Regulatory Takings: Implementation of Executive Order on Government Actions Affecting Private Property Use
Published: 2003-09-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Each year federal agencies issue numerous proposed or final rules or take other regulatory actions that may potentially affect the use of private property. Some of these actions may result in the property owner being owed just compensation under the Fifth Amendment. In 1988 the President issued Executive Order 12630 on property rights to ensure that government actions affecting the use of private property are undertaken on a well-reasoned basis with due regard for the potential financial impacts imposed on the government. GAO was asked to provide information on the compliance of the Department of Justice and four agencies--the Department of Agriculture, the Army Corps of Engineers, the Environmental Protection Agency, and the Department of the Interior--with the executive order. Specifically, GAO examined the extent to which (1) Justice has updated its guidelines for the order to reflect changes in case law and issued supplemental guidelines for the four agencies, (2) the four agencies have complied with the specific provisions of the executive order, and (3) just compensation awards have been assessed against the four agencies in recent years. We provided the agencies with a draft of this report for comment. They provided technical and editorial suggestions that we incorporated as appropriate.
section_title: What GAO Found
paragraphs: Justice has not updated the guidelines that it issued in 1988 pursuant to the executive order, but has issued supplemental guidelines for three of the four agencies. The executive order provides that Justice should update the guidelines, as necessary, to reflect fundamental changes in takings case law resulting from Supreme Court decisions. While Justice and some other agency officials said that the changes in the case law since 1988 have not been significant enough to warrant a revision, other agency officials and some legal experts said that fundamental changes have occurred and that the guidelines should be updated. Justice issued supplemental guidelines for three agencies, but not for Agriculture because of unresolved issues such as how to assess the takings implications of denying or limiting permits that allow ranchers to graze livestock on federal lands managed by Agriculture. Although the executive order's requirements have not been amended or revoked since 1988, the four agencies' implementation of some of these requirements has changed over time as a result of subsequent guidance provided by the Office of Management and Budget (OMB). For example, the agencies no longer prepare annual compilations of just compensation awards or account for these awards in their budget documents because OMB issued guidance in 1994 advising agencies that this information was no longer required. According to OMB, this information is not needed because the number and amount of these awards are small and the awards are paid from the Department of the Treasury's Judgment Fund, rather than from the agencies' appropriations. Regarding other requirements, agency officials said that they fully consider the potential takings implications of their regulatory actions, but provided us with limited documentary evidence to support this claim. For example, the agencies provided us with a few examples of takings implications assessments because, agency officials said, these assessments are not always documented in writing or retained on file. In addition, our review of the agencies' rulemakings for selected years that made reference to the executive order revealed that relatively few specified that a takings implication assessment was done and few anticipated significant takings implications. According to Justice, 44 regulatory takings lawsuits brought against the four agencies by property owners were concluded during fiscal years 2000 through 2002, and of these, 14 cases resulted in just compensation awards or settlement payments totaling about $36.5 million. The executive order's requirement for assessing the takings implications of planned actions applied to only three of these cases. The actions associated with the other 11 cases either predated the order's issuance or were otherwise excluded from the order's provisions. The relevant agency assessed the takings potential of its action in only one of the three cases subject to the order's requirements. According to Justice, as of the end of fiscal year 2002, 54 additional regulatory takings lawsuits involving the four agencies were pending resolution.

section_title: Letter
paragraphs: Each year federal agencies issue numerous proposed or final rules or take  other regulatory actions that may potentially affect the use of private  property.  Agencies take these actions to meet a variety of societal goals,  such as protecting the environment, promoting public health and safety,  conserving natural resources, and preserving historic sites.  At the same  time, these actions may place restrictions on the use of private property,  such as limiting the development of land that includes critical wildlife  habitat or wetlands needed for flood control, thereby potentially depriving  the landowner of the use or economic value of the property.  In such cases,  the property owner may be owed just compensation under the Fifth  Amendment to the Constitution.
In 1988 the President issued Executive Order 12630 (EO), “Governmental  Actions and Interference with Constitutionally Protected Property Rights,”  to ensure that government actions are undertaken on a well-reasoned basis  with due regard for the potential financial impacts imposed on the  government by the Just Compensation Clause of the Fifth Amendment.  Specifically, the EO requires executive branch agencies, among other  things, to (1) prepare annual compilations of awards of just compensation  resulting from landowner lawsuits alleging takings, (2) account for takings  awards levied against them in their annual budget submissions, (3)  designate an agency official responsible for implementing the order, and  (4) consider the potential takings implications of their proposed actions  and document significant takings implications in notices of proposed  rulemaking.  The EO also requires the Department of Justice (Justice),  specifically the U.S. Attorney General, to issue general guidelines to  provide agencies with a uniform framework for their implementation of the  EO and to issue supplemental guidelines for each agency, as appropriate,  that reflect that agency’s unique responsibilities.  In addition, the EO  requires the Attorney General to update the general guidelines, as  necessary, to reflect fundamental changes in takings case law resulting  from U.S. Supreme Court decisions.  Furthermore, the EO requires the  Office of Management and Budget (OMB) to ensure that the policies of  executive branch agencies are consistent with the EO’s requirements and  that just compensation awards made against the agencies are included in  agencies’ budget submissions.
If a landowner believes that a government regulatory action has resulted in  a taking of his or her private property, that landowner may file a lawsuit  seeking just compensation under the Fifth Amendment.  In general, these  suits must be brought in the United States Court of Federal Claims.Justice is generally responsible for litigating these cases on behalf of the  government. Such cases, many of which may take years to resolve, may  result in a dismissal, a decision in favor of the government, a settlement  payment made to the landowner, or an award of just compensation.  In  general, these awards and settlements are paid from the Department of the  Treasury’s Judgment Fund. Relative to the thousands of regulatory  actions taken by federal agencies each year, the number of lawsuits seeking  just compensation related to these actions is small.
You asked us to provide information on measures taken by Justice to  implement certain provisions of the EO and the efforts of four agencies—  the Department of Agriculture, the U.S. Army Corps of Engineers, the  Environmental Protection Agency (EPA), and the Department of the  Interior—to comply with the EO’s requirements.  Specifically, we  examined the extent to which (1) Justice has updated its guidelines to  reflect changes in case law and issued supplemental guidelines for the four  agencies, (2) the four agencies have complied with the specific provisions  of the EO, and (3) awards of just compensation have been assessed by the  courts against the four agencies in recent years and, in these cases,  whether the agencies assessed the potential takings implications of their  actions before implementing them.
