4. Regulatory Takings
Mugler v. Kansas,
123 U.S. 623 (1887)
ERROR TO THE SUPREME COURT OF THE STATE OF KANSAS. APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF KANSAS.
Mr. George G. Vest, for plaintiff in error.
Mr. B.S. Bradford, Attorney General of the State of Kansas, Mr. George R. Peck, Mr. J.B. Johnson, and Mr. George J. Barker for defendant in error, submitted on their brief.
Mr. S.B. Bradford, Attorney General of the State of Kansas, Mr. Edwin A. Austin, Assistant Attorney General of that State, and Mr. J.F. Tufts, Assistant Attorney General for Atchison County, Kansas, for appellant submitted on their brief. October 25, 1887, Mr. Bradford moved the court to reopen the cause and reassign it for argument. October 26, 1887, the court denied the motion.
Mr. Joseph II. Choate for appellee. Mr. Robert M. Eaton and Mr. John C. Tomlinson were with him on his brief.
Mr. Justice Harlan delivered the opinion of the court.
These cases involve an inquiry into the validity of certain statutes of Kansas relating to the manufacture and sale of intoxicating liquors. [A series of Kansas statutes worked to prohibit the manufacture or sale of alcoholic beverages.]
The first two are indictments, charging Mugler, the plaintiff in error, in one case, with having sold, and in the other, with having manufactured, spirituous, vinous, malt, fermented, and other intoxicating liquors, in Saline County, Kansas, without having the license or permit required by the statute. The defendant, having been found guilty, was fined, in each case, one hundred dollars, and ordered to be committed to the county jail until the fine was paid. Each judgment was affirmed by the Supreme Court of Kansas, and thereby, it is contended, the defendant was denied rights, privileges, and immunities guaranteed by the Constitution of the United States.
The third case – Kansas v. Ziebold & Hagelin – was commenced by petition filed in one of the courts of the State. The relief sought is: 1. That the group of buildings in Atchison County, Kansas, constituting the brewery of the defendants, partners as Ziebold & Hagelin, be adjudged a common nuisance, and the sheriff or other proper officer directed to shut up and abate the same. 2. That the defendants be enjoined from using, or permitting to be used, the said premises as a place where intoxicating liquors may be sold, bartered, or given away, or kept for barter, sale, or gift, otherwise than by authority of law.
The facts necessary to a clear understanding of the questions, common to these cases, are the following: Mugler and Ziebold & Hagelin were engaged in manufacturing beer at their respective establishments, (constructed specially for that purpose,) for several years prior to the adoption of the constitutional amendment of 1880. They continued in such business in defiance of the statute of 1881, and without having the required permit. Nor did Mugler have a license or permit to sell beer. The single sale of which he was found guilty occurred in the State, and after May 1, 1881, that is, after the act of February 19, 1881, took effect, and was of beer manufactured before its passage.
The buildings and machinery constituting these breweries are of little value if not used for the purpose of manufacturing beer; that is to say, if the statutes are enforced against the defendants the value of their property will be very materially diminished.
The general question in each case is, whether the foregoing statutes of Kansas are in conflict with that clause of the Fourteenth Amendment, which provides that “no State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law.”
[The Court canvasses prior cases and reasons that it is within a state’s police powers to prohibit alcohol sales and manufacture.]
Undoubtedly the State, when providing, by legislation, for the protection of the public health, the public morals, or the public safety, is subject to the paramount authority of the Constitution of the United States, and may not violate rights secured or guaranteed by that instrument, or interfere with the execution of the powers confided to the general government. Henderson v. Mayor of New York, 92 U.S. 259; Railroad Co. v. Husen, 95 U.S. 465; New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650; Walling v. Michigan, 116 U.S. 446; Yick Wo v. Hopkins, 118 U.S. 356; Morgan’s Steamship Co. v. Louisiana Board of Health, 118 U.S. 455.
Upon this ground – if we do not misapprehend the position of defendants – it is contended that, as the primary and principal use of beer is as a beverage; as their respective breweries were erected when it was lawful to engage in the manufacture of beer for every purpose; as such establishments will become of no value as property, or, at least, will be materially diminished in value, if not employed in the manufacture of beer for every purpose; the prohibition upon their being so employed is, in effect, a taking of property for public use without compensation, and depriving the citizen of his property without due process of law. In other words, although the State, in the exercise of her police powers, may lawfully prohibit the manufacture and sale, within her limits, of intoxicating liquors to be used as a beverage, legislation having that object in view cannot be enforced against those who, at the time, happen to own property, the chief value of which consists in its fitness for such manufacturing purposes, unless compensation is first made for the diminution in the value of their property, resulting from such prohibitory enactments.
This interpretation of the Fourteenth Amendment is inadmissible. It cannot be supposed that the States intended, by adopting that Amendment, to impose restraints upon the exercise of their powers for the protection of the safety, health, or morals of the community. In respect to contracts, the obligations of which are protected against hostile state legislation, this court in Butchers’ Union Co. v. Crescent City Co., 111 U.S. 746, 751, said that the State could not, by any contract, limit the exercise of her power to the prejudice of the public health and the public morals. So, in Stone v. Mississippi, 101 U.S. 814, 816, where the Constitution was invoked against the repeal by the State of a charter, granted to a private corporation, to conduct a lottery, and for which that corporation paid to the State a valuable consideration in money, the court said: “No legislature can bargain away the public health or the public morals. The people themselves cannot do it, much less their servants… . Government is organized with a view to their preservation, and cannot divest itself of the power to provide for them.” Again, in New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650, 672: “The constitutional prohibition upon state laws impairing the obligation or contracts does not restrict the power of the State to protect the public health, the public morals, or the public safety, as the one or the other may be involved in the execution of such contracts. Rights and privileges arising from contracts with a State are subject to regulations for the protection of the public health, the public morals, and the public safety, in the same sense, and to the same extent, as are all contracts and all property, whether owned by natural persons or corporations.”
The principle, that no person shall be deprived of life, liberty, or property, without due process of law, was embodied, in substance, in the constitutions of nearly all, if not all, of the States at the time of the adoption of the Fourteenth Amendment; and it has never been regarded as incompatible with the principle, equally vital, because essential to the peace and safety of society, that all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community. Beer Co.v. Massachusetts, 97 U.S. 25, 32; Commonwealth v. Alger, 7 Cush. 53. An illustration of this doctrine is afforded by Patterson v. Kentucky, 97 U.S. 501. The question there was as to the validity of a statute of Kentucky, enacted in 1874, imposing a penalty upon any one selling or offering for sale oils and fluids, the product of coal, petroleum, or other bituminous substances, which would burn or ignite at a temperature below 130° Fahrenheit. Patterson having sold, within that commonwealth, a certain oil, for which letters-patent were issued in 1867, but which did not come up to the standard required by said statute, and having been indicted therefor, disputed the State’s authority to prevent or obstruct the exercise of that right. This court upheld the legislation of Kentucky, upon the ground, that while the State could not impair the exclusive right of the patentee, or of his assignee, in the discovery described in the letters-patent, the tangible property, the fruit of the discovery, was not beyond control in the exercise of her police powers. It was said: “By the settled doctrines of this court the police power extends, at least, to the protection of the lives, the health, and the property of the community against the injurious exercise by any citizen of his own rights. State legislation, strictly and legitimately for police purposes, does not, in the sense of the Constitution, necessarily intrench upon any authority which has been confided, expressly or by implication, to the national government. The Kentucky statute under examination manifestly belongs to that class of legislation. It is, in the best sense, a mere police regulation, deemed essential to the protection of the lives and property of citizens.” p. 504. Referring to the numerous decisions of this court guarding the power of Congress to regulate commerce against encroachment, under the guise of state regulations, established for the purpose and with the effect of destroying or impairing rights secured by the Constitution, it was further said: “It has, nevertheless, with marked distinctness and uniformity, recognized the necessity, growing out of the fundamental conditions of civil society, of upholding state police regulations which were enacted in good faith, and had appropriate and direct connection with that protection to life, health, and property which each State owes to her citizens.” See also United States v. Dewitt, 9 Wall. 41; License Tax Cases, 5 Wall. 462; Pervear v. Commonwealth, 5 Wall. 475.
Another decision, very much in point upon this branch of the case, is Fertilizing Co. v. Hyde Park, 97 U.S. 659, 667, also decided after the adoption of the Fourteenth Amendment. The court there sustained the validity of an ordinance of the village of Hyde Park, in Cook County, Illinois, passed under legislative authority, forbidding any person from transporting through that village offal or other offensive or unwholesome matter, or from maintaining or carrying on an offensive or unwholesome business or establishment within its limits. The Fertilizing Company had, at large expense, and under authority expressly conferred by its charter, located its works at a particular point in the county. Besides, the charter of the village, at that time, provided that it should not interfere with parties engaged in transporting animal matter from Chicago, or from manufacturing it into a fertilizer or other chemical product. The enforcement of the ordinance in question operated to destroy the business of the company, and seriously to impair the value of its property. As, however, its business had become a nuisance to the community in which it was conducted, producing discomfort, and often sickness, among large masses of people, the court maintained the authority of the village, acting under legislative sanction, to protect the public health against such nuisance. It said: “We cannot doubt that the police power of the State was applicable and adequate to give an effectual remedy. That power belonged to the States when the Federal Constitution was adopted. They did not surrender it, and they all have it now. It extends to the entire property and business within their local jurisdiction. Both are subject to it in all proper cases. It rests upon the fundamental principle that every one shall so use his own as not to wrong and injure another. To regulate and abate nuisances is one of its ordinary functions.”
It is supposed by the defendants that the doctrine for which they contend is sustained by Pumpelly v. Green Bay Co., 13 Wall. 166. But in that view we do not concur. That was an action for the recovery of damages for the overflowing of the plaintiff’s land by water, resulting from the construction of a dam across a river. The defence was that the dam constituted a part of the system adopted by the State for improving the navigation of Fox and Wisconsin rivers; and it was contended that as the damages of which the plaintiff complained were only the result of the improvement, under legislative sanction, of a navigable stream, he was not entitled to compensation from the State or its agents. The case, therefore, involved the question whether the overflowing of the plaintiff’s land, to such an extent that it became practically unfit to be used, was a taking of property, within the meaning of the constitution of Wisconsin, providing that “the property of no person shall be taken for public use without just compensation therefor.” This court said it would be a very curious and unsatisfactory result, were it held that, “if the government refrains from the absolute conversion of real property to the uses of the public, it can destroy its value entirely, can inflict irreparable and permanent injury to any extent, can, in effect, subject it to total destruction, without making any compensation, because, in the narrowest sense of that word, it is not taken for the public use. Such a construction would pervert the constitutional provision into a restriction upon the rights of the citizen, as those rights stood at the common law, instead of the government, and make it an authority for the invasion of private right under the pretext of the public good, which had no warrant in the laws or practices of our ancestors.” pp. 177, 178.
These principles have no application to the case under consideration. The question in Pumpelly v. Green Bay Company arose under the State’s power of eminent domain; while the question now before us arises under what are, strictly, the police powers of the State, exerted for the protection of the health, morals, and safety of the people. That case, as this court said in Transportation Co. v. Chicago, 99 U.S. 635, 642, was an extreme qualification of the doctrine, universally held, that “acts done in the proper exercise of governmental powers, and not directly encroaching upon private property, though these consequences may impair its use,” do not constitute a taking within the meaning of the constitutional provision, or entitle the owner of such property to compensation from the State or its agents, or give him any right of action. It was a case in which there was a “permanent flooding of private property,” a “physical invasion of the real estate of the private owner, and a practical ouster of his possession.” His property was, in effect, required to be devoted to the use of the public, and, consequently, he was entitled to compensation.
As already stated, the present case must be governed by principles that do not involve the power of eminent domain, in the exercise of which property may not be taken for public use without compensation. A prohibition simply upon the use of property for purposes that are declared, by valid legislation, to be injurious to the health, morals, or safety of the community, cannot, in any just sense, be deemed a taking or an appropriation of property for the public benefit. Such legislation does not disturb the owner in the control or use of his property for lawful purposes, nor restrict his right to dispose of it, but is only a declaration by the State that its use by any one, for certain forbidden purposes, is prejudicial to the public interests. Nor can legislation of that character come within the Fourteenth Amendment, in any case, unless it is apparent that its real object is not to protect the community, or to promote the general well-being, but, under the guise of police regulation, to deprive the owner of his liberty and property, without due process of law. The power which the States have of prohibiting such use by individuals of their property as will be prejudicial to the health, the morals, or the safety of the public, is not – and, consistently with the existence and safety of organized society, cannot be – burdened with the condition that the State must compensate such individual owners for pecuniary losses they may sustain, by reason of their not being permitted, by a noxious use of their property, to inflict injury upon the community. The exercise of the police power by the destruction of property which is itself a public nuisance, or the prohibition of its use in a particular way, whereby its value becomes depreciated, is very different from taking property for public use, or from depriving a person of his property without due process of law. In the one case, a nuisance only is abated; in the other, unoffending property is taken away from an innocent owner.
It is true, that, when the defendants in these cases purchased or erected their breweries, the laws of the State did not forbid the manufacture of intoxicating liquors. But the State did not thereby give any assurance, or come under an obligation, that its legislation upon that subject would remain unchanged. Indeed, as was said in Stone v. Mississippi, above cited, the supervision of the public health and the public morals is a governmental power, “continuing in its nature,” and “to be dealt with as the special exigencies of the moment may re quire;” and that, “for this purpose, the largest legislative discretion is allowed, and the discretion cannot be parted with any more than the power itself.” So in Beer Co. v. Massachusetts, 97 U.S. 32: “If the public safety or the public morals require the discontinuance of any manufacture or traffic, the hand of the legislature cannot be stayed from providing for its discontinuance by any incidental inconvenience which individuals or corporations may suffer.”
Mr. Justice Field delivered the following separate opinion.
These clauses appear to me to deprive one who owns a brewery and manufactures beer for sale, like the defendants, of property without due process of law. The destruction to be ordered is not as a forfeiture upon conviction of any offence, but merely because the legislature has so commanded. Assuming, which is not conceded, that the legislature, in the exercise of that undefined power of the State, called its police power, may, without compensation to the owner, deprive him of the use of his brewery for the purposes for which it was constructed under the sanction of the law, and for which alone it is valuable, I cannot see upon what principle, after closing the brewery, and thus putting an end to its use in the future for manufacturing spirits, it can order the destruction of the liquor already manufactured, which it admits by its legislation may be valuable for some purposes, and allows to be sold for those purposes. Nor can I see how the protection of the health and morals of the people of the State can require the destruction of property like bottles, glasses, and other utensils, which may be used for many lawful purposes. It has heretofore been supposed to be an established principle, that where there is a power to abate a nuisance, the abatement must be limited by its necessity, and no wanton or unnecessary injury can be committed to the property or rights of individuals. Thus, if the nuisance consists in the use to which a building is put, the remedy is to stop such use, not to tear down or to demolish the building itself, or to destroy property found within it. Babcock v. City of Buffalo, 56 N.Y. 268; Chenango Bridge Co. v. Paige, 83 N.Y. 178, 189. The decision of the court, as it seems to me, reverses this principle.
It is plain that great wrong will often be done to manufacturers of liquors, if legislation like that embodied in this thirteenth section can be upheld. The Supreme Court of Kansas admits that the legislature of the State, in destroying the values of such kinds of property, may have gone to the utmost verge of constitutional authority. In my opinion it has passed beyond that verge, and crossed the line which separates regulation from confiscation.
Pennsylvania Coal Company v. Mahon,
260 U.S. 393 (1922)
Mr. Justice Holmes delivered the opinion of the Court.
This is a bill in equity brought by the defendants in error to prevent the Pennsylvania Coal Company from mining under their property in such way as to remove the supports and cause a subsidence of the surface and of their house. The bill sets out a deed executed by the Coal Company in 1878, under which the plaintiffs claim. The deed conveys the surface, but in express terms reserves the right to remove all the coal under the same, and the grantee takes the premises with the risk, and waives all claim for damages that may arise from mining out the coal. But the plaintiffs say that whatever may have been the Coal Company’s rights, they were taken away by an Act of Pennsylvania, approved May 27, 1921, P.L. 1198, commonly known there as the Kohler Act. The Court of Common Pleas found that if not restrained the defendant would cause the damage to prevent which the bill was brought, but denied an injunction, holding that the statute if applied to this case would be unconstitutional. On appeal the Supreme Court of the State agreed that the defendant had contract and property rights protected by the Constitution of the United States, but held that the statute was a legitimate exercise of the police power and directed a decree for the plaintiffs. A writ of error was granted bringing the case to this Court.
The statute forbids the mining of anthracite coal in such way as to cause the subsidence of, among other things, any structure used as a human habitation, with certain exceptions, including among them land where the surface is owned by the owner of the underlying coal and is distant more than one hundred and fifty feet from any improved property belonging to any other person. As applied to this case the statute is admitted to destroy previously existing rights of property and contract. The question is whether the police power can be stretched so far.
Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. As long recognized, some values are enjoyed under an implied limitation and must yield to the police power. But obviously the implied limitation must have its limits, or the contract and due process clauses are gone. One fact for consideration in determining such limits is the extent of the diminution. When it reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to sustain the act. So the question depends upon the particular facts. The greatest weight is given to the judgment of the legislature, but it always is open to interested parties to contend that the legislature has gone beyond its constitutional power.
This is the case of a single private house. No doubt there is a public interest even in this, as there is in every purchase and sale and in all that happens within the commonwealth. Some existing rights may be modified even in such a case. Rideout v. Knox, 148 Mass. 368. But usually in ordinary private affairs the public interest does not warrant much of this kind of interference. A source of damage to such a house is not a public nuisance even if similar damage is inflicted on others in different places. The damage is not common or public. Wesson v. Washburn Iron Co., 13 Allen, 95, 103. The extent of the public interest is shown by the statute to be limited, since the statute ordinarily does not apply to land when the surface is owned by the owner of the coal. Furthermore, it is not justified as a protection of personal safety. That could be provided for by notice. Indeed the very foundation of this bill is that the defendant gave timely notice of its intent to mine under the house. On the other hand the extent of the taking is great. It purports to abolish what is recognized in Pennsylvania as an estate in land – a very valuable estate – and what is declared by the Court below to be a contract hitherto binding the plaintiffs. If we were called upon to deal with the plaintiffs’ position alone, we should think it clear that the statute does not disclose a public interest sufficient to warrant so extensive a destruction of the defendant’s constitutionally protected rights.
But the case has been treated as one in which the general validity of the act should be discussed. The Attorney General of the State, the City of Scranton, and the representatives of other extensive interests were allowed to take part in the argument below and have submitted their contentions here. It seems, therefore, to be our duty to go farther in the statement of our opinion, in order that it may be known at once, and that further suits should not be brought in vain.
It is our opinion that the act cannot be sustained as an exercise of the police power, so far as it affects the mining of coal under streets or cities in places where the right to mine such coal has been reserved. As said in a Pennsylvania case, “For practical purposes, the right to coal consists in the right to mine it.” Commonwealth v. Clearview Coal Co., 256 Pa. St. 328, 331. What makes the right to mine coal valuable is that it can be exercised with profit. To make it commercially impracticable to mine certain coal has very nearly the same effect for constitutional purposes as appropriating or destroying it. This we think that we are warranted in assuming that the statute does.
It is true that in Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531, it was held competent for the legislature to require a pillar of coal to be left along the line of adjoining property, that, with the pillar on the other side of the line, would be a barrier sufficient for the safety of the employees of either mine in case the other should be abandoned and allowed to fill with water. But that was a requirement for the safety of employees invited into the mine, and secured an average reciprocity of advantage that has been recognized as a justification of various laws.
The rights of the public in a street purchased or laid out by eminent domain are those that it has paid for. If in any case its representatives have been so short sighted as to acquire only surface rights without the right of support, we see no more authority for supplying the latter without compensation than there was for taking the right of way in the first place and refusing to pay for it because the public wanted it very much. The protection of private property in the Fifth Amendment presupposes that it is wanted for public use, but provides that it shall not be taken for such use without compensation. A similar assumption is made in the decisions upon the Fourteenth Amendment. Hairston v. Danville & Western Ry. Co., 208 U.S. 598, 605. When this seemingly absolute protection is found to be qualified by the police power, the natural tendency of human nature is to extend the qualification more and more until at last private property disappears. But that cannot be accomplished in this way under the Constitution of the United States.
The general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. It may be doubted how far exceptional cases, like the blowing up of a house to stop a conflagration, go – and if they go beyond the general rule, whether they do not stand as much upon tradition as upon principle. Bowditch v. Boston, 101 U.S. 16. In general it is not plain that a man’s misfortunes or necessities will justify his shifting the damages to his neighbor’s shoulders. Spade v. Lynn & Boston R.R. Co., 172 Mass. 488, 489. We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change. As we already have said, this is a question of degree – and therefore cannot be disposed of by general propositions. But we regard this as going beyond any of the cases decided by this Court. The late decisions upon laws dealing with the congestion of Washington and New York, caused by the war, dealt with laws intended to meet a temporary emergency and providing for compensation determined to be reasonable by an impartial board. They went to the verge of the law but fell far short of the present act. Block v. Hirsh, 256 U.S. 135. Marcus Brown Holding Co. v. Feldman, 256 U.S. 170. Levy Leasing Co. v. Siegel, 258 U.S. 242.
We assume, of course, that the statute was passed upon the conviction that an exigency existed that would warrant it, and we assume that an exigency exists that would warrant the exercise of eminent domain. But the question at bottom is upon whom the loss of the changes desired should fall. So far as private persons or communities have seen fit to take the risk of acquiring only surface rights, we cannot see that the fact that their risk has become a danger warrants the giving to them greater rights than they bought.
Mr. Justice Brandeis, dissenting. (multiple citations omitted)
The Kohler Act prohibits, under certain conditions, the mining of anthracite coal within the limits of a city in such a manner or to such an extent “as to cause the … subsidence of any dwelling or other structure used as a human habitation, or any factory, store, or other industrial or mercantile establishment in which human labor is employed.” Coal in place is land; and the right of the owner to use his land is not absolute. He may not so use it as to create a public nuisance; and uses, once harmless, may, owing to changed conditions, seriously threaten the public welfare. Whenever they do, the legislature has power to prohibit such uses without paying compensation; and the power to prohibit extends alike to the manner, the character and the purpose of the use. Are we justified in declaring that the Legislature of Pennsylvania has, in restricting the right to mine anthracite, exercised this power so arbitrarily as to violate the Fourteenth Amendment?
Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use. The property so restricted remains in the possession of its owner. The State does not appropriate it or make any use of it. The State merely prevents the owner from making a use which interferes with paramount rights of the public. Whenever the use prohibited ceases to be noxious – as it may because of further change in local or social conditions, – the restriction will have to be removed and the owner will again be free to enjoy his property as heretofore.
The restriction upon the use of this property can not, of course, be lawfully imposed, unless its purpose is to protect the public. But the purpose of a restriction does not cease to be public, because incidentally some private persons may thereby receive gratuitously valuable special benefits… . . If by mining anthracite coal the owner would necessarily unloose poisonous gasses, I suppose no one would doubt the power of the State to prevent the mining, without buying his coal fields. And why may not the State, likewise, without paying compensation, prohibit one from digging so deep or excavating so near the surface, as to expose the community to like dangers? In the latter case, as in the former, carrying on the business would be a public nuisance.
It is said that one fact for consideration in determining whether the limits of the police power have been exceeded is the extent of the resulting diminution in value; and that here the restriction destroys existing rights of property and contract. But values are relative. If we are to consider the value of the coal kept in place by the restriction, we should compare it with the value of all other parts of the land. That is, with the value not of the coal alone, but with the value of the whole property. The rights of an owner as against the public are not increased by dividing the interests in his property into surface and subsoil. The sum of the rights in the parts can not be greater than the rights in the whole. The estate of an owner in land is grandiloquently described as extending ab orco usque ad coelum. But I suppose no one would contend that by selling his interest above one hundred feet from the surface he could prevent the State from limiting, by the police power, the height of structures in a city. And why should a sale of underground rights bar the State’s power? For aught that appears the value of the coal kept in place by the restriction may be negligible as compared with the value of the whole property, or even as compared with that part of it which is represented by the coal remaining in place and which may be extracted despite the statute. Ordinarily a police regulation, general in operation, will not be held void as to a particular property, although proof is offered that owing to conditions peculiar to it the restriction could not reasonably be applied… . . Where the surface and the coal belong to the same person, self-interest would ordinarily prevent mining to such an extent as to cause a subsidence. It was, doubtless, for this reason that the legislature, estimating the degrees of danger, deemed statutory restriction unnecessary for the public safety under such conditions.
The [majority’s] conclusion seems to rest upon the assumption that in order to justify such exercise of the police power there must be “an average reciprocity of advantage” as between the owner of the property restricted and the rest of the community; and that here such reciprocity is absent. Reciprocity of advantage is an important consideration, and may even be an essential, where the State’s power is exercised for the purpose of conferring benefits upon the property of a neighborhood, as in drainage projects, or upon adjoining owners, as by party wall provisions. But where the police power is exercised, not to confer benefits upon property owners, but to protect the public from detriment and danger, there is, in my opinion, no room for considering reciprocity of advantage. There was no reciprocal advantage to the owner prohibited from using his oil tanks in 248 U.S. 498; his brickyard, in 239 U.S. 394; his livery stable, in 237 U.S. 171; his billiard hall, in 225 U.S. 623; his oleomargarine factory, in 127 U.S. 678; his brewery, in 123 U.S. 623; unless it be the advantage of living and doing business in a civilized community. That reciprocal advantage is given by the act to the coal operators.
Miller v. Schoene,
276 U.S. 272 (1928)
Messrs. Randolph Harrison, of Lynchburg, Va., and D. O. Dechert, of Harrisonburg, Va., for plaintiffs in error.
Mr. F. S. Tavenner, of Woodstock, Va., for defendant in error.
Mr. Justice Stone delivered the opinion of the Court.
Acting under the Cedar Rust Act of Virginia, Acts Va. 1914, c. 36, as amended by Acts Va. 1920, c. 260, now embodied in Va. Code (1924) as sections 885 to 893, defendant in error, the state entomologist, ordered the plaintiffs in error to cut down a large number of ornamental red cedar trees growing on their property, as a means of preventing the communication of a rust or plant disease with which they were infected to the apple orchards in the vicinity. The plaintiffs in error appealed from the order to the circuit court of Shenandoah county which, after a hearing and a consideration of evidence, affirmed the order and allowed to plaintiffs in error $100 to cover the expense of removal of the cedars. Neither the judgment of the court nor the statute as interpreted allows compensation for the value of the standing cedars or the decrease in the market value of the realty caused by their destruction whether considered as ornamental trees or otherwise. But they save to plaintiffs in error the privilege of using the trees when felled. On appeal the Supreme Court of Appeals of Virginia affirmed the judgment. Miller v. State Entomologist, 146 Va. 175, 135 S. E. 813. Both in the circuit court and the Supreme Court of Appeals plaintiffs in error challenged the constitutionality of the statute under the due process clause of the Fourteenth Amendment and the case is properly here on writ of error. Judicial Code, § 237a (28 USCA § 344).
The Virginia statute presents a comprehensive scheme for the condemnation and destruction of red cedar trees infected by cedar rust. By section 1 it is declared to be unlawful for any person to ‘own, plant or keep alive and standing’ on his premises any red cedar tree which is or may be the source or ‘host plant’ of the communicable plant disease known as cedar rust, and any such tree growing within a certain radius of any apple orchard is declared to be a public nuisance, subject to destruction. Section 2 makes it the duty of the state entomologist, ‘upon the request in writing of ten or more reputable freeholders of any county or magisterial district, to make a preliminary investigation of the locality * * * to ascertain if any cedar tree or trees * * * are the source of, harbor or constitute the host plant for the said disease * * * and constitute a menace to the health of any apple orchard in said locality, and that said cedar tree or trees exist within a radius of two miles of any apple orchard in said locality.’ If affirmative findings are so made, he is required to direct the owner in writing to destroy the trees and, in his notice, to furnish a statement of the ‘fact found to exist whereby it is deemed necessary or proper to destroy’ the trees and to call attention to the law under which it is proposed to destroy them. Section 5 authorizes the state entomologist to destroy the trees if the owner, after being notified, fails to do so. Section 7 furnishes a mode of appealing from the order of the entomologist to the circuit court of the county, which is authorized to ‘hear the objections’ and ‘pass upon all questions involved,’ the procedure followed in the present case.
As shown by the evidence and as recognized in other cases involving the validity of this statute, Bowman v. Virginia State Entomologist, 128 Va. 351, 105 S. E. 141, 12 A. L. R. 1121; Kelleher v. Schoene (D. C.) 14 F. (2d) 341, cedar rust is an infectious plant disease in the form of a fungoid organism which is destructive of the fruit and foliage of the apple, but without effect on the value of the cedar. Its life cycle has two phases which are passed alternately as a growth on red cedar and on apple trees. It is communicated by spores from one to the other over a radius of at least two miles. It appears not to be communicable between trees of the same species, but only from one species to the other, and other plants seem not to be appreciably affected by it. The only practicable method of controlling the disease and protecting apple trees from its ravages is the destruction of all red cedar trees, subject to the infection, located within two miles of apple orchards.
The red cedar, aside from its ornamental use, has occasional use and value as lumber. It is indigenous to Virginia, is not cultivated or dealt in commercially on any substantial scale, and its value throughout the state is shown to be small as compared with that of the apple orchards of the state. Apple growing is one of the principal agricultural pursuits in Virginia. The apple is used there and exported in large quantities. Many millions of dollars are invested in the orchards, which furnish employment for a large portion of the population, and have induced the development of attendant railroad and cold storage facilities.
