The Taking Issue
Lecture Series 3
John Keller – Plan 752
Planning Law
“Nor shall private property be
taken except for a public purpose
and then on payment of just
compensation”
“The Takings Clause” the 5th
Amendment to the Constitution of the
United States
Introduction to Takings
• The First Period – Pre 1856
– The general legal conception is
that no taking can occur without
a touching
– A touching is a physical invasion
on to private property by the
government
Examples of Touching
• Brick Presbyterian Church v City of
NY
– In 1843 NYC passed a law that
prohibited “dead bodies from being
buried within the city limits”
– Brick Presbyterian Church purchased a
plot of ground next to the church for
cemetery purposes
– They brought suit against NYC on the
theory that their property had been
taken since it could no longer be used
for burial purposes
Brick Continued
• Brick’s Argument
– A regulation so severe as to
deprive an owner of all
p[practical use of the property is a
taking and due compensation
• Court’s Decision
– No reason can be advanced for
providing compensation for an
injury arising from a mere
regulation. No property was
entered and none was taken
The Wharf Case
• Commonwealth v Alger
– City of Boston passes a law in 1847
that prohibits the erection of a
wharf into the Boston harbor unless
it is less than 100 feet. The harbor
was nearly impassible by this time
because of wharf’s projecting far
out into the navigation area
Alger - Continued
• The Allegation
– Alger brings suit under the theory
that this constitutes a restraint of
free trade and deprives them of
the opportunity to use their
property to the fullest. Their
allegation is that a restraint of
trade is the same thing as the
government divesting them of all
or part of the title to their property
Alger - Decision
• The Court Finds
– This is a just restraint of an injurious
use. Government uses eminent
domain to appropriate property to
a private use and the police
power to prevent injury to the
public interest. This is not an
appropriation of property but a
restraint.
Second Period
• Civil War to Mugler
– Judicial thinking remain much the
same until after the turn of the
Century
– In order to find a taking –
government must constitute some
sort of physical invasion of private
property. If government enacted
a regulation to protect the public
from an injurious use – it was not
more than a mere regulation.
Pumpelly v Green Bay
• A Physical Invasion
– In 1871 the U.S. Army Engineers
erected a dyke along a one side
of a river.to protect a fort from
flooding. This caused the adjacent
field to flood more often than was
normal. Pumpelly sued under the
theory that the government had
taken his land as a water storage
basin
The Decision
• The Interpretation
– The court found that in the strict
sense of the law the property was
not taken by the government.
However, the floodwater, which
normally inundated the fort was
diverted to the owner’s land and
this, in reality constitutes a physical
invasion or a touching – and thus
a taking that must be
compensated
Alcohol and Kansas
• Mugler v Kansas - 1887
– In 1880 Kansas passed a
constitutional amendment that
forbade the manufacture of
alcohol. Mugler owned a distillery
in Salina, KS. In 1885 he was
ordered to cease operations.
Mugler sued under the theory that
the State had deprived him of all
value of his land and the $10,000
he had paid for the
manufacturing operation
Supreme Court
Reasoning
• The Rationale
– The prohibition by the State of Kansas, in its
Constitution and laws, of the manufacture or
sale within the limits of the State of intoxicating
liquors for general use there as a beverage, is
fairly adapted to the end of protecting the
community against the evils which result from
excessive use of ardent spirits; and is not subject
to the objection that, under the guise of police
regulations, the State is aiming to deprive the
citizen of his constitutional rights.
Mugler - Continued
• The Findings
– A prohibition 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, is not
an appropriation of property for the
public benefit, in the sense in which a
taking of property by the exercise of the
State's power of eminent domain is such
a taking or appropriation.
– AND
Mugler - Continued
The destruction of a property right,
in the exercise of the police power
of the State,in violation of law,is
not a taking of property for public
use, and does not deprive the
owner of it without due process of
law.
Mugler After the Trial &
Mugler’s Granddaughter
Today
Justice Harlan’s Dictum
• The State takes property for the
public good and for public use
through eminent domain after
compensation
• The State protects the public health
and safety through the police power
• No compensation can arise from a
mere police power regulation
The Modern Era
• Penn. Coal Company v Mahon
– A Penn statute forbids the removal of the coal
support estate under any land used for a
residence, cemetery, school, public building,
town, or factory
– Mahon had purchased the home from an
individual who had sold the mineral and
supports rights to Penn Coal. Mahon purchased
the property with full knowledge that the support
right had passed to Penn Coal
The Act
Centralia 1983
Centralia 1999
Centralia Today - 2002
National Fuel in 1922
Support Estate
Justice Holmes
• Government could hardly go on if to some
extent values incidental to property could
not be diminished without paying for every
such change. Some values are enjoyed
under an implied limitation and must yield
to the police power. But obviously,the
implied limitation must have its limits or the
right of contract and the due process
clause are gone
Holmes Continues
• One fact for consideration in determining
such limits is the extent of diminution. When
it reaches a certain magnitude, in most if
not in all cases, there must be an exercise
of eminent domain
• The right to coal consists in the right to mine
it. This coal is the property of the Penn Coal
Company. In this sense all value of the
property has been destroyed
The Impact
• Penn. Coal makes the end of an era
of judicial thinking.
• The impact is that a “regulatory
taking” was possible when the
magnitude of the diminution passed
a certain point
• In the Penn Coal was this magnitude
reach the categorical level where all
value of the resource was destroyed
Agins v Tiburon 1980
• After appellants acquire five acres of
unimproved land in Tiburon for residential
development
• The city was required by California law to
prepare a general plan governing land use
and the development of open-space land.
