Fannie Mae-No Politics (FNMA)

[clarencebeaks21]

Regarding the Lucas case: IMO Lucas may not be the good fit it seems to be. It cuts both ways. Lucas only requires that a state regulation have some foothold in prior law or practice in situations where it completely destroys the value of an owner’s property. This ‘foothold’ (as set out in Scalia’s exception) ended up swallowing most of his rule, and was later used in both regulatory use takings & non-regulatory physical takings. Lucas ends up, at best, an ad hoc inquiry by the judge into whether the state’s background in such a total taking was well-rooted in some old custom, however esoteric. (I’m mildly surprised no one tried to use the locally-funded and sponsored witch trials in Salem MA). Scalia gave no guidance on its exception methodology, and ultimately this subjectivity would undercut the goal of Lucas, which was meant as a clear, bright line rule *in favor of* owners’ rights.
((If Hard cases make bad law, Lucas is IMO “Exhibit A”.))

Lucas tried to leap beyond the prior balancing approach of benefit v harm, but ultimately most Lucas cases still just become new varieties of Penn Central in their ad hoc subjectivity, so the state wins.

Fortunately —and I think for GSE shareholders , maybe also timely— the SCOTUS majority seems to agree that Takings law is in dire need of revision.

Professor Richard Epstein’s recent blog on the June 2021 Cedar Point vs. Hassid takings case is (IMO) *spot-on*. It doesn’t go all the way to pre-New Deal law, but it sure has all the hallmarks of a turning point. I agree 90% with Epstein. I think the next case or two in Takings will be selected specifically to overrule Penn Central (thus also Lucas). Penn Central was wrong then and is wrong today. Whether this change comes in time to aid shareholders is anyone’s guess. GLTA.