On the evidence we may accept the conclusion of the Supreme Court of Appeals that the state was under the necessity of making a choice between the preservation of one class of property and that of the other wherever both existed in dangerous proximity. It would have been none the less a choice if, instead of enacting the present statute, the state, by doing nothing, had permitted serious injury to the apple orchards within its borders to go on unchecked. When forced to such a choice the state does not exceed its constitutional powers by deciding upon the destruction of one class of property in order to save another which, in the judgment of the legislature, is of greater value to the public. It will not do to say that the case is merely one of a conflict of two private interests and that the misfortune of apple growers may not be shifted to cedar owners by ordering the destruction of their property; for it is obvious that there may be, and that here there is, a preponderant public concern in the preservation of the one interest over the other. Compare Bacon v. Walker, 204 U. S. 311, 27 S. Ct. 289, 51 L. Ed. 499; Missouri, Kansas & Texas R. Co. v. May, 194 U. S. 267, 24 S. Ct. 638, 48 L. Ed. 971; Chicago, Terre Haute & Southeastern R. Co. v. Anderson, 242 U. S. 283, 37 S. Ct. 124, 61 L. Ed. 302; Perley v. North Carolina, 249 U. S. 510, 39 S. Ct. 357, 63 L. Ed. 735. And where the public interest is involved preferment of that interest over the property interest of the individual, to the extent even of its destruction, is one of the distinguishing characteristics of every exercise of the police power which affects property. Mugler v. Kansas, 123 U. S. 623, 8 S. Ct. 273, 31 L. Ed. 205; Hadacheck v. Los Angeles, 239 U. S. 394, 36 S. Ct. 143, 60 L. Ed. 348, Ann. Cas. 1917B, 927; Village of Euclid v. Ambler Realty Co., 272 U. S. 365, 47 S. Ct. 114, 71 L. Ed. 303; Northwestern Fertilizer Co. v. Hyde Park, 97 U. S. 659, 24 L. Ed. 1036; Northwestern Laundry v. Des Moines, 239 U. S. 486, 36 S. Ct. 206, 60 L. Ed. 396; Lawton v. Steele, 152 U. S. 133, 14 S. Ct. 499, 38 L. Ed. 385; Sligh v. Kirkwood, 237 U. S. 52, 35 S. Ct. 501, 59 L. Ed. 835, Reinman v. Little Rock, 237 U. S. 171, 35 S. Ct. 511, 59 L. Ed. 900.
We need not weigh with nicety the question whether the infected cedars constitute a nuisance according to the common law; or whether they may be so declared by statute. See Hadacheck v. Los Angeles, supra, 411 (36 S. Ct. 143). For where, as here, the choice is unavoidable, we cannot say that its exercise, controlled by considerations of social policy which are not unreasonable, involves any denial of due process. The injury to property here is no more serious, nor the public interest less, than in Hadacheck v. Los Angeles, supra, Northwestern Laundry v. Des Moines, supra, Reinman v. Little Rock, supra, or Sligh v. Kirkwood, supra.
The statute is not, as plaintiffs in error argue, subject to the vice which invalidated the ordinance considered by this court in Eubank v. Richmond, 226 U. S. 137, 33 S. Ct. 76, 57 L. Ed. 156, 42 L. R. A. (N. S.) 1123, Ann. Cas. 1914B, 192. That ordinance directed the committee on streets of the city of Richmond to establish a building line, not less than five nor more than thirty feet from the street line whenever requested to do so by the owners of two-thirds of the property abutting on the street in question. No property owner might build beyond the line so established. Of this the court said (page 143 (33 S. Ct. 77)):
It (the ordinance) leaves no discretion in the committee on streets as to whether the street (building, semble) line shall or shall not be established in a given case. The action of the committee is determined by two-thirds of the property owners. In other words, part of the property owners fronting on the block determine the extent of use that other owners shall make of their lots, and against the restriction they are impotent.
The function of the property owners there is in no way comparable to that of the ‘ten or more reputable freeholders’ in the Cedar Rust Act. They do not determine the action of the state entomologist. They merely request him to conduct an investigation. In him is vested the discretion to decide, after investigation, whether or not conditions are such that the other provisions of the statute shall be brought into action; and his determination is subject to judicial review. The property of plaintiffs in error is not subjected to the possibly arbitrary and irresponsible action of a group of private citizens.
The objection of plaintiffs in error to the vagueness of the statute is without weight. The state court has held it to be applicable and that is enough when, by the statute, no penalty can be incurred or disadvantage suffered in advance of the judicial ascertainment of its applicability. Compare Connally v. General Construction Co., 269 U. S. 385, 46 S. Ct. 126, 70 L. Ed. 322.
Economic Analysis of “Takings” of Private Property, available at http://cyber.law.harvard.edu/bridge/LawEconomics/takings.htm
A crucial constitutional question since the founding of the United States has been the extent to which the state and federal legislatures are permitted to impair private property rights. From the beginning, American courts have recognized that governments must be accorded some latitude in setting and modifying the entitlements associated with the ownership of land and other commodities. The courts have refused, however, to acquiesce in all legislative interferences with private property rights.
The constitutional provisions used to shield property from governmental encroachment have changed over the course of American history. Until the end of the nineteenth century, most regulations of private property emanated from the state governments, not the federal government. That fact – combined with the Supreme Court’s ruling that the Bill of Rights was inapplicable to the states – minimized the significance of the Fifth Amendment’s ban on uncompensated “takings” of private property. In the limited number of cases in which the Supreme Court undertook to review challenges to allegedly confiscatory legislation, it based its rulings either on broad principles of natural law or on the contracts clause of Article I, Section 10. In 1897, the Supreme Court held for the first time that the due-process clause of the Fourteenth Amendment “incorporated” against the states the takings clause of the Fifth Amendment. Since that date the stream of cases invoking the federal Constitution to challenge legislative or judicial impairments of property rights has steadily increased.
Before World War II, legal scholars paid relatively little attention to the so-called “takings” doctrine. Since the 1950s, however, the body of academic writing dealing with the issue has mushroomed. The ambition of the large majority of the authors who have contributed to the discussion has been to define a principled line that would enable the courts to differentiate permissible “regulation” of private property from impermissible (if uncompensated) expropriation thereof. Prominent among those who have attempted this feat have been economists.
Economic analysis of the takings doctrine can be traced to a 1967 Harvard Law Review article in which Frank Michelman argued (among other things) that a judge called on to determine whether the Fifth Amendment had been violated in a particular case might plausibly select as her criterion of judgment the maximization of net social welfare. If that were her ambition, Michelman contended, the judge should begin by estimating and comparing the following economic impacts:
- the net efficiency gains secured by the government action in question (in other words, “the excess of benefits produced by the measure over losses inflicted by it”);
- the “settlement costs” – i.e., the costs of measuring the injuries sustained by adversely affected parties and of providing them monetary compensation; and
- the “demoralization costs” incurred by not indemnifying them. Michelman’s definition of the third of these terms was original and critical; to ascertain the “demoralization costs” entailed by not paying compensation, the judge should measure “the total of … the dollar value necessary to offset disutilities which accrue to losers and their sympathizers specifically from the realization that no compensation is offered, and … the present capitalized dollar value of lost future production (reflecting either impaired incentives or social unrest) caused by demoralization of uncompensated losers, their sympathizers, and other observers disturbed by the thought that they themselves may be subjected to similar treatment on some other occasion.”
Once the judge has calculated these impacts, Michelman contended, her job is straightforward.
- If (1) is the smallest figure, she should contrive some way to enjoin the action – for example, by declaring it to be violative of the constitutional requirement that private property be taken only for a “public use.”
- If (2) is the smallest figure, she should not enjoin the action but should require that the parties hurt by it be compensated.
- If (3) is the smallest figure, she should allow the government to proceed without indemnifying the victims.
Applying this composite test, Michelman suggested that some of the guidelines employed by the Supreme Court when deciding takings cases, though seemingly simplistic or senseless, turn out to have plausible utilitarian justifications. For example, the rule that “physical invasion” by government of private property is always deemed a taking, though apparently a clumsy device for separating mild from severe encroachments on private rights, turns out to have important redeeming features: it identifies a set of cases in which settlement costs (the costs of both ascertaining liability and measuring the resultant damages) are likely to be modest and in which, because of the “psychological shock, the emotional protest, the symbolic threat to all property and security” commonly associated with bald invasions, “demoralization costs” are likely to be high – precisely the circumstance in which compensation is most appropriate. Similarly, the courts’ sensitivity in takings cases to the ratio between the economic injury sustained by the plaintiff and the overall value of the affected parcel (rather than to the absolute amount of the economic injury) makes some sense on the following plausible assumptions: “(1) that one thinks of himself not just as owning a total amount of wealth or income, but also as owning several discrete things whose destinies he controls; (2) that deprivation of one of these mentally circumscribed things is an event attended by pain of a specially acute or demoralizing kind, as compared with what one experiences in response to the different kind of event consisting of a general decline in one’s net worth; and (3) that events of the specially painful kind can usually be identified by compensation tribunals with relative ease.”
Michelman’s analysis proved highly influential among constitutional scholars, but did not go uncontested. In the 1980s, several younger scholars argued that Michelman had made a crucial mistake. When measuring “demoralization costs,” they argued, a judge should not include the diminution in investment and “productive activity” caused by not making the victims whole. Indeed, widespread adoption of Michelman’s strategy would send precisely the wrong signal to property owners; assured that they would be indemnified if and when the public needed their land, they would overinvest in capital improvements – and, in particular, in capital improvements likely soon to be rendered obsolete by governmental action or regulation. Inducement of efficient kinds and levels of activity, the revisionist economists claimed, requires that economic actors “bear all real costs and benefits of their decisions” including the risk of future changes in pertinent legal rules.
From this point (now widely considered convincing), economic analysis of the takings doctrine has radiated in a variety of directions. Here are a few:
Insurance Schemes. The guideline just mentioned (that efficiency will be enhanced by forcing landowners to bear the risk of future changes in pertinent legal rules) has at least one serious drawback: It may result in a few landowners suffering very large, uncompensated losses – a situation economists generally regard as undesirable. From an efficiency standpoint, the best solution to this problem would be the development and widespread use of a private insurance system. Landowners would buy “takings” insurance, just as they now routinely buy fire insurance. Such a system would not erode the benefits of making landowners bear the costs of regulation, because the rate that an insurer charged for insuring a particular parcel would almost certainly reflect the likelihood that that particular parcel would later be subject to governmental action. For example, developers who bought land in flood plains or on eroding beaches would pay very large premiums, while landowners in lower-risk areas would pay much lower premiums. The resultant incentive to avoid developing parcels likely soon to be regulated is precisely what we would wish to create.
Unfortunately, a private market in “takings” insurance has not yet developed. Various reasons have been suggested for this failure, but the fact remains that landowners cannot currently shield themselves against uncompensated takings. Even if private insurance were available, some landowners undoubtedly would not purchase it – because they systematically underestimated the danger of regulation or because they were simply poor planners. Under these nonideal conditions, some economists have conceded that governmental compensation for severe land-use regulations may be economically defensible as, in effect, a form of compulsory state-supplied insurance.
Reconstructing Demoralization Costs. Perhaps the revisionist critique of “demoralization costs” has gone too far. After all, many people become unhappy when they experience or witness uncompensated severe regulations of private property, and those psychic injuries (measured, as always, by people’s willingness and ability to pay money to avoid them) must be considered when one tries to design a takings doctrine that maximizes net social welfare. Moreover, those costs go further than the (potentially substantial) disutilities caused by the frustration of people’s “political preferences” – the pain they experience when they witness behavior they consider unjust. They include secondary effects that might be called “search costs”:
A judicial decision denying compensation in defiance of a popular perception that it should be forthcoming risks undermining people’s faith that, by the large, the law comports with their sense of justice. Erosion of that faith, in turn, would reduce people’s willingness to make decisions – the rationality of which depends upon the content of the pertinent legal rules – without taking the time to “look up” the rules… . Generally speaking, our willingness to act in this fashion is efficient; as long as the rules are in fact consistent with our senses of justice, it is desirable, from an economic standpoint, that we trust our intuitions. Any material diminution in that willingness would give rise to deadweight losses that merit the attention of a conscientious economist.
Determining the magnitude of demoralization costs of these various sorts is, however, very difficult. Frequently, one can argue plausibly that the psychic injuries caused by a particular sort of regulation will be huge – or will be insignificant. Consider, for example, the situation in which land-use regulations are suddenly tightened, not by the legislature, but by a change in common-law rules. Will the demoralization costs caused by such putative “judicial takings” be smaller or larger than those associated with comparable “legislative takings”? Barton Thompson points to several circumstances suggesting that they will be smaller: the fact that courts can more easily disguise the extent to which they are changing the pertinent land-use regulations; courts’ ability to fall back on their general reputation for objective and principled decisionmaking; and the tendency of the doctrine of stare decisis to mitigate landowners’ anxieties that judicial modification of one land-use regulation portends more sweeping changes in the future. Barton acknowledges, however, that many of these factors can be “flipped,” suggesting that judicial takings will result in unusually high demoralization costs:
The mysteries and insulation of the judicial process, for example, might actually increase demoralization. Property holders may believe that they at least understand the legislative process, have some electoral control over politicians, and know how to wage a fight on political grounds. They may feel far more distressed about a legal process that affects them without apparently understanding their concerns, speaks in a foreign and confusing tongue, and is directed by judges over whom they feel they have no effective popular control. Given the existence of stare decisis and people’s expectations that courts will generally observe precedent, moreover, property holders may fear disintegration of the social structure far more when a court significantly modifies prior property law than when the legislature engages in traditional political behavior.
Barton’s avowedly indeterminate analysis of “judicial takings” is typical of the murk one enters when trying to predict psychic injuries. In short, demoralization costs are plainly relevant to the design of an efficient takings doctrine, but their uncertainty makes economists queasy about relying on them.
“Fiscal Illusions.” Several economists have argued that it is mistaken to concentrate exclusively upon the effect of constitutional doctrine on the incentives of landowners to use and improve their possessions; one must also take into account the incentives of government officials to regulate private property. Specifically, these economists have argued that, unless government officials are compelled somehow to bear the costs of the regulations they adopt, they will tend to impose on private property inefficiently tight land-use controls. In this respect, the position of the government vis-à-vis private landowners is similar to the position of a private landowner vis-à-vis her neighbors. The purpose of nuisance law, it is often said, is to force each landowner to internalize the costs of her activities and thus discourage her from acting in ways that impose on her neighbors inefficiently high levels of annoyance (smoke, smells, pollution, excess light, etc.). Similarly, some economists have argued, the purpose of a just-compensation requirement is to compel government officials to internalize the costs of their regulatory activities and thus discourage them from fettering landowners excessively. This claim has been subjected by other economists to two sorts of critique. First, it is not altogether clear that, unless deterred by a just-compensation requirement, government officials will overregulate. Louis Kaplow points out that, although it is true that (in the absence of such a requirement) government officials will not bear the costs of their regulatory activities, they also will not reap the benefits of those activities. (In this respect, they are different from potentially hyperactive private landowners.) There is thus no reason to assume that, unless leashed by a strict takings doctrine, officials will run amok. A student Note in the Harvard Law Review reinforces this point by suggesting two reasons why government officials might be prone to adopt inefficiently low levels of regulation: (a) ordinarily, the beneficiaries of land-use restrictions are more dispersed (and thus less able to make their views known to their elected representatives) than the landowners adversely affected by those regulations; and (b) government officials typically undervalue the interests in regulation of the members of future generations.
Second, even if the “fiscal-illusion” effect is serious, it is not obvious that the enforcement of a constitutional just-compensation requirement is the only – or best – way to offset it. Other strategies might work as well or better. For example, the student Note just mentioned contends that optimal levels of regulation might be achieved equally effectively by assigning to the state the authority to proscribe without compensation any uses of private land that government officials believe are injurious to the public – but then permit adversely affected landowners to buy from the government exemptions from those regulations. The state’s police power, in other words, could be treated as an alienable servitude. Unless transaction costs interfered with the market in such exemptions (concededly a tricky issue), the adoption of such a system should (Coase tells us) result in the same, efficient level of regulation as a regime in which landowners were originally assigned the right not to be regulated and the state had to expropriate (through the payment of “just compensation”) the authority to regulate them.
Has this growing body of scholarship had any impact on the courts? Yes and no. Some of the economists’ more basic arguments have indeed influenced judicial resolution of takings cases. For example, the causal nihilism typical of most economic analyses contributed to the partial corrosion of the so-called noxious-use exception to the ban on uncompensated takings. In the early twentieth century the Supreme Court consistently and confidently ruled that when a state forbids the continuation of a use of land or other property that would be harmful to the public or to neighbors, it is not obliged to indemnify the owner. For example, in Miller v. Schoene, the Court upheld on this basis a Virginia statute that required the owner of ornamental cedar trees to cut them down because they produced cedar rust that endangered apple trees in the vicinity. As legal scholars became increasingly familiar with the economic analysis of doctrinal problems – and, in particular, with Ronald Coase’s assertion that, in all cases of conflicting land uses, it is senseless to characterize one such use as the “cause” of harm to the other – they pointed out that the Court’s handling of cases like Miller was naive. The activity of keeping cedar trees in the vicinity of apple orchards is no more (and no less) “noxious” than the activity of keeping apple orchards in the vicinity of cedar trees. In the face of this chorus of criticism, the Court retreated. Its renunciation of the “noxious use” test was most complete and overt in Justice Brennan’s majority opinion in the case with which we have been concerned:
We observe that the land uses in issue in Hadacheck, Miller, and Goldblatt were perfectly lawful in themselves. They involved no “blameworthiness, … moral wrongdoing or conscious act of dangerous risk-taking which induced society to shift the cost to a particular individual.” These cases are better understood as resting not on any supposed “noxious” quality of the prohibited uses but rather on the ground that the restrictions were reasonably related to the implementation of a policy – not unlike historic preservation – expected to produce a widespread public benefit and applicable to all similarly situated property.
For better or worse, however, the Court since Penn Central has drifted back toward its original view. The justices’ invocations of the distinction between “noxious” and “innocent” uses have been more tentative and awkward than in the period before 1960, but nevertheless have been increasing.
The Court’s opinion in Loretto v. Teleprompter Manhattan CATV Corp. furnishes a more straightforward illustration of the power of the economic argument. At issue in the case was a New York statute empowering a cable television company to install fixtures on the sides and roofs of privately owned buildings. In holding that such a “permanent physical occupation” of private property, no matter how trivial, always constitutes a taking, Justice Marshall relied twice on Michelman’s 1967 article – first, for Michelman’s analysis of the historical development of the physical-occupation rule; and second for his defense of the rule as effective way of identifying situations involving both low settlement costs and high demoralization costs.
The newer and more refined variations on the economic theme, however, have had little if any impact on judicial decisions in this field. In particular the danger – widely recognized by scholars – that liberal grants of compensation to property owners adversely affected by government action will give rise to a “moral hazard” problem, leading to inefficiently high levels of investment in improvements likely to be rendered valueless by subsequent regulation seems to have fallen on deaf judicial ears.
Equally troublesome is the tendency of judges (or their law clerks) to misuse economic arguments – or at least to deploy them in ways their originators would have found surprising and distressing. Perhaps the clearest illustration of such misuse concerns the fate of the phrase: “discrete, investment-backed expectations.” Toward the close of his 1967 article Michelman provided a brief, avowedly utilitarian defense of the venerable and much-maligned “diminution in value” test for determining whether a statute had effected a taking. The true justification of the test, he argued, is that, like the physical-invasion test, it mandates compensation in situations in which property owners will experience severe psychological injury. Recognition of this justification, Michelman went on to argue, requires that we reconceive the test slightly:
More sympathetically perceived, however, the test poses not [a] … loose question of degree; it does not ask “how much,” but rather … it asks “whether or not”: whether or not the measure in question can easily be seen to have practically deprived the claimant of some distinctly perceived, sharply crystallized, investment-backed expectation.
In his Penn Central opinion, Justice Brennan several times invoked the language with which Michelman closed his discussion – without recapitulating, however, the argument on which it was based. Cut loose from its moorings, Michelman’s proposed test has since been put to some surprising uses. For example, in Kaiser-Aetna v. United States, the owner of a resort and marina in Hawaii argued that, by granting it permission to convert a shallow, landlocked lagoon into a bay accessible to pleasure boats, the Army Corps of Engineers had forfeited the right subsequently to declare the bay a navigable waterway open to the public – unless, of course, it compensated the marina owner. Emphasizing the large amount of money the petitioner had invested in the project, Justice Rehnquist and a majority of the Court agreed. A well-established factor in assessing takings challenges, Rehnquist held, is the extent to which the challenged government action “interfere[s] with reasonable investment backed expectations.” In the case at bar, the interference plainly had been substantial. Whatever one thinks of the merits of the ruling, it is considerably removed from Michelman’s original point, namely, that total or nearly total devaluation of a distinct property interest (something that plainly did not occur in Kaiser-Aetna) should be deemed a taking because of its likely psychic impact on the owner of the property.
Pennell v. City of San Jose,
485 U.S. 1, 42 Cal.3d 365, 228 Cal.Rptr. 726, 721 P.2d 1111 (1986), affirmed.
REHNQUIST, C.J., delivered the opinion of the Court, in which BRENNAN, WHITE, MARSHALL, BLACKMUN, and STEVENS, JJ., joined. SCALIA, J., filed an opinion concurring in part and dissenting in part, in which O’CONNOR, J., joined, post, p. —-. KENNEDY, J., took no part in the consideration or decision of the case.
Harry D. Miller, Oakland, Cal., for appellants.
Joan R. Gallo, San Jose, Cal., for appellees.
Chief Justice Rehnquist delivered the opinion of the Court.
This case involves a challenge to a rent control ordinance enacted by the city of San Jose, California, that allows a hearing officer to consider, among other factors, the “hardship to a tenant” when determining whether to approve a rent increase proposed by a landlord. Appellants Richard Pennell and the Tri-County Apartment House Owners Association sued in the Superior Court of Santa Clara County seeking a declaration that the ordinance, in particular the “tenant hardship” provisions, are “facially unconstitutional and therefore … illegal and void.” The Superior Court entered judgment on the pleadings in favor of appellants, sustaining their claim that the tenant hardship provisions violated the Takings Clause of the Fifth Amendment, as made applicable to the States by the Fourteenth Amendment. The California Court of Appeal affirmed this judgment, but the Supreme Court of California reversed, each by a divided vote. The majority of the Supreme Court rejected appellants’ arguments under the Takings Clause and the Equal Protection and Due Process Clauses of the Fourteenth Amendment; the dissenters in that court thought that the tenant hardship provisions were a “forced subsidy imposed on the landlord” in violation of the Takings Clause. On appellants’ appeal to this Court we postponed consideration of the question of jurisdiction, and now having heard oral argument we affirm the judgment of the Supreme Court of California.
The city of San Jose enacted its rent control ordinance (Ordinance) in 1979 with the stated purpose of
alleviating some of the more immediate needs created by San Jose’s housing situation. These needs include but are not limited to the prevention of excessive and unreasonable rent increases, the alleviation of undue hardships upon individual tenants, and the assurance to landlords of a fair and reasonable return on the value of their property.
San Jose Municipal Ordinance 19696, § 5701.2.
At the heart of the Ordinance is a mechanism for determining the amount by which landlords subject to its provisions may increase the annual rent which they charge their tenants. A landlord is automatically entitled to raise the rent of a tenant in possession1 by as much as eight percent; if a tenant objects to an increase greater than eight percent, a hearing is required before a “Mediation Hearing Officer” to determine whether the landlord’s proposed increase is “reasonable under the circumstances.” The Ordinance sets forth a number of factors to be considered by the hearing officer in making this determination, including “the hardship to a tenant.” § 5703.28(c)(7). Because appellants concentrate their attack on the consideration of this factor, we set forth the relevant provision of the Ordinance in full:
5703.29. Hardship to Tenants. In the case of a rent increase or any portion thereof which exceeds the standard set in Section 5703.28(a) or (b), then with respect to such excess and whether or not to allow same to be part of the increase allowed under this Chapter, the Hearing Officer shall consider the economic and financial hardship imposed on the present tenant or tenants of the unit or units to which such increases apply. If, on balance, the Hearing Officer determines that the proposed increase constitutes an unreasonably severe financial or economic hardship on a particular tenant, he may order that the excess of the increase which is subject to consideration under subparagraph (c) of Section 5703.28. or any portion thereof, be disallowed. Any tenant whose household income and monthly housing expense meets certain income requirements shall be deemed to be suffering under financial and economic hardship which must be weighed in the Hearing Officer’s determination. The burden of proof in establishing any other economic hardship shall be on the tenant.
If either a tenant or a landlord is dissatisfied with the decision of the hearing officer, the Ordinance provides for binding arbitration. A landlord who attempts to charge or who receives rent in excess of the maximum rent established as provided in the Ordinance is subject to criminal and civil penalties.
Before we turn to the merits of appellants’ contentions we consider the claim of appellees that appellants lack standing to challenge the constitutionality of the Ordinance. [The Court decided there was standing.]
Turning now to the merits, we first address appellants’ contention that application of the Ordinance’s tenant hardship provisions violates the Fifth and Fourteenth Amendments’ prohibition against taking of private property for public use without just compensation. In essence, appellants’ claim is as follows: § 5703.28 of the Ordinance establishes the seven factors that a hearing officer is to take into account in determining the reasonable rent increase. The first six of these factors are all objective, and are related either to the landlord’s costs of providing an adequate rental unit, or to the condition of the rental market. Application of these six standards results in a rent that is “reasonable” by reference to what appellants contend is the only legitimate purpose of rent control: the elimination of “excessive” rents caused by San Jose’s housing shortage. When the hearing officer then takes into account “hardship to a tenant” pursuant to § 5703.28(c)(7) and reduces the rent below the objectively “reasonable” amount established by the first six factors, this additional reduction in the rent increase constitutes a “taking.” This taking is impermissible because it does not serve the purpose of eliminating excessive rents – that objective has already been accomplished by considering the first six factors – instead, it serves only the purpose of providing assistance to “hardship tenants.” In short, appellants contend, the additional reduction of rent on grounds of hardship accomplishes a transfer of the landlord’s property to individual hardship tenants; the Ordinance forces private individuals to shoulder the “public” burden of subsidizing their poor tenants’ housing. As appellants point out, ”it is axiomatic that the Fifth Amendment’s just compensation provision is ‘designed to bar 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.’” First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 318-319 (1987) (quoting Armstrong v. United States, 364 U.S. 40, 49,(1960)).
We think it would be premature to consider this contention on the present record. As things stand, there simply is no evidence that the “tenant hardship clause” has in fact ever been relied upon by a hearing officer to reduce a rent below the figure it would have been set at on the basis of the other factors set forth in the Ordinance. In addition, there is nothing in the Ordinance requiring that a hearing officer in fact reduce a proposed rent increase on grounds of tenant hardship. Section 5703.29 does make it mandatory that hardship be considered – it states that “the Hearing Officer shall consider the economic hardship imposed on the present tenant” – but it then goes on to state that if “the proposed increase constitutes an unreasonably severe financial or economic hardship … he may order that the excess of the increase” be disallowed. § 5703.29 (emphasis added). Given the “essentially ad hoc, factual inquiry” involved in the takings analysis, Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979), we have found it particularly important in takings cases to adhere to our admonition that “the constitutionality of statutes ought not be decided except in an actual factual setting that makes such a decision necessary.” Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U.S. 264, 294-295 (1981). In Virginia Surface Mining, for example, we found that a challenge to the Surface Mining Control and Reclamation Act of 1977, 91 Stat. 447, 30 U.S.C. § 1201 et seq., was “premature,” 452 U.S., at 296, n. 37, and “not ripe for judicial resolution,” id., at 297, because the property owners in that case had not identified any property that had allegedly been taken by the Act, nor had they sought administrative relief from the Act’s restrictions on surface mining. Similarly, in this case we find that the mere fact that a hearing officer is enjoined to consider hardship to the tenant in fixing a landlord’s rent, without any showing in a particular case as to the consequences of that injunction in the ultimate determination of the rent, does not present a sufficiently concrete factual setting for the adjudication of the takings claim appellants raise here. Cf. CIO v. McAdory, 325 U.S. 472, 475-476 (1945) (declining to consider the validity of a state statute when the record did not show that the statute would ever be applied to any of the petitioner’s members).
Appellants also urge that the mere provision in the Ordinance that a hearing officer may consider the hardship of the tenant in finally fixing a reasonable rent renders the Ordinance “facially invalid” under the Due Process and Equal Protection Clauses, even though no landlord ever has its rent diminished by as much as one dollar because of the application of this provision. [The Court decided the Ordinance was not facially unconstitutional on these grounds.]
For the foregoing reasons, we hold that it is premature to consider appellants’ claim under the Takings Clause and we reject their facial challenge to the Ordinance under the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The judgment of the Supreme Court of California is accordingly
Justice KENNEDY took no part in the consideration or decision of this case.
Justice Scalia, with whom Justice O’Connor joins, concurring in part and dissenting in part.
I agree that the tenant hardship provision of the Ordinance does not, on its face, violate either the Due Process Clause or the Equal Protection Clause of the Fourteenth Amendment. I disagree, however, with the Court’s conclusion that appellants’ takings claim is premature. I would decide that claim on the merits, and would hold that the tenant hardship provision of the Ordinance effects a taking of private property without just compensation in violation of the Fifth and Fourteenth Amendments.
Appellants contend that any application of the tenant hardship provision of the San Jose Ordinance would effect an uncompensated taking of private property because that provision does not substantially advance legitimate state interests and because it improperly imposes a public burden on individual landlords. I can understand how such a claim – that a law applicable to the plaintiffs is, root and branch, invalid – can be readily rejected on the merits, by merely noting that at least some of its applications may be lawful. But I do not understand how such a claim can possibly be avoided by considering it “premature.” Suppose, for example, that the feature of the rental ordinance under attack was a provision allowing a hearing officer to consider the race of the apartment owner in deciding whether to allow a rent increase. It is inconceivable that we would say judicial challenge must await demonstration that this provision has actually been applied to the detriment of one of the plaintiffs. There is no difference, it seems to me, when the facial, root-and-branch challenge rests upon the Takings Clause rather than the Equal Protection Clause.
