Master Supreme Court held that Congress's elimination of descent and devise for certain Indian land interests, causing uncompensated escheat to the tribe, effected a taking. with this comprehensive case brief.
Hodel v. Irving is a cornerstone takings case at the intersection of constitutional property rights and federal Indian policy. The decision addresses whether Congress may eliminate the right to pass certain property at death (by will or intestacy) without paying just compensation, in order to solve a serious administrative and social problem: the extreme fractionation of ownership interests in Indian allotment lands. The case thus illuminates the limits of the government’s power to reshape property interests for public purposes without triggering the Fifth Amendment’s Just Compensation Clause.
The Court’s opinion is especially significant for its articulation of the "bundle of sticks" metaphor. While government may regulate some incidents of ownership without compensation, the Court here recognized that the right to pass property at death is itself a distinct and valuable stick in the bundle. By categorically abolishing both descent and devise for a defined class of property interests and forcing escheat to the tribe without compensation, Congress crossed the constitutional line. Hodel v. Irving therefore refines regulatory takings doctrine and delineates how far escheat and inheritance reforms may go.
481 U.S. 704 (1987), Supreme Court of the United States
In the late nineteenth and early twentieth centuries, federal allotment policy divided tribal lands into individual parcels held in trust or with restrictions on alienation. Over generations, undivided fractional interests in these parcels were inherited by numerous heirs, creating extreme ownership fractionation: single tracts with hundreds of co-owners, some holding tiny shares generating negligible income but requiring costly administration. To confront this problem, Congress enacted Section 207 of the Indian Land Consolidation Act (ILCA). As relevant here, Section 207 provided that any undivided fractional interest in allotted land that constituted 2% or less of the parcel’s total acreage and that had produced less than $100 in income for the owner in the year preceding the owner’s death could not pass by will or intestacy; instead, it would escheat to the tribe without compensation. Several owners (and representatives of estates) of such fractional interests in the Oglala Sioux Reservation challenged Section 207 as an unconstitutional taking of property without just compensation. Lower courts agreed, and the government appealed.
Does a federal statute that abolishes both descent and devise for certain small fractional interests in Indian allotment lands and causes those interests to escheat to the tribe without compensation effect a taking under the Fifth Amendment?
The Fifth Amendment prohibits the taking of private property for public use without just compensation. Although government may adjust the benefits and burdens of economic life and regulate incidents of ownership, a regulation that goes too far may constitute a taking under an ad hoc inquiry considering the economic impact on the claimant, interference with reasonable investment-backed expectations, and the character of the government action (Penn Central). The right to pass property at death is a recognized, valuable attribute of ownership; the complete abrogation of both descent and devise for a class of property interests, resulting in uncompensated escheat to the government or a tribal entity, constitutes a taking requiring just compensation. Prior cases (e.g., Andrus v. Allard) permitting regulation of a single strand of the property bundle do not authorize total destruction of the distinct and important right to transmit property at death.
Yes. Section 207 of the ILCA, by completely abolishing the rights of descent and devise for certain fractional interests and mandating uncompensated escheat to the tribe, effected a taking in violation of the Just Compensation Clause.
The Court acknowledged Congress’s legitimate and important objective: reducing the severe fractionation of Indian allotment interests that made land management costly and dysfunctional. However, even important public purposes do not obviate the constitutional requirement of just compensation when the government takes property. Applying takings principles, the Court emphasized the character of the government action. Section 207 did not merely regulate the manner of transfer or condition inheritance in modest ways; it eliminated both intestate succession and testamentary disposition for a defined class of property and appropriated those interests for tribal ownership without compensation. The right to pass wealth at death is a core attribute of property and a distinct stick in the bundle of rights. Its total abrogation, even for small-value interests, is constitutionally significant. The government argued that the economic impact on any one owner was minimal and invoked Andrus v. Allard, where the Court upheld a federal ban on the sale of eagle artifacts despite diminution of economic value. The Court distinguished Allard: there, owners retained other significant incidents of ownership, including the rights to possess, donate, and devise; here, Congress extinguished the very right to transmit the property at death. Historical escheat statutes were also unavailing because traditional escheat generally operates only where an owner dies without a will and without heirs; it does not deny the ability to devise the property in the first instance. The Court also noted feasible alternatives that would not effect a taking, such as limiting devise to lineal descendants or to co-owners, providing a mechanism for partition or forced sale with compensation, or offering compensation upon escheat. The existence of less drastic means underscored that Congress had crossed the constitutional boundary by choosing complete abrogation without compensation. Accordingly, Section 207’s escheat provision constituted a taking.
