by Mitch Kokai
Senior Political Analyst, John Locke Foundation
… [F]ew observers have noticed a recent federal court ruling that will, absent Supreme Court intervention, grant the government immense powers to confiscate private property in violation of the Fifth Amendment.
The Fifth Amendment to the U.S. Constitution mandates that private property cannot be taken for public use “without just compensation.” But this clause was eviscerated by U.S. Court of Appeals for the Federal Circuit in Love Terminal Partners v. United States, which held that any property not earning a current positive cash flow can be taken by the government without a dime of compensation. Unless this ruling is reversed on appeal, it will have a devastating impact on the value of millions of properties with excellent prospects for appreciation but no current tenants. And it will put all real-estate investments not earning money at risk of being stolen by the government.
The case has its roots in the Wright Amendment. This anti-competitive law was designed to protect Fort Worth’s interest in the Dallas/Fort Worth International Airport by sharply restricting flights out of Love Field Airport in Dallas. …
… The cities of Dallas and Fort Worth, American Airlines and Southwest Airlines, and the Dallas/Fort Worth International Airport Authority came together to craft a compact to lift the Wright Amendment restrictions. The compact was blessed by Congress and passed into law.
But the new law came with a twist: It mandated the confiscation and destruction of the Lemmon Avenue Terminal.
The Court of Federal Claims, recognizing that the very law that destroyed the terminal would have given it immense market value, assessed just compensation at $133 million. But last year, the Court of Appeals for the Federal Circuit reversed that decision, ruling that the investors were due exactly zero for an investment that the government had destroyed and would now confiscate.