Regulatory Taking

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					Property II - Outline

Regulatory Taking
Gov can regulate the use of property under the police power o for protecting public health, safety, public welfare o but at some point, the regulations may become a taking o regulation is an essential power of government. o A vested interest cannot be asserted against regulation, because of conditions once obtaining. Per se – Permanent physical occupations are always takings  must compensate
  without regard to any public interests served No set formula for determining whether compensation is due for a government restriction on property  ad hoc, factual inquiries  Degree of interference with investment-backed expectations.  Protection cannot be made to depend on the size of the area permanently occupied.

Regulation is not precluded by the fact that the value of investments made in the business prior to any legislative action would be greatly diminished. No complaint could be based upon the fact that the use had been carried out for a long time.

Ex: Statue statute provided that a L may not interfere with the installation of cable equipment on his property. L brought action saying installation is a taking (the cable co. installed wires, boxes on roof and along walls). Yes – permanent physical occupation  taking.
Non Ex: Construction of a temp dam on a river to construct a tunnel - not a taking Ex: If by reason of frequency and altitude of flights, ∏ Could not use his land for any purpose his loss would be complete – taking. Ex: State requires Ls to permit 3rd parties to install swimming pools on Ls‟ rooftops for the convenience of Ts – taking


nuisance control measures are never takings

Temporary invasion o calls for a balancing processing Harm Test o If for protecting public from harm/nuisance, then police power, and noncompensable.  Can prohibit O from making a nuisance of himself o If to extract a public benefit, then eminent domain, and is compensable.  Cannot extract a public good without being for it. Ex: Law event acquired the chopping down of Cedar trees so that the theater brusque fungus does not spread to apple trees.  No taking -legislature decided that Apple trees are more important Ex: ∏‟s chicken quarantined to prevent spread of Evian influenza  No taking - scientific evidence established reasonableness of regulation Ex: state destroys healthy orange trees to prevent the spread of citrus canker and protect citrus industry  Taking - destruction conferred public benefit to the entire FLA economy Ex: ∆ sold surface land to ∏ and retained mining rights – ∏ assumed risks in K. PA act came along and prohibited coal mining that caused a house to cave in. The act is a complete destruction of property right (mining), therefore invalid as taking.

Diminution in value  when diminution in value reaches a certain magnitude, it is a exercise of eminent domain/taking  If a regulation goes too far, it will be recognized as a taking  large damage may be compensable, but small damage is not Reciprocity of advantage
o o can justify various laws. Regulations that involve reciprocal advantages and disadvantages are not a taking.

Apparent losers under a gov program might not be losers at all (or not, at least, big losers) because they are simultaneously benefited by the very action that burdens them Page 1 of 5


Property II - Outline
o If O obtains no advantage, then taking  advantage does not have to equal disadvantage

Factors of particular significance:  economic impact on the claimant  extent to which the regulation interferes with distinct investment backed expectations  character of the governmental action  taking found when there is physical invasion Diminution in property value, standing alone, does not establish a taking No taking for gov action that causes economic harm if it did not interfere with interests that were sufficiently bound up with the reasonable expectations of the claimant to constitute “property”. No taking where a gov action promotes health, safety, morals, general welfare, by prohibiting use of land. No taking for gov action that prohibits a beneficial use to which individual parcels had previously been devoted and thus caused substantial individualized harm. Taking: A state statute that substantially furthers important public policies may so frustrate distinct investment backed expectations as to amount to a taking. Taking: Gov Action that may be characterized as acquisitions of resources to permit or facilitate uniquely public functions.

Ex: Penn Central was not allowed to build a 55-story office space on top of historical landmark Grand Central Station.  ∏ Could not establish a taking it merely by showing the it had been denied the right to exploit the airspace, a valuable property interest  court focused on what is permitted not on what uses were prohibited  premitted continuing use as terminal  primitive continuing to use as office space   regarded as ∏‟s primary expectation concerning use  go to sell its TDRs Distinct investment-backed expectations (DIBE):  some courts: read DIBE out of the taking equation  some courts: find DIBE only in instances when a regulations interfere with investments that have already been made o as opposed to regulations limiting possible future investment activities Transferable development rights (TDRs):  Severs development rights from other rights and land  can be used for development beyond that which would otherwise be permitted  recipients may sell their TDR's or use them on land they own.  Provide some form of compensation  Used in: o Preservation of historic sites o preservation of farmland and open space o incentive for low income housing o regulate land use generally  TDRs can ease the burden of regulation such that it will not amount to a taking

Individual landmarks  Since there is no historic district with many owners affected, the designation of a single historic building can impose a large cost on one individual who reaps no reciprocity of benefit. While property may be regulated to a certain extent, if regulation goes too far it would be recognized as a taking. D:\Docstoc\Working\pdf\48bc9971-2ab5-49b0-b7ad-3085c5481735.doc Page 2 of 5

