Vito Corleone and Takings Law

 

 

 

 

 

 

 

 

Picture of Vito Corleone from The Godfather Movie 

"Someday, and that day may never come, I'll call on you to do a service for me, but until that day accept this justice as a gift on my daughter's wedding day."

Hmmm. What do these words of Don Vito Corleone have to do with the law of Takings? Let's talk about this when we discuss Nollan and Dolan in near future.

Is Nollan a regulatory takings case, or a physical takings case?

You Tube Link

Does this scene remind you of Nollan?  Who plays Don Corleone in Nollan?

Here is the AI storyline about this scene:

Bonaserra in Godfather

Amerigo Bonasera is the Sicilian-American undertaker who delivers the iconic opening line of The Godfather: "I believe in America." 

His character serves as a critical thematic introduction to the film’s exploration of justice, loyalty, and the "American Dream." 

Key Role and Storyline

The Request: Bonasera approaches Don Vito Corleone during Connie’s wedding because the American legal system failed to punish the men who brutally assaulted his daughter. [By tradition, the Don must Grant any reasonable request for a favor from a guest at his daughter's wedding] While he initially asks for their murder, the Don refuses, instead ordering a non-lethal but severe beating to match the "justice" of the original crime.

The Tension: The scene is famous for the Don's rebuke of Bonasera. Vito is insulted that Bonasera went to the police first and only came to him as a "gangster for hire" rather than a friend. Bonasera eventually submits, kisses the Don's hand, and accepts the debt.

Repaying the Debt: Years later, Bonasera is called upon to fulfill his "service." After the assassination of Sonny Corleone, Vito brings the bullet-riddled body to Bonasera’s funeral parlor, asking him to "use all your powers and all your skill" to make the body presentable for an open-casket funeral so his mother does not see him that way.

Lucas: Some questions

From Oyez:

Facts of the case

In 1986, Lucas bought two residential lots on the Isle of Palms, a South Carolina barrier island. He intended to build single-family homes as on the adjacent lots. In 1988, the state legislature enacted a law which barred Lucas from erecting permanent habitable structures on his land. The law aimed to protect erosion and destruction of barrier islands. Lucas sued and won a large monetary judgment. The state appealed.

Question

Does the construction ban depriving Lucas of all economically viable use of his property amount to a "taking" calling for "just compensation" under the Fifth and Fourteenth Amendments?

Prof. Linder poses some questions about Lucas:

--"Lucas contended that the action of the S. C. Coastal Commission rendered his property valueless? Is this true? What value might it have? (In oral argument, Justice Blackmun asked the attorney for Lucas: "If the property has no value, will you give it to me?") " [How much would Justice Blackmun be willing to pay Mr. Lucas for his two undevelopable lots? $975,000? $100,000?$10,000?] {How does Justice Scalia define "no productive or economically beneficial use of land"? See p. 839:

On the other side of the balance, affirmatively supporting a
compensation requirement, is the fact that regulations that leave the owner
of land without economically beneficial or productive options for its use—
typically, as here, by requiring land to be left substantially in its natural
state—carry with them a heightened risk that private property is being
pressed into some form of public service under the guise of mitigating
serious public harm. 

 

--What options does South Carolina have after the Court's decision in Lucas?"

 

Notice the denominator issue Justice Scalia mentions in Lucas at p. 838 n. 16:

 Regrettably, the rhetorical force of our “deprivation of all economically feasible use”
rule is greater than its precision, since the rule does not make clear the “property interest”
against which the loss of value is to be measured. When, for example, a regulation requires a
developer to leave 90% of a rural tract in its natural state, it is unclear whether we would
analyze the situation as one in which the owner has been deprived of all economically
beneficial use of the burdened portion of the tract, or as one in which the owner has suffered a
mere diminution in value of the tract as a whole.

Here are some more questions concerning the reach of Lucas.

Suppose I own two separate but adjoining parcels of land, Blackacre and Whiteacre, each of which is 50 acres. Some endangered species (the Prairie Roach) is discovered on Whiteacre and I am forbidden to develop Whiteacre in any way. However, Blackacre is unaffected by this regulation. Apply Lucas.

Suppose Blackacre and Whiteacre are owned by different individuals, Mr. Smith and Ms. Jones? Does Ms. Jones, the owner of Whiteacre, have a Lucas claim for compensation?

Now, instead of two 50-acre parcels of land, suppose I own one 100-acre parcel, Greenacre. The Prairie Roach is discovered on the South portion of my tract, and under the regulations I am forbidden from developing the South 50 acres, but I am permitted to develop the North 50 acres. Taking under Lucas? How should this case come out under the Takings Clause?

What about strategic planning to maximize your position under Lucas. The authors of a leading land Use casebook (Selmi et. al) ask the question this way:

Consider the owner of land containing a stand of forest that serves as a habitat for an endangered spotted owl. If the owner conveyed all of the developable portions of the tract, ultimately just retaining the forest, would the owner have a Lucas cause of action if regulatory agencies denied a timber cutting permit?....Should Lucas be modified to establish a "good faith" exception that prevents a finding of a taking where a parcel is subdivided, leaving a segment of the larger parcel unbuildable?

The good professor makes it sound like it is unethical (or at least lacking in good faith) for a citizen to seek the maximum protection of the Bill of Rights. Is it?