• In response, the city adopted zoning
ordinances that placed appellants'
property in a zone in which property may
be devoted to one-family dwellings
Restrictions
• Sliding scale densities allowed
between 1 – 5 dwellings on the
5 acre tract
• Agins sues for a taking
• Claims damages of $2 million
and that the ordinance is
facially invalid
Findinsg
• In this case, the zoning ordinance
substantially advances legitimate
governmental goals. The State of California
has determined that the development of
local open-space plans will discourage the
"premature and unnecessary conversion of
open-space land to urban uses."
Must Compensation Be
in the Same Coin?
• Penn. Central Transportation
Company
Background
• The New York City Landmarks Designation
Law is administered by the Landmark
Review Committee of 11 members with a
staff
• They are charged with approving any
changes or modification to a Landmark
Property
• Grand Central Station was completed in
1913 by Reed , Stern and Warren and was
designated as a landmark site in 1968
Grand Central – A
National Masterpiece in
the French Beaux Arts
Controversy
• Penn. Central Railroad gave a 50
year lease to a U.K. Corp. who
intended to build a complex of
office buildings above the terminal
• Two plans were submitted – the first
for 55 stories and the other for 53
stories. One plan would have
stripped the façade from the
building
Commissions Review
• “A 55 story office building
above a flamboyant Beaux-Arts
façade cannot be divorced
from the setting.” The
Landmarks Commission
designates a number of other
properties owned by Penn.
Central as receiving zones
Other Buildings By the
Architect
Taipei 101 in
Taiwan
The Concept
Transfer Rights Scheme
• Under the TDR concept, the
owner may transfer the
development rights from the
sending to a designated
receiving zone
Sending District
Receiving
Zones
Response
• Penn. Central files suit alleging that
the Landmarks ruling and transfer
law constitute a taking is that just
compensation was not given to
them
• Landmarks Commission responds by
noting that Penn. Central owns
numerous properties in the nearby
vicinity suitable to accept this type
of density
And Further
• Penn. Central argues that they are losing money on
the operation of the terminal and need to income
from the lease to turn a profit.
• The Terminal is a valuable property interest,
They urge that the Landmarks Law has
deprived them of any gainful use of their
"air rights" above the Terminal and that,
irrespective of the value of the remainder
of their parcel, the city has "taken" their
right to this superjacent airspace, thus
entitling them to "just compensation"
measured by the fair market value of these
air rights.
Supreme Court Decision
• Nothing the Commission has said or done suggests
an intention to prohibit ay construction above the
Terminal.
• The Commission's report emphasized that whether
any construction would be allowed depended
upon whether the proposed addition "would
harmonize in scale, material, and character with
the terminal.”
• Since appellants have not sought approval for the
construction of a smaller structure, we do not know
that appellants will be denied any use of any
portion of the airspace above the Terminal.
TDR Ruling
• Although appellants and others argue that New
York City's transferable development rights program
is far from ideal, The New York courts here
supportably found that, at least in the case of the
Terminal, the rights afforded are valuable.
• While these rights may well not have constituted
"just compensation" if a "taking" had occurred, the
rights nevertheless undoubtedly mitigate whatever
financial burdens the law has imposed on
appellants and, for that reason, are to be taken into
account in considering the impact of regulation.
Conclusion
• On this record, we conclude that the application
of New York City's Landmarks Law has not
effected a "taking" of appellants' property. The
restrictions imposed are substantially related to
the promotion of the general welfare, and not
only permit reasonable beneficial use of the
landmark site, but also afford appellants
opportunities further to enhance not only the
Terminal site proper but also other properties.
How Big Is A
Taking?
• Loretto v.Teleprompter
Manhattan CATV Corp.
The Controversy
• Mrs Loretto purchases a 5 story
apartment building in NYC
• The previous owner of the building
granted CATV the right to install TV
cable lines and connectors on the
outside of the building. The building’s
tenants themselves were not
connected to the cable
And Then
• Two years after Mrs. Loretto
purchases the building the CTAV runs
a line to the tenants in the building
• The CTAV did not ask permission
• A NYC Law forbade interference by
a landlord and just grants them a flat
one dollar compensation. Tenants
had to pay for the actual cost of
hookup
The Tenants Were
Pleased
Mrs Loretto Was Not
Pleased
• She discovers the installation
• Claims a taking and a trespass
• The district court rejects the
claim that a physical
occupation always constitutes a
taking
Analysis
• On appeal the court determined that the
law requires that a landlord allow both
crossover and non-crossover connection.
The owner would be compensated for
non-crossover connections only. The court
did not determine if $1 was adequate
compensation. They said the law was
necessary in a era of rapidly growing
communications
Supreme Court Decision
• There is no exact set formula of what
constitutes a taking
– A taking is more easily found where they
is a direct physical invasion rather than a
public regulation
– Even though the interference is
“insubstantial” a physical invasion is still
compensable
– And the courted noted that there are
three distinctions that should be
considered
Distinctions
• A permanent physical invasion
• A physical invasion of short
duration
• And a regulation that merely
restricts the use of property
Permanent
Temporary
Regulatory
Conclusions
• In short, when the "character of the
governmental action," is a
permanent physical occupation of
property, our cases uniformly have
found a taking to the extent of the
occupation, without regard to
whether the action achieves an
important public benefit or has only
minimum economic impact on the
owner
Result
• Teleprompter's cable installation on
appellant's building constitutes a taking
under the traditional test.
• The installation involved a direct physical
attachment of plates, boxes, wires, bolts,
and screws to the building
• We find no constitutional difference
between a crossover and a non-crossover
installation. The portions of the installation
necessary for both crossovers and noncrossovers permanently appropriate
appellant's property. Accordingly, each
type of installation is a taking.
