Takings

Palazzolo v. Rhode Island

A landowner who acquires land after regulations take effect can still raise a regulatory takings claim. In 1971, a state agency in Rhode Island (defendant) adopted regulations designating an 18-acre plot of waterfront land as wetlands, making it nearly impossible to gain approval to build on most of the land. Several years later, Anthony Palazzo (plaintiff) became the owner of this land. In the 1980s, he applied twice for a permit to build a beach club on it. He was denied both times. Palazzolo filed a lawsuit in state court for damages. He claimed that the regulations were an inverse condemnation, also known as a regulatory taking, preventing him from using his own property. He alleged that the regulations constituted an uncompensated taking of his property, in violation of the Fifth and Fourteenth Amendments. A landowner who acquires land after regulations take effect can still raise a regulatory takings claim. The Takings Clause exists because some exercises of a state's regulatory power are so unreasonable and onerous as to compel the payment of just compensation. Such regulations do not become any less unreasonable or onerous simply because of the passage of time or title to a new owner. To hold otherwise would, in effect, allow a state to put an expiration date on the restrictions of its power in the Takings Clause. A state would only need to wait until the property was acquired by a new owner to be free of a previous owner's possible claim for just compensation. Also, when landowners who have a takings claim sell their land, they are transferring their full rights to the new owners, including the right to challenge land-use regulations under the Takings Clause. In this case, Rhode Island's specific regulations are a taking. A state may not reduce land so significantly as to leave the landowner with only a token interest. Yet the Rhode Island state agency states that Palazzolo could build a house on a portion of his land. As a result, the parcel still has some value. Any taking claim needs to be evaluated as a regulatory taking under the Penn Central test. That test requires looking at how much the government's action resembles a traditional taking, how much the regulation reduces the property's value, and how much the regulation undermines the owner's reasonable, investment-backed expectations. The case is remanded to let the trial court assess Palazzolo's claims under Penn Central.

Loretto v. Teleprompter Manhattan CATV Corp.

A permanent physical occupation authorized by government is a taking requiring the payment of just compensation without regard to the public interests that it may serve or the fact that it only has a minimal economic impact on the property owner. Prior to 1973, Teleprompter routinely obtained permission from building landlords to install its cable facilities. In 1973, New York passed a law which prohibited interference by a landlord in the installation of cable and the acceptance of payment from a cable company. Loretto brought suit in New York state court alleging that the installation of cable facilities on her building by Teleprompter was an unconstitutional taking of her property. Both precedent and historical circumstances support the rule that a minor but permanent, physical occupation of an owner's property, authorized by government constitutes a "taking." A permanent physical occupation requires compensation for the property owner because it is more serious and intrusive than either a temporary intrusion or an intrusion that merely restricts the use of property. A permanent physical occupation requires payment of just compensation because it destroys the property owner's opportunity to exercise three basic property rights: (1) the owner may no longer fully possess the property or exclude others from possessing it; (2) the owner can no longer exclude others from using his or her property, and cannot make any personal non-possessory uses of it; and (3) the owner cannot properly dispose of the property because a permanent physical occupation typically strips the property of most or all of its economic value. Appling these factors to the present case, the bolting of cable wires and boxes to the building, as well as the complete occupancy of space immediately above and upon the roof and along the building's exterior wall satisfies the test for finding a "permanent physical occupation" by Teleprompter Manhattan CATV Corp. of Loretto's property. It does not matter in the present case that the area "taken" by the cable company is relatively small. The mere fact that cable equipment is permanently installed on the building by a third party with governmental permission means that the action constitutes a taking of Loretto's property that requires just compensation under the Fifth and Fourteenth Amendments.

