The text of the Fifth Amendment itself provides a basis for drawing a distinction between physical takings and regulatory takings. Its plain language requires the payment of compensation whenever the government acquires private property for a public purpose, whether the acquisition is the result of a condemnation proceeding or a physical appropriation.
A regional planning agency imposed the temporary moratoria to maintain the status quo while studying the impact of development near a popular resort lake and designing an environmentally sound growth strategy.The landowners living near a pristine lake sued the regional planning agency, alleging that the development moratoria ordered by the agency constituted an unlawful taking of the landowners' property without compensation. The landowners contended that the moratoria against all viable economic use of their properties imposed a constitutional obligation on the agency to compensate the landowners for the value of its use during the moratoria. The district court indeed found that unlawful taking took place. On appeal, however, the United States Court of Appeals for the Ninth Circuit reversed the district court's ruling. The case was appealed to the Supreme Court of the United States.
Was there unlawful taking?
The United State Supreme Court held that the mere enactment of the regulations implementing the moratoria did not constitute a per se taking of the landowners' property. Rather, whether a taking occurred depended upon consideration of the landowners' investment-backed expectations, the actual impact of the regulation on the landowners, the importance of the public interest involved, and the reasons for imposing the temporary restriction. Adoption of a categorical rule that any deprivation of all economic use, no matter how brief, constituted a compensable taking would impose unreasonable financial obligations upon governments for the normal delays involved in processing land use applications and would improperly encourage hasty decision making.