The Swamp Case Series
–
Parsippany-Troy Hills
The Area
Background
• This involves the use of a wetlands
area of about 1,500 acres know as
Troy Meadows
• There are practically no uses in this
area and about 75% is owned by a
private conservation trust
• The plaintiff owns and operates a
sand and gravel extraction business
on a large tract zoned industrial. This
company has filled a large portion of
their land
The Controversy
• In 1954 the township passes a
zoning amendment that forbids
the establishment of any new
use, or the expansion of an
existing use, in the Troy
Meadows except for an
agricultural type use. The law
also forbade the filling of the
wetlands
The Actions
• Later, a new Meadowlands
Development Zone was added
that allowed hunting and
fishing, communications towers,
wildlife parks, and sewage
plants and public water facilities
Response
• The sand and gravel business
ignored the new amendments
and continued to fill their
portion of the wetlands.
• Finally the business file suit
saying that the government had
appropriated the property to
public use
• They were allowed under a
special permit to fill within 300
feet of the road
The Case
• New Jersey Supreme Court
– the two main and practical effect of retaining
the meadows in their natural interrelated
aspects are:
– first, a detention basin in aid of flood control in
the lower reaches of the Passaic Valley far
beyond this municipality;
– and second, preservation of the land as open
space for the benefits which would accrue to
the local public from an undeveloped use such
as that of a nature refuge by the Wildlife
Preserve This prime public, rather than private,
utilization can be clearly implied from the
purpose sections of the zone regulations
The Decision
• We are in danger of forgetting that a strong public
desire to improve is not enough to warrant
achieving the desire by a shorter cut than the
constitutional way of paying for the change.“
• While the issue of regulation as against taking is
always a matter of degree, there can be no
question but that the line has been crossed where
the purpose and practical effect of the regulation is
to appropriate private property for a flood water
detention basin or open space.
Just v Marinette County
1972
Lake
The Just’s Tract – 36.4 acres
Noquebay
No Fill Area
The Statute
• Wisconsin passes a shore lands
ordinance
• Shore lands are defined as land
within 1,000 feet of the normal
high water elevation of
navigable lakes
• All county shore land
ordinances must be approved
by the state or the state will
adopt an ordinance for them
Now Comes the Justs
• The Justs buy a tract of 36 acres
along a navigable lakes
• It has a frontage of 1266’ along
the lake
• Over the next few years the Just
sell 5 lots with lake frontage that
extend back 600 feet – it has a
frontage of 366’
The Just’s Land
366 feet
Lake
5 parcels sold
Noquebay
Land retained by the Just’s
Marshes and Swamp
Land
The Next Act
• Without a permit the Justs begin
filling the marshes with sand and
fill dirt
• County issues a stop work order
and fines the Justs
• The Justs file suit in district court
alleging that the ordinance
constitutes a taking without
compensation
Legal Test
• The trial court finds for the State and
fines the Justs
• The Justs appeal and demand
money damages
• The State contends that it is a
conflict between the right of the
property owner to alter land versus
the authority of the State to prevent
environmental destruction
The Court’s Questions
• Is an owner’s right to alter land
so absolute that it can be
changed to any purpose?
• Is this case is an owners right so
absolute that they can change
the essential character to an
use that is unsuitable and
damaging to the rights of
others?
Rulings
• This is not a case where an
owner is prohibited for using
land for natural or indigenous
uses
• Altering and filling are not
always prohibited – just when
they pose harm
• Nothing in law indicates that
destroying a wetland is a
reasonable use of the land
Final Decision
• The Justs say that the value of
their land has been severely
depreciated
• This depreciation is only based
on what the land would be
worth if it were filled for housing
– not its natural state
The Justs Were Not Happy
and Bought a Portable Sign To
Place On Their Property
Sibson v State
To be Filled
Sibson
House
Wetland 6 acres tract
Background
• Sibson owns a 6 acre tract of
wetland near Portsmouth NH.
• The Sibson’s filled 2 acres of the
wetland, constructed a house,
and later sold it for $75,000
• They then applied to fill the
remaining 4 acres
The Application
• The NH Board of Water Resources denied
the permit and cited irreparable harm to
the ecology of the marsh.
• The Sibson’s claimed a taking and filed suit
to force compensation
• They relied on the Penn Coal case citing
that when all or substantially all of the
value of land is taken through regulation
that the owner is due just compensation
NH Supreme Court
• The court found that clearly the police
power is sufficient to prevent the filling of
the marsh and that the power was
properly exercised by the state
• “The action of the State Board did not
depreciate the value of the wetland. Its
value was the same after the denial of the
permit. All traditional uses of the wetland
remain. In other words, if you pay swamp
prices you get swamp uses. The owner has
no absolute right to change the essential
character of the land for a purpose to
which it is unsuited
Agins v Tiburon
Agins v Tiburon 1980
• California requires all cities to prepare a
general land use and open space plan
• Agins, a developer, acquires 5 acres in
Tiburon.
• Tiburon is nearly 100% developed
• A new zoning amendment is passed which
placed Agin’s land in a district that
allowed between 1 – 5 homes –
discretionary on review by the city
Agin’s Issues
• Agin’s claims a regulatory taking in that
they could not recoup the value of the
land with just one home
• Tiburon claims the issue is not ripe because
the rule was not tested as applied
• Does the amendment deny Agin’s all use
of the land without just compensation
Supreme Court Decsion
• Since no development plan was
submitted, the court had to answer the
question of a facial taking
• A ordinance such as this cannot be a
taking as long as the state advances a
legitimate interest or denies all
economically viable uses of the property
• The legitimate state interest in this case is
the value of open space and urban
conversion
First English
Angeles Nt. Forest
Background
• In 1957 the First Evangelical
Lutheran Church purchases21acre parcel of land in a canyon
along the banks of the Middle
Fork of Mill creek in the Angeles
National Forest. This land is a
natural drainage channel for
the watershed area owned by
the National Forest service.
