Exam Guide 1 I. Right to Exclude v. Rights of Access 3

XII. Regulatory Takings

A. PROPERTY AS MEDIATOR BETWEEN CITIZENS AND THE STATE

• 
  State must have the power to pass laws regulating and limiting use of property to protect public health, safety, and welfare
  
• 
  Property rights must at the same time be defended from illegitimate encroachment by the state
  

• 
  Regulatory takings law involves determining circumstances under which government acts or regulations require compensation to property holders whose interests are negatively affected by government regulation
  

B. JUST COMPENSATION

• 
  Some states mandate payment of 125 or 150% of the fair market value (“super-compensation” statutes)
  

• 
  One exception is when there is a temporary taking, entitling business owner to compensation for loss of goodwill
  

• 
  Some states have passed legislation providing for compensation of goodwill when business is inextricably tied to particular location
  
• 
  Some states also allowed compensation for business losses if business is not easily movable because of the unique character of the property
  

C. REGULATORY TAKINGS PROBLEM

D. DETERMINATION OF TAKINGS

1. 
   The “character of the government action”
   
2. 
   The protection of “reasonable, investment-backed expectations”
   
3. 
   The “economic impact” of the regulation on the particular owner
   

1. 
   Government mandated “permanent physical invasions of property”
   
2. 
   Regulations that “completely deprive an owner of ALL economically viable use of her property”
   

1. 
   Deprivation of certain core property rights or estates in land (such as in Babbitt)
   
2. 
   Retroactive deprivation of vested rights belonging to owners who invested in reasonable reliance on a prior regulatory authorization (as in Kaiser Aetna)
   
3. 
   Required dedication of property imposed as conditions on land use development permits when those “exactions do not substantially advance the same interests that land-use authorities asserted would allow them to deny the permit altogether.” (as in Dolan and Nollan)
   

Miller v. Schoene, US (1928)

• 
  Facts: VA statute called for the destruction of red cedar trees infected by cedar rust which destroys apple trees within a 2 mile radius and the only practicable method of controlling the disease and protecting apple trees is the destruction of all infected red cedar trees within that radius.
  
• 
  Rule: When forced to such a choice the state does not exceed its constitutional powers by deciding upon the destruction of one class of property in order to save another which, in the judgment of the legislature, is of greater value to the public
  

Penn Central Transportation Co. v. New York City, US (1978)

• 
  Facts: Penn Central wasn’t allowed to construct 50 story office building above the terminal after the terminal was designated as a landmark.
  
• 
  Rule: When health, safety, morals, or general welfare would be promoted by prohibiting particular contemplated uses of land, Court has upheld land-use regulations that destroyed or adversely affected recognized real property interests
  
• 
  Rule: depriving realization of an “opportunity cost” is not a taking
  
• 
  Rule: Court unlikely to find “taking” where law doesn’t interfere with the present uses of property
  
• 
  Holding: Affirmed NYC’s Landmarks Law not a taking
  

• 
  Facts: Coal companies under a state statute were required to leave coal in place for support reasons (27 million tons of coal), depriving them of essentially all value of the support estate that they had previously purchased from the owners of the surface estates.
  
• 
  Rule: Court less likely to find “taking” where law protects public from “a significant threat to the common welfare” and property as a whole retains significant economic value
  
• 
  Holding: Did not constitute taking
  

• 
  Is law legitimately preventing harm of others or illegitimately requiring owner to contribute a benefit to community?
  
• 
  Does law illegitimately impose disparate impact on a few owners or constitute a legitimate general regulatory law affecting a class of property appropriately subject to heightened restrictions?
  

• 
  The greater the diminution in value, the more likely the regulation will be characterized as a taking, though no owner is guaranteed the most beneficial use of the property
  
• 
  A key question is how to identify the “denominator” against which the deprivation will be compared
  

• 
  A regulation is more likely to be held a taking if a citizen has already invested substantially in reasonable reliance on an existing statutory or regulatory scheme
  
• 
  A regulation is less likely to be a taking if the regulation prevents the owner from realizing an expected benefit in the future, imposing a mere opportunity cost
  

• 
  Facts: Florida legislature passes Beach and Shore Preservation Act that establishes erosion control line on beaches subjecting land seaward of line to state control for beach restoration and nourishment. Beachfront property owners allege taking of littoral rights.
  
