When Property Is Taken
The issue whether one's property has been "taken" with the consequent requirement of just compensation can hardly arise when government institutes condemnation proceedings directed to it. Where, however, physical damage results to property because of government action, or where regulatory action limits activity on the property or otherwise deprives it of value, whether there has been a taking in the Fifth Amendment sense becomes critical.
Government Activity Not Directed at the Property. — The older cases proceeded on the basis that the requirement of just compensation for property taken for public use referred only to "direct appropriation, and not to consequential injuries resulting from the exercise of lawful power."628 Accordingly, a variety of consequential injuries were held not to constitute takings: damage to abutting property resulting from the authorization of a railroad to erect tracts, sheds, and fences over a street;629 similar deprivations, lessening the circulation of light and air and impairing access to premises, resulting from the erection of an elevated viaduct over a street, or resulting from the changing of a grade in the street.630 Nor was government held liable for the extra expense which the property owner must obligate in order to ward off the consequence of the governmental action, such as the expenses incurred by a railroad in planking an area condemned for a crossing, constructing gates, and posting gatemen,631 or by a landowner in raising the height of the dikes around his land to prevent their partial flooding consequent to private construction of a dam under public licensing.632chanrobles-red
628 Legal Tender Cases, 79 U.S. (12 Wall.) 457, 551 (1871). The Fifth Amendment "has never been supposed to have any bearing upon, or to inhibit laws that indirectly work harm and loss to individuals," the Court explained.
629 Meyer v. City of Richmond, 172 U.S. 82 (1898).
631 Chicago, B. & Q. R.R. v. City of Chicago, 166 U.S. 226 (1897).
632 Manigault v. Springs, 199 U.S. 473 (1905).
But the Court also decided long ago that land can be "taken" in the constitutional sense by physical invasion or occupation by the government, as occurs when government floods land.633 A later formulation was that "[p]roperty is taken in the constitutional sense when inroads are made upon an owner's use of it to an extent that, as between private parties, a servitude has been acquired either by agreement or in course of time."634 It was thus held that the government had imposed a servitude for which it must compensate the owner on land adjoining its fort when it repeatedly fired the guns at the fort across the land and had established a fire control service there.635 In two major cases, the Court held that the lessees or operators of airports were required to compensate the owners of adjacent land when the noise, glare, and fear of injury occasioned by the low altitude overflights during takeoffs and landings made the land unfit for the use to which the owners had applied it.636 Eventually, the term "inverse condemnation" came to be used to refer to such cases where the government has not instituted formal condemnation proceedings, but instead the property owner has sued for just compensation, claiming that governmental action or regulation has "taken" his property.637
Navigable Waters. — The repeated holdings that riparian ownership is subject to the power of Congress to regulate commerce constitute an important reservation to the developing law of liability in the taking area. When damage results consequentially from an improvement to a river's navigable capacity, or from an improvement on a nonnavigable river designed to affect navigability elsewhere, it is generally not a taking of property but merely an exercise of a servitude to which the property is always subject.638 This exception does not apply to lands above the ordinary high-water mark of a stream,639 hence is inapplicable to the damage the Government may do to such "fast lands" by causing overflows, by erosion, and otherwise, consequent on erection of dams or other improvements.640 And, when previously nonnavigable waters are made navigable by private investment, government may not, without paying compensation, simply assert a navigation servitude and direct the property owners to afford public access.641chanrobles-red
635 Portsmouth Harbor Land & Hotel Co. v. United States, 260 U.S. 327 (1922). Cf. Portsmouth Harbor Land & Hotel Co. v. United States, 250 U.S. 1 (1919); Peabody v. United States, 231 U.S. 530 (1913).
636 United States v. Causby, 328 U.S. 256 (1946); Griggs v. Allegheny County, 369 U.S. 84 (1962). A corporation chartered by Congress to construct a tunnel and operate railway trains therein was held liable for damages in a suit by one whose property was so injured by smoke and gas forced from the tunnel as to amount to a taking. Richards v. Washington Terminal Co., 233 U.S. 546 (1914).
637 "The phrase 'inverse condemnation' generally describes a cause of action against a government defendant in which a landowner may recover just compensation for a 'taking' of his property under the Fifth Amendment, even though formal condemnation proceedings in exercise of the sovereign's power of eminent domain have not been instituted by the government entity." San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621, 638 n.2 (1981) (Justice Brennan dissenting). See also United States v. Clarke, 445 U.S. 253, 257 (1980); Agins v. City of Tiburon, 447 U.S. 255, 258 n.2 (1980).
638 Gibson v. United States, 166 U.S. 269 (1897); Lewis Blue Point Oyster Co. v. Briggs, 229 U.S. 82 (1913); United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53 (1913); United States v. Appalachian Power Co., 311 U.S. 377 (1940); United States v. Commodore Park, Inc., 324 U.S. 386 (1945); United States v. Willow River Power Co., 324 U.S. 499 (1945); United States v. Twin City Power Co., 350 U.S. 222 (1956); United States v. Rands, 389 U.S. 121 (1967).
