SCOTUS Likes “Moral Hazard” — Conscientious Property Owners Get Screwed Again

Take a moment to peruse the brand-new opinion of the Supreme Court in Armour v. Indianapolis, No. 11-1616, June 4, 2012.  Click here.  It’s on the subject of property taxation — the kissin’ cousin of eminent domain valuation, and here too the Supreme Court’s majority displays the sort of the-government-can-do-no-wrong attitude we have come to know and despise in eminent domain cases (particularly those raising a right to take issue, where anything that is merely “rationally related to the conceivable” is deemed good enough to justify takings of private property for transparently private uses in violation of the “public use” limitation of the Fifth Amendment).

What happened here was that Indianapolis had imposed an assessment for a new sewer line, that could be paid by the assessed land owners either as a lump sum or on an installment plan. A number of land owners did the former. Then the state changed the law, so the city informed the owners who were still paying off the assessment, that there was no liability on their part, so they could forget about paying the balance of their assessments. But what about us, said the owners who had already paid the whole amount in a lump sum? Tough, said the city — we’re keeping your money. So those folks, feeling aggrieved, sued. They won in the lower state courts, but the Indiana Supreme Court, a court that rarely sees a case of a landowner vs. the government that it likes, reversed. Now, a SCOTUS majority has affirmed that holding.

How did they do it, given the blatant disparity of treatment of the two groups of identically situated property owners? Easy. The city said it would be too inefficient, i.e., too much trouble to refund the money, and that was good enough for the court’s majority. Unsurprisingly, the opinion is by Justice Breyer, and is concurred in by Justices Ginsburg, Kagan, Sotomayor, Kennedy and — surprise, surprise — Thomas. The Chief Justice dissented, along with Justices Alito, and Scalia who concurred in the Chief’s dissent.

We always thought that the wretched Kelo case was the ultimate in the Court’s majority’s  the-government-can-do-no-wrong attitude, even when the beneficiaries of the government action in question are favored private individuals. But this one is right up there, and in terms of demonstrating such a judicial attidude of pro-government favoritism, runs neck-and-neck with Kelo. This much seems clear to us when we reflect on the uncontested fact that the way the city did it, some of the land owners assessed for the same project wound up paying 30 times as much as others, in spite of the fact that the state law in question required equality of treatment of the assessed property owners.

And that, folks, is equal protection of the law as seen by the Magnificent Nine.