The Use
• A summer camp for handicapped
children
• July 1977, a forest fire destroys
approximately 3,860 acres of the
watershed area, creating a serious
flood hazard. February 1978 a flood
occurs and the runoff from the storm
floods the land where Lutherglen sits
and destroys all of its buildings.
After the Flood
Its hard to
make
something
foolproof
when there
are so many
clever fools
Enter the County
• L. A. County passes an
ordinance that forbids building
anywhere in the interim flood
zone.
• If course Lutherglen is right in the
middle of the flood zone
• And, of course First Lutheran files
suit against Los Angeles County
Case and Appeals
• The district court dismisses the
suit for damages by First
Lutheran for a taking of there
property.
• The appeals court upholds the
trial court citing Agins v Tiburon.
• There is also a snicker or two
about L.A. County participating
in cloud seeding and causing
the whole thing.
Cloud Seeding?
“Members of
our church
always wear
their seatbelts
so aliens can’t
suck them out
of the car”
More Courts
• Eight years after the initial
hearing the case is passed to
the Supreme Court
• The question now does not
relate to Lutherglen itself, but
whether a taking can be
characterized as “temporary”
• The Sp. Ct. finds that the proper
remedy is monetary damages if
the ordinance is found to
constitute a taking
Bottom Line
• As Justice Holmes aptly noted more
than 50 years ago, "a strong public
desire to improve the public
condition is not enough to warrant
achieving the desire by a shorter cut
than the constitutional way of
paying for the change
• Remand the case to Calif. Courts to
determine if a taking occurred
Opening Shots - Nollan
• The Nollans own a beachfront
property in Ventura County
California.
• ¼ mile north of the property is the
Faria County Park (an Oceanside
public beach and recreation area).
Another public beach known locally
as the “Cove” is located approx.
1,800 ft to the south of the property.
Facts
• An 8’ high sea wall divides the
lot from the beach portion of
the lot. At the time a 504 sq. ft.
bungalow existed on the
property and was used to rent
out to vacationers
Regional Location
Closer View
Here It IS!
Seawall
Next Round
• Nollans originally leased the lot with
the option to buy. Nollans wanted to
buy the lot and could do so under
the following conditions:
• Existing bungalow must be
demolished and a single family
structure (remaining consistent with
neighboring structures) would
replace it.
– In order to replace structure Nollans
needed coastal development permit
from the California Coastal Commission.
A permit of application was submitted on
Feb. 25, 1982.
Controversy Begins
• Commission recommended permit upon
the condition that they allow a public
easement on the portion of their property
bordered on one side by the 8ft sea wall
and on the other by the mean high tide
line. Essentially allowing a lateral easement
for the public to pass through their
property.
• Nollans protested the condition but the
California Coastal Commission overruled
and granted the permit pending the
Nollans obtain recordation of a deed
restriction granting the easement
The Arguments
• Nollan’s Argument
• Condition could not be imposed
unless the proposed development
had a direct adverse impact on the
public access to the beach
• The California Coastal Commission
condition was essentially a taking
and in violation of the property
clauses in the Constitutions 5th and
14th Amendments
The Contra Arguments
• California Coastal Commissions Argument
• Protecting the Public’s ability to see the
beach
• Assisting the public in overcoming the
“psychological barrier” to using the beach
created by a developed shorefront
• Preventing congestion on public beaches
• Commission had similar conditions on 43 of
the 60 properties in that tract
The Court History
• Court History
• June 3, 1982-Nollans appeal to the Ventura
California Superior Court to invalidate the
access condition. Court agrees and sends
case back to California Coastal
Commission.
• California Coastal Commission holds public
hearing and reaffirms its position on the
condition.
• Nollans take case to Superior Court
claiming the condition is in violation of the
taking clause of the 5th Amendment.
Court sides with Nollans.
Next Step
• California Coastal Commission
appeals to the California Court of
Appeals. Court of appeals finds in
favor of the California Coastal
Commission citing that if the project
creates a need for public access
and condition was related to
burdens created by the project the
condition would be constitutional.
• Case is taken to U.S. Supreme Court
and argued March 30, 1987.
Enter the Supreme Court
• U.S. Supreme Court Decision and Implications
• Court found that a “permit condition is not a taking
if it serves the same legitimate governmental
purpose that a refusal to issue the permit would
serve” (Mandelker 2003).
• However, it is unclear how allowing a lateral access
will lower the “psychological barrier” imposed by
the new development and or how it helps to
alleviate congestion in the two near by public
beaches. It is further unclear as to how the access
will help reduce the viewing of the public beach.
Conclusions
• In a sense there was not found to be a
“nexus” between the California Coastal
Commissions arguments and the
intended purpose of the condition.
• Court agrees with the commission that
the comprehensive coastal access
proposed by the California Coastal
Commission is a good idea, however they
will have to compensate the Nollans if
they want the easement.
• Court finds in favor of the Nollans.
In Other Words
• There was a touching (permit
condition)
• The State could not raise the
need to such a level that it
would justify a physical
interference with the Nollan’s
property
David H. Lucas v. South
Carolina Coastal Council
U.S. Supreme Court
505 U.S. 1003
June 29, 1992
Background
• 1972: Federal Coastal Zone Management Act
• 1977: South Carolina Coastal Zone Management
Act
– Based on federal Act to require permits to be
obtained before development in “critical areas”
along beachfronts
• Late 70’s: Lucas and others developed Isle of Palms
• 1986: Lucas purchased two lots in Beachwood East
Subdivision for $975,000
• 1988: Beachfront Management Act
– Construction of habitable improvements was
prohibited seaward of a line drawn 20 ft. landward
and parallel to the baseline.
