LEAHY: I turn next to -- to Senator Grassley. Then, after Senator
Grassley, to Senator Feingold.
GRASSLEY: Welcome once again, Judge. I hope you had a good
break. And I appreciate very much the opportunity to ask you some
I'd like to start off my round with some questions about your
understanding of individual property rights and how they're protected
by the Constitution.
And let me say, as I observe property rights around the world,
there's a big difference between developed nations and developing
nations. And respect for private property has a great deal to do with
the advancement of societies.
So I believe all Americans care about this right. They want to
protect their homes and anything they own from unlawful taking by
government. But this is also a right that is important for
agricultural interests. As you know, besides being a senator, I come
from an agricultural state in Iowa and am a farmer, as well.
I'm sure that ordinary Americans, besides the economic interests
that might be involved, are all very well concerned about where you
stand on property rights. So some of these issues have been
discussed, but I want to go into a little more depth on Kelo as an
Could you explain what your understanding is of the state of the
Fifth Amendment's taking cause jurisprudence after the Supreme Court
decision in Kelo? Senator Brownback said this aptly when Chief
Justice Roberts was before this committee: Quote, "Isn't it now the
case that it is much easier for one man's home to become another man's
Your general understanding of the takings clause?
SOTOMAYOR: Good afternoon, Senator Grassley. And it's wonderful
to see you again.
GRASSLEY: Thank you.
SOTOMAYOR: I share your view of the importance of property
rights under the Constitution. As you know, I was a commercial
litigator that represented national and international companies, and
it wasn't even the case that it was a difference between developed and
Many of my clients who were from developed countries chose to --
in part, to invest in the United States because of the respect that
our Constitution pays to property rights in its various positions, in
its various amendments.
With respect to the Kelo question, the issue in Kelo, as I
understand it, is whether or not a state who had determined that there
was a public purpose to the takings under the -- the takings clause of
the Constitution that requires the payment of just compensation when
something is -- is condemned for use by the government, whether the
takings clause permitted the state, once it's made a proper
determination of public purpose and use, according to the law, whether
the state could then have a private developer do that public act, in
essence. Could they contract with a private developer to effect the
And so the holding as I understood it in Kelo was a question
addressed to that issue.
SOTOMAYOR: With respect to the importance of property rights and
the process that the state must use, I just point out to you that in
-- in another case involving that issue that came before me in a
particular series of cases that I had involving a village in New York,
that I -- I ruled in favor of the property rights -- the property
owner's rights to challenge the process that the state had followed in
his case and to hold that the state had not given him adequate notice
of their intent to use the property -- well, not adequate notice not
to use the property, but to be more precise, that they hadn't given
him an adequate opportunity to express his objection to the public
taking in that case.
GRASSLEY: Could I zero in on two words in the Kelo case? The
Constitution uses the word use, public use. Where as the Kelo case
talked about taking private property for public purpose. In your
opinion, is public use and public purpose the same thing?
SOTOMAYOR: Well, as I understood the Supreme Court's decision in
Kelo, it was looking at the court's precedence over time and
determining that its precedence had suggested that the two informed
each other, that public purpose in terms of developing an area that
would have a public improvement and use that the two would inform each
GRASSLEY: Do you believe that the Supreme Court overstepped
their constitutional authorities when they went beyond the words of
the Constitution, in other words, to the word purpose, and thus
expanded the ability of government to take an individual's private
property? Because I think everybody believes that Kelo was an
expansion of previous precedent there.
SOTOMAYOR: I know that there are many litigants who have
expressed that view. And, in fact, there has been many state
legislators that have passed state legislation not permitting state
governments to take in the situation that the Supreme Court approved
of in Kelo. The question of whether the Supreme Court overstepped the
Constitution, as I've indicated, the court, at least my understanding
of the majority's opinion, believed and explained why it thought not.
I have to accept because it is precedent that as precedent. And
so, I can't comment further than to say that I understand the
questions and I understand what state legislatures have done and would
have to await another situation, or the court would, to apply the
holding in that case.
GRASSLEY: Then I think that answers my next question. But it
was going to be to ask you whether you think that Kelo improperly
undermines the constitutionally-protected private property rights. I
presume you're saying that you believe that's what the court said and
it doesn't undermine property rights.
SOTOMAYOR: I can only talk about what the -- the courts said in
the context of that particular case and to explain that it is the
court's holding. And so, it's entitled to stare decisis effect and
GRASSLEY: I see.
SOTOMAYOR: But the extent of that has to await the next step,
the next cases.