There is no reason thus to shield alleged constitutional injustice from judicial scrutiny. I would therefore consider appellants’ takings claim on the merits.
The Fifth Amendment of the United States Constitution, made applicable to the States through the Fourteenth Amendment, Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239 (1897), provides that “private property shall not be taken for public use, without just compensation.” We have repeatedly observed that the purpose of this provision is “to bar 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.” Armstrong v. United States, 364 U.S. 40, 49 (1960); see also First English Evangelical Lutheran Church of Glendale v. Los Angeles County, 482 U.S. 304, 318-319 (1987); Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 163 (1980); Agins v. Tiburon, supra, 447 U.S., at 260; Penn Central Transportation Co. v. New York City, 438 U.S. 104, 123 (1978); Monongahela Navigation Co. v. United States, 148 U.S. 312, 325 (1893).
Traditional land-use regulation (short of that which totally destroys the economic value of property) does not violate this principle because there is a cause-and-effect relationship between the property use restricted by the regulation and the social evil that the regulation seeks to remedy. Since the owner’s use of the property is (or, but for the regulation, would be) the source of the social problem, it cannot be said that he has been singled out unfairly. Thus, the common zoning regulations requiring subdividers to observe lot-size and set-back restrictions, and to dedicate certain areas to public streets, are in accord with our constitutional traditions because the proposed property use would otherwise be the cause of excessive congestion. The same cause-and-effect relationship is popularly thought to justify emergency price regulation: When commodities have been priced at a level that produces exorbitant returns, the owners of those commodities can be viewed as responsible for the economic hardship that occurs. Whether or not that is an accurate perception of the way a free-market economy operates, it is at least true that the owners reap unique benefits from the situation that produces the economic hardship, and in that respect singling them out to relieve it may not be regarded as “unfair.” That justification might apply to the rent regulation in the present case, apart from the single feature under attack here.
Appellants do not contest the validity of rent regulation in general. They acknowledge that the city may constitutionally set a “reasonable rent” according to the statutory minimum and the six other factors that must be considered by the hearing officer (cost of debt servicing, rental history of the unit, physical condition of the unit, changes in housing services, other financial information provided by the landlord, and market value rents for similar units). San Jose Municipal Ordinance 19696, § 5703.28(c) (1979). Appellants’ only claim is that a reduction of a rent increase below what would otherwise be a “reasonable rent” under this scheme may not, consistently with the Constitution, be based on consideration of the seventh factor the hardship to the tenant as defined in § 5703.29. I think they are right.
Once the other six factors of the Ordinance have been applied to a landlord’s property, so that he is receiving only a reasonable return, he can no longer be regarded as a “cause” of exorbitantly priced housing; nor is he any longer reaping distinctively high profits from the housing shortage. The seventh factor, the “hardship” provision, is invoked to meet a quite different social problem: the existence of some renters who are too poor to afford even reasonably priced housing. But that problem is no more caused or exploited by landlords than it is by the grocers who sell needy renters their food, or the department stores that sell them their clothes, or the employers who pay them their wages, or the citizens of San Jose holding the higher paying jobs from which they are excluded. And even if the neediness of renters could be regarded as a problem distinctively attributable to landlords in general, it is not remotely attributable to the particular landlords that the Ordinance singles out – namely, those who happen to have a “hardship” tenant at the present time, or who may happen to rent to a “hardship” tenant in the future, or whose current or future affluent tenants may happen to decline into the “hardship” category.
The traditional manner in which American government has met the problem of those who cannot pay reasonable prices for privately sold necessities – a problem caused by the society at large – has been the distribution to such persons of funds raised from the public at large through taxes, either in cash (welfare payments) or in goods (public housing, publicly subsidized housing, and food stamps). Unless we are to abandon the guiding principle of the Takings Clause that “public burdens … should be borne by the public as a whole,” Armstrong, 364 U.S., at 49, this is the only manner that our Constitution permits. The fact that government acts through the landlord-tenant relationship does not magically transform general public welfare, which must be supported by all the public, into mere “economic regulation,” which can disproportionately burden particular individuals. Here the city is not “regulating” rents in the relevant sense of preventing rents that are excessive; rather, it is using the occasion of rent regulation (accomplished by the rest of the Ordinance) to establish a welfare program privately funded by those landlords who happen to have “hardship” tenants.
Of course all economic regulation effects wealth transfer. When excessive rents are forbidden, for example, landlords as a class become poorer and tenants as a class (or at least incumbent tenants as a class) become richer. Singling out landlords to be the transferors may be within our traditional constitutional notions of fairness, because they can plausibly be regarded as the source or the beneficiary of the high-rent problem. Once such a connection is no longer required, however, there is no end to the social transformations that can be accomplished by so-called “regulation,” at great expense to the democratic process.
The politically attractive feature of regulation is not that it permits wealth transfers to be achieved that could not be achieved otherwise; but rather that it permits them to be achieved “off budget,” with relative invisibility and thus relative immunity from normal democratic processes. San Jose might, for example, have accomplished something like the result here by simply raising the real estate tax upon rental properties and using the additional revenues thus acquired to pay part of the rents of “hardship” tenants. It seems to me doubtful, however, whether the citizens of San Jose would allow funds in the municipal treasury, from wherever derived, to be distributed to a family of four with income as high as $32,400 a year – the generous maximum necessary to qualify automatically as a “hardship” tenant under the rental Ordinance.2 The voters might well see other, more pressing, social priorities. And of course what $32,400-a-year renters can acquire through spurious “regulation,” other groups can acquire as well. Once the door is opened it is not unreasonable to expect price regulations requiring private businesses to give special discounts to senior citizens (no matter how affluent), or to students, the handicapped, or war veterans. Subsidies for these groups may well be a good idea, but because of the operation of the Takings Clause our governmental system has required them to be applied, in general, through the process of taxing and spending, where both economic effects and competing priorities are more evident.
That fostering of an intelligent democratic process is one of the happy effects of the constitutional prescription – perhaps accidental, perhaps not. Its essence, however, is simply the unfairness of making one citizen pay, in some fashion other than taxes, to remedy a social problem that is none of his creation. As the Supreme Court of New Jersey said in finding unconstitutional a scheme displaying, among other defects, the same vice I find dispositive here:
A legislative category of economically needy senior citizens is sound, proper and sustainable as a rational classification. But compelled subsidization by landlords or by tenants who happen to live in an apartment building with senior citizens is an improper and unconstitutional method of solving the problem.
Property Owners Assn. v. North Bergen, 74 N.J. 327, 339 (1977).
I would hold that the seventh factor in § 5703.28(c) of the San Jose Ordinance effects a taking of property without just compensation.
- Under § 5703.3, the Ordinance does not apply to rent or rent increases for new rental units first rented after the Ordinance takes effect, § 5703.3(a), to the rental of a unit that has been voluntarily vacated, § 5703.3(b)(1), or to the rental of a unit that is vacant as a result of eviction for certain specified acts, § 5703.3(b)(2).
- Under the San Jose Ordinance, “hardship” tenants include (though are not limited to) those whose “household income and monthly housing expense meets sic the criteria” for assistance under the existing housing provisions of § 8 of the Housing and Community Development Act of 1974, 42 U.S.C. § 1437f (1982 ed. and Supp. III). The United States Department of Housing and Urban Development currently limits assistance under these provisions for families of four in the San Jose area to those who earn $32,400 or less per year. Memorandum from U.S. Dept. of Housing and Urban Development, Assistant Secretary for Housing-Federal Housing Comm’r, Income Limits for Lower Income and Very Low-Income Families Under the Housing Act of 1937 (Jan. 15, 1988).
4.3.1. Ad hoc Takings
Penn Central Transportation Co., v. New York City,
438 U.S. 104 (1978)
Daniel M. Gribbon argued the cause for appellants. With him on the briefs were John R. Bolton and Carl Helmetag, Jr.
Leonard Koerner argued the cause for appellees. With him on the brief were Allen G. Schwartz, L. Kevin Sheridan, and Dorothy Miner.
Assistant Attorney General Wald argued the cause for the United States as amicus curiae urging affirmance. On the brief were Solicitor General McCree, Assistant Attorney General Moorman, Peter R. Steenland, Jr., and Carl Strass.1
Briefs of amici curiae were filed by Evelle J. Younger, Attorney General, E. Clement Shute, Jr., and Robert H. Connett, Assistant Attorneys General, and Richard C. Jacobs, Deputy Attorney General, for the State of California; and by Eugene J. Morris for the Real Estate Board of New York, Inc.
Mr. Justice Brennan delivered the opinion of the Court.
The question presented is whether a city may, as part of a comprehensive program to preserve historic landmarks and historic districts, place restrictions on the development of individual historic landmarks–in addition to those imposed by applicable zoning ordinances–without effecting a “taking” requiring the payment of “just compensation.” Specifically, we must decide whether the application of New York City’s Landmarks Preservation Law to the parcel of land occupied by Grand Central Terminal has “taken” its owners’ property in violation of the Fifth and Fourteenth Amendments.
Over the past 50 years, all 50 States and over 500 municipalities have enacted laws to encourage or require the preservation of buildings and areas with historic or aesthetic importance.2 These nationwide legislative efforts have been precipitated by two concerns. The first is recognition that, in recent years, large numbers of historic structures, landmarks, and areas have been destroyed3 without adequate consideration of either the values represented therein or the possibility of preserving the destroyed properties for use in economically productive ways.4 The second is a widely shared belief that structures with special historic, cultural, or architectural significance enhance the quality of life for all. Not only do these buildings and their workmanship represent the lessons of the past and embody precious features of our heritage, they serve as examples of quality for today. “[H]istoric conservation is but one aspect of the much larger problem, basically an environmental one, of enhancing–or perhaps developing for the first time–the quality of life for people.”5
New York City, responding to similar concerns and acting pursuant to a New York State enabling Act,6 adopted its Landmarks Preservation Law in 1965. See N. Y. C. Admin. Code, ch. 8-A, § 205-1.0 et seq. (1976). The city acted from the conviction that “the standing of [New York City] as a world-wide tourist center and world capital of business, culture and government” would be threatened if legislation were not enacted to protect historic landmarks and neighborhoods from precipitate decisions to destroy or fundamentally alter their character. § 205-1.0 (a). The city believed that comprehensive measures to safeguard desirable features of the existing urban fabric would benefit its citizens in a variety of ways: e. g., fostering “civic pride in the beauty and noble accomplishments of the past”; protecting and enhancing “the city’s attractions to tourists and visitors”; “support[ing] and stimul[ating] business and industry”; “strengthen[ing] the economy of the city”; and promoting “the use of historic districts, landmarks, interior landmarks and scenic landmarks for the education, pleasure and welfare of the people of the city.” § 205-1.0 (b).
The New York City law is typical of many urban landmark laws in that its primary method of achieving its goals is not by acquisitions of historic properties,7 but rather by involving public entities in land-use decisions affecting these properties and providing services, standards, controls, and incentives that will encourage preservation by private owners and users.8 While the law does place special restrictions on landmark properties as a necessary feature to the attainment of its larger objectives, the major theme of the law is to ensure the owners of any such properties both a “reasonable return” on their investments and maximum latitude to use their parcels for purposes not inconsistent with the preservation goals.
This case involves the application of New York City’s Landmarks Preservation Law to Grand Central Terminal (Terminal). The Terminal, which is owned by the Penn Central Transportation Co. and its affiliates (Penn Central), is one of New York City’s most famous buildings. Opened in 1913, it is regarded not only as providing an ingenious engineering solution to the problems presented by urban railroad stations, but also as a magnificent example of the French beaux-arts style.
On August 2, 1967, following a public hearing, the Commission designated the Terminal a “landmark” and designated the “city tax block” it occupies a “landmark site.”9 The Board of Estimate confirmed this action on September 21, 1967. Although appellant Penn Central had opposed the designation before the Commission, it did not seek judicial review of the final designation decision.
On January 22, 1968, appellant Penn Central, to increase its income, entered into a renewable 50-year lease and sublease agreement with appellant UGP Properties, Inc. (UGP), a wholly owned subsidiary of Union General Properties, Ltd., a United Kingdom corporation. Under the terms of the agreement, UGP was to construct a multistory office building above the Terminal. UGP promised to pay Penn Central $1 million annually during construction and at least $3 million annually thereafter. The rentals would be offset in part by a loss of some $700,000 to $1 million in net rentals presently received from concessionaires displaced by the new building.
Appellants UGP and Penn Central then applied to the Commission for permission to construct an office building atop the Terminal. Two separate plans, both designed by architect Marcel Breuer and both apparently satisfying the terms of the applicable zoning ordinance, were submitted to the Commission for approval. The first, Breuer I, provided for the construction of a 55-story office building, to be cantilevered above the existing facade and to rest on the roof of the Terminal. The second, Breuer II Revised,10 called for tearing down a portion of the Terminal that included the 42d Street facade, stripping off some of the remaining features of the Terminal’s facade, and constructing a 53-story office building. The Commission denied a certificate of no exterior effect on September 20, 1968. Appellants then applied for a certificate of “appropriateness” as to both proposals. After four days of hearings at which over 80 witnesses testified, the Commission denied this application as to both proposals.
The Commission’s reasons for rejecting certificates respecting Breuer II Revised are summarized in the following statement: “To protect a Landmark, one does not tear it down. To perpetuate its architectural features, one does not strip them off.” Record 2255. Breuer I, which would have preserved the existing vertical facades of the present structure, received more sympathetic consideration… . . In conclusion, the Commission stated:
“[We have] no fixed rule against making additions to designated buildings–it all depends on how they are done … . But to balance a 55-story office tower above a flamboyant Beaux-Arts facade seems nothing more than an aesthetic joke. Quite simply, the tower would overwhelm the Terminal by its sheer mass. The ‘addition’ would be four times as high as the existing structure and would reduce the Landmark itself to the status of a curiosity.
“Landmarks cannot be divorced from their settings– particularly when the setting is a dramatic and integral part of the original concept. The Terminal, in its setting, is a great example of urban design. Such examples are not so plentiful in New York City that we can afford to lose any of the few we have. And we must preserve them in a meaningful way–with alterations and additions of such character, scale, materials and mass as will protect, enhance and perpetuate the original design rather than overwhelm it.”
Id., at 2251.11
The New York Court of Appeals … summarily rejected any claim that the Landmarks Law had “taken” property without “just compensation,” id., at 329, 366 N. E. 2d, at 1274, indicating that there could be no “taking” since the law had not transferred control of the property to the city, but only restricted appellants’ exploitation of it… . .
The issues presented by appellants are (1) whether the restrictions imposed by New York City’s law upon appellants’ exploitation of the Terminal site effect a “taking” of appellants’ property for a public use within the meaning of the Fifth Amendment, which of course is made applicable to the States through the Fourteenth Amendment, see Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 239 (1897), and, (2), if so, whether the transferable development rights afforded appellants constitute “just compensation” within the meaning of the Fifth Amendment.12 We need only address the question whether a “taking” has occurred.13
Before considering appellants’ specific contentions, it will be useful to review the factors that have shaped the jurisprudence of the Fifth Amendment injunction “nor shall private property be taken for public use, without just compensation.” The question of what constitutes a “taking” for purposes of the Fifth Amendment has proved to be a problem of considerable difficulty. While this Court has recognized that the “Fifth Amendment’s guarantee … [is] designed to bar 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,” Armstrong v. United States, 364 U. S. 40, 49 (1960), this Court, quite simply, has been unable to develop any “set formula” for determining when “justice and fairness” require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons. See Goldblatt v. Hempstead, 369 U. S. 590, 594 (1962). Indeed, we have frequently observed that whether a particular restriction will be rendered invalid by the government’s failure to pay for any losses proximately caused by it depends largely “upon the particular circumstances [in that] case.” United States v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958); see United States v. Caltex, Inc., 344 U. S. 149, 156 (1952).
In engaging in these essentially ad hoc, factual inquiries, the Court’s decisions have identified several factors that have particular significance. The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. See Goldblatt v. Hempstead, supra, at 594. So, too, is the character of the governmental action. A “taking” may more readily be found when the interference with property can be characterized as a physical invasion by government, see, e. g., United States v. Causby, 328 U. S. 256 (1946), than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.
“Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law,” Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 413 (1922), and this Court has accordingly recognized, in a wide variety of contexts, that government may execute laws or programs that adversely affect recognized economic values. Exercises of the taxing power are one obvious example. A second are the decisions in which this Court has dismissed “taking” challenges on the ground that, while the challenged government action caused economic harm, it did not interfere with interests that were sufficiently bound up with the reasonable expectations of the claimant to constitute “property” for Fifth Amendment purposes. See, e. g., United States v. Willow River Power Co., 324 U. S. 499 (1945) (interest in high-water level of river for runoff for tailwaters to maintain power head is not property); United Statesv. Chandler-Dunbar Water Power Co., 229 U. S. 53 (1913) (no property interest can exist in navigable waters); see also Demorest v. City Bank Co., 321 U. S. 36 (1944); Muhlker v. Harlem R. Co., 197 U. S. 544 (1905); Sax, Takings and the Police Power, 74 Yale L. J. 36, 61-62 (1964).
More importantly for the present case, in instances in which a state tribunal reasonably concluded that “the health, safety, morals, or general welfare” would be promoted by prohibiting particular contemplated uses of land, this Court has upheld land-use regulations that destroyed or adversely affected recognized real property interests. See Nectow v. Cambridge, 277 U. S. 183, 188 (1928). Zoning laws are, of course, the classic example, see Euclid v. Ambler Realty Co., 272 U. S. 365 (1926) (prohibition of industrial use); Gorieb v. Fox, 274 U. S. 603, 608 (1927) (requirement that portions of parcels be left unbuilt); Welch v. Swasey, 214 U. S. 91 (1909) (height restriction), which have been viewed as permissible governmental action even when prohibiting the most beneficial use of the property. See Goldblatt v. Hempstead, supra, at 592-593, and cases cited; see also Eastlake v. Forest City Enterprises, Inc., 426 U. S. 668, 674 n. 8 (1976).
Zoning laws generally do not affect existing uses of real property, but “taking” challenges have also been held to be without merit in a wide variety of situations when the challenged governmental actions prohibited a beneficial use to which individual parcels had previously been devoted and thus caused substantial individualized harm. Miller v. Schoene, 276 U. S. 272 (1928), is illustrative. In that case, a state entomologist, acting pursuant to a state statute, ordered the claimants to cut down a large number of ornamental red cedar trees because they produced cedar rust fatal to apple trees cultivated nearby. Although the statute provided for recovery of any expense incurred in removing the cedars, and permitted claimants to use the felled trees, it did not provide compensation for the value of the standing trees or for the resulting decrease in market value of the properties as a whole. A unanimous Court held that this latter omission did not render the statute invalid. The Court held that the State might properly make “a choice between the preservation of one class of property and that of the other” and since the apple industry was important in the State involved, concluded that the State had not exceeded “its constitutional powers by deciding upon the destruction of one class of property [without compensation] in order to save another which, in the judgment of the legislature, is of greater value to the public.” Id., at 279.
Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922), is the leading case for the proposition that a state statute that substantially furthers important public policies may so frustrate distinct investment-backed expectations as to amount to a “taking.” There the claimant had sold the surface rights to particular parcels of property, but expressly reserved the right to remove the coal thereunder. A Pennsylvania statute, enacted after the transactions, forbade any mining of coal that caused the subsidence of any house, unless the house was the property of the owner of the underlying coal and was more than 150 feet from the improved property of another. Because the statute made it commercially impracticable to mine the coal, id., at 414, and thus had nearly the same effect as the complete destruction of rights claimant had reserved from the owners of the surface land, see id., at 414-415, the Court held that the statute was invalid as effecting a “taking” without just compensation. See also Armstrong v. United States, 364 U. S. 40 (1960) (Government’s complete destruction of a materialman’s lien in certain property held a “taking”); Hudson Water Co. v. McCarter, 209 U. S. 349, 355 (1908) (if height restriction makes property wholly useless “the rights of property … prevail over the other public interest” and compensation is required). See generally Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law, 80 Harv. L. Rev. 1165, 1229-1234 (1967).
Finally, government actions that may be characterized as acquisitions of resources to permit or facilitate uniquely public functions have often been held to constitute “takings.” United States v. Causby, 328 U. S. 256 (1946), is illustrative. In holding that direct overflights above the claimant’s land, that destroyed the present use of the land as a chicken farm, constituted a “taking” Causby emphasized that Government had not “merely destroyed property [but was] using a part of it for the flight of its planes.” Id., at 262-263, n. 7. See also Griggs v. Allegheny County, 369 U. S. 84 (1962) (overflights held a taking); Portsmouth Co. v. United States, 260 U. S. 327 (1922) (United States military installations’ repeated firing of guns over claimant’s land is a taking); United States v. Cress, 243 U. S. 316 (1917) (repeated floodings of land caused by water project is a taking); but see YMCA v. United States, 395 U. S. 85 (1969) (damage caused to building when federal officers who were seeking to protect building were attacked by rioters held not a taking). See generally Michelman, supra, at 1226-1229; Sax, Takings and the Police Power, 74 Yale L. J. 36 (1964).
In contending that the New York City law has “taken” their property in violation of the Fifth and Fourteenth Amendments, appellants make a series of arguments, which, while tailored to the facts of this case, essentially urge that any substantial restriction imposed pursuant to a landmark law must be accompanied by just compensation if it is to be constitutional. Before considering these, we emphasize what is not in dispute. Because this Court has recognized, in a number of settings, that States and cities may enact land-use restrictions or controls to enhance the quality of life by preserving the character and desirable aesthetic features of a city, see New Orleans v. Dukes, 427 U. S. 297 (1976); Young v. American Mini Theatres, Inc., 427 U. S. 50 (1976); Village of Belle Terre v. Boraas, 416 U. S. 1, 9-10 (1974); Berman v. Parker, 348 U. S. 26, 33 (1954); Welch v. Swasey, 214 U. S., at 108, appellants do not contest that New York City’s objective of preserving structures and areas with special historic, architectural, or cultural significance is an entirely permissible governmental goal. They also do not dispute that the restrictions imposed on its parcel are appropriate means of securing the purposes of the New York City law. Finally, appellants do not challenge any of the specific factual premises of the decision below. They accept for present purposes both that the parcel of land occupied by Grand Central Terminal must, in its present state, be regarded as capable of earning a reasonable return,14 and that the transferable development rights afforded appellants by virtue of the Terminal’s designation as a landmark are valuable, even if not as valuable as the rights to construct above the Terminal. In appellants’ view none of these factors derogate from their claim that New York City’s law has effected a “taking.”
They first observe that the airspace above the Terminal is a valuable property interest, citing United States v. Causby, supra. They urge that the Landmarks Law has deprived them of any gainful use of their “air rights” above the Terminal and that, irrespective of the value of the remainder of their parcel, the city has “taken” their right to this superjacent airspace, thus entitling them to “just compensation” measured by the fair market value of these air rights.
Apart from our own disagreement with appellants’ characterization of the effect of the New York City law, see infra, at 134-135, the submission that appellants may establish a “taking” simply by showing that they have been denied the ability to exploit a property interest that they heretofore had believed was available for development is quite simply untenable. Were this the rule, this Court would have erred not only in upholding laws restricting the development of air rights, see Welch v. Swasey, supra, but also in approving those prohibiting both the subjacent, see Goldblatt v. Hempstead, 369 U. S. 590 (1962), and the lateral, see Gorieb v. Fox, 274 U. S. 603 (1927), development of particular parcels.15 “Taking” jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a particular governmental action has effected a taking, this Court focuses rather both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole–here, the city tax block designated as the “landmark site.”
Secondly, appellants, focusing on the character and impact of the New York City law, argue that it effects a “taking” because its operation has significantly diminished the value of the Terminal site. Appellants concede that the decisions sustaining other land-use regulations, which, like the New York City law, are reasonably related to the promotion of the general welfare, uniformly reject the proposition that diminution in property value, standing alone, can establish a “taking,” see Euclid v. Ambler Realty Co., 272 U. S. 365 (1926) (75% diminution in value caused by zoning law); Hadacheck v. Sebastian, 239 U. S. 394 (1915) (87 1/2% diminution in value); cf. Eastlake v. Forest City Enterprises, Inc., 426 U. S., at 674 n. 8, and that the “taking” issue in these contexts is resolved by focusing on the uses the regulations permit. See also Goldblatt v. Hempstead, supra. Appellants, moreover, also do not dispute that a showing of diminution in property value would not establish a “taking” if the restriction had been imposed as a result of historic-district legislation, see generally Maher v. New Orleans, 516 F. 2d 1051 (CA5 1975), but appellants argue that New York City’s regulation of individual landmarks is fundamentally different from zoning or from historic-district legislation because the controls imposed by New York City’s law apply only to individuals who own selected properties.
Stated baldly, appellants’ position appears to be that the only means of ensuring that selected owners are not singled out to endure financial hardship for no reason is to hold that any restriction imposed on individual landmarks pursuant to the New York City scheme is a “taking” requiring the payment of “just compensation.” Agreement with this argument would, of course, invalidate not just New York City’s law, but all comparable landmark legislation in the Nation. We find no merit in it.
Next, appellants observe that New York City’s law differs from zoning laws and historic-district ordinances in that the Landmarks Law does not impose identical or similar restrictions on all structures located in particular physical communities. It follows, they argue, that New York City’s law is inherently incapable of producing the fair and equitable distribution of benefits and burdens of governmental action which is characteristic of zoning laws and historic-district legislation and which they maintain is a constitutional requirement if “just compensation” is not to be afforded. It is, of course, true that the Landmarks Law has a more severe impact on some landowners than on others, but that in itself does not mean that the law effects a “taking.” Legislation designed to promote the general welfare commonly burdens some more than others. The owners of the brickyard in Hadacheck, of the cedar trees in Miller v. Schoene, and of the gravel and sand mine in Goldblatt v. Hempstead, were uniquely burdened by the legislation sustained in those cases.16 Similarly, zoning laws often affect some property owners more severely than others but have not been held to be invalid on that account. For example, the property owner in Euclid who wished to use its property for industrial purposes was affected far more severely by the ordinance than its neighbors who wished to use their land for residences.
In any event, appellants’ repeated suggestions that they are solely burdened and unbenefited is factually inaccurate. This contention overlooks the fact that the New York City law applies to vast numbers of structures in the city in addition to the Terminal–all the structures contained in the 31 historic districts and over 400 individual landmarks, many of which are close to the Terminal.17 Unless we are to reject the judgment of the New York City Council that the preservation of landmarks benefits all New York citizens and all structures, both economically and by improving the quality of life in the city as a whole–which we are unwilling to do–we cannot conclude that the owners of the Terminal have in no sense been benefited by the Landmarks Law. Doubtless appellants believe they are more burdened than benefited by the law, but that must have been true, too, of the property owners in Miller, Hadacheck, Euclid, and Goldblatt.18
Appellants’ final broad-based attack would have us treat the law as an instance, like that in United States v. Causby, in which government, acting in an enterprise capacity, has appropriated part of their property for some strictly governmental purpose. Apart from the fact that Causby was a case of invasion of airspace that destroyed the use of the farm beneath and this New York City law has in nowise impaired the present use of the Terminal, the Landmarks Law neither exploits appellants’ parcel for city purposes nor facilitates nor arises from any entrepreneurial operations of the city. The situation is not remotely like that in Causby where the airspace above the property was in the flight pattern for military aircraft. The Landmarks Law’s effect is simply to prohibit appellants or anyone else from occupying portions of the airspace above the Terminal, while permitting appellants to use the remainder of the parcel in a gainful fashion. This is no more an appropriation of property by government for its own uses than is a zoning law prohibiting, for “aesthetic” reasons, two or more adult theaters within a specified area, see Young v. American Mini Theatres, Inc., 427 U. S. 50 (1976), or a safety regulation prohibiting excavations below a certain level. See Goldblatt v. Hempstead.
Rejection of appellants’ broad arguments is not, however, the end of our inquiry, for all we thus far have established is that the New York City law is not rendered invalid by its failure to provide “just compensation” whenever a landmark owner is restricted in the exploitation of property interests, such as air rights, to a greater extent than provided for under applicable zoning laws. We now must consider whether the interference with appellants’ property is of such a magnitude that “there must be an exercise of eminent domain and compensation to sustain [it].” Pennsylvania Coal Co. v. Mahon, 260 U. S., at 413. That inquiry may be narrowed to the question of the severity of the impact of the law on appellants’ parcel, and its resolution in turn requires a careful assessment of the impact of the regulation on the Terminal site.
Unlike the governmental acts in Goldblatt, Miller, Causby, Griggs, and Hadacheck, the New York City law does not interfere in any way with the present uses of the Terminal. Its designation as a landmark not only permits but contemplates that appellants may continue to use the property precisely as it has been used for the past 65 years: as a railroad terminal containing office space and concessions. So the law does not interfere with what must be regarded as Penn Central’s primary expectation concerning the use of the parcel. More importantly, on this record, we must regard the New York City law as permitting Penn Central not only to profit from the Terminal but also to obtain a “reasonable return” on its investment.