Regulatory Takings. — While it is established that government may take private property, with compensation, to promote the public interest, that interest also may be served by regulation of property use pursuant to the police power, and for years there was broad dicta that no one may claim damages due to a police regulation designed to secure the common welfare, especially in the area of health and safety regulations.642 "The distinguishing characteristic between eminent domain and the police power is that the former involves the taking of property because of its need for the public use while the latter involves the regulation of such property to prevent the use thereof in a manner that is detrimental to the public interest."643 But regulation may deprive an owner of most or all beneficial use of his property and may destroy the values of the property for the purposes to which it is suited.644 The older cases flatly denied the possibility of compensation for this diminution of property values,645 but the Court in 1922 established as a general principle that "if regulation goes too far it will be recognized as a taking."646chanrobles-red
640 United States v. Lynah, 188 U.S. 445 (1903); United States v. Cress, 243 U.S. 316 (1917); Jacobs v. United States, 290 U.S. 13 (1933); United States v. Dickinson, 331 U.S. 745 (1947); United States v. Kansas City Ins. Co., 339 U.S. 799 (1950); United States v. Virginia Electric & Power Co., 365 U.S. 624 (1961).
642 Mugler v. Kansas, 123 U.S. 623, 668-69 (1887). See also The Legal Tender Cases, 79 U.S. (12 Wall.) 457, 551 (1871); Chicago, B. & Q. R.R. v. City of Chicago, 166 U.S. 226, 255 (1897); Omnia Commercial Co. v. United States, 261 U.S. 502 (1923); Norman v. Baltimore & Ohio R.R., 294 U.S. 240 (1935).
643 1 NICHOLS' THE LAW OF EMINENT DOMAIN § 1.42 (J. Sackman, 3d rev. ed. 1973).
644 E.g., Hadacheck v. Sebastian, 239 U.S. 394 (1915) (ordinance upheld restricting owner of brick factory from continuing his use after residential growth surrounding factory made use noxious, even though value of property was reduced by more than 90%); Miller v. Schoene, 276 U.S. 272 (1928) (no compensation due owner's loss of red cedar trees ordered destroyed because they were infected with rust that threatened contamination of neighboring apple orchards: preferment of public interest in saving cash crop to property interest in ornamental trees was rational).
In the Mahon case, Justice Holmes for the Court, over Justice Brandeis' vigorous dissent, held unconstitutional a state statute prohibiting subsurface mining in regions where it presented a danger of subsidence for homeowners. The homeowners had purchased by deeds that reserved to the coal companies ownership of sub-surface mining rights and that held the companies harmless for damage caused by subsurface mining operations. The statute thus gave the homeowners more than they had been able to obtain through contracting, and at the same time deprived the coal companies of the entire value of their subsurface estates. The Court observed that "[f]or practical purposes, the right to coal consists in the right to mine," and that the statute, by making it "commercially impracticable to mine certain coal," had essentially "the same effect for constitutional purposes as appropriating or destroying it."647 The regulation, therefore, in precluding the companies from exercising any mining rights whatever, went "too far."648 However, when presented 65 years later with a very similar restriction on coal mining, the Court upheld it, pointing out that, unlike its predecessor, the newer law identified important public interests.649
The Court had been early concerned with the imposition upon one or a few individuals of the costs of furthering the public interest.650 But it was with respect to zoning, in the context of substantive due process, that the Court first experienced some difficulty in this regard. The Court's first zoning case involved a real estate company's challenge to a comprehensive municipal zoning ordinance, alleging that the ordinance prevented development of its land for industrial purposes and thereby reduced its value from $10,000 an acre to $2,500 an acre.651 Acknowledging that zoning was of recent origin, the Court observed that it must find its justification in the police power and be evaluated by the constitutional standards applied to exercises of the police power. After considering traditional nuisance law, the Court determined that the public interest was served by segregation of incompatible land uses and the ordinance was thus valid on its face; whether its application to diminish property values in any particular case was also valid would depend, the Court said, upon a finding that it was not "clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare."652 A few years later the Court, again relying on due process rather than taking law, did invalidate the application of a zoning ordinance to a tract of land, finding that the tract would be rendered nearly worthless and that to exempt the tract would impair no substantial municipal interest.653 But then the Court withdrew from the land-use scene until the 1970s, giving little attention to States and their municipalities as they developed more comprehensive zoning techniques.654chanrobles-red
645 Mugler v. Kansas, 123 U.S. 623, 668-69 (1887) (ban on manufacture of liquor greatly devalued plaintiff's plant and machinery; no taking possible simply because of legislation deeming a use injurious to public health and welfare).
646 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). See also Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (a regulation that deprives a property owner of all beneficial use of his property requires compensation, unless the owner's proposed use is one prohibited by background principles of property or nuisance law existing at the time the property was acquired).
647 260 U.S. at 414-15.
648 260 U.S. at 415. In dissent, Justice Brandeis argued that a restriction imposed to abridge the owner's exercise of his rights in order to prohibit a noxious use or to protect the public health and safety simply could not be a taking, because the owner retained his interest and his possession. Id. at 416.
649 Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987).
650 Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405 (1935) (government may not require railroad at its own expense to separate the grade of a railroad track from that of an interstate highway). See also Panhandle Eastern Pipe Line Co. v. State Comm'n, 294 U.S. 613 (1935); Atchison, T. & S. F. Ry. v. Public Utility Comm'n, 346 U.S. 346 (1953), and compare the Court's two decisions in Georgia Ry. & Electric Co. v. City of Decatur, 295 U.S. 165 (1935), and 297 U.S. 620 (1936).
