Opinion ID: 71236
Heading Depth: 2
Heading Rank: 2

Heading: Whether the City Effected a Taking of the Project

Text: 41 Corn argues that the state court judgment conclusively establishes that he had a property right in the Project which was taken by the City when it denied him permission to build the mini-warehouse. He contends that the City's actions denied him of all economically viable use of the Project, entitling him to just compensation. The City responds that, even if Corn had a property interest in the Project, it is not the type of property interest cognizable in a just compensation claim. According to the City, any property interest in the Project properly was the subject of Corn's substantive due process claim and may not be relitigated in the guise of a just compensation claim. 42 The district court held that Corn had no property interest in developing the Project. In so holding, however, the district court failed to consider the state court's holding that, under Florida law, Corn had acquired certain vested rights in the Project. Nevertheless, we need not decide what preclusive effect, if any, the state court finding of vested rights under state law has in this federal action for just compensation under the Fifth Amendment. We hold that, regardless of what vested rights Corn may have had in the Project under Florida law, a denial of permission to build a particular development project does not, by itself, state a just compensation claim. To recover just compensation, Corn must show that the denial of his rights in the Project denied him all or substantially all economically viable use of the Parcel, not simply economically viable use of whatever property rights he had in the Project. 5 43 The Fifth Amendment prohibits the government from taking private property for public use without paying just compensation. The private property subject to the Fifth Amendment's prohibition, however, does not include every single property interest recognized by the law. Corn correctly notes that the Supreme Court has recognized that the Just Compensation Clause protects property interests other than just fee simple ownership of land. See, e.g., Dolan v. City of Tigard, 512 U.S. 374, ----, 114 S.Ct. 2309, 2316, 129 L.Ed.2d 304 (1994) (Fifth Amendment protects right to exclude others); Nollan v. California Coastal Comm'n, 483 U.S. 825, 831, 107 S.Ct. 3141, 3145, 97 L.Ed.2d 677 (1987) (same). But Corn cites no authority holding that a denial of rights in a particular development project requires just compensation when, as here, the denial substantially advances legitimate governmental interests and does not deny the landowner all or substantially all economically viable use of his land. 44 The Supreme Court's decisions suggest that a just compensation claim turns on the remaining economically viable uses of the land itself rather than on the ability to take advantage of a particular right relative to the land. In Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), for example, the Court rejected the type of narrow focus on particular rights urged by Corn, characterizing as quite simply untenable the suggestion that a taking is established simply by showing that a landowner has been denied the ability to exploit a particular property interest. Id. at 130, 98 S.Ct. at 2662. The landowner in Penn Central argued that New York City had deprived it of any gainful use of the valuable air rights above Grand Central Station and that, regardless of the value of the remainder of the parcel, the city had taken its right to the airspace, entitling it to just compensation measured by the fair market value of the air rights. Rejecting this argument, the Court noted: 45 Taking jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a particular governmental action has effected a taking, this Court focuses rather both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole.... 46 Id. (emphasis added). See also Andrus v. Allard, 444 U.S. 51, 65-66, 100 S.Ct. 318, 327, 62 L.Ed.2d 210 (1979) (But the denial of one traditional property right does not always amount to a taking. At least where an owner possesses a full bundle of property rights, the destruction of one strand of the bundle is not a taking, because the aggregate must be viewed in its entirety.) 47 It is true that the Supreme Court has found a taking when economically viable uses of the land itself remain. Those cases, however, generally have involved either a physical invasion of the land, see, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982); Kaiser Aetna v. United States, 444 U.S. 164, 100 S.Ct. 383, 62 L.Ed.2d 332 (1979), or destruction of a fundamental attribute of ownership, see, e.g., Nollan, 483 U.S. 825, 107 S.Ct. 3141 (right to exclude others); Kaiser Aetna, 444 U.S. 164, 100 S.Ct. 383 (same). Here, of course, Corn's land has not been physically invaded, and Corn does not contend that the right to build a mini-warehouse is a fundamental attribute of ownership or one of the most essential sticks in the bundle of rights that are commonly characterized as property. Dolan, 512 U.S. at ----, 114 S.Ct. at 2316 (quoting Kaiser Aetna, 444 U.S. at 176, 100 S.Ct. at 391). 