Lucas v. South Carolina Coastal Council

A state regulation that completely deprives private property of all its economic value constitutes a taking under the Fifth and Fourteenth Amendments that requires the payment of just compensation to the property owner, unless the economic activity prevented by the regulation is not part of the owner's initial title or property rights when acquiring the property. In 1986, David Lucas (plaintiff) paid $975,000 for two residential lots on the Isle of Palms in South Carolina. The lots consisted of beachfront property on which Lucas intended to build single-family homes. In 1988, however, South Carolina enacted the Beachfront Management Act which barred Lucas from building any permanent habitable structures on his two lots. Lucas brought suit against the South Carolina Coastal Council (defendant) in the South Carolina Court of Common Pleas on the grounds that the Act constituted a taking of his property for a public use that required just compensation under the Fifth and Fourteenth Amendments. The court found that the Act rendered Lucas' property completely valueless and thus the application of the Act constituted a taking of Lucas' property that required payment of just compensation. The United States Supreme Court granted certiorari. A common maxim which emerges from takings jurisprudence is that, "while property may be regulated to a certain extent, if the regulation goes too far it will be recognized as a taking." However, there is difficulty in applying this principle because few standards exist to define what constitutes going "too far." In seeking to define this terminology, precedent invalidates two discrete categories of regulations for going "too far" i.e. regulations that compel a property owner to suffer physical "invasion" on his property and regulations that deny all economically beneficial or productive uses of land. However, the application of the second category is troubling because there has never been an outline justified for this category of takings. In the present case applying the Beachfront Management Act to Lucas' property constitutes a taking that requires payment of just compensation for the following reasons: total deprivation of beneficial use of property has the same effect as a permanent physical invasion of property that renders a land owner powerless to use the property; and regulations that leave a land owner without economically beneficial or productive options for use of his land carry with them the heightened risk that the private property is being pressed into some sort of public use, all the while disguised as a measure to mitigate public harm. Regardless of whether the justification for providing just compensation for total economic takings is founded on the desire to provide a benefit or prevent a burden to the public, the detrimental economic effects on the property owner are enough to warrant providing him with just compensation. A new per se rule is suggested as a result. When a state regulation deprives private property of all economic value, that regulation constitutes a taking and the owner of the property must be paid just compensation. An exception to this rule, however, exists for economic uses of private property not originally contemplated by the owner's title or property rights when acquiring the property. In enacting this rule, there is also a prohibition on "noxious uses" of property found in the common law of nuisances. Applying these principles to the present case, the South Carolina regulation completely deprives Lucas' property of all economic value, and he is thus entitled to just compensation. The majority "launches a missile to kill a mouse." The majority issues an unnecessarily broad opinion and ignores limits of jurisdiction and traditional rules of review, as well as creates a new categorical per se rule and exception, to decide a relatively simple and narrow question of law. The only question for review is whether the South Carolina Legislature has a rational reason for enacting the Beachfront Management Act to address an issue affecting the public good. If so, this finding is entitled to great deference and Lucas is not entitled to payment of just compensation. Instead, a sweeping rule is fashioned, along with an entirely new scheme for deciding the constitutionality of regulations that eliminate all economic value. The majority itself cannot even comfortably handle the broad implications of its new per se rule, as it immediately carves out an exception relating to public nuisances. This ruling is unnecessarily broad. The new categorical rule is unsound and an unwise addition to the law, and the exception to the rule is too rigid and narrow for meaningful application to future cases. The categorical rule is unsupported by precedent, as there has never previously been an absolute stance taken that a deprivation of all economic value always constitutes a taking. The application of the rule would lend itself to arbitrary results, as a property owner losing ninety-five percent of the value of his property would recover nothing, while a property owner losing one hundred percent of value would recover just compensation. Additionally, the rule will be unsound in practice, as the elastic nature of property rights will allow future courts to define "property" as broadly or narrowly as they wish to justify whatever result they want, be it a taking or not. Finally, reasoning for this holding is shaky since an exception to a categorical rule is articulated. The uncertainty of the rule's status and the wide variety of ways in which it can be applied make its creation an improper exercise of judgment on behalf of the majority.

Character of the Government Action

Character of the Government Action This is generally where the debate is centered. The government will argue: That the regulation was a general regulation of the specific market (landlord-tenant), rather than a regulation on the individual. The government didn't single out one owner, but had to choose between a specific, incompatible land uses. By preventing nuisance, the owner retains reciprocity of benefits since they too will be benefitting from the regulation (Ex: All NYC property owners benefit from historical preservation). It is necessary to regulate market behavior. The owner will argue: That they are being singled out. That this is an exaction only for the benefit of others.

Dolan v. City of Tigard

Dolan v. City of Tigard The government may not, without just compensation, place land use conditions on an approval of a private property development plan unless there is a "rough proportionality" between the conditions and the impact of the proposed development. Dolan (plaintiff) owned a property located adjacent to and partially on a creek's 100-year floodplain. She operated a store on part of the property and she wished to redevelop the store, doubling its size and paving her gravel parking lot. In doing so, she would increase the impervious surface on the property and, as a result, storm water runoff. The City of Tigard (defendant) granted her a permit to complete the redevelopment, subject to conditions that required Dolan to (1) dedicate the portion of the property within the floodplain to a recreational public greenway designed to minimize flood damage and (2) dedicate a segment adjacent to the floodplain to the development of a pedestrian/bicycle pathway in order to reduce traffic congestion in town that may have been caused by her larger store. There is not a proportional connection sufficient to withstand a Takings Clause claim between conditions placed on a development permit requiring a landowner to dedicate portions of her property to a public greenway and a pedestrian/bicycle pathway and the government's interests of preventing floods and reducing traffic that may arise as a result of the development. The government may not place land use restrictions on property unless there is a rough proportionality between the conditions imposed and the impact of the land use. In this case, Tigard has not met its burden of showing that the land use restrictions are roughly proportional to the impact of Dolan's proposed redevelopment. Put another way, Tigard has not shown that the required land dedications, as currently constructed, are necessary to offset the impact of Dolan's redevelopment. In terms of the public greenway, Tigard has not shown that a public greenway, as opposed to a private one, is necessary to control flooding. A public greenway would completely eradicate Dolan's right to exclude others from her property, a significant burden not justified by Tigard. In terms of the pathway, Tigard has not shown that the proposed pathway is sufficiently likely to reduce traffic congestion caused by Tigard's larger store. Although the city finds that the pathway could offset some of the traffic, such speculation is not sufficient to warrant a requirement that Dolan dedicate a portion of her land for that purpose. The Oregon Supreme Court is reversed and the case is remanded for further proceedings consistent with this opinion. The Court's new "rough proportionality" test is not supported by any cited state case law and it ignores a consideration of what the property owner may gain in the exchange—in this case, Dolan's acquisition of a permit provides her with significant benefits. In addition, the Court's rejection of the public greenway on account of its over-inclusiveness does not take into account the fact that Dolan has not preserved in the record a desire to seek a narrower form of relief. Finally, the Court's rejection of the pathway dedication is on account of nothing more than a play on words.

Two Historical Tests were used for identify takings:

Due process clause test for the exercise of police power This test looks at the purpose and goal of public policy and asks whether the regulation serves that purpose. It's about the goal of the property: it must promote the public health, safety, welfare. Takings Clause Test Doesn't look at the goal of regulation - looks at the effect on the owner and whether it goes too far. The goal is irrelevant; all tests are supposed to be about the effect of the regulation on the owner. An owner can be eligible for just compensation even if the regulation doesn't take the title from her.