Appellants, moreover, exaggerate the effect of the law on their ability to make use of the air rights above the Terminal in two respects.19 First, it simply cannot be maintained, on this record, that appellants have been prohibited from occupying any portion of the airspace above the Terminal. While the Commission’s actions in denying applications to construct an office building in excess of 50 stories above the Terminal may indicate that it will refuse to issue a certificate of appropriateness for any comparably sized structure, nothing the Commission has said or done suggests an intention to prohibit any construction above the Terminal. The Commission’s report emphasized that whether any construction would be allowed depended upon whether the proposed addition “would harmonize in scale, material, and character with [the Terminal].” Record 2251. Since appellants have not sought approval for the construction of a smaller structure, we do not know that appellants will be denied any use of any portion of the airspace above the Terminal.20
Second, to the extent appellants have been denied the right to build above the Terminal, it is not literally accurate to say that they have been denied all use of even those pre-existing air rights. Their ability to use these rights has not been abrogated; they are made transferable to at least eight parcels in the vicinity of the Terminal, one or two of which have been found suitable for the construction of new office buildings. Although appellants and others have argued that New York City’s transferable development-rights program is far from ideal,21 the New York courts here supportably found that, at least in the case of the Terminal, the rights afforded are valuable. While these rights may well not have constituted “just compensation” if a “taking” had occurred, the rights nevertheless undoubtedly mitigate whatever financial burdens the law has imposed on appellants and, for that reason, are to be taken into account in considering the impact of regulation. Cf. Goldblatt v. Hempstead, 369 U. S., at 594 n. 3.
On this record, we conclude that the application of New York City’s Landmarks Law has not effected a “taking” of appellants’ property. The restrictions imposed are substantially related to the promotion of the general welfare and not only permit reasonable beneficial use of the landmark site but also afford appellants opportunities further to enhance not only the Terminal site proper but also other properties.22
- Briefs of amici curiae urging affirmance were filed by David Bonderman and Frank B. Gilbert for the National Trust for Historic Preservation et al.; by Paul S. Byard, Ralph C. Menapace, Jr., Terence H. Benbow, William C. Chanler, Richard H. Pershan, Francis T. P. Plimpton, Whitney North Seymour, and Bethuel M. Webster for the Committee to Save Grand Central Station et al.; and by Louis J. Lefkowitz, Attorney General, Samuel A. Hirshowitz, First Assistant Attorney General, and Philip Weinberg, Assistant Attorney General, for the State of New York.
- See National Trust for Historic Preservation, A Guide to State Historic Preservation Programs (1976); National Trust for Historic Preservation, Directory of Landmark and Historic District Commissions (1976). In addition to these state and municipal legislative efforts, Congress has determined that “the historical and cultural foundations of the Nation should be preserved as a living part of our community life and development in order to give a sense of orientation to the American people,” National Historic Preservation Act of 1966, 80 Stat. 915, 16 U. S. C. § 470 (b) (1976 ed.), and has enacted a series of measures designed to encourage preservation of sites and structures of historic, architectural, or cultural significance. See generally Gray, The Response of Federal Legislation to Historic Preservation, 36 Law & Contemp. Prob. 314 (1971).
- Over one-half of the buildings listed in the Historic American Buildings Survey, begun by the Federal Government in 1933, have been destroyed. See Costonis, The Chicago Plan: Incentive Zoning and the Preservation of Urban Landmarks, 85 Harv. L. Rev. 574, 574 n. 1 (1972), citing Huxtable, Bank’s Building Plan Sets Off Debate on “Progress,” N. Y. Times, Jan. 17, 1971, section 8, p. 1, col. 2.
- See, e. g., N. Y. C. Admin. Code § 205-1.0 (a) (1976).
- Gilbert, Introduction, Precedents for the Future, 36 Law & Contemp. Prob. 311, 312 (1971), quoting address by Robert Stipe, 1971 Conference on Preservation Law, Washington, D. C., May 1, 1971 (unpublished text, pp. 6-7).
- See N. Y. Gen. Mun. Law § 96-a (McKinney 1977). It declares that it is the public policy of the State of New York to preserve structures and areas with special historical or aesthetic interest or value and authorizes local governments to impose reasonable restrictions to perpetuate such structures and areas.
- The consensus is that widespread public ownership of historic properties in urban settings is neither feasible nor wise. Public ownership reduces the tax base, burdens the public budget with costs of acquisitions and maintenance, and results in the preservation of public buildings as museums and similar facilities, rather than as economically productive features of the urban scene. See Wilson & Winkler, The Response of State Legislation to Historic Preservation, 36 Law & Contemp. Prob. 329, 330-331, 339-340 (1971).
- See Costonis, supra n. 2, at 580-581; Wilson & Winkler, supra n. 6; Rankin, Operation and Interpretation of the New York City Landmark Preservation Law, 36 Law & Contemp. Prob. 366 (1971).
- The Commission’s report stated:
“Grand Central Station, one of the great buildings of America, evokes a spirit that is unique in this City. It combines distinguished architecture with a brilliant engineering solution, wedded to one of the most fabulous railroad terminals of our time. Monumental in scale, this great building functions as well today as it did when built. In style, it represents the best of the French Beaux Arts.” Record 2240.
- Appellants also submitted a plan, denominated Breuer II, to the Commission. However, because appellants learned that Breuer II would have violated existing easements, they substituted Breuer II Revised for Breuer II, and the Commission evaluated the appropriateness only of Breuer II Revised.
- In discussing Breuer I, the Commission also referred to a number of instances in which it had approved additions to landmarks: “The office and reception wing added to Gracie Mansion and the school and church house added to the 12th Street side of the First Presbyterian Church are examples that harmonize in scale, material and character with the structures they adjoin. The new Watch Tower Bible and Tract Society building on Brooklyn Heights, though completely modern in idiom, respects the qualities of its surroundings and will enhance the Brooklyn Heights Historic District, as Butterfield House enhances West 12th Street, and Breuer’s own Whitney Museum its Madison Avenue locale.” Record 2251.
- Our statement of the issues is a distillation of four questions presented in the jurisdictional statement:
“Does the social and cultural desirability of preserving historical landmarks through government regulation derogate from the constitutional requirement that just compensation be paid for private property taken for public use?
“Is Penn Central entitled to no compensation for that large but unmeasurable portion of the value of its rights to construct an office building over the Grand Central Terminal that is said to have been created by the efforts of ‘society as an organized entity’?
“Does a finding that Penn Central has failed to establish that there is no possibility, without exercising its development rights, of earning a reasonable return on all of its remaining properties that benefit in any way from the operations of the Grand Central Terminal warrant the conclusion that no compensation need be paid for the taking of those rights?
“Does the possibility accorded to Penn Central, under the landmark-preservation regulation, of realizing some value at some time by transferring the Terminal development rights to other buildings, under a procedure that is conceded to be defective, severely limited, procedurally complex and speculative, and that requires ultimate discretionary approval by governmental authorities, meet the constitutional requirements of just compensation as applied to landmarks?” Jurisdictional Statement 3-4.
The first and fourth questions assume that there has been a taking and raise the problem whether, under the circumstances of this case, the transferable development rights constitute “just compensation.” The second and third questions, on the other hand, are directed to the issue whether a taking has occurred.
- As is implicit in our opinion, we do not embrace the proposition that a “taking” can never occur unless government has transferred physical control over a portion of a parcel.
- Both the Jurisdictional Statement 7-8, n. 7, and Brief for Appellants 8 n. 7 state that appellants are not seeking review of the New York courts’ determination that Penn Central could earn a “reasonable return” on its investment in the Terminal. Although appellants suggest in their reply brief that the factual conclusions of the New York courts cannot be sustained unless we accept the rationale of the New York Court of Appeals, see Reply Brief for Appellants 12 n. 15, it is apparent that the findings concerning Penn Central’s ability to profit from the Terminal depend in no way on the Court of Appeals’ rationale.
- These cases dispose of any contention that might be based on Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922), that full use of air rights is so bound up with the investment-backed expectations of appellants that governmental deprivation of these rights invariably–i. e., irrespective of the impact of the restriction on the value of the parcel as a whole–constitutes a “taking.” Similarly, Welch, Goldblatt, and Gorieb illustrate the fallacy of appellants’ related contention that a “taking” must be found to have occurred whenever the land-use restriction may be characterized as imposing a “servitude” on the claimant’s parcel.
- Appellants attempt to distinguish these cases on the ground that, in each, government was prohibiting a “noxious” use of land and that in the present case, in contrast, appellants’ proposed construction above the Terminal would be beneficial. We observe that the uses in issue in Hadacheck, Miller, and Goldblatt were perfectly lawful in themselves. They involved no “blameworthiness, … moral wrongdoing or conscious act of dangerous risk-taking which induce[d society] to shift the cost to a pa[rt]icular individual.” Sax, Takings and the Police Power, 74 Yale L. J. 36, 50 (1964). These cases are better understood as resting not on any supposed “noxious” quality of the prohibited uses but rather on the ground that the restrictions were reasonably related to the implementation of a policy–not unlike historic preservation–expected to produce a widespread public benefit and applicable to all similarly situated property.
Nor, correlatively, can it be asserted that the destruction or fundamental alteration of a historic landmark is not harmful. The suggestion that the beneficial quality of appellants’ proposed construction is established by the fact that the construction would have been consistent with applicable zoning laws ignores the development in sensibilities and ideals reflected in landmark legislation like New York City’s. Cf. West Bros. Brick Co. v. Alexandria, 169 Va. 271, 282-283, 192 S. E. 881, 885-886, appeal dismissed for want of a substantial federal question, 302 U. S. 658 (1937).
- There are some 53 designated landmarks and 5 historic districts or scenic landmarks in Manhattan between 14th and 59th Streets. See Landmarks Preservation Commission, Landmarks and Historic Districts (1977).
- It is, of course, true that the fact the duties imposed by zoning and historic-district legislation apply throughout particular physical communities provides assurances against arbitrariness, but the applicability of the Landmarks Law to a large number of parcels in the city, in our view, provides comparable, if not identical, assurances.
- Appellants, of course, argue at length that the transferable development rights, while valuable, do not constitute “just compensation.” Brief for Appellants 36-43.
- Counsel for appellants admitted at oral argument that the Commission has not suggested that it would not, for example, approve a 20-story office tower along the lines of that which was part of the original plan for the Terminal. See Tr. of Oral Arg. 19.
- See Costonis, supra n. 2, at 585-589.
- We emphasize that our holding today is on the present record, which in turn is based on Penn Central’s present ability to use the Terminal for its intended purposes and in a gainful fashion. The city conceded at oral argument that if appellants can demonstrate at some point in the future that circumstances have so changed that the Terminal ceases to be “economically viable,” appellants may obtain relief. See Tr. of Oral Arg. 42-43.
4.3.2. Per se Takings
Lucas v. South Carolina Coastal,
505 U.S. 1003 (1992)
A. Camden Lewis argued the cause for petitioner. With him on the briefs were Gerald M. Finkel and David J. Bederman.
C. C. Harness III argued the cause for respondent. With him on the brief were T. Travis Medlock, Attorney General of South Carolina, Kenneth P. Woodington, Senior Assistant Attorney General, and Richard J. Lazarus.
Justice Scalia, delivered the opinion of the Court.
In 1986, petitioner David H. Lucas paid $975,000 for two residential lots on the Isle of Palms in Charleston County, South Carolina, on which he intended to build single-family homes. In 1988, however, the South Carolina Legislature enacted the Beachfront Management Act, S. C. Code Ann. § 48-39-250 et seq. (Supp. 1990), which had the direct effect of barring petitioner from erecting any permanent habitable structures on his two parcels. See § 48-39-290(A). A state trial court found that this prohibition rendered Lucas’s parcels “valueless.” App. to Pet. for Cert. 37. This case requires us to decide whether the Act’s dramatic effect on the economic value of Lucas’s lots accomplished a taking of private property under the Fifth and Fourteenth Amendments requiring the payment of “just compensation.” U. S. Const., Amdt. 5.
South Carolina’s expressed interest in intensively managing development activities in the so-called “coastal zone” dates from 1977 when, in the aftermath of Congress’s passage of the federal Coastal Zone Management Act of 1972, 86 Stat. 1280, as amended, 16 U. S. C. § 1451 et seq., the legislature enacted a Coastal Zone Management Act of its own. See S. C. Code Ann. § 48-39-10 et seq. (1987). In its original form, the South Carolina Act required owners of coastal zone land that qualified as a “critical area” (defined in the legislation to include beaches and immediately adjacent sand dunes, § 48-39-10(J)) to obtain a permit from the newly created South Carolina Coastal Council (Council) (respondent here) prior to committing the land to a “use other than the use the critical area was devoted to on [September 28, 1977].” § 48-39-130(A).
In the late 1970’s, Lucas and others began extensive residential development of the Isle of Palms, a barrier island situated eastward of the city of Charleston. Toward the close of the development cycle for one residential subdivision known as “Beachwood East,” Lucas in 1986 purchased the two lots at issue in this litigation for his own account. No portion of the lots, which were located approximately 300 feet from the beach, qualified as a “critical area” under the 1977 Act; accordingly, at the time Lucas acquired these parcels, he was not legally obliged to obtain a permit from the Council in advance of any development activity. His intention with respect to the lots was to do what the owners of the immediately adjacent parcels had already done: erect singlefamily residences. He commissioned architectural drawings for this purpose.
The Beachfront Management Act brought Lucas’s plans to an abrupt end. Under that 1988 legislation, the Council was directed to establish a “baseline” connecting the landwardmost “point[s] of erosion … during the past forty years” in the region of the Isle of Palms that includes Lucas’s lots. S. C. Code Ann. § 48-39-280(A)(2) (Supp. 1988).1 In action not challenged here, the Council fixed this baseline landward of Lucas’s parcels. That was significant, for under the Act construction of occupable improvements2 was flatly prohibited seaward of a line drawn 20 feet landward of, and parallel to, the baseline. § 48-39-290(A). The Act provided no exceptions.
Lucas promptly filed suit in the South Carolina Court of Common Pleas, contending that the Beachfront Management Act’s construction bar effected a taking of his property without just compensation. Lucas did not take issue with the validity of the Act as a lawful exercise of South Carolina’s police power, but contended that the Act’s complete extinguishment of his property’s value entitled him to compensation regardless of whether the legislature had acted in furtherance of legitimate police power objectives. Following a bench trial, the court agreed. Among its factual determinations was the finding that “at the time Lucas purchased the two lots, both were zoned for single-family residential construction and … there were no restrictions imposed upon such use of the property by either the State of South Carolina, the County of Charleston, or the Town of the Isle of Palms.” App. to Pet. for Cert. 36. The trial court further found that the Beachfront Management Act decreed a permanent ban on construction insofar as Lucas’s lots were concerned, and that this prohibition “deprive[d] Lucas of any reasonable economic use of the lots, … eliminated the unrestricted right of use, and render[ed] them valueless.” Id., at 37. The court thus concluded that Lucas’s properties had been “taken” by operation of the Act, and it ordered respondent to pay “just compensation” in the amount of $1,232,387.50. Id., at 40.
The Supreme Court of South Carolina reversed. It found dispositive what it described as Lucas’s concession “that the Beachfront Management Act [was] properly and validly designed to preserve … South Carolina’s beaches.” 304 S. C. 376, 379, 404 S. E. 2d 895, 896 (1991). Failing an attack on the validity of the statute as such, the court believed itself bound to accept the “uncontested … findings” of the South Carolina Legislature that new construction in the coastal zone–such as petitioner intended–threatened this public resource. Id., at 383, 404 S. E. 2d, at 898. The court ruled that when a regulation respecting the use of property is designed “to prevent serious public harm,” id., at 383, 404 S. E. 2d, at 899 (citing, inter alia, Mugler v. Kansas, 123 U. S. 623 (1887)), no compensation is owing under the Takings Clause regardless of the regulation’s effect on the property’s value.
Two justices dissented. They acknowledged that our Mugler line of cases recognizes governmental power to prohibit “noxious” uses of property–i. e., uses of property akin to “public nuisances”–without having to pay compensation. But they would not have characterized the Beachfront Management Act’s ”primary purpose [as] the prevention of a nuisance.” 304 S. C., at 395, 404 S. E. 2d, at 906 (Harwell, J., dissenting). To the dissenters, the chief purposes of the legislation, among them the promotion of tourism and the creation of a “habitat for indigenous flora and fauna,” could not fairly be compared to nuisance abatement. Id., at 396, 404 S. E. 2d, at 906. As a consequence, they would have affirmed the trial court’s conclusion that the Act’s obliteration of the value of petitioner’s lots accomplished a taking.
We granted certiorari. 502 U. S. 966 (1991).
Prior to Justice Holmes’s exposition in Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922), it was generally thought that the Takings Clause reached only a “direct appropriation” of property, Legal Tender Cases, 12 Wall. 457, 551 (1871), or the functional equivalent of a “practical ouster of [the owner’s] possession,” Transportation Co. v. Chicago, 99 U. S. 635, 642 (1879). See also Gibson v. United States, 166 U. S. 269, 275-276 (1897). Justice Holmes recognized in Mahon, however, that if the protection against physical appropriations of private property was to be meaningfully enforced, the government’s power to redefine the range of interests included in the ownership of property was necessarily constrained by constitutional limits. 260 U. S., at 414-415. If, instead, the uses of private property were subject to unbridled, uncompensated qualification under the police power, “the natural tendency of human nature [would be] to extend the qualification more and more until at last private property disappear[ed].” Id., at 415. These considerations gave birth in that case to the oft-cited maxim that, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” Ibid.
Nevertheless, our decision in Mahon offered little insight into when, and under what circumstances, a given regulation would be seen as going “too far” for purposes of the Fifth Amendment. In 70-odd years of succeeding “regulatory takings” jurisprudence, we have generally eschewed any “‘set formula’ ” for determining how far is too far, preferring to “engag[e] in … essentially ad hoc, factual inquiries.” Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978) (quoting Goldblatt v. Hempstead, 369 U. S. 590, 594 (1962)). See Epstein, Takings: Descent and Resurrection, 1987 S. Ct. Rev. 1, 4. We have, however, described at least two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint. The first encompasses regulations that compel the property owner to suffer a physical “invasion” of his property. In general (at least with regard to permanent invasions), no matter how minute the intrusion, and no matter how weighty the public purpose behind it, we have required compensation. For example, in Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 (1982), we determined that New York’s law requiring landlords to allow television cable companies to emplace cable facilities in their apartment buildings constituted a taking, id., at 435-440, even though the facilities occupied at most only 1 12 cubic feet of the landlords’ property, see id., at 438, n. 16. See also United States v. Causby, 328 U. S. 256, 265, and n. 10 (1946) (physical invasions of airspace); cf. Kaiser Aetna v. United States, 444 U. S. 164 (1979) (imposition of navigational servitude upon private marina).
The second situation in which we have found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land. See Agins, 447 U. S., at 260; see also Nollan v. California Coastal Comm’n, 483 U. S. 825, 834 (1987); Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 495 (1987); Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S. 264, 295-296 (1981).3 As we have said on numerous occasions, the Fifth Amendment is violated when land-use regulation “does not substantially advance legitimate state interests or denies an owner economically viable use of his land. ” Agins, supra, at 260 (citations omitted) (emphasis added).4
We have never set forth the justification for this rule. Perhaps it is simply, as Justice Brennan suggested, that total deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation. See San Diego Gas & Electric Co. v. San Diego, 450 U. S., at 652 (dissenting opinion). “[F]or what is the land but the profits thereof[?]” 1 E. Coke, Institutes, ch. 1, § 1 (1st Am. ed. 1812). Surely, at least, in the extraordinary circumstance when no productive or economically beneficial use of land is permitted, it is less realistic to indulge our usual assumption that the legislature is simply “adjusting the benefits and burdens of economic life,” Penn Central Transportation Co., 438 U. S., at 124, in a manner that secures an “average reciprocity of advantage” to everyone concerned, Pennsylvania Coal Co. v. Mahon, 260 U. S., at 415. And the functional basis for permitting the government, by regulation, to affect property values without compensation–that “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law,” id., at 413–does not apply to the relatively rare situations where the government has deprived a landowner of all economically beneficial uses.
On the other side of the balance, affirmatively supporting a compensation requirement, is the fact that regulations that leave the owner of land without economically beneficial or productive options for its use–typically, as here, by requiring land to be left substantially in its natural state–carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm. See, e. g., Annicelli v. South Kingstown, 463 A. 2d 133, 140-141 (R. I. 1983) (prohibition on construction adjacent to beach justified on twin grounds of safety and “conservation of open space”); Morris County Land Improvement Co. v. Parsippany-Troy Hills Township, 40 N. J.539, 552-553, 193 A. 2d 232, 240 (1963) (prohibition on filling marshlands imposed in order to preserve region as water detention basin and create wildlife refuge). As Justice Brennan explained: “From the government’s point of view, the benefits flowing to the public from preservation of open space through regulation may be equally great as from creating a wildlife refuge through formal condemnation or increasing electricity production through a dam project that floods private property.” San Diego Gas & Elec. Co., supra, at 652 (dissenting opinion). The many statutes on the books, both state and federal, that provide for the use of eminent domain to impose servitudes on private scenic lands preventing developmental uses, or to acquire such lands altogether, suggest the practical equivalence in this setting of negative regulation and appropriation. See, e. g., 16 U. S. C. § 410ff-1(a) (authorizing acquisition of “lands, waters, or interests [within Channel Islands National Park] (including but not limited to scenic easements)”); § 460aa-2(a) (authorizing acquisition of “any lands, or lesser interests therein, including mineral interests and scenic easements” within Sawtooth National Recreation Area); §§ 3921-3923 (authorizing acquisition of wetlands); N. C. Gen. Stat. § 113A-38 (1990) (authorizing acquisition of, inter alia, “‘scenic easements’ ” within the North Carolina natural and scenic rivers system); Tenn. Code Ann. §§ 11-15-101 to XX-XX-XXX (1987) (authorizing acquisition of “protective easements” and other rights in real property adjacent to State’s historic, architectural, archaeological, or cultural resources).
We think, in short, that there are good reasons for our frequently expressed belief that when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.5
The trial court found Lucas’s two beachfront lots to have been rendered valueless by respondent’s enforcement of the coastal-zone construction ban.6 Under Lucas’s theory of the case, which rested upon our “no economically viable use” statements, that finding entitled him to compensation. Lucas believed it unnecessary to take issue with either the purposes behind the Beachfront Management Act, or the means chosen by the South Carolina Legislature to effectuate those purposes. The South Carolina Supreme Court, however, thought otherwise. In its view, the Beachfront Management Act was no ordinary enactment, but involved an exercise of South Carolina’s “police powers” to mitigate the harm to the public interest that petitioner’s use of his land might occasion. 304 S. C., at 384, 404 S. E. 2d, at 899. By neglecting to dispute the findings enumerated in the Act7 or otherwise to challenge the legislature’s purposes, petitioner “concede[d] that the beach/dune area of South Carolina’s shores is an extremely valuable public resource; that the erection of new construction, inter alia, contributes to the erosion and destruction of this public resource; and that discouraging new construction in close proximity to the beach/dune area is necessary to prevent a great public harm.” Id., at 382-383, 404 S. E. 2d, at 898. In the court’s view, these concessions brought petitioner’s challenge within a long line of this Court’s cases sustaining against Due Process and Takings Clause challenges the State’s use of its “police powers” to enjoin a property owner from activities akin to public nuisances. See Mugler v. Kansas, 123 U. S. 623 (1887) (law prohibiting manufacture of alcoholic beverages); Hadacheck v. Sebastian, 239 U. S. 394 (1915) (law barring operation of brick mill in residential area); Miller v. Schoene, 276 U. S. 272 (1928) (order to destroy diseased cedar trees to prevent infection of nearby orchards); Goldblatt v. Hempstead, 369 U. S. 590 (1962) (law effectively preventing continued operation of quarry in residential area).
It is correct that many of our prior opinions have suggested that “harmful or noxious uses” of property may be proscribed by government regulation without the requirement of compensation. For a number of reasons, however, we think the South Carolina Supreme Court was too quick to conclude that that principle decides the present case. The “harmful or noxious uses” principle was the Court’s early attempt to describe in theoretical terms why government may, consistent with the Takings Clause, affect property values by regulation without incurring an obligation to compensate–a reality we nowadays acknowledge explicitly with respect to the full scope of the State’s police power. See, e. g., Penn Central Transportation Co., 438 U. S., at 125 (where State “reasonably conclude[s] that ‘the health, safety, morals, or general welfare’ would be promoted by prohibiting particular contemplated uses of land,” compensation need not accompany prohibition); see also Nollan v. California Coastal Comm’n, 483 U. S., at 834-835 (“Our cases have not elaborated on the standards for determining what constitutes a ‘legitimate state interest[,]’ [but] [t]hey have made clear … that a broad range of governmental purposes and regulations satisfy these requirements”). We made this very point in Penn Central Transportation Co., where, in the course of sustaining New York City’s landmarks preservation program against a takings challenge, we rejected the petitioner’s suggestion that Mugler and the cases following it were premised on, and thus limited by, some objective conception of “noxiousness”:
“[T]he uses in issue in Hadacheck, Miller, and Goldblatt were perfectly lawful in themselves. They involved no ‘blameworthiness, … moral wrongdoing or conscious act of dangerous risk-taking which induce[d society] to shift the cost to a pa[rt]icular individual.’ Sax, Takings and the Police Power, 74 Yale L. J. 36, 50 (1964). These cases are better understood as resting not on any supposed ‘noxious’ quality of the prohibited uses but rather on the ground that the restrictions were reasonably related to the implementation of a policy–not unlike historic preservation–expected to produce a widespread public benefit and applicable to all similarly situated property.” 438 U. S., at 133-134, n. 30.
“Harmful or noxious use” analysis was, in other words, simply the progenitor of our more contemporary statements that “land-use regulation does not effect a taking if it ‘substantially advance[s] legitimate state interests’ . .. .” Nollan, supra, at 834 (quoting Agins v. Tiburon, 447 U. S., at 260); see also Penn Central Transportation Co., supra, at 127; Euclid v. Ambler Realty Co., 272 U. S. 365, 387-388 (1926).
The transition from our early focus on control of “noxious” uses to our contemporary understanding of the broad realm within which government may regulate without compensation was an easy one, since the distinction between “harmpreventing” and “benefit-conferring” regulation is often in the eye of the beholder. It is quite possible, for example, to describe in either fashion the ecological, economic, and esthetic concerns that inspired the South Carolina Legislature in the present case. One could say that imposing a servitude on Lucas’s land is necessary in order to prevent his use of it from “harming” South Carolina’s ecological resources; or, instead, in order to achieve the “benefits” of an ecological preserve.8 Compare, e. g., Claridge v. New Hampshire Wetlands Board, 125 N. H. 745, 752, 485 A. 2d 287, 292 (1984) (owner may, without compensation, be barred from filling wetlands because landfilling would deprive adjacent coastal habitats and marine fisheries of ecological support), with, e. g., Bartlett v. Zoning Comm’n of Old Lyme, 161 Conn. 24, 30, 282 A. 2d 907, 910 (1971) (owner barred from filling tidal marshland must be compensated, despite municipality’s “laudable” goal of “preserv[ing] marshlands from encroachment or destruction”). Whether one or the other of the competing characterizations will come to one’s lips in a particular case depends primarily upon one’s evaluation of the worth of competing uses of real estate. See Restatement (Second) of Torts § 822, Comment g, p. 112 (1979) (“Practically all human activities unless carried on in a wilderness interfere to some extent with others or involve some risk of interference”). A given restraint will be seen as mitigating “harm” to the adjacent parcels or securing a “benefit” for them, depending upon the observer’s evaluation of the relative importance of the use that the restraint favors. See Sax, Takings and the Police Power, 74 Yale L. J. 36, 49 (1964) (“[T]he problem [in this area] is not one of noxiousness or harm-creating activity at all; rather it is a problem of inconsistency between perfectly innocent and independently desirable uses”). Whether Lucas’s construction of singlefamily residences on his parcels should be described as bringing “harm” to South Carolina’s adjacent ecological resources thus depends principally upon whether the describer believes that the State’s use interest in nurturing those resources is so important that any competing adjacent use must yield.9
When it is understood that “prevention of harmful use” was merely our early formulation of the police power justification necessary to sustain (without compensation) any regulatory diminution in value; and that the distinction between regulation that “prevents harmful use” and that which “confers benefits” is difficult, if not impossible, to discern on an objective, value-free basis; it becomes self-evident that noxious-use logic cannot serve as a touchstone to distinguish regulatory “takings” – which require compensation – from regulatory deprivations that do not require compensation. A fortiori the legislature’s recitation of a noxious-use justification cannot be the basis for departing from our categorical rule that total regulatory takings must be compensated. If it were, departure would virtually always be allowed. The South Carolina Supreme Court’s approach would essentially nullify Mahon ‘s affirmation of limits to the noncompensable exercise of the police power. Our cases provide no support for this: None of them that employed the logic of “harmful use” prevention to sustain a regulation involved an allegation that the regulation wholly eliminated the value of the claimant’s land. See Keystone Bituminous Coal Assn., 480 U. S., at 513-514 (Rehnquist, C. J., dissenting).10
Where the State seeks to sustain regulation that deprives land of all economically beneficial use, we think it may resist compensation only if the logically antecedent inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with.11 This accords, we think, with our “takings” jurisprudence, which has traditionally been guided by the understandings of our citizens regarding the content of, and the State’s power over, the “bundle of rights” that they acquire when they obtain title to property. It seems to us that the property owner necessarily expects the uses of his property to be restricted, from time to time, by various measures newly enacted by the State in legitimate exercise of its police powers; “[a]s long recognized, some values are enjoyed under an implied limitation and must yield to the police power.” Pennsylvania Coal Co. v. Mahon, 260 U. S., at 413. And in the case of personal property, by reason of the State’s traditionally high degree of control over commercial dealings, he ought to be aware of the possibility that new regulation might even render his property economically worthless (at least if the property’s only economically productive use is sale or manufacture for sale). See Andrus v. Allard, 444 U. S. 51, 66-67 (1979) (prohibition on sale of eagle feathers). In the case of land, however, we think the notion pressed by the Council that title is somehow held subject to the “implied limitation” that the State may subsequently eliminate all economically valuable use is inconsistent with the historical compact recorded in the Takings Clause that has become part of our constitutional culture.12
Where “permanent physical occupation” of land is concerned, we have refused to allow the government to decree it anew (without compensation), no matter how weighty the asserted “public interests” involved, Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S., at 426 – though we assuredly would permit the government to assert a permanent easement that was a pre-existing limitation upon the landowner’s title. Compare Scranton v. Wheeler, 179 U. S. 141, 163 (1900) (interests of “riparian owner in the submerged lands … bordering on a public navigable water” held subject to Government’s navigational servitude), with Kaiser Aetna v. United States, 444 U. S., at 178-180 (imposition of navigational servitude on marina created and rendered navigable at private expense held to constitute a taking). We believe similar treatment must be accorded confiscatory regulations, i. e., regulations that prohibit all economically beneficial use of land: Any limitation so severe cannot be newly legislated or decreed (without compensation), but must inhere in the title itself, in the restrictions that background principles of the State’s law of property and nuisance already place upon land ownership. A law or decree with such an effect must, in other words, do no more than duplicate the result that could have been achieved in the courts – by adjacent landowners (or other uniquely affected persons) under the State’s law of private nuisance, or by the State under its complementary power to abate nuisances that affect the public generally, or otherwise.13
On this analysis, the owner of a lake bed, for example, would not be entitled to compensation when he is denied the requisite permit to engage in a land filling operation that would have the effect of flooding others’ land. Nor the corporate owner of a nuclear generating plant, when it is directed to remove all improvements from its land upon discovery that the plant sits astride an earthquake fault. Such regulatory action may well have the effect of eliminating the land’s only economically productive use, but it does not proscribe a productive use that was previously permissible under relevant property and nuisance principles. The use of these properties for what are now expressly prohibited purposes was always unlawful, and (subject to other constitutional limitations) it was open to the State at any point to make the implication of those background principles of nuisance and property law explicit. See Michelman, Property, Utility, and Fairness, Comments on the Ethical Foundations of “Just Compensation” Law, 80 Harv. L. Rev. 1165, 1239 – 1241 (1967). In light of our traditional resort to “existing rules or understandings that stem from an independent source such as state law” to define the range of interests that qualify for protection as “property” under the Fifth and Fourteenth Amendments, Board of Regents of State Colleges v. Roth, 408 U. S. 564, 577 (1972); see, e. g., Ruckelshaus v. Monsanto Co., 467 U. S. 986, 1011-1012 (1984); Hughes v. Washington, 389 U. S. 290, 295 (1967) (Stewart, J., concurring), this recognition that the Takings Clause does not require compensation when an owner is barred from putting land to a use that is proscribed by those “existing rules or understandings” is surely unexceptional. When, however, a regulation that declares “off-limits” all economically productive or beneficial uses of land goes beyond what the relevant background principles would dictate, compensation must be paid to sustain it.14
The “total taking” inquiry we require today will ordinarily entail (as the application of state nuisance law ordinarily entails) analysis of, among other things, the degree of harm to public lands and resources, or adjacent private property, posed by the claimant’s proposed activities, see, e. g., Restatement (Second) of Torts §§ 826, 827, the social value of the claimant’s activities and their suitability to the locality in question, see, e. g., id., §§ 828(a) and (b), 831, and the relative ease with which the alleged harm can be avoided through measures taken by the claimant and the government (or adjacent private landowners) alike, see, e. g., id., §§ 827(e), 828(c), 830. The fact that a particular use has long been engaged in by similarly situated owners ordinarily imports a lack of any common-law prohibition (though changed circumstances or new knowledge may make what was previously permissible no longer so, see id., § 827, Comment g. So also does the fact that other landowners, similarly situated, are permitted to continue the use denied to the claimant.
