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Regulatory taking


Regulatory taking

Regulatory taking is a situation in which a government regulation limits the uses of private property to such a degree that the regulation effectively deprives the property owners of economically reasonable use or value of their property to such an extent that it deprives them of utility or value of that property, even though the regulation does not formally divest them of title to it.


  • United States law 1
    • Physical occupation 1.1
    • Regulatory restriction on use of property 1.2
    • Inverse condemnation 1.3
  • Constitutional history 2
    • Legal tender cases 2.1
    • Fourteenth Amendment jurisprudence 2.2
    • The Pennsylvania Coal case 2.3
    • The Bituminous Coal Association case 2.4
    • Health and safety takings 2.5
  • Evolution of modern regulatory takings law 3
    • Penn Central 3.1
    • Andrus v. Allard 3.2
    • Agins 3.3
    • Loretto decision 3.4
    • Lucas v. South Carolina Coastal Council 3.5
    • Nollan and Dolan 3.6
    • Bayview Homes 3.7
    • Palazzolo 3.8
  • Political significance 4
  • Regulatory taking themes 5
    • Permit exhaustion 5.1
      • Total takings test 5.1.1
      • Unconstitutional conditions 5.1.2
      • The denominator problem 5.1.3
  • Notes 6
  • References 7
  • External links 8

United States law

In common law jurisdictions, state governments traditionally enjoy police power, under which a government may regulate a variety of aspects of the lives of its subjects.

Under American law, however, this power does not extend to the outright divestiture of title to private property, nor to the de facto equivalent of it. Instead, the power of eminent domain is a separate and distinct power which allows a government to divest a property owner of utility of such property, but when it does so, it must pay just compensation. Some states, not the federal government, use the full compensation standard, not the just compensation standard.

This power is limited in the Fifth Amendment to the United States Constitution, and extends to the states under the Due Process Clause of the Fourteenth Amendment. (The Fifth Amendment prohibits the federal government from taking property for public use without "just compensation," which American courts have interpreted in the usual case to mean "fair market value".) This prohibition is deemed incorporated in the Due Process Clause of the Fourteenth Amendment (which bars state governments from depriving people of their property without due process of law.)

Physical occupation

The most straightforward takings claim arises when the government physically occupies some part of a landowner's property without compensation: this runs directly into the plain language of the amendment itself. It is a "taking" of some property without compensation. With certain exceptions, a direct physical occupation, temporary or permanent, represents a taking. In some few cases, we find disputes surrounding whether a government action in fact constitutes a physical direct and immediate occupation of land. A leading case is United States v. Causby, 328 U.S. 256 (1946), in which a landowner was subjected incessant low-level military flights well below the federally recognized aviation airspace. In requiring compensation, the Court held:

The landowner owns at least as much of the space above the ground as the can occupy or use in connection with the land. See Hinman v. Pacific Air Transport, 9 Cir., 84 F.2d 755. The fact that he does not occupy it in a physical sense-by the erection of buildings and the like-is not material. ... In this case, as in Portsmouth Harbor Land & Hotel Co. v. United States, supra, the damages were not merely consequential. They were the product of a direct invasion of respondents' domain. As stated in United States v. Cress, 243 U.S. 316, 328 , 37 S.Ct. 380, 385, '... it is the character of the invasion, not the amount of damage resulting from it, so long as the damage is substantial, that determines the question whether it is a taking.' Flights over private land are not a taking, unless they are so low and so frequent as to be a direct and immediate interference with the enjoyment and use of the land.

Regulatory restriction on use of property

In contrast, a regulation restricting the use of property to further legitimate public ends, will not be considered a taking merely because it impairs the value or the utility of that land. However, when the regulation goes too far (as Justice Holmes put it in Pennsylvania Coal Co. v. Mahon), it will be judicially recognized as the equivalent of a taking which may not take place without payment of just compensation to the property's owner.

The issue of regulatory takings arises from the interaction between exercise of the traditional police power and exercise of eminent domain. The police power is the inherent state government power, to do what is reasonably necessary to promote and protect public health, safety, welfare and morals.

There are numerous instances where the US Supreme Court has found that state courts have reasonably concluded that "the health, safety, morals, or general welfare" would be promoted by prohibiting particular contemplated uses of land. And in this context the Supreme Court has repeatedly upheld land-use regulations that adversely affected recognized real property interests.

Zoning laws are the classic example; see Hadacheck v. Sebastian, 239 U.S. 394 (1915) (prohibition of brickyard operations within certain neighborhoods); Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926) (prohibition of industrial use); Gorieb v. Fox, 274 U.S. 603, 608 (1927) (requirement that portions of parcels be left unbuilt); Welch v. Swasey, 214 U.S. 91 (1909) (height restriction), which have been viewed as permissible governmental action even when prohibiting the most beneficial use of the property.

However, zoning restrictions may deny an owner any economically viable use of his land. Suppose a "low density residential" zone requires that a house have a setback (the distance from the edge of the property to the edge of the building) of no less than 100 feet (30 m). If a particular property were only 100 feet (30 m) deep, it would be impossible to build a house on the property.

Governmental land-use regulation that deny the property owner any economically viable use are deemed a taking of the affected property. See, e.g., Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), First English Evangelical Lutheran Church v. County of Los Angeles (1987). The general approach to this question was summed up in Agins v. City of Tiburon, 447 U.S. 255 (1980) which states that the application of land-use regulations to a particular piece of property is a taking only "if the ordinance does not substantially advance legitimate state interests ... or denies an owner economically viable use of his land." However, in Lingle v. Chevron, 544 U.S. 528 (2005), the Supreme Court overruled the "substantially advance" criterion of a taking. When a government regulation effects a taking of private property by such excessive regulation, the owner may initiate inverse condemnation proceedings to recover the just compensation for the taking of his or her property, provided that procedural hurdles have been overcome.

