Inverse condemnation

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Inverse condemnation is a legal concept and cause of action used by property owners when a governmental entity takes an action which damages or decreases the value of private property without obtaining ownership of the property through the use of eminent domain. Thus, unlike the typical eminent domain case, the property owner is the plaintiff and not the defendant.

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In the United States of America, inverse condemnation actions are filed against the federal government pursuant to the Takings Clause of the 5th Amendment to the United States Constitution, and against state governments under that clause or similar clauses found in most state constitutions.

History of inverse condemnation in the United States

Early republic to the 1920s

Since the early days of the United States, inverse condemnation claims have been brought under the Takings Clause which states that private property shall not "be taken without just compensation". [1] [2] It is generally accepted by legal scholars that the clause "was originally understood to apply only to physical seizures of property" and was not interpreted as expansively as it is today. [3]

The doctrine was first applied to regulations of property after the U.S. Supreme Court's seminal decision in Pennsylvania Coal Co. v. Mahon. [2] [3] In Mahon, the Court held that a Pennsylvania law which "barred coal mining if it would cause the land at the surface to subside" was unconstitutional. [3] In Mahon, Justice Oliver Wendell Holmes, writing for the court, "established the proposition that 'while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.'” [4] : 6 

1930s to the 1990s

For a number of decades, Mahon was an outlier case. However, jurists began to embrace the regulatory takings doctrine more after the emergence of the modern property rights movement in the 1970s, [5] particularly the formation of the Pacific Legal Foundation in 1971, and the publication in 1985 of Richard A. Epstein's book, Takings. [6] [7]

In particular, the doctrine was expanded by three Supreme Court cases in the 1980s. [5] In those cases, the Court "reaffirmed" the diminution in value test originating in Mahon, created the unconstitutional conditions doctrine for exactions, and "held an interim regulation could be considered a temporary taking". [5]

In 1991, the Court further expanded the doctrine with its seminal decision in Lucas v. South Carolina Coastal Council, where it held that a governmental regulation that deprived a land of all value constituted a taking. [8] Thus, during the late twentieth century, the discussion of regulatory takings predominated the discussion of inverse condemnation in legal academia. [9]

2000s to 2020

In 2013, the Supreme Court in Horne v. Department of Agriculture held that the Takings Clause applies to personal property as well as real property. [10]

A study of inverse condemnation claims filed in federal courts from the years 2000 to 2014 found that most arose out of "alleged physical invasions or direct appropriations of property interests, with most arising out of military airplane flights, flooding, or conversions of railroad lines to recreational trails." [9]

Cedar Point Nursery v. Hassid (2021)

In 2021, the Supreme Court further expanded and muddled the inverse condemnation doctrine in Cedar Point Nursery v. Hassid. [11] In Cedar Point, the Court ruled that “a California regulation that permits union organizers to enter the property of agricultural business to talk with employees about supporting a union [was] unconstitutional” because it appropriated a right to invade the property owner's property without paying just compensation for said right. [12] [11] In that decision, Chief Justice John Roberts, writing for the 6-3 majority, created a new per se takings rule, finding that when "the government enacts a regulation authorizing a temporary invasion of a property owner’s land, it effects a per se taking under the Fifth Amendment for which it must pay just compensation." [13]

One property law textbook author has stated that the decision upended four decades of takings jurisprudence. In particular, the author believed that the case did not follow precedent and that it conflated regulatory takings with the Court's exactions doctrine. [14] Other legal scholars have noted that the decision departed from prior precedent by not using the Penn Central test to analyze the impact of a government regulation. [15]

Direct acquisition

It is a taking "when the government physically takes possession of property without acquiring title to it." [4] : 5  If the government's action constitutes a taking, it must pay just compensation for the property acquired. [4] : 5 

