Opinion ID: 853972
Heading Depth: 3
Heading Rank: 1

Heading: The federal Takings Clause

Text: [W]hile property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 67 L.Ed. 322 (1922). Mahon is generally regarded as the seed from which all modern regulatory taking cases have grown. Department of Natural Resources v. Indiana Coal Council, 542 N.E.2d 1000, 1003 (Ind.1989). Seventy years after Mahon, however, the Supreme Court acknowledged that the decision offered little insight into when, and under what circumstances, a given regulation would be seen as going `too far' for purposes of the Fifth Amendment. Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992). Indeed, the Court has generally eschewed any set formula for determining how far is too far, preferring to engag[e] in . . . essentially ad hoc, factual inquiries. Id. (internal quotation marks and citations omitted). Although no precise rule determines when property has been taken, the question necessarily requires a weighing of private and public interests. Agins v. City of Tiburon, 447 U.S. 255, 260-61, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980) (citation omitted). As an overarching concern, the Court has stated that the Takings Clause is designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole[.] Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 123, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) (quoting Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960)). The Court has identified two discrete categories of regulations that violate the Takings Clause regardless of the legitimate state interest advanced. See generally Randall T. Shepard, Land Use Regulation in the Rehnquist Court: The Fifth Amendment and Judicial Intervention, 38 CATH. U.L.REV. 847 (1989). The first consists of regulations that compel a property owner to suffer a physical invasion, no matter how minute, of his property. Lucas, 505 U.S. at 1015, 112 S.Ct. 2886; see, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982) (law requiring landlords to allow cable companies to place cable facilitiesoccupying at most 1 ½ cubic feet of the landlord's propertyin their apartment buildings constituted a taking). The second category concerns regulations that deny all economically beneficial or productive use of the land. Lucas, 505 U.S. at 1015, 112 S.Ct. 2886. [2] A zoning ordinance that provides for the forfeiture of unregistered nonconforming uses does not fall into either of these prohibited categories. The forfeiture involved no physical invasion of the Leiszs' property. It merely limits the use of their rental property to three unrelated adults instead of four, five or more. Second, the ordinance does not deny the Leiszs all economically beneficial or productive use of their land. Rather, it denies them at most 25% to 40% of the rental income that they might otherwise receive. [3]
Even if there is no per se taking, the Fifth Amendment is violated when a land-use regulation does not substantially advance legitimate state interests[.] Id. at 1016, 112 S.Ct. 2886 (quoting Agins, 447 U.S. at 260, 100 S.Ct. 2138). Prior Supreme Court cases have not elaborated on the standards for determining what constitutes a `legitimate state interest,' but have upheld a broad range of governmental purposes and regulations, including scenic zoning, landmark preservation, and residential zoning. Nollan v. California Coastal Comm'n, 483 U.S. 825, 834-35, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987). The purpose of the registration requirement, according to the BZA, was to establish an administrative process for making a one-time determination of pre-existing status that protects both the owner and the zoning authority from later lengthy disputes and extensive proof problems related to the validity of a nonconforming use. The landowners make a qualified concession in this regard: The Leiszs concede that the city may require a grandfather registration form to be filled out by lawful, pre-existing, non-conforming use and that recordkeeping is useful for the BZA, and protects against problems of proof. Thus, the Leiszs do not attack the registration requirement itself, but rather challenge only its forfeiture penalty. In upholding a provision similar to Bloomington's, the Court of Civil Appeals of Texas noted that [t]he purpose of this registration ordinance is to provide [the City] with sufficient knowledge of the nature and extent of nonconforming uses claimed within the City so that the City can consider these nonconforming uses in planning and can monitor their abandonment. Without a registration scheme it would be impossible for [the City] to begin to implement the plan for the fair and reasonable return of the property to the character of the surrounding neighborhood. Board of Adjustment of San Antonio v. Nelson, 577 S.W.2d 783, 785 (Tex.Civ.App.1979), aff'd. on other grounds, 584 S.W.2d 701 (Tex. 1979). In discussing a registration requirement in Maryland, the court observed its purpose clearly is to bring about conformance, through the zoning process, of nonconforming uses as speedily as possible. To accomplish this, the County Commissioners needed to know where the applicable nonconforming uses were located; thus, the required certification of the nonconforming uses within a specified time. In addition, the County Commissioners sought to prevent unlawful expansion of such uses; hence the requirement that information concerning the exact nature and extent of the nonconforming use was required to be furnished. Moreover, the County Commissioners provided a sanction for a landowner's failure to comply with the certification requirementthe discontinuance of the nonconforming use. County Comm'rs of Carroll County v. Uhler, 78 Md.App. 140, 552 A.2d 942, 946 (Md. Ct. Spec.App.1989) (ordinance required only the registration of used car lots, service garages or junk yards). The very real problem associated with proving the existence of a nonconforming use several years in the past is highlighted by this case. The Leiszs offered affidavits and copies of old leases listing the names of four or five individuals living in the rentals when the ordinance was enacted. However, the BZA found this insufficient to prove uninterrupted occupancy by more than three adults since 1985. [4] Leisz, 686 N.E.2d at 939. Moreover, one of the purposes of any city's zoning regulations is to promote the orderly, responsible, and beneficial development and growth of its city. See, e.g., BMC § 20.01.02.02(a). This would be very difficultif not impossiblewithout some mechanism to monitor nonconforming uses. Although they concede the value of requiring registration of nonconforming uses, the Leiszs seem to suggest that there should be no penalty for noncompliance. The forfeiture provision, however, is a necessary part of the registration requirement. By its very nature, registration requires that a deadline be set. In this case, the June 8, 1985 ordinance required registration of nonconforming uses by October 1, 1985. Allowing nonconforming uses to continue indefinitely after the expiration of the registration deadline would make the entire registration requirement an exercise in futility. In sum, we conclude that the registration requirement, including the forfeiture sanction, substantially advances a legitimate state interest.