In recent years, the concept of regulatory taking has been used more loosely—outside the constitutional sense—by property rights groups, extending to include regulations that reduce property values by lesser amounts. Ballot initiatives based on this interpretation (such as Oregon's Measure 37) have been advanced in at least seven states in the years 2000 to 2006. All these states are in the American west, but a significant portion of the funding for the initiatives has come from sources on the east coast.[1]

Inverse condemnation

Inverse condemnation is a term which describes a claim brought against the government in which a property owner seeks compensation for a `taking' of his property under the Fifth Amendment. In states that prohibit uncompensated taking or damaging, physical damage to property is included in this definition. The term “inverse” is used, because usually condemnations are brought by the government. In the inverse condemnation context, it is the property owner who sues the government, alleging a taking (or damaging) of property without just compensation. See San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621, 638 n.2 (1981) (Justice Brennan dissenting); United States v. Clarke, 445 U.S. 253, 257 (1980); Agins v. City of Tiburon, 447 U.S. 255, 258 n.2 (1980).

Constitutional history

The authors of the United States Constitution had come from a country where feudal property rights derived originally from the King and the nobility. In the 17th and 18th century, the concept of property rights was changing dramatically. “By the 16th century, there was no 'free' land in the British Isles or in Western Europe. Every acre was owned by someone, either a private individual or by government in the form of the Crown. The laws of primogeniture and entail meant that an estate of land had to be passed on intact to the oldest son, and those without land were in large measure powerless.” Of particular importance at this time were the writings of the great English political theorist John Locke (1632–1704). To Locke, private property arose out of natural law and existed prior to the creation of government. The right to own property, therefore, did not depend upon the whims of a king or parliament; to the contrary, the primary purpose of government was to protect rights in property, since these rights were at the base of all liberties.

It is not likely that our founders considered the right to ownership of property as absolute. They understood that in a community, ownership of property, indeed the very value of property itself, rested to some extent on mutual obligations. “Ownership in land — the most tangible, and in the early days of the Republic, the most important form of property — had never meant absolute control over that property or an unfettered right to use it in any way the owner wanted. Traditions going back to English common law have always placed restrictions on property. The common law doctrine of nuisance, for example, prevented owners from using their land in a way that interfered unreasonably with the rights of their neighbors. Custom often allowed hunting on private, unenclosed land, or required that an owner allow access to rivers and lakes. Property in the form of businesses also had regulations on them; taverns, ferries and coach lines, for example, were often heavily regulated in both England and the North American colonies.” [2] While our founders regarded the right to own property as sacrosanct, they certainly did not regard that right as implying immunity from regulation.

The government takes property for roads, for government buildings, for parks, military bases, airports and to preserve water supplies. The power to take private property for public purposes is necessary to the ability to maintain, preserve and defend our republican form of government. The Fifth Amendment to the United States contains important protections against federal confiscation of private property. It states:

No person .....{shall be} deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

The text of this clause seems to provide three separate protections. The first prevents the federal government from depriving a person of property without due process of law. It applies to any deprivation of property, not just takings for public purpose. The second prevents the federal government from taking private property for private use, and the third requires payment of just compensation when property is taken for public purposes.

Until 1896 the Fifth Amendment Taking Clause applied only to the federal government. Thereafter it was held that the Just Compensation Clause is incorporated in the Due Process Clause of the 14th Amendment which does apply to states. The problem of sovereign immunity of the United States was solved when Congress enacted the Tucker Act which consents to lawsuits against the federal government in the U.S. Court of Federal Claims which sits in Washington, DC, but hears taking cases from all over the country. .

Legal tender cases

An early case involving interpretation of the Fifth Amendment was the Legal Tender Cases, 79 U.S. 457 (1870) During the American Civil War, the Legal Tender Acts of 1862 and 1863 made paper money a legal substitute for gold and silver, including for the payment of preexisting debts. In Hepburn v. Griswold, the Supreme Court had found the legal tender laws inconsistent with the spirit of the Constitution, which prohibited the states from passing "any ... law impairing the obligation of contracts." Moreover, the Court had held that an act compelling holders of contracts that called for payment in gold or silver to accept as legal tender "mere promises to pay dollars" was unconstitutional because it deprived "such persons of property without due process of law" under the Fifth Amendment. The Court until this time had rarely found an act of Congress unconstitutional. In 1871, the Court, with two new justices on the bench, reversed itself in the legal tender cases, Knox v. Lee and Parker v. Davis, and declared the Legal Tender Acts constitutional The Fifth Amendment does not apply to injuries which flow from the exercise of lawful power, the court held, but only to direct appropriation of property.

The fifth amendment.... forbids taking private property for public use without just compensation or due process of law. That provision has always been understood as referring only to a direct appropriation, and not to consequential injuries resulting from the exercise of lawful power. It has never been supposed to have any bearing upon, or to inhibit laws that indirectly work harm and loss to individuals. A new tariff, an embargo, a draft, or a war may inevitably bring upon individuals great losses; may, indeed, render valuable property almost valueless. They may destroy the worth of contracts. But whoever supposed that, because of this, a tariff could not be charged, or a non-intercourse act, or an embargo be enacted, or a war be declared?

Fourteenth Amendment jurisprudence

The Fourteenth Amendment to the United States Constitution extended the protection against uncompensated takings to citizens against their own states, and in so doing created both significant new protections for individual rights and a new avenue for federal interference with State and local democracy. Section 1 of the Fourteenth Amendment states:

All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Notice that the text of the fourteenth amendment's anti-confiscation provision is different from that of the Fifth Amendment. One might argue that the difference in text would lead to a limitation of the federal courts' role in enforcing state law protections against takings. But early on, the federal courts began the process of gradual incorporation of the bill of rights protections into the fourteenth amendment. The due process clause of the fourteenth amendment has historically been a major vehicle for the invasion by the federal courts into governance of the states. We find early justices of the Supreme Court puzzling over this, for example, in Mugler v. Kansas, 123 U.S. 623 (1887):

It is not a little remarkable that, while this provision has been in the constitution of the United States as a restraint upon the authority of the federal government for nearly a century, and while during all that time the manner in which the powers of that government have been exercised has been watched with jealousy, and subjected to the most rigid criticism in all its branches, this special limitation upon its powers has rarely been invoked in the judicial forum or the more enlarged theater of public discussion. But while it has been a part of the constitution as a restraint upon the powers of the states only a very few years, the docket of this court is crowded with cases in which we are asked to hold that state courts and state legislatures have deprived their own citizens of life, liberty, and property without due process of law. There is here abundant evidence that there exists some strange misconception of the scope of the provision as found in the fourteenth amendment. In fact, it would seem from the character of many of the cases before us, and the arguments made in them, that the clause under consideration is looked upon as a means of bringing to the test of the decision of this court the abstract opinions of every unsuccessful litigant in a state court of justice of the decision against him, and of the merits of the legislation on which such a decision may be founded.

