The U.S. Supreme Court’s decision in the regulatory takings case, Murr v. Wisconsin, is expected to come down any day. At issue in that case is the so-called “relevant parcel” question, which requires courts to identify the extent of an owner’s property interests as a threshold determination in a regulatory takings case. The purpose of this inquiry is to set a baseline so that the court cane determine the degree to which a government action impaired an owner’s rights. It sounds rather straight forward, but in the decades since the Supreme Court, in Penn Central Transportation Co. v. New York City (1978), declared that a takings analysis focuses on the “parcel as a whole,” the lower courts have struggled with the concept, resulting in conflicting rules and inconsistent judgments.
In Murr, for example, the Wisconsin courts held that a family had no development rights in a vacant parcel of land based on a state statute deeming certain properties “merged” if there is any degree of common ownership in a neighboring lot. If anyone else besides one of the Murrs had purchased the vacant property, they would have been entitled to build a cabin on it. Given that clearly unfair result, the U.S. Supreme Court is set to answer the question whether “two legally distinct, but commonly owned contiguous parcels, must be combined,” when the two parcels were acquired at separate times.
Indeed, the Wisconsin court’s ruling against the Murr family stands in stark contrast to a recent decision from the Federal Circuit, which is also pending on a petition to the U.S. Supreme Court. In Lost Tree Village v. United States (2013), a commercial property company developed thousands of acres of land beginning in the 1960s. By the time the company eventually applied to develop the last parcel—approximately a quarter of which is encumbered by wetlands—the Army Corps denied the permits, concluding that the developer had already received sufficient reasonable use via the development of neighboring plats. The developer sued for a total regulatory taking of Plat 57. In determining the relevant parcel, the Federal Circuit concluded that common ownership of continguous parcels, standing alone, “is an insufficient basis on which to find they constitute a single parcel for purposes of the takings analysis.”
With those conflicting cases in mind, the U.S. Supreme Court is set to consider PLF’s most recent “relevant parcel” petition in the Washington state regulatory takings case, Kinderace v. City of Sammamish, at its June 1, 2017, conference.
Like Murr, the Kinderace petition argues that a property owner’s rights in a given parcel of land should be obvious: they are established by title and by lawful zoning at the time of purchase. In Kinderace, Elliott Severson purchased a parcel of commercial-zoned property located among other commercial development along a busy street. At the time he bought the land, there was ample space to build a small restaurant or store while respecting all critical area restrictions. But, over the course of a few years, the city ratcheted up its critical areas regulations to the point that his property was rendered useless. And when it came time to pay for having taken the property, the city refused, reasoning that because Severson had been involved in developing neighboring properties in the past, he wasn’t deprived when the city refused to issue any approvals on his commercial-zoned (and taxed) property. The fact that he was left holding an undevelopable parcel of property didn’t matter.
The petition, which asks the Court to grant and hold the case pending its decision in Murr and resolution of Lost Tree Village, is now fully briefed (see the City’s response brief here and PLF’s reply here).