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Chrysler, Chevrolet, and the Fifth Amendment

I'm not a constitutional scholar. I don't even play one on radio. Despite the fact I was educated in California's public schools, I do recall this line from the closing section of the Fifth Amendment--"nor shall private property be taken for public use, without just compensation."

So, when the Obama administration decrees (as a part of the government take-over of GM and Chrysler) that a certain number of Chrysler and Chevrolet dealers (which are privately owned, with personal inventory, debt, and employees) must close (without any compensation, or purchase of their inventories or properties) simply because someone in DC tells them they must, we have crossed a very dangerous line.

Many a family business and fortune will be wiped out.  Not to mention the large number of those employed by these dealers who will likewise be unemployed and now forced to exist on government largess.

For all intents and purposes, how is this not government seizure of private property?

This is one lawsuit I will watch very closely.  Click here:

The DC Caesars need their collective private property-grabbing noses bloodied on this one!  How is this not a violation of the Fifth Amendment?

Reader Comments (39)

The Constitution is under attack.

It may be time for a revolution.

I'm just saying.
May 20, 2009 | Unregistered CommenterStan McCullars
As a lawyer I can tell you this is not a constitutional issue. I believe what is confusing you is the journalistic shorthand. The dealerships have dealership agreements which expire annually or every 2-3 years. The automaker simply is not renewing those particular dealership contracts, so there is no "taking" in the constitutional sense. Automakers shut off dealerships all the time for economic reasons, such as poor sales, etc. The agreements typically make clear that there is no guarantied right to renewal. (Ps- If there is a bankruptcy they will not even have to wait for the expiration of the contracts, they can simply reject them and end them.)
May 20, 2009 | Unregistered Commenterreg
Down, Stan, down boy. Christianity = obedience, not revolution. I'm just saying.
May 20, 2009 | Unregistered CommenterZrim

I just listened to two "legal experts" being interviewed on this very topic. One (the constitutional law professor) thought this was "quite possibly" a violation of the fifth amendment (because of the control of the inventory, the warranties, and the seizure of the "good will" of each business involved), while the other (the litigator) took your view, that it is merely a matter of a terminated agreement and then bankruptcy. That comes as no surprise . . .

Both agreed that this was "new territory" for the bankruptcy courts, especially since the federal decision conflicts with a number of state's laws regarding the termination of these contracts and disbursement of remaining dealer inventory, which the dealer will not be allowed to return, and probably can't sell off, forcing him to take a huge loss.

This is not (as you state) a matter of merely not renewing the contract of a poor-performing dealer. This is the breaking of an agreement by the new majority stock-holder (Caesar) with a dealer who may (and many have) met all the requirements mandated by Chrysler under the current contracts. These leases are not merely coming to term. They are being broken by fiat by Chrysler on June 12.

(And how is that not a seizure of private property again??) And who owns the remaining inventory if the feds seize it before it is liquidated? And who then, gets that money? Not the dealer . . .

Certainly, you will agree that this is a dangerous and reckless step for the feds to take--wiping out profitable privately-owned businesses which have no recourse regarding their inventory (parts and autos), warranties, or leases/mortgages (on their property).

These businesses are just plain wiped out. The owners have little remedy. And their employees are out in the cold.

And this is not an outrage to you???
May 20, 2009 | Registered CommenterKim Riddlebarger
Obama is now the general manager of Chrysler. He is also trying to force us to drive little box cars. Really, the liberals want us to drive small cars, live in small houses, and take cold showers etc. (So that they can make more money on the global warming farce.)

Obama feels that it is unfair for a person with a good education to have a job that pays him 250,000, and the person in Iowa -- without an education gets 7.00 an hour.

He wants capitalism to fail. He wants to make the government bigger, and to stick as many people on welfare as he can. The more people on welfare, the more the governmnet has control. (A great example of this type of failure is the state of California.) Remember, the more the government gives you, the more they own you.

Take away our guns. Give the government more control and usher in his socialist agenda. Meanwhile, the Journo rags (the newspapers) keep sucking up to him.