• 
  Rule: Takings Clause bars the STATE from taking private property without paying for it, no matter which branch is the instrument of the taking
  
• 
  Rule: The Takings Clause only protects property rights as they are established under state law, not as they might have been established or ought to have been established
  
• 
  Holding: Affirmed, no violation of Fifth and Fourteenth Amendments
  

#Singer – Believes there are 2 additional categorical takings

• 
  Core property right (Babbitt, Hodel)
  
• 
  Vested rights (Kaiser Aetna)
  

#Singer – categorical/per se takings are simply an “intensification” of the ad hoc factors so they are unequivocally takings

• 
  Character of government action → permanent physical occupation
  
• 
  Diminution in value → no economically viable use
  
• 
  Interference w/ reasonable investment backed expectations → vested rights
  

Pruneyard Shopping Center v. Robins, US (1980)

• 
  Facts: PruneYard had a policy prohibiting any visitor to engage in publicly expressive activity, including the circulation of petitions, not directly related to its commercial purposes and applied this without discrimination. Appellees sought to circulate opposition to a UN resolution against “Zionism.”
  
• 
  Rule: Where state actions adopt time, place, and manner regulations to minimize interference with its intended use of property, fact that action permits a “physical invasion” of property cannot be viewed as determinative
  
• 
  Rule: Physical invasion must also unreasonably impair the value or use of property and “reasonable investment backed expectations”
  
• 
  Holding (Rehnquist): Appellants failed to demonstrate that right to exclude others was so essential that state-authorized limitation of it constitutes a “taking”
  
• 
  Dissent (Marshall): limits on governmental authority to abolish “core” common law rights, including trepass
  
• 
  Dissent (Powell): state may not compel a person to affirm a belief they do not hold
  

• 
  Facts: NY law required landlords to permit a cable TV company to install its cable facilities on property. Installations occupied portions of roof and side of building, taking up very little relative space of building.
  
• 
  Rule: When a physical intrusion reaches extreme form of a permanent physical occupation, a taking has occurred
  
• 
  Rule: constitutional protection for the rights of private property cannot be made to depend on the size of the area permanently occupied
  
• 
  Rule: an owner suffers a special kind of injury when a stranger directly invades and occupies the owner’s property
  
• 
  Holding (Marshall): Reversed; regulation is a permanent physical invasion and thus a taking, distinguishes Pruneyard as temporary physical taking
  
• 
  Dissent (Blackmun): states have long exercised police power to provide utility connections, mailboxes, smoke detectors, fire extinguishers; installment arguably increases building’s value and marketability
  
• 
  #Singer – THIS MAKES NO SENSE
  

• 
  Pumpelly v. Green Bay Co. (1872) Court finds taking when statute authorizes building of dam and flooding of plaintiff’s land (“total destruction of property and value”)
  
• 
  United States v. Causby (1946) Court found taking where military aircraft flew so close to ground that it rendered plaintiff’s home inhabitable and completely frustrated their attempts to operate their chicken farm (“owner must have exclusive control of immediate airspace for full enjoyment of land”)
  
• 
  Kaiser Aetna v. United States (1979) Court finds taking where government requires owners of private marina to provide public access to lagoon (“investment backed expectations”)
  

• 
  Nollan v. California Coastal Commission (1987) Court found a taking when a regulatory commission required a beach front owner to grant a public easement of passage along the beach as a condition of obtaining a variance to expand the house
  

• 
  Heart of Atlanta Motel, Inc. v. United States. (1964) Court finds no taking where Civil Rights Act of 1964 requires hotels and motels accept customers regardless of race
  

• 
  Block v. Hirsh. (1921) Court upheld statute permitting physical possession of apartments after termination of leases set at rent controlled levels
  
• 
  Home Building & Loan Association v. Blaisdell (1934) Court upheld mortgage moratorium law (“temporary taking” and bank entitled to rent as compensation)
  
• 
  Yee v. City of Escondido (1992) Supreme Court upheld anti-eviction law for mobile home owners (did not authorize an “unwanted physical occupation” but regulated park owners “use of property” and thus did not amount to per se taking)
  

• 
  Same laws often have exceptions allowing landlord to go out of business and devote property to uses other than residential rental
  

Lucas v. South Carolina Coastal Council, US (1992)

• 
  Facts: Beachfront Management Act enacted after plaintiff purchased parcels barred him from erecting any permanent habitable structures.
  
