Takings 101

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SandBar 7:1, Regulatory Takings Issue, April, 2008 Takings 101 The Fifth Amendment provides, “nor shall private property be taken for public use, without just compensation.” Courts will generally find a right to compensation when the government 1) directly appropriates private property; 2) physically occupies private property; and 3) imposes a regulatory constraint on the use of property so severe as to deprive an owner of all economically beneficial use. The first and second categories might also be called “eminent domain” or “condemnation.” Eminent domain is “the inherent power of a governmental entity to take privately owned property, especially land, and convert it to public use, subject to reasonable compensation for the taking.”1 Condemnation is “to determine and declare that certain property is assigned to public use.”2 Inverse condemnation is “an action brought by a property owner for compensation from a governmental entity that has taken the owner’s property without bringing formal condemnation proceedings.”3 An example of a physical taking is the Loretto v. Teleprompter Manhattan CATV Corporation case. In Loretto, the government required landlords to allow installation of cable television in their rental properties. In that instance, the government gave itself the right to occupy a portion of the private property without paying for the privilege. The third category of takings is considered a regulatory taking. As noted above, mere regulation of property is not enough for a court to find a taking. The regulation must deprive an owner of all economically beneficial use. For instance, in Lucas v. South Carolina Coastal Council, the court found that a zoning ordinance prohibiting all development on a property owner’s land resulted in a regulatory taking.4 If the regulation merely decreases the value of the property, it will not necessarily result in a taking. The court will perform a multi-factor balancing test outlined in Penn Central Transportation Co. v. New York City5 to determine whether or not there has been a taking. The factors include: 1) the extent to which the regulation interferes with investment-backed expectations; 2) the economic impact of the regulation on the claimant; and 3) the character of the government’s interest, or the social goals being promoted by the government. In this edition of The SandBar, we have focused on various takings issues. The cases range from more “traditional” takings cases involving land use regulations to more novel cases, including a case in which fishermen alleged a taking when their fishing licenses were rendered useless by an area being designated as a national wildlife refuge. Please enjoy and feel free to contact us with any questions or comments. Endnotes 1. Black’s Law Dictionary 233 (2d Pocket ed. 2001). 2. Id. at 123-124. 3. Id. at 124. 4. 505 U.S. 1003 (1992). 5. 438 US 104 (U.S. 1978).
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SandBar 7:1, Regulatory Takings Issue, April, 2008

Takings 101

The Fifth Amendment provides, “nor shall private property be taken for public use, without just compensation.” Courts will generally find a right to compensation when the government 1) directly appropriates private property; 2) physically occupies private property; and 3) imposes a regulatory constraint on the use of property so severe as to deprive an owner of all economically beneficial use.
      The first and second categories might also be called “eminent domain” or “condemnation.” Eminent domain is “the inherent power of a governmental entity to take privately owned property, especially land, and convert it to public use, subject to reasonable compensation for the taking.”1 Condemnation is “to determine and declare that certain property is assigned to public use.”2 Inverse condemnation is “an action brought by a property owner for compensation from a governmental entity that has taken the owner’s property without bringing formal condemnation proceedings.”3
      An example of a physical taking is the Loretto v. Teleprompter Manhattan CATV Corporation case. In Loretto, the government required landlords to allow installation of cable television in their rental properties. In that instance, the government gave itself the right to occupy a portion of the private property without paying for the privilege.
      The third category of takings is considered a regulatory taking. As noted above, mere regulation of property is not enough for a court to find a taking. The regulation must deprive an owner of all economically beneficial use. For instance, in Lucas v. South Carolina Coastal Council, the court found that a zoning ordinance prohibiting all development on a property owner’s land resulted in a regulatory taking.4
      If the regulation merely decreases the value of the property, it will not necessarily result in a taking. The court will perform a multi-factor balancing test outlined in Penn Central Transportation Co. v. New York City5 to determine whether or not there has been a taking. The factors include: 1) the extent to which the regulation interferes with investment-backed expectations; 2) the economic impact of the regulation on the claimant; and 3) the character of the government’s interest, or the social goals being promoted by the government.
      In this edition of The SandBar, we have focused on various takings issues. The cases range from more “traditional” takings cases involving land use regulations to more novel cases, including a case in which fishermen alleged a taking when their fishing licenses were rendered useless by an area being designated as a national wildlife refuge. Please enjoy and feel free to contact us with any questions or comments.

Endnotes
1. Black’s Law Dictionary 233 (2d Pocket ed. 2001).
2. Id. at 123-124.
3. Id. at 124.
4. 505 U.S. 1003 (1992).
5. 438 US 104 (U.S. 1978).