Rights of the People; Individual Freedom and the Bill of Rights, Chapter 9 [1]:

During the 19th and early parts of the 20th century, a great debate took place in the United States over the nature of property rights and the balance that should be struck between the rights of private owners and businessmen on the one hand and the police powers of the state that were enlisted to ameliorate the harsher aspects of industrialization. Especially within the judicial branch, many judges seemed to hold an unalloyed Lockean view that nothing should be done to disturb individual rights in property. As a result, conservative courts consistently restricted both state legislatures and the Congress in their efforts to put through reform measures such as wages and work-hours laws, factory safety measures, rate regulation of public utilities, and progressive taxation of income — measures that are common in all modern states. Not until the Great Depression of the 1930s did the forces of reform finally triumph. This did not mean that the American people abandoned property rights, but rather that property rights took on a more proportional value within a larger revolution in individual liberties. Starting in 1937, both the country and its courts began to concentrate on personal liberties, and especially the meaning of the Equal Protection Clause of the Fourteenth Amendment.

The Pennsylvania Coal case

The Supreme Court first held that state regulations that go too far may effect a taking in the 1922 case of Pennsylvania Coal Co. v. Mahon. There, Justice Holmes wrote for the majority that "[t]he general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." In that case the law in question (the Pennsylvania Kohler Act) forbade all mining under inhabited land, but that was held by the Supreme Court to be a taking of the coal.

State land use, public health and environmental legislation necessarily limits the use of private property. But these laws do not directly occupy private property. What then are the limits on state power to constrain the use of private property without providing compensation. Two important cases, both dealing with state mining regulation, help frame this issue. The first, Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), was decided by the Supreme Court at a time when the Court actively intervened broadly against state and local regulation in a variety of contexts. The case arose from a challenge to state legislation designed to deal with coal mine subsidence. As the Court later explained in Keystone Bituminous Coal Assn. v. Debenedictis, 480 U.S. 470 (1987):

Coal mine subsidence is the lowering of strata overlying a coal mine, including the land surface, caused by the extraction of underground coal. This lowering of the strata can have devastating effects. It often causes substantial damage to foundations, walls, other structural members, and the integrity of houses and buildings. Subsidence frequently causes sinkholes or troughs in land which make the land difficult or impossible to develop. Its effect on farming has been well documented – many subsided areas cannot be plowed or properly prepared. Subsidence can also cause the loss of groundwater and surface ponds.

From 1890 to 1920 coal interests purchased great reaches of mineral interests throughout western Pennsylvania. Under these purchases, the landowner preserved the right to use the surface land, but gave up mineral claims. Many of the deeds to mineral interests contained waivers which gave up the right to claim damages to the surface interest, in the event that mining caused damage to the surface interest. As the Court later explained:

It is stipulated that approximately 90% of the coal that is or will be mined by petitioners in western Pennsylvania was severed from the surface in the period between 1890 and 1920. When acquiring or retaining the mineral estate, petitioners or their predecessors typically acquired or retained certain additional rights that would enable them to extract and remove the coal. Thus, they acquired the right to deposit wastes, to provide for drainage and ventilation, and to erect facilities such as tipples, roads, or railroads, on the surface. Additionally, they typically acquired a waiver of any claims for damages that might result from the removal of the coal.

Both of the two Pennsylvania coal cases reviewed state legislation which sought to limit the amount of devastation which could be caused by this undermining process. The coal companies argued that they had acquired the right to this devastation: that it had been purchased from others who originally owned it. The state and injured landowners argued that the right to devastate was not property. Or, viewed differently, that all property is held subject to the government's right to regulate.

The early mining operations often removed so much of the underground coal that the mines became a hazard to the miners underground and to those residing on the surface. For this reason, the Pennsylvania legislature acted to limit the amount of material that could be removed from the mines below: so as to leave sufficient underground support below.

Pennsylvania Coal Co. v. Mahon involved an action by an individual landowner who sought to prevent a mining operation from violating this law, undermining their home. The owner's deed conveyed the surface but in express terms reserved the right to remove all the coal. Under Pennsylvania law the deed also conveyed the right to surface support to the coal company which could thus remove subsurface coal even if that caused subsuidence. The deed provided that the grantee takes the premises with that risk and waives all claim for damages that may arise from mining out the coal. The coal company essentially thus owned a property right to mine as much as it wished, without regard to consequences to the surface, by reason of this deed. Over a dissent by Justice Brandeis, the court ruled that Pennsylvania's statute deprived the coal companies of the right to mine their coal, and this was deemed a confiscation. The Court's opinion recognizes that government may lawfully limit the use of property to some extent without compensation, but found that this statute went too far. Said the court:

Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. As long recognized, 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 contract and due process clauses are gone. One fact for consideration in determining such limits is the extent of the diminution. When it reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to sustain the act. So the question depends upon the particular facts.
The general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. It may be doubted how far exceptional cases, like the blowing up of a house to stop a conflagration, go-and if they go beyond the general rule, whether they do not stand as much upon tradition as upon principle. Bowditch v. Boston, 101 U.S. 16 . In general it is not plain that a man's misfortunes or necessities will justify his shifting the damages to his neighbor's shoulders. 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. As we already have said this is a question of degree-and therefore cannot be disposed of by general propositions. But we regard this as going beyond any of the cases decided by this Court. The late decisions upon laws dealing with the congestion of Washington and New York, caused by the war, dealt with laws intended to meet a temporary emergency and providing for compensation determined to be reasonable by an impartial board. They were to the verge of the law but fell far short of the present act.

The Bituminous Coal Association case

Some 65 years later, the Court considered similar Pennsylvania legislation which required that some underground coal be left in place to provide surface support. In the Bituminous Coal case, the State's legislation received a more sympathetic hearing from the Court in Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470 (1987). The Court wrote:

"...[T]he character of the governmental action involved here leans heavily against finding a taking; the Commonwealth of Pennsylvania has acted to arrest what it perceives to be a significant threat to the common welfare. [t]here 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...."