Background
Context
Lucas v Carolina Coastal Commission
Merrick
Road
Beach Line 1986
Beach Line 1956
Beach Line 1902
Lot 2
Lot 1
Controversy
• Lucas bought two beachfront lots
zoned for single-family residential
development in 1986 with no
restrictions imposed upon the use of
the property by the state, county, or
town
• In 1988, the Beachfront Management
Act made a permanent ban on
construction on Lucas’s lots
Trial Court
• Lucas contends that the construction of
the Beachfront Management Act caused
a taking of his property without just
compensation
• The Trial Court agreed and found that the
Act “deprived Lucas of any reasonable
economic use of the lots,…eliminated the
unrestricted right of use, and rendered
them valueless”
Change in Beachfront
Management Act
• In 1990, while the issue was in
front of the South Carolina
Supreme Court and before
issuance of the court’s opinion,
the Act was amended to allow
for special permits to be issued
• The State Supreme Court
determined that that case was
unripe
Supreme Court of South
Carolina
• The State Supreme Court reversed the
decision
• The court’s reasoning was that “when a
regulation respecting the use of property is
designed to prevent serious public harm,
no compensation is owing under the
Takings Clause regardless of the
regulation’s effect on the property’s
value”
Dissent of State Supreme
Court
• Two justices dissented because “they
would not have characterized the
Beachfront Management Act’s primary
purpose as the prevention of a nuisance”
• “To the dissenters, the chief purposes of the
legislation, among them the promotion of
tourism and the creation of a habitat for
indigenous flora and fauna, could not fairly
be compared to nuisance abatement”
US Supreme Court
• Prior decision was overturned based on
two principles:
– The court decided that the case was ripe
because it was filed before the amendment to
the Act in 1990
– The State Supreme Court erred in applying the
noxious uses principle
• Tie in to previous case law
– In Pennsylvania Coal v. Mahon, 260 U.S. 413, “if
the protection against physical appropriations of
private property was to be meaningfully
enforced, the government’s power to redefine
the range of interests included in the ownership
of property was necessarily constrained by
constitutional limits”
Reasoning
• Lucas sacrificed all economically beneficial
uses in the name of common good, so it is a
categorical taking
• Creating a distinction between regulation that
prevents “harmful uses” and that which
“confers benefits” is next to impossible
• Background principles of nuisance and
property law must be defined
After The Case
After the case was reversed and remanded to the trial court in South
Carolina, both parties wisely agreed to settle rather than expose
themselves to the whims of a jury. The settlement amounted to $1.575
million. Lucas got his investment back, was able to pay off his lawyers and
pocketed $100,000 for his 4 years of trouble. He also agreed to convey
title to the state.
So what did the state do with the property?
With the Beachfront Management Act now amended, the Coastal
Council was empowered to issue a special permit allowing the
state to sell Lucas' property to developers! The attorney
representing the state explained lamely that it needed to recoup
some of the monies paid in the settlement. And the state may as
well have done so since the two lots have been described as
standing out like missing teeth in a row of million-dollar homes
fronting the Atlantic Ocean
Guess What’s on the Lot
Now?
The Widow Mrs. Dolan
The Place
The Ditch
The Background
• Dolan v Tigard
– Mrs Dolan applies to redevelop
her site
– Plans to expand from 9,700 sq. ft.
to 17,600 sq. ft and to pave a 39
space car parking lot
– This is in the form of an additional
building to the Northeast and a
new parking lot
Main Street
Gravel
Parking
Lot
Fanno
Creek
Existing
Plumbing and
Electrical
Supply Store
The City
• After a comprehensive study the City
adopted and plan to enhance the
drainage of the town and to relieve
congestion in the main part of town by
connecting new bike paths
• The City requires that new development in
the CBD dedicate space for the new
bike/walkway and also contribute to the
drainage system (and also enhance the
appearance of Fanno Creek and as
greenway system)
The Exaction
The Commission required that Dolan dedicate the
portion of her property lying within the 100 year
floodplain for improvement of a storm drainage
system along Fanno Creek and that she dedicate
an additional 15 foot strip of land adjacent to the
floodplain as a pedestrian/bicycle pathway. The
dedication required by that condition
encompasses approximately 7,000 square feet, or
roughly 10% of the property. In accordance with
city practice, petitioner could rely on the
dedicated property to meet the 15% open space
and landscaping requirement mandated by the
city's zoning scheme.
Mrs Dolan Replies
• Dolan appealed to the Land Use Board of
Appeals (LUBA) on the ground that the
city's dedication requirements were not
related to the proposed development,
and, therefore, those requirements
constituted an uncompensated taking of
their property under the Fifth Amendment.
In evaluating the federal taking claim,
LUBA assumed that the city's findings about
the impacts of the proposed development
were supported by substantial evidence.
Supreme Court Findings
• Without question, had the city simply required
petitioner to dedicate a strip of land along Fanno
Creek for public use, rather than conditioning the
grant of her permit to redevelop her property on
such a dedication, a taking would have occurred.
• Petitioner does not quarrel with the city's authority
to exact some forms of dedication as a condition
for the grant of a building permit.
• She argues that the city has identified no special
benefits conferred on her, and has not identified
any special quantifiable burdens created by her
new store that would justify the particular
dedications required from her which are not
required from the public at large.
Nexus – The Two Tests
• Undoubtedly, the prevention of flooding along
Fanno Creek and the reduction of traffic
congestion in the Central Business District qualify as
the type of legitimate public purposes we have
upheld
• It seems equally obvious that a nexus exists
between preventing flooding along Fanno Creek
and limiting development within the creek's 100year
floodplain. Petitioner proposes to double the size of
her retail store and to pave her new gravel parking
lot, thereby expanding the impervious surface on
the property and increasing the amount of storm
water runoff into Fanno Creek.