Why isn't it good faith to structure your property holdings to maximize your rights under the Takings Clause? Is it bad faith to structure a business deal or an estate plan in a way designed to maximize favorable tax treatment? Indeed, would it not be malpractice for a tax attorney to neglect to provide advice about tax advantages of certain favorable ways of structuring a transaction?

Who should pay the cost of protecting endangered species? The society which benefits as a whole when a species is protected? Or the individual landowner who has the bad luck to own property needed by endangered species? Why not "take and pay" when land is needed for critical habitat?

Lucas Problem

Suppose Grutz is the owner of a 3000 acre tract of land somewhere in Florida. The land is currently undeveloped, but Grutz intends to develop it as a shopping center. The land is zoned for commercial use.

 Shortly before the scheduled ground breaking for the shopping center, a federal environmental S.W.A.T. team sweeps into town and discovers that there are some endangered wildflowers growing on the property. Under the Federal Ecosystem Protection Act of 2024, landowners are forbidden to make any use of their land which would threaten an endangered species.

Under the law, Grutz is required to leave approximately 2/3 of his land in its natural state. He will be permitted to develop about 1000 of his acres for low-density use. (Such as residential use to develop 5 10-acre homes) The effect of this regulatory scheme is to reduce the value of his property from about $10 million dollars (which is what he paid for it) to $500,000.

Is this regulatory scheme a taking?

What are the issues?

 

Here is the key passage from note 16 on page 838:

 Regrettably, the rhetorical force of our “deprivation of all economically feasible use”
rule is greater than its precision, since the rule does not make clear the “property interest”
against which the loss of value is to be measured. When, for example, a regulation requires a developer to leave 90% of a rural tract in its natural state, it is unclear whether we would analyze the situation as one in which the owner has been deprived of all economically beneficial use of the burdened portion of the tract, or as one in which the owner has suffered a mere diminution in value of the tract as a whole. (For an extreme—and, we think, unsupportable—view of the relevant calculus, see Penn Central Transportation Co. v. New York City, 366 N.E.2d 1271, 1276–1277 (N.Y.1977), aff’d, 438 U.S. 104 (1978), where the state court examined the diminution in a particular parcel’s value produced by a municipal ordinance in light of total value of the taking claimant’s other holdings in the vicinity.) Unsurprisingly, this uncertainty regarding the composition of the denominator in our “deprivation” fraction has produced inconsistent pronouncements by the Court. Compare Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414 (1922) (law restricting subsurface extraction of coal held to effect a taking), with Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470, 497–502 (1987) (nearly identical law held not to effect a taking); see also id., at 515–520 (Rehnquist, C.J., dissenting); Rose, Mahon Reconstructed: Why the Takings Issue is Still a Muddle, 57 S.Cal.L.Rev. 561, 566–569 (1984). The answer to this difficult question may lie in how the owner’s reasonable expectations have been shaped by the State’s law of property—i.e., whether and to what degree the State’s law has accorded legal recognition and
protection to the particular interest in land with respect to which the takings claimant alleges a diminution in (or elimination of) value. In any event, we avoid this difficulty in the present case, since the “interest in land” that Lucas has pleaded (a fee simple interest) is an estate with a rich tradition of protection at common law, and since the South Carolina Court of Common Pleas found that the Beachfront Management Act left each of Lucas’s beachfront lots without economic value.

Lucas: The Rest of the Story

 The case resulted in a settlement. Here is how Prof. Dukeminier describes it: "The state purchased Lucas's land for $850,000 and paid him another $750,000 in interest, attorney's fees, and costs. Strapped for the money (a total of $1,575,000), the state resold the lots to a construction company!"

Lol! When it was the landowner's investment at risk, the state said it would be the end of the beach if Lucas could build on his land. But once the state bought the land, it sold the land to a construction company to recoup its investment. The Takings Clause requires the government to decide--with its own funds-- whether a particular taking is worth the cost of compensation.

Lucas--Crimes and Nuisances Exception to Takings Claim

Notice on p. 840, the Court mentions that the trial court took the position that the state's interest in protecting the beach/dune system from erosion justified a total taking without compensation.

Basically, the state believed that it could regulate private land to press it into public service as a kind of wave shock-absorber, to serve as "a storm barrier which dissipates wave energy and contributes to shoreline stability.' (p. 840 n. 17)

So is ordinary residential use of your land, similar to the use neighbors make of their lands, a nuisance that may be enjoined without compensation.

What does the Court say about this? --see bottom of p. 841-843. 

See also Justice Rehnquist's dissent in Keystone (480 U.S. at 512:

"The nuisance exception to the taking guarantee," however, "is not coterminous with the police power itself," Penn Central Transportation, supra, at 145 (REHNQUIST, J., dissenting), but is a narrow exception allowing the government to prevent "a misuse or illegal use." Curtin v. Benson, 222 U. S. 78, 86 (1911). It is not intended to allow "the prevention of a legal and essential use, an attribute of its ownership." Ibid.

Lucas Photographic Update

 Link

Another Question About Lucas

Let's finish our discussion of Lucas and "total regulatory takings" by discussing note 6 on page 848.

Professor Sax is a critic of Lucas, and he says the problem with Lucas is it focuses too much on the owner's right to develop undeveloped land and not sufficiently on "the broader view of land as performing in its natural state vital ecological functions, such as water purification by wetlands, provision of habitat for wildlife, and restoration of beaches by sand dunes."