There is a real disconnect, when the American people don't like his policies, but like him. Huh?

Shhh! The Journo rags want to keep it quiet, but more Americans are against abortion, than for it. Keep in mind, that the liberals always blame five things whenever anything goes wrong. 1. The Jews, 2. The Christians, 3. White people, 4. Bush and 5. Rush.
May 20, 2009 | Unregistered CommenterLloyd Cadle

Welfare say,
'You come no more,
We send cash right to your door."

Welfare checks,
They make you wealthy, medicaid
it keep you healthy!

By and by, I get
plenty money, Thanks
to you American dummy.

They come in turbins
and Ford trucks, I
May 20, 2009 | Unregistered CommenterLloyd Cadle
KR - You pose an argument that would be very difficult to refute. I agree with you wholeheartedly. Lloyd also, has some good points. Zrim - I'm not certain. Weren't the colonists correct in revolting against Britain? I'm not arguing, just questioning...
As long as the American public views Obama as a "star," this nonsense will continue. I, for one, can't sit by and watch it happen.
As you once explained to me, we are of two kingdoms. I thank God for that, and will continue to pray for the leaders of the kingdom of man.
May 20, 2009 | Unregistered Commenterhb
Welfare Poem continued:

I buy big house with
welfare bucks.

They come here,
we live together,
more welfare checks,
it gets better!

We have hobby, it's called
breeding, welfare pay for
baby feeding.

Americans' crazy! He pay all
year, to keep welfare running here!
May 20, 2009 | Unregistered CommenterLloyd Cadle
"Down, Stan, down boy. Christianity = obedience, not revolution. I'm just saying. "

What if the original intent of the founding documents of this country and all of the surrounding writings of the Founders of this country call for revolution if those documents are not honored by the government? I'm just saying.
May 21, 2009 | Unregistered Commenterwalt
That's my theory. We in the United States are governed by the Constitution, not by politicians.
May 21, 2009 | Unregistered CommenterStan McCullars
I am not a big fan of many of Obama's policies, economic or social. However the issue of the dealership agreements is simply not Constitutional in scope. (The litgator you heard was right! They ususally are, says this litigator. ;-))
The rejection of contracts in bankruptcy court happens all the time . It has been part and parcel of the system forever. That is how the automakers will also be able to reject their labor agreements and renegotiate those. This is part of the Bankruptcy Code.
There are statutes in pretty much every state regulating the rights of an automaker to not renew a dealership agreement, but they most likely will not cover the circumstances here.
The bigger issue I have is why we gave the autodealers millions of dollars to stay out of bankruptcy, only to see them now enter bankruptcy. What a collosal waste of billions.

Stan and Walt, Have either of you read the Federalist papers. There is absolutely nothing in them that would suggest we need a revolution under the present circumstances. Our "revolutionary activity"is through the ballot box. If you don't like the result, in a democracy you need to learn to live with it. I certainly have dealt with it for may years in my lifetime, including the last 6 or so under W.
May 21, 2009 | Unregistered Commenterreg
"If you don't like the result, in a democracy you need to learn to live with it. I certainly have dealt with it for may years in my lifetime, including the last 6 or so under W."

I'm fine with living with who's elected. I'm not fine with those who've been elected ignoring or otherwise undermining the contract with the people that they've sworn to uphold in the oath of office. Democracy can't work without people elected in good faith keeping their word and upholding the agreement with the people (in this case, the Constitution). You can't follow laws that are based on the momentary and arbitrary whims of elected officials who are acting in bad faith, undermining the laws, and changing the original intent and meaning of laws on the books (again, the Constitution), can you? How is that even possible? Ancient Near Eastern despots even did better.

I think things are a bit more complicated than you think they are. Speaking of W, remember all the whining we heard during the W years about him trashing the Constitution? Has that suddenly stopped now, or is everything the same but the nameplates on the doors?