So – Is the Exaction Fair?
• The second part of our analysis requires us
to determine whether the degree of the
exactions demanded by the city's permit
conditions bear the required relationship to
the projected impact of petitioner's
proposed development.
• We conclude that the findings upon which
the city relies do not show the required
reasonable relationship between the
required floodplain and the petitioner’s
new building. The same may be said for
the need for the bike path
Bottom Line
• Government must be able to
demonstrate a rough
proportionality between the
need for the exaction and the
impact of development
Battle Ground WA
City of Battleground v
Benchmark Land Devel.
• As a condition of development
approval, the City of Battleground
required Benchmark Land Company
to improve an existing street
adjacent to Benchmark’s proposed
subdivision. The street is congested.
• The City based its condition upon a
generally applicable ordinance
requiring developers to construct
half-width road improvements to
adjoining access streets as a
prerequisite to permit approval.
Half Street
Improvement
The Contention
Benchmark challenged the
condition with and sought
damages from the City for a
taking. The trial court ruled
that studies conclusively
showed that there was no
substantial impact from the
new subdivision on traffic that
would warrant the new half
street
improvement
More Studies
• After the trial both Benchmark and
the City conduct traffic studies.
• Guess what – Benchmark’s expert
says no impact and the City’s expert
says that there will be impact.
• Also, the City says that it does not
have to do a specific Dolan study
ever time that have to improve a
new half street
Wash. Sp. Ct. 4 Part Test
• What must the government
establish
– A Public Problem
– A development that impacts the
public problem
– Governmental approval of a set of
conditions that tends to alleviate
the problem
– Rough proportionality between
the conditions and the solution to
the problem
The Court’s Analysis
• A Dolan style analysis is required
when the developer is likely to
incur “significant costs” arising
from improvements
• Battleground fails the essential
nexus test – the proposed
solution does not tend to
alleviate the public problem
A Little Salt Marsh
Palazzolo v Rhode Island
SGI Tract 18 acres
2 acres
Upland
Beach
16 acres
Salt
Marsh
Shoreline
Site Picture
Credits to Dan Mandelker for this picture
Location
Background
• Palazzolo v Rhode Island
– Palazzolo and associated formed Shore
Gardens Enterprises in 1959 for $8,000
– Within a year Palazzolo bought out his
associates and became sole owner
– For six years Palazzolo filed various
applications to fill 11 acres of the salt
marsh and all were rejected
– After 1966 no further applications were
filed for over a decade
Into The 1970s
• In 1971 Rhode Island creates the Coastal
Management Council
• The Council adopts rules that severely
restrict the filling of salt marshes
• In 1983 Palazzolo files an application to fill
the entire marsh area and construct a
seawall bulkhead. The application is
denied.
• In 1985 he files an application to fill 11 of
the 18 acres of salt marsh for a 75 unit
subdivision – this is denied in that it did not
meet the standards for a special exception
The 1985 Application
SGI Tract 18 acres
2 acres
Upland
Beach
Here
11 acres
Salt
Marsh
The Legal Challenge
• Palazzolo files suit in state court alleging that the
Coastal Management Council deprived him of all
economic value of his property
• He seeks $3,150,000 in damages
• The trial court and the State Supreme Court deny
him any relief for several reasons
– His claim was not ripe
– He took title with full knowledge of the
regulations
– He still retained about $200,000 in value in the
upland parcel
Summary Brief Questions
Question 1
• Whether the Supreme Court of Rhode Island
permissibly treated petitioner's takings claim as
unripe, where that takings claim was based on the
State's purported refusal to allow large-scale
residential development on petitioner's property
and petitioner had never sought permission from
the appropriate state officials to construct
residences
Summary Brief Questions
2
• Whether petitioner can establish a taking of
property through proof that his land would
dramatically increase in value if longstanding
development restrictions were removed, even
though the restrictions were in effect at the time
petitioner acquired the property and the land
retains substantial value notwithstanding the
restrictions
The Supreme Court
Decision – The Ripeness
Claim
• A landowner may not establish a taking before the
land-use authority has the opportunity, using its own
reasonable procedures, to decide and explain the
reach of a challenged regulation
• Once it becomes clear that the permissible uses of
the property are known to a reasonable degree of
certainty, a takings claim is likely to have ripened.
Here, the Council’s decisions make plain that it
interpreted its regulations to bar petitioner from
engaging in any filling or development on the
wetlands. Further permit applications were not
necessary to establish this point.
The Remaining Value
• The State Supreme Court did not err in finding that
petitioner failed to establish a deprivation of all
economic use
• It is undisputed that his parcel retains significant
development value
• Petitioner is correct that, assuming a taking is
otherwise established, a State may not evade the
duty to compensate on the premise that the
landowner is left with a token interest.
• This is not the situation in this case, however. A
regulation permitting a landowner to build a
substantial residence on a parcel does not leave
the property “economically idle.”
