Mr. Inside and Mr. Outside, a reference to--for those of you who remember--the old Army teams from the 1940s that sported a backfield with Glenn Davis and Doc Blanchard. In our context, the inside guy is the master of private law, in Dale's case mainly the law of mortgages. The outside guy is the master of public law, who knows a great deal about takings, eminent domain and state regulation. I mention Dale's combination of talents not only because they are relevant to his very distinguished career, but also because they are relevant to the problem that I shall tackle in this lecture: how to identify and then solve the exactions problem. In dealing with a question of this sort, most public lawyers start with the original document, the Constitution. The tools of their trade are the interpretive ones associated with textual analysis in its historical context. The underlying subject matter of the particular transaction is a decidedly second-order concern. In contrast, I came into constitutional law quite by accident, and with a certain degree of regret, for at heart I remain very much a private lawyer. My starting points of reference are the routine transactions between ordinary individuals, none of whom have any of the special prerogatives of the state. From that baseline, I seek to figure out how those relationships should be altered when one of the parties is the state, with its own unique powers of coercion. That difference in starting point matters, for where you begin will, in large measure, tell you something about where you're going to end up. Those scholars and judges who treat constitutional law as the quintessential public law subject always find ways to introduce huge degrees of discretionary power for the state in its dealings with ordinary, private interests. Those, relatively few of us who start from the private law perspective on property fights veer in exactly the opposite direction, by finding that these rights resist easy incursion by state regulation. Clearly, public lawyers have to yield something to private lawyers in their calculations. Just as clearly, private lawyers have to yield something to the public lawyers who are also concerned with the effort to guard private rights from government regulation. Both sides will end somewhere in the middle, but not necessarily at the same place. By starting at opposite ends, the inevitable frictions of legal doctrine and its application make it unlikely that the two intellectual ventures will end up at the same middle position. Given this private law perspective, I plan to start not with the Constitution, and not with the power of the state through its permit power to condition the use or disposition of property upon the willingness of a landowner to engage in certain kinds of actions or to refuse to engage in certain kinds of actions. Instead, I will start with the ideas of property which I then use as a basis for understanding constitutional doctrine. That approach is congenial to my own personal education in law, which began at Oxford in the fall of 1964. My first course at Oxford was Roman law, which is a subject that I teach to this day. My views on property law have been heavily influenced by the Roman conceptions, which in fact shaped the views of many great English and American writers at the time of the founding of our Constitution. So like a good Romanist or early common law lawyer, I shall start with the private law conception of property in order to explain how that framework lets us understand the sophistication of modern private transactions, in contrast to the crude conceptions of private property that dominate constitutional discourse. …