651 Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926).
652 272 U.S. at 395. See also Zahn v. Board of Public Works, 274 U.S. 325 (1927).
653 Nectow v. City of Cambridge, 277 U.S. 183 (1928).
654 Initially, the Court's return to the land-use area involved substantive due process, not takings. Village of Belle Terre v. Boraas, 416 U.S. 1 (1974) (sustaining single-family zoning as applied to group of college students sharing a house); Moore v. City of East Cleveland, 431 U.S. 494 (1977) (voiding single-family zoning so strictly construed as to bar a grandmother from living with two grandchildren of different children). See also City of Eastlake v. Forest City Enterprises, 426 U.S. 668 (1976).
As governmental regulation of property has expanded over the years—in terms of zoning and land use controls, environmental regulations, and the like—the Court never developed, as it admitted, a "set formula to determine where regulation ends and taking begins."655 Rather, as one commentator remarked, its decisions constitute a "crazy quilt pattern" of judgments.656 Nonetheless, the Court has now formulated general principles that guide many of its decisions in the area.
656 Dunham, Griggs v. Allegheny County in Perspective: Thirty Years of Supreme Court Expropriation Law, SUP. CT. REV. 63 (1962). For an effort to ground taking jurisprudence in its philosophical precepts, see Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of 'Just Compensation' Law, 80 HARV. L. REV. 1165 (1967).
In Penn Central Transportation Co. v. City of New York,657 the Court, while cautioning that regulatory takings cases require "essentially ad hoc, factual inquiries," nonetheless laid out general guidance for determining whether a regulatory taking has occurred. "The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are . . . relevant considerations. So too, is the character of the governmental action. A 'taking' may more readily be found when the interference with property can be characterized as a physical invasion by government than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good."658
At issue in Penn Central was the City's landmarks preservation law, as applied to deny approval to construct a 53-story office building atop Grand Central Terminal. The Court upheld the landmarks law against Penn Central's takings claim through application of the principles set forth above. The economic impact on Penn Central was considered: the Company could still make a "reasonable return" on its investment by continuing to use the facility as a rail terminal with office rentals and concessions, and the City specifically permitted owners of landmark sites to transfer to other sites the right to develop those sites beyond the otherwise permissible zoning restrictions, a valuable right that mitigated the burden otherwise to be suffered by the owner. As for the character of the governmental regulation, the Court found the landmarks law to be an economic regulation rather than a governmental appropriation of property, the preservation of historic sites being a permissible goal and one that served the public interest.659
Justice Holmes began his analysis in Mahon with the observation that "[g]overnment hardly could go on if to some extent values incident to property could not be diminished without paying for every . . . change in the general law,"660 and Penn Central's economic impact standard also leaves ample room for recognition of this principle. Thus, the Court can easily hold that a mere permit requirement does not amount to a taking,661 nor does a simple recordation requirement.662 The tests become more useful, however, when compliance with regulation becomes more onerous.
657 438 U.S. 104 (1978). Justices Rehnquist and Stevens and Chief Justice Burger dissented. Id. at 138.
658 438 U.S. at 124 (citations omitted).
659 438 U.S. at 124-28, 135-38.
660 260 U.S. at 413.
661 United States v. Riverside Bayview Homes, 474 U.S. 121 (1985) (requirement that permit be obtained for filling privately-owned wetlands is not a taking, although permit denial resulting in prevention of economically viable use of land may be).
662 Texaco v. Short, 454 U.S. 516 (1982) (state statute deeming mineral claims lapsed upon failure of putative owners to take prescribed steps is not a taking); United States v. Locke, 471 U.S. 84 (1984) (reasonable regulation of recordation of mining claim is not a taking).
Several times the Court has relied on the concept of "distinct [or, in later cases, 'reasonable'] investment-backed expectations" first introduced in Penn Central. In Ruckelshaus v. Monsanto Co.,663 the Court used the concept to determine whether a taking had resulted from the government's disclosure of trade secret information submitted with applications for pesticide registrations. Disclosure of data that had been submitted from 1972 to 1978, a period when the statute guaranteed confidentiality and thus "formed the basis of a distinct investment-backed expectation," would have destroyed the property value of the trade secret and constituted a taking.664 Following 1978 amendments setting forth conditions of data disclosure, however, applicants voluntarily submitting data in exchange for the economic benefits of registration had no reasonable expectation of additional protections of confidentiality.665 Relying less heavily on the concept but rejecting an assertion that reasonable investment backed-expectations had been upset, the Court in Connolly v. Pension Benefit Guaranty Corp.666 upheld retroactive imposition of liability for pension plan withdrawal on the basis that employers had at least constructive notice that Congress might buttress the legislative scheme to accomplish its legislative aim that employees receive promised benefits. However, where a statute imposes severe and "substantially disproportionate" retroactive liability based on conduct several decades earlier, on parties that could not have anticipated the liability, a taking (or violation of due process) may occur. On this rationale, the Court in Eastern Enterprises v. Apfel667 struck down the Coal Miner Retiree Health Benefit Act's requirement that companies formerly engaged in mining pay miner retiree health benefits, as applied to a company that spun off its mining operation in 1965 before collective bargaining agreements included an express promise of lifetime benefits.
663 467 U.S. 986 (1984).
664 467 U.S. at 1011.