To report on the extent to which Justice has updated its guidelines and  issued supplemental guidance for the four agencies, we obtained copies of  these documents and interviewed knowledgeable agency officials.  We also  conducted legal research and sought the opinions and reviewed the  publications of other relevant individuals, including representatives of  private property rights and environmental groups and law school  professors, as to whether changes in takings case law since 1988 warranted  revisions to the guidelines.  To determine the extent of the four agencies’  compliance with specific provisions of the EO, we interviewed  knowledgeable agency officials and reviewed the documents they  provided.  We also interviewed OMB and Justice officials regarding the  agencies’ compliance with specific provisions, as appropriate.  In addition,  we reviewed 375 Federal Register notices published in 1989, 1997, and 2002  relating to regulatory actions of the four agencies and referencing the EO.  These years were selected judgmentally: 1989 represents the first full year  under the EO, 1997 represents an intermediate year, and 2002 represents  the most recent full year.  In addition, these years provide 1 year’s  experience under each of the past three presidential administrations.  We  undertook this analysis to determine if and how the agencies documented  their compliance with the EO.  Finally, regarding awards of just  compensation made against the agencies and, in these cases, whether the  agencies had assessed the takings potential of their actions, we obtained  from Justice a list of all regulatory takings cases related to the four  agencies that were concluded during fiscal years 2000 through 2002.  We  initially sought this type of data for the full 15-year period since the EO’s  issuance, but Justice officials indicated that the full set of data was not  readily available.  We then discussed these cases with relevant officials at  the four agencies and analyzed documents they provided.  We also  discussed these cases with the Clerk of the U.S. Court of Federal Claims  and officials responsible for administering the Department of the  Treasury’s Judgment Fund and reviewed documents they provided.
subsections: section_title: Background
paragraphs: The just compensation clause of the Fifth Amendment states “nor shall  private property be taken for public use, without just compensation.”  Initially, this clause applied to the government’s exercise of its power of  eminent domain.  In eminent domain cases, the government invokes its  eminent domain power by filing a condemnation action in court against a  property owner to establish that the taking is for a public use or purpose,  such as the construction of a road or school, and to have the amount of just  compensation due the property owner determined by the court. In such  cases, the government takes title to the property, providing the owner just  compensation based on the fair market value of the property at the time of  taking.  In later years, Supreme Court decisions established that regulatory  takings are subject to the just compensation clause as well.  In contrast to  the direct taking associated with eminent domain, regulatory takings arise  from the consequences of government regulatory actions that affect private  property.  In these cases, the government does not take action to condemn  the property or offer compensation.  Instead, the government effectively  takes the property by denying or limiting the owner’s planned use of the  property, referred to as an inverse taking. An owner claiming that a  government action has effected a taking and that compensation is owed  must initiate suit against the government to obtain any compensation due.The court awards just compensation to the owner upon concluding that a  taking has occurred.
In 1987, concerned with the number of pending regulatory takings lawsuits  and with court decisions seen as increasing the exposure of the federal  government to liability for such takings, the President’s Task Force on  Regulatory Relief began drafting an executive order to direct executive  branch agencies to more carefully consider the takings implications of their  proposed regulations or other actions.  According to a former Assistant  Attorney General, this order was needed to protect public funds by  minimizing government intrusion upon private property rights and to  budget for the payment of just compensation when such intrusions were  inevitable. The President issued this order, EO 12630, on March 15, 1988.
According to the EO, actions subject to its provisions include regulations,  proposed regulations, proposed legislation, comments on proposed  legislation, or other policy statements that, if implemented or enacted,  could cause a taking of private property.  Such actions may include rules  and regulations that propose or implement licensing, permitting, or other  conditions, requirements or limitations on private property use.  The EO  also enumerates agency actions that are not subject to the order, including  the exercise of the power of eminent domain and law enforcement actions  involving seizure, for violations of law, of property for forfeiture, or as  evidence in criminal proceedings.
Among other things, the EO requires the U.S. Attorney General to issue  guidelines to help agencies evaluate the takings implications of their  proposed actions, and, as necessary, to update these guidelines to reflect  fundamental changes in takings case law resulting from U.S. Supreme  Court decisions.  The Attorney General issued these guidelines on June 30,  1988, to establish a basic, uniform framework for federal agencies to use in  their internal evaluations of the takings implications of administrative,  regulatory, and legislative policies and actions. In addition, the guidelines  discuss agency responsibilities for implementing the EO and the process  for preparing agency-specific supplemental guidelines.
The Attorney General’s guidelines provide that agencies should assess the  takings implications of their proposed actions to determine their potential  for a compensable taking and that decision makers should consider other  viable alternatives, when available, to meet statutorily required objectives  while minimizing the potential impact on the public treasury.  In cases  where alternatives are not available, the potential takings implications are  to be noted, such as in a notice of proposed rulemaking.  The guidelines  also state that takings implication assessments are internal, predecisional  management aids and that they are not subject to judicial review.  In  addition, the form and manner of these assessments are left up to each  agency.
The guidelines also include an appendix that provides detailed information  regarding some of the case law surrounding consideration of whether a  taking has occurred and the extent of any potential just compensation  claim.  For example, the appendix discusses the Penn Central  Transportation Co. v. City of New Yorkcase in which the Supreme Court  set out a list of three “influential factors” for determining whether an  alleged regulatory taking should be compensated:  (1) the economic impact  of the government action, (2) the extent to which the government action  interfered with reasonable investment-backed expectations, and (3) the  “character” of the government action.  However, the appendix provides a  caveat that it is not intended to be an exhaustive account of relevant case  law, adding that the consideration of the potential takings of an action as  well as the applicable case law will normally require close consultation  between agency program personnel and agency counsel.
In addition to requiring guidelines, the EO requires OMB to ensure that the  policies of executive branch agencies are consistent with the EO’s  principles, criteria, and requirements.  For example, for proposed  regulatory actions subject to OMB review, agencies are required to include  a discussion summarizing the potential takings implications of these  actions in their submissions to OMB.  The EO also requires OMB to ensure  that all takings awards levied against the agencies are properly accounted  for in agencies’ budget submissions.