GRASSLEY: OK. Well, then maybe it would be fair for me to ask
you what is your understanding of the constitutional limitations then
on government entity -- any government entity taking land for public
SOTOMAYOR: Well, that was the subject of much discussion in the
Kelo case among the justices. And with certain justices in the
dissent hypothesizing that the limits were difficult to see, the
majority taking the position that there were limits.
As I've indicated to you, opining on a hypothetical is very, very
difficult for a judge to do.
SOTOMAYOR: And as a potential justice on the Supreme Court but,
more importantly, as a Second Circuit judge still sitting, I can't
engage in a question that involves hypotheses.
GRASSLEY: Right. Let me ask you a couple obvious then. Does
the Constitution allow for takings without any compensation?
SOTOMAYOR: Well, the Constitution provides when the government
takes it has to pay compensation. As you know, the question of what
constitutes an actual taking is a very complex one because there is a
difference between taking a home and regulation that may or may not
constitute a taking. It's -- so I'm not at all trying to not answer
GRASSLEY: OK. Well, then let me ask you another question.
Maybe you can't answer it. Would you strike down a taking that
provided no compensation at all?
SOTOMAYOR: Well, as I explained, if the taking violates the
Constitution, I would be required to strike it down.
GRASSLEY: Let me move on to the Didden case v. the Village of
Port Chester. It raised serious concerns about whether you understand
the protection provided by the Constitution for individual property
rights. In this case, Mr. Didden alleged that his local village
government violated his Fifth Amendment rights when it took his
property to build a national chain drugstore.
At the meeting with the government agency, another developer, Mr.
Didden was told that he could give the developer $800,000 or a 50
percent interest in his pharmacy project. And if Mr. Didden did not
accept either condition, the government would simply take his
Two days after Mr. Didden refused to comply with these demands,
the government began proceeding to take his land. The district court
denied Mr. Didden his day in court, and your panel affirmed that
decision in a five-paragraph opinion. Why did you deny Mr. Didden his
day in court? How can these facts, in essence, allegations of
extortion at least not warrant the opportunity to call witnesses to
see if Mr. Didden was telling an accurate story?
SOTOMAYOR: The Didden case presented a narrow issue that the
LEAHY: Officer, remove that man immediately.
LEAHY: We will stand in order...
LEAHY: We will stand in order...
LEAHY: Officers, you will remove that man.
LEAHY: You know...
And they did. And they did.
LEAHY: Again, both Senator Session is and I have said, as all
previous chairs and ranking members of this have said, this is a
hearing of the United States Senate. The judge deserves respect.
Senators in asking questions deserve respect.
I will order the removal of anyone who disrupts it, whether
they're supportive of the nominee or opposed to the nominee, whether
they're supportive of a position I take or opposed to it. We will
have the respect that should be accorded to both the nominee and to
the United States Senate.
SESSIONS: Thank you, Mr. Chairman. I think you've handled this
well throughout, and I support you 100 percent.
LEAHY: Thank you.
Senator -- Senator Grassley, we did stop the clock, so it did not
take from your time.
GRASSLEY: Thank you. People always say I have the ability to
turn people on.
Maybe you could start over again with your -- with your sentence,
(UNKNOWN): Where were we?
SOTOMAYOR: I hope I remember where we were.
SOTOMAYOR: Senator, the right of property owners to have their
day in court is a very important one, but there is a corollary to the
right to have your day in court, which is that you have to bring it to
court in a timely manner...
SOTOMAYOR: ... because people who are relying on your assertion
of rights should know when you're going to make them. And so there's
a doctrine called the statute of limitations that says if a party
knows or has reason to know of their injury, then that party has to
come in to court and raise their arguments within that statute that
sets the limits of the action.
SOTOMAYOR: In the -- oh, I'm sorry.
GRASSLEY: No, no, no...
SOTOMAYOR: No, no, no.
GRASSLEY: ... you, please. I interrupted you. I should not
have interrupted you.
SOTOMAYOR: No, I...
GRASSLEY: Please, go ahead.
SOTOMAYOR: In the Didden case, the question was whether Mr.
Didden knew that the state was intending to take his property and for
what it, the state, claimed was a public use and that it had plans to
have a private developer take his -- they take his property and the
private developer develop the land.
So there was a full hearing by the village on this question of
whether there was a public use of the land. Mr. Didden didn't claim
in the action before the courts that he didn't have notice of that
hearing. He did not raise a challenge in that hearing to the public
taking. And he didn't raise a challenge to the state's intent to have
a private developer develop the land.
Now, in that case, the developer was developing not just Mr.
Didden's property. It was one piece of property in a larger
development project. And that larger development project had been
based on the village's conclusions from its very lengthy hearings in
accordance with New York law that the area was blighted and that the
area needed economic development.