He Figures Out How To
Use His Property
Tahoe-Sierra Preservation v
Tahoe Regional Planning
OCTOBER 2001
Lake Tahoe Region
Background
• Tahoe is the highest – largest
alpine lake in the U.S. 22 X 12
miles
• Maximum depth 1,645’
• Water purity at 99 percent
in1960
• Permanent residents 34,000 with
38,000 temporary residents in
seasons
Factoids
• Considered a national treasure
only two lakes in the world are
comparable – Glacier Lake and
Lake Baikal in Russia
• World class amenity value
• Tahoe began its environmental
deterioration about 40 years
ago
• Significant increase in the lack
of clarity because of algae
growth
The Big Conclusion
• Unless the rate of runoff from
impervious cover is reduced or
eliminated the great “blue lake”
will go green from lack of clarity
within this decade and cannot
recover under any know natural
process
Early Efforts
• In the 1960s and 70s Nevada,
California, seven different counties,
11 municipalities, and the Federal
government sign a compact to
protect the drainage basin of Lake
Tahoe
• Restrictions on development are
significant but the problem increases
• Land owners who purchased lots
before 1972 could build at a later
time as long as they observed
reasonable construction regulations
Many Landowners
Express Their
Disappointment
Problems Continued
• By 1982 it was obvious that Lake Tahoe was
losing ground and that development
would have to cease
• Stringent regulations were them placed on
property according to the potential for
harm if the vacant land was developed
• Thus, the two moratoria were adopted
starting in 1983. In addition to the 32
months, the real delay lasted about 6 years
before people could building again
So, The Planners Act
• Lake Tahoe Regional Planning
Association imposes two moratoria
on development in order to prepare
a revised comprehensive plan and
devise strategies for sound
environmental growth
• This totals 32 months
• Sierra-Tahoe Preservation Association
claims a temporary taking during the
32 months
District Court
• Hearing court says that a “partial taking”
did not occur under a Penn. Central
Analysis.
• BUT, a categorical taking did occur during
the 32 months under the moratorium
because of the Lucas analysis – owners
were temporarily deprived of all value for
the 32 months
Finally, The Supreme
Court
• As already noted the Supreme Court
refused to declare the moratorium a
per se categorical taking. It will
depend on the moves and counter
moves of the parties and a “Penn.
Central Style Analysis” will be used
• The lot owners are going to be
ticked off because they wanted a
“fairness and justice” analysis like Del
Monte Dunes
Observations Some
Good Things to Say
• It appears that moratoria are essential
planning tools to protect the public at
large
• Moratoria a not that much different than
other delays caused by normal
administrative review
• Moratoria prevent hastily enacted
regulations
• Moratoria foster informed decision making
and per se taking rules do not
Repeating The Big
Picture
• Flexible analysis of regulation
takings is required – Penn
Central becomes the
touchstone case for takings
• Moratoria may be categorical
takings when they are in force
but not all categorical takings
are compensable.
The Penn Central
Analysis
• To characterize a governmental action as
a taking, the court must
– Examine the character of the action
– Extent of interference with an
investment backed expectation
– Diminution and value alone cannot not
establish a taking
– Extent to which the state can show a
compelling interest for the regulation
Wild Rice River v City of
Fargo 2005
Basic Facts
Land is purchased in 1947
Platted in 1993 to 38 lots
Sixteen lots located on a Oxbow of Rice River
1994 provides water and service with 10 year
agreement with Fargo to provide services
Spends 500,000 in initial development costs
Sold first lot in 1994 to Rutten for $24,000
And Then ….. Fargo
Round One
The Aftermath
1997 – All undeveloped lots are flooded and
Rutten’s house ruined
1998 – FEMA issues preliminary flood rate map
and this shows several lots in the floodway
Fargo enacts MORATORIUM for the time
necessary for FEMA to issue final map
It actually runs for 21 months
1999 – Rutten’s daughter applies for building
permit and is denied as are other applicants
The Suit
2000 Wild Rice sues Fargo
Claims inverse condemnation
Tortuous interference with contract
In late 2000 Fargo ends moratorium
Wild Rice sells several lot is 2002
And 2005 for $39 - $59,000
The trail court dismisses all claims for inverse
condemnation, interference and bad faith
delay. Also denies a temporary takings claim
under the First Lutheran Church theory.
Sp. Ct. of ND Appeals
The court reviews a large cross section of
takings cases including Penn Central and the
Lake Tahoe cases
Concludes that:
 The moratorium was system wide and did
not single out Wild Rice
 Fargo was doing was it was required to do
– preventing an injury
 There was no extraordinary delay in
government decision making – no bad faith
 There was no taking – the land was worth
more after the moratorium than before
City of Glenn Heights
Texas v Sheffield
Development Co. 2001
Glenn Heights TX
Facts
• 20 miles south of Dallas
•Population of 7,000 in 2008
• 10,470 persons estimated in 2010
•“Glenn Heights is a pleasant residential community
with low cost of living just minutes from Dallas. Ideal
for those who want the quiet life with the amenities of
a nearby metropolitan area.” Website
Time Periods of the Case
• Prior to the agreement
– Involves 194 acres of a 240 acre
tract zoned PD 10
– PD 10 was granted in 1988 for
single family residence on 6,500 sq.
ft lots; some larger lots were
included in later phases
– Phase 1 of PD 10 (43 acres) has
already been fully developed
under this concept
However
• In 1995 Glen Heights adopts a
new code
• 14 of the existing PDs were not
rezoned and they were allowed
to continue unchanged. This
included PD 10.
Due Diligence Phase
• Sheffield conducts a due
diligence
• They concluded that the zoning
was secure.
• Sheffield purchased the
property in 1996
The Moratorium
• Glenn Heights enacts a
moratorium on the approval of
development applications
• If Sheffield (et al) were allowed
to file an application he would
lock in his development rights
• Moratorium is to run for 30 days
How Many Days
• The moratorium should have
lapsed in March of 1997
• Sheffield tries to file a final plan
• Staff says NO because the city
manager extended the
moratorium
• The City Council officially
extends the moratorium until
April 27, 1998
To Finish It Off
• On the day the moratorium
lapses the City Council down
zones the remaining 194 acres
to 10,000 sq. ft – a loss of 4,400
sq. ft per lot
• Sheffield is torqued
Temper - Temper
Sheffield Goes to District
Court
• Sheffield files suit for a taking and requests
compensatory damages
• The district court finds for Sheffield and the
jury awards damages $485,000 a reduction
from $970,000
• Finds that the down zoning but not the
moratorium constituted a taking
Sheffield and Glenn
Heights Both Appeal to
Texas Sp. Ct
• Sheffield says yes it was a taking and
the district court should have found
that the moratorium was also a
taking
• Glenn Heights says “no way” is this
down zoning a taking and we only
reduced the property by 38%
$289,920
Texas Sp. Ct. Begins Their
Anlaysis
• Uses a very traditional takings analysis
– Two types of taking – physical and
regulatory
– Courts should not act as a “super zoning
board” but give discretion to the
legislature
– If Glenn Heights advances a legitimate
state interest then the down zoning is
not a taking
The Court Partially Saves
Glenn Heights’ Butte
• What is the legitimate state interest?
