The Taking Issue

1. The Taking Issue Lecture Series 3 John Keller – Plan 752 Planning Law

2. “Nor shall private property be taken except for a public purpose and then on payment of just compensation” “The Takings Clause” the 5th Amendment to the Constitution of the United States

3. Introduction to Takings • The First Period – Pre 1856 • The general legal conception is that no taking can occur without a touching • A touching is a physical invasion on to private property by the government

4. Examples of Touching • Brick Presbyterian Church v City of NY • In 1843 NYC passed a law that prohibited “dead bodies from being buried within the city limits” • Brick Presbyterian Church purchased a plot of ground next to the church for cemetery purposes • They brought suit against NYC on the theory that their property had been taken since it could no longer be used for burial purposes

5. Brick Continued • Brick’s Argument • A regulation so severe as to deprive an owner of all p[practical use of the property is a taking and due compensation • Court’s Decision • No reason can be advanced for providing compensation for an injury arising from a mere regulation. No property was entered and none was taken

6. The Wharf Case • Commonwealth v Alger • City of Boston passes a law in 1847 that prohibits the erection of a wharf into the Boston harbor unless it is less than 100 feet. The harbor was nearly impassible by this time because of wharf’s projecting far out into the navigation area

7. Alger - Continued • The Allegation • Alger brings suit under the theory that this constitutes a restraint of free trade and deprives them of the opportunity to use their property to the fullest. Their allegation is that a restraint of trade is the same thing as the government divesting them of all or part of the title to their property

8. Alger - Decision • The Court Finds • This is a just restraint of an injurious use. Government uses eminent domain to appropriate property to a private use and the police power to prevent injury to the public interest. This is not an appropriation of property but a restraint.

9. Second Period • Civil War to Mugler • Judicial thinking remain much the same until after the turn of the Century • In order to find a taking – government must constitute some sort of physical invasion of private property. If government enacted a regulation to protect the public from an injurious use – it was not more than a mere regulation.

10. Pumpelly v Green Bay • A Physical Invasion • In 1871 the U.S. Army Engineers erected a dyke along a one side of a river.to protect a fort from flooding. This caused the adjacent field to flood more often than was normal. Pumpelly sued under the theory that the government had taken his land as a water storage basin

11. The Decision • The Interpretation • The court found that in the strict sense of the law the property was not taken by the government. However, the floodwater, which normally inundated the fort was diverted to the owner’s land and this, in reality constitutes a physical invasion or a touching – and thus a taking that must be compensated

12. Alcohol and Kansas • Mugler v Kansas - 1887 • In 1880 Kansas passed a constitutional amendment that forbade the manufacture of alcohol. Mugler owned a distillery in Salina, KS. In 1885 he was ordered to cease operations. Mugler sued under the theory that the State had deprived him of all value of his land and the $10,000 he had paid for the manufacturing operation

13. Supreme Court Reasoning • The Rationale • The prohibition by the State of Kansas, in its Constitution and laws, of the manufacture or sale within the limits of the State of intoxicating liquors for general use there as a beverage, is fairly adapted to the end of protecting the community against the evils which result from excessive use of ardent spirits; and is not subject to the objection that, under the guise of police regulations, the State is aiming to deprive the citizen of his constitutional rights.

14. Mugler - Continued • The Findings • A prohibition upon the use of property for purposes that are declared by valid legislation to be injurious to the health, morals or safety of the community, is not an appropriation of property for the public benefit, in the sense in which a taking of property by the exercise of the State's power of eminent domain is such a taking or appropriation. • AND

15. Mugler - Continued The destruction of a property right, in the exercise of the police power of the State,in violation of law,is not a taking of property for public use, and does not deprive the owner of it without due process of law.

16. Mugler After the Trial & Mugler’s Granddaughter Today

17. Justice Harlan’s Dictum • The State takes property for the public good and for public use through eminent domain after compensation • The State protects the public health and safety through the police power • No compensation can arise from a mere police power regulation

18. The Modern Era • Penn. Coal Company v Mahon • A Penn statute forbids the removal of the coal support estate under any land used for a residence, cemetery, school, public building, town, or factory • Mahon had purchased the home from an individual who had sold the mineral and supports rights to Penn Coal. Mahon purchased the property with full knowledge that the support right had passed to Penn Coal

19. The Act Centralia 1983 Centralia 1999

20. Centralia Today - 2002

21. National Fuel in 1922

22. Support Estate

23. Justice Holmes • Government could hardly go on if to some extent values incidental to property could not be diminished without paying for every such change. Some values are enjoyed under an implied limitation and must yield to the police power. But obviously,the implied limitation must have its limits or the right of contract and the due process clause are gone

24. Holmes Continues • One fact for consideration in determining such limits is the extent of diminution. When it reaches a certain magnitude, in most if not in all cases, there must be an exercise of eminent domain • The right to coal consists in the right to mine it. This coal is the property of the Penn Coal Company. In this sense all value of the property has been destroyed

25. The Impact • Penn. Coal makes the end of an era of judicial thinking. • The impact is that a “regulatory taking” was possible when the magnitude of the diminution passed a certain point • In the Penn Coal was this magnitude reach the categorical level where all value of the resource was destroyed

26. Agins v Tiburon 1980 • After appellants acquire five acres of unimproved land in Tiburon for residential development • The city was required by California law to prepare a general plan governing land use and the development of open-space land. • In response, the city adopted zoning ordinances that placed appellants' property in a zone in which property may be devoted to one-family dwellings

27. Restrictions • Sliding scale densities allowed between 1 – 5 dwellings on the 5 acre tract • Agins sues for a taking • Claims damages of $2 million and that the ordinance is facially invalid

28. Findinsg • In this case, the zoning ordinance substantially advances legitimate governmental goals. The State of California has determined that the development of local open-space plans will discourage the "premature and unnecessary conversion of open-space land to urban uses."