Despite the existence of the EO, some Members of Congress hold the view  that the enforcement of the just compensation clause with respect to  regulatory takings is inadequate and that statutory measures are needed to  reduce the infringement on private property rights resulting from  government regulation and to ensure compensation in the event of such  infringement.  For example, a variety of legislation has been proposed in  Congress over the past 10 years to achieve those goals.  In general,  according to a study prepared by the Congressional Budget Office, these  bills included measures that would (1) increase the requirements for  analysis and reporting that federal agencies must meet before making  decisions that could restrict the uses of private property, (2) relax the  procedural requirements that must be satisfied before a federal court will  hear the merits of a takings claim, and (3) require that the budget of an  agency whose action triggers a regulatory compensation claim be the  source of any compensation awarded. Although property rights  advocates have supported these legislative initiatives, others, including  some environmental groups, have questioned the need for legislation and  voiced the view that the consideration of the takings potential of an agency  action should not impede the government’s ability to protect the  environment or provide other societal benefits.
section_title: Justice Has Not Updated Its 1988 Guidelines, but Has Issued Supplemental Guidelines for Three of the Four Agencies
paragraphs: Justice has not updated the general guidelines that it issued pursuant to the  EO in June 1988 for evaluating the risk of and avoiding regulatory takings,  but it has issued supplemental guidelines for three of the four agencies.  Officials at Justice and two of the four agencies said that changes in takings  case law related to Supreme Court decisions made since 1988 have not  been significant enough to warrant a revision of the general guidelines.  Justice officials also noted that because the guidelines provide a general  framework for agencies to follow in implementing the EO, they do not  require frequent revision.  However, Interior and Agriculture officials said  that it would be helpful to their staffs if Justice updated a summary of the  key aspects of relevant case law contained in an appendix to the guidelines  to reflect significant developments in the past 15 years.  Similarly, some law  professors and representatives of property rights groups noted that the  body of relevant case law has evolved significantly over the past 15 years,  requiring an update to the guidelines.  Regarding supplemental guidelines,  Justice has issued these guidelines for three of the four agencies, but has  not done so for Agriculture.  According to Justice and Agriculture officials,  Agriculture’s supplemental guidelines went through several drafts in the  early 1990s, but were never completed because the two agencies disagreed  on issues such as how to assess the takings implications of changes in  grazing and special use permits.  However, Justice and Agriculture  officials told us that Agriculture’s compliance with the EO has not been  encumbered by the agency’s lack of supplemental guidelines.
subsections: section_title: Agency Officials and Other Experts Differ on the Need to Update the Guidelines to Reflect Changes in Takings Case Law
paragraphs: Agency officials and other experts differ on the need to update the Attorney  General’s guidelines to reflect changes in regulatory takings case law since  1988.  Justice officials said the guidelines have not been updated since 1988  because there have been no fundamental changes in regulatory takings  case law, the EO’s criterion for an update.  They said that the guidelines, as  written, still cover the main issues in determining the risk of a regulatory  taking and that subsequent Supreme Court decisions have not substantially  changed this analysis.  For example, these officials said the three-factor  test outlined in the 1978 Penn Central case remains the most important  guidance for analyzing the potential for a taking that is subject to just  compensation.  Justice officials also emphasized that the guidelines  address only a general framework for agencies’ evaluations of the takings  implications of their proposed actions and thus are not intended to be an  up-to-date, comprehensive primer on all possible considerations.  The  guidelines state that the individual agencies must still conduct their own  evaluations, including necessary legal research, when assessing the takings  potential of a proposed regulation or action.
Two of the four agencies supported Justice’s position that the guidelines do  not need to be updated.  Officials at the other two agencies expressed the  view that an appendix to the guidelines that summarizes key regulatory  takings case law should be updated.  Regarding agencies that supported  Justice’s position, Corps of Engineers staff indicated that based on their  review of relevant Supreme Court decisions since 1988, there has been no  fundamental change in the criteria for assessing potential takings and thus  no update to the Attorney General’s guidelines is necessary.  Similarly, EPA  staff said that some of the takings cases decided since 1988 gave the  appearance that the Court was changing the three-pronged test set out in  the Penn Central decision.  However, these officials noted that more recent  cases have returned to the Penn Central test, thereby removing the need  for updating the Attorney General’s guidelines.  In contrast, officials at  Interior and Agriculture said that it would be helpful if Justice updated the  summary of key takings cases contained in an appendix to the guidelines to  reflect significant developments in case law over the past 15 years.
Other legal experts also said that the Attorney General’s guidelines should  be updated, noting that regulatory takings case law has not remained static  over the past 15 years.  For example, a Congressional Research Service  attorney who has written extensively on the issue of regulatory takings said  that the guidelines should be updated to reflect more recent Supreme Court  decisions.  This attorney noted that while the EO does not define a  “fundamental” change regarding the need for an update, a number of  important cases have been decided since the guidelines were issued.  For  example, the attorney pointed to the Lucas v. South Carolina Coastal  Council decision of 1992 concerning a state ban on the development of  beachfront property.  This attorney noted that this case laid out a  categorical exception to the Penn Central test for regulations that deny a  property owner all economically viable use of the owner’s lands.  The  attorney stated that Lucas made new law in clarifying when,  notwithstanding a denial of all economically viable use, there is no taking.
Similarly, other legal experts concerned with the protection of private  property rights said that there have been significant developments in  regulatory takings case law since 1988.  These experts also cited Lucas and  other cases and said that these cases further develop and/or limit the  application of the three-pronged test outlined in the Penn Central case.  These experts said that the mere passage of time and the sheer number of  regulatory takings cases concluded since 1988 argue for updating the  guidelines.
In addition, one of these experts, a law professor who has written and  lectured on the issue of regulatory takings, said that the level of specificity  with which Justice prepared the original guidelines sets a precedent.  This  expert explained that there have been many important changes in  regulatory takings case law since 1988 and that the guidelines should be  updated to reflect these changes given the detailed manner in which the  original guidelines were prepared.
At the same time, another legal expert, an attorney from an environmental  research group, indicated that the guidelines might not require updating.  In  general, this attorney said that regulatory takings cases concluded since  1988 reaffirm the three-pronged test in the Penn Central case.  According  to this attorney, the Lucas case was initially thought to be more significant,  but more recently it has been read and interpreted more narrowly by the  courts and therefore does not constitute a fundamental change in the law.
Appendix II provides a summary of Supreme Court regulatory takings  cases decided since 1988 that were cited as being important by officials we  contacted or in the relevant literature and that may be appropriate for  inclusion in the guidelines.
section_title: Justice Has Issued Supplemental Guidelines for Three of the Four Agencies
paragraphs: The Attorney General has issued supplemental guidelines required by the  EO for three of the four agencies—the Corps of Engineers, EPA, and  Interior. Although several attempts were made to draft supplemental  guidelines for Agriculture in the early 1990s, the Attorney General did not  finalize and issue these guidelines because of unresolved issues.However, Justice and Agriculture officials indicated that the latter agency’s  lack of supplemental guidelines has not hindered its compliance with the  EO.