It seems unlikely that common-law principles would have prevented the erection of any habitable or productive improvements on petitioner’s land; they rarely support prohibition of the “essential use” of land, Curtin v. Benson, 222 U. S. 78, 86 (1911). The question, however, is one of state law to be dealt with on remand. We emphasize that to win its case South Carolina must do more than proffer the legislature’s declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common-law maxim such as sic utere tuo ut alienum non laedas. As we have said, a “State, by ipse dixit, may not transform private property into public property without compensation … .” Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U. S. 155, 164 (1980). Instead, as it would be required to do if it sought to restrain Lucas in a commonlaw action for public nuisance, South Carolina must identify background principles of nuisance and property law that prohibit the uses he now intends in the circumstances in which the property is presently found. Only on this showing can the State fairly claim that, in proscribing all such beneficial uses, the Beach front Management Act is taking nothing.15
* * *
The judgment is reversed, and the case is remanded for proceedings not inconsistent with this opinion.
Justice Kennedy, concurring in the judgment.
The case comes to the Court in an unusual posture, as all my colleagues observe. Ante, at 1010-1011; post, at 1041 (Blackmun, J., dissenting); post, at 1061-1062 (Stevens, J., dissenting); post, at 1076-1077 (statement of Souter, J.). After the suit was initiated but before it reached us, South Carolina amended its Beach front Management Act to authorize the issuance of special permits at variance with the Act’s general limitations. See S. C. Code Ann. § 48-39-290(D)(1) (Supp. 1991). Petitioner has not applied for a special permit but may still do so. The availability of this alternative, if it can be invoked, may dispose of petitioner’s claim of a permanent taking. As I read the Court’s opinion, it does not decide the permanent taking claim, but neither does it foreclose the Supreme Court of South Carolina from considering the claim or requiring petitioner to pursue an administrative alternative not previously available.
The potential for future relief does not control our disposition, because whatever may occur in the future cannot undo what has occurred in the past. The Beach front Management Act was enacted in 1988. S. C. Code Ann. § 48-39-250 et seq. (Supp. 1990). It may have deprived petitioner of the use of his land in an interim period. § 48-39-290(A). If this deprivation amounts to a taking, its limited duration will not bar constitutional relief. It is well established that temporary takings are as protected by the Constitution as are permanent ones. First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304, 318 (1987).
The issues presented in the case are ready for our decision. The Supreme Court of South Carolina decided the case on constitutional grounds, and its rulings are now before us. There exists no jurisdictional bar to our disposition, and prudential considerations ought not to militate against it. The State cannot complain of the manner in which the issues arose. Any uncertainty in this regard is attributable to the State, as a consequence of its amendment to the Beach front Management Act. If the Takings Clause is to protect against temporary deprivations, as well as permanent ones, its enforcement must not be frustrated by a shifting background of state law.
Although we establish a framework for remand, moreover, we do not decide the ultimate question whether a temporary taking has occurred in this case. The facts necessary to the determination have not been developed in the record. Among the matters to be considered on remand must be whether petitioner had the intent and capacity to develop the property and failed to do so in the interim period because the State prevented him. Any failure by petitioner to comply with relevant administrative requirements will be part of that analysis.
The South Carolina Court of Common Pleas found that petitioner’s real property has been rendered valueless by the State’s regulation. App. to Pet. for Cert. 37. The finding appears to presume that the property has no significant market value or resale potential. This is a curious finding, and I share the reservations of some of my colleagues about a finding that a beach front lot loses all value because of a development restriction. Post, at 1043-1045 (Blackmun, J., dissenting); post, at 1065, n. 3 (Stevens, J., dissenting); post, at 1076 (statement of Souter, J.). While the Supreme Court of South Carolina on remand need not consider the case subject to this constraint, we must accept the finding as entered below. See Oklahoma City v. Tuttle, 471 U. S. 808, 816 (1985). Accepting the finding as entered, it follows that petitioner is entitled to invoke the line of cases discussing regulations that deprive real property of all economic value. See Agins v. City of Tiburon, 447 U. S. 255, 260 (1980).
The finding of no value must be considered under the Takings Clause by reference to the owner’s reasonable, investment-backed expectations. Kaiser Aetna v. United States, 444 U. S. 164, 175 (1979); Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978); see also W. B. Worthen Co. v. Kavanaugh, 295 U. S. 56 (1935). The Takings Clause, while conferring substantial protection on property owners, does not eliminate the police power of the State to enact limitations on the use of their property.Mugler v. Kansas, 123 U. S. 623, 669 (1887). The rights conferred by the Takings Clause and the police power of the State may coexist without conflict. Property is bought and sold, investments are made, subject to the State’s power to regulate. Where a taking is alleged from regulations which deprive the property of all value, the test must be whether the deprivation is contrary to reasonable, investmentbacked expectations.
There is an inherent tendency towards circularity in this synthesis, of course; for if the owner’s reasonable expectations are shaped by what courts allow as a proper exercise of governmental authority, property tends to become what courts say it is. Some circularity must be tolerated in these matters, however, as it is in other spheres. E. g., Katz v. United States, 389 U. S. 347 (1967) (Fourth Amendment protections defined by reasonable expectations of privacy). The definition, moreover, is not circular in its entirety. The expectations protected by the Constitution are based on objective rules and customs that can be understood as reasonable by all parties involved.
In my view, reasonable expectations must be understood in light of the whole of our legal tradition. The common law of nuisance is too narrow a confine for the exercise of regulatory power in a complex and interdependent society. Goldblatt v. Hempstead, 369 U. S. 590, 593 (1962). The State should not be prevented from enacting new regulatory initiatives in response to changing conditions, and courts must consider all reasonable expectations whatever their source. The Takings Clause does not require a static body of state property law; it protects private expectations to ensure private investment. I agree with the Court that nuisance prevention accords with the most common expectations of property owners who face regulation, but I do not believe this can be the sole source of state authority to impose severe restrictions. Coastal property may present such unique concerns for a fragile land system that the State can go further in regulating its development and use than the common law of nuisance might otherwise permit.
The Supreme Court of South Carolina erred, in my view, by reciting the general purposes for which the state regulations were enacted without a determination that they were in accord with the owner’s reasonable expectations and therefore sufficient to support a severe restriction on specific parcels of property. See 304 S. C. 376, 383, 404 S. E. 2d 895, 899 (1991). The promotion of tourism, for instance, ought not to suffice to deprive specific property of all value without a corresponding duty to compensate. Furthermore, the means, as well as the ends, of regulation must accord with the owner’s reasonable expectations. Here, the State did not act until after the property had been zoned for individual lot development and most other parcels had been improved, throwing the whole burden of the regulation on the remaining lots. This too must be measured in the balance. See Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 416 (1922).
With these observations, I concur in the judgment of the Court.
Justice Blackmun, dissenting.
Today the Court launches a missile to kill a mouse.
The State of South Carolina prohibited petitioner Lucas from building a permanent structure on his property from 1988 to 1990. Relying on an unreviewed (and implausible) state trial court finding that this restriction left Lucas’ property valueless, this Court granted review to determine whether compensation must be paid in cases where the State prohibits all economic use of real estate. According to the Court, such an occasion never has arisen in any of our prior cases, and the Court imagines that it will arise “relatively rarely” or only in “extraordinary circumstances.” Almost certainly it did not happen in this case.
Nonetheless, the Court presses on to decide the issue, and as it does, it ignores its jurisdictional limits, remakes its traditional rules of review, and creates simultaneously a new categorical rule and an exception (neither of which is rooted in our prior case law, common law, or common sense). I protest not only the Court’s decision, but each step taken to reach it. More fundamentally, I question the Court’s wisdom in issuing sweeping new rules to decide such a narrow case. Surely, as Justice Kennedy demonstrates, the Court could have reached the result it wanted without inflicting this damage upon our Takings Clause jurisprudence.
My fear is that the Court’s new policies will spread beyond the narrow confines of the present case. For that reason, I, like the Court, will give far greater attention to this case than its narrow scope suggests – not because I can intercept the Court’s missile, or save the targeted mouse, but because I hope perhaps to limit the collateral damage.
Statement of Justice Souter.
I would dismiss the writ of certiorari in this case as having been granted improvidently. After briefing and argument it is abundantly clear that an unreviewable assumption on which this case comes to us is both questionable as a conclusion of Fifth Amendment law and sufficient to frustrate the Court’s ability to render certain the legal premises on which its holding rests.
The petition for review was granted on the assumption that the State by regulation had deprived the owner of his entire economic interest in the subject property. Such was the state trial court’s conclusion, which the State Supreme Court did not review. It is apparent now that in light of our prior cases, see, e. g., Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 493-502 (1987); Andrus v. Allard, 444 U. S. 51, 65-66 (1979); Penn Central Transportation Corp. v. New York City, 438 U. S. 104, 130-131 (1978), the trial court’s conclusion is highly questionable. While the respondent now wishes to contest the point, see Brief for Respondent 45-50, the Court is certainly right to refuse to take up the issue, which is not fairly included within the question presented, and has received only the most superficial and one-sided treatment before us.
Because the questionable conclusion of total deprivation cannot be reviewed, the Court is precluded from attempting to clarify the concept of total (and, in the Court’s view, categorically compensable) taking on which it rests, a concept which the Court describes, see ante, at 1016-1017, n. 6, as so uncertain under existing law as to have fostered inconsistent pronouncements by the Court itself. Because that concept is left uncertain, so is the significance of the exceptions to the compensation requirement that the Court proceeds to recognize. This alone is enough to show that there is little utility in attempting to deal with this case on the merits.
- This specialized historical method of determining the baseline applied because the Beachwood East subdivision is located adjacent to a so-called “inlet erosion zone” (defined in the Act to mean “a segment of shoreline along or adjacent to tidal inlets which are directly influenced by the inlet and its associated shoals,”S. C. Code Ann. § 48-39-270(7) (Supp.1988)) that is”not stabilized by jetties,terminal groins, or other structures,” § 48-39-280(A)(2).For areas other than these unstabilized inlet erosion zones, the statute directs that the baseline be established along “the crest of an ideal primary oceanfront sand dune.”§ 48-39-280(A)(1).
- The Act did allow the construction of certain nonhabitable improvements, e. g., “wooden walkways no larger in width than six feet,” and “small wooden decks no larger than one hundred forty-four square feet.” §§ 48-39-290(A)(1) and (2).
- We will not attempt to respond to all of Justice Blackmun’s mistaken citation of case precedent. Characteristic of its nature is his assertion that the cases we discuss here stand merely for the proposition “that proof that a regulation does not deny an owner economic use of his property is sufficient to defeat a facial takings challenge” and not for the point that ”denial of such use is sufficient to establish a takings claim regardless of any other consideration.” Post, at 1050, n. 11. The cases say, repeatedly and unmistakably, that ”’[t]he test to be applied in considering [a] facial [takings] challenge is fairly straightforward. A statute regulating the uses that can be made of property effects a taking if it “denies an owner economically viable use of his land. ”’ ” Keystone, 480 U. S., at 495 (quoting Hodel, 452 U. S., at 295-296(quoting Agins, 447 U. S., at 260)) (emphasis added).
Justice Blackmun describes that rule (which we do not invent but merely apply today) as “alter[ing] the long-settled rules of review” by foisting on the State “the burden of showing [its]regulation is not a taking.” Post, at 1045, 1046. This is of course wrong. Lucas had to do more than simply file a lawsuit to establish his constitutional entitlement; he had to show that the Beachfront Management Act denied him economically beneficial use of his land. Our analysis presumes the unconstitutionality of state land-use regulation only in the sense that any rule with exceptions presumes the invalidity of a law that violates it–for example, the rule generally prohibiting content-based restrictions on speech. See, e. g., Simon & Schuster, Inc. v. Members of N. Y. State Crime Victims Bd., 502 U. S. 105, 115 (1991) (“A statute is presumptively inconsistent with the First Amendment if it imposes a financial burden on speakers because of the content of their speech”). Justice Blackmun’s real quarrel is with the substantive standard of liability we apply in this case, a longestablished standard we see no need to repudiate.
- Regrettably, the rhetorical force of our “deprivation of all economically feasible use” rule is greater than its precision, since the rule does not make clear the “property interest” against which the loss of value is to be measured. When, for example, a regulation requires a developer to leave 90% of a rural tract in its natural state, it is unclear whether we would analyze the situation as one in which the owner has been deprived of all economically beneficial use of the burdened portion of the tract, or as one in which the owner has suffered a mere diminution in value of the tract as a whole. (For an extreme–and, we think, unsupportable–view of the relevant calculus, see Penn Central Transportation Co. v. New York City, 42 N. Y. 2d 324, 333-334, 366 N. E. 2d 1271, 1276-1277 (1977), aff’d, 438 U. S. 104 (1978), where the state court examined the diminution in a particular parcel’s value produced by a municipal ordinance in light of total value of the takings claimant’s other holdings in the vicinity.) Unsurprisingly, this uncertainty regarding the composition of the denominator in our “deprivation” fraction has produced inconsistent pronouncements by the Court. Compare Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 414 (1922) (law restricting subsurface extraction of coal held to effect a taking), with Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 497-502 (1987) (nearly identical law held not to effect a taking); see also id., at 515-520 (Rehnquist, C. J., dissenting); Rose, Mahon Reconstructed: Why the Takings Issue is Still a Muddle, 57 S. Cal. L. Rev. 561, 566-569 (1984). The answer to this difficult question may lie in how the owner’s reasonable expectations have been shaped by the State’s law of property–i. e., whether and to what degree the State’s law has accorded legal recognition and protection to the particular interest in land with respect to which the takings claimant alleges a diminution in (or elimination of) value. In any event, we avoid this difficulty in the present case, since the “interest in land” that Lucas has pleaded (a fee simple interest) is an estate with a rich tradition of protection at common law, and since the South Carolina Court of Common Pleas found that the Beachfront Management Act left each of Lucas’s beachfront lots without economic value.
- Justice Stevens criticizes the “deprivation of all economically beneficial use” rule as “wholly arbitrary,” in that “[the] landowner whose property is diminished in value 95% recovers nothing,” while the landowner who suffers a complete elimination of value “recovers the land’s full value.” Post, at 1064. This analysis errs in its assumption that the landowner whose deprivation is one step short of complete is not entitled to compensation. Such an owner might not be able to claim the benefit of our categorical formulation, but, as we have acknowledged time and again, “[t]he economic impact of the regulation on the claimant and …the extent to which the regulation has interfered with distinct investment-backed expectations” are keenly relevant to takings analysis generally. Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978). It is true that in at least some cases the landowner with 95% loss will get nothing, while the landowner with total loss will recover in full. But that occasional result is no more strange than the gross disparity between the landowner whose premises are taken for a highway (who recovers in full) and the landowner whose property is reduced to 5% of its former value by the highway (who recovers nothing). Takings law is full of these “allor-nothing” situations.
Justice Stevens similarly misinterprets our focus on “developmental” uses of property (the uses proscribed by the Beachfront Management Act) as betraying an “assumption that the only uses of property cognizable under the Constitution are developmental uses.” Post, at 1065, n. 3. We make no such assumption. Though our prior takings cases evince an abiding concern for the productive use of, and economic investment in, land, there are plainly a number of noneconomic interests in land whose impairment will invite exceedingly close scrutiny under the Takings Clause. See, e. g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419, 436 (1982) (interest in excluding strangers from one’s land).
- This finding was the premise of the petition for certiorari, and since it was not challenged in the brief in opposition we decline to entertain the argument in respondent’s brief on the merits, see Brief for Respondent 45-50, that the finding was erroneous. Instead, we decide the question presented under the same factual assumptions as did the Supreme Court of South Carolina. See Oklahoma City v. Tuttle, 471 U. S. 808, 816 (1985).
- The legislature’s express findings include the following:
“The General Assembly finds that:
“(1) The beach/dune system along the coast of South Carolina is extremely important to the people of this State and serves the following functions:
“(a) protects life and property by serving as a storm barrier which dissipates wave energy and contributes to shoreline stability in an economical and effective manner;
“(b) provides the basis for a tourism industry that generates approximately two-thirds of South Carolina’s annual tourism industry revenue which constitutes a significant portion of the state’s economy. The tourists who come to the South Carolina coast to enjoy the ocean and dry sand beach contribute significantly to state and local tax revenues;
“(c) provides habitat for numerous species of plants and animals, several of which are threatened or endangered. Waters adjacent to the beach/ dune system also provide habitat for many other marine species;
“(d) provides a natural health environment for the citizens of South Carolina to spend leisure time which serves their physical and mental wellbeing.
“(2) Beach/dune system vegetation is unique and extremely important to the vitality and preservation of the system.
“(3) Many miles of South Carolina’s beaches have been identified as critically eroding.
“(4) … [D]evelopment unwisely has been sited too close to the [beach/ dune] system. This type of development has jeopardized the stability of the beach/dune system, accelerated erosion, and endangered adjacent property. It is in both the public and private interests to protect the system from this unwise development.
“(5) The use of armoring in the form of hard erosion control devices such as seawalls, bulkheads, and rip-rap to protect erosion-threatened structures adjacent to the beach has not proven effective. These armoring devices have given a falsesense of security to beachfront property owners. In reality, these hard structures, in many instances, have increased the vulnerability of beachfront property to damage from wind and waves while contributing to the deterioration and loss of the dry sand beach which is so important to the tourism industry.
“(6) Erosion is a natural process which becomes a significant problem for man only when structures are erected in close proximity to the beach/ dune system. It is in both the public and private interests to afford the beach/dune system space to accrete and erode in its natural cycle. This space can be provided only by discouraging new construction in close proximity to the beach/dune system and encouraging those who have erected structures too close to the system to retreat from it.
… . .
“(8) It is in the state’s best interest to protect and to promote increased public access to South Carolina’s beaches for out-of-state tourists and South Carolina residents alike.” S. C. Code Ann. § 48-39-250 (Supp. 1991).
- In the present case, in fact, some of the “[South Carolina] legislature’s ‘findings’ ” to which the South Carolina Supreme Court purported to defer in characterizing the purpose of the Act as “harm-preventing,” 304 S. C. 376, 385, 404 S. E. 2d 895, 900 (1991), seem to us phrased in “benefitconferring” language instead. For example, they describe the importance of a construction ban in enhancing “South Carolina’s annual tourism industry revenue,” S. C. Code Ann. § 48-39-250(1)(b) (Supp. 1991), in “provid[ing] habitat for numerous species of plants and animals, several of which are threatened or endangered,” § 48-39-250(1)(c), and in “provid[ing] a natural healthy environment for the citizens of South Carolina to spend leisure time which serves their physical and mental well-being,” § 48-39-250(1)(d). It would be pointless to make the outcome of this case hang upon this terminology, since the same interests could readily be described in “harm-preventing” fashion.
Justice Blackmun, however, apparently insists that we must make the outcome hinge (exclusively) upon the South Carolina Legislature’s other, “harm-preventing” characterizations, focusing on the declaration that “prohibitions on building in front of the setback line are necessary to protect people and property from storms, high tides, and beach erosion.” Post, at 1040. He says “[n]othing in the record undermines [this] assessment,” ibid., apparently seeing no significance in the fact that the statute permits owners of existing structures to remain (and even to rebuild if their structures are not “destroyed beyond repair,” S. C. Code Ann. § 48-39-290(B) (Supp. 1988)), and in the fact that the 1990 amendment authorizes the Council to issue permits for new construction in violation of the uniform prohibition, see S. C. Code Ann. § 48-39-290(D)(1) (Supp. 1991).
- In Justice Blackmun’s view, even with respect to regulations that deprive an owner of all developmental or economically beneficial land uses, the test for required compensation is whether the legislature has recited a harm-preventing justification for its action. See post, at 1039, 1040-1041, 1047-1051. Since such a justification can be formulated in practically every case, this amounts to a test of whether the legislature has a stupid staff. We think the Takings Clause requires courts to do more than insist upon artful harm-preventing characterizations.
- E. g., Mugler v. Kansas, 123 U. S. 623 (1887) (prohibition upon use of a building as a brewery; other uses permitted); Plymouth Coal Co. v. Pennsylvania, 232 U. S. 531 (1914) (requirement that “pillar” of coal be left in ground to safeguard mine workers; mineral rights could otherwise be exploited); Reinman v. Little Rock, 237 U. S. 171 (1915)(declaration that livery stable constituted a public nuisance; other uses of the property permitted); Hadacheck v. Sebastian, 239 U. S. 394 (1915) (prohibition of brick manufacturing in residential area; other uses permitted); Goldblatt v. Hempstead, 369 U. S. 590 (1962) (prohibition on excavation; other uses permitted).
- Drawing on our First Amendment jurisprudence, see, e. g., Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U. S. 872, 878-879 (1990), Justice Stevens would “loo[k] to the generality of a regulation of property” to determine whether compensation is owing. Post, at 1072. The Beach front Management Act is general, in his view, because it “regulates the use of the coastline of the entire State.” Post, at 1074. There may be some validity to the principle Justice Stevens proposes, but it does not properly apply to the present case. The equivalent of a law of general application that inhibits the practice of religion without being aimed at religion, see Oregon v. Smith, supra, is a law that destroys the value of land without being aimed at land. Perhaps such a law – the generally applicable criminal prohibition on the manufacturing of alcoholic beverages challenged in Mugler comes to mind – cannot constitute a compensable taking. See 123 U. S., at 655-656. But a regulation specifically directed to land use no more acquires immunity by plundering landowners generally than does a law specifically directed at religious practice acquire immunity by prohibiting all religions. Justice Stevens’s approach renders the Takings Clause little more than a particularized restatement of the Equal Protection Clause.
- After accusing us of “launch[ing] a missile to kill a mouse,” post, at 1036, Justice Blackmun expends a good deal of throw-weight of his own upon a noncombatant, arguing that our description of the “understanding” of land ownership that informs the Takings Clause is not supported by early American experience. That is largely true, but entirely irrelevant. The practices of the States prior to incorporation of the Takings and Just Compensation Clauses, see Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226 (1897) – which, as Justice Blackmun acknowledges, occasionally included outright physical appropriation of land without compensation, see post, at 1056 – were out of accord with any plausible interpretation of those provisions. Justice Blackmun is correct that early constitutional theorists did not believe the Takings Clause embraced regulations of property at all, see post, at 1057-1058, and n. 23, but even he does not suggest (explicitly, at least) that we renounce the Court’s contrary conclusion in Mahon. Since the text of the Clause can be read to encompass regulatory as well as physical deprivations (in contrast to the text originally proposed by Madison, see Speech Proposing Bill of Rights (June 8, 1789), in 12 J. Madison, The Papers of James Madison 201 (C. Hobson, R. Rutland, W. Rachal, & J. Sisson ed. 1979) (“No person shall be … obliged to relinquish his property, where it may be necessary for public use, without a just compensation”), we decline to do so as well.
- The principal “otherwise” that we have in mind is litigation absolving the State (or private parties) of liability for the destruction of “real and personal property, in cases of actual necessity, to prevent the spreading of a fire” or to forestall other grave threats to the lives and property of others. Bowditch v. Boston, 101 U. S. 16, 18-19 (1880); see United States v. Pacific R. Co., 120 U. S. 227, 238-239 (1887).
- Of course, the State may elect to rescind its regulation and thereby avoid having to pay compensation for a permanent deprivation. See First English Evangelical Lutheran Church, 482 U. S., at 321. But “where the [regulation has] already worked a taking of all use of property, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective.” Ibid.
- Justice Blackmun decries our reliance on background nuisance principles at least in part because he believes those principles to be as manipulable as we find the “harm prevention”/”benefit conferral” dichotomy, see post, at 1054-1055. There is no doubt some leeway in a court’s interpretation of what existing state law permits – but not remotely as much, we think, as in a legislative crafting of the reasons for its confiscatory regulation. We stress that an affirmative decree eliminating all economically beneficial uses may be defended only if an objectively reasonable application of relevant precedents would exclude those beneficial uses in the circumstances in which the land is presently found.
4.3.3. Per se vs. Ad hoc
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency,
535 U.S. 302 (2002)
Michael M. Berger argued the cause for petitioners. With him on the briefs were Gideon Kanner and Lawrence L. Hoffman.
John G. Roberts, Jr., argued the cause for respondents. With him on the brief were Frankie Sue Del Papa, Attorney General of Nevada, and William J. Frey, Deputy Attorney General, Bill Lockyer, Attorney General of California, Richard M. Frank, Chief Assistant Attorney General, Matthew Rodriquez, Senior Assistant Attorney General, and Daniel L. Siegel, Supervising Deputy Attorney General, E. Clement Shute, Jr., Fran M. Layton, Ellison Folk, John L. Marshall, and Richard J. Lazarus.
Solicitor General Olson argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Acting Assistant Attorney General Cruden, Deputy Solicitor General Kneedler, and Malcolm L. Stewart.
Justice Stevens delivered the opinion of the Court.
The question presented is whether a moratorium on development imposed during the process of devising a comprehensive land-use plan constitutes a per se taking of property requiring compensation under the Takings Clause of the United States Constitution.1 This case actually involves two moratoria ordered by respondent Tahoe Regional Planning Agency (TRPA) to maintain the status quo while studying the impact of development on Lake Tahoe and designing a strategy for environmentally sound growth. The first, Ordinance 81-5, was effective from August 24, 1981, until August 26, 1983, whereas the second more restrictive Resolution 83-21 was in effect from August 27, 1983, until April 25, 1984. As a result of these two directives, virtually all development on a substantial portion of the property subject to TRPA’s jurisdiction was prohibited for a period of 32 months. Although the question we decide relates only to that 32-month period, a brief description of the events leading up to the moratoria and a comment on the two permanent plans that TRPA adopted thereafter will clarify the narrow scope of our holding.
The relevant facts are undisputed. The Court of Appeals, while reversing the District Court on a question of law, accepted all of its findings of fact, and no party challenges those findings. All agree that Lake Tahoe is “uniquely beautiful,” 34 F. Supp. 2d 1226, 1230 (Nev. 1999), that President Clinton was right to call it a “‘national treasure that must be protected and preserved,’ ” ibid., and that Mark Twain aptly described the clarity of its waters as “‘not merely transparent, but dazzlingly, brilliantly so,’ ” ibid. (emphasis added) (quoting M. Twain, Roughing It 174-175 (1872)).