The Keystone decision is characterized by deference to the State's determination that its legislation promoted public health and safety:

Under our system of government, one of the State's primary ways of preserving the public weal is restricting the uses individuals can make of their property. While each of us is burdened somewhat by such restrictions, we, in turn, benefit greatly from the restrictions that are placed on others. These restrictions are "properly treated as part of the burden of common citizenship."

Notably, the Keystone decision bears four dissents: Justices Rehnquist, Powell, O'Connor and Scalia.

Health and safety takings

Suppose the government must cut a firebreak through a forest upon private property to prevent spread of a forest fire. Or suppose the government destroys healthy livestock in a quarantine area to prevent spread of disease. These are invasive takings, but they do not fall under the per se rule described in the previous section. From the very first, the takings cases recognized that `all property in this country is held under the implied obligation that the owner's use of it shall not be injurious to the community.' Mugler v. Kansas, 123 U.S. 623, 665 (1887). The most straightforward example of this principle occurs when the government must condemn or destroy property to prevent spread of disease or other threat to the public health or safety. "Thus, in order to protect the health and safety of the community, government may condemn unsafe structures, may close unlawful business operations, may destroy infected trees, and surely may restrict access to hazardous areas – for example, land on which radioactive materials have been discharged, land in the path of a lava flow from an erupting volcano, or land in the path of a potentially life-threatening flood. When a governmental entity imposes these types of health and safety regulations, it may not be "burdened with the condition that [it] must compensate such individual owners for pecuniary losses they may sustain, by reason of their not being permitted, by a noxious use of their property, to inflict injury upon the community."

Evolution of modern regulatory takings law

Penn Central

Perhaps the most important modern case on regulatory takings is the Grand Central Station case. In Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978) the Court denied a takings claim brought by the owner of Grand Central Terminal following refusal of New York City Landmarks Preservation Commission to approve plans for construction of 50-story office building over Grand Central Terminal. Penn Central contended that under the New York Historical Preservation Law, it was entitled to derive a net income from Grand Central Terminal, but the city's regulation had forced it into an indefinite deficit condition. The trial court agreed but its decision was reversed on appeal. Eventually the U.S. Supreme Court held that: the owners could not establish a "taking" merely by showing that they had been denied the right to exploit the superadjacent airspace, irrespective of the remainder of the parcel; the fact that the law affected some owners more severely than others did not itself result in a "taking," and that the law did not interfere with owners' present use or prevent it from realizing a reasonable rate of return on its investment, especially since preexisting air rights were transferable to other parcels in the vicinity, which acted as a form of compensation for the claimed taking of air rights.

The Court’s ruling has caused confusion because in it the court declined to explain what constitutes a cause of action for a regulatory taking, and only asserted that the decision whether a regulatory taking has occurred is made ad hoc on the basis of the facts in each case. “The question of what constitutes a "taking" for purposes of the Fifth Amendment has proved to be a problem of considerable difficulty. 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," Armstrong v. United States, 364 U.S. 40, [438 U.S. 104, 124] 49 (1960), 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. See Goldblatt v. Hempstead, 369 U.S. 590, 594 (1962). Indeed, we have frequently observed that whether a particular restriction will be rendered invalid by the government's failure to pay for any losses proximately caused by it depends largely "upon the particular circumstances [in that] case." United States v. Central Eureka Mining Co., 357 U.S. 155, 168 (1958); see United States v. Caltex, Inc., 344 U.S. 149, 156 (1952). In engaging in these essentially ad hoc, factual inquiries, the Court's decisions have identified several factors that have particular significance.

In making its decision, the Court would consider

  1. the economic impact of the regulation on the claimant,
  2. the extent to which the regulation has interfered with distinct investment-backed expectations and
  3. the character of the governmental action.

These factors have been criticized because the court failed to provide guidance as to exactly what they mean, what must be proven to establish a taking using them as a test, and whether all three, two, or any one of them is sufficient to show a taking.

Andrus v. Allard

Another interesting case from this time period is Andrus v. Allard, the eagle feather case. In Andrus v. Allard, 444 U.S. 51 (1979), the Court found that the federal Eagle Protection Act could prohibit the sale of lawfully purchased eagle parts. The Court noted that the Act did not confiscate the owner’s property, but rather regulated the terms of sale:

The regulations challenged here do not compel the surrender of the artifacts, and there is no physical invasion or restraint upon them. Rather, a significant restriction has been imposed on one means of disposing of the artifacts. But the denial of one traditional property right does not always amount to a taking. At least where an owner possesses [444 U.S. 51, 66] a full "bundle" of property rights, the destruction of one "strand" of the bundle is not a taking, because the aggregate must be viewed in its entirety. Compare Penn Central, supra, at 130–131, and United States v. Twin City Power Co., 350 U.S. 222 (1956), with Pennsylvania Coal Co. v. Mahon, supra, and United States v. Virginia Electric & Power Co., 365 U.S. 624 (1961). See also Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of "Just Compensation" Law, 80 Harv. L. Rev. 1165, 1230–1233 (1967). In this case, it is crucial that appellees retain the rights to possess and transport their property, and to donate or devise the protected birds.

The fact that the statute barred the most profitable use of the property was not sufficient, the Court held:

It is, to be sure, undeniable that the regulations here prevent the most profitable use of appellees' property. Again, however, that is not dispositive. When we review regulation, a reduction in the value of property is not necessarily equated with a taking. Compare Goldblatt v. Hempstead, supra, at 594, and Hadacheck v. Sebastian, 239 U.S. 394 (1915), with Pennsylvania Coal Co. v. Mahon, supra. In the instant case, it is not clear that appellees will be unable to derive economic benefit from the artifacts; for example, they might exhibit the artifacts for an admissions charge. At any rate, loss of future profits – unaccompanied by any physical property restriction – provides a slender reed upon which to rest a takings claim. Prediction of profitability is essentially a matter of reasoned speculation that courts are not especially competent to perform. Further, perhaps because of its very uncertainty, the interest in anticipated gains has traditionally been viewed as less compelling than other property-related interests. Cf., e. g., Fuller & Perdue, The Reliance Interest in Contract Damages (pt. 1), 46 Yale L. J. 52 (1936).