The EO directed the Attorney General, in consultation with each executive  branch agency, to issue supplemental guidelines for each agency as  appropriate to the specific obligations of that agency.  The Attorney  General’s guidelines state that the supplement should prescribe  implementing procedures that will aid the agency in administering its  specific programs under the analytical and procedural framework  presented in the EO and the Attorney General’s guidelines, including the  preparation of takings implication assessments.
In general, for certain agency actions, the three agencies’ supplemental  guidelines include specific categorical exclusions from the EO’s provisions.  For example, Interior’s guidelines exclude its nonlegislative actions to  which the affected property owners have consented; regulations or permits  authorizing the taking, possession, transportation, or use of migratory birds  or wildlife; biological opinions issued pursuant to the Endangered Species  Act under certain conditions; listings of certain species under the  Endangered Species Act; and denial of permits to import species into or  export species from the United States.  Similarly, the Corps of Engineers’  guidelines exclude its denials “without prejudice” (i.e., the applicant can  apply again) of Clean Water Act section 404 permits, because these denials  are not considered substantive decisions.  In addition, EPA’s guidelines  exclude its actions related to the transportation, storage, disposal,  registration, distribution, and use of pesticides; protection of public water  systems and underground sources of drinking water; control of emissions  of air pollutants; disposal of hazardous, solid, and medical waste; and  control of actual or threatened releases of hazardous substances or  pollutants or contaminants.
The Attorney General has not issued supplemental guidelines for  Agriculture because Justice and Agriculture could not reach agreement on  how to assess the potential takings implications of the latter agency’s  actions related to grazing and special use permits covering applicants’ use  of public lands. In this regard, Agriculture officials said that because the  agency issues, modifies, or denies literally thousands of grazing and special  use permits every year, the agency was concerned about the resource  implications of having to do a takings implication assessment in each case.  In addition, in Agriculture’s view, the granting of a permit for the use of  public lands does not convey “property rights” to the permit recipient, and  thus agency actions to condition or deny such a permit do not constitute a  potential taking.  Accordingly, Agriculture argued that these permit actions  should be excluded from the EO’s requirements or, if not, that the agency  be allowed to do a generic takings implication assessment that would apply  to multiple permits.  Agriculture officials indicated that Justice officials did  not agree with these suggestions, and the matter was never resolved.  According to Agriculture officials, this lack of resolution resulted, in part,  because of ongoing litigation against Agriculture alleging a taking related to  the agency’s denial of a grazing permit and changing priorities related to  the arrival of a new administration in 1993.  Despite Agriculture’s lack of  supplemental guidelines, agency officials said that their implementation of  the EO and the Attorney General’s guidelines has not been encumbered.  Justice officials agreed with this assessment.
section_title: Implementation of Key Provisions by the Four Agencies Has Changed Over the Life of the Executive Order
paragraphs: Although the EO’s requirements have not been amended or revoked since  1988, the four agencies’ implementation of some of its key provisions has  changed over time because of subsequent guidance provided by OMB.  For  example, the agencies no longer prepare annual compilations of just  compensation awards or account for these awards in their budget  documents because OMB issued guidance in 1994 advising agencies that  this information is no longer required.  According to OMB, this information  is not needed because the number and amount of these awards is small and  the awards are paid from the Department of the Treasury’s Judgment Fund,  rather than from the agencies’ appropriations.  Each of the four agencies  has designated an official—typically the chief counsel, general counsel, or  solicitor—to be responsible for ensuring the agency’s compliance with the  EO.  Finally, the four agencies told us that they fully consider the potential  takings implications of their planned regulatory actions, but provided us  with limited documentary evidence to support this claim.
subsections: section_title: Agencies No Longer Prepare and Report Annual Compilations of Just Compensation Awards or Include Information on These Awards in Their Annual Budget Submissions
paragraphs: The EO requires each executive branch agency to submit annually to OMB  and Justice an itemized compilation report of all just compensation awards  entered against the United States for regulatory takings related to the  agencies’ activities.  The EO also requires that agencies include information  on these awards in their annual budget submissions.  However, at present,  the agencies are not complying with these provisions because of guidance  provided by OMB.
Regarding annual compilations of just compensation awards, OMB first  provided guidance on the form and content of compilations in its Circular  A-11, issued in June 1988. However, in a subsequent version of this  circular issued in July 1994, OMB advised agencies that the submission of  this information is no longer necessary. According to OMB officials, this  information is not needed because just compensation awards or  settlements related to regulatory takings cases do not affect agency  budgets but are paid from the Department of the Treasury’s Judgment  Fund.  Furthermore, OMB and Justice officials said that because the  number of just compensation awards and settlements paid by the federal  government annually and the total dollar amount of these payments are  relatively small, the overall budget implications for the government are  small.  Hence, these officials said the annual reporting of just compensation  awards was unnecessary.  OMB officials offered similar reasons for not  requiring agencies to include information on just compensation awards in  their annual budget documents.
Although OMB no longer requires agencies to comply with these EO  provisions, the provisions remain in the EO.  However, OMB and Justice  officials noted that because the provisions of executive orders are not the  equivalent of statutory requirements, not complying with these provisions  does not have the same implications.  Instead, executive orders are policy  tools for the executive branch and are subject to changing interpretation  and emphasis with each new administration.  Furthermore, these officials  said that the relative lack of regulatory takings cases and associated just  compensation awards each year is an indication that the EO has succeeded  in raising agencies’ awareness of the need to carefully consider the  potential takings implications of their actions, even if subsequent OMB  guidance has excused the agencies from some of the EO’s provisions.
section_title: The Four Agencies Have Designated Officials to Ensure the Agencies’ Implementation of the EO
paragraphs: Each of the four agencies has designated an official to be responsible for  ensuring that the agency’s actions comply with the EO’s requirements.  In  general, the responsible official at each agency is the agency’s senior legal  official. EPA’s and Interior’s supplemental guidelines specifically identify  the designated official by title.  Concerning Agriculture and the Corps of  Engineers, we did not find written evidence of this designation, although  agency officials assured us that their senior legal official fulfilled this role.  Justice officials indicated that the designated official at each of the four  agencies is effectively performing the compliance assurance and liaison  functions required by the EO.  However, as a practical matter, staff  attorneys, in consultation with relevant program officials, determine the  potential takings implications of an agency’s planned actions.
section_title: Agencies Report That They Fully Consider the Takings Implications of Their Planned Actions but Provided Little Evidence to Support This Claim
paragraphs: The four agencies said that they fully consider the potential takings  implications of their planned regulatory actions, but provided us with  limited documentary evidence to support this claim.  Officials at each of  the four agencies indicated that the requirements of the EO and the  provisions of the Attorney General’s guidelines primarily guide their  consideration of the takings potential of agency actions.  Officials at the  Corps of Engineers, EPA, and Interior also cited the Attorney General’s  supplemental guidelines for each agency as being important, particularly  for identifying agency-specific exclusions to the EO’s provisions.  For  example, EPA officials indicated that their agency performs relatively few  takings implication assessments because most of its actions are excluded  from the provisions of the EO, as enumerated in its guidelines.  These  officials explained that EPA’s program responsibilities generally do not  include land management, and in past lawsuits alleging regulatory takings  that involved EPA, another federal agency usually took the action giving  rise to the takings claim, and EPA typically served as an advisor or  consultant to that agency.