So, Prof. Sax would tell Mr. Lucas that it is a privilege of citizenship to invest $1 million in land in order to serve the public's interest in ecology by leaving land in its natural state to provide ecological functions.

What are your thoughts about this? Should ecologically-sensitive land be developed? If not, who should bear the costs of laws requiring land to be left in its natural state? Individual property owners such as Mr. Lucas? Or the public through taxes designed to provide Just Compensation?

Which view is more likely to protect the ecology? Which view is more fair?

Lucas Facts Re-imagined

 Suppose after Lucas spends $975,000 for his two beachfront lots and the law changes to forbid him from developing either lot, I approach him with an offer. I offer to buy both lots from him for $300,000 on the theory that he has a strong Takings claim for compensation.

Since I bought the lots after the law was enacted forbidding development, how does this affect my Takings claims? If I purchased all of Lucas's rights concerning the 2 lots, including his right to resist an unconstitutional Taking, do I succeed to his reasonable expectations concerning his right to develop the land?

How should my claims be adjudicated?

Lucas: A Categorical Rule for Total Regulatory Takings

The Court holds that "categorical treatment [is] appropriate...where regulation denies all economically beneficial or productive use of the land." (p. 838)

Thus, if a regulation results in a total taking, just compensation must be paid.

The Court explains that "the justification for this rule is...that total deprivation of beneficial use is, from the landowner's point of view, the equivalent of a physical appropriation."  p. 839. Also, it carries with it "a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm." Id.

Why was the regulation in this case "total?" Or was it?

How does the majority explain? What does Justice Blackmun argue in his dissent on this point? (p. 845)

Who do you think has the better argument?

If a taking of 100 requires compensation of 100, why doesn't a taking of 75 require compensation of 75?

First English--Is it good for government to be cautious when approaching violations of the Bill of Rights?

In his dissent on page 819, Justice Stevens complains that the Court's ruling, requiring Just Compensation for "temporary takings," might lead "cautious local officials and land-use planners" from going forward with regulations that might constitute takings. As he puts it in a part of his dissenting opinion edited from the casebook, the "availability of the damages remedy will induce land-use planning officials to stay well back of the invisible line that they dare not cross."

Is this a bad thing? In a free society, do we want public officials to boldly approach lines designed to protect fundamental constitutional rights from being tread upon by government?

Or is "caution" and respect for constitutional rights good things to encourage in agents of the state? Do we want government to boldly approach the lines protecting our freedom of speech and freedom from unreasonable searches and seizures? Or do we want government to respect the lines the Constitution draws protecting our constitutional rights?

But now the practical point: Suppose you are serving as a City Attorney and you are asked to advise your client, the city, as to the practical significance of First English.  Suppose you are considering a regulatory scheme that is pretty ambitious – it may be a taking, but then again it may not be a taking. Subjective, ad hoc tests do not provide much guidance.  How does First English affect your advice?


Suppose that in a future landmark-preservation case like Penn Central (but maybe with a little more extreme loss of value or with new Justices who might be more friendly toward property rights) the Court decides that the landmark restrictions went "too far" as applied to the Pl's property and thus constitute a regulatory taking. What options are available to the government? See casebook p. 818: "Once a court determines that a taking has occurred, the government retains the whole range of options already available--amendment of the regulation, withdrawal of the invalidated regulation, or exercise of eminent domain."

Suppose the government decides to release the Pl's property from the landmark restrictions. The Court in First English holds that "no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective." Id.

What would be the Pl's damages, in a case like Penn Central, for a "temporary" deprivation, perhaps for a period of 5-10 years while the case was being litigated, of the right to profitably develop its property? Notice in Penn Central the lost rentals amounted to $1-3 million (in 1978 dollars) per annum. The damages might be 10 times that today. Plus, perhaps, attorneys' fees!

Does this explain the apoplexy of Justice Stevens?

But, of course, these damages must be suffered by someone, either by the Pl or the government. When the government acts unconstitutionally, who should bear the damages--the victim or the perpetrator of the unconstitutional wrong?

First English (casebook p. 816)

           Appellant, First English Church, owned a 21 acre parcel in the Angeles National Forest which it operated as a campground for disabled children.  (Called “Lutherglen”)
        
            In February 1978, a flood destroyed the buildings at Lutherglen.
        
            How did govnment respond to this natural disaster? Did it help the church rebuild? [#RebuildLutherglen]
        
            In response to the flood, the County of Los Angeles adopted an ordinance which prohibited the construction of any building or structure in the flood protection area, which included Lutherglen. p. 816 Basically, the government shut down this religious ministry for disabled children!
        
            The Church sued in inverse condemnation alleging that the ordinance was a taking because it denied them “all use of Lutherglen.”  

            The California courts ruled that this claim should be dismissed because it sought only damages and in California, damages are not awarded for regulatory takings – that is, the appropriate remedy is invalidation not compensation. P. 817 (only “non-monetary relief for Takings”—Huh?)
        
            Take a look at p. 816 and 817:

           Under the Agins case in California, “compensation is not required until the challenged regulation or ordinance has been held excessive in an action for declaratory relief or a writ of mandamus and the government has nevertheless decided to continue the regulation in effect.”
    

          Suppose in this case a court held, after years of litigation, that the flood protection ordinance goes “too far” and is a taking.
        
