What is a Taking?
A Mix of Federal and State Law
As we, all know land use law and Constitutional law frequently intersect. Among others, the application of environmental controls often raises questions about a taking, since the preservation of resources may severely limit use. If the State denies the owner of all economic use, the state must show to avoid compensating the owner, the use of the property would either:
- Constitute a nuisance under state law or
- Could otherwise be banned under state property law.
The Fifth Amendment’s requirement that just compensation be paid when property is taken for a public use is the basis for the most frequent constitutional challenges in land use cases. Distinction must be dawn between:
- Physical Taking, such as a dam that that floods upstream property and
- Regulatory Taking (police power to limit the use of land), the economic effects of regulatory actions forms the basis for the other most frequent complaints. The Supreme Court has held that regulations can be “deemed taking when the impact is excessive.”
FIFTH AMENDMENT VERSUS Procedural DUE PROCESS (through the Fourteenth Amendment):
- Compensation is the remedy for a Fifth Amendment taking
- Here it is very important to note that when a portion of larger land ownership in taken will the court base its evaluation on the impact on the value of the total land or if will base its finding only on the value of the land that is taken. Obviously, diminishing the size of the total land not only impacts the taken land but also can substantially reduce the value of the smaller land that is remaining by changing its best use.
2. Injunctive relief is the remedy for a Due Process taking:
a. Procedural: Focuses on Notice and Hearing Provisions.
b. Substantive: Focuses on Legitimate Public Interest, Means are Reasonable, and the impact on a Regulated Class (Protected Class)
REGULATORY TAKING (When a regulation goes to far):
- When the economic effect of a regulation is to deprive the owner of any viable use of the property a taking may result. Generally, economic impact takings are divided into two categories:
- Total Taking, totally deprives a landowner of economic use, is a taking.
- Partial Taking, multi-factor balancing test, judicial balancing of competing values.
- The major measure of how far is too far is Diminution in Value.
- The Three Factor Rule:
- Economic Impact of the Regulation.
- How the Regulation Impacts Investment Backed Expectations.
- The Character of the governmental action.
- The Alternative Two Factor Test:
- Does the regulation substantially advance a legitimate state interest?
- Does the regulation denied an owner economically viable use of the land.
INVERSE CONDEMNATION, unlike the direct exercise of eminent domain, where the government sues property owners, in the regulatory situation, the property owner must initiate an action in inverse condemnation seeking compensation. The Fifth Amendment mandates compensation as the remedy for a taking. A taking must be for a public purpose, but once that is found, in general the property owner cannot enjoin the taking. The remedy is compensation. While this is always true for a physical taking, in a regulatory taking, the State must pay just compensation for the period that the regulation caused a taking. In the case of the MSHCP, the period is a permanent loss. If a court determines that, a taking exists, the government may retain the ordinance and compensate based on a permanent loss or it may lift the regulation and pay merely for the temporary loss of use the owner sustained while the regulation caused a taking. Inverse Condemnation actions are subject to stringent requirements; many suits are dismissed because it is too early to file the suit. Generally, owners must seek compensation from the state courts first.