Officials at three of the agencies—Agriculture, the Corps of Engineers, and  Interior—also said that their agency has provided relevant internal  guidance.  For example, an Agriculture internal regulation on rulemaking  requires implementation of the EO, including the preparation of takings  implication assessments, as appropriate. Similarly, the Corps’ Chief  Counsel issued internal guidance in a memo that addresses legal analyses  and takings implication assessments related to wetland and other permit  decisions.  For Interior, the agency’s departmental manual requires that it  assess the potential takings implications of planned rulemakings before  they are published in the Federal Register.
Agencies provided us a few written examples of takings implication  assessments.  Agency officials said that these assessments are not always  documented in writing, and, because of the passage of time, those  assessments that were put in writing may no longer be on file.  They also  noted that these assessments are internal, predecisional documents that  generally are not subject to the Freedom of Information Act or judicial  review; thus they are not typically retained in a central file for a rulemaking  or other decision, and therefore they are difficult to locate.  For example,  the Corps of Engineer’s internal guidance memo states that takings  implication assessments should be removed from the related  administrative file once the agency has concluded a decision on a permit.
In addition, agency officials also noted that they do not maintain a master  file of all takings implication assessments.  For example, in many cases,  attorneys assigned to field offices conduct these assessments.  In these  cases, agency officials said that headquarters staff may not have copies.  Nevertheless, with the exception of EPA, each agency provided us with  some examples of written takings implication assessments. These  assessments varied in form and the level of detail included.
We also had difficulty independently verifying the four agencies’  preparation of takings implication assessments from the information  contained in Federal Register notices related to their proposed and final  rulemakings.  Specifically, 375 notices mentioned the EO in 1989, 1997, and  2002, but relatively few provided an indication as to whether a takings  implication assessment was done.  Most of these rules included only a  simple statement that the EO was considered and, in general, that there  were no significant takings implications.  In contrast, 50 specified that an  assessment of the rule’s potential for takings implications was prepared,  and of these, 10 noted that the rule had the potential for “significant”  takings implications. Table 1 summarizes this information.  In addition,  appendix III provides more detailed information on these rules.
Given the limited amount of information available from the agencies or  available from the Federal Register notices we reviewed, we could not fully  assess the extent to which the EO’s requirements were fully considered by  the agencies.
section_title: Few Awards of Just Compensation Were Made Against the Four Agencies for Takings Cases Concluded during Fiscal Years 2000 through 2002
paragraphs: According to Justice data, 44 regulatory takings cases brought against the  four agencies were concluded during fiscal years 2000 through 2002. Of  these cases, the courts decided in favor of the plaintiff in 2 cases, resulting  in awards of just compensation totaling about $4.2 million.  The Justice  Department settled in 12 other cases, providing total payments of about  $32.3 million.  Of these 14 cases with awards or settlements payments, 10  related to actions of Interior, 3 to actions of the Corps of Engineers, and 1  to an action of Agriculture.  However, the EO’s requirements for assessing  the takings implications of planned regulatory actions applied to only 3 of  these 14 cases.  For the other 11 cases, the associated regulatory action  either predated the EO’s issuance or the matter at hand was otherwise  excluded from the EO’s provisions.  Based on available evidence, we found  that the relevant agency assessed the takings potential of its action in only  1 of the 3 cases subject to the EO’s requirements.  As of the end of fiscal  year 2002, Justice reported that 54 additional regulatory takings cases  involving the four agencies were pending resolution.
subsections: section_title: Fourteen Takings Cases Concluded during Fiscal Years 2000 through 2002 Ended with Awards of Just Compensation or Settlement Payments
paragraphs: Fourteen of 44 regulatory takings cases involving the four agencies and  concluded during fiscal years 2000 through 2002 resulted in government  payments, according to Justice data.  The U.S. Court of Federal Claims  awarded payment of just compensation in 2 cases for a sum totaling about  $4.2 million.  Justice settled the remaining 12 cases, for a sum totaling  about $32.3 million.In general, the cases settled were concluded with  compromise agreements, including stipulated dismissals or settlement  agreements, reached among the litigants and approved by the applicable  court.  In these cases, the agreement usually provides that the parties have  agreed to end the case with a payment to the plaintiff, but no finding that a  taking occurred.  For example, in one case concluded in 2001 that alleged a  taking of an oil and gas lease on federal land managed by Interior’s Bureau  of Land Management, the litigants negotiated a stipulated dismissal that  provided that a payment of $3 million be made to the plaintiffs.  This  payment was to cover all claims made by the plaintiffs in the case.  However, the stipulated dismissal also provided that the final outcome  should not be construed as an admission of liability by the United States  government for a regulatory taking.  In addition, the dismissal required that  the plaintiffs surrender their interests in a portion of the lease.  In the 2  cases with award payments, the court concluded that a taking had  occurred and thus it awarded just compensation.
Of these 14 cases with awards or settlement payments, the 10 Interior cases  generally dealt with permits related to mining claims on federal lands  managed by that agency or matters related to granting access on public  lands.  For example, one case involving mining claims resulted in the  plaintiff receiving a settlement of almost $4 million.  In another case,  involving the denial of preferred access to a lake on land managed by the  agency, the plaintiff received a settlement of $100,000.  The three Corps’  cases generally related to its denial or issuance with conditions of wetlands  permits for private property.  One of these cases, concerning the filling of a  wetland in Florida, resulted in a settlement payment of $21 million,  accounting for more than half of the total compensation awards and  settlement payments related to the 14 cases.  The single Agriculture case  concerned the title to mineral rights in a national forest managed by the  agency.  The plaintiff received an award of $353,000 in this case.  Table 2  provides a breakout by agency on the number of cases and the amount of  the award or settlement involved.  In addition, appendix IV provides  detailed descriptions of the particulars for each case.