         Under the Agins case, the County could simply repeal or abandon the ordinance without any obligation to pay damages for the “temporary taking” the 3, or 4, or 5, or 10 year period during which the regulation was in effect.

         Is this consistent with a fair reading of the Just Compensation Clause? 

         Suppose the University fired a teacher for some unconstitutional reason—maybe gender or race.  The teacher spends 5 or 6 years without work, litigating the dismissal, and finally wins a judgment against UNL for the wrongful termination.  What should her remedy be?
        
        Would it be sufficient if the court were to order the City merely to rehire the teacher?  
    
        Or, should she also get a judgment for the “temporary” deprivation of lost wages, benefits, insurance, etc.

        What does the Court hold (see p. 818):

 Once a court determines that a taking has occurred, the government retains the whole range of options already available—amendment of the regulation, withdrawal of the invalidated regulation, or exercise of eminent domain. Thus we do not, as the Solicitor General suggests, “permit a court, at the behest of a private person, to require the … Government to exercise the power of eminent domain….” We merely hold that where the government’s activities have already worked a taking of all use of property, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective.

What does this mean?

Euclid Case

Welcome to Euclid!

So long as you are not a "parasite" or a "pig in the parlor" to quote Justice Sutherland's interesting way of describing "apartment houses" and, I assume, those who wish to live in apartments in nice residential areas.

By the way, here is a Latin refresher for y'all:

"An ancient common law maxim, sic utere tuo ut alienum non laedas (one must use one's property so as not to injure another's property)." (see casebook p. 758).

How do apartments (and the people who live in apartments) "injure" single-family homeowners?

Make sure you read note 3 on page 761 carefully? What do you think about the lower court's take on zoning? Is it fair? Unfair?

Euclid: Single Family Zoning

 Why not allow apartment buildings to be built in "single-family" residential districts?

See page 760:

"With particular reference  to  apartment  houses,  it  is  pointed  out  that  the  development  of detached  house  sections  is  greatly  retarded  by  the  coming  of  apartment houses,  which  has  sometimes   resulted  in  destroying  the  entire  section  for private house purposes; that in such sections  very often the apartment house is a mere parasite, constructed in order to take advantage of the  open spaces and  attractive  surroundings  created  by  the  residential  character  of  the  district. Moreover, the coming of one apartment house is followed by others, interfering  by  their height  and  bulk  with  the  free  circulation  of  air  and monopolizing  the  rays  of  the   sun  which  otherwise  would  fall  upon  the smaller   homes,   and   bringing,  as   their    necessary   accompaniments,   the disturbing   noises   incident   to   increased   traffic   and    business,   and   the occupation, by means of moving and parked automobiles, of larger portions of  the streets, thus detracting from their safety and depriving children of the privilege of quiet and  open spaces for play, enjoyed by those in more favored localities—until,  finally,  the   residential  character  of  the  neighborhood  and its desirability as a place of detached  residences are utterly destroyed. Under these  circumstances,  apartment  houses,   which  in  a  different  environment would  be  not  only  entirely unobjectionable but highly desirable,   come very near to being nuisances."

 And what is a nuisance?

See page 758: "A nuisance may be merely a right thing in the  wrong  place,  like  a  pig  in  the  parlor  instead  of  the  barnyard.  If  the validity    of   the   legislative   classification   for   zoning   purposes be fairly debatable, the legislative judgment must be allowed to control."

As You Wish Deference

This extreme deference to the legislature is what I call "as you wish" deference. It is similar to the way Farmboy in Princess Bride would always say "as you wish" lovingly to Buttercup, no matter how unreasonable her demand.

Deference to the legislature, of course, is to reject the citizen's claim to individual liberty and private property.

Euclid (page 753)

 This case deals with a comprehensive zoning ordinance enacted by the Village of Euclid. 

 Zoning is a relatively recent legal development that put Governemnt in the position of deciding how private land should be used.

Look at how extensive were the controls enacted in this case.

 All the land in the village was divided into 6 use districts – the most restricted of which allowed only single-family dwellings and farming and the most permissive of which allowed practically all residential, commercial, and industrial uses.

 All land was further divided into three height districts and to four area districts governing minimum area of dwellings.

The PI in this case owned a 68-acre tract of land that was zoned U-2, U-3 and U-6
    
    U-2        -Two family dwellings
    U-3        - Apartments, hotels, libraries, museums
    U-6        - Commercial and Industrial

Approximately one-third of this land was zoned for residential use only, even though the evidence showed that the “normal and reasonably to be expected” use of the land was “general trade and commercial purposes.”  P. 757 Notice that this tract of land is being used to buffer single-family parcels located south of Euclid Avenue. Reduction in value of about 75%. See p. 756.

Take a look at the lower court's discussion of the police power and the Takings issue [p. 761, n. 3

Do you agree with the lower court's analysis? 

Lucas v. South Carolina Coastal Commission: Pictures and Diagrams

 Link

In 1986, Lucas bought 2 residential lots on the beach in South Carolina. He paid $975,000 for the two beachfront lots. The neighborhood was already developed with large beach houses (see diagram and pictures at above link), and Lucas wished to build a single-family home on each of his two lots. 