665 467 U.S. at 1006-07. Similarly, disclosure of data submitted before the confidentiality guarantee was placed in the law did not frustrate reasonable expectations, the Trade Secrets Act merely protecting against "unauthorized" disclosure. Id. at 1008-10.
666 475 U.S. 211 (1986). Accord, Concrete Pipe & Products v. Construction Laborers Pension Trust, 508 U.S. 602, 645-46 (1993). In addition, see Kaiser Aetna v. United States, 444 U.S. 164, 179 (1979) (involving frustration of "expectancies" developed through improvements to private land and governmental approval of permits), and PruneYard Shopping Center v. Robins, 447 U.S. 74, 84 (1980) (characterizing and distinguishing Kaiser Aetna as involving interference with "reasonable investment backed expectations").
667 524 U.S. 498 (1998). The split doctrinal basis of Eastern Enterprises under-cuts its precedent value, and that of Connolly and Concrete Pipe, for takings law. A majority of the justices (one supporting the judgment and four dissenters) found substantive due process, not takings law, to provide the analytical framework where, as in Eastern Enterprises, the gravamen of the complaint is the unfairness and irrationality of the statute, rather than its economic impact.
On the other hand, a federal ban on the sale of artifacts made from eagle feathers was sustained as applied to the existing inventory of a commercial dealer in such artifacts, the Court not directly addressing the ban's obvious interference with investment-backed expectations.668 The Court merely noted that the ban served a substantial public purpose in protecting the eagle from extinction, that the owner still had viable economic uses for his holdings, such as displaying them in a museum and charging admission, and that he still had the value of possession.669
The Court has made plain that in applying the economic impact and investment-backed expectations factors of Penn Central, courts are to compare what the property owner has lost through the challenged government action with what the owner retains. Discharging this mandate requires a court to define the extent of plaintiff's property—the "parcel as a whole"—that sets the scope of analysis. The Supreme Court holds that takings law "does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated."670 But while this apparently means that one may not exclude acreage from the relevant parcel solely to isolate the regulated portion, there are numerous arguments for excluding acreage (purchased by plaintiff at a different time, in different zoning status, etc.) that the Court has not addressed. And roiling the waters are persistent expressions of concern by the conservative justices, often in dicta, about the possible unfairness of an absolute parcel-as-a-whole rule.671 Most recently, however, in Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency,672 a six-justice majority including Justices Kennedy and O'Connor offered a ringing endorsement of relevant-parcel doctrine. Tahoe-Sierra affirmed the established spatial (court must consider the entire relevant tract) and functional (court must consider plaintiff's full bundle of rights) dimensions of the doctrine,673 and added a temporal one (court must consider the entire time span of plaintiff's property interest). Invoking this temporal dimension, the Court held that temporary land-use development moratoria do not effect a total elimination of use, since use and value return in the period following the moratorium's expiration. Thus, such moratoria are to be tested under the ad hoc, multifactor Penn Central test, rather than the per se approach to "total takings" discussed further on.
668 Andrus v. Allard, 444 U.S. 51 (1979).
669 Similarly, the Court in Goldblatt had pointed out that the record contained no indication that the mining prohibition would reduce the value of the property in question. 369 U.S. at 594. Contrast Hodel v. Irving, 481 U.S. 704 (1987), where the Court found insufficient justification for a complete abrogation of the right to pass on to heirs interests in certain fractionated property. Note as well the differing views expressed in Irving as to whether that case limits Andrus v. Allard to its facts. Id. at 718 (Justice Brennan concurring, 719 (Justice Scalia concurring). And see the suggestion in Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027-28 (1992), that Allard may rest on a distinction between permissible regulation of personal property, on the one hand, and real property, on the other.
670 Penn Central, 438 U.S. at 130. The identical principle was reaffirmed in Key-stone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 497 (1987); Concrete Pipe & Products of California, Inc. v. Construction Laborers Pension Trust, 508 U.S. 602, 644 (1993); and Tahoe-Sierra, 122 S. Ct. at 1481.
671 See, e.g., Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1016 n.7 (1992) ("answer ... may lie in how the owner's reasonable expectations have been shaped by the State's law of property"). Justice Kennedy provided extended dicta in his majority opinion in Palazzolo v. Rhode Island, referring to this "difficult, persisting question" and noting that "we have at times expressed discomfort with the logic of this rule." 533 U.S. 606, 631 (2001).
672 122 S. Ct. 1465 (2002).
673 The spatial dimension is illustrated by the takings analysis in Penn Central, declining to segment Grand Central Terminal from the air rights over it. Functional parcel as a whole—refusing to segment one "stick" in the "bundle" of rights— was applied in Andrus v. Allard, 444 U.S. 51, 65-66 (1979), holding that denial of the right to sell Indian artifacts was not a taking in light of rights in the artifacts that were retained.