Economic Impact on the Owner

Economic Impact on the Owner The great the impact on the owner, the more, the more likely it will be ruled a taking, but no owner has the right to the most profitable use of their property. The government will argue: That there is a limited economic impact. That the owner can continue with the land use they already had the rights to. That owners are not entitled to the most profitable use of land, and that their remaining use results in there being no taking. The owner will argue: That the economic impact is great. That the most profitable, valuable, and important use of the land was taken.

Babbitt v. Youpee

If the extraordinary character of a regulation is such that it denies a landowner certain fundamental property rights such as the devise and descent of his land, the regulation amounts to a taking of property without just compensation. Congress passed a regulation designed to improve a growing problem caused by an Indian land allotment policy that resulted in parcels of Indian land becoming fractionated, with individual parcels held by dozens of owners. The regulation provided that instead of passing in a fractionated manner to heirs, fractional interests in land would automatically escheat to the tribe. This regulation was struck down in Hodel v. Irving, 481 U.S. 704 (1987) as a taking of property without just compensation. Subsequently Congress amended the regulation (amendment) to permit the devise of a previously escheatable interest, but only to another owner of a fractional interest in the same parcel. The Youpees (plaintiffs) are the children and potential heirs of William Youpee, a member of the Sioux and Assiniboine Tribes. William died testate and devised his several interests in land to his children. Each interest was left to a single child. Under the amended regulation, the Youpees' interests would escheat to the tribe because none of them owned another fractional interest in any of the parcels William was devising to them. The Youpees brought suit claiming a taking without just compensation Through the amendment to the regulation, all Congress did was create a small class of individuals that could receive fractional interests. This is not sufficient to overcome the restriction on the right of alienation that the amendment still imposes. The amendment still severely reduces the number of individuals to which a landowner can devise land. Further, this small group of permitted devisees is unlikely to contain any lineal heirs, who are often those to whom the land interests are devised. The Youpees embody this idea, as none of the Youpee children have any current interests in the relevant land, so under the amendment, William Youpee's devise to them is invalid and his interests escheat to the tribe. In addition, the regulation as amended is over-inclusive as its restriction does not always further the government's interest of consolidation of ownership in Indian lands. Such is the case with the Youpees. Each land interest that William Youpee left to his children was left to a single child. His will did not fractionate the holding of Indian land any more than it already had been; it simply maintained the status quo. As a result of the foregoing, the regulation as amended amounts to a taking without just compensation.

PruneYard Shopping Center v. Robins

In making a determination on whether a taking has occurred, courts look to the character of the governmental action and the economic impact of the restriction in terms of the investment-backed rate of return of the owner. PruneYard (defendant) operates a large, privately owned shopping center. It has a policy prohibiting people from engaging in any "publicly expressive activity" on the premises, including circulating petitions. One day, a group of high school students (students) (plaintiffs) set up a table and distributed pamphlets and asked people to sign a petition concerning a United Nations resolution. They were peaceful and orderly, but a PruneYard security guard asked them to leave on account of the PruneYard policy. The students brought suit seeking to enjoin PruneYard from denying their ability to distribute pamphlets. A state's enforcement of individuals' freedom of speech on private property open to the public does not amount to a taking of the owner's property. In order to constitute a taking, the owner's right to exclude the individuals must be essential to the economic value of the property. In this case, the exclusion of the students is not essential, and may not even be relevant to the economic value of PruneYard's shopping center. The students were peaceful and orderly and there is no evidence that PruneYard patrons objected to the students' presence or that their presence adversely affected PruneYard's business in any way. In addition, the governmental action of enforcing individuals' freedom of expression is a noteworthy one. Therefore, because the government's enforcement of the students' speech rights is important and because it does not impair the economic value of PruneYard's business, the judgment of the California Supreme Court is affirmed.

Interference with Investment-Backed Expectations

Interference with Investment-Backed Expectations This factor centers largely on timing of when the regulation came into effect vs. when the owner invested in a specific use. Did the owner buy the land before or after the regulation went into place? The owner will argue: Laws can change, but not dramatically so as to harm investment-backed expectations. Investment that were made in reliance under reasonable circumstances at the time should be protected. The government will argue: The law guides the owner's investment-backed expectations. They should expect that the law is going to change and should build that into their investment considerations. The idea of expectations is circular, since the court sets expectations based on its prior decisions, while also purporting to interpret expectations. Thus, what really matters is the investment, not the expectation (because the idea of expectations is inherently circular).

Judicial Takings

Judicial Takings can be argued for when a court changes a doctrine that leads to an owner losing a right. Judicial takings are not recognized as law since the Supreme Court has not ruled on this idea by a majority. In theory the remedy available for a judicial taking would be an injunction reversing the decision and striking down the regulation in dispute, along with just compensation. Scalia argues that courts are taking property rights by deciding private disputes. This would mean that federal law preempts common law, which is untenable. The proposed test for identifying a judicial taking asks: Did the owner leave a court proceeding without a property right he had walked in with? This implies looking back at state court's rulings from years past to see what the established property right was, and whether switching doctrines terminated that right.

Just Compensation is required when:

Just Compensation is required when: The government has the power to promote health, safety, and the general welfare through its police power (doesn't have to pay just compensation). Therefore, the key question becomes: when does the exercise of police power become the exercise of takings power and require just compensation? Task is to draw the line where government interference with property crosses the line into eminent domain status, requiring them to pay just compensation.