– Glen Heights did not make any findings
of fact
– The trial court really did not address
several important issues
– However, the testimony at the trial says
the down zoning was beneficial
because of less density (less crowing,
urbanization, less traffic, more open
space)
– The number of DU’s was reduced from
1,030 to 521 and pop from 3,000 to 1,500
So, That’s One For the
City
• Reducing population density is a
legitimate state interest
The Planning Staff Dons
Toga and Has An Orgy of
Celebrations
However, Let Just Hold
On For a Minute
• Sheffield still has substantial value in
the land after the down zoning so it
cannot be a Lucas style taking
(categorical) of all economic value
• But, did the City unreasonably
interfere with Sheffield’s investment
back expectations and property
rights
Analysis
• If you only had a small brain in their head
you knew that Sheffield intended to
develop the property at the same density
for which it was originally zoned
• Even the trial court found that the utilities
were properly sized to permit 4 – 5 units per
acre – everything in the completed Phase
1 points to the same development patterns
in the following units
Comes Now the Evil of
Density
The Court Ponders
• When Sheffield undertook their
due diligence no one ever
mentioned anything about
down zoning
• Is there a bigger picture here
that we are missing?
The Contesta
DeUrninationa Begins
• Sheffield – There is no demand for
large lots
• City – Bull, you just want every ounce
of density you can get. You are just
in business to make money
• Sheffield – our appraiser says that we
have a 90% loss
• City – no way, its more like 35%
The Court Puts a Stop to
the Argument
• The City’s argument is weak
• There is plenty of good
infrastructure to handle this
density
• The City blind-sided Sheffield.
They could have let them know
that the rezoning was being
considered
But Wait – Is the
Moratorium a Taking
Also
• A moratorium , like a down zoning, must
advance a legitimate state interest
– City Council admits it had a meeting in
secret
– Admits that they passed the moratorium
to increase their bargaining power
– Admits that Council discussed the
actual rezoning of the property
Reverses The Trial Court
• The moratorium was improperly used
• In this case it constitutes a taking as
an unreasonable interference with
an investment backed expectation
• Awards Sheffield $280,000 damages
for the period of the temporary
taking
Now Its Sheffield Turn
Ripening - Introduction
Inset Williamson Reg. Plng/Hamilton National Bank
Regional Context
NASHVILLE
Zoning & UGB
Case Location
Franklin – Williamson
County
Nashville TN 1985
• In 1973 a developer obtained preliminary
permission to develop his tract under a set
of “cluster” provisions
• The zoning was changed in 1977 under a
down zoning scheme
• The developer was allowed to continue
with the original zoning provisions
• In 1979 the developer applied for a final
plat on a new phase of his development
• The Planning Commission applied the 1977
rules and denied his application
A Takings Claim
• The developer claim a right to the 1973
regulations
• The District court ruled that the developer
was entitled to the 1973 density regulations
• But, not taking occurred for the temporary
deprivation of the economic use of his/her
property
• The Appeals Court reverse saying that the
permit denial did constitute a taking and
was entitled to monetary relief
The Supreme Court
• The Supreme Court reversed the Appeals
Ct.
• Court notes that the developer did not seek
any variances or even apply for variances
that would have allowed full development
of the property
• The claim was not ripe
• The developer did not exhaust available
administrative remedies
• The developer offered not proof that there
was substantial interference with
investment back expectations
Diminution of Land
Value
Range of
Speculative Value
Range of police
power regulation
Resort Hotel
Mall
Wal-Mart
Large
Housing
Development
$2.5 million
$1 million
$500,000
1 du/acre
$40,000
Compelling
government reasons
Agri Use Only
$10,000
Limit of taking
immunity
Natural Resource
Use Only
$1,000
Taking – Basic Tests
•
•
•
•
Touching – Invasion
Size is not an issue
Creating a Nexus
Roughly proportionate to the impact
of development
• Investment backed expectation
• Categorical taking
• I smell a rat
Triggering Points
• Does the regulation or action result in a
temporary or permanent invasion of
private property?
• Does the regulation or action require the
owner to dedicate a portion of their
property to public use? Roughly
Proportional!!!!!
• Does the regulation deprive the owner of
all or nearly all economic viability?
• Does it appear the government is jerking
the land owner’s chain?
Taking Matrix
Agins Style Taking _Rationally Related
Nollan/Dolan Style Taking _Exaction Related
Taking/Roughly Proportionate
Lucas Style Taking Categorical
Penn Central Style Taking_Reasonably
Necessary to Effectuate a Substantial Public
Purpose & Investment Backed Expectations
When Its All Over
Lingle v Chevron 2005
Hawaii passes law regulating amount that
energy company can charge a gasoline
dealer for rent
Lower court relies on Agins and rules
against the state in that the statutes does
not “substantially advance a legitimate
governmental interest
The case reaches the Supreme Court after
Hawaii appeals the decision
The Supreme Court rejects the Agins’ test as
“imprecise”
“The “substantially advances” inquiry reveals
nothing about the magnitude or character of
the burden a particular regulation imposes
upon private property rights”
Do You sometimes feel like
this?