2.2 Academic commentators

Academic commentary has also made appeal to average reciprocity of advantage. We can briefly catalogue some prominent examples.

Lee Anne Fennell has invoked the idea as a general justification for the eminent domain power.24 Fennell starts from the assertion that the ordinary practice (in the United States) of providing compensation equal to the assessed fair market value of the taken property systematically shortchanges the owners of that property, leaving a substantial ‘uncompensated increment’ between the value which owners of taken property place on that property and the fair market value that they receive in compensation.25 Therefore, Fennell argues, an important question is whether receiving reciprocal advantages—or ‘in-kind’ compensation—might close the compensation gap sufficiently to justify the existing eminent domain system.26 The key issue for Fennell is whether ‘this exercise of eminent domain [is] of a type that, if universalized, would provide back to the burdened landowner enough benefits to induce a reasonable landowner’s willing participation in the overall scheme’. The answer matters, because ‘[i]f the overall system delivers results that are both efficient and distributively acceptable, then we might hypothesize that landowners are receiving back from the system enough in-kind benefits to make up for the burdens that the system imposes on them’.27

Frank Michelman’s classic discussion of utilitarian justifications for eminent domain suggests that to the extent that ‘demoralization costs’ are a significant source of disutility, condemnees’ perceptions of receiving reciprocal advantages from the overall system of eminent domain could help tilt the utilitarian calculus in favour of permitting condemnation. The relevant questions, then, are: first, whether ‘there [is] implicit in the measure some reciprocity of burdens coupled with benefits (as, for example, in a measure restricting a large area to residential development) or does it channel benefits and burdens to different persons?’ And,

24Fennell 2004, 987–9.

25Fennell is not alone in making that assertion. Indeed, today it appears to be generally accepted in the academic takings literature. See e.g. Coniston Corp. v Village of Hoffman Estates 1988, 464 (Posner, J.); Merrill 1986, 83. I have argued elsewhere that there is good reason to question that assertion. See Lee 2013. However, determining that assertion’s ultimate accuracy is unnecessary for the purposes of our inquiry.

26James Krier and Christopher Serkin have offered a similar justification for states’ power of eminent domain, at least when that power is exercised for genuinely public uses: ‘Over time . . .

imbalances should even out as those whose property is taken in one round for one public use are later benefited by other public uses subsidized by condemnation of other private property.’ Krier and Serkin 2004, 866.

27Fennell 2004, 987. There is a potential circularity problem lurking in Fennell’s argument, because our judgments about whether a legal system is distributively acceptable themselves depend upon our judgments about what sorts of compensation, including implicit in-kind compensation, are paid to burdened parties. It is no surprise that if we start by assuming that the overall system is in fact distributively acceptable, then we might naturally hypothesize that landowners are receiving adequate in-kind benefits, since the truth of that hypothesis was already included in the initial assumption: unless we already believe that landowners are receiving adequate benefits in compensation for the burdens imposed upon them, we cannot confidently assert that the system indeed is distributively acceptable.

second, how likely is it that the ‘members of the class burdened by the measure’ were able to influence the decision to impose the measure sufficiently ‘to have extracted some compensatory concession “in kind”’?28

Michelman himself seems rather sceptical about the possibility of genuine reciprocity in such circumstances, describing these sorts of reciprocity considerations as serving ‘a utilitarian purpose to cater to the sense of security by preserving an illusion of long-run indiscriminateness in the distribution of social burdens and benefits’.29 However, Michelman later returns to the justificatory potential of reciprocal advantage when he presents a Rawlsian ‘fairness’-based account of permissible uses of eminent domain. Michelman focuses on a probability-based interpretation of reciprocal advantage: ‘A decision not to compensate is not unfair as long as the disappointed claimant ought to be able to appreciate how such decisions might fit into a consistent practice which holds forth a lesser long-run risk to people like him than would any consistent practice which is naturally suggested by the opposite decision’.30

Lynda Oswald has developed the idea that average reciprocity of advantage may be relevant in zoning contexts.31 Such reciprocity, she suggests, provides a justification for the subset of zoning ordinances that prohibit non-hazardous activities, such as ‘height or minimum-yard regulations’.32 These restrictions

confer benefits upon similarly situated property owners by holding each of them to a uniform standard. Although each property owner may find use of his or her land restricted by the regulation, each is benefited by having similar burdens imposed upon his or her neighbors. Thus, although a property owner might be limited to residential use, he or she is secure in the knowledge that neighboring properties are also so limited, and that a factory will not be erected in the midst of the residential area, where it would greatly diminish the value of his or her residential property.33

Richard Epstein makes extensive use of average reciprocity of advantage, under the name ‘implicit in-kind compensation’, in his broad account of when the state may impose restrictions that burden property owners without paying those owners monetary compensation. Such restrictions are justified, Epstein argues, only if they either are imposed under the state’s ‘police power’ to regulate nuisances and similar harmful activities or are accompanied by implicit in-kind compensation sufficient to leave the burdened property owner at least as well off as he was before the

31Oswald 1997, 1510.

32She asserts that zoning ordinances prohibiting hazardous activities ‘are more properly grounded in the state’s nuisance-prevention power’. Oswald 1997, 1510. However, some people would decline to draw this distinction, and would instead suggest that even the police power itself derives from the presence of reciprocal advantage. Justice Holmes’s opinion in Jackman provides one example. Holmes asserted that the ‘exercise of [the police power] has been held warranted in some cases by what we may call the average reciprocity of advantage, although the advantages may not be equal in the particular case’. Jackman v Rosenbaum Co. 1922, 30. (I am not certain that the cases which Holmes cites to support this assertion actually do what Holmes claims. However, resolving such details is unnecessary for our present topic.) I take up this suggestion below, in discussing the US Supreme Court’s decision in L’Hote v New Orleans 1900.

33Oswald 1997, 1510.