The Taking Issue
Lecture Series 3
John Keller – Plan 752 Planning
Law
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
– In 1880 Kansas passed a constitutional
amendment that forbade the manufacture
of alcohol. Mugler owned a distillery in
Salina, Kansas constructed in 1887and
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
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 the 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
At This Point Things Start To Get
Ugly – Real Ugly
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 have argued
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 tat 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, completely occupying space immediately
above and upon the roof and along the building's
exterior wall. In light of our analysis, we find no
constitutional difference between a crossover and a
noncrossover 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
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 954 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 of the state
will adopt an ordinance foe 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 a 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 swamp 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
Filled portion
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
First English
Background
• In 1957 the First Evangelical Lutheran
Church purchases21-acre 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
Recriminations
“I hope God
strikes all the
planner’s and
Commie’s dead
for what you
have done to
Lutherglen”
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
Open 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 approximately 1,800 ft to
the south of the property. An 8ft 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
Seawall
Next Round
• Nollans originally leased the lot with the
option to buy. Nollans wanted to buy 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
• Nollans 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 sighting 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
• The State could not raise the need to
such a level that it would justify a
physical interference with the Nollan’s
property
Only Known Picture of the
Nollans
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
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 contended 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
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
The Widow Mrs. Dolan
The Place
The Ditch
The Background
• Dolan v Tigard
– Mrs Dolan applies to redevelop her site
– Plan 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, but challenges the showing
made by the city to justify these exactions. 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
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 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
Of Butterflies and Buckwheat
Del Monte Dunes
• Section 1983 action for an
uncompensated taking
• 37 acres of oceanfront located on an old
fuel tank farm
• Zoned for HD Residential and would
permit 1,000 units at full density
• In 1981 The developer submits a site
plan to develop 344 units
The First Hearing
The First Few Rounds
• Planning Commission rejects and says it
would favor 264 units
• Late 1983 the developer returns with a plan
for 264 units but once again is rejected and
the request is now for 224 units
• Developer returns with a plan for 224 units
and is rejected and the request is now for 190
units (late 1984)
The Developer Is Angry
And Then Along Came
• In the continuing review concern is shown
over Smith’s Blue Butterfly and the Dune
Buckwheat
• SBB lives for one week, flies 200 feet, and
must land on a mature Buckwheat stalk
• NO SBB found on this site after four years of
searching - limited Buckwheat is found in the
“bowl”
The SBB Itself
The Next Hearing The Charge of
the Light Brigade
Into the Valley of Death Rode the 500
Nevertheless
• Developer devotes 17.9 acres to open
space
• Uses 190 units on only 5.1 of the 37.6
acres
• BUT, concern over the adjacent public
beach, SBB and the Buckwheat cause
the Planning Commission to reject the
proposal
Sorrow And Anger
• After five years, five rejected proposals
and 19 different site plans the developer
sues for relief as an uncompensated
taking
• Developer argues that the final outcome
was to force all development into the
bowl – this contained the sensitive
buckwheat stands
A Jury Trial
• Case is dismissed by the District Court but
reversed by the Appeal Ct. and returned for
re-hearing
• District Court grants JURY trial – How could
the City ask for 2/3 of the tract to be set aside
for literally public purposes and then turn
around and deny the application because of
the outcome of its own actions?
The Outcome
• Jury finds for Del Monte Dunes on
taking and equal protection
• Jury awards 1.45 million - 1994
• Appeals Court affirms – 1996
• U.S. Supreme Court affirms in May of
1999 by smelling a rat
The Developer’s Attitude
The City’s Attitude
But Who Is Laughing Out
Loud?
A Little More Salt March
Palazzalo 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
Background
• Palazzalo v Rhode Island
– Palazzalo and associated formed Shore Gardens
Enterprises in 1959
– Within a year Palazzalo bought out his associates
and became sole owner
– For six years Palazzalo 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 Palazzalo files and application to fill
the entire marsh area and construct a seawall
bulkhead. The application is denied.
• In 1985 he files and 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
11 acres
Salt
Marsh
The Legal Challenge
• Palazzalo files suit in state court alleging that
the Coastal Management Council had
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
The Supreme Court Decision
– The Ripeness Claim
• Although 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, for 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 an 18-acre 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
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.
• Chief Justice Rehquist in a big, dumb
idiot
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
City of Glenn Heights Texas v
Sheffield Development Co.
2001
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 1968 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
• Glenn Heights says “no way” is this
down zoning a taking and we only
reduced the property by 38% $289,920
• Sheffield says yes it was a taking and
the district court should have found that
the moratorium was also a taking
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 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
They Are Elated
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?
When Its All Over
Do You sometimes feel like this