Returning to Principles of "Fairness and Justice": The Role of Investment-Backed Expectations in Total Regulatory Taking Claims

Abstract

The U.S. Supreme Court has difficulty determining when a regulation is so excessive as to amount to an unconstitutional taking under the Fifth Amendment. In making that determination, the Court has failed to deploy an investment-backed expectations analysis as a normative guide, even though the concept is part of at least one constitutional test. Nevertheless, the Court's focus on principles of "fairness and justice" suggests that the original, conceptual formulation of investment- backed expectations comports with the Court's normative takings philosophy. Using the extreme situation where a regulation completely eliminates a property's value as an analytical example, this Note argues that the Court should expressly adopt an efficiency-fairness, demoralization cost approach to its investment-backed expectations analysis in such a situation. In so doing, the Court should draw upon public choice theory to supply administrable factors that indicate unconstitutional government regulation because it already takes a similar, but implicit, approach to takings claims.