CONSTITUTIONAL LIMITS ON REGULATION 1. Federalism issues: which level of government (national, state, local) is empowered to take regulatory action: see syllabus part VI.A. Distribution and separation of powers issues: is the regulator authorized to act? Property rights protection against “expropriation,” destruction of investment’s value: in the US, the “takings” clause.

TODAY: Takings Jurisprudence in the U.S. Development of general rules for analyzing regulatory takings cases Development of two special categories of takings (+ some more recent decisions) AND a view of the sometimes confused and confusing world of judicial decision making.

What is a “taking” for constitutional purposes? 5th Amendment: “Nor shall private property be taken for public use without just compensation.” What is a “physical taking”? A “regulatory taking”? Pa. Coal v. Mahon (1922): “government could hardly go on” if compensation were required for every diminution of property value caused by regulation “if regulation goes too far it will be recognized as a taking …”

In most regulatory takings cases, what sort of analysis determines whether compensation is due? Penn Central v. City of NY (1978): No “set formula”; is “ad hoc, factual inquiry” Economic impact on claimant Interference with “distinct investment backed expectations” Character of governmental action Legitimacy of public purpose

Regulatory Takings: Basic Penn Central (1978) analysis, except in special cases “Lucas-type” (1992) cases Exactions cases Nollan (1987) Dolan (1994)

“Lucas-type” categorical takings: Lucas v. S.C.Coastal Council (1992) 1986: Lucas purchased lots for $975,000 to develop high-end resort homes 1988: SC statute prohibited construction on lots Trial court determined that land now “valueless” (but had nominal value) How did the court analyze this problem? Did it use the Penn Central analysis? If regulation leaves no “economically beneficial use” of the property, then is a taking requiring compensation. Was the land literally valueless?

Lucas v. S.C.Coastal Council (1992) Is there any exception to the majority opinion’s rule? The “nuisance exception”: what is it? Kennedy concurrence: “The common law of nuisance is too narrow a confine … The state should not be prevented from enacting new regulatory initiatives in response to changing conditions, and courts must consider all reasonable expectations whatever their source. Blackmun dissent: “Today the Court launches a missile to kill a mouse.”

Palazzo v. Rhode Island (2001): Corp. (owned by P) purchased land  Govt wetlands restrictions imposed  Corp. dissolved; land transferred to P.  development applications denied. Can build house. Value = $200,000. Diminution = 93% COURT: Rejected blanket rule prohibiting recovery by owners who take title after regulation imposed No categorical taking

Ban was absolute for as long as it lasted  no development permitted. Tahoe-Sierra Case (USSC 2002): Planning agency’s construction moratorium was, on its face, indefinite, but actually lasted for 2 years. Ban was absolute for as long as it lasted  no development permitted. Is this a Lucas-type categorical taking? What exactly was taken? Why did the property owners believe compensation was due?

Transferable Development Rights: Lake Tahoe

Takings: Basic Penn Central (1978) analysis, except in special cases “Lucas-type” (1992) cases Exactions cases Nollan (1987) Dolan (1994)

The “Exactions” category: Nollan v. CCC (1987) Water line Right of way --------------------------------------- Public beach Public beach HOUSE Nollan’s property lines

Exactions: Nollan v. CCC (1987) There must be an “essential nexus” between legitimate government purpose and the use restriction imposed. “right of way” condition fails this test

Exactions: Dolan v. City of Tigard (1994) GOVT GOAL Drainage / impervious surfaces Traffic congestion / parking PERMIT CONDITION Dedicated public greenway Bike path Is there an essential nexus between these conditions and the goals they are designed to further? Are the conditions constitutional? If not, why not?

All takings cases Lucas-type categorical takings Exactions cases