Property II - Outline Two discrete categories of regulatory action occam possible without case specific inquiry into the public interest advanced: 1. where there is physical invasion of the property. 2. Regulation denies all economically beneficial or productive use of land Where the state seeks to sustain regulation that deprives land of all economically benefited use, it may resist compensation only if the logically antecedent inquiry into the nature of the owner‟s estate shows that the proscribed use interests were not part of his title to begin with. Confiscatory regulations cannot be newly legislated without compensation. - Such law must do no more than duplicate the result that could have been achieved in the courts o by adjacent land owners under state law of private nuisance o by the state under its power to abate public nuisance if a regulation denies all economically beneficial uses of land, it is a categorical taking, unless the state can justify its actions as preventing a common law nuisance applying traditional state nuisance law. Ripess (or Final Decision) Doctrine A claim that the application of government regulations effects a taking is not ripe until - the gov entity charged with implementation of the regulation - has reached a final decision - regarding the application of the regulation to the property at issue. - And ∏ exhausted any state-provided proccedures Must inquire into the economic impact and interferes with a reasonable investment-backed expectations. The finality requirement is concerned with whether the initial decision maker has arrived at the definitive position. The exhaustion requirement generally refers to administrative and judicial procedures by which an injured party may seek review. If a state provided an adequate procedure for seeking just compensation, respondent could not claim violation of the just compensation clause until it used the procedure and was denied just compensation. Ex: ∏ bought beach property to build a house. State later passed beachfront management act and prevented him from building. He can not put any permanent habitable house on the land. No other use is possible. Taking unless state nuisance laws apply. Claim is not ripe (Williamson): 1. ∏ has not yet obtained a final decision regarding the application of the zoning ordinance and subdivision regulations to its property. - Resort to the procedure for obtaining variances would result in a conclusive determination by the commission - the commission's refusal to approve the preliminary plat does not determine the issue. 2. Bank did not utilize the procedures TN provides for obtaining just compensation - The state provides a procedure for inverse condemnation to obtain just compensation


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Property II - Outline While property may be regulated to a certain extent, if a regulation goes too far it will be recognized as a taking. Lucas: regulation which denies all economically beneficial or productive use of land with require compensation. Wherise a regulation places limitations on land that fall short of emanating all economically beneficial use, a taking nonetheless may have occurred. Depending on the following factors:  The regulations economic effect on the land owner.  The extent to which the regulation interferes with reasonable investment backed expectations.  The character of the government action some enactments are unreasonable and do not become less so through the passage of time or title.  Future generations have the right to challenge unreasonable limitations on the use and value of land. Ex (Palazzolo): ∏ acquired property after wetlands regulation enacted. Can not build anything on land. Not barred from brining Takings claim.

A regulation that otherwise would be unconstitutional absent compensation is not transformed into a background principle of the state‟s law by mere virtue of the passage of title.  Have to look at the nature of the land use proscribed A law does not become a background principle for subsequent owners by enactment itself Exaction  O applies for bldg permit, city may impose conditions on the development which does not benefit O but benefits the city – O to provide goods and services o Common substitute for funding public improvements. o State must show:  Must be some logical connection between an exaction and the regulation excepted in exchange for it.  Permit conditions imposed on O bear a „rough proportionality‟ to the negative impact of the development to the public Impact Fees  These are Exactions too. But they exact $ not goods. Moratorium  suspension of governmental approvals  Temporary deferment of a particular type of development D:\Docstoc\Working\pdf\48bc9971-2ab5-49b0-b7ad-3085c5481735.doc

Ex: public path to coss O‟s property for beach access

O can be required to pick a cost roughly proportionate to the injury inflicted on the city.

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Property II - Outline   Temporary delay is rather than permanent takings Takings clause governs moratoria Ex (Tahoe): temaporary moratorium on building lasted 32 months. Still no taking. Property value will rebound afer moratorium lifted.

Temporary development moratorium does not automatically amount to regulatory taking of private property requiring just compensation.  It‟s an important factor but not exclusive. Whether a temporary moratorium effecfor some listeningts a taking is neither “yes, always” nor “no, never”.  It depends upon the particular circumstances of the case. o Need to engage and essentially ad hoc, factual inquiries. After Mahon, a physical appropriation or a public use are not necessary for regulatory taking. Under Lucas, categorical rule would not apply if the diminution in value is 95% instead of 100%. a fee simple estate cannot be rendered valueless by temporary prohibition on economic use, because the property will recover value as soon as the prohibition is lifted.  Fluctuations in value during the process of governmental decisionmaking, absent extraordinary delay, are incidents of ownership – Not a taking. With a moratorium, there is a clear reciprocity of advantage.


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