In 1988, South Carolina enacted the Beachfront Management Act which barred Lucas "from erecting any permanent habitable structures on his two parcels." (casebook p. 836). The Act basically required Lucas to leave the two lots in their natural (undeveloped) state. As Justice Blackmun put it in his dissent, Lucas was allowed to picnic, camp, swim, and (in my words) tiptoe through the tulips on his land, but he was not allowed to construct a beach house as all his neighbors had already done. Blackmun also pointed out that Lucas could post a guard to walk the boundaries of his lots and "exclude others" from trespassing. Finally, he might also be able to sell his lots to his neighbors who might wish to have a larger yard for their already developed properties. (casebook p. 845). How much would his neighbor likely pay for a lot that could not be developed in any way? $450,000? $250,000? $10,000? $5,000?

So, is this heavy restriction on Lucas's two lots a taking requiring just compensation? Is it a categorical taking that requires compensation? If not, how would the Penn Central "too far/reasonable-investment-backed expectations test come out?

Correction: Mahon was not a 5 to 4 decision

 It was 8 to 1. Holmes had 7 friends and Brandeis had no friends.

I was thinking about another very similar case, one that went the other way by a 5 to 4 vote-Keystone Bituminous Coal Ass'n v. DeBenedictis [see note 3, p. 815]

The debate between Holmes and Brandeis is the same; Holmes' majority was 8 to 1 not 5 to 4.

Hat tip to Jesse Kaufman for pointing this out.

By the way, that Corvette I owned in the 80s was never (hardly ever) driven above the speed limit (and certainly never at any speed near 150 or even 100) (or even 85). I always set my cruise control at 1 mile below the speed limit. 

And, a few years later, I traded that 'vette in for a minivan!!!

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?]

Strike Grand Central Station, Substitute St. Patrick's Cathedral

                                                 Picture of St. Patrick's Cathedral in New York City 

 

Suppose in the Penn Central case, the building being restricted by landmarking laws was St. Patrick's Cathedral. Does this raise any new issues?

See the following Gotham Times article: Landmarking Churches and Religious Properties

Penn Central case: Important Excerpts

1. p. 820: "The question presented is whether a city may, as part of a comprehensive program to preserve historic landmarks and historic districts, place restrictions on the development of individual historic landmarks—in addition to those imposed by applicable zoning ordinances—without effecting a 'taking' requiring the payment of “just compensation.”

2. p. 821: Landmark laws are based upon "a widely shared belief that structures with special historic, cultural, or architectural significance enhance the quality of life for all." [If "all" benefit, shouldn't all chip in and help pay for the cost of this regulatory taking?]

3. The Landmark Preservation Commission rejected Penn Central's plan to build a 55-story office tower "to be cantilevered above the existing facade, calling it an "aesthetic joke." (p. 824-825). This cost Penn Central rental income of approximately $3million a year! This is a huge taking of control over Penn Central's airspace!

Compare this taking of airspace to that in the Causby case. If the taking in Causby required just compensation, should the much greater taking in Penn Central also require just compensation? If all benefit, should all pay to acquire this benefit?

4.What is the purpse of the Takings Clause?" --p.827: "While this Court has recognized that the 'Fifth Amendment’s guarantee ... [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,'... this Court, quite simply, has been unable to develop any 'set formula' for determining when 'justice and fairness' require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons."

5. Is this a "physical taking" of control over the air space above Grand Central Station? Or a "regulatory taking" thereof? Who has the right to control how the air space above GCS is employed? Penn Central? Or the government? If Penn Central began to develop the air space above GCS, what would the government of NYC do? Stand by helplessly? Or physically intervene, with guns and police if necessary? Is there really a material difference between physical takings and regulatory takings? If your answer is yes, is this a substantive difference or a formal difference?  

Why does it matter? What is the test for a physical taking? [Per se rule: a physical taking is a taking no matter how small]. What is the test for a regulatory taking? [ad hoc (case-by-case) test that asks whether the regulation has gone too far. What is too far? Remember Mahon case?

6.  In Penn Central, the Court says that whether a regulation goes too far depends upon whether the regulation "has interfered with distinct investment backed expectations" (p. 827) and whether it allows the property owner capable "of earning a reasonable return" on its investment. (p. 829) Where is all this nutmeg in the text of the Takings Clause?

7. The Court holds that there is no taking in this case (and thus no need for Just Compensation) because the law "does not interfere in any way with the present use of the Terminal," and allows Penn Central "a reasonable return on its investment."  (p. 833). What is a reasonable return on an investment? Who decides? The market? Or the government?

8. Last but not least: Is the holding in Penn Central faithful to the purpose of the Takings Clause "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."  Who benefited from preserving GCS as an NYC landmark? Who bore the economic burden of preserving it? How is the landmark different from what it would have been if NYC directly condemned the air space over GCS?

 

Property Spring 2026: Assignment For Week Six

Remember, no class on Thursday (Thursday February 19: I will be in Dallas visiting my three granddaughters and their mom and dad)

--Casebook p. 791-807 (Public Use Requirement) 

--U.S. v. Causby (casebook p. 730-738); Casebook p. 807-810 (Physical Takings and Loretto);Cedar Point decision

--Regulatory Takings: Mahon (casebook p. 811-816); Penn Central (casebook p. 820-836)

If time permits:

--Euclid (casebook p.753-763); First English (casebook p. 816-820); Keystone, 480 US 470 (1987) (read it on Hein or WestLaw).