Lake Tahoe’s exceptional clarity is attributed to the absence of algae that obscures the waters of most other lakes. Historically, the lack of nitrogen and phosphorous, which nourish the growth of algae, has ensured the transparency of its waters.2 Unfortunately, the lake’s pristine state has deteriorated rapidly over the past 40 years; increased land development in the Lake Tahoe Basin (Basin) has threatened the “‘noble sheet of blue water’ ” beloved by Twain and countless others. 34 F. Supp. 2d, at 1230. As the District Court found, “[d]ramatic decreases in clarity first began to be noted in the late 1950’s/early 1960’s, shortly after development at the lake began in earnest.” Id., at 1231. The lake’s unsurpassed beauty, it seems, is the wellspring of its undoing.
The upsurge of development in the area has caused “increased nutrient loading of the lake largely because of the increase in impervious coverage of land in the Basin resulting from that development.” Ibid.
[The Court recounts the history of inter-governmental cooperation and land use regulations since the 1960s that have attempted to solve the water quality problems. A three-year moratorium was imposed while TRPA developed a regional water quality plan. When that plan was complete, California sued, alleging the plan was inadequate to protect Lake Tahoe. The federal court entered an injunction that essentially continued the moratorium for another three years, until 1987 when a new regional plan was completed. Around the same time that California filed suit, Petitioners –- a total of around 2,400 landowners -– also filed their suit, seeking compensation for the moratorium that had been in effect from 1981-1984. That litigation became protracted “produc[ing] four opinions by the Court of Appeals for the Ninth Circuit and several published District Court opinions.” The majority in this case held that only the 1981 moratorium, not the additional delay caused by the federal injunction was before it. It also characterized Petitioners as mounting only a facial challenge to the moratorium. “For petitioners, it is enough that a regulation imposes a temporary deprivation–no matter how brief–of all economically viable use to trigger a per se rule that a taking has occurred.”]
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. But the Constitution contains no comparable reference to regulations that prohibit a property owner from making certain uses of her private property.3 Our jurisprudence involving condemnations and physical takings is as old as the Republic and, for the most part, involves the straightforward application of per se rules. Our regulatory takings jurisprudence, in contrast, is of more recent vintage and is characterized by “essentially ad hoc, factual inquiries,” Penn Central, 438 U. S., at 124, designed to allow “careful examination and weighing of all the relevant circumstances.” Palazzolo, 533 U. S., at 636 (O’Connor, J., concurring).
When the government physically takes possession of an interest in property for some public purpose, it has a categorical duty to compensate the former owner, United States v. Pewee Coal Co., 341 U. S. 114, 115 (1951), regardless of whether the interest that is taken constitutes an entire parcel or merely a part thereof. Thus, compensation is mandated when a leasehold is taken and the government occupies the property for its own purposes, even though that use is temporary. United States v. General Motors Corp., 323 U. S. 373 (1945); United States v. Petty Motor Co., 327 U. S. 372 (1946). Similarly, when the government appropriates part of a roof top in order to provide cable TV access for apartment tenants, Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 (1982); or when its planes use private airspace to approach a government airport, United States v. Causby, 328 U. S. 256 (1946), it is required to pay for that share no matter how small. But a government regulation that merely prohibits landlords from evicting tenants unwilling to pay a higher rent, Block v. Hirsh, 256 U. S. 135 (1921); that bans certain private uses of a portion of an owner’s property, Village of Euclid v. Ambler Realty Co., 272 U. S. 365 (1926); Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470 (1987); or that forbids the private use of certain airspace, Penn Central Transp. Co. v. New York City, 438 U. S. 104 (1978), does not constitute a categorical taking. “The first category of cases requires courts to apply a clear rule; the second necessarily entails complex factual assessments of the purposes and economic effects of government actions.” Yee v. Escondido, 503 U. S. 519, 523 (1992). See also Loretto, 458 U. S., at 440; Keystone, 480 U. S., at 489, n. 18.
This longstanding distinction between acquisitions of property for public use, on the one hand, and regulations prohibiting private uses, on the other, makes it inappropriate to treat cases involving physical takings as controlling precedents for the evaluation of a claim that there has been a “regulatory taking,”4 and vice versa. For the same reason that we do not ask whether a physical appropriation advances a substantial government interest or whether it deprives the owner of all economically valuable use, we do not apply our precedent from the physical takings context to regulatory takings claims. Land-use regulations are ubiquitous and most of them impact property values in some tangential way–often in completely unanticipated ways. Treating them all as per se takings would transform government regulation into a luxury few governments could afford. By contrast, physical appropriations are relatively rare, easily identified, and usually represent a greater affront to individual property rights.5 “This case does not present the ‘classi[c] taking’ in which the government directly appropriates private property for its own use,” Eastern Enterprises v. Apfel, 524 U. S. 498, 522 (1998); instead the interference with property rights “arises from some public program adjusting the benefits and burdens of economic life to promote the common good,” Penn Central, 438 U. S., at 124.
Perhaps recognizing this fundamental distinction, petitioners wisely do not place all their emphasis on analogies to physical takings cases. Instead, they rely principally on our decision in Lucas v. South Carolina Coastal Council, 505 U. S. 1003 (1992)–a regulatory takings case that, nevertheless, applied a categorical rule–to argue that the Penn Central framework is inapplicable here. A brief review of some of the cases that led to our decision in Lucas, however, will help to explain why the holding in that case does not answer the question presented here.
As we noted in Lucas, it was Justice Holmes’ opinion in Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922),6 that gave birth to our regulatory takings jurisprudence.7 In subsequent opinions we have repeatedly and consistently endorsed Holmes’ observation that “if regulation goes too far it will be recognized as a taking.” Id., at 415. Justice Holmes did not provide a standard for determining when a regulation goes “too far,” but he did reject the view expressed in Justice Brandeis’ dissent that there could not be a taking because the property remained in the possession of the owner and had not been appropriated or used by the public.8 After Mahon, neither a physical appropriation nor a public use has ever been a necessary component of a “regulatory taking.”
In the decades following that decision, we have “generally eschewed” any set formula for determining how far is too far, choosing instead to engage in “‘essentially ad hoc, factual inquiries.’ ” Lucas, 505 U. S., at 1015 (quoting Penn Central, 438 U. S., at 124). Indeed, we still resist the temptation to adopt per se rules in our cases involving partial regulatory takings, preferring to examine “a number of factors” rather than a simple “mathematically precise” formula.9 Justice Brennan’s opinion for the Court in Penn Central did, however, make it clear that even though multiple factors are relevant in the analysis of regulatory takings claims, in such cases we must focus on “the parcel as a whole”:
“‘Taking’ jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a particular governmental action has effected a taking, this Court focuses rather both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole–here, the city tax block designated as the ‘landmark site.’ ” Id., at 130-131.
This requirement that “the aggregate must be viewed in its entirety” explains why, for example, a regulation that prohibited commercial transactions in eagle feathers, but did not bar other uses or impose any physical invasion or restraint upon them, was not a taking. Andrus v. Allard, 444 U. S. 51, 66 (1979). It also clarifies why restrictions on the use of only limited portions of the parcel, such as setback ordinances, Gorieb v. Fox, 274 U. S. 603 (1927), or a requirement that coal pillars be left in place to prevent mine subsidence, Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S., at 498,were not considered regulatory takings. In each of these cases, we affirmed that “where an owner possesses a full ‘bundle’ of property rights, the destruction of one ‘strand’ of the bundle is not a taking.” Andrus, 444 U. S., at 65-66.
While the foregoing cases considered whether particular regulations had “gone too far” and were therefore invalid, none of them addressed the separate remedial question of how compensation is measured once a regulatory taking is established. In his dissenting opinion in San Diego Gas & Elec. Co. v. San Diego, 450 U. S. 621, 636 (1981), Justice Brennan identified that question and explained how he would answer it:
“The constitutional rule I propose requires that, once a court finds that a police power regulation has effected a ‘taking,’ the government entity must pay just compensation for the period commencing on the date the regulation first effected the ‘taking,’ and ending on the date the government entity chooses to rescind or otherwise amend the regulation.” Id., at 658.
Justice Brennan’s proposed rule was subsequently endorsed by the Court in First English, 482 U. S., at 315, 318, 321. First English was certainly a significant decision, and nothing that we say today qualifies its holding. Nonetheless, it is important to recognize that we did not address in that case the quite different and logically prior question whether the temporary regulation at issue had in fact constituted a taking.
In First English, the Court unambiguously and repeatedly characterized the issue to be decided as a “compensation question” or a “remedial question.” Id., at 311 (“The disposition of the case on these grounds isolates the remedial question for our consideration”); see also id., at 313, 318. And the Court’s statement of its holding was equally unambiguous: “We merely hold that where the government’s activities have already worked a taking of all use of property, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective.” Id., at 321 (emphasis added). In fact, First English expressly disavowed any ruling on the merits of the takings issue because the California courts had decided the remedial question on the assumption that a taking had been alleged. Id., at 312-313 (“We reject appellee’s suggestion that … we must independently evaluate the adequacy of the complaint and resolve the takings claim on the merits before we can reach the remedial question”). After our remand, the California courts concluded that there had not been a taking, First English Evangelical Church of Glendale v. County of Los Angeles, 210 Cal. App. 3d 1353, 258 Cal. Rptr. 893 (1989), and we declined review of that decision, 493 U. S. 1056 (1990).
To the extent that the Court in First English referenced the antecedent takings question, we identified two reasons why a regulation temporarily denying an owner all use of her property might not constitute a taking. First, we recognized that “the county might avoid the conclusion that a compensable taking had occurred by establishing that the denial of all use was insulated as a part of the State’s authority to enact safety regulations.” 482 U. S., at 313. Second, we limited our holding “to the facts presented” and recognized “the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like which [were] not before us.” Id., at 321. Thus, our decision in First English surely did not approve, and implicitly rejected, the categorical submission that petitioners are now advocating.
Similarly, our decision in Lucas is not dispositive of the question presented. Although Lucas endorsed and applied a categorical rule, it was not the one that petitioners propose. Lucas purchased two residential lots in 1988 for $975,000. These lots were rendered “valueless” by a statute enacted two years later. The trial court found that a taking had occurred and ordered compensation of $1,232,387.50, representing the value of the fee simple estate, plus interest. As the statute read at the time of the trial, it effected a taking that “was unconditional and permanent.” 505 U. S., at 1012. While the State’s appeal was pending, the statute was amended to authorize exceptions that might have allowed Lucas to obtain a building permit. Despite the fact that the amendment gave the State Supreme Court the opportunity to dispose of the appeal on ripeness grounds, it resolved the merits of the permanent takings claim and reversed. Since “Lucas had no reason to proceed on a ‘temporary taking’ theory at trial,” we decided the case on the permanent taking theory that both the trial court and the State Supreme Court had addressed. Ibid.
The categorical rule that we applied in Lucas states that compensation is required when a regulation deprives an owner of ”all economically beneficial uses” of his land. Id., at 1019. Under that rule, a statute that “wholly eliminated the value” of Lucas’ fee simple title clearly qualified as a taking. But our holding was limited to “the extraordinary circumstance when no productive or economically beneficial use of land is permitted.” Id., at 1017. The emphasis on the word “no” in the text of the opinion was, in effect, reiterated in a footnote explaining that the categorical rule would not apply if the diminution in value were 95% instead of 100%. Id., at 1019, n. 8.10 Anything less than a “complete elimination of value,” or a “total loss,” the Court acknowledged, would require the kind of analysis applied in Penn Central. Lucas, 505 U. S., at 1019-1020, n. 8.11
Certainly, our holding that the permanent “obliteration of the value” of a fee simple estate constitutes a categorical taking does not answer the question whether a regulation prohibiting any economic use of land for a 32-month period has the same legal effect. Petitioners seek to bring this case under the rule announced in Lucas by arguing that we can effectively sever a 32-month segment from the remainder of each landowner’s fee simple estate, and then ask whether that segment has been taken in its entirety by the moratoria. Of course, defining the property interest taken in terms of the very regulation being challenged is circular. With property so divided, every delay would become a total ban; the moratorium and the normal permit process alike would constitute categorical takings. Petitioners’ “conceptual severance” argument is unavailing because it ignores Penn Central ‘s admonition that in regulatory takings cases we must focus on “the parcel as a whole.” 438 U. S., at 130– 131. We have consistently rejected such an approach to the “denominator” question. See Keystone, 480 U. S., at 497. See also Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., 508 U. S. 602, 644 (1993) (“To the extent that any portion of property is taken, that portion is always taken in its entirety; the relevant question, however, is whether the property taken is all, or only a portion of, the parcel in question”). Thus, the District Court erred when it disaggregated petitioners’ property into temporal segments corresponding to the regulations at issue and then analyzed whether petitioners were deprived of all economically viable use during each period. 34 F. Supp. 2d, at 1242-1245. The starting point for the court’s analysis should have been to ask whether there was a total taking of the entire parcel; if not, then Penn Central was the proper framework.12
An interest in real property is defined by the metes and bounds that describe its geographic dimensions and the term of years that describes the temporal aspect of the owner’s interest. See Restatement of Property §§ 7-9 (1936). Both dimensions must be considered if the interest is to be viewed in its entirety. Hence, a permanent deprivation of the owner’s use of the entire area is a taking of “the parcel as a whole,” whereas a temporary restriction that merely causes a diminution in value is not. Logically, a fee simple estate cannot be rendered valueless by a temporary prohibition on economic use, because the property will recover value as soon as the prohibition is lifted. Cf. Agins v. City of Tiburon, 447 U. S., at 263, n. 9 (“Even if the appellants’ ability to sell their property was limited during the pendency of the condemnation proceeding, the appellants were free to sell or develop their property when the proceedings ended. Mere fluctuations in value during the process of governmental decisionmaking, absent extraordinary delay, are ‘incidents of ownership. They cannot be considered as a “taking” in the constitutional sense’ ” (quoting Danforth v. United States, 308 U. S. 271, 285 (1939))).
Neither Lucas, nor First English, nor any of our other regulatory takings cases compels us to accept petitioners’ categorical submission. In fact, these cases make clear that the categorical rule in Lucas was carved out for the “extraordinary case” in which a regulation permanently deprives property of all value; the default rule remains that, in the regulatory taking context, we require a more fact specific inquiry. Nevertheless, we will consider whether the interest in protecting individual property owners from bearing public burdens “which, in all fairness and justice, should be borne by the public as a whole,” Armstrong v. United States, 364 U. S., at 49, justifies creating a new rule for these circumstances.13
Considerations of “fairness and justice” arguably could support the conclusion that TRPA’s moratoria were takings of petitioners’ property based on any of seven different theories. First, even though we have not previously done so, we might now announce acategorical rule that, in the interest of fairness and justice, compensation is required whenever government temporarily deprives an owner of all economically viable use of her property. Second, we could craft a narrower rule that would cover all temporary landuse restrictions except those “normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like” which were put to one side in our opinion in First English, 482 U. S., at 321. Third, we could adopt a rule like the one suggested by an amicus supporting petitioners that would “allow a short fixed period for deliberations to take place without compensation–say maximum one year–after which the just compensation requirements” would “kick in.”14 Fourth, with the benefit of hindsight, we might characterize the successive actions of TRPA as a “series of rolling moratoria” that were the functional equivalent of a permanent taking.15 Fifth, were it not for the findings of the District Court that TRPA acted diligently and in good faith, we might have concluded that the agency was stalling in order to avoid promulgating the environmental threshold carrying capacities and regional plan mandated by the 1980 Compact. Cf. Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U. S. 687, 698 (1999). Sixth, apart from the District Court’s finding that TRPA’s actions represented a proportional response to a serious risk of harm to the lake, petitioners might have argued that the moratoria did not substantially advance a legitimate state interest, see Agins and Monterey. Finally, if petitioners had challenged the application of the moratoria to their individual parcels, instead of making a facial challenge, some of them might have prevailed under a Penn Central analysis.
As the case comes to us, however, none of the last four theories is available. The “rolling moratoria” theory was presented in the petition for certiorari, but our order granting review did not encompass that issue, 533 U. S. 948 (2001); the case was tried in the District Court and reviewed in the Court of Appeals on the theory that each of the two moratoria was a separate taking, one for a 2-year period and the other for an 8-month period. 216 F. 3d, at 769. And, as we have already noted, recovery on either a bad faith theory or a theory that the state interests were insubstantial is foreclosed by the District Court’s unchallenged findings of fact. Recovery under a Penn Central analysis is also foreclosed both because petitioners expressly disavowed that theory, and because they did not appeal from the District Court’s conclusion that the evidence would not support it. Nonetheless, each of the three per se theories is fairly encompassed within the question that we decided to answer.
With respect to these theories, the ultimate constitutional question is whether the concepts of “fairness and justice” that underlie the Takings Clause will be better served by one of these categorical rules or by a Penn Central inquiry into all of the relevant circumstances in particular cases. From that perspective, the extreme categorical rule that any deprivation of all economic use, no matter how brief, constitutes a compensable taking surely cannot be sustained. Petitioners’ broad submission would apply to numerous “normal delays in obtaining building permits, changes in zoning ordinances, variances, and the like,” 482 U. S., at 321, as well as to orders temporarily prohibiting access to crime scenes, businesses that violate health codes, fire-damaged buildings, or other areas that we cannot now foresee. Such a rule would undoubtedly require changes in numerous practices that have long been considered permissible exercises of the police power. As Justice Holmes warned in Mahon, “[g]overnment hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.” 260 U. S., at 413. A rule that required compensation for every delay in the use of property would render routine government processes prohibitively expensive or encourage hasty decisionmaking. Such an important change in the law should be the product of legislative rulemaking rather than adjudication.16
More importantly, for reasons set out at some length by Justice O’Connor in her concurring opinion in Palazzolo v. Rhode Island, 533 U. S., at 636, we are persuaded that the better approach to claims that a regulation has effected a temporary taking “requires careful examination and weighing of all the relevant circumstances.” In that opinion, Justice O’Connor specifically considered the role that the “temporal relationship between regulatory enactment and title acquisition” should play in the analysis of a takings claim. Id., at 632. We have no occasion to address that particular issue in this case, because it involves a different temporal relationship–the distinction between a temporary restriction and one that is permanent. Her comments on the “fairness and justice” inquiry are, nevertheless, instructive:
“Today’s holding does not mean that the timing of the regulation’s enactment relative to the acquisition of title is immaterial to the Penn Central analysis. Indeed, it would be just as much error to expunge this consideration from the takings inquiry as it would be to accord it exclusive significance. Our polestar instead remains the principles set forth in Penn Central itself and our other cases that govern partial regulatory takings. Under these cases, interference with investment-backed expectations is one of a number of factors that a court must examine… .
“The Fifth Amendment forbids the taking of private property for public use without just compensation. We have recognized that this constitutional guarantee is ’ “designed to bar 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.”’ Penn Central, [438 U. S.], at 123-124 (quoting Armstrong v. United States, 364 U. S. 40, 49 (1960)). The concepts of ‘fairness and justice’ that underlie the Takings Clause, of course, are less than fully determinate. Accordingly, we have eschewed ‘any “set formula” for determining when “justice and fairness” require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons.’ Penn Central, supra, at 124 (quoting Goldblatt v. Hempstead, 369 U. S. 590, 594 (1962)). The outcome instead ‘depends largely “upon the particular circumstances [in that] case.”’ Penn Central, supra, at 124 (quoting United States v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958)).” Id., at 633.
In rejecting petitioners’ per se rule, we do not hold that the temporary nature of a land-use restriction precludes finding that it effects a taking; we simply recognize that it should not be given exclusive significance one way or the other.
A narrower rule that excluded the normal delays associated with processing permits, or that covered only delays of more than a year, would certainly have a less severe impact on prevailing practices, but it would still impose serious financial constraints on the planning process.17 Unlike the “extraordinary circumstance” in which the government deprives a property owner of all economic use, Lucas, 505 U. S., at 1017, moratoria like Ordinance 81-5 and Resolution 83–21 are used widely among land-use planners to preserve the status quo while formulating a more permanent development strategy.18 In fact, the consensus in the planning community appears to be that moratoria, or “interim development controls” as they are often called, are an essential tool of successful development.19 Yet even the weak version of petitioners’ categorical rule would treat these interim measures as takings regardless of the good faith of the planners, the reasonable expectations of the landowners, or the actual impact of the moratorium on property values.20
The interest in facilitating informed decisionmaking by regulatory agencies counsels against adopting a per se rule that would impose such severe costs on their deliberations. Otherwise, the financial constraints of compensating property owners during a moratorium may force officials to rush through the planning process or to abandon the practice altogether. To the extent that communities are forced to abandon using moratoria, landowners will have incentives to develop their property quickly before a comprehensive plan can be enacted, thereby fostering inefficient and ill-conceived growth. A finding in the 1980 Compact itself, which presumably was endorsed by all three legislative bodies that participated in its enactment, attests to the importance of that concern. 94 Stat. 3243 (“The legislatures of the States of California and Nevada find that in order to make effective the regional plan as revised by the agency, it is necessary to halt temporarily works of development in the region which might otherwise absorb the entire capability of the region for further development or direct it out of harmony with the ultimate plan”).
We would create a perverse system of incentives were we to hold that landowners must wait for a takings claim to ripen so that planners can make well-reasoned decisions while, at the same time, holding that those planners must compensate landowners for the delay.
Indeed, the interest in protecting the decisional process is even stronger when an agency is developing a regional plan than when it is considering a permit for a single parcel. In the proceedings involving the Lake Tahoe Basin, for example, the moratoria enabled TRPA to obtain the benefit of comments and criticisms from interested parties, such as the petitioners, during its deliberations.21 Since a categorical rule tied to the length of deliberations would likely create added pressure on decisionmakers to reach a quick resolution of land-use questions, it would only serve to disadvantage those landowners and interest groups who are not as organized or familiar with the planning process. Moreover, with a temporary ban on development there is a lesser risk that individual landowners will be “singled out” to bear a special burden that should be shared by the public as a whole. Nollan v. California Coastal Comm’n, 483 U. S. 825, 835 (1987). At least with a moratorium there is a clear “reciprocity of advantage,” Mahon, 260 U. S., at 415, because it protects the interests of all affected landowners against immediate construction that might be inconsistent with the provisions of the plan that is ultimately adopted. “While each of us is burdened somewhat by such restrictions, we, in turn, benefit greatly from the restrictions that are placed on others.” Keystone, 480 U. S., at 491. In fact, there is reason to believe property values often will continue to increase despite a moratorium. See, e. g., Growth Properties, Inc. v. Klingbeil Holding Co., 419 F. Supp. 212, 218 (Md. 1976) (noting that land values could be expected to increase 20% during a 5-year moratorium on development). Cf. Forest Properties, Inc. v. United States, 177 F. 3d 1360, 1367 (CA Fed. 1999) (record showed that market value of the entire parcel increased despite denial of permit to fill and develop lake-bottom property). Such an increase makes sense in this context because property values throughout the Basin can be expected to reflect the added assurance that Lake Tahoe will remain in its pristine state. Since in some cases a 1-year moratorium may not impose a burden at all, we should not adopt a rule that assumes moratoria always force individuals to bear a special burden that should be shared by the public as a whole.
It may well be true that any moratorium that lasts for more than one year should be viewed with special skepticism. But given the fact that the District Court found that the 32 months required by TRPA to formulate the 1984 Regional Plan was not unreasonable, we could not possibly conclude that every delay of over one year is constitutionally unacceptable.22 Formulating a general rule of this kind is a suitable task for state legislatures.23 In our view, the duration of the restriction is one of the important factors that a court must consider in the appraisal of a regulatory takings claim, but with respect to that factor as with respect to other factors, the “temptation to adopt what amount to per se rules in either direction must be resisted.” Palazzolo, 533 U. S., at 636 (O’Connor, J., concurring). There may be moratoria that last longer than one year which interfere with reasonable investment-backed expectations, but as the District Court’s opinion illustrates, petitioners’ proposed rule is simply “too blunt an instrument” for identifying those cases. Id., at 628. We conclude, therefore, that the interest in “fairness and justice” will be best served by relying on the familiar Penn Central approach when deciding cases like this, rather than by attempting to craft a new categorical rule.
Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
Chief Justice Rehnquist, with whom Justice Scalia and Justice Thomas join, dissenting.
For over half a decade petitioners were prohibited from building homes, or any other structures, on their land. Because the Takings Clause requires the government to pay compensation when it deprives owners of all economically viable use of their land, see Lucas v. South Carolina Coastal Council, 505 U. S. 1003 (1992), and because a ban on all development lasting almost six years does not resemble any traditional land-use planning device, I dissent.
“A court cannot determine whether a regulation has gone ‘too far’ unless it knows how far the regulation goes.” MacDonald, Sommer & Frates v. Yolo County, 477 U. S. 340, 348 (1986) (citing Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 415 (1922)).24 In failing to undertake this inquiry, the Court ignores much of the impact of respondent’s conduct on petitioners. Instead, it relies on the flawed determination of the Court of Appeals that the relevant time period lasted only from August 1981 until April 1984.
Because respondent caused petitioners’ inability to use their land from 1981 through 1987, that is the appropriate period of time from which to consider their takings claim.
I now turn to determining whether a ban on all economic development lasting almost six years is a taking. Lucas reaffirmed our “frequently expressed” view that “when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.” 505 U. S., at 1019. See also Agins v. City of Tiburon, 447 U. S. 255, 258-259 (1980). The District Court in this case held that the ordinances and resolutions in effect between August 24, 1981, and April 25, 1984, “did in fact deny the plaintiffs all economically viable use of their land.” 34 F. Supp. 2d 1226, 1245 (Nev. 1999). The Court of Appeals did not overturn this finding. And the 1984 injunction, issued because the environmental thresholds issued by respondent did not permit the development of single-family residences, forced petitioners to leave their land economically idle for at least another three years. The Court does not dispute that petitioners were forced to leave their land economically idle during this period. See ante, at 312. But the Court refuses to apply Lucas on the ground that the deprivation was “temporary.”
Neither the Takings Clause nor our case law supports such a distinction. For one thing, a distinction between “temporary” and “permanent” prohibitions is tenuous. The “temporary” prohibition in this case that the Court finds is not a taking lasted almost six years.25 The “permanent” prohibition that the Court held to be a taking in Lucas lasted less than two years. See 505 U. S., at 1011-1012. The “permanent” prohibition in Lucas lasted less than two years because the law, as it often does, changed. The South Carolina Legislature in 1990 decided to amend the 1988 Beach front Management Act to allow the issuance of “‘special permits’ for the construction or reconstruction of habitable structures seaward of the baseline.” Id., at 1011-1012. Landuse regulations are not irrevocable. And the government can even abandon condemned land. See United States v. Dow, 357 U. S. 17, 26 (1958). Under the Court’s decision today, the takings question turns entirely on the initial label given a regulation, a label that is often without much meaning. There is every incentive for government to simply label any prohibition on development “temporary,” or to fix a set number of years. As in this case, this initial designation does not preclude the government from repeatedly extending the “temporary” prohibition into a long-term ban on all development. The Court now holds that such a designation by the government is conclusive even though in fact the moratorium greatly exceeds the time initially specified. Apparently, the Court would not view even a 10-year moratorium as a taking under Lucas because the moratorium is not “permanent.”
Our opinion in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304 (1987), rejects any distinction between temporary and permanent takings when a landowner is deprived of all economically beneficial use of his land. First English stated that “‘temporary takings which, as here, deny a landowner all use of his property, are not different in kind from permanent takings, for which the Constitution clearly requires compensation.” Id., at 318. Because of First English ‘s rule that “temporary deprivations of use are compensable under the Takings Clause,” the Court in Lucas found nothing problematic about the later developments that potentially made the ban on development temporary. 505 U. S., at 1011-1012 (citing First English, supra ); see also 505 U. S., at 1033 (Kennedy, J., concurring in judgment) (“It is well established that temporary takings are as protected by the Constitution as are permanent ones” (citing First English, supra, at 318)).
More fundamentally, even if a practical distinction between temporary and permanent deprivations were plausible, to treat the two differently in terms of takings law would be at odds with the justification for the Lucas rule. The Lucas rule is derived from the fact that a “total deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation.” 505 U. S., at 1017. The regulation in Lucas was the “practical equivalence” of a long-term physical appropriation, i. e., a condemnation, so the Fifth Amendment required compensation. The “practical equivalence,” from the landowner’s point of view, of a “temporary” ban on all economic use is a forced leasehold. For example, assume the following situation: Respondent is contemplating the creation of a National Park around Lake Tahoe to preserve its scenic beauty. Respondent decides to take a 6-year leasehold over petitioners’ property, during which any human activity on the land would be prohibited, in order to prevent any further destruction to the area while it was deciding whether to request that the area be designated a National Park.
Surely that leasehold would require compensation. In a series of World War II-era cases in which the Government had condemned leasehold interests in order to support the war effort, the Government conceded that it was required to pay compensation for the leasehold interest.26 See United States v. Petty Motor Co., 327 U. S. 372 (1946); United States v. General Motors Corp., 323 U. S. 373, 376 (1945). From petitioners’ standpoint, what happened in this case is no different than if the government had taken a 6-year lease of their property. The Court ignores this “practical equivalence” between respondent’s deprivation and the deprivation resulting from a leasehold. In so doing, the Court allows the government to “do by regulation what it cannot do through eminent domain–i. e., take private property without paying for it.” 228 F. 3d 998, 999 (CA9 2000) (Kozinski, J., dissenting from denial of rehearing en banc).
Instead of acknowledging the “practical equivalence” of this case and a condemned leasehold, the Court analogizes to other areas of takings law in which we have distinguished between regulations and physical appropriations, see ante, at 321-324. But whatever basis there is for such distinctions in those contexts does not apply when a regulation deprives a landowner of all economically beneficial use of his land. In addition to the “practical equivalence” from the landowner’s perspective of such a regulation and a physical appropriation, we have held that a regulation denying all productive use of land does not implicate the traditional justification for differentiating between regulations and physical appropriations. In “the extraordinary circumstance when no productive or economically beneficial use of land is permitted,” it is less likely that “the legislature is simply ‘adjusting the benefits and burdens of economic life’ … in a manner that secures an ‘average reciprocity of advantage’ to everyone concerned,” Lucas, supra, at 1017-1018 (quoting Penn Central Transp. Co. v. New York City, 438 U. S., at 124, and Pennsylvania Coal Co. v. Mahon, 260 U. S., at 415), and more likely that the property “is being pressed into some form of public service under the guise of mitigating serious public harm,” Lucas, supra, at 1018.