SOTOMAYOR: So to that issue became the issue before the court in
the sense of, had Mr. Didden, knowing that he could be injured by the
state's finding of public use and the state's decision to let a
private developer develop this land -- did he bring his lawsuit in a
timely manner. And the court below and our court ruled on that basis
that he hadn't because he had reason to know about the injury that
could -- that could come to him.
GRASSLEY: Well, since Mr. Didden's claim was based on conduct of
the developer, how could he ever have filed a successful claim under
the standard that you just mentioned?
SOTOMAYOR: Mr. Didden alleged in his complaint that the private
developer had extorted him. Extortion, under the law, is defined as
an unlawful demand for money. On this one piece of property, within a
larger development that the private developer was actively engaged in
doing what he had contracted with the state to do, to revive the
economic base by making investments in it, the private developer knew
that Mr. Didden had his claims. The private developer had his
agreement with state.
And so he was doing -- at least this was the private developer's
argument -- what he was entitled to do which is to say we disagree.
I'm claiming that I have a right under contract. You're claiming that
you have a right under the takings clause. Let's settle this.
I'm going to lose X amount of money. So you pay me back for me
not to do what I'm entitled to do under the law.
That's, however, was -- those were the claims of the parties in
the action. In the end, the decision of the court was if you believe
that the takings of your property were not proper under the public use
-- under the takings clause, and you knew that the state had entered a
contract with this private developer, then you had knowledge that you
could be injured and you should have come to court earlier.
GRASSLEY: Why was the situation in Didden not the kind of
prohibited pretextual (ph) taking articulated in Kelo? How was this
not some sort of form of extortion? And if there wasn't a pretext in
the Didden case where the developer says give me the money personally
or we'll take your land, then what is the pretext?
SOTOMAYOR: Well, as I -- as I have described the case...
GRASSLEY: Yes, I understand.
SOTOMAYOR: ... the question comes up in the context of what did
Mr. Didden know, did he have enough to know he could be injured, was
there no public use to the -- to which the property would apply, and
what rights did the private developer have with the state.
And so the extortion question came up in a legal context
surrounding the relative rights of the parties. And so as I said,
extortion is a term -- a legal term which is someone demanding money
with no lawful claim to it. I'm simplifying this. There's different
definitions of extortion that apply to different situations.
But in the context of this case, that's the simplest description
of the case, I believe.
GRASSLEY: The Second Circuit panel in Didden took over a year to
issue its rulings, suggesting that you understood the novelty and
importance of this case, yet your opinion dealt with Mr. Didden's
Fifth Amendment claim in just one paragraph. Did you believe that
this was an ordinary takings case?
SOTOMAYOR: Well, cases present claims by parties. And to the
extent that Mr. Didden was raising claims that sounded in the issues
the court was looking at in Kelo, certainly if Kelo had not come out
and the court had to, for whatever reason, determine that somehow the
Kelo decision affected the statute of limitations question, it may
have had to reach the question.
But courts do often wait for supreme courts to act on cases that
are pending in order to see if some form of its analysis changes or
not or inform whether a different look should be given to the case.
But on the bottom-line issue, Kelo didn't change, in the judgment
of the panel, the statute of limitations question.
GRASSLEY: OK. Regardless of the statutes of limitations, I am
curious why you didn't elaborate on your Kelo analysis. And why
wasn't this opinion published?
SOTOMAYOR: Well, Kelo didn't control the outcome; the statute of
limitations did. So there was no basis to go into an elaborate
discussion of Kelo.
The discussion of Kelo really was to say that we had understood
the public taking issue that Mr. Didden had spent a lot of time in his
argument about, but the ruling was based on the narrow statute of
limitations ground. So the Kelo discussion didn't need to be longer
because it wasn't the holding of the case. The holding of the case
was the statute of limitations.
GRASSLEY: OK. This -- on another case, the Supreme Court
reversed you 6-3 just three months ago in Entergy Corporation v.
Riverkeeper. You had held that the Environmental Protection Agency,
which is the agency with expertise, could not use a cost-benefit
analysis in adopting regulations from the construction of water
structures that had an impact on fish.
Rather, you interpreted the Clean Water Act to hold that EPA had
to require upgrades to technology that achieved the greatest reduction
in adverse environmental impact, even when the costs of those upgrades
were disproportionate to benefit.
Following long-established precedent, the Supreme Court held that
the EPA was reasonable in providing a cost-benefit analysis when
adopting regulations under the Clean Water Act. In reversing, the
Supreme Court questioned your proper applications of settled law that
agency regulations should be upheld, so long as they're reasonable.