Kelo v. City of New London

Kelo v. City of New London A state's use of eminent domain to condemn property from private individuals and redistribute it to other private individuals constitutes a "public use" under the Fifth Amendment if it is rationally related to a conceivable public purpose. In 2000, the City of New London, Connecticut (defendant) approved a new development project that involved using its eminent-domain authority to seize private property to sell to private developers. The city stated that the purpose of this exercise of eminent domain was to create new jobs and increase tax revenues from the sale of property. Susette Kelo (plaintiff) had lived in a home in the New London area since 1997. Wilhelmina Dery (plaintiff) was born in her New London home in 1918 and had lived in the home with her husband Charles (plaintiff) for roughly sixty years. The property owned by Kelo and the Derys was in one of the areas scheduled to be condemned by the city's development project. Nine private property owners, including Kelo and the Derys (plaintiffs), brought suit in Connecticut state court to challenge the project on the grounds that it violated the "public use" requirement of the Fifth Amendment The city may validly exercise its eminent-domain authority to take private property and distribute it to private developers without violating the Fifth Amendment's public use requirement. In Berman v. Parker, 348 U.S. 26 (1954), and Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), a state's use of eminent domain to take property from private individuals and redistribute that property to other private individuals was upheld, because the overarching purpose of the eminent-domain programs is to promote the public welfare in some way. State legislative judgments about the prudence of programs providing for the public good in these precedent cases are entitled to great deference from the judicial branch. In the same way in the present case, the State of Connecticut's legislative judgment that the eminent-domain program at issue is necessary to promote public benefits, such as increased jobs and tax revenue, is entitled to great deference. Relying on previous decisions, the Connecticut Legislature's plan unquestionably serves a public purpose, satisfying the public-use requirement of the Fifth Amendment. Kelo's argument, that a true public use cannot confer only economic benefits on the public, is rejected—an economic benefit conferred on the general public can still constitute a viable public purpose. Additionally, Kelo's argument that the proposed public benefit needs to be "reasonably certain" to occur is rejected as well. The deference afforded to reasonable state legislative judgments prevents the judiciary from having to make this inquiry. The City of New London's eminent-domain program is upheld as constitutional, because it furthers a public purpose. Historically, three classes of eminent-domain takings have satisfied the public-use requirement: (1) taking property for public ownership, such as for public roads; (2) taking property for use by common carriers, like railroads, who put the property to public uses; and (3) taking property for private ownership in the context of some sort of a public program. Taking property and transferring it to private owners is problematic, but allowing such takings where the sole public purpose is economic development goes too far. This ruling gives the federal government carte blanche to "transfer property from those with fewer resources to those with more," most likely the already rich and powerful. The majority's holding is fundamentally at odds with the long-respected tradition of upholding private property rights. The protection of private property outweighed public necessity in the minds of the Framers, as they drafted significant legal protections of private property directly into the Constitution. The majority opinion seeks to eliminate liberties expressly enumerated in the Constitution. Additionally, the majority's construction of the public-use requirement of the Fifth Amendment waters down the significance of the Clause as a valuable limit on abuses of eminent-domain authority. The principle of providing deference to state legislative judgments does not justify this loss of an essential liberty. The majority should reconsider the meaning of the Public Use Clause itself and should not base its opinion on the application of its own past precedents. Allowing the government to take private property for any broadly construed economically beneficial public purpose will disproportionately burden poor and minority communities, who will lose their property in the name of urban renewal.

Miller v. Schoene

Miller v. Schoene If a state is forced to make a choice between saving one of two types of property, the state does not violate the Due Process Clause by deciding upon the destruction of one class of property in order to save another which, in the legislature's judgment, is more valuable to the public. The State of Virginia passed the Cedar Rust Act, which required property owners to remove red cedar trees infected by cedar rust on properties located within two miles of an apple orchard. The purpose of the Act was to prevent the spread of cedar rust to apple orchards, despite the fact that cedar rust has no effect on the health of cedar trees. Miller (plaintiff) owned a grove of cedar trees infected with cedar rust near an apple orchard. Schoene (defendant), the Virginia State Entomologist, ordered Miller to cut down his cedar trees. Miller filed suit to enjoin the order in Shenandoah County Circuit Court on the grounds that it violated the Due Process Clause of the Fourteenth Amendment. Giving preference to a public interest over the private interest of a property owner is a valid exercise of a state's police power, even if the ultimate result is the destruction of the private property owner's interest. In this case, the State of Virginia is faced with a choice of protecting either cedar trees or apple orchards, as both cannot coexist near each other. Cedar trees have some value as lumber, but apple-growing is a multi-million-dollar industry in Virginia. Thus, Virginia acted reasonably in choosing to save apple orchards by ordering the destruction of cedar trees. This type of choice between two items of property is unavoidable, and the legislature acted reasonably in making the choice.