Pennsylvania Coal v Mahon (page 811)

Coal Company conveyed the surface of land to certain persons (“B) “but in express terms reserves the right to remove all the coal under the same and the grantee takes the premises with the risk and waives all claim for damages that may arise from mining the coal.”  (p. 811)
    
    [To understand the holding in Mahon, it is necessary to know that Pennsylvania recognizes three separate physical estates in real property – the surface estate, the mineral estate, and the support estate. The owner of the surface estate, as you might expect, acquires the right to possess and improve the surface of real property.  The owner of the mineral estate acquires the right to extract minerals from the property.  The owner of the support estate has the right to control the removal or non-removal of the layer of coal and earth that supports the surface.  Thus, when the owner of the mineral estate also owns the support estate, he has the right to extract coal without regard to whether it causes subsidence damage to the surface estate or any improvements thereon.
    
        Many years ago western Pennsylvania property owners severed the mineral estates and the support estates from the surface estates of much of the land in that region.  The coal mining companies typically acquired or retained both the mineral estate and the support estate.  Thus, coal mining companies owned the right not only to extract coal deposits from the land, but additionally to do so without any liability to the owners of the surface estates for damages resulting from subsidence.]

Grand Central Station Pictures

 link

Keystone vs. Pennsylvania Coal

See note 3 page 815-816 (discussing Keystone decision). I have not assigned Keystone.

Notice that in Keystone the Supreme Court did not overrule Pennsylvania Coal. Thus, both cases remain "the law of the land."

Is it possible to follow both X and not X? In other words, suppose a third case involving the regulation of support estates comes before a lower court. How should that case be decided? Is the regulatory confiscation of "support estates" a taking as in Pennsylvania Coal, or not a taking as in Keystone?

How did Justice Stevens attempt to distinguish Pennsylvania Coal?

See 480 U.S. at 481 ("the similarities are far less significant than the differences").

What are the differences?

1. Stevens says that in Keystone the government "has acted to arrest what it perceives to be a significant threat to the common welfare." (id. at 485)

How is this a difference from Pennsylvania Coal? Wasn't the major point of the Brandeis dissent in Pennsylvania Coal  that there was no taking there because the government had acted to prevent the coal mining companies "from making a use which interferes with the paramount rights of the public" and thus a regulation "imposed to protect the public health, safety or morals from dangers threatened is not a taking?" (p. 814). And what was Justice Holmes response to this dissenting argument? See p. 813:

"The rights of the public in a street purchased or laid out by eminent
domain are those that it has paid for. If in any case its representatives have
been so short sighted as to acquire only surface rights without the right of
support, we see no more authority for supplying the latter without
compensation than there was for taking the right of way in the first place
and refusing to pay for it because the public wanted it very much. The
protection of private property in the Fifth Amendment presupposes that it is
wanted for public use, but provides that it shall not be taken for such use
without compensation."

2. Stevens also argues that the facts of Keystone are different because "there is no record in this case to support a finding, similar to the one the Court made in [Pennsylvania Coal] that the Subsidence Act makes it impossible for petitioners to profitably engage in their business, or that there has been undue interference with their investment-backed expectations." (480 U.S. at 485).

Is this a fair description of Justice Holmes' majority opinion in Pennsylvania Coal finding that the regulation in that case made "it commercially impracticable to mine certain coal?"

Did not the regulation in Keystone render it "commercially impracticable" for the coal companies to mine the 27 million mines of coal that were required to be left in the ground to provide support? Compare "certain coal" in Pennsylvania Coal with 27 million tons of coal in Keystone. (See 480 U.S. at 498: "The 27 million tons of coal do not constitute a separate segment of property for takings law purposes.")

Consider Chief Justice Rehnquist's dissent:

"In sum, I would hold that Pennsylvania's Bituminous Mine Subsidence and Land Conservation Act effects a taking of petitioners' property without providing just compensation. Specifically, the Act works to extinguish petitioners' interest in at least 27 million tons of coal by requiring that coal to be left in the ground, and destroys their purchased support estates by returning to them financial liability for subsidence. I respectfully dissent from the Court's decision to the contrary."

What is going on in Justice Stevens' opinion in Keystone? Has he persuaded you that the differences between Pennsylvania Coal  and Keystone are significant and support different results in the two cases?

Or is this a case in which Justice Stevens, without overruling Pennsylvania Coal, has clearly rejected Justice Holmes' majority opinion in the case and instead adopted Justice Brandeis's dissent? Is this intellectually honest?

Now consider this excerpt from Justice Scalia's must-read book, A Matter of Interpretation, at p. 9:
 

As I have described, this system of making law by judicial opinion, and making law by distinguishing earlier cases, is what every American law student, every newborn American lawyer, first sees when he opens his eyes. And the impression remains for life. His image of the great judge—the Holmes, the Cardozo—is the man (or woman) who has the intelligence to discern the best rule of law for the case at hand and then the skill to perform the broken-field running through earlier cases that leaves him free to impose that rule: distinguishing one prior case on the left, straight-arming another one on the right, high-stepping away from another precedent about to tackle him from the rear, until (bravo!) he reaches the goal—good law. That image of the great judge remains with the former law student when he himself becomes a judge, and thus the common-law tradition is passed on.

Of course, there is a big difference between the judge's role in making the common law, and her role in carrying out the commands of the Written Constitution. What is the difference?