In the course of its opinion in Penn Central the Court rejected the principle that no compensation is required when regulation bans a noxious or harmful effect of land use.674 The principle, it had been contended, followed from several earlier cases, including Goldblatt v. Town of Hempstead.675 In that case, after the town had expanded around an excavation used by a company for mining sand and gravel, the town enacted an ordinance that in effect terminated further mining at the site. Declaring that no compensation was owed, the Court stated that "[a] prohibition simply upon the use of property for purposes that are declared, by valid legislation, to be injurious to the health, morals, or safety of the community, cannot, in any just sense, be deemed a taking or an appropriation of property for the public benefit. Such legislation does not disturb the owner in the control or use of his property for lawful purposes, nor restrict his right to dispose of it, but is only a declaration by the State that its use by any one, for certain forbidden purposes, is prejudicial to the public interests."676 In Penn Central, however, the Court denied that there was any such test and that prior cases had turned on the concept. "These cases are better understood as resting not on any supposed 'noxious' quality of the prohibited uses but rather on the ground that the restrictions were reasonably related to the implementation of a policy—not unlike historic preservation—expected to produce a widespread public benefit and applicable to all similarly situated property."677 More recently, in Lucas v. South Carolina Coastal Council,678 the Court explained "noxious use" analysis as merely an early characterization of police power measures that do not require compensation. "[N]oxious use logic cannot serve as a touchstone to distinguish regulatory 'takings'— which require compensation—from regulatory deprivations that do not require compensation."679chanrobles-red
674 The dissent was based upon this test. 438 U.S. at 144-46.
675 369 U.S. 590 (1962). Hadacheck v. Sebastian, 239 U.S. 394 (1915), and, perhaps, Miller v. Schoene, 276 U.S. 272 (1928), also fall under this heading, although Schoene may also be assigned to the public peril line of cases.
676 369 U.S. at 593 (quoting Mugler v. Kansas, 123 U.S. 623, 668-69 (1887). The Court posited a two-part test. First, the interests of the public required the interference, and, second, the means were reasonably necessary for the accomplishment of the purpose and were not unduly oppressive of the individual. 369 U.S. at 595. The test was derived from Lawton v. Steele, 152 U.S. 133, 137 (1894) (holding that state officers properly destroyed fish nets that were banned by state law in order to preserve certain fisheries from extinction).
677 438 U.S. at 133-34 n.30.
678 505 U.S. 1003 (1992).
679 505 U.S. at 1026. The Penn Central majority also rejected the dissent's contention, 438 U.S. at 147-50, that regulation of property use constitutes a taking unless it spreads its distribution of benefits and burdens broadly so that each person burdened has at the same time the enjoyment of the benefit of the restraint upon his neighbors. The Court deemed it immaterial that the landmarks law has a more severe impact on some landowners than on others: "Legislation designed to promote the general welfare commonly burdens some more than others." Id. at 133-34.
Penn Central is not the only guide to when an inverse condemnation has occurred; other criteria have emerged from other cases before and after Penn Central. The Court has long recognized a per se takings rule for certain physical invasions: when government permanently680 occupies (or authorizes someone else to permanently occupy property), the action constitutes a taking and compensation must be paid regardless of the public interests served by the occupation or the extent of damage to the parcel as a whole.681 The modern case dealt with a law that required landlords to permit a cable television company to install its cable facilities upon their buildings; although the equipment occupied only about 1 c cubic feet of space on the exterior of each building and had only de minimis economic impact, a divided Court held that the regulation authorized a permanent physical occupation of the property and thus constituted a taking.682 Recently, the Court sharpened further the distinction between regulatory takings and permanent physical occupations by declaring it "inappropriate" to use case law from either realm as controlling precedent in the other.683 Physical invasions falling short of permanent physical occupations remain subject to Penn Central.
680 By contrast, the per se rule is inapplicable to temporary physical occupations of land. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 428, 434 (1982); PruneYard Shopping Center v. Robins, 447 U.S. 74, 84 (1980).
681 The rule emerged from cases involving flooding of lands and erection of poles for telegraph lines, e.g., Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166 (1872); City of St. Louis v. Western Union Tel. Co., 148 U.S. 92 (1893); Western Union Tel. Co. v. Pennsylvania R.R., 195 U.S. 540 (1904).
A second per se taking rule is of more recent vintage. Land use controls constitute takings, the Court stated in Agins v. City of Tiburon, if they do not "substantially advance legitimate governmental interests,"684 or if they deny a property owner "economically viable use of his land."685 This second Agins criterion creates a categorical rule: when, with respect to the parcel as a whole, the landowner "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."686 The only exceptions, the Court explained in Lucas, are for those restrictions that come with the property as title encumbrances or other legally enforceable limitations. Regulations "so severe" as to prohibit all economically beneficial use of land "cannot be newly legislated or decreed (without compensation), but must inhere in the title itself, in the restrictions that background principles of the State's law of property and nuisance already place upon land ownership. A law or decree with such an effect must, in other words, do no more than duplicate the result that could have been achieved in the courts— by adjacent land owners (or other uniquely affected persons) under the State's law of private nuisance, or by the State under its complementary power to abate [public] nuisances . . . , or otherwise."687 Thus, while there is no broad "noxious use" exception separating police power regulations from takings, there is a narrower "background principles" exception based on the law of nuisance and unspecified "property law" principles.
682 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). Loretto was distinguished in FCC v. Florida Power Corp., 480 U.S. 245 (1987); regulation of the rates that utilities may charge cable companies for pole attachments does not constitute a taking in the absence of any requirement that utilities allow attachment and acquiesce in physical occupation of their property. See also Yee v. City of Escondido, 503 U.S. 519 (1992) (no physical occupation was occasioned by regulations in effect preventing mobile home park owners from setting rents or determining who their tenants would be; owners could still determine whether their land would be used for a trailer park and could evict tenants in order to change the use of their land).
