The Constitutional Protection of Property Rights: Lessons from the United States and Germany

Abstract

"Constitutional limitations on a government's power to confiscate property, whether by an outright taking of title or by excessive regulation, are important to economic growth. Over the past 200 years, the Supreme Court of the United States has used different clauses in the constitution as the basis for this protection. When the usefulness of one clause waned, the Supreme Court turned to another clause to continue its protection of property rights. Our paper will trace the path from the use of the contract clause in the nineteenth century to the rise of substantive due process after the Civil War and its demise during the New Deal to the modern use of the takings clause. After analyzing the extent of the protection accorded property rights in the United States today, we will turn to the German constitution for a comparison of constitutional property rights protection. In many ways, the German courts have used Article 14 of the German constitution to provide similar protection to that given in the United States. However, the German courts have used a principle of Aproportionality as a basis for greater scrutiny of legislative action. We will show that the German proportionality principle is similar to the principles that had been used in the United States under substantive due process but no longer apply under the takings clause. We will also show that the decision of the United States Supreme Court and the German Constitutional Court are so similar that they could be viewed as part of one legal doctrine, both in terms of analysis and outcome. Next we will examine why the constitutional law of the two countries are so similar given two constitutional provisions with vastly different language. Finally, we will conclude by considering the lessons we can draw from the similar enforcement of the two different constitutional provisions and the lessons each country can draw from the other's experience."