Under Chevron, agency interpretation of statutes are entitled to
deference so long as they are reasonable, in other words, if they
aren't capricious and arbitrary. Do you find it unreasonable that the
EPA was willing to allow money to be spent in a cost-effective manner
by not requiring billions of additional dollars to be spent to save a
minimal number of additional fish?
SOTOMAYOR: To be able to answer your question, I would need to
explain a little bit more about the background. The Supreme Court has
now ruled in that case that the conclusion of the Second Circuit would
not be upheld on this narrow question. But the question the 2nd
Circuit was looking at is what did Congress intend or mean when in the
statute at issue it said that the agency had to use the best
technology available to minimize an adverse environmental impact.
Those were the statute's words.
In looking at that, the circuit applied general statutory
construction principles, which is, in our judgment, what was the
ordinary meaning of that and...
GRASSLEY: Are you saying you're not bound by Chevron then?
SOTOMAYOR: No, absolutely not.
GRASSLEY: OK, go ahead.
SOTOMAYOR: Chevron -- Chevron speaks to agency action or
interpretation. But ultimately the task of a court is to give
deference to what Congress wants. That's the very purpose of
Congress' legislation. And so, what the court was trying to do there
was to see if the agency's interpretation in light of the words of the
statute and how Congress has used cost-benefit analysis in other
statutes in this area and determine what Congress intended.
And so, we looked at the language. And it said just what it said
-- best technology available to minimize adverse environmental impact.
We looked at how Congress used cost benefit in similar statutes and
similar provisions. Or I shouldn't say similar -- in other
provisions. We noted that under the statutes at issue when Congress
wanted the agency to use cost-benefit analysis, it said so.
In this provision, Congress was silent. But the language, in the
panel's judgment, was the language. And so, in trying to discern what
Congress' intent was, we came to the conclusion, not that cost had no
role in the agency's evaluation, but that Congress had specified a
more limited role than cost benefit. We described it as cost
And, in fact, we voted to vote it past our decision, asked and
sent the case back to describe to us exactly what the agency had done
and why. Had it used cost benefit? Had it used cost effectiveness?
The cost was always going to be a part of what the agency could
consider. The issue was more in what approach did Congress' words
And so, agency deference is important. But Congress is the one
who writes the statutes. So you have to start as a court with what
did Congress intend.
GRASSLEY: It seems to me like you're saying when going (ph) the
expertise of the statute that the agency was being arbitrary and
SOTOMAYOR: Not -- not at all, sir. We were trying to look at
the statute as a whole and determine what Congress meant by words that
appeared to say that best technology available had to minimize an
SOTOMAYOR: As I said, that does have -- and as our opinion said,
considerations of cost. But given that Congress didn't use the cost
benefit -- give the agency cost benefit approval in the terms of this
particular provision while it had in others, we determined that the
agency and precedent interpreting provisions limited the use of cost
GRASSLEY: In another 2004 administrative law case dealing with
environmental issues, NRDC v. Abraham, you voted to strike down a Bush
administration regulation and reinstate a Clinton administration
environmental rule that had never even become final. In this case, it
appears you also fairly narrowly interpreted Chevron deference when
striking down EPA adoptions of reasonable regulations.
If you were elevated to the Supreme Court, do you intend to
replace an agency's policy decisions with your own personal policy
opinions, as it appears you did in both -- in the Abraham case?
SOTOMAYOR: No, sir. In that case, we were talking about and
deciding an issue of whether the agency had followed its own
procedures in changing policy. We weren't substituting our judgment
for that of the agency. We were looking at the agency's own
regulations as to the procedure that it had to follow in order to
change an approach by the agency.
So that was a completely different question. With respect to
deference to administrative bodies, in case after case where Chevron
deference required deference, I have voted in favor of upholding
administrative -- executive and administrative decisions.
GRASSLEY: This will probably have to be my last question.
Since 2005, you have been a presiding judge on a panel of an
appeal filed by eight states and environmental groups arguing that
greenhouse gases are a public nuisance that warrant a court-imposed
injunction to reduce emissions.
Your panel, in Connecticut v. American Electric Power, has sat on
that case for 45 months or nearly three times the average of the
Second Circuit. Why, after four years, have you failed to issue a
decision in this case?
SOTOMAYOR: The American Bar Association rule on code of conduct
does not permit me to talk about a pending case. I can talk to you
about one of the delays for substantial a period of time in that
decision, and it was that the Supreme Court was considering a case, a
Massachusetts case, that had some relevancy or at least had relevancy
to the extent that the panel asked the parties to brief further the
applicability of that case to that decision.
GRASSLEY: OK. Thank you, Mr. Chairman.
LEAHY: Thank you, Senator Grassley.