683 Tahoe-Sierra, 122 S. Ct. at 1479.
684 This test was derived from Nectow v. City of Cambridge, 277 U.S. 183 (1928), a due process case.
686 Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992) (emphasis in original). The Agins/ Lucas total deprivation rule does not create an allor-nothing situation, since "the landowner whose deprivation is one step short of complete" may still be able to recover through application of the Penn Central economic impact and "distinct [or reasonable] investment-backed expectations" criteria. Id. at 1019 n.8 (1992). See also Palazzolo, 533 U.S. at 632.
687 505 U.S. at 1029.
Together with the investment-backed expectations factor of Penn Central, background principles were viewed by many lower courts as supporting a "notice rule" under which a taking claim was absolutely barred if based on a restriction imposed under a regulatory regime predating plaintiff's acquisition of the property. In Palazzolo v. Rhode Island,688 the Court forcefully rejected the absolute version of the notice rule, regardless of rationale. Under such a rule, it said, "[a] State would be allowed, in effect, to put an expiration date on the Takings Clause."689 Whether any role is left for preacquisition regulation in the takings analysis, however, the Court's majority opinion did not say, leaving the issue to dueling concurrences from Justice O'Connor (prior regulation remains a factor) and Justice Scalia (prior regulation is irrelevant). Less than a year later, Justice O'Connor's concurrence carried the day in extended dicta in Tahoe-Sierra,690 though the decision failed to elucidate the factors affecting the weighting to be accorded the pre-existing regime.
The "or otherwise" reference, the Court explained in Lucas,691 was principally directed to cases holding that in times of great public peril, such as war, spreading municipal fires, and the like, property may be taken and destroyed without necessitating compensation. Thus, in United States v. Caltex,692 the owners of property destroyed by retreating United States armies in Manila during World War II were held not entitled to compensation, and in United States v. Central Eureka Mining Co.,693 the Court held that a federal order suspending the operations of a nonessential gold mine for the duration of the war in order to redistribute the miners, un-accompanied by governmental possession and use or a forced sale of the facility, was not a taking entitling the owner to compensation for loss of profits. Finally, the Court held that when federal troops occupied several buildings during a riot in order to dislodge rioters and looters who had already invaded the buildings, the action was taken as much for the owners' benefit as for the general public benefit and the owners must bear the costs of the damage inflicted on the buildings subsequent to the occupation.694chanrobles-red
688 533 U.S. 606 (2001).
689 533 U.S. at 627.
690 122 S. Ct. at 1486.
691 505 U.S. at 1029 n.16.
692 344 U.S. 149 (1952). In dissent, Justices Black and Douglas advocated the applicability of a test formulated by Justice Brandeis in Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405, 429 (1935), a regulation case, to the effect that "when particular individuals are singled out to bear the cost of advancing the public convenience, that imposition must bear some reasonable relation to the evils to be eradicated or the advantages to be secured."
693 357 U.S. 155 (1958).
694 National Bd. of YMCA v. United States, 395 U.S. 85 (1969). "An undertaking by the Government to reduce the menace from flood damages which were inevitable but for the Government's work does not constitute the Government a taker of all lands not fully and wholly protected. When undertaking to safeguard a large area from existing flood hazards, the Government does not owe compensation under the Fifth Amendment to every landowner which it fails to or cannot protect." United States v. Sponenbarger, 308 U.S. 256, 265 (1939).
The first prong of the Agins test,695 asking whether land use controls "substantially advance legitimate governmental interests," has been applied by the Court only in Nollan v. California Coastal Commission.696 There the Court held that extraction of a public access easement across a strip of beach as a condition for a permit to enlarge a beachfront home did not "substantially advance" the state's legitimate interest in preserving public view of the beach from the street in front of the lot. The easement instead was designed to allow the public to walk back and forth along the beach between two public beaches. "[U]nless the permit condition serves the same governmental purpose as the development ban," the Court concluded, "the building restriction is not a valid regulation of land use but 'an out-and-out plan of extortion."'697 "If [the government] wants an easement across the Nollans' property, it must pay for it."698 Because the Nollan Court found no essential nexus between the permit condition and the asserted government interest, it did not address whether there is any additional requirement when such a nexus does exist.699 Seven years later, however, the Court announced in Dolan v. City of Tigard700 that conditions attached to development permits must be related to the impact of the proposed development not only in nature but also in degree. Government must establish a "rough proportionality" between the burden imposed by such conditions on the property owner, and the impact of the property owner's proposed development on the community—at least in the context of adjudicated (rather than legislated) conditions.
696 483 U.S. 825 (1987).
697 483 U.S. at 837.
698 483 U.S. at 842.
699 Justice Scalia, author of the Court's opinion in Nollan, amplified his views in a concurring and dissenting opinion in Pennell v. City of San Jose, 485 U.S. 1 (1988), explaining that "common zoning regulations requiring subdividers to observe lot-size and set-back restrictions, and to dedicate certain areas to public streets, are in accord with [constitutional requirements] because the proposed property use would otherwise be the cause of" the social evil (e.g., congestion) that the regulation seeks to remedy. By contrast, the Justice asserted, a rent control restriction pegged to individual tenant hardship lacks such cause-and-effect relationship and is in reality an attempt to impose on a few individuals public burdens that "should be borne by the public as a whole." 485 U.S. at 20, 22.
