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abating activity "akin to a public nuisance. "29 Justice Stevens and four of his colleagues found that Pennsylvania was merely restraining "uses of property that are tantamount to public nuisances and that it is not necessary to "weigh with nicety the question whether [the activity] constitute(s) a nuisance according to common law."" Chief Justice Rehnquist and three of his colleagues insisted, on the contrary, that "[t]his statute is not the type of regulation that our precedents have held to be within the 'nuisance exception' to takings analysis."31⁄2

If the Justices of the United States Supreme Court have to struggle so much to determine where to draw the line over the nuisance principle, one can only imagine what the claims process would look like under an enacted S. 605.

Public and Private Nuisance

Public and private nuisance are two quite different legal wrongs. Neither H.R. 925 nor S. 605 distinguishes between them, and presumably the use of the term nuisance in both bills is meant to embrace both public and private nuisance. While most of the discussion above is directed to private nuisance, the same basic point applies to both public and private nuisance. That is, both have certain technical requirements that have to be met, or a nuisance claim will be dismissed by a court.

Public nuisance interferes with the exercise of public rights (rather than private property rights). Widely disseminated water and air pollution can be public nuisances, and classic public nuisances are keeping a house of prostitution, storing explosives in the midst of a city, making loud and disturbing noises, and blocking public thoroughfares.

This distinction means that pollution making water unusable for many downstream landowners in the use of their land is not a public nuisance because it only interferes with private rights. But pollution that interferes with the public right to fish in a river, or the public right of navigation, is a public nuisance. Thus, many harms--even widespread ones--are not public nuisances because they don't interfere with rights one has as a member of the general public. There has, however, been a resurgent and sometimes successful modern application of public nuisance

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actions by state prosecutors, especially in hazardous waste

cases.

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Federal Law Encroachment on State Jurisdiction

While nothing in either H.R. 925 or S. 605 directly preempts state authority to define state nuisance law, one potentially undesirable consequence of the bills, if enacted, would be to engage Federal agencies and courts in an ongoing process of defining the boundaries and rationale of nuisance law in all 50 states. It seems inevitable that this process will bring a significant Federal influence to bear on the interpretation and content of an area of state law that has always been the special domain of the states. The Federal influence could be especially strong in influencing nuisance law, where state-law development has not been extensive in recent years, having been largely displaced by extensive regulatory statutes.

-end

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Sevinsky, Public Nuisance: A Common Law Remedy Among the Statutes, 5 Natural Resources and Environment 29 (1990).

[The prepared statements of Alice Rivlin, Michael Davis, Gary S. Guzy and John R. Schmidt are located in the appendix of October 18, 1995.]

Senator THURMOND. Thank you very much.
Mr. Adler?

STATEMENT OF JONATHAN H. ADLER

Mr. ADLER. Thank you, Mr. Chairman, for the opportunity to present testimony before this Committee on this very important issue. My name is Jonathan Adler. I am director of Environmental Studies at the Competitive Enterprise Institute, a nonprofit, nonpartisan public policy institute here in Washington, DC.

Mr. Chairman, Americans believe very deeply in their right to private property. While polls consistently show that Americans care about environmental protection and want to see the environ-ment protected, those very same polls show that a majority of Americans support compensation for landowners, when their land is devalued due to environmental regulations.

Public good should be provided at public, not private, expense. This is the rule for most nonenvironmental public goods such as military bases and highways. On the other hand, public goods, like wetland preserves and wildlife refuges, are created by bureaucratic edicts that deny property owners the use of their land.

If the public wants to protect species habitat or an ancient stand of trees for some broad environmental value, it should be able to, but the public should be willing to pay for it. The costs should not be imposed on whomever is unfortunate enough to hold title to a coveted piece of land.

As the Supreme Court held in Armstrong v. The United States, the takings clause, “* * * was designed to bar government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." I believe that 605 would go a long way in invigorating that principle, particularly in ways that the Supreme Court has not.

More importantly, arguments over the potential costs of takings compensation requirement obscure the more fundamental issue. Land use regulations inevitably entail costs. The real issue is who should bear those costs. Costs of excessive land use controls are borne by the Federal regulatory agencies themselves, as is called for under S. 605. Agencies will have a tremendous new incentive to consider the costs of their regulatory edicts, as well as more costeffective alternatives to command and control regulation.

Nonregulatory approaches to wetlands protection, for example, can be less than one one-hundredth of the cost of Federal regulations in protecting wetlands. Enactment of S. 605 would encourage the EPA and the Army Corps of Engineers to consider such alternative approaches.

Earlier today there was mention of the recent Nobel prize winners in science. I think it is important to also remember the Nobel prize winners in economics, which is Professor James Buchanan at George Mason University, who pointed out that incentives to public agencies matter in their behavior. If the public agencies are not given incentives to consider the cost of their rules, they will not do so. This bill would force them to consider those incentives, and that

would be to the benefit of Environmental Protection and to private property owners.

Environmental argument made against takings compensation proposals like S. 605 is that paying compensation for regulatory takings will amount to paying polluters not to pollute. This represents a fundamental misunderstanding of the nature of property rights and the proper role of government in protecting them. Moreover, it misrepresents the nature of the proposal before this committee.