Nollan v. California Coastal Commission

Nollan v. California Coastal Commission A permit condition may constitute a taking if there is not an essential nexus connecting the imposition of the condition to a legitimate state interest in solving a problem relating to the development. James and Marilyn Nollan (plaintiffs) owned beachfront property in California. When they attempted to rebuild a home that was located on the property, the California Coastal Commission (defendant) granted their building permit, with the condition that the Nollans create an easement for the public to pass over their property to get to a public beach. The Commission found that the condition was necessary to offset the psychological barrier to beach use caused by a developed beachfront area, to protect the public's ability to see the beach, and to prevent beach congestion. The Nollans brought suit to challenge the condition. If a permit condition serves the same legitimate police-power purpose as refusing to issue the permit altogether, then the condition will not be treated as a taking if the outright refusal to issue the permit would not constitute a taking. However, if the permit condition offered as a substitute for outright prohibition does not substantially further the stated purpose for the prohibition, then the permit condition constitutes a taking, and the government must provide just compensation for acceptance of the condition. Here, if the Commission had required the Nollans to create an easement on their land, without attaching the condition to their permit, this would have constituted a taking. Furthermore, the lack of a connection between the condition and some other purpose within the police power favors the notion that this condition was a taking. None of the Commission's proposed justifications for the condition (i.e., to protect the public's view of the beach, to prevent a psychological barrier to beach use, and to prevent beach congestion) are plausible explanations for imposing the condition. Similarly, although the Commission claims that the condition is intended as part of a comprehensive program to provide continuous public access to the beach, this is merely a statement of the Commission's goal and not a justification for requiring the Nollans to contribute their property to achieve that goal. Thus, because the condition imposed on the building permit is a taking, the government must provide just compensation to the Nollans to create the easement. The judgment of the appellate court is reversed.

Penn Central Transp. Co. v. New York City

Penn Central Transp. Co. v. New York City In determining whether a state regulation constitutes a taking under the Fifth and Fourteenth Amendments, courts should consider the economic impact of the regulation on the owner, the extent to which the regulation has interfered with the owner's reasonable investment-backed expectations, and the character of the government action involved in the regulation. In 1965, New York City (defendant) enacted the "Landmarks Preservation Law" to enable the city to designate certain buildings and neighborhoods as historical landmarks. Penn Central Transportation Co. (Penn Central) (plaintiff) owned Grand Central Terminal in New York City which was designated as a historical landmark under the law. In 1968, to increase its income, Penn Central leased the airspace above Grand Central Terminal for fifty years to UGP Properties, Inc. Penn Central expected the lease to provide it with millions of dollars of additional income every year. Penn Central and UGP then submitted two proposals for building designs to the New York City Commission and applied for permission to construct an office building above Grand Central Terminal. After lengthy hearings, the Commission denied this request on the grounds that Grand Central Terminal was a historical landmark. Penn Central brought suit in New York Supreme Court against New York City alleging that the City Commission's application of the Landmarks Preservation Law which denied its rights to build an office building above Grand Central Terminal and receive revenue from the building constituted a taking of the company's property without just compensation as required by the Fifth and Fourteenth Amendments. Precedent decisions have been essentially ad hoc, factual inquiries based entirely on the facts of an individual case, with no precise standard articulated for when principles of fairness and justice require the payment of just compensation for a taking. In response to its frustration over this lack of standards, a new multi-factor test is articulated for determining when a taking requires the payment of just compensation to a property owner. When determining whether a state regulation constitutes a taking of private property for public use with the requirement of just compensation under the Fifth and Fourteenth Amendments, courts should consider the economic impact of the regulation on the owner, the extent to which the regulation has interfered with the owner's reasonable investment-backed expectations, and the character of the government action involved in the regulation. Additionally, precedent decisions often do not find a taking when private property is destroyed to promote the health, safety, and general welfare of the public. Applying these principles to the present case, Penn Central's overall assertion that any economic restriction imposed on the use of their property under the Landmarks Preservation law constitutes a taking which requires just compensation is rejected. The economic impact of the law on Penn Central does not constitute a total diminution of the value of its property, as it can still generate revenue from renting out portions of Grand Central Terminal. It is merely prohibited from gaining additional revenue from leasing the airspace rights above the building. Penn Central's investment-backed expectations are not significantly impaired by the regulation, as the revenue from developed airspace was not an option when Penn Central first invested in the property. Finally the governmental invasion caused by the regulation is not physical (an invasion which is almost always upheld as a taking.) Rather, the government "invasion" in the present case is merely a prohibition on further development of Penn Central's property. Additionally, a significant public interest in light space was furthered by regulation which prohibits the development of airspace above the terminal.

Penn Central

Penn Central introduced the Ad Hoc Balancing Test used by courts in identifying regulatory takings. When a taking can't be categorized as one of the four per se takings, then property owners will resort to using this test. The three factors evaluated in this test are Economic Impact on the Owner Character of the Government Action Interference with Investment-Backed Expectations

Per Se Takings

Per Se Takings encompasses the four categories of takings recognized by the government based on previous cases, including (1) Physical invasion, (2) Deprivation of all (100%) economic value of the use of the land, (3) Deprivation of a core property strand, (4) Exaction. The reasonableness of the taking is not considered, and instead only the effect on the owner is considered.

Physical Invasion Takings

Physical Invasion Takings By definition, a physical taking is a taking and no balancing or reasonableness test is required. Temporary physical intrusions are not takings. They must be permanent. Courts will also consider if the intrusion introduces a stranger into the relationship? If so, there is a taking. If not, there is no taking. Is it a traditional landlord-tenant regulation? If not, there is a taking. If so, there is not taking. Typical regulations and rent control are examples. The government will argue that: (1) it's temporary, not permanent; (2) it's just a regulation of land uses (IWH); and (3) it's just a continuation of occupation by someone you let in who now won't leave, not occupation by a stranger. Plaintiffs will argue that: (1) it's permanent; (2) it's not like IWH; and (3) it's invasion by a stranger. Rent control (only exists in 3 states) has always been said to not be a taking. Limit on rent and requires the landlord not evict even after lease expires. Probably more about economic value; the landlord is getting paid. Distinction: the landlord chose this specific tenant, but is just letting them stay; not imposing a stranger. It's just a continuation of an occupation by someone you already let in. Warranty of habitability: permanent physical invasion, but not taking.