I'm in favor of the rule of law, not the rule of arbitrary and ephemeral whims of ensconced Beltwayers.
May 21, 2009 | Unregistered Commenterwalt
I agree with Zrim, when he brings up obedience, on our part in relation to the government.

Also, I agree with Reg, when he brings up that we can attempt to change things at the ballot box.

We have to submit to the government, unless they command us to do something against the Word of God. In that case, Peter says in Acts 5:29, "But Peter and the other apostles answered and said: 'We ought to obey God rather than men.'"

Another example on how to submit to a bad government was Luther in 1524 and 1525, in the war of the oppressed peasants. The peasants, as you may recall, wanted to take the law into their own hands in a revolt against the government.

Luther said, "Bad and unjust government excuses neither revolt nor resistance to the government. Do not make your Christian name a cloak for your impatient, rebellious, and unchristian undertaking." Luther was sympathetic to the plight of the peasants, but not at the expense of going against the Word of God.

That being said, the Obama's potential "cap and trade" bill is going to cost the average tax payer upwards of 4,000 dollars, as it will lead to our energy bills to almost double, and our gas prices to go up another 70%.

Companies will have carbon dioxide credits, and if they use them up, they will have to purchase more from other companies. For a quick start, more than one million people will be layed off, and more companies will move to Mexico, to avoid this tremendous hassle and expense.

All of this, so that we can convert to windmill energy. I heard a report this morning, that the government will have access to our computers, to monitor our thermostats, and if we set them in the 70's, we will be hit hard on our bills. Folks, it is coming to the point where the government will want us to set our thermostats up to about 92 degrees for the summer months.

Meanwhile, the Journo rags will report that Obama's policies saved about 100 jobs at some chicken factory, but they won't report on how many will lose their jobs because of the global warming farce.

What a great day for all Americans as more of the Journo rags, (newspapers) go out of business!

People wanted change. Brother, change they have! California style government is now in the White House.
May 21, 2009 | Unregistered CommenterLloyd Cadle
Walt & Stan,

I'm no politico or economist, to say nothing of a constitutionalist. So I don't pretend to be. But I am quite persuaded that the Christian life can be summed up in one word: obedience. This isn't to suggest there is anything wrong with ranting, good natured bellyaching about the state of things or even ideological disagreement.

But, to the extent that we Americans have it our DNA to promote, nurture and even reward civil DISobedience and call it patriotic, I do think Christianity confronts us in ways we'd rather disregard because we would rather that our polity descended from on high in a neat package. After all, "they were amazed" in Mark 12 for good reason (hint: it wasn't just about filing honest tax returns).
May 21, 2009 | Unregistered CommenterZrim
One last thing on Obama: If you want your sports car, or SUV etc., you better hurry before the government will force you into buying your small box car (the Obama clown-Pelosi car).

Before Obama leaves office, we might all be commuting on our ten speeds, to cut down on the carbon dioxide emissions. The Journo rags (newspapers), shhh, try to keep it out of the news, that these carbon dioxide emissions actually went down during the Bush years!

But, the Journo rags would rather give us the hard hitting, investigative reporting on Obama's new dog, or Michelle Obamas' new dress. (All of the news that is fit to print! -- the New York Times slogan).
May 21, 2009 | Unregistered CommenterLloyd Cadle

You are absolutely right about the necessity for the Christian citizen to be an obedient citizen. Justin Martyr's point is still a critical one.

That is why it is so important that we, as obedient citizens, vigilantly watch Caesar (by this I mean the "inside the Beltway crowd," on the left and the right) like a hawk. We may hold to two kingdoms and seek to keep on our side of the divide, but Caesar is a mono-kingdomist (if I can coin a new word) of the first order. He thinks ours is all his . . .

Obedient Christian citizens vote with a Christian conscience. Obedient Christian citizens will not be afraid speak out in protest whenever Caesar does not keep up his end of the bargain (or if he violates natural law and historical legal precedent). And while desire for more power and property-grabbing is in the air, now is the time to argue the case for limited federal government and states rights. We must do that loudly, publicly, and without violence, or threatening anarchy.

