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A government taking occurs when the regulatory strictures placed on a piece of property so limit its use that it is stripped of economic viability. Penn Central Transportation Co. v. New York City is the leading case in the Supreme Court’s regulatory takings jurisprudence.
At issue in that case was the effect of New York’s Landmarks Preservation Law on Penn Central’s use of its property, Grand Central Terminal, which the new law made a historical landmark to be immured from change. The Penn Central Court stated that, confronted with a takings case, it “focuses . . . both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole” (emphasis added).
Careful to avoid unduly constraining itself in future cases, the Court did not decide how the “parcel as a whole” question must be answered. It embraced a flexible, fact-sensitive approach upon which lower courts have since developed their own tests.
When adjoining parcels of land have a common owner, does such common ownership mean that they are really one piece of land, an undivided whole for the purposes of the Fifth Amendment’s Takings Clause? That the answer to the question should matter at all perhaps throws into relief just how tortuous Supreme Court reasoning has become, unmoored from both the Constitution’s text and common sense. Later this year, the Court will hear arguments in Murr v. Wisconsin, which case implicates just the legal question above.
The petitioners in the case are four siblings, owners of waterfront property on the Wisconsin side of Lake St. Croix, their land comprising two indisputably separate and distinct lots. The petitioners’ parents purchased the second of the two parcels years after the first as an investment property, foreseeing further growth in the area and hoping to develop or sell the second lot. Subsequently passed ordinances redefined the criteria for development on the lake and now prevent the Murrs from developing their land. The ordinances thus effectively stripped the Murrs’ second plot of all value.
The respondents, the state of Wisconsin and St. Croix County, argue that, for the purposes of the takings inquiry, the “relevant parcel” is not the Murrs’ second lot alone but the two tracts combined. If the two abutting pieces of property are taken to be one, then, the theory goes, the Murrs still have something.
This kind of reasoning ought to be deeply troubling to defenders of liberty and private property; it is tantamount to punishing the Murrs for their wise investment, for it is conceded that, because of a grandfather provision in the ordinance at issue, the land could be developed perfectly legally were it owned by anyone else. This is just the kind of nonsensical result that materializes when government and law go beyond their proper roles, when they become arbitrary and peremptory tools for injustice rather than protecting the individual and his rights. In a free society, government must be limited and rules few, always mindful of the fact that every deviation will yield unintended and unforeseen consequences. The creeping bias in favor of “doing something,” adding a new rule or regulation, must always be resisted by a free people.
Given the prevailing excess of needless rules and regulations – everywhere and all the time limiting what individuals are allowed to do with their own property – we might say that, in a sense, government has already taken almost everything. After all, the bundle of rights that we call private property, at least in theory, bestows on its holder many prerogatives that we now find restricted by an ever-expanding library of rules. As writes the redoubtable English jurist William Blackstone, the “absolute right” of private property entails “the free use, enjoyment, and disposal” of the owned land. But if so many of the decisions about our property are made in advance, so many of the options foreclosed by local, state, and federal government rules, with what are we left?
Subtly robbed of the traditional incidents of ownership, we move (sometimes almost imperceptibly) from of free society that respects property and choice to a moribund maze of bureaucracy and permissions. If government bodies at various levels are holding the strings and calling the shots, then our property isn’t really ours at all, at least not entirely. Ownership – as a matter of fact, at least – resides in the incidents of ownership. It is not enough that the mere pro forma indicia of property ownership remain with the individual; these can offer small consolation to the many hapless casualties of arbitrary rules, people like the Murrs – whose parents worked hard to invest and leave them a legacy.
One hopes that the Supreme Court gets it right, that their hard work will not have been in vain. Liberty lovers everywhere should root on the Murrs and their lawyers at the Pacific Legal Foundation.