Regulatory takings

The doctrine of regulatory takings “is a mix of per se rules and balancing tests, with an ample amount of ambiguity thrown in.” [16] Most cases involving regulatory takings are "evaluated under the multifactor balancing test established in Penn Central Transportation Co. v. New York City , which requires that a court examine, among other factors, the regulation’s economic impact on the property owner, its degree of interference with the owner’s reasonable investment-backed expectations, and the property’s character to determine whether a regulation goes far enough to characterize it as a taking." [17]

Nuisance-based takings

Despite commentators and jurists often dividing inverse condemnation cases into two categories (physical takings and regulatory takings), a third form of inverse condemnation exists: nuisance-based takings. [18] The doctrine of nuisance-based takings "consists of cases where the government (or a third party acting pursuant to explicit governmental authority) uses its own property in ways that interfere with the ability of other owners to use and enjoy their properties". [18]

Unconstitutional exactions

An exaction is a government-imposed condition on the development of land which requires developers to mitigate anticipated negative impacts of the development. [19] The Supreme Court of the United States has identified several criteria for identifying when an exaction, including monetary exactions, becomes a taking that requires compensation under the Fifth Amendment. [20]

In Nollan v. California Coastal Commission , the Court ruled that an exaction is constitutional if it shares an "essential nexus" with the reasons that would allow rejection of the permit altogether. [20]

Moreover, in Dolan v. City of Tigard , the Court added that an exaction is constitutional only if the public benefit from the exaction is "roughly proportional" to the burden imposed on the public by allowing the proposed land use. The government imposing the exaction has the burden to prove the existence of "rough proportionality" between the ends and means. [20]

Unlike the typical eminent domain case, the property owner is the plaintiff and not the defendant. [21] The Takings Clause may be enforced against the federal government or against states through incorporation of the 5th Amendment through the Fourteenth Amendment. [22] Moreover, inverse condemnation cases may also arise under state constitutions, most of which include a Takings clause which are interpreted similarly to the Takings Clause in the federal constitution. [22]

Inverse condemnation claims against the federal government are typically brought in the United States Court of Federal Claims and appealed to the Federal Circuit. [23] [9]

Criticism of the doctrine

Inverse condemnation has long had a reputation in legal academia as being "muddled," [24] a "confusing mess," [9] and "incoherent". [14]

Environmentalists are the foremost critics of the doctrine of regulatory takings because environmentalists see the doctrine as "a threat to modern environmental laws". [5] [9] However, one empirical study discounted this view--finding that regulatory takings had become "an eclectic sideshow to the United States' grand struggles over regulatory policy." [9]

Another common critique of the doctrine from various legal academics is that the doctrine does not adhere to the original intent of the Fifth Amendment. [25]

See also

Related Research Articles

In United States constitutional law, a regulatory taking occurs when governmental regulations limit the use of private property to such a degree that the landowner is effectively deprived of all economically reasonable use or value of their property. Under the Fifth Amendment to the United States Constitution governments are required to pay just compensation for such takings. The amendment is incorporated to the states via the Due Process Clause of the Fourteenth Amendment.

Barron v. Baltimore, 32 U.S. 243 (1833), is a landmark United States Supreme Court case in 1833, which helped define the concept of federalism in US constitutional law. The Court ruled that the Bill of Rights did not apply to the state governments, establishing a precedent until the ratification of the Fourteenth Amendment to the United States Constitution.

Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002), is one of the United States Supreme Court's more recent interpretations of the Takings Clause of the Fifth and Fourteenth Amendments. The case dealt with the question of whether a moratorium on construction of individual homes imposed by the Tahoe Regional Planning Agency fell under the Takings Clause of the United States Constitution and whether the landowners therefore should receive just compensation as required by that clause. The Tahoe Regional Planning Agency was represented by future Chief Justice John Roberts. Justice John Paul Stevens wrote the opinion of the Court, finding that the moratorium did not constitute a taking. It reasoned that there was an inherent difference between the acquisition of property for public use and the regulation of property from private use. The majority concluded that the moratorium at issue in this case should be classified as a regulation of property from private use and therefore no compensation was required.

