Positive Liberty

I am truly flabbergasted by a decision I just read out of the District Court in Hawaii. Not by the outcome, which is obviously correct, but by the cajones it requires to make the argument that the plaintiffs made.

The case involves Hawaii’s infamous rental “conversion” law, which the Supreme Court upheld unanimously in the Midkiff case in 1984. Under this law, a person renting, say, a house, can go to the city and ask the city to condemn the house and sell it to the renter for pennies on the dollar. This blatant violation of the public use clause was allowed in Midkiff on the grounds that it was a good thing to break up “land monopoly,” and whatever’s “a good thing” satisfies the Fifth Amendment’s “public use” requirement.

So now a bunch of people who are leasing condos go to the city of Honolulu and ask the city to condemn the condos and sell to them. The city agrees, and requires them all to pay $1,000 each for their participation in this theft. Then, last summer, the city council gets together and passes a resolution saying, you know, we think private takings like this aren’t such a good idea anymore, and we’re not going to do them.

So the renters sue the city for violating the Contracts Clause of the United States Constitution.

Putting aside the parallel to the brazenness of a criminal suing for breach of a contract for stolen goods, the District Court properly rejects this argument on the grounds that government simply cannot contract away its authority to refrain from eminent domain. The case is Hsiung et al. v. City and County of Honolulu, No. CV 05-00104DAE-LEK, 2005 WL 1719392 (D. Haw. July 19, 2005).

But the case is very instructive, I think, on the real nature of the redevelopment/eminent domain enterprise.