29. Must Compensation Be in the Same Coin? • Penn. Central Transportation Company

30. Background • The New York City Landmarks Designation Law is administered by the Landmark Review Committee of 11 members with a staff • They are charged with approving any changes or modification to a Landmark Property • Grand Central Station was completed in 1913 by Reed , Stern and Warren and was designated as a landmark site in 1968

31. Grand Central – A National Masterpiece in the French Beaux Arts

32. Controversy • Penn. Central Railroad gave a 50 year lease to a U.K. Corp. who intended to build a complex of office buildings above the terminal • Two plans were submitted – the first for 55 stories and the other for 53 stories. One plan would have stripped the façade from the building

33. Commissions Review • “A 55 story office building above a flamboyant Beaux-Arts façade cannot be divorced from the setting.” The Landmarks Commission designates a number of other properties owned by Penn. Central as receiving zones

34. Other Buildings By the Architect Taipei 101 in Taiwan

35. The Concept

36. Transfer Rights Scheme • Under the TDR concept, the owner may transfer the development rights from the sending to a designated receiving zone Sending District Receiving Zones

37. Response • Penn. Central files suit alleging that the Landmarks ruling and transfer law constitute a taking is that just compensation was not given to them • Landmarks Commission responds by noting that Penn. Central owns numerous properties in the nearby vicinity suitable to accept this type of density

38. And Further • Penn. Central argues that they are losing money on the operation of the terminal and need to income from the lease to turn a profit. • The Terminal is a valuable property interest,They urge that the Landmarks Law has deprived them of any gainful use of their "air rights" above the Terminal and that, irrespective of the value of the remainder of their parcel, the city has "taken" their right to this superjacent airspace, thus entitling them to "just compensation" measured by the fair market value of these air rights.

39. Supreme Court Decision • Nothing the Commission has said or done suggests an intention to prohibit ay construction above the Terminal. • The Commission's report emphasized that whether any construction would be allowed depended upon whether the proposed addition "would harmonize in scale, material, and character with the terminal.” • Since appellants have not sought approval for the construction of a smaller structure, we do not know that appellants will be denied any use of any portion of the airspace above the Terminal.

40. TDR Ruling • Although appellants and others argue that New York City's transferable development rights program is far from ideal, The New York courts here supportably found that, at least in the case of the Terminal, the rights afforded are valuable. • While these rights may well not have constituted "just compensation" if a "taking" had occurred, the rights nevertheless undoubtedly mitigate whatever financial burdens the law has imposed on appellants and, for that reason, are to be taken into account in considering the impact of regulation.

41. Conclusion • On this record, we conclude that the application of New York City's Landmarks Law has not effected a "taking" of appellants' property. The restrictions imposed are substantially related to the promotion of the general welfare, and not only permit reasonable beneficial use of the landmark site, but also afford appellants opportunities further to enhance not only the Terminal site proper but also other properties.

42. How Big Is A Taking? • Loretto v.Teleprompter Manhattan CATV Corp.

43. The Controversy • Mrs Loretto purchases a 5 story apartment building in NYC • The previous owner of the building granted CATV the right to install TV cable lines and connectors on the outside of the building. The building’s tenants themselves were not connected to the cable

44. And Then • Two years after Mrs. Loretto purchases the building the CTAV runs a line to the tenants in the building • The CTAV did not ask permission • A NYC Law forbade interference by a landlord and just grants them a flat one dollar compensation. Tenants had to pay for the actual cost of hookup

45. The Tenants Were Pleased

46. Mrs Loretto Was Not Pleased • She discovers the installation • Claims a taking and a trespass • The district court rejects the claim that a physical occupation always constitutes a taking

47. Analysis • On appeal the court determined that the law requires that a landlord allow both crossover and non-crossover connection. The owner would be compensated for non-crossover connections only. The court did not determine if $1 was adequate compensation. They said the law was necessary in a era of rapidly growing communications

48. Supreme Court Decision • There is no exact set formula of what constitutes a taking • A taking is more easily found where they is a direct physical invasion rather than a public regulation • Even though the interference is “insubstantial” a physical invasion is still compensable • And the courted noted that there are three distinctions that should be considered

49. Distinctions • A permanent physical invasion • A physical invasion of short duration • And a regulation that merely restricts the use of property Regulatory Permanent Temporary

50. Conclusions • In short, when the "character of the governmental action," is a permanent physical occupation of property, our cases uniformly have found a taking to the extent of the occupation, without regard to whether the action achieves an important public benefit or has only minimum economic impact on the owner