But meanwhile, lets hope and pray that this discussion remains purely theoretical, and that enough protest "encourages" Caesar to back-off. The Bible is clear about the necessity of civic righteousness on the part of God's people. Yet, it also warns us about a God-hating beast empowered by the dragon who just hates it when the orthodox confess "Jesus is Lord" (meaning Caesar isn't).

That is why I want Caesar neutered in the courts and at the ballot box . . . peacefully, of course.

One way to do this would be to repeal the seventeenth amendment and force the US Senate out of its year-round existence within the Beltway, and back to the state legislatures for six months of the year. That is the kind of thing I am thinking about . . .


Attorneys are worse than theologians when it comes to seeing two completely different things in the same set of circumstances. I just heard another constitutional guy lay out his case for a clear violation of the fifth amendment. I'm sorry, but I completely disagree with you that this is merely a matter of contract law and not a government seizure of private property.

So, we'll see what the courts say, meanwhile you litigators continue to rack up the billable hours. . .

Oh, and by the way, the bailout of the auto-industry is a huge outrage in its own right. Let the big three go belly-up. That is why we have bankruptcy laws in the first place. These courts were not created for those whom the government has driven out of business by becoming majority share-holders after a power-grab of privately-owned businesses!

We'll revisit this after the courts take a look . . .
May 21, 2009 | Registered CommenterKim Riddlebarger

The attorneys for non-tarp Chrysler creditors (White and Case and Wachovia Financial) agree with me . . . Here's their filing:

Here's an article explaining this for non-legal types:

The authors argue a point I've wondered about throughout this whole discussion. I thought Obama was a constitutional law professor. Turns out he was a litigator instead!

Go non-tarp creditors!!!!!
May 21, 2009 | Registered CommenterKim Riddlebarger

I know we have been here before, and while I appreciate your liberty to your particular views (some of which I might even share), I really have a hard time seeing how the spirit of obedience abides everything you said after the second sentence. Maybe it's just my brutal upper-midwesterner, but what I hear is, "Be obedient until things don't go your way." I thought the test of a better obedience was when things don't go one's way, or am I just too down-home?

When I read the NT I just see very little of anything of the notion that we are to rise up and slap Caesar's wrists. How does talk of "neutering Caesar" square with something like Mark 12, or reinforce what it means to seek the peace and prosperity of the city? If Caesar was given to us for our own good, and if to obey him (not worship) is to obey God, how does "speaking out in protest against him" comport exactly?

And I don't see much of a corrective against disobedience beyond, "Don't be disobedient." Is there anything a bit more substantive than that? How is the letter of your call to be obedient harmonizing with a spirit of obedience?
May 21, 2009 | Unregistered CommenterZrim
A couple of final thoughts:
Most everything we complain about in terms of our elected officials would be solved if we had term limits at every level of government, state, federal and local-say 10 years at most. Most of the problems would go away. I agree that the green police are going to be the biggest infringer of individual rights going forward. They will regulate not just industry, but each of us in the minutiae of how we live. How much we shower, what we can eat or drink, what we drive, where we live, how we garden, prune our bushes, etc.

Finally Kim, can you tell me how 1 Corinthians 5:9-13 and particular the verses "12What business is it of mine to judge those outside the church? Are you not to judge those inside? 13God will judge those outside." plays into our relationship with the government and the world. It seems to advocate almost a benign neglect of the outside world while calling us to live in the world (and advocating purity and discipline within the church). I always find these verses thought provoking since it seems he is addressing more than just interacting with "sinners" on the outside of the church, but also telling us not to worry what the world does with and to its own. Thoughts?
May 21, 2009 | Unregistered Commenterreg
ps, Kim, the brief you link to deals with the government purporting to "prime" senior lenders and bootstrap its lien ahead of the previous senior liens. That could be a problem however analyzed and may well result in a Court reallocating the seniority of the liens, thereby watering down even what little collateral the tax payers got for their money. This does not deal with or apply to the termination of dealership contracts however.
May 21, 2009 | Unregistered Commenterreg

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