The Court also reads Lucas as being fundamentally concerned with value, ante, at 329-331, rather than with the denial of “all economically beneficial or productive use of land,” 505 U. S., at 1015. But Lucas repeatedly discusses its holding as applying where ”no productive or economically beneficial use of land is permitted.” Id., at 1017; see also ibid. (“[T]otal deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation”); id., at 1016 (“[T]he Fifth Amendment is violated when land-use regulation … denies an owner economically viable use of his land”); id., at 1018 (“[T]he functional basis for permitting the government, by regulation, to affect property values without compensation … does not apply to the relatively rare situations where the government has deprived a landowner of all economically beneficial uses”); ibid. (“[T]he fact that regulations that leave the owner of land without economically beneficial or productive options for its use … carry with them a heightened risk that private property is being pressed into some form of public service”); id., at 1019 (“[W]hen the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking”). Moreover, the Court’s position that value is the sine qua non of the Lucas rule proves too much. Surely, the land at issue in Lucas retained some market value based on the contingency, which soon came to fruition (see supra, at 347), that the development ban would be amended.
Lucas is implicated when the government deprives a landowner of “all economically beneficial or productive use of land.” 505 U. S., at 1015. The District Court found, and the Court agrees, that the moratorium “temporarily” deprived petitioners of “‘all economically viable use of their land.’ ” Ante, at 316. Because the rationale for the Lucas rule applies just as strongly in this case, the “temporary” denial of all viable use of land for six years is a taking.
The Court worries that applying Lucas here compels finding that an array of traditional, short-term, land-use planning devices are takings. Ante, at 334-335, 337-338. But since the beginning of our regulatory takings jurisprudence, we have recognized that property rights “are enjoyed under an implied limitation.” Mahon, supra, at 413.
But a moratorium prohibiting all economic use for a period of six years is not one of the longstanding, implied limitations of state property law.27 Moratoria are “interim controls on the use of land that seek to maintain the status quo with respect to land development in an area by either ‘freezing’ existing land uses or by allowing the issuance of building permits for only certain land uses that would not be inconsistent with a contemplated zoning plan or zoning change.” 1 E. Ziegler, Rathkopf’s The Law of Zoning and Planning § 13:3, p. 13-6 (4th ed. 2001). Typical moratoria thus prohibit only certain categories of development, such as fast-food restaurants, see Schafer v. New Orleans, 743 F. 2d 1086 (CA5 1984), or adult businesses, see Renton v. Playtime Theatres, Inc., 475 U. S. 41 (1986), or all commercial development, see Arnold Bernhard & Co. v. Planning & Zoning Comm’n, 194 Conn. 152, 479 A. 2d 801 (1984). Such moratoria do not implicate Lucas because they do not deprive landowners of all economically beneficial use of their land. As for moratoria that prohibit all development, these do not have the lineage of permit and zoning requirements and thus it is less certain that property is acquired under the “implied limitation” of a moratorium prohibiting all development. Moreover, unlike a permit system in which it is expected that a project will be approved so long as certain conditions are satisfied, a moratorium that prohibits all uses is by definition contemplating a new land-use plan that would prohibit all uses.
But this case does not require us to decide as a categorical matter whether moratoria prohibiting all economic use are an implied limitation of state property law, because the duration of this “moratorium” far exceeds that of ordinary moratoria. As the Court recognizes, ante, at 342, n. 37, state statutes authorizing the issuance of moratoria often limit the moratoria’s duration. California, where much of the land at issue in this case is located, provides that a moratorium “shall be of no further force and effect 45 days from its date of adoption,” and caps extension of the moratorium so that the total duration cannot exceed two years. Cal. Govt. Code Ann. § 65858(a) (West Supp. 2002); see also Minn. Stat. § 462.355, subd. 4 (2000) (limiting moratoria to 18 months, with one permissible extension, for a total of two years). Another State limits moratoria to 120 days, with the possibility of a single 6-month extension. Ore. Rev. Stat. Ann. § 197.520(4) (1997). Others limit moratoria to six months without any possibility of an extension. See Colo. Rev. Stat. § 30-28-121 (2001); N. J. Stat. Ann. § 40:55D-90(b) (1991).28 Indeed, it has long been understood that moratoria on development exceeding these short time periods are not a legitimate planning device. See, e. g., Holdsworth v. Hague, 9 N. J. Misc. 715, 155 A. 892 (1931).
Resolution 83-21 reflected this understanding of the limited duration of moratoria in initially limiting the moratorium in this case to 90 days. But what resulted–a “moratorium” lasting nearly six years–bears no resemblance to the short-term nature of traditional moratoria as understood from these background examples of state property law.
Because the prohibition on development of nearly six years in this case cannot be said to resemble any “implied limitation” of state property law, it is a taking that requires compensation.
* * *
Lake Tahoe is a national treasure, and I do not doubt that respondent’s efforts at preventing further degradation of the lake were made in good faith in furtherance of the public interest. But, as is the case with most governmental action that furthers the public interest, the Constitution requires that the costs and burdens be borne by the public at large, not by a few targeted citizens. Justice Holmes’ admonition of 80 years ago again rings true: “We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.” Mahon, 260 U. S., at 416.
- Often referred to as the “Just Compensation Clause,” the final Clause of the Fifth Amendment provides: ”… nor shall private property be taken for public use without just compensation.” It applies to the States as well as the Federal Government. Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 239, 241 (1897); Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U. S. 155, 160 (1980).
- According to a Senate Report: “Only two other sizable lakes in the world are of comparable quality–Crater Lake in Oregon, which is protected as part of the Crater Lake National Park, and Lake Baikal in the [former] Soviet Union. Only Lake Tahoe, however, is so readily accessible from large metropolitan centers and is so adaptable to urban development.” S. Rep. No. 91-510, pp. 3-4 (1969).
- In determining whether government action affecting property is an unconstitutional deprivation of ownership rights under the Just Compensation Clause, a court must interpret the word “taken.” When the government condemns or physically appropriates the property, the fact of a taking is typically obvious and undisputed. When, however, the owner contends a taking has occurred because a law or regulation imposes restrictions so severe that they are tantamount to a condemnation or appropriation, the predicate of a taking is not self-evident, and the analysis is more complex.
- To illustrate the importance of the distinction, the Court in Loretto, 458 U. S., at 430, compared two wartime takings cases, United States v. Pewee Coal Co., 341 U. S. 114, 116 (1951), in which there had been an “actual taking of possession and control” of a coal mine, and United States v. Central Eureka Mining Co., 357 U. S. 155 (1958), in which, “by contrast, the Court found no taking where the Government had issued a wartime order requiring nonessential gold mines to cease operations . .. .” 458 U. S., at 431. Loretto then relied on this distinction in dismissing the argument that our discussion of the physical taking at issue in the case would affect landlord-tenant laws. “So long as these regulations do not require the landlord to suffer the physical occupation of a portion of his building by a third party, they will be analyzed under the multifactor inquiry generally applicable to nonpossessory governmental activity.” Id., at 440 (citing Penn Central ).
- According to The Chief Justice’s dissent, even a temporary, useprohibiting regulation should be governed by our physical takings cases because, under Lucas v. South Carolina Coastal Council, 505 U. S. 1003, 1017 (1992), “from the landowner’s point of view,” the moratorium is the functional equivalent of a forced leasehold, post, at 348. Of course, from both the landowner’s and the government’s standpoint there are critical differences between a leasehold and a moratorium. Condemnation of a leasehold gives the government possession of the property, the right to admit and exclude others, and the right to use it for a public purpose. A regulatory taking, by contrast, does not give the government any right to use the property, nor does it dispossess the owner or affect her right to exclude others.
The Chief Justice stretches Lucas ’ “equivalence” language too far. For even a regulation that constitutes only a minor infringement on property may, from the landowner’s perspective, be the functional equivalent of an appropriation. Lucas carved out a narrow exception to the rules governing regulatory takings for the “extraordinary circumstance” of a permanent deprivation of all beneficial use. The exception was only partially justified based on the “equivalence” theory cited by The Chief Justice’s dissent. It was also justified on the theory that, in the “relatively rare situations where the government has deprived a landowner of all economically beneficial uses,” it is less realistic to assume that the regulation will secure an “average reciprocity of advantage,” or that government could not go on if required to pay for every such restriction. 505 U. S., at 1017-1018. But as we explain, infra, at 339-341, these assumptions hold true in the context of a moratorium.
- The case involved “a bill in equity brought by the defendants in error to prevent the Pennsylvania Coal Company from mining under their property in such way as to remove the supports and cause a subsidence of the surface and of their house.” Mahon, 260 U. S., at 412. Mahon sought to prevent Pennsylvania Coal from mining under his property by relying on a state statute, which prohibited any mining that could undermine the foundation of a home. The company challenged the statute as a taking of its interest in the coal without compensation.
- In Lucas, we explained: “Prior to Justice Holmes’s exposition in Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922), it was generally thought that the Takings Clause reached only a ‘direct appropriation’ of property, Legal Tender Cases, 12 Wall. 457, 551 (1871), or the functional equivalent of a ‘practical ouster of [the owner’s] possession,’ Transportation Co. v. Chicago, 99 U. S. 635, 642 (1879) … . Justice Holmes recognized in Mahon, however, that if the protection against physical appropriations of private property was to be meaningfully enforced, the government’s power to redefine the range of interests included in the ownership of property was necessarily constrained by constitutional limits. 260 U. S., at 414-415. If, instead, the uses of private property were subject to unbridled, uncompensated qualification under the police power, ‘the natural tendency of human nature [would be] to extend the qualification more and more until at last private property disappear[ed].’ Id., at 415. These considerations gave birth in that case to the oft-cited maxim that, ‘while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.’ Ibid. ” 505 U. S., at 1014 (citation omitted).
- Justice Brandeis argued: “Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use. The property so restricted remains in the possession of its owner. The State does not appropriate it or make any use of it. The State merely prevents the owner from making a use which interferes with paramount rights of the public.” Mahon, 260 U. S., at 417 (dissenting opinion).
- In her concurring opinion in Palazzolo, 533 U. S., at 633, Justice O’Connor reaffirmed this approach: “Our polestar instead remains the principles set forth in Penn Central itself and our other cases that govern partial regulatory takings. Under these cases, interference with investment-backed expectations is one of a number of factors that a court must examine.” Ibid. “Penn Central does not supply mathematically precise variables, but instead provides important guide posts that lead to the ultimate determination whether just compensation is required.” Id., at 634. “The temptation to adopt what amount to per se rules in either direction must be resisted. The Takings Clause requires careful examination and weighing of all the relevant circumstances in this context.” Id., at 636.
- Justice Kennedy concurred in the judgment on the basis of the regulation’s impact on “reasonable, investment-backed expectations.” 505 U. S., at 1034.
- It is worth noting that Lucas underscores the difference between physical and regulatory takings. See supra, at 322-325. For under our physical takings cases it would be irrelevant whether a property owner maintained 5% of the value of her property so long as there was a physical appropriation of any of the parcel.
- The Chief Justice’s dissent makes the same mistake by carving out a 6-year interest in the property, rather than considering the parcel as a whole, and treating the regulations covering that segment as analogous to a total taking under Lucas, post, at 351.
- Armstrong, like Lucas, was a case that involved the “total destruction by the Government of all value” in a specific property interest. 364 U. S., at 48-49. It is nevertheless perfectly clear that Justice Black’s oft-quoted comment about the underlying purpose of the guarantee that private property shall not be taken for a public use without just compensation applies to partial takings as well as total takings.
- Brief for the Institute for Justice as Amicus Curiae 30. Although amicus describes the 1-year cutoff proposal as the “better approach by far,”ibid., its primary argument is that Penn Central should be overruled, id., at 20 (”All partial takings by way of land use restriction should be subject to the same prima facie rules for compensation as a physical occupation for a limited period of time”).
- Brief for Petitioners 44.See also Pet. for Cert. i.
- In addition, we recognize the anomaly that would be created if we were to apply Penn Central when a landowner is permanently deprived of 95% of the use of her property, Lucas, 505 U. S.,at 1019, n. 8, and yet find a per se taking anytime the same property owner is deprived of all use for only five days. Such a scheme would present an odd inversion of Justice Holmes’ adage: “A limit in time, to tide over a passing trouble, well may justify a law that could not be upheld as a permanent change.” Block v. Hirsh, 256 U. S. 135, 157 (1921).
- Petitioners fail to offer a persuasive explanation for why moratoria should be treated differently from ordinary permit delays. They contend that a permit applicant need only comply with certain specific requirements in order to receive one and can expect to develop at the end of the process, whereas there is nothing the landowner subject to a moratorium can do but wait, with no guarantee that a permit will be granted at the end of the process. Brief for Petitioners 28. Setting aside the obvious problem with basing the distinction on a course of events we can only know after the fact–in the context of a facial challenge–petitioners’ argument breaks down under closer examination because there is no guarantee that a permit will be granted, or that a decision will be made within a year. See, e. g., Dufau v. United States, 22 Cl. Ct. 156 (1990) (holding that 16-month delay in granting a permit did not constitute a temporary taking). Moreover, under petitioners’ modified categorical rule, there would be no per se taking if TRPA simply delayed action on all permits pending a regional plan. Fairness and justice do not require that TRPA be penalized for achieving the same result, but with full disclosure.
- See, e. g., Santa Fe Village Venture v. Albuquerque, 914 F. Supp. 478, 483 (N. M. 1995) (30-month moratorium on development of lands within the Petroglyph National Monument was not a taking); Williams v. Central, 907 P. 2d 701, 703-706 (Colo. App. 1995) (10-month moratorium on development in gaming district while studying city’s ability to absorb growth was not a compensable taking); Woodbury Place Partners v. Woodbury, 492 N. W. 2d 258 (Minn. App. 1993) (moratorium pending review of plan for land adjacent to interstate highway was not a taking even though it deprived property owner of all economically viable use of its property for two years); Zilber v. Moranga, 692 F. Supp. 1195 (ND Cal. 1988) (18-month development moratorium during completion of a comprehensive scheme for open space did not require compensation). See also Wayman, Leaders Consider Options for Town Growth, Charlotte Observer, Feb. 3, 2002, p. 15M (describing 10-month building moratorium imposed “to give town leaders time to plan for development”); Wallman, City May Put Reins on Beach Projects, Sun-Sentinel, May 16, 2000, p. 1B (2-year building moratorium on beach front property in Fort Lauderdale pending new height, width, and dispersal regulations); Foderaro, In Suburbs, They’re Cracking Down on the Joneses, N. Y. Times, Mar. 19, 2001, p. A1 (describing moratorium imposed in Eastchester, New York, during a review of the town’s zoning code to address the problem of oversized homes); Dawson, Commissioners recommend Aboite construction ban be lifted, Fort Wayne News Sentinel, May 4, 2001, p. 1A (3-year moratorium to allow improvements in the water and sewage treatment systems).
- See J. Juergensmeyer & T. Roberts, Land Use Planning and Control Law §§ 5.28(G) and 9.6 (1998); Garvin & Leitner, Drafting Interim Development Ordinances: Creating Time to Plan, 48 Land Use Law & Zoning Digest 3 (June 1996) (“With the planning so protected, there is no need for hasty adoption of permanent controls in order to avoid the establishment of nonconforming uses, or to respond in an ad hoc fashion to specific problems. Instead, the planning and implementation process may be permitted to run its full and natural course with widespread citizen input and involvement, public debate, and full consideration of all issues and points of view”); Freilich, Interim Development Controls: Essential Tools for Implementing Flexible Planning and Zoning, 49 J. Urb. L. 65 (1971).
- The Chief Justice offers another alternative, suggesting that delays of six years or more should be treated as per se takings. However, his dissent offers no explanation for why 6 years should be the cutoff point rather than 10 days, 10 months, or 10 years. It is worth emphasizing that we do not reject a categorical rule in this case because a 32-month moratorium is just not that harsh. Instead, we reject a categorical rule because we conclude that the Penn Central framework adequately directs the inquiry to the proper considerations–only one of which is the length of the delay.
- Petitioner Preservation Council, “through its authorized representatives, actively participated in the entire TRPA regional planning process leading to the adoption of the 1984 Regional Plan at issue in this action, and attended and expressed its views and concerns, orally and in writing, at each public hearing held by the Defendant TRPA in connection with the consideration of the 1984 Regional Plan at issue herein, as well as in connection with the adoption of Ordinance 81-5 and the Revised 1987 Regional Plan addressed herein.” App. 24.
- We note that the temporary restriction that was ultimately upheld in the First English case lasted for more than six years before it was replaced by a permanent regulation. First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 210 Cal. App. 3d 1353, 258 Cal. Rptr. 893 (1989).
- Several States already have statutes authorizing interim zoning ordinances with specific time limits. See Cal. Govt. Code Ann. § 65858 (West Supp. 2002) (authorizing interim ordinance of up to two years); Colo. Rev. Stat. § 30-28-121 (2001) (six months); Ky. Rev. Stat. Ann. § 100.201 (2001) (one year); Mich. Comp. Laws Ann. § 125.215 (West 2001) (three years); Minn. Stat. § 394.34 (2000) (two years); N. H. Rev. Stat. Ann. § 674:23 (West 2001) (one year); Ore. Rev. Stat. Ann. § 197.520 (1997) (10 months); S. D. Codified Laws § 11-2–10 (2001) (two years); Utah Code Ann. § 17-27-404 (1995) (18 months); Wash. Rev. Code § 35.63.200 (2001); Wis. Stat. § 62.23(7)(d) (2001) (two years). Other States, although without specific statutory authority, have recognized that reasonable interim zoning ordinances may be enacted. See, e. g., S. E. W. Freil v. Triangle Oil Co., 76 Md. App. 96, 543 A. 2d 863 (1988); New Jersey Shore Builders Assn. v. Dover Twp. Comm., 191 N. J. Super. 627, 468 A. 2d 742 (1983); SCA Chemical Waste Servs., Inc. v. Konigsberg, 636 S. W. 2d 430 (Tenn. 1982); Sturgess v. Chilmark, 380 Mass. 246, 402 N. E. 2d 1346 (1980); Lebanon v. Woods, 153 Conn. 182, 215 A. 2d 112 (1965).
- We are not bound by the Court of Appeals’ determination that petitioners’ claim under 42 U. S. C. § 1983 (1994 ed., Supp. V) permitted only challenges to Ordinance 81-5 and Regulation 83-21. Petitioners sought certiorari on the Court of Appeals’ ruling that respondent Tahoe Regional Planning Agency (hereinafter respondent) did not cause petitioners’ injury from 1984 to 1987. Pet. for Cert. 27-30. We did not grant certiorari on any of the petition’s specific questions presented, but formulated the following question: “Whether the Court of Appeals properly determined that a temporary moratorium on land development does not constitute a taking of property requiring compensation under the Takings Clause of the United States Constitution?” 533 U. S. 948-949 (2001). This Court’s Rule 14(1)(a) provides that a “question presented is deemed to comprise every subsidiary question fairly included therein.” The question of how long the moratorium on land development lasted is necessarily subsumed within the question whether the moratorium constituted a taking. Petitioners did not assume otherwise. Their brief on the merits argues that respondent “effectively blocked all construction for the past two decades.” Brief for Petitioners 7.
- Even under the Court’s mistaken view that the ban on development lasted only 32 months, the ban in this case exceeded the ban in Lucas.
- There was no dispute that just compensation was required in those cases. The disagreement involved how to calculate that compensation. In United States v. General Motors Corp., 323 U. S. 373 (1945), for example, the issues before the Court were how to value the leasehold interest (i. e., whether the “long-term rental value [should be] the sole measure of the value of such short-term occupancy,” id., at 380), whether the Government had to pay for the respondent’s removal of personal property from the condemned warehouse, and whether the Government had to pay for the reduction in value of the respondent’s equipment and fixtures left in the warehouse. Id., at 380-381.
- Six years is not a “cutoff point,” ante, at 338, n. 34; it is the length involved in this case. And the “explanation” for the conclusion that there is a taking in this case is the fact that a 6-year moratorium far exceeds any moratorium authorized under background principles of state property law. See infra, at 353-354. This case does not require us to undertake a more exacting study of state property law and discern exactly how long a moratorium must last before it no longer can be considered an implied limitation of property ownership (assuming, that is, that a moratorium on all development is a background principle of state property law, see infra, at 353).
- These are just some examples of the state laws limiting the duration of moratoria. There are others. See, e. g., Utah Code Ann. §§ 17-27– 404(3)(b)(i)–(ii) (1995) (temporary prohibitions on development “may not exceed six months in duration,” with the possibility of extensions for no more than “two additional six-month periods”). See also ante, at 337, n. 31.
Lingle, Governor of Hawaii, et al. v. Chevron U.S.A. Inc.,
544 U.S. 528 (2005)
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Mark J. Bennett, Attorney General of Hawaii, argued the cause for petitioners. With him on the briefs were Michael L. Meaney, Deputy Attorney General, Seth P. Waxman, Paul R. Q. Wolfson, Robert G. Dreher, and John D. Echeverria.
Deputy Solicitor General Kneedler argued the cause for the United States as amicus curiae in support of petitioners. With him on the brief were Acting Solicitor General Clement, Assistant Attorney General Keisler, Malcolm L. Stewart, Mark B. Stern, and Sharon Swingle.
Craig E. Stewart argued the cause for respondent. With him on the brief were Donald B. Ayer, Michael S. Fried, and Louis K. Fisher.
Justice O’Connor delivered the opinion of the Court.
On occasion, a would-be doctrinal rule or test finds its way into our case law through simple repetition of a phrase – however fortuitously coined. A quarter century ago, in Agins v. City of Tiburon, 447 U. S. 255 (1980), the Court declared that government regulation of private property “effects a taking if [such regulation] does not substantially advance legitimate state interests… .” Id., at 260. Through reiteration in a half dozen or so decisions since Agins, this language has been ensconced in our Fifth Amendment takings jurisprudence. See Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U. S. 687, 704 (1999) (citing cases).
In the case before us, the lower courts applied Agins’ “substantially advances” formula to strike down a Hawaii statute that limits the rent that oil companies may charge to dealers who lease service stations owned by the companies. The lower courts held that the rent cap effects an uncompensated taking of private property in violation of the Fifth and Fourteenth Amendments because it does not substantially advance Hawaii’s asserted interest in controlling retail gasoline prices. This case requires us to decide whether the “substantially advances” formula announced in Agins is an appropriate test for determining whether a regulation effects a Fifth Amendment taking. We conclude that it is not.
The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth, see Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226 (1897), provides that private property shall not “be taken for public use, without just compensation.” As its text makes plain, the Takings Clause “does not prohibit the taking of private property, but instead places a condition on the exercise of that power.” First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304, 314 (1987). In other words, it “is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.” Id., at 315 (emphasis in original). While scholars have offered various justifications for this regime, we have emphasized its role in “bar[ring] 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.” Armstrong v. United States, 364 U.S. 40, 49 (1960); see also Monongahela Nav. Co. v. United States, 148 U. S. 312, 325 (1893).
The paradigmatic taking requiring just compensation is a direct government appropriation or physical invasion of private property. See, e.g., United States v. Pewee Coal Co., 341 U. S. 114 (1951) (Government’s seizure and operation of a coal mine to prevent a national strike of coal miners effected a taking); United States v. General Motors Corp., 323 U. S. 373 (1945) (Government’s occupation of private warehouse effected a taking). Indeed, until the Court’s watershed decision in Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 (1922), “it was generally thought that the Takings Clause reached only a ‘direct appropriation’ of property, or the functional equivalent of a ‘practical ouster of [the owner’s] possession.’” Lucas v. South Carolina Coastal Council, 505 U. S. 1003, 1014 (1992)(citations omitted and emphasis added; brackets in original); see also id., at 1028, n. 15 (“[E]arly constitutional theorists did not believe the Takings Clause embraced regulations of property at all”).
Beginning with Mahon, however, the Court recognized that government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct appropriation or ouster – and that such “regulatory takings” may be compensable under the Fifth Amendment. In Justice Holmes’ storied but cryptic formulation, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” 260 U. S., at 415. The rub, of course, has been – and remains – how to discern how far is “too far.” In answering that question, we must remain cognizant that “government regulation – by definition – involves the adjustment of rights for the public good,” Andrus v. Allard, 444 U. S. 51, 65 (1979), and that “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law,” Mahon, supra, at 413.
Our precedents stake out two categories of regulatory action that generally will be deemed per se takings for Fifth Amendment purposes. First, where government requires an owner to suffer a permanent physical invasion of her property – however minor – it must provide just compensation. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 (1982) (state law requiring landlords to permit cable companies to install cable facilities in apartment buildings effected a taking). A second categorical rule applies to regulations that completely deprive an owner of ”all economically beneficial us[e]” of her property. Lucas, 505 U. S., at 1019 (emphasis in original). We held in Lucas that the government must pay just compensation for such “total regulatory takings,” except to the extent that “background principles of nuisance and property law” independently restrict the owner’s intended use of the property. Id., at 1026-1032.
Outside these two relatively narrow categories (and the special context of land-use exactions discussed below, see infra, at 546-548), regulatory takings challenges are governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U. S. 104 (1978). The Court in Penn Central acknowledged that it had hitherto been “unable to develop any ‘set formula’” for evaluating regulatory takings claims, but identified “several factors that have particular significance.” Id., at 124. Primary among those factors are “[t]he economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations.” Ibid. In addition, the “character of the governmental action” – for instance whether it amounts to a physical invasion or instead merely affects property interests through “some public program adjusting the benefits and burdens of economic life to promote the common good” – may be relevant in discerning whether a taking has occurred. Ibid. The Penn Central factors – though each has given rise to vexing subsidiary questions – have served as the principal guidelines for resolving regulatory takings claims that do not fall within the physical takings or Lucas rules. See, e. g., Palazzolo v. Rhode Island, 533 U. S. 606, 617-618 (2001); id., at 632-634 (O’CONNOR, J., concurring).
Although our regulatory takings jurisprudence cannot be characterized as unified, these three inquiries (reflected in Loretto, Lucas, and Penn Central) share a common touchstone. Each aims to identify regulatory actions that are functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Accordingly, each of these tests focuses directly upon the severity of the burden that government imposes upon private property rights. The Court has held that physical takings require compensation because of the unique burden they impose: A permanent physical invasion, however minimal the economic cost it entails, eviscerates the owner’s right to exclude others from entering and using her property – perhaps the most fundamental of all property interests. See Dolan v. City of Tigard, 512 U. S. 374, 384 (1994); Nollan v. California Coastal Comm’n, 483 U. S. 825, 831-832 (1987); Loretto, supra, at 433; Kaiser Aetna v. United States, 444 U. S. 164, 176 (1979). In the Lucas context, of course, the complete elimination of a property’s value is the determinative factor. See Lucas, supra, at 1017 (positing that “total deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation”). And the Penn Central inquiry turns in large part, albeit not exclusively, upon the magnitude of a regulation’s economic impact and the degree to which it interferes with legitimate property interests.
In Agins v. City of Tiburon, a case involving a facial takings challenge to certain municipal zoning ordinances, the Court declared that “[t]he application of a general zoning law to particular property effects a taking if the ordinance does not substantially advance legitimate state interests, see Nectow v. Cambridge, 277 U. S. 183, 188 (1928), or denies an owner economically viable use of his land, see Penn Central Transp. Co. v. New York City, 438 U. S. 104, 138, n. 36 (1978).” 447 U. S., at 260. Because this statement is phrased in the disjunctive, Agins’ “substantially advances” language has been read to announce a stand-alone regulatory takings test that is wholly independent of Penn Central or any other test. Indeed, the lower courts in this case struck down Hawaii’s rent control statute based solely upon their findings that it does not substantially advance a legitimate state interest. See supra, at 534, 536. Although a number of our takings precedents have recited the “substantially advances” formula minted in Agins, this is our first opportunity to consider its validity as a freestanding takings test. We conclude that this formula prescribes an inquiry in the nature of a due process, not a takings, test, and that it has no proper place in our takings jurisprudence.
There is no question that the “substantially advances” formula was derived from due process, not takings, precedents. In support of this new language, Agins cited Nectow v. Cambridge, 277 U. S. 183, a 1928 case in which the plaintiff claimed that a city zoning ordinance “deprived him of his property without due process of law in contravention of the Fourteenth Amendment,” id., at 185. Agins then went on to discuss Village of Euclid v. Ambler Realty Co., 272 U. S. 365 (1926), a historic decision holding that a municipal zoning ordinance would survive a substantive due process challenge so long as it was not “clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.” Id., at 395 (emphasis added); see also Nectow, supra, at 187-188 (quoting the same “substantial relation” language from Euclid).
When viewed in historical context, the Court’s reliance on Nectow and Euclid is understandable. Agins was the Court’s first case involving a challenge to zoning regulations in many decades, so it was natural to turn to these seminal zoning precedents for guidance. See Brief for United States as Amicus Curiae in Agins v. City of Tiburon, O. T. 1979, No. 79-602, pp. 12-13 (arguing that Euclid “set out the principles applicable to a determination of the facial validity of a zoning ordinance attacked as a violation of the Takings Clause of the Fifth Amendment”). Moreover, Agins’ apparent commingling of due process and takings inquiries had some precedent in the Court’s then-recent decision in Penn Central. See 438 U. S., at 127 (stating in dicta that “[i]t is … implicit in Goldblatt [v. Hempstead, 369 U. S. 590 (1962),] that a use restriction on real property may constitute a ‘taking’ if not reasonably necessary to the effectuation of a substantial public purpose, see Nectow v. Cambridge, supra”). But see Goldblatt v. Hempstead, 369 U. S. 590, 594-595 (1962) (quoting “‘reasonably necessary’” language from Lawton v. Steele, 152 U. S. 133, 137 (1894), a due process case, and applying a deferential “‘reasonableness’” standard to determine whether a challenged regulation was a “valid exercise of the … police power” under the Due Process Clause). Finally, when Agins was decided, there had been some history of referring to deprivations of property without due process of law as “takings,” see, e. g., Rowan v. Post Office Dept., 397 U. S. 728, 740 (1970), and the Court had yet to clarify whether “regulatory takings” claims were properly cognizable under the Takings Clause or the Due Process Clause, see Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172, 197-199 (1985).