In addition to the cases concluded during fiscal years 2000 through 2002,  Justice reported that an additional 54 regulatory takings cases involving the  four agencies were still pending resolution at the end of fiscal year 2002.
section_title: Only Three of the Takings Cases Concluded with Awards of Just Compensation or Settlement Payments Were Subject to the EO
paragraphs: Based on information provided by the four agencies, only 3 of the 14 cases  with payments were subject to the EO’s requirement to conduct a  regulatory takings implication assessment.  For the other 11 cases, the  agency action involved either predated the EO’s issuance or was otherwise excluded from the EO’s requirements.
Of the three cases subject to the EO’s requirements, we found evidence that  a regulatory takings implication assessment had been done in only one  instance. In that case, the Corps of Engineers denied a wetlands permit  sought by the plaintiff to fill wetlands on the plaintiff’s property in order to  develop a commercial medical center.  The plaintiff brought suit alleging a  compensable taking had occurred.  In its takings implication assessment,  the Corps had concluded that the permit denial did not constitute a taking  because the applicant was still free to use the property for other purposes  that did not involve filling the wetland.  Therefore, the Corps concluded  that the permit denial did not deprive the plaintiff of all viable economic  use of the property.  However, the case ended with a stipulated dismissal  and a payment of $880,000 to the plaintiff.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to Agriculture, the Corps of Engineers,  EPA, Interior, Justice, and OMB for review and comment. With the  exception of OMB, the agencies provided us with technical corrections and  editorial comments that we have incorporated as appropriate.  OMB  indicated that it did not have any comments on the draft.  In addition, two  of the agencies, Agriculture and EPA, provided an overall reaction to the  report.  Agriculture indicated that the report provides a thorough and  reasonable review of the issues regarding the EO’s implementation and that  the agency does not disagree with the information presented.  Similarly,  EPA indicated that it generally agreed with the information provided in the  report.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after the  date of this letter.  We will send copies of this report to the Attorney  General; the Secretary of Agriculture; the Secretary of the Army; the Administrator, Environmental Protection Agency; the Secretary of the  Interior; the Director, Office of Management and Budget; and interested  congressional committees.  We will make copies available to others upon  request.  In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.
If you have any questions concerning this report, I can be reached at 202- 512-3841 or mittala@gao.gov. Major contributors to this report are listed in appendix V.
section_title: Objectives, Scope, and Methodology
paragraphs: The Chairman of the House Subcommittee on the Constitution, Committee  on the Judiciary, asked us to provide information on measures taken by the  Department of Justice to implement certain provisions of Executive Order  12630 (EO) regarding regulatory takings of private property and the efforts  of four agencies—the Department of Agriculture, U.S. Army Corps of  Engineers, Environmental Protection Agency, and the Department of the  Interior—to comply with the requirements of the EO.  Specifically, the  Chairman asked us to examine the extent to which (1) Justice has updated  its guidelines to implement the EO to reflect changes in case law and issued  supplemental guidelines for the four agencies, (2) the four agencies have  complied with the specific provisions of the EO, and (3) awards of just  compensation have been assessed against the four agencies by the courts  for regulatory takings in recent years and, in these cases, whether the  agencies assessed the potential takings implications of their actions before  implementing them.
To report on the extent to which Justice has updated its guidelines and  issued supplemental guidance for the four agencies, we obtained copies of  these documents and interviewed knowledgeable agency officials.  At  Justice, these officials included attorneys in the agency’s Environment and  Natural Resources Division.  At the four agencies, these officials included  attorneys in each agency’s legal office (i.e., Office of the Chief Counsel,  General Counsel, or Solicitor).  We also discussed these matters with  officials of the Office and Management and Budget’s Office of Information  and Regulatory Affairs.  In addition, we conducted legal research and  sought the opinions and reviewed the publications of other relevant  individuals at the Congressional Research Service; private property rights  groups, including the Defenders of Property Rights; environmental groups,  including the Georgetown Environmental Law and Policy Institute; and law  schools, as to whether changes in takings case law since 1988 warrant  revisions to the guidelines.  In the course of this work, we identified and  summarized key regulatory takings cases heard before the Supreme Court  that have been concluded since 1988.  Our work may not have identified all  such cases.  Furthermore, we do not take a position as to whether these  cases, individually or collectively, constitute a fundamental change in the  body of regulatory takings case law that would trigger the need to update  Justice’s guidelines.
To determine the extent of the four agencies’ compliance with specific  provisions of the EO, we interviewed knowledgeable officials in the legal  offices of these agencies and reviewed the documents they provided.  These documents included written takings implication assessments of the  takings potential of proposed regulatory actions.  At each agency we  requested examples of these assessments, although we did not ask the  agencies to conduct an exhaustive search of their records for these  assessments because the agencies generally expressed concerns about the  time and resources such a search could require.  In addition, the agencies  indicated that assessments are not always written or, if written, are not  always retained in official files.  During the course of our work, we also  asked for copies of written assessments associated with specific regulatory  takings cases that were concluded with either a settlement or just  compensation payment.  In addition, we obtained copies of some additional  takings implication assessments from Federal Register notices.
Furthermore, regarding the agencies’ compliance with specific provisions  of the EO, we interviewed Justice and OMB Officials, as appropriate.  We  also reviewed OMB’s Circular A-11, Preparation and Submission of  Budget Estimates, and discussed with OMB officials how the guidance in  that circular has changed over time and affected the four agencies’  compliance with the EO.  In addition, we reviewed 375 Federal Register  notices of proposed and final regulatory actions published in 1989, 1997,  and 2002 relating to the four agencies and referencing the EO to determine  if and how the agencies documented their compliance with the EO.  These  years were selected judgmentally: 1989 represents the first full year under  the EO, 1997 represents an intermediate year, and 2002 represents the most  recent full year.  These years also provide 1 year’s experience under each of  the past three presidential administrations.
Finally, regarding awards of just compensation made against the agencies  and, in these cases, whether the agencies had assessed the takings  potential of their actions, we obtained from Justice a list of all takings  cases related to the four agencies that were concluded during fiscal years  2000 through 2002.  We initially sought this type of data for the full 15-year  period since the EO’s issuance, but Justice officials indicated that the full  set of data was not readily available and would be very labor intensive to  provide.  We then discussed these cases with relevant officials at the four  agencies and analyzed documents they provided.  In particular, we focused  on cases in which just compensation awards or settlement payments were  made, and, for these cases, whether the agencies had assessed the potential  takings implications of their actions before implementing them.  We also  discussed the cases with the Clerk of the U.S. Court of Federal Claims and  officials responsible for administering the Department of the Treasury’s  Judgment Fund and reviewed documents they provided, in part, to verify  the information on the cases with just compensation awards or settlement  payments.