One year after the eagle feather decision, the Court decided Agins v. Tiburon, 447 U.S. 255 (1980). In Agins the Court stated that the application of land-use regulations to a particular piece of property is a taking when it denies the land's owner reasonable, viable use of it, or "if the ordinance does not substantially advance legitimate state interests ... or denies an owner economically viable use of his land." After landowners had acquired 5 acres (20,000 m2) of unimproved land in a city 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 the owners’ property in a zone in which property may be devoted to one-family dwellings, accessory buildings, and open-space uses, with density restrictions permitting appellants to build between one and five single-family residences on their tract. The city expressed its intention to acquire the Agins parcel for open space, and actually commenced condemnation proceedings to take title to it. Later, the city abandoned the condemnation, and adopted the ordinance in issue. Without having sought approval for development of their tract under the ordinances, appellants brought suit against the city in state court, alleging that the city had taken their property without just compensation in violation of the Fifth and Fourteenth Amendments. The California Supreme Court departed from long-standing California precedent and held that monetary compensation was not available in regulatory taking cases which the court refused to recognize. That holding was eventually overruled by the U.S. Supreme Court a few years later in First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987).

The U.S. Supreme Court held:

The application of a general zoning law to particular property effects a taking if the ordinance does not substantially advance legitimate state interests, see Nectow v. Cambridge, 277 U.S. 183, 188 (1928), or denies an owner economically viable use of his land, see Penn Central Transp. Co. v. New York City, 438 U.S. 104, 138 , n. 36 (1978). The determination that governmental action constitutes a taking is, in essence, a determination that the public at large, rather than a single owner, must bear the burden of an exercise of state power in the public interest. Although no precise rule determines when property has been taken, see Kaiser Aetna v. United States, 444 U.S. 164 (1979), the question necessarily requires a weighing of private and public interests. In this case, the law confers a reciprocal benefit: it benefits all landowners, serving the city's interest in assuring careful and orderly development of residential property with provision for open-space areas.

It took Bonnie Agins 30 years of litigation and administrative proceedings before she was permitted to build three houses on her 5-acre (20,000 m2) parcel.

Note that the "substantially advance" element of Agins, was later overruled in the Lingle case, where the court explained that its Agins opinion was mistaken on that point and that the "substantially advance" element was appropriate in substantive due process cases, not taking ones.

Loretto decision

In Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), the Supreme Court ruled that a regulation is generally considered a per se taking when it forces land owners to endure a permanent physical occupation on their land, such as the permanent physical presence of cable lines on a residential building. The Court argued that any permanent physical presence destroyed the property owner's right to exclude, long recognized as one of the key rights in the "bundle of rights" commonly characterized as property. The Court considered a New York statute which required landlords to install CATV cable facilities on the roof of their buildings; the facilities were part of a city-wide cable network designed to bring cable services to the entire city. The landlords were required to provide a location for 6 feet (1.8 m) of cable one-half inch in diameter and two 4" x 4" x 4" metal boxes at a one-time charge determined by the Cable Commission at $1. The City argued that the Court should apply a balancing test—that the invasion of property was minimal in comparison to the community wide benefit. But the Court's decision suggested that there was a per se rule requiring compensation in cases of this kind. 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 minimal economic impact on the owner.

Yet, as the dissent in Loretto points out, there would seem to be all sorts of circumstances wherein the government may require installation of devices without compensation: “...the States traditionally – and constitutionally – have exercised their police power "to require landlords to . . . provide utility connections, mailboxes, smoke detectors, fire extinguishers, and the like in the common area of a building." These provisions merely ensure tenants access to services the legislature deems important, such as water, electricity, natural light, telephones, inter-communication systems, and mail service. It might be asked how does one square these requirements with the requirement for compensation in Loretto. Is it that the extinguishers belong to the landowner; is it that the extinguishers improve the value of the building, and so the compensation required is zero; or is it something else?

Lucas v. South Carolina Coastal Council

In the Penn Central case, the Supreme Court had described a three prong balancing test, which required a case by case analysis to determine if there had been a regulatory taking. This meant that it was difficult to predict whether a particular regulation merited compensation. Might there be situations in which there should be a “per se” rule requiring compensation? In 1992, the U.S. Supreme Court ruled that a State regulation that deprives a property owner of all economically beneficial use of that property can be a taking. Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). Lucas had purchased two residential lots on a South Carolina barrier island, intending to build single-family homes such as those on the immediately adjacent parcels. At that time, Lucas's lots were not subject to the State's coastal zone building permit requirements. In 1988, however, the state legislature enacted the Beachfront Management Act, which barred Lucas from erecting any permanent habitable structures on his parcels. He filed suit against respondent state agency, contending that, even though the Act may have been a lawful exercise of the State's police power, the ban on construction deprived him of all "economically viable use" of his property and therefore effected a "taking" under the Fifth and Fourteenth Amendments that required the payment of just compensation. The court further clarified, however, that a regulation is not a taking if it is consistent with "restrictions that background principles of the State's law of property and nuisance already placed upon ownership." As an example of "background principles," the court referred to the right of government to prevent flooding of others' property. The Court noted:

A review of the relevant decisions demonstrates that the "harmful or noxious use" principle was merely this Court's early formulation of the police power justification necessary to sustain (without compensation) any regulatory diminution in value; that the distinction between regulation that "prevents harmful use" and that which "confers benefits" is difficult, if not impossible, to discern on an objective, value-free basis; and that, therefore, noxious-use logic cannot be the basis for departing from this Court's categorical rule that total regulatory takings must be compensated....Although it seems unlikely that common-law principles would have prevented the erection of any habitable or productive improvements on Lucas's land, this state-law question must be dealt with on remand. To win its case, respondent cannot simply proffer the legislature's declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common-law maxim such as sic utere tuo ut alienum non laedas, but must identify background principles of nuisance and property law that prohibit the uses Lucas now intends in the property's present circumstances.

Following the Lucas U.S. Supreme Court decision, the Lucas case was remanded to the South Carolina Supreme Court which in turn remanded it to the trial court for a valuation trial. However, the case settled when the state bought Lucas' property, and later resold it to a developer.

