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Murr v. Wisconsin - 137 S. Ct. 1933 (2017)

Rule:

Judicial precedent states two guidelines for determining when government regulation is so onerous that it constitutes a taking. First, with certain qualifications, a regulation that denies all economically beneficial or productive use of land will require compensation under the Takings Clause. Second, when a regulation impedes the use of property without depriving the owner of all economically beneficial use, a taking still may be found based on a complex of factors, including (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. 

Facts:

The St. Croix River is protected under federal, state, and local law. The Murrs own two adjacent lots (Lot E and Lot F) along the lower portion of the river in the town of Troy, Wisconsin. For the area where the Murrs’ property was located, state and local regulations prevented the use or sale of adjacent lots under common ownership as separate building sites unless they had at least one acre of land suitable for development. A grandfather clause relaxed this restriction for substandard lots, which were in separate ownership from adjacent lands on January 1, 1976, the regulation's effective date. Murrs’ parents purchased Lots E and F separately in the 1960s, and maintained them under separate ownership until transferring Lot F to the Murrs in 1994 and Lot E in 1995. The unification of the lots under common ownership therefore implicated the rules barring their separate sale or development. The Murrs became interested in selling Lot E as part of an improvement plan for the lots, and sought variances from the St. Croix County Board of Adjustment. The Board denied the request, and the state courts affirmed in relevant part. In particular, the State Court of Appeals found that the local ordinance effectively merged the lots, so the Murrs could only sell or build on the single combined lot. The Murrs filed suit, alleging that the regulations worked a regulatory taking that deprived them of all, or practically all, of the use of Lot E. The County Circuit Court granted summary judgment to the State, explaining that the Murrs had other options to enjoy and use their property, including eliminating the cabin and building a new residence on either lot or across both. The Court also found that the Murrs had not been deprived of all economic value of their property, because the decrease in market value of the unified lots was less than 10 percent. The State Court of Appeals affirmed, holding that the takings analysis properly focused on Lots E and F together and that, using that framework, the merger regulations did not effect a taking.

Issue:

Did the Court of Appeals err in ruling that no taking took place?

Answer:

No

Conclusion:

Judgment was affirmed. The United States Supreme Court held that in the context of a regulatory takings claim, courts had to consider a number of factors in determining the denominator, including the treatment of the land under state and local law, the physical characteristics of the land, and the prospective value of the regulated land, and the endeavor was to determine whether reasonable expectations about property ownership would have led a landowner to anticipate that his holdings would be treated as one parcel or separate tracts. Under the appropriate multi-factor standard, the landowners' property should have been evaluated as a single parcel consisting of two lots together for purposes of the takings analysis because state law had merged the lots, the physical characteristics supported treatment as a unified parcel, and the parcels could not be sold or built upon separately.

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