Ka Wai Ola - Office of Hawaiian Affairs, Volume 1, Number 10, 1 Kekemapa 1984 — Points of Wide Concern Missed [ARTICLE+ILLUSTRATION]

Points of Wide Concern Missed

By Louis (Buzzv) Agard

Comments on leasehold con\ersion and renegotiations of leases miss points of wide eoncern. Professor of law on eminent domain, Richard Epstein in the Wall Street Journal points out that the Hawaii legislature uses an incorrect approach

in designing the Land Reform Act. Three recent unanimous decisions illustrate how easy it is for a determined Supreme Court to bypass constitutional guarantees. The most flagrant case is Hawaii Housing versus Midkiff or the Land Reform Act whieh the appelate court in San Francisco struck down as a "naked" taking from A to B. But the Supreme Court rescued the Hawaii statute by approving taking "rationally related to a conceivable public purpose." In this instance of coping with oligopolistic market structures because 22 landowners owned about 73 percent of the land on Oahu. Epstein continued, however, no antitrust expert would describe a market with 22 sellers as oligopolistic. Similarly no one could "presume"that the buyer's failure to obtain land at the price he thinks fair is evidence of defect in marketstructure. It is only an expression of the eternal desire to buy for less than the asking price. The present legal position is in marked contrast to the original constitution, with specific provisions designed to limit government power over contracts, taxation and private property. The contracts clause states: "N o state shall pass any law impairing the Obligation of Contracts." The uniformity clause provides that "all Duties and Excises shall be uniform throughout the United States." The Fifth Amendment provides "nor shall private property be taken for public use. without iust comnensation."

The court has deployed the so-called "rationa! basis" test. Yet rational basis is a term of art and a bit of false advertising. Because the means chosen and any legitimate end of government upholds the rational basis test. In theory, the class of legitimate ends is both capacious and undefined, while the means used need only ha\e a remote connection. Using the legislature to coerce transfer of private lands encourages bypassing private markets in favor of political markets to decide what property should be transferred and at what price under the rational basis test is a false argument to emancipate federal and state governments from constitutional restraints. The eontract, uniformity and public-use clauses limit legislative powers as an original purpose under the constitutional system, to protect private markets from political pressures. Under the Act the legislature may divert sources from the production of wealth to the transfer of weahh and promote political division that threatens the eeonomie foundations of a stable, free and democratic society. The connection between po!itics and markets, so well understood by the founding fathers, has been all but forgotton. After an anticipated national constitutional convention the court may be able to decide otherwise, although it has reversed itself several times in the past. Until then the legislature has its job cut out for it in the coming session.