700 512 U.S. 374 (1994).
Nollan and Dolan occasioned considerable debate over the breadth of what became known as the "heightened scrutiny" test. The stakes were plainly high in that the test, where it applies, lessens the traditional judicial deference to local police power and places the burden of proof as to rough proportionality on the government. In City of Monterey v. Del Monte Dunes at Monterey, Ltd.,701 the Court unanimously confined the Dolan rough proportionality test, and, by implication, the Nollan nexus test, to the exaction context that gave rise to those cases. For certain, then, is that City of Monterey bars application of rough proportionality to outright denials of development. Still unclear, however, is whether the Court meant to place outside Dolan exactions of a purely monetary nature, in contrast with the dedication conditions involved in Nollan and Dolan.702
Following the Penn Central decision, the Court grappled with the issue of the appropriate remedy property owners should pursue in objecting to land use regulations.703 The remedy question arises because there are two possible constitutional objections to be made to regulations that go "too far" in reducing the value of property or which do not substantially advance a legitimate governmental interest. The regulation may be invalidated as a denial of due process, or may be deemed a taking requiring compensation, at least for the period in which the regulation was in effect. The Court finally resolved the issue in First English Evangelical Lutheran Church v. County of Los Angeles, holding that when land use regulation is held to be a taking, compensation is due for the period of implementation prior to the holding.704 The Court recognized that, even though government may elect in such circumstances to discontinue regulation and thereby avoid compensation for a permanent property deprivation, "no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective."705 Outside the land-use context, however, the Court has now recognized a limited number of situations where invalidation, rather than compensation, remains the appropriate takings remedy.706chanrobles-red
701 526 U.S. 687 (1999).
702 City of Monterey also appears to give a lax interpretation to the "substantially advances a legitimate government interest" test of Agins, by endorsing jury instructions interpreting "substantially advance" to require only a "reasonable relationship." 526 U.S. at 704. Such a reading of City of Monterey, however, puts it squarely at odds with Nollan, 483 U.S. at 834 n.3, where the Court earlier stressed that "substantially advance" imposes a stricter standard than the due process one of rational basis.
703 See, e.g., Agins v. City of Tiburon, 447 U.S. 255 (1980) (issue not reached because property owners challenging development density restrictions had not submitted a development plan); Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 293-97 (1981), and Hodel v. Indiana, 452 U.S. 314, 333-36 (1981) (rejecting facial taking challenges to federal strip mining law).
704 482 U.S. 304 (1987). The decision was 6-3, Chief Justice Rehnquist's opinion of the Court being joined by Justices Brennan, White, Marshall, Powell, and Scalia, and Justice Stevens' dissent being joined in part by Justices Blackmun and O'Connor. The position the Court adopted had been advocated by Justice Brennan in a dissenting opinion in San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 636 (1981) (dissenting from Court's holding that state court decision was not "final judgment" under 28 U.S.C. § 1257).
705 482 U.S. at 321.
706 Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) (statute imposing generalized monetary liability); Babbitt v. Youpee, 519 U.S. 234 (1997) (amended statutory requirement that small fractional interests in allotted Indian lands escheat to tribe, rather than pass on to heirs); Hodel v. Irving, 481 U.S. 704 (1987) (pre-amendment version of escheat statute).
The process of describing general criteria to guide resolution of regulatory taking claims, begun in Penn Central, has reduced to some extent the ad hoc character of takings law. It is nonetheless true that not all cases fit neatly into the categories delimited to date, and that still other cases that might be so categorized are explained in different terms by the Court. The overriding objective, the Court frequently reminds us, is to vitalize the Takings Clause's protection against government "forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole."707 Thus a taking may be found if the effect of regulation is enrichment of the government itself rather than adjustment of the benefits and burdens of economic life in promotion of the public good.708 Similarly, the Court looks askance at governmental efforts to secure public benefits at a landowner's expense— "government actions that may be characterized as acquisitions of resources to permit or facilitate uniquely public functions."709
707 Armstrong v. United States, 364 U.S. 40, 49 (1960). For other incantations of this fairness principle, see Penn Central, 438 U.S. at 123-24; and Tahoe-Sierra Pres. Council v. Tahoe Regional Planning Agency, 122 S. Ct. 1465, 1478, 1484-89 (2002).
708 Webb's Fabulous Pharmacies v. Beckwith, 449 U.S. 155 (1980) (government retained the interest derived from funds it required to be deposited with the clerk of the county court as a precondition to certain suits; the interest earned was not reasonably related to the costs of using the courts, since a separate statute required payment for the clerk's services). By contrast, a charge for governmental services "not so clearly excessive as to belie [its] purported character as [a] user fee" does not qualify as a taking. United States v. Sperry Corp., 493 U.S. 52, 62 (1989).
709 Penn Central Transp. Co. v. New York City, 438 U.S. 104, 128 (1978). In addition to the cases cited there, see also Kaiser Aetna v. United States, 444 U.S. 164, 180 (1979) (viewed as governmental effort to turn private pond into "public aquatic park"); Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987) ("extortion" of beachfront easement for public as permit condition unrelated to purpose of permit).