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), was a case in which the Supreme Court of the United States held that whether a regulatory act constitutes a taking requiring compensation depends on the extent of diminution in the value of the property.

Dolan v. City of Tigard, 512 U.S. 374 (1994), more commonly Dolan v. Tigard, is a United States Supreme Court case. It is a landmark case regarding the practice of zoning and property rights, and has served to establish limits on the ability of cities and other government agencies to use zoning and land-use regulations to compel property owners to make unrelated public improvements as a condition to getting zoning approval, citing the violation of the Fifth Amendment’s Takings Clause.

<span class="mw-page-title-main">2004 Oregon Ballot Measure 37 and 2007 Oregon Ballot Measure 49</span> Oregon ballot measures

Oregon Ballot Measure 37 was a controversial land-use ballot initiative that passed in the U.S. state of Oregon in 2004 and is now codified as Oregon Revised Statutes (ORS) 195.305. Measure 37 has figured prominently in debates about the rights of property owners versus the public's right to enforce environmental and other land use regulations. Voters passed Measure 49 in 2007, substantially reducing the impact of Measure 37.

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987), is a United States Supreme Court case interpreting the Fifth Amendment's Takings Clause. In this case, the court upheld a Pennsylvania statute which limited coal mining causing damage to buildings, dwellings, and cemeteries through subsidence.

<span class="mw-page-title-main">Fifth Amendment to the United States Constitution</span> 1791 amendment enumerating due process rights

The Fifth Amendment to the United States Constitution creates several constitutional rights, limiting governmental powers focusing on criminal procedures. It was ratified, along with nine other articles, in 1791 as part of the Bill of Rights.

The Pacific Legal Foundation (PLF) is an American nonprofit public interest legal organization established for the purpose of defending and promoting individual and economic freedom. PLF attorneys provide pro bono legal representation, file amicus curiae briefs, and hold administrative proceedings with the stated goal of supporting property rights, equality before the law, freedom of speech and association, economic liberty, and the separation of powers. The organization is the first and oldest libertarian public interest law firm, having been founded in 1973.

Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), is a U.S. Supreme Court case that limited access to federal court for plaintiffs alleging uncompensated takings of private property under the Fifth Amendment. In June 2019, this case was overruled in part by the Court's decision in Knick v. Township of Scott, Pennsylvania.

First English Evangelical Lutheran Church v. Los Angeles County, 482 U.S. 304 (1987), was a 6–3 decision of the United States Supreme Court. The court held that the complete destruction of the value of property constituted a "taking" under the Fifth Amendment even if that taking was temporary and the property was later restored.

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Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), is a United States Supreme Court case in which the Court held that the Coal Industry Retiree Health Benefit Act constituted an unconstitutional regulatory taking of property which required the Act to be invalidated. The import of this decision is that it was made in the context of a purely economic regulation. The plurality examines the statute and its resultant harm as an ad hoc factual inquiry based on factors delineated in Penn Central Transportation Co. v. New York City, such as the economic impact of the regulation, its interference with reasonable investment backed expectations, and the character of the governmental action. The decision thereby moved beyond the traditional notions of equal protection which had been applied to economic regulation since the time of Lochner v. New York, requiring extreme deference to Congress, and applied a regulatory takings analysis to the problem resulting in a much less deferential result. While the plurality recognizes that this is not a traditional takings case where the government appropriates private property for public use, they also state this is the type of case where the "Armstrong Principle" of preventing 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. However, while the plurality seems to invalidate this particular law on takings grounds, the concurrences and the dissents warn of such an analysis as this should actually be examined under substantive due process or ex post facto theories.

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005), was a landmark case in United States regulatory takings law whereby the Court expressly overruled precedent created in Agins v. City of Tiburon. Agins held that a government regulation of private property effects a taking if such regulation does not substantially advance legitimate state interests. Writing for the Court, Justice O’Connor found the test untenable for a number of reasons, but declined to grant Chevron relief because Chevron’s motion before the court was limited to a discussion of the “substantially advances” theory which had just been struck down. The Court remanded to the Ninth Circuit for a determination of whether the statute exacted a taking according to the formula of Penn Central.