We conducted our work between October 2002 and September 2003 in  accordance with generally accepted government auditing standards.
section_title: Summary of Significant Supreme Court Regulatory Takings Cases
paragraphs: This appendix summarizes regulatory takings cases decided by the U.S.  Supreme Court since 1988, the year the EO was issued and the Attorney  General promulgated guidelines related to the EO.  These cases were cited  as being important to the body of relevant case law by legal experts in our  interviews with them or in various written products they prepared,  including books, law review articles, reports, papers, speeches, or  testimonies.  The cases discussed are not intended to be an exhaustive list  of all such cases.  In addition, the appendix discusses certain cases that  were decided prior to 1988 because they are referenced in some of the  more recent cases discussed below or are cited elsewhere in this report.
subsections: section_title: Cases Decided After 1988
paragraphs: Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional  Planning Agency, 535 U.S. 302 (2002)
Issue:  Were two moratoria imposed by the Lake Tahoe Regional Planning  Agency compensable takings?
Background:  The Tahoe Regional Planning Agency issued two  ordinances prohibiting all development on vacant lots within residential  subdivisions in the Lake Tahoe Basin for a period of 32 months.  A group of  about 400 individual owners brought suit contending that the ordinances  constituted compensable takings.  (Subsequent to the landowners bringing  suit in 1984, development moratoria continued to prohibit use of many of  the parcels; however, the Supreme Court was only asked to address the 32- month moratoria.)
Decision:  The Supreme Court held that the temporary moratorium on  development was not a per se or categorical taking.  Instead, the question  of whether the Takings Clause of the Fifth Amendment requires  compensation when the government enacts a temporary regulation denying  a property owner any economic use of his property is to be decided by  applying the factors of Penn Central rather than any categorical rule.  The  Court also stated that First English Evangelical Lutheran Church v.  County of Los Angeles (discussed below) concerned the question of  whether compensation is an appropriate remedy for a temporary taking,  not whether or when such a taking has occurred.
Palazzolo v. Rhode Island, 533 U.S. 606 (2001)
Issue:  Did state denials rejecting developer’s proposals to fill in or build  on all or most of a lot, principally consisting of wetlands, cause a taking?
Background:  A landowner made several applications to the state for a  permit to fill 11 acres of wetlands, build 74 houses, or construct a private  beach club.  The state denied these applications, but informed him that he  would be allowed to build at least one house on the property.  The  landowner estimated that the limitations imposed by the state equated to a  94 percent diminution in value of the property and brought suit, arguing for  an extension of the Lucas v. South Carolina Coastal Council (Lucas) test  (discussed below) to his situation.
Decision:  The Supreme Court rejected extending Lucas to a situation  where there had been less than a complete denial of the economically  viable use of the property.  The Court noted that the ability to build a house  on the property was of significant worth.  The Court remanded the case  back to state court for evaluation under the Penn Central test.  The Court  also ruled that the acquisition of title after the effective date of the  regulation that was the basis for the regulatory takings claim did not bar  the claim.
City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687  (1999)
Issues:  Was it proper to submit the determination of a city’s liability for a  regulatory taking to a jury and did the rough-proportionality standard of  Dolan v. City of Tigard (Dolan) (discussed below) apply to challenges  based on denial of development?
Background:  Del Monte Dunes and its predecessor landowner sought to  develop an oceanfront parcel of land within the jurisdiction of the city of  Monterey.  The city, in a series of repeated rejections, denied proposals to  develop the property, each time imposing more rigorous demands on the  developers.  The property owner brought a civil rights suit against the city  alleging, among other things, that the rejections had effected a regulatory  taking.  The case was tried before a jury, which ruled in favor of Del Monte  Dunes.
Decision:  The Supreme Court ruled that the issues of whether the city’s  repeated rejections of the property owner’s development proposals  deprived the owner of all economically viable use of the owner’s property  and whether the city’s decision to reject Del Monte Dunes’ development  plan was reasonably related to a legitimate public purpose were factual  questions for a jury to resolve.  The Court also stated that the “rough  proportionality” standard of Dolan did not apply.  Dolan dealt with  situations in which land-use decisions condition approval of development  on the dedication of property to public use.  The Court held that Dolan did  not apply to the present case in which the landowner’s challenge was based  on denial of development.
Suitum v. Tahoe Regional Planning Agency, 520 U.S. 725 (1997)
Issue:  Was a landowner’s regulatory taking claim ripe for adjudication?
Background:  A landowner claimed that the Tahoe Regional Planning  Agency committed a regulatory taking when it determined that the  landowner’s undeveloped residential lot near Lake Tahoe was ineligible for  development.  However, the planning agency had indicated that the  landowner was entitled to receive certain “Transferable Development  Rights” that she could sell to other landowners with the agency’s approval.  The landowner did not seek those rights but instead brought an action for  just compensation for the agency’s alleged taking of her property.  In  response, the planning agency claimed that the landowner’s takings claim  was not ripe because she failed to apply to transfer her development rights,  and thus, the amount of her takings claim could not be determined.
Decision:  The Supreme Court ruled that the planning agency had made a  final decision in determining that the landowner’s property was ineligible  for development, and thus, her claim was ripe for adjudication.  The Court  reasoned that the valuation of the landowner’s transfer rights is simply an  issue of fact about possible market prices and went to the issue of how  much just compensation was owed, not whether there had been a taking.  The Court discussed Agins v. City of Tiburon (discussed below), in which  it held that because the owners who were challenging ordinances  restricting the number of houses they could build on their property had not  submitted a plan for development of their property, there was no concrete  controversy regarding the application of the specific zoning provisions.
Dolan v. City of Tigard, 512 U.S. 374 (1994)
Issue:  The Court stated that it granted certiorari to resolve a question left  open by its decision in Nollan v. California Coastal Commission  (discussed below):  What is the required degree of connection between the  exactions imposed by the city and the projected impacts of the proposed  development?
Background:  A landowner applied to the city of Tigard for a permit to  redevelop her plumbing and electrical supply store site.  As a condition of  granting the landowner’s permit application, the city required the  landowner to dedicate a portion of her property as a public greenway to  minimize flooding and to dedicate an additional portion of her land as a  pedestrian/bicycle pathway to reduce traffic congestion, in accordance  with the city’s land use plan. The landowner challenged the dedication  requirements on the grounds that they were not related to the proposed  development and, therefore, constituted an uncompensated taking of her  property under the Fifth Amendment.