Cedar Point Nursery: Notes and Questions

Note: One of you asked me a good question the other day after class--how does the 11th Amendment state sovereign immunity fit in to Takings litigation.[It's been a few years since I taught--or thought about--the 11th Amendment, so it took me a second to clear my mind and focus on that excellent question] The answer is the Ex parte Young exception, which holds a suit against a state official seeking to force the official to comply with federal law is not barred by the Eleventh Amendment as a suit against the State. Haddid in this case is Victoria Haddid who was the Chair of the California Labor Relations Board. She was sued in her capacity as a state official, and thus this is not a suit commenced the State of California as a sovereign state. It's a legal fiction, but it is the law of the land. Also, a school board or city or county government is not "one of the United States" under the 11th Amendment. So, Duncan v. City of Lincoln is no problem.

 

 I don't want to spend too much time discussing Cedar Point, but I do want to focus on the facts and ask whether the facts amount to a taking of private property for a public use. If you go back to the text of the incorporated 5th Amendment, it declares that private property may only be taken by government if the taking is for a public use. 

Here is how the majority explains the question presented in the case:

 

A California regulation grants labor organizations a“right to take access” to an agricultural employer’s property in order to solicit support for unionization. Cal. Code Regs.,tit. 8, §20900(e)(1)(C) (2020). Agricultural employers must allow union organizers onto their property for up to three hours per day, 120 days per year. The question presented is whether the access regulation constitutes a per se physical taking under the Fifth and Fourteenth Amendments.

 Notice that the Court does not focus on the public use requirement, even though the law requires the employer to permit third persons (union organizers) to "take access" of private property for up to three hours per day and 120 days per year. Is this a public use taking of private property? Or merely a "public purpose" taking of private property? Or is it a private use and private purpose taking, because it singles out a subgroup of the public for access?

Notice that the Court's precedents distinguish between physical takings of private property (such as in Causby and Loretto) and "regulatory takings" of private property (such as when government "instead imposes regulations that restrict an owner's ability to use his own property").

As the Court puts it, physical takings (no matter how small and partial) are assessed under "a simple per se rule: The government must pay for what it takes." (p. 5) All physical takings must be compensated!

However, regulatory takings are assessed under an ad hoc subjective standard: regulatory takings require compensation only if the degree of the regulatory taking "goes too far." (p. 6)

So, if the union access rule is evaluated as an uncompensated physical taking, it is unconstitutional. But if it is evaluated as a non-physical regulation, then it will be protected by the Takings Clause only if it goes "too far."

The 6 to 3 majority in Cedar Point, concludes that the "take access" law constitutes an unconstitutional physical taking because it "appropriates a right to invade the growers' property and therefore constitutes a per se physical taking." (p. 7).

And here is a longer explanation of the Court's holding (p. 10):

"The upshot of this line of precedent is that government-authorized invasions of property—whether
by plane, boat, cable, or beachcomber—are physical takings requiring just compensation.  As in
those cases, the government here has appropriated a right of access to the growers’ property, al-
lowing union organizers to traverse it at will for three hours a day, 120 days a year.  The
regulation appropriates a right to  physically  invade  the  growers’  property—to  literally “take
access,” as the regulation provides.  Cal. Code Regs., tit. 8, §20900(e)(1)(C).  It is therefore a
per se physical taking under our precedents.   Accordingly, the growers’ complaint states a
claim for an uncompensated taking in violation of the Fifth and Fourteenth Amendments."

Here are some questions:

1. To go back to Kelo and the public use requirement, do you agree that the taking in this case was for a public use? Or is it a taking from A (landowner) and a transfer to B (the union)?

2. Do you agree with the Court that the taking in this case was a physical taking, a physical appropriation of private property? Why or why not?

3. Should the Court recognize a "labor union" exception to the Takings Clause? Is social justice on one side of this case? Which side? Or is this a case involving competing visions of social justice? The right to join a union versus, in the words of John Adams: "Property must be secured, or liberty cannot exist."

4. The Court holds that the take access rule "constitutes a per se physical taking" and remands the case "for further proceedings consistent with this opinion." What does that mean? If California is willing to pay just compensation, will the take access rule be enforceable? What is the fair market value of the take access rule? How much compensation is Cedar Point entitled to? This is difficult to value. The closest analogy is a taking of a season ticket to all the New York Yankees' home games every year (a license to take access to a seat in Yankee Stadium 81 times per year for 3 to 4 hours per game). How much would that cost? How about the value of a season ticket to the Omaha Storm Chasers? Does the administrative agency even have the power to appropriate funds from the California public treasury? In this case, the remedy sought was injunctive relief--a permanent injunction against the access rule's enforcement.

5. Justices who wish to ignore constitutional protection of property rights often argue that the complexities of modern times require property rights to be set aside. Notice on page 16 how Justice Roberts responds to this type of argument: "With regard to the complexities of modern society, we think they only reinforce the importance of safeguarding the basic property rights that help preserve individual liberty, as the Founders explained." See also p. 5: "The Founders recognized that the protection of private property is indispensable to the promotion of individual freedom. As John Adams tersely put it, '[p]roperty must be secured, or liberty cannot exist.'”

Loretto v. Teleprompter (p. 808)

What are the facts of this case? What was the purpose of this law?
    
        State of New York, in order “to facilitate tenant access” to cable television, enacted a law requiring landlords to allow cable facilities to be installed in their buildings. p. 809

 Law allows A to trespass on the property of B.
    