Stop the Beach Renourishment v. Florida Department of Environmental Protection, 560 U.S. 702 (2010), was a United States Supreme Court case in which the Court held that the Florida Supreme Court did not effect an unconstitutional taking of littoral property owners' rights to future accretions and to contact the water by upholding Florida's beach renourishment program.

Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), is a United States Supreme Court case in which the Court held that land-use agencies imposing conditions on the issuance of development permits must comply with the "nexus" and "rough proportionality" standards of Nollan v. California Coastal Commission and Dolan v. City of Tigard, even if the condition consists of a requirement to pay money, and even if the permit is denied for failure to agree to the condition. It was the first case in which monetary exactions were found to be unconstitutional conditions.

Horne v. Department of Agriculture, 569 U.S. 513 (2013) ; 576 U.S. 351 (2015), is a case in which the United States Supreme Court issued two decisions regarding the Takings Clause of the Fifth Amendment to the United States Constitution. The case arose out of a dispute involving the National Raisin Reserve, when a farmer challenged a rule that required farmers to keep a portion of their crops off the market. In Horne I the Court held that the plaintiff had standing to sue for violation of the United States Constitution’s Takings Clause. In Horne II the Court held that the National Raisin Reserve was an unconstitutional violation of the Takings Clause.

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<span class="mw-page-title-main">Federal Declaration of Taking Act of 1931</span> 1931 US Federal statute allowing the federal government to seize private land for public use

Federal Declaration of Taking Act of 1931 is a federal statute granting the American federal government power to acquire private land for public use purposes in the United States. The Takings Clause defines private land as eminent domain meaning United States government entity is obligated the award of just compensation to a property owner relinquishing private property for public use purposes.

Cedar Point Nursery v. Hassid, 594 U.S. ___ (2021), was a United States Supreme Court case involving eminent domain and labor relations. In its decision, the Court held that a regulation made pursuant to the California Agricultural Labor Relations Act that required agricultural employers to allow labor organizers to regularly access their property for the purposes of union recruitment constituted a per se taking under the Fifth Amendment. Consequently, the regulation may not be enforced unless “just compensation” is provided to the employers.

