Opinion ID: 185020
Heading Depth: 2
Heading Rank: 2

Heading: The Takings Analysis

Text: The Takings Clause of the Fifth Amendment prohibits thegovernment from taking private property ... for public use,without just compensation. U.S. Const. amend. V. In aregulatory takings case, the principal focus of inquiry iswhether a regulation reaches a certain magnitude in depriving an owner of the use of property. Pennsylvania Coal Co.v. Mahon, 260 U.S. 393, 413 (1922); see also id. at 415 (askingwhether the regulation goes too far). The Supreme Courthas indicated that most regulatory takings cases should beconsidered on an ad hoc basis, with three primary factorsweighing in the balance: the regulation's economic impact onthe claimant, the regulation's interference with the claimant'sreasonable investment-backed expectations, and the characterof the government action. See Penn Central Transp. Co., 438U.S. at 124. The meaning of the three factors identified in Penn Centralhas been amplified by the Court, both in Penn Central and inlater cases. The regulation's economic effect upon the claimant may be measured in several different ways. See Hodel v.Irving, 481 U.S. 704, 714 (1987) (looking to the market value of a property); Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 495-96 (1987) (looking to whether theregulation makes property owner's coal operation commercially impracticable); Andrus v. Allard, 444 U.S. 51, 66(1979) (looking to the possibility of other economic use besides sale, which was prohibited by the challenged regulation); Penn Central Transp. Co., 438 U.S. at 136 (focusing onthe ability to earn a reasonable rate of return). A reasonableinvestment-backed expectation must be more than a 'unilateral expectation or an abstract need.'  Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005-06 (1984) (quoting Webb'sFabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161(1980)). Claimants cannot establish a takings claim simplyby showing that they have been denied the ability to exploit aproperty interest that they heretofore had believed was available for development. Penn Central Transp. Co., 438 U.S.at 130. And the character of the governmental action depends both on whether the government has legitimized aphysical occupation of the property, see Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 434-35(1982), and whether the regulation has a legitimate publicpurpose, see Keystone Bituminous Coal Ass'n, 480 U.S. at485. Finally, under all three of these factors, the effect of theregulation must be measured on the parcel as a whole. SeePenn Central Transp. Co., 438 U.S. at 130-31. The Supreme Court has indicated that it will find a categorical or per se taking in two circumstances. The firstcircumstance includes regulations that result in permanentphysical occupation of property. Loretto, 458 U.S. at 434-35. This circumstance is not at issue in this case. The secondcircumstance includes regulations pursuant to which the government denies all economically beneficial or productive useof property. See Lucas, 505 U.S. at 1015. This so-calledtotal taking claim is at the heart of District Intown'scomplaint here. Unfortunately, the facial simplicity of thetotal taking standard belies the difficulty in its application. As the Court acknowledged in Lucas, its rhetorical force ...is greater than its precision, since the rule does not make clear the 'property interest' against which the loss of value isto be measured. 505 U.S. at 1016 n.7. Under both Lucas and Penn Central, then, we must firstdefine what constitutes the relevant parcel before we canevaluate the regulation's effect on that parcel. In the instantcase the question is: Does the relevant parcel consist of theproperty as a whole or do the eight lots for which construction permits were denied constitute the relevant parcels? This has been referred to as the denominator problem. E.g., Loveladies Harbor, Inc. v. United States, 28 F.3d 1171,1179 (Fed. Cir. 1994). State law may offer some guidance onhow to define the relevant parcel, but, as the Court has noted,state law is not always determinative. Compare Lucas, 505U.S. at 1017 n.7 (suggesting that one may look to the influence of the State's property law--whether and to what extentthe State has recognized and extended legal recognition tothe particular interest alleged to have been deprived of alleconomic value--on the claimant's reasonable expectations),with Keystone Bituminous Coal Ass'n, 480 U.S. at 500 (refusing to treat the support estate as a separate parcel ofproperty simply because Pennsylvania law recognizes it assuch and noting that our takings jurisprudence foreclosesreliance on such legalistic distinctions within a bundle ofproperty rights).