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Issue
Whether a government regulation restricting the use of the privately owned land constitutes a regulatory taking under the Fifth Amendment. Specifically, whether an ordinance that “prohibits the individual development or sale of adjacent, substandard lots under common ownership, unless an individual lot has at least one acre of net project area,” violates the Takings Clause of the U.S. Constitution, which reads, “nor shall private property be taken for public use, without just compensation.”
Facts
The Murr siblings’ parents bought adjacent lots of land on the St. Croix River in 1960 and 1963. They built a cabin on the first lot, but left the second lot vacant. Although each lot covered about 1.25 acres of land, a steep cliff bisected the two lots, resulting in less than one acre of suitable land on each lot. The parents transferred the lots to the Murr siblings “Murr” in 1994 and 1995.
Years later, because of flooding, Murr wanted to rebuild the cabin farther from the river. But property regulations restricted them from doing so outright. Murr sought a series of special exception permits to rebuild the cabin, construct a retaining wall, and allow for other construction-related exceptions to the codes. One regulation required that the individual development or sale of adjacent lots, under the same ownership, is allowed only if an individual lot has at least one acre of net project area. Both of Murr’s lots failed to meet the requirements for sale or development.
Facing opposition from the Department of Natural Resources and the county zoning staff, the St. Croix County Board of Adjustment denied all exception requests. Unable to sell one of the lots, and being unable to designate the two lots as separate building sites, Murr was thus left with two lots, neither one of which he could sell separately, and on neither one of which he could rebuild the cabin.
The Court Below
After the Board’s rejection, Murr appealed to the state circuit court, which affirmed the Board’s denial of Murr’s request to sell or use the two lots as separate building sites.
Still unable to build, Murr then appealed to the Wisconsin Court of Appeals. It upheld the Board’s interpretation of the ordinance setting forth the criteria for building on the river. See the opinion here:
Murr v. St. Croix County Board of Adjustment, 332 Wis.2d 172 Wis. Court of Appeals, 2011
Murr appealed to the Wisconsin Supreme Court, but was denied review.
Trying again on constitutional grounds, Murr then brought action against the state and county, arguing that the ordinance preventing them from using or selling the parcels was a violation of the Fifth Amendment’s Takings Clause. The state circuit court ruled in favor of the state and county. Murr then appealed to the Wisconsin Court of Appeals, which again ruled against Murr. See the opinion here:
Murr v. State of Wisconsin, 359 Wis.2d 675 Wis. Court of Appeals, 2014
Murr then appealed to the Wisconsin Supreme Court, but was again denied review. Since Murr was now arguing on a federal question, he appealed to the United States Supreme Court, which granted certiorari, but ruled in favor of the state and county. See the opinion here:
Murr v. Wisconsin, 137 S.Ct. 1933 2017
Question before the Supreme Court
“In a regulatory taking case, does the ‘parcel as a whole’ concept as described in Penn Central Transportation Company v. City of New York, 438 U.S. 104, 130-31 1978, establish a rule that two legally distinct, but commonly owned contiguous parcels, must be combined for takings analysis purposes?”
CCJ filed an amicus curiae brief in the Supreme Court in support of Murr
Summary:
The fundamental consideration in this case is whether Murr’s lots should be considered as two distinct pieces of property, or whether they should be considered as an aggregate whole. Determining whether the government has committed an unlawful taking often depends on the amount or percentage of the owner’s property that the regulation takes, and then balancing that deprivation with the public benefit derived from the law or regulation. In general, as seen in Penn Central, the Supreme Court has held that parcels of property should be considered “as a whole,” and not bisected for purposes of separate analysis. Despite the Murr’s property being two separate lots, however, the Wisconsin regulation considered them in the aggregate for purposes of development and sale.
It should be noted that “regulatory taking,” as opposed to simply seizing property, occurs when a government regulation affects private property to such a degree that it essentially deprives the owner of its use or value. If a government regulation prohibits farming or construction on a piece of property, for example, one could argue that the regulation “takes” the property from the owner, even though he may still hold title to it. Murr argues that the regulation that effectively prohibits his sale or development of a single lot is just such a regulatory taking.
The court below relied on Penn Central as a precedent, but the case is inapplicable. In that case, the Court considered a single piece of property and whether it could be divided into two separate interests for purposes of analysis. Murr’s property is not a single parcel, but is actually two separate lots. It is clear that two separate lots should be considered separately for takings considerations, even if they border each other. Artificially “aggregating” the properties together dilutes the effects of the actual regulatory taking that deprived Murr of the entire value of his lot, and indeed, the Penn Central implicitly prohibits “aggregating” two adjacent lots.
Also, the current approach of “balancing” private property rights with “public purpose” is misguided. A regulation depriving an owner of even the slightest amount of his property without just compensation to simply “benefit the public” should be prohibited, unless that person is legitimately causing a “nuisance” or using his property to deprive his neighbors of their own property rights. In general, no individual should be targeted to burden the benefits of the rest of society. Essentially taking hundreds of thousands of dollars’ worth of the Murr’s property is indeed a significant burden, and yet there was no significant “public benefit” derived from the regulation. Indeed, neighbors were using their property in much the same way as Murr wanted to use his, but his property just happened to fall under these regulations.
Further, even if the Court does consider Penn Central a precedent in this case, Penn Central itself should be reconsidered. The Court should embrace “conceptual severance,” even if considering the Murr’s property to be a single lot of land.
“Conceptual severance” refers to the “conceptual” division of a single property into separate, distinct property interests for purposes of legal analysis, particularly when considering whether a regulation is a taking. For example, consider the division of a piece of land into surface rights—for building rental homes or a business, perhaps—and the mineral rights—the earth itself, which may hold gold, silver, or other valuable resources. If a government regulation prohibits mining in a particular area, and if a miner owns a mine in that area, one could argue he has been deprived of 100% of the value of his land. If one refrains from conceptual severance, however, someone else could argue that the same regulation deprives the miner of only a fraction of the value of his land, since his ability to use and profit from his surface rights remains intact. A deprivation of only 5% of the value of one’s land by government regulation may not qualify as an unlawful taking. In this case, Murr indeed is unable to sell or develop one of his lots of land as he wishes, and so he has been deprived a major percentage of the value of his land.
CCJ supports conceptual severance because it takes circumstances into account when determining the protection of property rights, a paramount object in good government. Takings Clause cases should be approached with the original understandings of the Clause in mind. Penn Central does not apply in this case, and even if it did, Penn Central should be revisited to restore the full measure of protection of private property rights intended by the Takings Clause.
Final Outcome
The Supreme Court affirmed the lower court ruling, rejecting CCJ’s argument. Holding to the rule that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking,” the Court found that the rule “strikes a balance between property owners’ rights and the government’s authority to advance the common good.” It held that the regulations were a legitimate exercise of government power, that the two adjacent parcels were required to be evaluated as a single parcel in determining whether the regulations affected a regulatory taking, and finally, that the regulations did not qualify as an unlawful, regulatory taking under the Fifth Amendment.