Policy Justifications for Takings in which there is a deprivation of all (100%) economic value of the use of the land

Policy Justifications for Takings in which there is a deprivation of all (100%) economic value of the use of the land Logic for 100% Rule: This makes it close to a physical taking, it's like confiscation. The original goal of the takings clause was to stop confiscations. Takings clause is designed to protect citizens from government and so we must have clear rules. Argument against 100% Rule: 100% is kind of arbitrary (95% prevention gets nothing?). Immediately comes under dispute to define the elements of the rule and ends up being very subjective in defining what a nuisance is. Arguments for the Lucas Approach: There is a desire to have clear rules defined for what the government can and cannot do. Balancing creates uncertainty and creates opportunity for abuse of power. Arguments against the Lucas Approach: Defining clear rules in these situations is near impossible by defintion. By creating clear rules we end up with a worse subjective analysis that hinges upon the subjective interpretation of what constitutes a nuisance. 100% is kind of arbitrary (95% prevention gets nothing?). Very few takings cases ever succeed using Lucas as an argument.

Policy Justifications for Takings in which there is an unreasonable or unrelated exaction demanded.

Policy Justifications for Takings in which there is an unreasonable or unrelated exaction demanded. Critique of Nolan/Dolan Tests: This interferes with efficient and realistic land use policymaking: government will just reject the permit instead of bargaining. Government can always just say no, but now they can't tell an owner "yes, but..." or "yes, if..." which creates a bad result for owners and an incentive for the government to say no. Decision is definitely not pro-owners, even though it was created to prevent the government from extorting owners. Improper judicial role: Court has to engage in a very fact & policy intensive decision about proportionality, which should left to experts (such as administrative agencies and legislatures). Critique of Koontz: This destroys the original logic behind Nolan/Dolan - since the government could always tax or create a fee for the permit approval, conditioning the permit on paying the fee doesn't allow the government to get something that it could not have gotten otherwise (with a tax). This requires the court to engage in even more drastic policy analysis: every fee is subject to analysis of whether it's roughly proportionate to its effects. Arguments against exactions limitations (tests): Limiting the government's ability to negotiate will discourage the government from allowing development. Practically, if the government doesn't like an activity, they can just say no. The gov't doesn't have to allow Dolan to add onto her store if it doesn't want the externalities of it. So the tests allow you to say "no" but not "yes, if" Arguments for the tests: Keeps the government from extorting individuals. You can't allow the government to get stuff it cannot otherwise get just by making it a condition of something else. The gov't can't take Dolan's land and make a bike path without it being a taking, so how can you allow the gov't to get it by making it a condition of rezoning her property without compensating her. We have so many zoning laws that you basically have to get permission to do anything, so there's a large opportunity for the gov't to abuse its power. Administrability: You're asking the court to engage in very heavy-duty policy making. Judges don't want to do this policy making, and are just allowing the gov't to do whatever it wants. Typical End result: If you're a repeat player with the gov't, you just offer money up front without the gov't requesting it, and therefore Nolan/Dolan/Koontz doesn't apply. The non-repeat players don't know what to offer, and the end result is then that developers can still get the bargains they want but individual owners largely cannot. It's very easy when you're sitting on the Supreme court to require the judges to do these tests, but lower judges don't want to do it and don't really know how to do it, so they pretty much just allow it through.

Policy Justifications for the Kelo test.

Policy Justifications for the Kelo test. Anti-Kelo: Rights based: Taking someone's land and giving it to another infringes on our right of security in land ownership. Social utility: There are always potentially better uses for your land, and it's a huge disincentive to develop your land if you're always living under the threat of it being taken away. The government will target weaker owners. The poorer a person is, the less valuable their land is, and so it is easier for the government to take it. This can cause disparate racial impact. Kelo is about a white middle class party. There are cases pursued by poorer racial minorities with equal merit that do not receive the same judicial treatment. Pro-Kelo: There is no clear distinction between traditional and non-traditional public use. There exists the same risk of corruption and discrimination. It's not clear that there's a difference between economic development and blight prevention.

Regulatory Takings

Regulatory Takings exist when a government regulation limits the uses of private property to such a degree that the regulation effectively deprives the property owners of economically reasonable use or value of their property to such an extent that it deprives them of utility or value of that property, even though the regulation does not formally divest them of title to it.

Stop the Beach Renourishment v. Florida

Stop the Beach Renourishment v. Florida (1) To constitute a taking in violation of the Fifth Amendment, a property owner must show that he has a vested and future right superior to that of the state and in contravention to state law. The Florida Department of Environmental Protection (defendant) granted the city of Destin and Walton County, Florida a permit to restore a portion of oceanfront beach by adding 75 feet of dry sand to the ocean side of the mean high-water line (i.e., the average reach of high tide, which is also the boundary between privately-owned property and state-owned property). Stop the Beach Renourishment, Inc., a group of beachfront property owners in the project's area (SBR) (plaintiffs), brought suit, alleging that the project constituted an uncompensated taking under the Fifth Amendment. Specifically, SBR alleged that the project infringed upon their rights to receive natural accretions to their property—which they were entitled to under state law—because after the project's completion, the accretions would occur beyond the boundary line and would be reaped by the state, rather than the property owners. In addition, SBR claimed that the project was an unconstitutional taking of their right to have their property contact the ocean directly. (1) Yes. To constitute a taking in violation of the Fifth Amendment, a property owner must show that he has a vested and future right superior to that of the state and in contravention to state law. Generally, state law defines property interests that exist both above land and beneath the water. The State of Florida owns in trust for the public the land permanently submerged beneath the water and the foreshore, the land between the low-tide line and the mean high-water line. Littoral owners have property rights to accretions that gradually build up over time at the water's edge. However, when sand and sediment is placed to submerged land by the doctrine of avulsion, those property rights cease to exist. In this case, SBR contends the deposits of sand constitute a taking of private property because it cuts off their right to future accretions. The Takings Clause of the Fifth Amendment bars a state from taking property without paying for it. SBR must show that littoral property owners have rights to future accretions and contact with the water that supersedes the state's right to fill in the submerged land it owns. First, the state, as the owner of the submerged land adjacent to the littoral property, has the right to fill the land for the public's use. Second, if an avulsion exposes land previously submerged, it continues to belong to the state even if it prevents a littoral owner from having property rights to the water's edge. Both concepts are supported by state law and case law. Here, the Florida Supreme Court correctly concluded that the state's use of the doctrine of avulsion to place sand and sediment along the submerged beach supersedes the rights of littoral owners. It may appear counter-intuitive to allow a state to deprive owners of certain property rights through the use of its own state-created avulsion, but the Takings Clause only protects rights as they are established under state law.