Compensation should be paid when the Federal Government acts so as to deprive a property owner of a right to use and enjoy that property. Property rights properly understood do not include the right to injure or harm the person or property of another. This principle is grounded in the common law.

S. 605 embodies this principle. Section 204(d)(1) explicitly spells out a nuisance exception to the payment of compensation by the Federal Government. The language in this section is clearly modeled on the language of the Supreme Court's Lucas decision. When the Government limits or prohibits the use of property that is likely to harm another person or property, it does not deprive the owner of a property right. However, should the Government limit the use of property for some other purpose, such as the provision of wildlife habit or some other public good that we all benefit from equally, compensation should be paid. The difference is the nature of the Government action in question. This should determine whether or not compensation is due, not the level of the devaluation experienced by the landowner.

Regrettably, S. 605 does not require compensation if the property owner does not suffer a sufficient economic loss. From dealing with lots of grassroots groups, I know this is a real concern that they have, and 33 percent, in their view, is a compromise. I believe for those who believe in property rights, 33 percent threshold is a compromise. It is the equivalent of saying that a burglar has not committed a crime if he only takes some percentage of the money in your wallet and leaves the rest.

Finally, Mr. Chairman, it is important to recognize that regulatory takings themselves can have negative environmental impacts. Takings often discourage individuals from taking steps to improve habit and environmental amenities due to the threat of regulation.

Senator Chafee, who was here earlier, has seen this firsthand when he visited the farm of Mr. Ben Cone in North Carolina earlier this year and saw firsthand how careful conservation practices were destroyed as a result of regulatory takings.

It is my understanding that Mr. Cone has, indeed, filed a takings claim in Federal court in the U.S. Claims Court, and I would argue and believe that Mr. Cone will be successful if he goes through with his suit. Mr. Cone is a wealthy landowner. He has the resources to pay for such a suit. Most landowners do not. This bill would expand their ability to seek justice in court.

Property rights are important for both economic and environmental reasons, Mr. Chairman. It must be protected from both government regulation and private malfeasance. Compensating landowners when they are deprived of the reasonable use of their land

will not produce environmental catastrophe. In many cases, it will actually eliminate the negative environmental incentives created by improperly conceived government regulations.

Thank you, Mr. Chairman. I would be happy to answer any questions that you might have.

[The prepared statement of Mr. Adler follows:]

PREPARED STATEMENT OF JONATHAN H. ADLER

Thank you Mr. Chairman for the opportunity to present testimony before this Committee. My name is Jonathan Adler, and I am director of environmental studies at the Competitive Enterprise Institute in Washington, D.C. CEI is a non-profit, non-partisan research and advocacy institute dedicated to the principles of free enterprise and limited government. CEI's work includes efforts to advance the public understanding of the hidden costs of government overregulation and to research and promote free market approaches to policy issues.

CEI has long been involved in the property rights debate. CEI analysts have analyzed the impact of regulatory takings on private landowners, as well as the environmental implications of different property rights regimes. In January, CEI published a Property Rights Reader of essays by CEI analysts and associates on property rights and related subjects. CEI also engages in direct legal action where necessary, and has represented victims of takings in court. Most recently, CEI filed an amicus curiae brief in the case of Babbitt v. Sweet Home before the U.S. Supreme Court.

In my testimony I will focus on the issue of property rights and regulatory takings with a particular focus on the implications of current legislative proposals en environmental protection.

INTRODUCTION

The growth of federal land use regulation over the past two decades has sparked a strong grass roots opposition. While polls seem to indicate broad public support for current environmental laws, those same polls show strong public sentiment in favor of compensation for regulatory takings. A May 1995 Roper Starch Poll found that two-thirds of Americans believe landowners should be compensated when wetlands regulations or endangered species protections devalue their land. Only 26 percent opposed compensation.

Much of the debate over property rights and whether the federal government should compensate the victims of regulatory takings is focused in the environmental arena. For two decades, federal land-use control has been the dominant means of achieving many environmental objectives. As a result, the federal government has denied countless landowners the reasonable use of their land in the name of environmental protection; property owners are finding their land effectively taken from them without compensation.

Two federal laws, in particular, have been the focus of the debate over compensation for regulatory takings: the Endangered Species Act (ESA) and Section 404 of the Clean Water Act (CWA), the source of regulations limiting the development of wetlands. However it would be a mistake to believe that these are the only two federal laws that unduly limit the use of private land. In New Hampshire, for example, grass roots property rights activism centered on opposition to the designation of a "wild and scenic" river. Any bill that seeks to protect the property rights of Americans must cover all federal laws that deprive landowners of the reasonable use of their land. There is no principled basis upon which to pick and choose which laws, environmental or otherwise, should be covered.

The primary reason that current approaches to environmental protection engender conflict and opposition is that they trample on the property rights of individual Americans, often bankrupting them in the process. Under current environmental laws individual Americans have been prevented from building homes, plowing fields, filling ditches, felling trees, clearing brush, and repairing fences, all on private land. The federal government has even barred private landowners from clearing firebreaks to protect their homes from fire hazards. In Riverside County, California, for instance, the Fish and Wildlife Service informed Cindy Domenigoni on July 1, 1992 that clearing a firebreak would constitute a "harm" to the endangered Stephens' kangaroo rat and was "not authorized." A similar notice was sent to Michael F. Rowe on June 5, 1992, which included the admonition that discing to clear a

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