Nollan and Dolan

In Nollan v. California Coastal Commission, 483 U.S. 825 the Court reviewed a regulation under which the California Coastal Commission demanded a lateral public easement across the Nollans' beachfront lot in exchange for a permit to demolish an existing bungalow and replace it with a three-bedroom house. The public easement was designed to connect two public beaches that were separated by the Nollan's property. The Coastal Commission had asserted that the public easement condition was imposed to promote the legitimate state interest of diminishing the "blockage of the view of the ocean" caused by construction of the larger house. The Court observed that requiring a dedication of private property in exchange for a building permit was "out and out extortion" unless it could be shown that the private development imposed a burden on public facilities or resources, and the dedication would mitigate such impact. This became known as the "essential nexus" between a legitimate state interest and the permit condition.

Then, in Dolan v. City of Tigard, 512 U.S. 374 (1994) the Court evaluated further the degree of the connection required. In that case, the City of Tigard, Oregon required any business owner seeking to expand substantially onto property adjacent to a floodplain, to create a public greenway and bike path from private land in order to prevent flooding and traffic congestion. The Supreme Court ruled that the City’s requirement would be a taking if the City did not show that there was a reasonable relationship between the creation of the greenway and bike path and the impact of the development, and that the exaction was roughly proportional to the impact. "Without question, had the city simply required petitioner to dedicate a strip of land along Fanno Creek for public use, rather than conditioning the grant of her permit to redevelop her property on such a dedication, a taking would have occurred,” the Court held. “ Such public access would deprive petitioner of the right to exclude others, "one of the most essential sticks in the bundle of rights that are commonly characterized as property."

Following remand, the Dolan case settled with the city paying Ms. Dolan several hundred thousand dollars.

Bayview Homes

In 1985, the Supreme Court applied its regulatory takings analysis to the Clean Water Act, which prohibits any discharge of dredged or fill materials into "navigable waters"—defined as the "waters of the United States"—unless authorized by a permit issued by the United States Army Corps of Engineers (Corps). United States v. Riverside Bayview Homes, Inc., 474 U.S. 121. The Corps issued regulations construing the Act to cover all "freshwater wetlands" that are adjacent to other covered waters. These regulations defined the adjacent wetlands as "those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions." Riverside Bayview Homes, Inc., began placing fill materials on its property near the shores of Lake St. Clair, Michigan. A Circuit Court of Appeals rejected the COE's interpretation, and suggested that the regulation would create a taking without just compensation in violation of the Fifth Amendment.

In its decision, the Supreme Court held that in order to be within the regulatory authority of the United States, these semi-aquatic characteristics would have to be the result of frequent flooding by the nearby navigable waters. But the Supreme Court rejected the attempt to narrow the Corps of Engineer’s regulatory reach. Perhaps some particular properties might in individual cases be so adversely impacted that a taking might be found. But this would not justify overturning the regulation itself. “Governmental land-use regulation may under extreme circumstances amount to a 'taking' of the affected property. See, e.g., Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985); Penn Central Transportation Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). But mere assertion of regulatory jurisdiction by a governmental body does not constitute a regulatory taking. See Hodel v. Virginia Surface Mining & Reclamation Association, 452 U.S. 264 (1981). A requirement that a person obtain a permit before engaging in a certain use of his or her property does not itself "take" the property in any sense: after all, the very existence of a permit system implies that permission may be granted, leaving the landowner free to use the property as desired. Moreover, even if the permit is denied, there may be other viable uses available to the owner. "[e]quitable relief is not available to enjoin an alleged taking of private property for a public use, duly authorized by law, when a suit for compensation can be brought against the sovereign subsequent to a taking." Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) This maxim rests on the principle that so long as compensation is available for those whose property is in fact taken, the governmental action is not unconstitutional.


On June 28, 2001, the Court issued a significant chapter in the saga of regulatory takings with Palazzolo v. Rhode Island, 533 U.S. 606 (2001). Palazzolo addressed three issues that had been bedeviling the litigation of regulatory takings: When is a takings claim ripe? When does notice of a preexisting regulation destroy the right to challenge the application of that regulation? And how much use and value may a regulation destroy before compensation is due? For over forty years, Anthony Palazzolo owned, directly or indirectly, a valuable parcel of property in the ocean resort town of Westerly, Rhode Island. Shore Gardens, Inc. (Shore Gardens), acquired the property in 1959 and 1960. Mr. Palazzolo became the sole owner of Shore Gardens in 1960. The property consists of roughly eighteen acres of wetlands and a small indeterminate amount of uplands. The land was divided into seventy-four parcels in two subdivision map filings that occurred in 1936 and 1959. Just north of the property is Winnapaug Pond, an intertidal pond with an outlet to the Atlantic Ocean. According to the state’s biologist, “[l]and uses of Winnapaug Pond/Atlantic Beach area are moderate-to-heavy density seasonal development, residential and commercial; development directly adjacent to this site is moderate density seasonal dwellings.” At the time of his application, the vicinity of Mr. Palazzolo’s property was developed with vacation homes, mostly on the northern, western, and eastern boundaries of the pond and along the neighboring ocean beach. Mr. Palazzolo’s property is bisected by a gravel road and there are several homes in the immediate vicinity; the road and homes were built on fill prior to the 1970s. Like the neighboring homes, the only way to develop Mr. Palazzolo’s land is to raise the grade with fill.

In 1971, the Rhode Island Legislature authorized the Coastal Resources Management Council (CRMC) to regulate the filling of coastal wetlands. The CRMC promulgated regulations requiring that any filling of coastal salt marsh, such as that found on Mr. Palazzolo’s property, meet certain public interest requirements. CRMC had ruled that private housing, and even low-income public housing, does not meet this public interest requirement. Prior to the adoption of this regulatory regime, Mr. Palazzolo applied twice to utilize the property, in 1963 and in 1966, to the Department of Natural Resources (DNR) seeking permission to dredge Winnapaug Pond in order to develop the property. The State approved both applications in April 1971, finding that neither application would “‘have any significant effect on wildlife.’” Shortly thereafter, however, the State withdrew the approval, and Mr. Palazzolo did not appeal.