• 
  Rule: The fact that a particular use has long been engaged in by similarly situated owners ordinarily imports a lack of any common-law prohibition, as does fact that other landowners, similarly situated, are permitted to continue use denied to claimant
  
• 
  Rule: when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking
  
• 
  Holding (Scalia): Reversed and remanded
  
• 
  Concurrence (Kennedy): Where taking deprives property of all value, test must be whether deprivation is contrary to reasonable, investment-backed expectations
  
• 
  Dissent (Blackmun): petitioner may enjoy other attributes of ownership, such as “right to exclude others”
  
• 
  Dissent (Stevens): Wholly arbitrary and effectively freezes state common law
  

• 
  Facts: Plaintiff was denied permits to develop his waterfront property and cited Lucas in arguing he had been denied all economically viable use of his land.
  
• 
  Rule: States are not insulated from takings claims merely because an owner has acquired title after a regulatory law went into effect
  
• 
  Holding: Reversed and reserved judgment
  

• 
  Facts: A construction moratorium was placed around Lake Tahoe to formulate a plan to prevent loss of the lake’s “exceptional clarity and extended to 6 years. Plaintiffs’ argued this was a taking under Lucas.
  
• 
  Rule: Only a 100% diminution in value triggers the Lucas rule, any lesser deprivation of value is governed by the multifactor Penn Central
  
• 
  Holding (: Court refused to find a temporary building moratorium was a per se taking
  
• 
  Dissent (Rehnquist): functional effect of moratorium was to temporarily deny owners all economically viable use of land
  

• 
  Facial challenged likely to succeed only where law imposes permanent physical invasion of property (Loretto) or completely extinguishes core property right (Babbitt)
  
• 
  Otherwise, owner must demonstrate economic impact on particular parcel to show taking
  

• 
  Generally require owner apply for permit to develop land and be denied, and exhaust all appeals and administrative remedies available under state law
  
• 
  Municipal actor cannot avoid takings challenges by repetitive and unfair procedures never resulting in final determination of permissible scope
  

C. DEPRIVATION OF CORE PROPERTY RIGHTS:

Babbitt v. Youpee, US (1997)

• 
  Facts: Indian Land Consolidation Act (ILCA) sought to address problem with fractioned allotment of Indian property by escheating certain small interests to Indian tribes upon death of current owners.
  
• 
  Rule: Allowing a decedent to leave an interest only to a current owner severely restricts the number of potential successors and amounts to a taking
  

Andrus v. Allard, US (1979)

• 
  Facts: Eagle Protection Act and Migratory Bird Treaty protect bird species by prohibiting sale of eagle feathers, including those acquired prior to passage of act
  
• 
  Rule: Where an owner possesses a full “bundle” of property rights, destruction of one “strand” of the bundle is not a taking, because aggregate must be viewed in its entirety
  

Kaiser Aetna v. United States, US (1979)

• 
  Facts: Private, fee-paying marina club is compelled by federal government to provide free public access to its lagoon after investing in expensive construction project to connect the lagoon to navigable waters.
  
• 
  Rule: Taking exists where action interferes with “reasonable investment backed expectations” or imposes a forced physical invasion by strangers
  

• 
  Facts: Company signed earlier labor agreements obligating it to contribute certain amounts to trust funds established for payment of health benefits to retired coal miners. 1992 statute required contribution for retired miners who worked for it before 1966 even though it left coal business in 1966.
  
• 
  Rule: Takings clause applies only to takings of specific property interests and not general obligations to pay money from whatever funds one possesses
  
• 
  Holding: Retroactive liability effects unconstitutional deprivation of property
  

Kelo v. City of New London, US (2005)

• 
  Facts: City of New London approved development plan projected to create jobs, increase tax and other revenues, and revitalize an economically distressed city. In assembling the necessary land, the city purchased property from willing sellers and sought to use eminent domain to acquire the remainder.
  
• 
  Rule: State may not take property of one for the sole purpose of transferring it to another private party, but may transfer property if purpose of taking is for future “use by the public”
  
• 
  Rule: Promoting economic development is a traditional and long accepted function of government
  
• 
  Rule: The fact that the government’s pursuit will often benefit private parties is not alone fatal to the plan
  
• 
  Rule: When legislature’s purpose is legitimate and its means are not irrational, empirical debates over wisdom of takings are not to be carried out in federal courts
  
• 
  Holding (Stevens): Affirmed; proposed condemnations for economic development are for a public use within meaning of Fifth Amendment
  
• 
  Concurrence (Kennedy): heightened standard of review, less deference
  
• 
  Dissent (O’Connor): taking only when condemnation affirmatively harms public
  
• 
  Dissent (Thomas): objection based on textual interpretation of “public use”