Does the Privatization of Publicly Owned Infrastructure Implicate the Public Trust Doctrine? Illinois Central and the Chicago Parking Meter Concession Agreement

Kaplan, Ivan | February 3, 2012

During the nineteenth century, legislatures proved “excessively generous” in granting railroad corporations property rights in publicly owned, commercially vital municipal streets and harbors. Jacksonian jurists, suspicious of corporate influence, invoked the public trust doctrine to rescind grants of privilege inconsistent with the public interest. In Illinois Central Railroad Co. v. Illinois, the “lodestar” of the modern doctrine, the Supreme Court refused to recognize the Illinois legislature’s authority to convey the submerged lands of the Chicago Harbor to a railroad corporation, a conveyance that empowered a private enterprise to “practically control . . . for its own profit” a publicly owned “highway” vital to Chicago’s “vast and constantly increasing commerce.” During the latter half of the twentieth century, courts seized on Illinois Central as a useful tool for protecting environmentally sensitive waterways while generally ignoring a century of caselaw applying the public trust doctrine to non-submerged infrastructure, namely municipal streets. The latent potential of the doctrine to protect public infrastructure from corporate monopolization remains relevant because private investors are increasingly pursuing property rights in such assets. A prominent example is the Chicago parking meter privatization, conveying to a Morgan Stanley subsidiary the rights to all on-street parking meter revenues for seventy-five years. This Note analyzes the Chicago parking meter privatization under Illinois Central, and subsequent Illinois public trust caselaw, and concludes that the agreement represents precisely the sort of conveyance the Illinois Central Court sought to proscribe, namely, one that sacrifices public “management and control” of a highway “for commerce, trade, and intercourse” essential to Chicago’s continued economic and urban development. In the absence of judicial intervention, shortsighted state and local governments will continue to succumb to the temptation of selling rights in vital public infrastructure for temporary, short-term profit, in opaque, potentially corrupt transactions, sacrificing the ability of future generations to regulate as public necessity, safety, and welfare require.