Mr. Palazzolo had an interest in the property through the 1960s and early 1970s as the sole shareholder of Shore Gardens. Eventually, Mr. Palazzolo let the corporation lapse, and its charter was revoked in 1978. At this point, the property “pass[ed] by operation of law to Palazzolo, its sole shareholder.” After that time, Mr. Palazzolo, now as the owner of the property in his individual capacity, twice more applied for permits to CRMC to fill the property. The first application, filed in 1983, like the one filed in 1963, was to fill approximately eighteen acres of the property. Unlike the original applications, this involved no dredging. Mr. Palazzolo expected that approval of this application would allow him to proceed with the development of homes on the seventy-four lots that had been previously subdivided, although the 1983 application was only for the preliminary step of filling the wetlands, not the development of homes. CRMC denied this application on July 12, 1984, and Mr. Palazzolo did not appeal the denial.

In 1985 Mr. Palazzolo applied to fill 11.4 acres (46,000 m2); like his 1966 application to DNR, he intended to prepare the site to make it suitable for a family beach recreational area. The plan called for the construction of a fifty-car parking lot with room for boat trailers and the provision of picnic tables, concrete barbecue pits, and portable toilets. This plan was rejected in 1986. CRMC found that, in its natural state, Mr. Palazzolo’s property provided the public benefits of “refuge and feeding areas for larval and juvenile finfish and shellfish and for migratory waterfowl and wading birds,” “access of [f]auna . . . to cover areas,” and that the property facilitates “the exchange of nutrient/waste products,” and allows “sediment trapping,” “flood storage,” and “nutrient retention.” Furthermore, the proposal failed to meet various regulatory criteria outlined in CRMC’s CRMP regulations. For example, it found that Mr. Palazzolo’s beach club was in “conflict” with CRMP Section 130(A)(1) because the proposed beach club did not serve “a compelling public purpose which provides benefits to the public as a whole as opposed to individual or private interests.” Mr. Palazzolo unsuccessfully appealed the denial of the permit.

Based on the four denials over the span of twenty-three years, Mr. Palazzolo sued in 1988 for inverse condemnation, alleging that the property had a net value of $3,150,000. The trial court ruled against Mr. Palazzolo and the Rhode Island Supreme Court upheld the trial court’s decision. The court’s first ground for affirming the trial court decision was that Mr. Palazzolo’s claim was not ripe because he failed to apply for “less ambitious development plans.” It found that the 1963 and 1983 applications sought to fill the entire 18 acres (73,000 m2) of wetlands and (mistakenly) that the beach club applications sought to “fill all of the wetlands except for a fifty-foot strip.” The court concluded that Mr. Palazzolo should have filed another application to fill fewer acres of wetlands or to utilize just the upland area of the property.

The state Supreme Court also provided two other alternative bases for affirming the trial court decision. It held that because Mr. Palazzolo acquired the property in 1978 by virtue of the dissolution of Shore Gardens, he had acquired the property after the adoption of the regulations restricting the filling of wetlands and thus “had no reasonable investment-backed expectations.” Put another way, “the right to fill wetlands was not part of the title he acquired.” The court also found that Mr. Palazzolo “had not been deprived of all beneficial use of his property” because had he developed the upland portion of the land he could have realized some value from the property (approximately $200,000 compared to Palazzolo’s estimate of a $3.1 million net value). Alternatively, he could have realized “value in the amount of $157,000 as an open-space gift.”

The Supreme Court reversed. As a preliminary issue the Supreme Court addressed the question whether Palazzolo's case was "ripe" for review by the Courts. In other words, had Palazollo done everything he could do to work through the regulatory system to avoid his loss. The central question, the Court found, was whether Palazollo had obtained a final decision from the Council determining the permitted use for the land. A number of previous cases have established "the important principle that a landowner may not establish a taking before a land-use authority has the opportunity, using its own reasonable procedures, to decide and explain the reach of a challenged regulation:"

Under our ripeness rules a takings claim based on a law or regulation which is alleged to go too far in burdening property depends upon the landowner's first having followed reasonable and necessary steps to allow regulatory agencies to exercise their full discretion in considering development plans for the property, including the opportunity to grant any variances or waivers allowed by law. As a general rule, until these ordinary processes have been followed the extent of the restriction on property is not known and a regulatory taking has not yet been established. See Suitum, supra, at 736, and n. 10, 117 S.Ct. 1659 (noting difficulty of demonstrating that "mere enactment" of regulations restricting land use effects a taking). Government authorities, of course, may not burden property by imposition of repetitive or unfair land-use procedures in order to avoid a final decision. Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 698, 119 S.Ct. 1624, 143 L.Ed.2d 882 (1999).

A final decision does not occur until the responsible agency determines the extent of permitted development on the land. MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340, 351. But the landowner "obtained such a final decision when the Council denied his 1983 and 1985 applications. The State Supreme Court erred in ruling that, notwithstanding those denials, doubt remained as to the extent of development the Council would allow on petitioner's parcel due to his failure to explore other uses for the property that would involve filling substantially less wetlands. This is belied by the unequivocal nature of the wetland regulations at issue and by the Council's application of the regulations to the subject property."

Since Mahon, we have given some, but not too specific, guidance to courts confronted with deciding whether a particular government action goes too far and effects a regulatory taking. First, we have observed, with certain qualifications, that a regulation which "denies all economically beneficial or productive use of land" will require compensation under the Takings Clause. Agins v. City of Tiburon, 447 U.S. 255 (1980). Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations, and the character of the government action. Penn Central, supra, at 124, 98 S.Ct. 2646. These inquiries are informed by the purpose of the Takings Clause, which is to prevent the 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." Armstrong v. United States, 364 U.S. 40 (1960)[3]

Political significance

The opening gun in the current fight over effects of stringent regulation of private property in America was fired in 1973 when the Council on Environmental Quality came out in favor of the British approach of viewing the right to develop land as a public rather than private right. To that end its proponents argued that there should be no such thing as a regulatory taking, and the owners of land subjected to confiscatory regulations should only be able to get a judicial declaration that the regulation is invalid. The owners' response has been that this is no remedy because it can take many years to get relief from the courts, and even when land owners win in court they remain uncompensated for potentially huge losses incurred during the legal battle, such as loss of the property by foreclosure. This doctrinal confrontation raged until 1987 when the U.S. Supreme Court decided First English Evangelical Lutheran Church v. County of Los Angeles, in which it held that a taking of property was no less a taking when it was effected by non-physical means; i.e., by regulations that denied land owners use of their property, even when it did so on a temporary basis. Thus, whether physical or regulatory, a taking requires the payment of just compensation to the owner of the taken property.