On the other side of the coin, the nature as well as the extent of property interests affected by governmental regulation sometimes takes on importance. Some strands are more important than others. The right to exclude others from one's land is so basic to ownership that extinguishment of this right ordinarily constitutes a taking.710 Similarly valued is the right to pass on property to one's heirs.711 Nor must property have realizable net value to fall under the Takings Clause.712
Even though takings were found or assumed in several decisions since 1987,713 considerable obstacles remain for future litigants challenging regulatory restrictions on land use. As suggested above, regulatory takings will most likely remain difficult to establish in spite of Nollan. The Lucas fact situation, in which government regulation renders land entirely without economic use, will doubtless prove rare, as the Court itself envisioned on more than one occasion.714 Buttressing this point is Tahoe-Sierra's strong implication that the Lucas per se rule is triggered only by complete elimination of use and value, something that occurs exceedingly infrequently in the real world in light of the lingering value even undevelopable land may have as open space or for speculation. More broadly, Tahoe-Sierra is suffused with a general distaste for the use of per se rules in takings analysis, leading observers to argue that in the ordinary regulatory situation, the ad hoc Penn Central standard will often be "the only game in town.".
Failure to incur administrative (and judicial) delays can result in dismissal of an as-applied taking claim based on ripeness doctrine, an area of takings law that the Court has developed extensively since Penn Central. In the leading decision of Williamson County Regional Planning Commission v. Hamilton Bank,715 the Court announced the canonical two-part ripeness test for takings actions brought in federal court. First, for an as-applied challenge, the property owner must obtain from the regulating agency a "final, definitive position" regarding how it will apply its regulation to the owner's land. Second, when suing a state or municipality, the owner must exhaust any possibilities for obtaining compensation from the state or its courts before coming to federal court. Thus, the claim in Williamson County was found unripe because the plaintiff had failed to seek a variance (first prong of test), and had not sought compensation from the state courts in question even though they recognized inverse condemnation claims (second prong). Similarly, in MacDonald, Sommer & Frates v. County of Yolo,716 a final decision was found lacking where the landowner had been denied approval for one subdivision plan calling for intense development, but that denial had not foreclosed the possibility that a scaled-down (though still economic) version would be approved. In a somewhat different context, a taking challenge to a municipal rent control ordinance was considered "premature" in the absence of evidence that a tenant hardship provision had ever been applied to reduce what would otherwise be considered a reasonable rent increase.717 Beginning with Lucas in 1992, however, the Court's ripeness determinations have displayed an impatience with formalistic reliance on the "final decision" rule, while nonetheless explicitly reaffirming it. In Palazzolo v. Rhode Island,718 for example, the Court saw no point in requiring the landowner to apply for approval of a scaled-down development of his wetland, since the regulations at issue made plain that no development at all would be permitted there. "[O]nce it becomes clear that the agency lacks the discretion to permit any development, or the permissible uses of the property are known to a reasonable degree of certainty, a takings claim is likely to have ripened."719chanrobles-red
710 Nollan v. California Coastal Comm'n, 483 U.S. 825, 831-32 (1987) (physical occupation occurs with public easement that eliminates right to exclude others); Kaiser Aetna v. United States, 444 U.S. 164 (1979) (imposition of navigation servitude requiring public access to a privately-owned pond was a taking under the circumstances; owner's commercially valuable right to exclude others was taken, and requirement amounted to "an actual physical invasion"). But see PruneYard Shopping Center v. Robins, 447 U.S. 74, 84 (1980) (requiring shopping center to permit individuals to exercise free expression rights on property onto which public had been invited was not destructive of right to exclude others or "so essential to the use or economic value of [the] property" as to constitute a taking).
711 Hodel v. Irving, 481 U.S. 704 (1987) (complete abrogation of the right to pass on to heirs fractionated interests in lands constitutes a taking), Babbitt v. Youpee, 519 U.S. 234 (1997) (same result based on "severe" restriction of the right).
712 Phillips v. Washington Legal Foundation, 524 U.S. 156 (1998) (interest on client funds in state Interest on Lawyers Trust Account program is property of client within meaning of Takings Clause, though funds could not generate net interest in absence of program).
713 First English, Nollan, Lucas, Dolan, and City of Monterey.
714 Lucas spoke of the total taking situation to which its rule applied as "extraordinary" and "relatively rare." 505 U.S. at 1017-18. Quite recently, Tahoe-Sierra reiterated the "extraordinary" reference. 122 S. Ct. at 1483.
Facial challenges dispense with the Williamson County final decision prerequisite, though at great risk to the plaintiff in that without pursuing administrative remedies, a claimant often lacks evidence that a statute has the requisite economic impact on his or her property.720chanrobles-red
715 473 U.S. 172 (1985).
716 477 U.S. 340 (1986).
717 Pennell v. City of San Jose, 485 U.S. 1 (1988).
718 533 U.S. 606 (2001).
719 533 U.S. at 620. See also Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725 (1997) (taking claim ripe despite plaintiff's not having applied for sale of her transferrable development rights, since no discretion remains to agency and value of such rights is simple issue of fact).
720 See, e.g., Hodel v. Virginia Surface Mining & Reclamation Ass'n, 452 U.S. 264, 295-97 (1981) (facial challenge to surface mining law rejected); United States v. Riverside Bayview Homes, 474 U.S. 121, 127 (1985) (mere permit requirement does not itself take property); Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 493-502 (1987) (facial challenge to anti-subsidence mining law rejected).