Hodel v. Irving is a leading case establishing that the right to pass property at death is a compensable property interest. It clarifies that while legislatures have broad latitude to regulate inheritance and to address serious social problems (like land fractionation), the total elimination of both descent and devise for a class of property interests—especially when it operates as an appropriation—is a taking requiring just compensation. For students of Constitutional Law and Property, the case refines regulatory takings doctrine and provides a concrete application of the bundle-of-rights framework. It distinguishes permissible regulation of certain strands (Allard) from the impermissible destruction of a core strand (testamentary transfer) and sets boundaries for escheat-based reforms. It also anchors subsequent developments, including Congress’s amendments to the ILCA and further Supreme Court scrutiny in Babbitt v. Youpee.
Congress sought to address extreme fractionation of ownership in Indian allotment lands. Over generations, undivided fractional interests became so numerous and small that they generated minimal income for owners while imposing substantial administrative costs, hindering land use and tribal self-governance. Section 207 attempted to halt further fractionation by preventing tiny interests from being inherited or devised, instead escheating them to the tribe.
The Court invoked the bundle-of-rights conception of property and recognized that testamentary transfer—the ability to pass property at death by will or through intestacy—is a separate, historically rooted and highly valuable stick in that bundle. Eliminating that stick entirely for a class of property owners fundamentally alters ownership and therefore can amount to a taking, even if the immediate economic value of a particular interest is small.
In Allard, the government prohibited the sale of eagle artifacts but left owners with other significant rights, including possession, donation, and the ability to devise. The Court held that regulating one strand of the property bundle did not destroy all economically viable use. In Hodel, by contrast, Congress abolished both descent and devise for the covered interests, appropriating them to the tribe upon death without compensation. That qualitative difference—the total destruction of a core strand—made the statute a taking.
No. The decision does not condemn escheat statutes generally. Traditional escheat, which operates when an owner dies intestate without heirs, remains permissible. Legislatures may also impose reasonable conditions on inheritance or devise (e.g., limiting devise to certain relatives or co-owners), so long as they do not completely abolish the right to pass property at death without providing just compensation.
Congress amended the ILCA to relax the absolute bar, including allowing certain devises (e.g., to co-owners or lineal descendants). However, in Babbitt v. Youpee (1997), the Supreme Court struck down the amended scheme as still effecting an unconstitutional taking. Ultimately, Congress adopted further reforms, such as probate consolidation mechanisms and partition sales with compensation, to address fractionation without abolishing core property rights.
The Court relied on the ad hoc, factual inquiry associated with Penn Central, focusing on the character of the government action, the nature of the property interest affected, and the extent of interference. It emphasized the unusual character of completely abolishing testamentary transfer and the historical importance of that right, which outweighed arguments that the immediate economic impact of any single tiny interest was minimal.
Hodel v. Irving squarely holds that the government cannot abolish the rights of descent and devise for a class of property interests and appropriate those interests to itself or a tribal entity without paying just compensation. Even in service of an unquestionably important goal—curbing the dysfunction of fractionated Indian allotments—Congress crossed the constitutional line by eliminating a core attribute of ownership.
For law students, the case is a vivid application of the bundle-of-rights framework and the Penn Central approach, demonstrating how the character of government action and the identity of the property stick taken can predominate over a narrow focus on dollar-value impact. It sets durable boundaries for escheat and inheritance reforms and remains essential reading in both property and constitutional law curricula.