Decision:  The Supreme Court found that preventing flooding and  reducing traffic congestion were legitimate public purposes and that there  was a nexus between the conditions imposed by the city and these  purposes.  The Supreme Court then applied a “rough proportionality” test,  stating that the city has the burden of establishing the constitutionality of  its conditions by making an “individualized determination” that the  conditions in question were proportional to the stated purposes.  The Court  ruled that the city’s dedication requirements constituted an uncompensated  taking of the landowner’s property because the city had failed to show  either the need for a public, as opposed to a private, greenway or that the  additional number of vehicle and bicycle trips generated by the proposed  development was reasonably related to the city’s requirement for a  dedicated pedestrian/bicycle path.
Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)
Issue:  Is a government regulation of land that completely eliminates its  economic use a compensable taking?
Background:  A landowner bought two residential lots on a South Carolina  barrier island, intending to build single-family homes.  Subsequently, the  state enacted a statute that barred him from erecting permanent habitable  structures on the land.  The landowner filed suit in state court, claiming  that the law caused a taking of his property without just compensation.  The South Carolina trial court found that the statute rendered the  landowner’s parcel valueless, and awarded compensation.  The South  Carolina Supreme Court reversed the award of compensation, holding that,  under previous U.S. Supreme Court cases, when a regulation is designed to  prevent “harmful or noxious uses” of property akin to public nuisances, no  compensation was due the landowner, regardless of the regulation’s effect  on the property’s value.
Decision:  The Court reversed the South Carolina Supreme Court’s  decision, ruling that the state court erred in applying the “harmful or  noxious” uses principle to decide this case.  The Court stated that  regulations that deny the property owner all “economically viable uses of  his land” constitutes a per se, or categorical, regulatory taking that requires  compensation, without inquiring into the public interest advanced in  support of the restraint. However, the Court also noted that no taking has  occurred if the state law simply makes explicit the limitations on land  ownership already existing as a result of the background principles of a  state’s law of property and nuisance.  The Supreme Court remanded the  case for the South Carolina court to determine whether these principles  would have prohibited the landowner from building on his property.
section_title: Cases Decided Before 1988
paragraphs: Nollan v. California Coastal Commission, 483 U.S. 825 (1987)
Issue:  Was there a nexus between the condition on the requested permit  and a legitimate state government purpose of protecting the public view of  a beach?
Background:  The California Coastal Commission demanded a lateral  public easement across the Nollans’ beachfront lot in exchange for a permit  to demolish an existing bungalow and replace it with a three-bedroom  house.  The public easement was designed to connect two public beaches  that were separated by the Nollan property.  The Coastal Commission had  asserted that the public easement condition was imposed to promote the  legitimate state interest of diminishing the “blockage of the view of the  ocean” caused by construction of the larger house.
Decision:  The Court found that there had been a taking, as it found no  “essential nexus” between the government’s purpose and its condition on  construction that required the property owners to grant an easement  allowing the public access to their beachfront.  The Court ruled that while  the Coastal Commission could have required that the Nollans provide a  viewing spot on their property for passersby, there was no nexus between  visual access to the ocean and a permit condition requiring lateral public  access along the Nollans’ beachfront lot.
First English Evangelical Lutheran Church v. County of Los  Angeles, 482 U.S. 304 (1987)
Issue:  Did an interim ordinance prohibiting construction of any structures  in a flood zone cause a temporary taking of property requiring  compensation?
Background:  A church purchased a 21-acre parcel of land located in a  canyon along the banks of a river that is a natural drainage channel for a  watershed area.  The church operated a campground on the site.  Flooding  destroyed the campground and its buildings.  In response to the flooding of  the canyon, the County of Los Angeles adopted an interim ordinance that  prohibited construction in an interim flood protection area, including the  site on which the campground had stood.  The church filed suit, seeking  just compensation for loss of the use of the campground.
Decision:  The Court ruled that even if a regulation that has been found to  result in a taking is repealed or invalidated the government must pay just  compensation for the interim period that the regulation was in effect.
Agins v. City of Tiburon, 447 U.S. 255 (1980)
Issue: Did a zoning ordinance limiting the number of houses that  landowners could build on their property cause a taking?
Background: The landowners acquired 5 acres of unimproved land for  residential development in Tiburon, California.  Subsequently, the city  adopted two ordinances that modified existing zoning requirements.  The  density restrictions under the ordinances permitted the landowners to  build between one and five single-family residences on their 5-acre tract.  The landowners did not seek approval to develop their land, and instead  brought suit for just compensation.  The complaint alleged that their land  had greater value than other suburban property in California due to the  scenic views, and that the ordinances destroyed the value of their property.
Decision:  The Court held that the zoning ordinance on its face did not  cause a taking.  The court stated that the ordinance was rationally related  to the legitimate public goal of open-space preservation, the ordinance  benefits property owners as well as the public, and the landowners may  still be able to build up to five houses on a lot.  The Court also found that  because the landowners had not submitted a plan for development of their  property, there was no concrete controversy regarding the application of  the specific zoning provisions.
Penn Central Transportation Co. v. City of New York, 438 U.S. 104  (1978)
Issue:  Did the city’s use of a historic preservation ordinance to block  construction of an office tower atop a designated historic landmark cause a  taking?
Background: The Landmark Preservation Commission denied Penn  Central permission to build a multistory office building above Grand  Central Station in New York City.  Penn Central alleged the regulation took  its property.
Decision:  The Court ruled that there had been no taking of property.  In  evaluating the case, the Court set forth a three-pronged test for determining  whether a government regulation has resulted in a taking:  (1) the character  of the governmental actions; (2) the economic impact of the action on the  property owner; and (3) the extent to which the regulation has interfered  with the distinct, investment-backed expectations of the owner.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)
Issue:  Did a state law barring coal mining that might cause subsidence of  overlying land result in a taking of private property in a case where the  mineral estate owner is different from the surface estate owner?
Background:  A coal company conveyed the surface ownership of its  property and retained the right to remove coal from the subsurface.  Subsequently, a state law was enacted, forbidding the mining of coal in  such a way as to cause the subsidence of housing in situations where the  surface and subsurface ownership belong to different parties.  As a result,  the coal company was unable to exercise its right to remove the coal.
Decision:  The Court held that a taking occurred.  The Court stated “while  property may be regulated to a certain extent, if regulation goes too far it  will be recognized as a taking.”  The Court reasoned that the extent of the  taking under the state law—abolishing the right to mine coal, which it  deemed “a very valuable estate”—was great.  Moreover, because the state  law applied only where surface and subsurface land is in different  ownership, it benefits a narrow private interest rather than a broad public  one.
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the individuals named above, Doreen S. Feldman, James K.  McDowell, Jonathan S. McMurray, John P. Scott, and Timothy W. Wexler  made key contributions to this report.  Kathleen A. Gilhooly and Lisa M.  Wilson also made important contributions.
section_title: GAO’s Mission
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