Penn Cent. Transp. Co. v. New York City

438 U.S. 104, 98 S. Ct. 2646 (1978)



A "taking" may more readily be found when the interference with property can be characterized as a physical invasion by the government, than when the interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.


In accordance with procedures established by New York City's Landmarks Preservation Law. Grand Central Terminal was designated as a “landmark" and found to fall under the responsibility of the Landmarks Preservation Commission. The owner of the terminal subsequently entered into a lease agreement whereby the lessee would construct a multistory office building in the space above the terminal. The owner and lessee then sought the Commission's approval for the contemplated construction as required under the landmarks law, which were rejected by the Commission. The owner of the terminal and the lessee brought an action in the New York Supreme Court claiming that the Landmarks Law had "taken" private property without just compensation in violation of Fifth and Fourteenth Amendments, and had violated the Fourteenth Amendment as constituting a deprivation of property without due process of law. The trial court held that the landmarks law was unconstitutional, and enjoined the city from using the landmarks law to impede construction of any structure that might otherwise lawfully be constructed at the site of Grand Central Terminal. On Appeal, the New York Supreme Court, Appellate Division, reversed and the Court of Appeals of New York affirmed, rejecting any claim that the landmarks law had "taken" property without just compensation. The case was appealed to the Supreme Court of the United States.


Did the Landmark Law effect a taking of Grand Central Terminal in violation of the 5th and 14th Amendment?




The Court held that the Landmark Law did not take the Grand Central Terminal without just compensation and did not deprive the owner of their property without Fourteenth Amendment due process of law. A use restriction on real property may constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose, or perhaps if it has an unduly harsh impact upon the owner's use of the property. Nevertheless, the application of the law had not effected a taking and the restrictions imposed were substantially related to the promotion of the general welfare and permitted reasonable beneficial use.

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