        Was this law really designed to protect tenants? Or was it designed to protect the cable company? See p. 809 (5% fee had been the norm.)
    
Basically, the law required landlords to allow cable wires to be run through their buildings. Is this a physical takings case or a regulatory takings case?
    

This is a very small physical occupation of privately-owned buildings. See p. 810.
    
        Is this a “taking” that requires payment of just compensation?
    
        Court holds yes.: “Constitutional protection for the rights of private property cannot be made to depend on the size of the area permanently occupied.” P. 809-810
    
        The size of the taking goes to the amount of compensation, not to whether a taking has occurred.
    
    Compare—swimming pool hypo on p. 809.

    
        This is a per se rule – all physical takings are takings for which just compensation must be paid. — Dr. Seuss might say “A physical taking is a taking no matter how small.”
    
        What are the damages in a case like this? See p. 809: FMV of voluntary cable easement.
    
        Permanent easement to operate a commercial cable business on private property. See p. 809: “standard rate of 5% of gross revenues” generated from the particular building.
    
    
But see P. 808 (“reduction in value” caused by the easement). How much is that? You could argue it is the present value of 5% of cable revenues over the years.

 

See n. 1 on page 810. What is a per se or categorical rule (as distinct from an ad hoc rule)? 

Which kind of rule provides the greatest certainty, the greatest protection of private property? Why?
    
    Compare strict liability in tort versus negligence?

Holmes v. Brandeis in Pennsylvania Coal v. Mahon

                     Pictures of Justice Holmes and Justice Brandeis

What are the reasonable expectations of the purchaser when a person or a governmental agency purchases merely the surface rights to land and explicitly recognizes that the grantor (the Coal Company) has the right "to remove all coal" under the surface without any liability that may arise concerning damage to the surface estate? p. 811

In Pennsylvania Coal, Justice Holmes' majority opinion clashed with Justice Brandeis' dissenting opinion. Let's take a closer look:

Brandeis says the Kohler Act is not a "Taking" because a "restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking." (p.814). In other words, a taking for a public use is not a taking. Huh?

Holmes says that this police power purpose may satisfy the "public use" requirement, but it does not dispense with the requirement of "just compensation": "We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change." (p. 813)

Also: "When this seemingly absolute protection [of private property from uncompensated takings] is found to be qualified by the police power, the natural tendency of human nature is to extend the qualification more and more until at last private property disappears." Id. What point is Holmes making here?

Who do you think has the better of this argument?


Holmes says that the "general rule...is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking."

What does "too far" mean to Holmes? (see p. 813: "To make it commercially impracticable to mine certain coal has very nearly the same effect for constitutional purposes as appropriating it or destroying it.")

What does it mean to Brandeis? (see p. 815: "But values are relative. If we are to consider the value of the coal kept in place by the restriction, we should compare it with the value of all other parts of the land. That is, with the value not of the coal alone, but with the value of the whole property.")

This is what we sometime refer to as the denominator issue in the law of regulatory takings. Do you see what this issue is? 

Certain Coal/Certain Coal   vs     Certain Coal/All Coal

What do you think? Would you have joined Holmes' majority opinion or Brandeis' dissent? Why?

See note 3, p. 815-816: In Keystone the Court basically adopted the reasoning of Justice Brandeis in Mahon to uphold as not-a-taking a law "remarkably similar to the Kohler Act."

Here are some additional questions that require digging deeply:

Suppose the police shut down an illegal drug house under laws prohibiting the sale of illegal drugs. Does this constitute a "taking" of real property that requires just compensation? If your answer is no (as I assume it is), how is this case different from Mahon?

Note 2 on page 815 asserts that "[a]t the time of its adoption, the Fifth Amendment was viewed as applicable only to physical acquisitions of land, not to regulations of land." What were the threats to property rights in 1791? Were landmark laws, zoning laws, and the ubiquitous restrictions of the modern Regulatory State anticipated at the time the Takings Clause was ratified? Does the original principle of "no confiscatory takings without just compensation," apply to modern confiscatory regulations? Should the First Amendment principle of "freedom of the press" apply only to 18th century media technology, because movies, television, and the internet were not anticipated at the time of the adoption of the First Amendment? Or does the original principle of "freedom of the press" apply to modern threats to free expression? Does the Fourth Amendment's protection against unreasonable searches protect us against modern kinds of searches, such as electronic surveillance and wiretaps? Can one be an originalist and in good faith support enforcing the principles of Just Compensation, privacy from unreasonable searches, and freedom of expression to modern threats to the liberties protected by the First, Fourth and Fifth Amendments?

In District of Columbia v. Heller, the 2008 case upholding an individual constitutional right to "keep and bear Arms," the Court referred to a similar argument against liberty as "frivolous":

Some have made the argument, bordering on the frivolous, that only those arms in existence in the 18th century are protected by the Second Amendment. We do not interpret constitutional rights that way. Just as the First Amendment protects modern forms of communication, and the Fourth Amendment applies to modern forms of search, the Second Amendment extends, prima facie, to all instruments that constitute bearable arms, even those that were not in existence at the time of the founding.

In other words, originalism discerns the principle that defines the liberty, which then must be applied to modern threats against that liberty. It seems to follow that the Takings Clause applies to modern confiscatory takings of private property, including "regulatory" takings.