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Cite as: 524 U. S. 156 (1998)

167

Opinion of the Court

by the deposited funds. We held that the statute authoriz-
ing the clerk to conﬁscate the earned interest violated the
Takings Clause. As we explained, “a State, by ipse dixit,
may not transform private property into public property
without compensation” simply by legislatively abrogating
the traditional rule that “earnings of a fund are incidents of
ownership of the fund itself and are property just as the fund
itself is property.”
In other words, at
449 U. S., at 164.
least as to conﬁscatory regulations (as opposed to those regu-
lating the use of property), a State may not sidestep the Tak-
ings Clause by disavowing traditional property interests
long recognized under state law. See id., at 163–164; see
also Lucas v. South Carolina Coastal Council, 505 U. S.
1003, 1029 (1992).

Petitioners nevertheless contend that Webb’s does not con-
trol because Texas does not, in fact, adhere to the “interest
follows principal” rule, “at least if elevated to the level of
an absolute legal rule.” Brief for Petitioners 22. They
point to several examples, such as income-only trusts and
marital community property rules, where under Texas law
interest does not follow principal. According to petitioners,
the IOLTA program is simply another exception to the
general rule.

We ﬁnd these examples insufﬁcient to dispel the pre-
sumption of deference given the views of a federal court as
to the law of a State within its jurisdiction. Bernhardt v.
Polygraphic Co. of America, 350 U. S. 198, 204 (1956). Peti-
tioners’ examples miss the point of our decision in Webb’s.
Texas’ exception of income-only trusts and certain marital
property from the general rule that “interest follows princi-
pal” has a ﬁrm basis in traditional property law principles.
Permitting the owner of a sum of money to distribute to a
designated beneﬁciary the interest income generated by his
principal is entirely consistent with the fundamental maxim
of property law that the owner of a property interest may
dispose of all or part of that interest as he sees ﬁt. United