The U.S. Supreme Court has identified three factors of particular significance to an ad hoc takings inquiry: (1) [t]he economic impact of the regulation on the claimant, (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3) the character of the governmental action. Penn Central, 438 U.S. at 124, 98 S.Ct. 2646. Under the current zoning ordinance, the Leiszs may continue to use their two properties as rental units. Due to the failure of the prior owners to register their nonconforming use, however, they are restricted to renting the units to a maximum of three unrelated adults. Their property continues to have an economically viable use, even if it is somewhat diminished. When a regulation is, as in this case, reasonably related to the promotion of the general welfare, the Supreme Court has uniformly reject[ed] the proposition that diminution in property value, standing alone, can establish a `taking[.]' Id. at 131, 98 S.Ct. 2646 (citing Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926) (75% diminution in value); Hadacheck v. Sebastian, 239 U.S. 394, 36 S.Ct. 143, 60 L.Ed. 348 (1915) (87 ½% diminution in value)). Although a valid consideration, the diminution of the value of the Leiszs' rentals is not the only consideration. Even if it is a fair measure of the economic impact of the regulation prong of Penn Central, other factors are equally relevant to the takings issue under the facts of this case. In particular, the forfeiture of the Leiszs' nonconforming use caused no interference with their reasonable investment-based expectations. Both the ordinance and the prior owners' failure to register were matters of public record at the time the Leiszs bought their property. Property owners are charged with knowledge of ordinances that affect their property. [5] Wesner v. Metropolitan Dev. Comm'n, 609 N.E.2d 1135, 1137 n. 2 (Ind.Ct.App.1993); cf. Texaco, Inc. v. Short, 454 U.S. 516, 532, 102 S.Ct. 781, 70 L.Ed.2d 738 (1982) (It is well established that persons owning property within a state are charged with knowledge of relevant statutory provisions affecting the control and disposition of such property.). Their reasonable expectation was that the city might show up at their properties at any time and demand the termination of their unregistered nonconforming use. Any investment-backed expectation they harbored out of ignorance of the ordinance is entitled to no weight. [6] Indeed, whether they were aware of it or not, the price at which they bought the properties may have been, and in a perfect world was, a reflection of this risk. The character of the governmental action points in the same direction. The registration requirement takes nothing from the landowner. Rather, it merely requires the filing of a form by a designated date. Noncompliance with the regulation, not the regulation itself, results in the forfeiture of a vested property right. The power to protect the property interest rests solely with the landowner. The Supreme Court addressed a similar situation in United States v. Locke, 471 U.S. 84, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985), which dealt with a federal law that provided for the forfeiture of mining claims if they were not registered within three years of the law's enactment and every year thereafter. Id. at 88, 105 S.Ct. 1785. The Court found no taking, noting that it had never required the payment of just compensation to a landowner for the consequences of his own neglect. Id. at 107, 105 S.Ct. 1785 (quoting Texaco, 454 U.S. at 530, 102 S.Ct. 781). The landowner's property loss could have [been] avoided with minimal burden; it was their failure to file on timenot the action of Congressthat caused the property right to be extinguished. Regulation of property rights does not take private property when an individual's reasonable, investment-backed expectations can continue to be realized as long as he complies with reasonable regulatory restrictions the legislature has imposed. Id. The claims in Locke were worth millions of dollars and reverted to the federal government. Id. at 89, 105 S.Ct. 1785. In contrast, the Leiszs have merely forfeited the right to use their rental properties to house more than three unrelated individuals and the City of Bloomington has received nothing from them. We conclude that the forfeiture of the Leiszs' nonconforming use due to its nonregistration is not a taking under the Fifth and Fourteenth Amendments. The ordinance at issue serves important public purposes. Any diminution in the economic value of the Leiszs' property is the direct result of their predecessors' failure to comply with a reasonable registration requirement. Under these facts, the forfeiture of the Leiszs' nonconforming use in no way offends notions of fairness and justice. This view is consistent with the Supreme Court's opinion in Locke and also finds support in other jurisdictions that have considered and upheld similar provisions. See, e.g., Uhler, 552 A.2d at 946 (landowner's failure to comply with requirement for obtaining nonconforming use certificate required discontinuance of nonconforming use); Nelson, 577 S.W.2d at 785-86 (nonconforming use lost where owner failed to register it within time period provided by ordinance). [7]