48 Corn correctly notes that the property rights protected by the Fifth Amendment are created and defined by state law. See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1030, 112 S.Ct. 2886, 2901, 120 L.Ed.2d 798. He errs, however, in suggesting that the Fifth Amendment requires the payment of just compensation for every deprivation of a right recognized by state law. Property as used in the Just Compensation Clause is defined much more narrowly than in the due process clauses. Pittman v. Chicago Bd. of Educ., 64 F.3d 1098, 1104 (7th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 2497, 135 L.Ed.2d 189 (1996); Pro-Eco, Inc. v. Board of Comm'rs of Jay County, Ind., 57 F.3d 505, 511 n. 6 (7th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 672, 133 L.Ed.2d 522 (1995). See also Scott v. Greenville County, 716 F.2d 1409, 1421-22 & n. 20 (4th Cir.1983) (entitlement to building permit is property protected by due process clause but not by Fifth Amendment takings doctrine). Thus, while certain property interests may not be taken without due process, they may be taken without paying just compensation. We think that Corn's right in the Project is such an interest. 6 49 Corn contends that this circuit has held that a denial of vested rights in a development project may entitle a developer to just compensation under the Fifth Amendment. According to Corn, A.A. Profiles, Inc. v. City of Fort Lauderdale, 850 F.2d 1483 (11th Cir.1988), cert. denied, 490 U.S. 1020, 109 S.Ct. 1743, 104 L.Ed.2d 180 (1989), and Wheeler v. City of Pleasant Grove, 664 F.2d 99 (5th Cir.1981), cert. denied, 456 U.S. 973, 102 S.Ct. 2236, 72 L.Ed.2d 847 (1982), establish that a landowner is entitled to just compensation when denied a property interest in a project, regardless of whether the land itself may be put to other economically viable uses. The City contends that A.A. Profiles and Wheeler are better viewed as due process cases rather than as just compensation cases. 50 Plaintiff in A.A. Profiles planned to operate a wood-chipping business on its land. Plaintiff received the necessary approvals from the city commission, completed the purchase of the land, obtained building permits, and commenced construction on the land. Id. at 1485. Subsequently, the city withdrew its approval, issued a stop work order, and re-zoned the land. Id. Plaintiff alleged that the city's actions violated the prohibition against taking private property without just compensation and procedural due process. Id. We framed the issue as whether the city's actions substantially advanced a legitimate state interest. Id. at 1478. In finding that they did not, we relied heavily on our indistinguishable decision in Wheeler. In Wheeler, we held that a city ordinance prohibiting the plaintiff from building an apartment complex for which it had already received a building permit was arbitrary and capricious and therefore violated due process. Id. at 100. We also characterized the city ordinance in Wheeler as a confiscatory measure, and noted that a regulatory undertaking that is confiscatory is a taking. Id. 51 Though the City correctly notes that the government action in both A.A. Profiles and Wheeler violated due process, we agree with Corn that both cases hold that a denial of rights in a development project may give rise to a just compensation claim as well as to a due process claim. But we cannot agree with Corn's suggestion that, under A.A. Profiles and Wheeler, a developer establishes a just compensation claim simply by showing denial of a vested right in a particular development project. We based our holding in both cases on the first prong of a just compensation claim, holding that the government action failed to advance a legitimate state interest. A.A. Profiles, 850 F.2d at 1487-88; Wheeler, 664 F.2d at 100. We did not mention the economically viable use prong of a just compensation claim. Neither A.A. Profiles nor Wheeler addresses the issue in this case: whether government actions substantially advancing legitimate state interests effect a taking when they deny economically viable use of a particular development right but allow the land itself to be used for many economically viable uses. 52 For the reasons discussed above, we hold that the government does not effect a taking when its actions substantially advance legitimate state interests and leave economically viable uses of the land itself. Thus, Corn may recover just compensation only to the extent that he was denied economically viable use of the Parcel; he may not recover just compensation for any denial of his rights in the Project that did not also deny him economically viable use of the Parcel.