References

  1. ↑ Dave Owen, The Realities of Takings Litigation, 47 B.Y.U.L. Rev. 577 (2021).
  2. 1 2 Dave Owen, The Realities of Takings Litigation, 47 BYU L. Rev. 577 (2022). Available at: https://digitalcommons.law.byu.edu/lawreview/vol47/iss2/8
  3. 1 2 3 William Michael Treanor, Jam for Justice Holmes: Reassessing the Significance of Mahon, 86 Geo. L.J. 813, 814 (1998).
  4. 1 2 3 Cedar Point Nursery v. Hassid, 594 U.S. ___ (2021), slip op.
  5. 1 2 3 4 Kathleen L. McCanless, How to Decide Whose Bank Pays: The Impact of Supreme Court Takings Jurisprudence on Environmental Regulations, 30 Vill. Envtl. L.J. 137 (2019). Available at: https://digitalcommons.law.villanova.edu/elj/vol30/iss1/5
  6. ↑ T.S. Baumgardner, "Takings" under the Police Power - The Development of Inverse Condemnation as Method of Challenging Zoning Ordinances, 30 Sw L.J. 723 (1976) https://scholar.smu.edu/smulr/vol30/iss4/4
  7. ↑ Timothy L. Foden, The Battle for Public Interest Law: Exploring the Orwellian Nature of the Freedom Based Public Interest Movement, 20 Conn. Pub. Int. L.J. 159 (2021).
  8. ↑ Byrne, J. Peter (2018). "A FIXED RULE FOR A CHANGING WORLD: THE LEGACY OF LUCAS V. SOUTH CAROLINA COASTAL COUNCIL". Real Property, Trust and Estate Law Journal. 53 (1): 1–26. ISSN   2159-4538.
  9. 1 2 3 4 5 6 Dave Owen, The Realities of Takings Litigation, 47 BYU L. Rev. 577 (2022). Available at: https://digitalcommons.law.byu.edu/lawreview/vol47/iss2/8
  10. ↑ Horne v. Dept. of Agriculture, No. 14-275, 576 U.S. 351, 135 S. Ct. 2419 (2015) ("Horne II").
  11. 1 2 Lee Anne Fennell, Escape Room: Implicit Takings After Cedar Point Nursery, 17 Duke Journal of Constitutional Law & Public Policy 1-61 (2022) Available at: https://scholarship.law.duke.edu/djclpp/vol17/iss1/2
  12. ↑ Benjamin Alexander Mogren, A New Takings Clause? The Implications of Cedar Point Nursery v. Hassid for Property Rights and Moratoria, 31 Wm. & Mary Bill Rts. J. 545 (2022), https://scholarship.law.wm.edu/wmborj/vol31/iss2/8
  13. ↑ Review, Columbia Law. "RENT REGULATIONS AFTER CEDAR POINT". Columbia Law Review. Retrieved 2023-08-05.
  14. 1 2 "Cedar Point Nursery v. Hassid Quietly Rewrote Four Decades of Takings Clause Doctrine". Reason.com. 2021-06-25. Retrieved 2023-08-05.
  15. ↑ Andavolu, Sarika (2022-11-15). "Staying in the Takings Lane: The Compensation Issue in Cedar Point Nursery". Cardozo Law Review. Retrieved 2023-08-05.
  16. ↑ Robert Meltz, Takings Law Today: A Primer for the Perplexed, 34 Ecology L.Q. 307, 317 (2007).
  17. ↑ Abigail Flanigan, Rent Regulations After Cedar Point (February 23, 2022). Columbia Law Review, Available at SSRN: https://ssrn.com/abstract=4042141
  18. 1 2 Carlos A. Ball, The Curious Intersection of Nuisance and Takings Law, 86 B.U. L. Rev. 819 (2006).
  19. ↑ Casner, A.J. et al.Cases and Text on Property, Fifth Edition. Aspen Publishers, New York: 2004, p. 1221
  20. 1 2 3 Luke Wake & Jarod Bona, Legislative Exactions after Koontz v. St. Johns River Management District, 27 Geo. Envtl. L. Rev. 539 (2015). Available at SSRN: https://ssrn.com/abstract=2564205 or http://dx.doi.org/10.2139/ssrn.2564205
  21. ↑ T.S. Baumgardner, "Takings" under the Police Power - The Development of Inverse Condemnation as Method of Challenging Zoning Ordinances, 30 Sw L.J. 723 (1976) https://scholar.smu.edu/smulr/vol30/iss4/4
  22. 1 2 Shelley Ross Saxer, The Aftermath of Takings 70 Am. U.L. Rev. 589, 593 (2020).
  23. ↑ Bud Davis, Strengthening the Floodwalls: Reinterpreting the Federal Circuit's Ridge Line Test To Limit Government Liability in Takings Jurisprudence, 26 Fed. Cir. B.J. 29 (2016).
  24. ↑ Michael Allan Wolf, Superfluous Judicial Activism: The Takings Gloss, 91 Geo. Wash. L. Rev. 287 (2023) - Available at SSRN: https://ssrn.com/abstract=4478379
  25. ↑ David L. Siegel, How the History and Purpose of the Regulatory Takings Doctrine Help to Define The Parcel as a Whole, 36 Verm. L. Rev. 603 (2012), available at https://lawreview.vermontlaw.edu/wp-content/uploads/2012/06/14-Siegel-Book-3-Vol.-36.pdf
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