Taking for Non-Public Use

Taking for Non-Public Use can also be argued for when there is a dispute over whether the beneficiary of the government action is a private party. In these situations, neither party disagrees that a taking has occurred and that just compensation is owed. The issue is over whether the taking was made for a non-public (private) use. If so, the taking is in violation of the Fifth Amendment. The essential question becomes whether or not there is a distinction between traditional public use and non-traditional private use with respect to benefit to the public.

There are three elements required for takings:

Taking of private property For Public Use Without Just Compensation

Takings Analysis

Takings Analysis First try to prove there is a per se taking. If that fails, go to the Penn Central Ad Hoc balancing test. If that fails, try to prove there is a judicial taking, or that that purpose of the taking is not for public use.

Takings

Takings are defined as a seizure of private property or a substantial deprivation of the right to its free use or enjoyment that is caused by government action and especially by the exercise of eminent domain and for which just compensation to the owner must be given according to the Fifth and Fourteenth Amendments.

Takings in which there is a deprivation of a core property righ

Takings in which there is a deprivation of a core property right also constitute per se takings. If a party is to lose an essential property right, this is automatically considered a taking. Babbitt illustrates how this works when the right to convey and transfer property is taken away. Courts consider how much of the property right was deprived. What is a core property right? Courts argue that personal property can be regulated more than real property, The government will argue that The property right wasn't taken in its entirety, or That it is not an essential property right that is being taken. (Feather and Big NYC Soda Cup examples). Plaintiffs will argue that The government is creating an unconstitutional restraint on alienation, and that an essential property right was taken away in its entirety.

Takings in which there is a deprivation of all (100%) economic value of the use of the land

Takings in which there is a deprivation of all (100%) economic value of the use of the land is also recognized as a per se taking. The elements courts analyze in identifying this kind of takings are (1) how 100% if economic value is defined (2) what the denominator is for defining the property (3) whether or not the land use in dispute is a nuisance. Lucas Rule A new per se rule is suggested as a result. When a state regulation deprives private property of all economic value, that regulation constitutes a taking and the owner of the property must be paid just compensation. An exception to this rule, however, exists for economic uses of private property not originally contemplated by the owner's title or property rights when acquiring the property. In enacting this rule, there is also a prohibition on "noxious uses" of property found in the common law of nuisances. Owners will argue: That the restriction resulted in the owner losing 100% of the economic value provided by the property. This is very difficult to prove, as the requirement is absolute. The government will argue: That the value of property and amount of the loss should be defined broadly. (100% loss of 10% of land is NOT 100%. You can still use the land elsewhere in the other 90%) Denominator Issue: we should look at the whole lot; it's okay if you lost value of small portion of lot as long as some part of lot still has value. Government prefers larger denominator (whole lot) and owner smaller (affected portion). Majority takes government's approach, basically killing any Lucas claim. The government could also claim that the use in dispute is a nuisance. If the land use in dispute is causing a nuisance, the government was just preventing a nuisance, and therefore didn't take anything from the owner because he didn't hold that stick in the bundle of rights to begin with. If an owner didn't have a traditional right under common law for the land use in dispute, then owner didn't lose anything when the government enacted a statute that prohibited the use.

Takings in which there is an unreasonable or unrelated exaction demanded

Takings in which there is an unreasonable or unrelated exaction demanded also constitute per se takings. Exaction is the action of demanding and obtaining something from someone, especially a payment or service. This a concept in US real property law where a condition for development is imposed on a parcel of land that requires the developer to mitigate anticipated negative impacts of the development (quid pro quos). Courts require that there be rough proportionality and essential nexus between the proposed land use and exaction for there to be a taking identified. Rough proportionality test: Is there (reasonable) proportion between what the government is asking for and what the owner is asking for? A critique of the test is that the "proportion" is not defined. Courts will consider if there is there some alternative strategy that can solve the harm without infringing upon the owner's property rights? Is the intervention sufficient to solve the harm? Essential nexus test: Is there a connection between what the effects of what the owner is asking for and the concession the government is asking from the owner in exchange? Courts consider what is the connection between the effect on the general public and what the government is asking of the owner. Is there a connection between the property right infringement and the harm to alleviate? Nolan and Dolan Nolan: nexus not satisfied because blocking views isn't related to the city's request to connect the beaches so people can walk. This met the public use requirement, but did not meet the essential nexus requirement. Dolan: Tigard. Nexus is satisfied because when she paves the road it will create more runoff. But the rough proportionality test is not satisfied because the government was asking for more land than Dolan was going to effect. In Koontz, the court decided that the Nolan test applied to monetary exactions. Plaintiffs will argue that There is no connection between the exaction and effects of the proposed development. The exaction requested by the government is not reasonably proportionate to the effects the development will have on the general public. When property development is so dependent on zoning and land-use regulation, the government holds all the power and can get anything out of conditioning and exactions. The government will argue The exaction is a general legislative enactment and not an individualized one, falling outside the scope of Nolan/Dolan/Koontz. That the exaction is related and proportional to the effects of what the owner is asking for.

