Penn Central Case

            

 

 

 

 

 

 

                     Above: Pictures of Grand Central Station

 

 

Here are two views of Grand Central Station (the South facade) dwarfed by what was once known as the Pan Am Building (now it is the Met Life Building).

Always keep in my mind the purpose of the Takings Clause (p. 827):

The Takings Clause "is designed to bar Government from forcing some people alone to bear public burdens which in all fairness and justice, should be borne by the public as a whole."

In which direction does that purpose cut in Penn Central?
   --Who benefits from Landmark laws?
   -- Who bears the financial burden of Landmark laws?

Here is the vague test the Court comes up with in Penn Central (p. 827):

"In engaging in these essentially ad hoc, factual inquiries, the Court’s
decisions have identified several factors that have particular significance.
The economic impact of the regulation on the claimant and, particularly, the
extent to which the regulation has interfered with distinct investment
backed expectations are, of course, relevant considerations... So, too, is the character
of the governmental action. A “taking” may more readily be found when the
interference with property can be characterized as a physical invasion by
government, see, e.g., United States v. Causby, 328 U.S. 256 (1946), than
when interference arises from some public program adjusting the benefits
and burdens of economic life to promote the common good."

The authors of a respected Hornbook say this test is riddled with "ambiguous factors" and conclude:

"After analyzing the facts of Penn Central under this newly-minted and confusing set of ad hoc factors, the Court essentially held that the railroad was not entitled to just compensation from the City for the loss of its rights to build an office tower above the terminal. Frustratingly, it was not even clear in the opinion how the Court had applied the new test to reach this conclusion." Liberty dies in darkness!

Another problem with Penn Central is it adopts a vague balancing test to decide whether a particular type of regulation is outweighed by its economic impact on private property. Where does the Court keep the scale that weighs these different interests? Or is it merely subjective, like trying to decide (to borrow a concept from Justice Scalia) whether a particular string is longer than a particular rock is heavy? Suppose I walked into class with a really long string and a really big rock, and I asked you whether the string was longer than the rock was heavy. Could you answer this problem accurately and objectively?

 Here are some additional questions to ponder as you read Penn Central:

1. The N.Y. Court of Appeals held that there was no "taking" because the landmarks law did "not transfer control of the property to the city, but only restricted appellants' exploitation of it." Do you agree? Who had the power to "control" the use of the airspace above Grand Central following enactment of the landmarks law?
2. The US Supreme Court said that the Takings Clause is "designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." See page 827. If this is true, shouldn't this case have come out the other way? Shouldn't the public as a whole share the cost of preserving landmark buildings which "enhance the quality of life for all?" In other words, if tax funds are used to compensate the landowner for the economic burdens of landmark restrictions, doesn't everyone receive their fair share of the benefits of preserving the landmark and doesn't everyone then pay (through their taxes) their fair share of the cost of acquiring those benefits?
   
3. Both Penn Central and Causby deal with government control of the airspace over private land. Should the cases have been decided the same way? Why or why not? Did NYC's landmark law constitute an "acquisition of resources to permit or facilitate uniquely public functions" as the Court characterizes the holding in Causby on p. 828?
4. Why doesn't Mahon and the "too far" test control a restriction as substantial as the one in this case? Was the taking in this case more or less substantial than the taking in Mahon?
   
5. Prof Linder asks some good questions too:

--"What do you think about the desirability of a rule that requires the payment of just compensation whenever governmental action causes a diminution in value greater than a certain amount, say 10%? 50%?"
--"Should the requirement of just compensation depend upon whether the government was taking action to prevent a harm or to secure a public benefit?" [How do we draw the line between laws preventing public harms and those acquiring public benefits?]