The always controversial concept of regulatory taking has drawn much attention in more recent years, as legislation – some by ballot initiative – restricting land use regulations has been promoted in western states. The best known example was Oregon's adoption of law severely restricting the government's property regulation powers, and requiring compensation for diminution in value of the regulated property. In a few other states, legislatures adopted similar laws, a prominent example being Florida's Bert Harris Property Protection Act.

Regulatory taking themes

Permit exhaustion

One precondition of a regulatory takings claim is that the claimant must obtain a final decision by the regulating entity as to what uses will be permitted. The Supreme Court's decisions make it clear that the mere assertion of regulatory jurisdiction by a governmental body does not constitute a regulatory taking. See Hodel v. Virginia Surface Mining & Reclamation Assn., 452 U.S. 264, 293–297(1981).

The reasons are obvious. A requirement that a person obtain a permit before engaging in a certain use of his or her property does not itself "take" the property in any sense: after all, the very existence of a permit system implies that permission may be granted, leaving the landowner free to use the property as desired. Moreover, even if the permit is denied, there may be other viable uses available to the owner. Only when a permit is denied and the effect of the denial is to prevent "economically viable" use of the land in question can it be said that a taking has occurred. United States v Riverside Bayview Homes, 474 US 121 (1985)

The United States Supreme Court has established a number of tests under which a state regulation constitutes a taking per se. These are physical invasion, denial of all economically viable private property uses, or requiring the owners to dedicate some of their property to the government without a justifying reason for so doing. For example, when the owners' proposed land use will result in a significant increase in traffic they may be required to dedicate a strip of their land to improve an adjacent road. But when an action does not fall into a category addressed by one of these tests, the Court relies primarily on an ad hoc inquiry into the specifics of such individual case. This approach has been the subject of much criticism because of its unpredictability.

Total takings test

In Lucas v. South Carolina Coastal Council, the Supreme Court ruled that a regulation that forbade construction on the owner's land thus depriving him of all economically beneficial uses constituted a per se taking unless the proscribed use interests were not part of the title to begin with. In other words, a law or decree with the effect of depriving all economically beneficial use must do no more than duplicate the result that could have been achieved in the courts under the law of nuisance.

Unconstitutional conditions

In Agins v. City of Tiburon, the Court held that the application of restrictive zoning could violate the Takings Clause if it did not substantially advance legitimate governmental interests. This rule was applied to invalidate conditions imposed on the issuance of building permits in Nollan v. California Coastal Commission and Dolan v. City of Tigard. However, in a 2005 decision, Lingle v. Chevron U.S.A. Inc., the Court rejected the Agins standard as a general test for regulatory takings. While Lingle expressly overruled the Agins test opting instead for the Penn. Central balancing test, the heightened scrutiny for exactions of private property articulated in Nollan and Dolan as well as the 2 categorical per se rules from Lucas and Loretto still apply in narrow circumstances.

The denominator problem

In the Penn Central Case, the Supreme Court ruled that taking law does not divide property into discrete segments and therefore a taking occurs only when an owner's entire ownership is excessively regulated, and the owners are therefore not entitled to compensation where a part of their land remains economically viable. This gave rise to the question of what is the "denominator" of the ownership fraction; i.e., what is the larger ownership whose part is being subjected to confiscatory regulation, since the regulatory taking of a part of it (the "numerator") is not compensable.

The question thus arises: What is the "denominator" of the regulated parcel? For example: in Pennsylvania Coal Co. v. Mahon (260 U.S. 393) Pennsylvania Coal owned the mineral rights in a property (as well as the right to surface support under Pennsylvania law), and Mahon owned the surface rights of that land. Relying on Pennsylvania statutory law, the surface owners wanted mining under their [surface] land stopped to prevent subsidence. The court agreed with the coal company and held that the state statute forbidding such mining was a taking of the coal company's property.

Thus, the Pennsylvania Coal Company suffered a 100% taking, because all of its property (the underground coal deposits) had been effectively extinguished by the regulation. It could no longer extract its own coal. On the other hand, under the more recent Penn Central approach, if one defines the "denominator" as the total property rights in a particular parcel (i.e., both surface and mineral rights), then there would be only a partial taking, because the mineral rights were only a part of the total rights in the property (even if those rights were distributed between two owners). This theory was more recently applied by the U S Court of Appeals in Whitney Benefits v. United States, holding that a federal regulation forbidding strip mining of large coal deposits in Wyoming, took the owners' property, requiring payment of compensation which, with interest and attorneys' fees, came to $200 million

In his dissent to Pennsylvania Coal Justice Brandeis argued that inasmuch as the police power regulation promoted public safety, the state statute forbidding mining under inhabited land trumped the coal company's property right to its coal. That theory has gained acceptance in the Supreme Court case of Keystone Bituminous Coal Ass'n v. DeBenedictis (480 U.S. 470) but only to the extent that the prohibition of mining was partial, not total.


  1. ^ See Patricia E. Salkin and Amy Lavine, Measure 37 and a Spoonful of Kelo, 38 The Urban Lawyer 1065 (Fall 2006)
  2. ^ See Rights of the People, Individual Freedoms and the Bill of Rights, Property Rights.
  3. ^ Palazzolo, 606 U.S. at 617–18


  • Epstein, Richard A. (1985). Takings: Private Property and the Power of Eminent Domain. Cambridge: Harvard University Press, ISBN 0-674-86728-9.
  • Eagle, Steven J. (2005). Regulatory Takings. Newark, NJ: LexisNexis, ISBN 0-8205-7493-7.
  • Frieden, Bernard, The Environmental Protection Hustle (1979 MIT Press).
  • Kanner, Gideon, Making Laws and Sausages: A Quarter-Century Retrospective on Penn Central Transportation Co. v. City of New York, 13 William & Mary Bill of Rights Journal 653 (2005).
  • Meltz, Robert, Merriam, Dwight H., and Frank, Richard M. (1999). The Takings Issue: Constitutional Limits on Land Use Control and Environmental Regulation. Washington, D.C. & Covelo, California: Island Press, ISBN 1-55963-380-8.

External links

  • Property (Casebook) (ISBN 0-7355-2437-8).
  • Reason magazine article from 1995, concerning political strategies for passing takings initiatives
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