Koontz v. St. Johns

The government's demand for property from a land-use permit applicant must have a nexus and rough proportionality between the demand and the effects of the proposed land use even when the government denies the permit and even when the government's demand is for money. Coy Koontz (plaintiff) applied to the St. Johns River Water Management District (District) (defendant) for a permit to develop a portion of his property that was zoned as wetlands. The District denied the application because Koontz refused to either (1) reduce the size of his development area and deed an easement to the government on the rest of the property, or (2) fund improvements to District-owned land several miles away. Koontz brought suit against the District, arguing that its decision violated the Takings Clause of the Fifth Amendment. The trial court found in favor of Koontz, holding that the District's denial of the application violated Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994). The Florida Supreme Court reversed, distinguishing Nollan and Dolan on the grounds that (1) the District did not condition approval of the application on any action by Koontz, but rather denied it, and (2) the District requested monetary payment rather than a direct interest in real property. The United States Supreme Court granted certiorari. Nollan and Dolan held that the government may not condition a land use permit approval on the applicant giving up a portion of the property unless there is a nexus and rough proportionality between the condition and the effects of the proposed land use. The Court finds that these cases apply even when the government denies the permit (versus conditioning approval) and even when the government's demand is for money (versus an interest in real property). First, the Court does not find any significant difference between conditions precedent and conditions subsequent in this case. There is no practical difference between denying a permit for an applicant's failure to agree to a condition and conditioning approval of a permit on that same condition. Accordingly, the fact that the District denied that application does not enable it to circumvent the requirements of Nollan and Dolan. Second, the fact that the District gave Koontz an option to simply pay for improvements to another parcel of land, rather than relinquishing some of his own land does not allow the District to circumvent Nollan and Dolan either. There is a direct link in this case between the condition to pay money and Koontz's ownership of a specific parcel of land. The condition thus implicates the Takings Clause and must comply with Nollan and Dolan. As a result of the foregoing, Nollan and Dolan apply to Koontz's land use permit application and the District's denial of that application. The Florida Supreme Court is reversed and the case is remanded for a determination of whether the District's actions complied with Nollan and Dolan.

Under the Kelo test,

Under the Kelo test, courts evaluate whether or not the taking serves or promotes a public benefit or has a public purpose. Courts will think of public use in terms of public benefit. Benefit can include property tax revenue and added jobs. While the government can grant land to a private developer, it must not be a pretext for a benefit that is solely private for a particular party or developer. Is the taking part of an overall plan of development for that specific area? There are two dissents to Kelo from Justices O'Connor and Thomas. O'Connor says that the government doesn't have to own the property or keep the property open to the public after the taking occurs. If the property taken by the government is given to a private party, the only way it could be for the public use is for it to be eliminating a harm emanating from the property before the taking. These "blighted" areas are considered to be creating a nuisance, and so the taking creates a public benefit by ridding the area of the blight, or nuisance. Test is a public use if the existing use of the land creates harm, and just by stopping the current use, you are generating a public benefit by eliminating the harm. If you have blighted property, once you take it, it is benefitting the public. Thomas argued that "public use" must include public ownership, or at least necessitate the property being open to the public. States responded to Kelo by changing their constitutions to recognize takings more broadly. Many states add public use requirements. Some states ban takings for economic development, while others don't add any other requirements.

Murr v. Wisconsin

Where a landowner owns adjacent tracts of land, the tracts constitute one parcel for purposes of the Takings Clause if the owner's reasonable expectations about property ownership would lead him to expect that his holdings would be treated as one parcel. One of the lots (Lot E) was undeveloped and below the rule's minimum lot size. Both tracts were narrow and contained a bluff and a steep bank to the river, making much of the tracts hard to develop. The company conveyed its lot to the Murrs, effectively merging the lots for development purposes under the rule, which prohibited development on Lot E. The value of the combined lot was greater than the value of the combined individual lots. The Murrs sued Wisconsin, claiming that the rule constituted a regulatory taking because the Murrs were unable to develop Lot E individually Lot lines do not always define the relevant parcel of land. In making such a determination, courts consider three factors, giving the first the most weight: (1) the treatment of the property, specifically any division under state and local law; (2) the property's physical characteristics; and (3) the property's prospective value, including any effect on the owner's other holdings. Because a Takings Clause analysis requires a comparison of the property value taken with the property value remaining, the definition of the property is a key inquiry. In this case, the court of appeals did not err in defining the Murrs' tracts as one parcel and holding that the Murrs' did not prove an uncompensated taking. First, the treatment of the property under state law weighs heavily against a taking because the state law's merger provision effectively merged the lots for development purposes, and the Murrs brought the lots under common ownership after the rule's enactment. Second, the physical characteristics of the property also weigh against a taking as the lots' size and topography make it difficult to develop on each individual lot, regardless of the rule. Further, that the lots are along the river makes it reasonable for the Murrs to expect that the government might seek to protect that public waterway. Finally, the prospective value of the regulated property weighs against a taking as the value of the combined lot was greater than the value of the combined individual lots. Based on these factors, the Murrs' reasonable expectations about property ownership would lead them to anticipate that the lots would be treated as one parcel.