Although Agins’ reliance on due process precedents is understandable, the language the Court selected was regrettably imprecise. The “substantially advances” formula suggests a means-ends test: It asks, in essence, whether a regulation of private property is effective in achieving some legitimate public purpose. An inquiry of this nature has some logic in the context of a due process challenge, for a regulation that fails to serve any legitimate governmental objective may be so arbitrary or irrational that it runs afoul of the Due Process Clause. See, e. g., County of Sacramento v. Lewis, 523 U. S. 833, 846 (1998)(stating that the Due Process Clause is intended, in part, to protect the individual against “the exercise of power without any reasonable justification in the service of a legitimate governmental objective”). But such a test is not a valid method of discerning whether private property has been “taken” for purposes of the Fifth Amendment.
In stark contrast to the three regulatory takings tests discussed above, the “substantially advances” inquiry reveals nothing about the magnitude or character of the burden a particular regulation imposes upon private property rights. Nor does it provide any information about how any regulatory burden is distributed among property owners. In consequence, this test does not help to identify those regulations whose effects are functionally comparable to government appropriation or invasion of private property; it is tethered neither to the text of the Takings Clause nor to the basic justification for allowing regulatory actions to be challenged under the Clause.
Chevron appeals to the general principle that the Takings Clause is meant “‘to bar 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.’” Brief for Respondent 17-21 (quoting Armstrong, 364 U. S., at 49). But that appeal is clearly misplaced, for the reasons just indicated. A test that tells us nothing about the actual burden imposed on property rights, or how that burden is allocated, cannot tell us when justice might require that the burden be spread among taxpayers through the payment of compensation. The owner of a property subject to a regulation that effectively serves a legitimate state interest may be just as singled out and just as burdened as the owner of a property subject to an ineffective regulation. It would make little sense to say that the second owner has suffered a taking while the first has not. Likewise, an ineffective regulation may not significantly burden property rights at all, and it may distribute any burden broadly and evenly among property owners. The notion that such a regulation nevertheless “takes” private property for public use merely by virtue of its ineffectiveness or foolishness is untenable.
Instead of addressing a challenged regulation’s effect on private property, the “substantially advances” inquiry probes the regulation’s underlying validity. But such an inquiry is logically prior to and distinct from the question whether a regulation effects a taking, for the Takings Clause presupposes that the government has acted in pursuit of a valid public purpose. The Clause expressly requires compensation where government takes private property ”for public use.” It does not bar government from interfering with property rights, but rather requires compensation “in the event of otherwise proper interference amounting to a taking.” First English Evangelical Lutheran Church, 482 U. S., at 315 (emphasis added). Conversely, if a government action is found to be impermissible – for instance because it fails to meet the “public use” requirement or is so arbitrary as to violate due process – that is the end of the inquiry. No amount of compensation can authorize such action.
Chevron’s challenge to the Hawaii statute in this case illustrates the flaws in the “substantially advances” theory. To begin with, it is unclear how significantly Hawaii’s rent cap actually burdens Chevron’s property rights. The parties stipulated below that the cap would reduce Chevron’s aggregate rental income on 11 of its 64 lessee-dealer stations by about $207,000 per year, but that Chevron nevertheless expects to receive a return on its investment in these stations that satisfies any constitutional standard. See supra, at 534. Moreover, Chevron asserted below, and the District Court found, that Chevron would recoup any reductions in its rental income by raising wholesale gasoline prices. See supra, at 535. In short, Chevron has not clearly argued – let alone established – that it has been singled out to bear any particularly severe regulatory burden. Rather, the gravamen of Chevron’s claim is simply that Hawaii’s rent cap will not actually serve the State’s legitimate interest in protecting consumers against high gasoline prices. Whatever the merits of that claim, it does not sound under the Takings Clause. Chevron plainly does not seek compensation for a taking of its property for a legitimate public use, but rather an injunction against the enforcement of a regulation that it alleges to be fundamentally arbitrary and irrational.
Finally, the “substantially advances” formula is not only doctrinally untenable as a takings test – its application as such would also present serious practical difficulties. The Agins formula can be read to demand heightened means-ends review of virtually any regulation of private property. If so interpreted, it would require courts to scrutinize the efficacy of a vast array of state and federal regulations – a task for which courts are not well suited. Moreover, it would empower – and might often require – courts to substitute their predictive judgments for those of elected legislatures and expert agencies.
Although the instant case is only the tip of the proverbial iceberg, it foreshadows the hazards of placing courts in this role. To resolve Chevron’s takings claim, the District Court was required to choose between the views of two opposing economists as to whether Hawaii’s rent control statute would help to prevent concentration and supracompetitive prices in the State’s retail gasoline market. Finding one expert to be “more persuasive” than the other, the court concluded that the Hawaii Legislature’s chosen regulatory strategy would not actually achieve its objectives. See 198 F. Supp. 2d, at 1187-1193. The court determined that there was no evidence that oil companies had charged, or would charge, excessive rents. See id., at 1191. Based on this and other findings, the District Court enjoined further enforcement of Act 257’s rent cap provision against Chevron. We find the proceedings below remarkable, to say the least, given that we have long eschewed such heightened scrutiny when addressing substantive due process challenges to government regulation. See, e. g., Exxon Corp. v. Governor of Maryland, 437 U. S. 117, 124-125 (1978); Ferguson v. Skrupa, 372 U. S. 726, 730-732 (1963). The reasons for deference to legislative judgments about the need for, and likely effectiveness of, regulatory actions are by now well established, and we think they are no less applicable here.
For the foregoing reasons, we conclude that the “substantially advances” formula announced in Agins is not a valid method of identifying regulatory takings for which the Fifth Amendment requires just compensation. Since Chevron argued only a “substantially advances” theory in support of its takings claim, it was not entitled to summary judgment on that claim.
* * *
Twenty-five years ago, the Court posited that a regulation of private property “effects a taking if [it] does not substantially advance [a] legitimate state interes[t].” Agins, 447 U. S., at 260. The lower courts in this case took that statement to its logical conclusion, and in so doing, revealed its imprecision. Today we correct course. We hold that the “substantially advances” formula is not a valid takings test, and indeed conclude that it has no proper place in our takings jurisprudence. In so doing, we reaffirm that a plaintiff seeking to challenge a government regulation as an uncompensated taking of private property may proceed under one of the other theories discussed above – by alleging a “physical” taking, a Lucas-type “total regulatory taking,” a Penn Central taking, or a land-use exaction violating the standards set forth in Nollan and Dolan. Because Chevron argued only a “substantially advances” theory in support of its takings claim, it was not entitled to summary judgment on that claim. Accordingly, we reverse the judgment of the Ninth Circuit and remand the case for further proceedings consistent with this opinion.
It is so ordered.
Justice Kennedy, concurring.
This separate writing is to note that today’s decision does not foreclose the possibility that a regulation might be so arbitrary or irrational as to violate due process. Eastern Enterprises v. Apfel, 524 U. S. 498, 539 (1998) (KENNEDY, J., concurring in judgment and dissenting in part). The failure of a regulation to accomplish a stated or obvious objective would be relevant to that inquiry. Chevron voluntarily dismissed its due process claim without prejudice, however, and we have no occasion to consider whether Act 257 of the 1997 Hawaii Session Laws “represents one of the rare instances in which even such a permissive standard has been violated.” Apfel, supra, at 550. With these observations, I join the opinion of the Court.
4.4. Procedural Issues
Williamson County Regional Planning Commission et al. v. Hamilton Bank of Johnson City,
473 U.S. 172 (1985)
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
Robert L. Estes argued the cause for petitioners. With him on the brief was M. Milton Sweeney.
Edwin S. Kneedler argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Lee, Assistant Attorney General Habicht, Deputy Solicitor General Claiborne, and David C. Shilton.
G. T. Nebel argued the cause for respondent. With him on the brief was Gus Bauman.
Justice Blackmun delivered the opinion of the Court.
Respondent, the owner of a tract of land it was developing as a residential subdivision, sued petitioners, the Williamson County (Tennessee) Regional Planning Commission and its members and staff, in United States District Court, alleging that petitioners’ application of various zoning laws and regulations to respondent’s property amounted to a “taking” of that property. At trial, the jury agreed and awarded respondent $350,000 as just compensation for the “taking.” Although the jury’s verdict was rejected by the District Court, which granted a judgment notwithstanding the verdict to petitioners, the verdict was reinstated on appeal. Petitioners and their amici urge this Court to overturn the jury’s award on the ground that a temporary regulatory interference with an investor’s profit expectation does not constitute a “taking” within the meaning of the Just Compensation Clause of the Fifth Amendment,1 or, alternatively, on the ground that even if such interference does constitute a taking, the Just Compensation Clause does not require money damages as recompense. Before we reach those contentions, we examine the procedural posture of respondent’s claim.
Under Tennessee law, responsibility for land-use planning is divided between the legislative body of each of the State’s counties and regional and municipal “planning commissions.” The county legislative body is responsible for zoning ordinances to regulate the uses to which particular land and buildings may be put, and to control the density of population and the location and dimensions of buildings. Tenn. Code Ann. § 13-7-101 (1980). The planning commissions are responsible for more specific regulations governing the subdivision of land within their region or municipality for residential development. §§ 13-3-403, 13-4-303. Enforcement of both the zoning ordinances and the subdivision regulations is accomplished in part through a requirement that the planning commission approve the plat of a subdivision before the plat may be recorded. §§ 13-3-402, 13-4-302 (1980 and Supp. 1984).
Pursuant to § 13-7-101, the Williamson County “Quarterly Court,” which is the county’s legislative body, in 1973 adopted a zoning ordinance that allowed “cluster” development of residential areas. Under “cluster” zoning,
both the size and the width of individual residential lots in … [a] development may be reduced, provided … that the overall density of the entire tract remains constant – provided, that is, that an area equivalent to the total of the areas thus ‘saved’ from each individual lot is pooled and retained as common open space.
2 N. Williams, American Land Planning Law § 47.01, pp. 212-213 (1974).
Cluster zoning thus allows housing units to be grouped, or “clustered” together, rather than being evenly spaced on uniform lots.
As required by § 13-3-402, respondent’s predecessor-in-interest (developer) in 1973 submitted a preliminary plat for the cluster development of its tract, the Temple Hills Country Club Estates (Temple Hills), to the Williamson County Regional Planning Commission for approval. At that time, the county’s zoning ordinance and the Commission’s subdivision regulations required developers to seek review and approval of subdivision plats in two steps. The developer first was to submit for approval a preliminary plat, or “initial sketch plan,” indicating, among other things, the boundaries and acreage of the site, the number of dwelling units and their basic design, the location of existing and proposed roads, structures, lots, utility layouts, and open space, and the contour of the land. App. in No. 82-5388 (CA6), pp. 857, 871 (CA App.). Once approved, the preliminary plat served as a basis for the preparation of a final plat. Under the Commission’s regulations, however, approval of a preliminary plat “will not constitute acceptance of the final plat.” Id., at 872. Approval of a preliminary plat lapsed if a final plat was not submitted within one year of the date of the approval, unless the Commission granted an extension of time, or unless the approval of the preliminary plat was renewed. Ibid. The final plat, which is the official authenticated document that is recorded, was required to conform substantially to the preliminary plat, and, in addition, to include such details as the lines of all streets, lots, boundaries, and building setbacks. Id., at 875.
On May 3, 1973, the Commission approved the developer’s preliminary plat for Temple Hills. App. 246-247. The plat indicated that the development was to include 676 acres, of which 260 acres would be open space, primarily in the form of a golf course. Id., at 422. A notation on the plat indicated that the number of “allowable dwelling units for total development” was 736, but lot lines were drawn in for only 469 units. The areas in which the remaining 276 units were to be placed were left blank and bore the notation “this parcel not to be developed until approved by the planning commission.” The plat also contained a disclaimer that “parcels with note ‘this parcel not to be developed until approved by the planning commission’ not a part of this plat and not included in gross area.” Ibid. The density of 736 allowable dwelling units was calculated by multiplying the number of acres (676) by the number of units allowed per acre (1.089). Id., at 361. Although the zoning regulations in effect in 1973 required that density be calculated “on the basis of total acreage less fifty percent (50%) of the land lying in the flood plain … and less fifty percent (50%) of all land lying on a slope with a grade in excess of twenty-five percent (25%),” CA App. 858, no deduction was made from the 676 acres for such land. Tr. 369.
Upon approval of the preliminary plat, the developer conveyed to the county a permanent open space easement for the golf course, and began building roads and installing utility lines for the project. App. 259-260. The developer spent approximately $3 million building the golf course, and another $500,000 installing sewer and water facilities. Defendant’s Ex. 96. Before housing construction was to begin on a particular section, a final plat of that section was submitted for approval. Several sections, containing a total of 212 units, were given final approval by 1979. App. 260, 270, 278, 423. The preliminary plat, as well, was reapproved four times during that period. Id., at 270, 274, 362, 423.
In 1977, the county changed its zoning ordinance to require that calculations of allowable density exclude 10% of the total acreage to account for roads and utilities. Id., at 363; CA App. 862. In addition, the number of allowable units was changed to one per acre from the 1.089 per acre allowed in 1973. Id., at 858, 862; Tr. 1169-1170, 1183. The Commission continued to apply the zoning ordinance and subdivision regulations in effect in 1973 to Temple Hills, however, and reapproved the preliminary plat in 1978. In August 1979, the Commission reversed its position and decided that plats submitted for renewal should be evaluated under the zoning ordinance and subdivision regulations in effect when the renewal was sought. App. 279-282. The Commission then renewed the Temple Hills plat under the ordinances and regulations in effect at that time. Id., at 283-284.
In January 1980, the Commission asked the developer to submit a revised preliminary plat before it sought final approval for the remaining sections of the subdivision. The Commission reasoned that this was necessary because the original preliminary plat contained a number of surveying errors, the land available in the subdivision had been decreased inasmuch as the State had condemned part of the land for a parkway, and the areas marked “reserved for future development” had never been platted. Plaintiff’s Exs. 1078 and 1079; Tr. 164-168. A special committee (Temple Hills Committee) was appointed to work with the developer on the revision of the preliminary plat. Plaintiff’s Ex. 1081; Tr. 169-170.
The developer submitted a revised preliminary plat for approval in October 1980.2 Upon review, the Commission’s staff and the Temple Hills Committee noted several problems with the revised plat. App. 304-305. First, the allowable density under the zoning ordinance and subdivision regulations then in effect was 548 units, rather than the 736 units claimed under the preliminary plat approved in 1973. The difference reflected a decrease in 18.5 acres for the parkway, a decrease of 66 acres for the 10% deduction for roads, and an exclusion of 44 acres for 50% of the land lying on slopes exceeding a 25% grade. Second, two cul-de-sac roads that had become necessary because of the land taken for the parkway exceeded the maximum length allowed for such roads under the subdivision regulations in effect in both 1980 and 1973. Third, approximately 2,000 feet of road would have grades in excess of the maximum allowed by county road regulations. Fourth, the preliminary plat placed units on land that had grades in excess of 25% and thus was considered undevelopable under the zoning ordinance and subdivision regulations. Fifth, the developer had not fulfilled its obligations regarding the construction and maintenance of the main access road. Sixth, there were inadequate fire protection services for the area, as well as inadequate open space for children’s recreational activities. Finally, the lots proposed in the preliminary plat had a road frontage that was below the minimum required by the subdivision regulations in effect in 1980.
The Temple Hills Committee recommended that the Commission grant a waiver of the regulations regarding the length of the cul-de-sacs, the maximum grade of the roads, and the minimum frontage requirement. Id., at 297, 304-306. Without addressing the suggestion that those three requirements be waived, the Commission disapproved the plat on two other grounds: first, the plat did not comply with the density requirements of the zoning ordinance or subdivision regulations, because no deduction had been made for the land taken for the parkway, and because there had been no deduction for 10% of the acreage attributable to roads or for 50% of the land having a slope of more than 25%; and second, lots were placed on slopes with a grade greater than 25%. Plaintiff’s Ex. 9112.
The developer then appealed to the County Board of Zoning Appeals for an “interpretation of the Residential Cluster zoning [ordinance] as it relates to Temple Hills.”3 App. 314. On November 11, 1980, the Board determined that the Commission should apply the zoning ordinance and subdivision regulations that were in effect in 1973 in evaluating the density of Temple Hills. Id., at 328. It also decided that in measuring which lots had excessive grades, the Commission should define the slope in a manner more favorable to the developer. Id., at 329.
On November 26, respondent, Hamilton Bank of Johnson City, acquired through foreclosure the property in the Temple Hills subdivision that had not yet been developed, a total of 257.65 acres. Id., at 189-190. This included many of the parcels that had been left blank in the preliminary plat approved in 1973. In June 1981, respondent submitted two preliminary plats to the Commission – the plat that had been approved in 1973 and subsequently reapproved several times, and a plat indicating respondent’s plans for the undeveloped areas, which was similar to the plat submitted by the developer in 1980. Id., at 88. The new plat proposed the development of 688 units; the reduction from 736 units represented respondent’s concession that 18.5 acres should be removed from the acreage because that land had been taken for the parkway. Id., at 424, 425.
On June 18, the Commission disapproved the plat for eight reasons, including the density and grade problems cited in the October 1980 denial, as well as the objections the Temple Hills Committee had raised in 1980 to the length of two cul-de-sacs, the grade of various roads, the lack of fire protection, the disrepair of the main-access road, and the minimum frontage. Id., at 370. The Commission declined to follow the decision of the Board of Zoning Appeals that the plat should be evaluated by the 1973 zoning ordinance and subdivision regulations, stating that the Board lacked jurisdiction to hear appeals from the Commission. Id., at 187-188, 360-361.
Respondent then filed this suit in the United States District Court for the Middle District of Tennessee, pursuant to 42 U. S. C. § 1983, alleging that the Commission had taken its property without just compensation and asserting that the Commission should be estopped under state law from denying approval of the project.4 Respondent’s expert witnesses testified that the design that would meet each of the Commission’s eight objections would allow respondent to build only 67 units, 409 fewer than respondent claims it is entitled to build,5 and that the development of only 67 sites would result in a net loss of over $1 million. App. 377. Petitioners’ expert witness, on the other hand, testified that the Commission’s eight objections could be overcome by a design that would allow development of approximately 300 units. Tr. 1467-1468.
After a 3-week trial, the jury found that respondent had been denied the “economically viable” use of its property in violation of the Just Compensation Clause, and that the Commission was estopped under state law from requiring respondent to comply with the current zoning ordinance and subdivision regulations rather than those in effect in 1973. App. 32-33. The jury awarded damages of $350,000 for the temporary taking of respondent’s property. Id., at 33-34.6 The court entered a permanent injunction requiring the Commission to apply the zoning ordinance and subdivision regulations in effect in 1973 to Temple Hills, and to approve the plat submitted in 1981. Id., at 34.
The court then granted judgment notwithstanding the verdict in favor of the Commission on the taking claim, reasoning in part that respondent was unable to derive economic benefit from its property on a temporary basis only, and that such a temporary deprivation, as a matter of law, cannot constitute a taking. Id., at 36, 41. In addition, the court modified its permanent injunction to require the Commission merely to apply the zoning ordinance and subdivision regulations in effect in 1973 to the project, rather than requiring approval of the plat, in order to allow the parties to resolve “legitimate technical questions of whether plaintiff meets the requirements of the 1973 regulations,” id., at 42, through the applicable state and local appeals procedures.7
A divided panel of the United States Court of Appeals for the Sixth Circuit reversed. 729 F. 2d 402 (1984). The court held that application of government regulations affecting an owner’s use of property may constitute a taking if the regulation denies the owner all “economically viable” use of the land, and that the evidence supported the jury’s finding that the property had no economically feasible use during the time between the Commission’s refusal to approve the preliminary plat and the jury’s verdict. Id., at 405-406. Rejecting petitioners’ argument that respondent never had submitted a plat that complied with the 1973 regulations, and thus never had acquired rights that could be taken, the court held that the jury’s estoppel verdict indicates that the jury must have found that respondent had acquired a “vested right” under state law to develop the subdivision according to the plat submitted in 1973. Id., at 407. Even if respondent had no vested right under state law to finish the development, the jury was entitled to find that respondent had a reasonable investment-backed expectation that the development could be completed, and that the actions of the Commission interfered with that expectation. Ibid.
The court rejected the District Court’s holding that the taking verdict could not stand as a matter of law. A temporary denial of property could be a taking, and was to be analyzed in the same manner as a permanent taking. Finally, relying upon the dissent in San Diego Gas & Electric Co. v. San Diego, 450 U. S. 621, 636 (1981), the court determined that damages are required to compensate for a temporary taking.8
We granted certiorari to address the question whether Federal, State, and local Governments must pay money damages to a landowner whose property allegedly has been “taken” temporarily by the application of government regulations. 469 U. S. 815 (1984). Petitioners and their amici contend that we should answer the question in the negative by ruling that government regulation can never effect a “taking” within the meaning of the Fifth Amendment. They recognize that government regulation may be so restrictive that it denies a property owner all reasonable beneficial use of its property, and thus has the same effect as an appropriation of the property for public use, which concededly would be a taking under the Fifth Amendment. According to petitioners, however, regulation that has such an effect should not be viewed as a taking. Instead, such regulation should be viewed as a violation of the Fourteenth Amendment’s Due Process Clause, because it is an attempt by government to use its police power to effect a result that is so unduly oppressive to the property owner that it constitutionally can be effected only through the power of eminent domain. Violations of the Due Process Clause, petitioners’ argument concludes, need not be remedied by “just compensation.”
The Court twice has left this issue undecided. San Diego Gas & Electric Co. v. San Diego, supra; Agins v. Tiburon, 447 U. S. 255, 263 (1980). Once again, we find that the question is not properly presented, and must be left for another day. For whether we examine the Planning Commission’s application of its regulations under Fifth Amendment “taking” jurisprudence, or under the precept of due process, we conclude that respondent’s claim is premature.
We examine the posture of respondent’s cause of action first by viewing it as stating a claim under the Just Compensation Clause. This Court often has referred to regulation that “goes too far,” Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 415 (1922), as a “taking.” See, e. g., Ruckelshaus v. Monsanto Co., 467 U. S. 986, 1004-1005 (1984); Agins v. Tiburon, 447 U. S., at 260; Prune Yard Shopping Center v. Robins, 447 U. S. 74, 83 (1980);Kaiser Aetna v. United States, 444 U. S. 164, 174 (1979); Andrus v. Allard, 444 U. S. 51, 65-66 (1979); Penn Central Transp. Co. v. New York City, 438 U. S. 104, 124 (1978); Goldblatt v. Hempstead, 369 U. S. 590, 594 (1962); United States v. Central Eureka Mining Co., 357 U. S. 155, 168 (1958). Even assuming that those decisions meant to refer literally to the Taking Clause of the Fifth Amendment, and therefore stand for the proposition that regulation may effect a taking for which the Fifth Amendment requires just compensation, see San Diego, 450 U. S., at 647-653 (dissenting opinion), and even assuming further that the Fifth Amendment requires the payment of money damages to compensate for such a taking, the jury verdict in this case cannot be upheld. Because respondent has not yet obtained a final decision regarding the application of the zoning ordinance and subdivision regulations to its property, nor utilized the procedures Tennessee provides for obtaining just compensation, respondent’s claim is not ripe.
As the Court has made clear in several recent decisions, a claim that the application of government regulations effects a taking of a property interest is not ripe until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue. In Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S. 264 (1981), for example, the Court rejected a claim that the Surface Mining Control and Reclamation Act of 1977, 91 Stat. 447, 30 U. S. C. § 1201 et seq., effected a taking because:
There is no indication in the record that appellees have availed themselves of the opportunities provided by the Act to obtain administrative relief by requesting either a variance from the approximate-original-contour requirement of § 515(d) or a waiver from the surface mining restrictions in § 522(e). If [the property owners] were to seek administrative relief under these procedures, a mutually acceptable solution might well be reached with regard to individual properties, thereby obviating any need to address the constitutional questions. The potential for such administrative solutions confirms the conclusion that the taking issue decided by the District Court simply is not ripe for judicial resolution.
452 U. S., at 297 (footnote omitted).
Similarly, in Agins v. Tiburon, supra, the Court held that a challenge to the application of a zoning ordinance was not ripe because the property owners had not yet submitted a plan for development of their property. 447 U. S., at 260. In Penn Central Transp. Co. v. New York City, supra, the Court declined to find that the application of New York City’s Landmarks Preservation Law to Grand Central Terminal effected a taking because, although the Landmarks Preservation Commission had disapproved a plan for a 50-story office building above the terminal, the property owners had not sought approval for any other plan, and it therefore was not clear whether the Commission would deny approval for all uses that would enable the plaintiffs to derive economic benefit from the property. 438 U. S., at 136-137.
Respondent’s claim is in a posture similar to the claims the Court held premature in Hodel. Respondent has submitted a plan for developing its property, and thus has passed beyond the Agins threshold. But, like the Hodel plaintiffs, respondent did not then seek variances that would have allowed it to develop the property according to its proposed plat, notwithstanding the Commission’s finding that the plat did not comply with the zoning ordinance and subdivision regulations. It appears that variances could have been granted to resolve at least five of the Commission’s eight objections to the plat. The Board of Zoning Appeals had the power to grant certain variances from the zoning ordinance, including the ordinance’s density requirements and its restriction on placing units on land with slopes having a grade in excess of 25%. Tr. 1204-1205; see n. 3, supra. The Commission had the power to grant variances from the subdivision regulations, including the cul-de-sac, road-grade, and frontage requirements.9 Indeed, the Temple Hills Committee had recommended that the Commission grant variances from those regulations. App. 304-306. Nevertheless, respondent did not seek variances from either the Board or the Commission.
Respondent argues that it “did everything possible to resolve the conflict with the commission,” Brief for Respondent 42, and that the Commission’s denial of approval for respondent’s plat was equivalent to a denial of variances. The record does not support respondent’s claim, however. There is no evidence that respondent applied to the Board of Zoning Appeals for variances from the zoning ordinance. As noted, the developer sought a ruling that the ordinance in effect in 1973 should be applied, but neither respondent nor the developer sought a variance from the requirements of either the 1973 or 1980 ordinances. Further, although the subdivision regulations in effect in 1981 required that applications to the Commission for variances be in writing, and that notice of the application be given to owners of adjacent property,10 the record contains no evidence that respondent ever filed a written request for variances from the cul-de-sac, road-grade, or frontage requirements of the subdivision regulations, or that respondent ever gave the required notice.11 App. 212-213; see also Tr. 1255-1257.
Indeed, in a letter to the Commission written shortly before its June 18, 1981, meeting to consider the preliminary sketch, respondent took the position that it would not request variances from the Commission until after the Commission approved the proposed plat:
[Respondent] stands ready to work with the Planning Commission concerning the necessary variances. Until the initial sketch is renewed, however, and the developer has an opportunity to do detailed engineering work it is impossible to determine the exact nature of any variances that may be needed.
Plaintiff’s Ex. 9028, p. 6.
The Commission’s regulations clearly indicated that unless a developer applied for a variance in writing and upon notice to other property owners, “any condition shown on the plat which would require a variance will constitute grounds for disapproval of the plat.” CA App. 933. Thus, in the face of respondent’s refusal to follow the procedures for requesting a variance, and its refusal to provide specific information about the variances it would require, respondent hardly can maintain that the Commission’s disapproval of the preliminary plat was equivalent to a final decision that no variances would be granted.
As in Hodel, Agins, and Penn Central, then, respondent has not yet obtained a final decision regarding how it will be allowed to develop its property. Our reluctance to examine taking claims until such a final decision has been made is compelled by the very nature of the inquiry required by the Just Compensation Clause. Although “[t]he question of what constitutes a ‘taking’ for purposes of the Fifth Amendment has proved to be a problem of considerable difficulty,” Penn Central Transp. Co. v. New York City, 438 U. S., at 123, this Court consistently has indicated that among the factors of particular significance in the inquiry are the economic impact of the challenged action and the extent to which it interferes with reasonable investment-backed expectations. Id., at 124. See also Ruckelshaus v. Monsanto Co., 467 U. S., at 1005; PruneYard Shopping Center v. Robins, 447 U. S., at 83; Kaiser Aetna v. United States, 444 U. S., at 175. Those factors simply cannot be evaluated until the administrative agency has arrived at a final, definitive position regarding how it will apply the regulations at issue to the particular land in question.
Here, for example, the jury’s verdict indicates only that it found that respondent would be denied the economically feasible use of its property if it were forced to develop the subdivision in a manner that would meet each of the Commission’s eight objections. It is not clear whether the jury would have found that the respondent had been denied all reasonable beneficial use of the property had any of the eight objections been met through the grant of a variance. Indeed, the expert witness who testified regarding the economic impact of the Commission’s actions did not itemize the effect of each of the eight objections, so the jury would have been unable to discern how a grant of a variance from any one of the regulations at issue would have affected the profitability of the development. App. 377; see also id., at 102-104. Accordingly, until the Commission determines that no variances will be granted, it is impossible for the jury to find, on this record, whether respondent “will be unable to derive economic benefit” from the land.12
Respondent asserts that it should not be required to seek variances from the regulations because its suit is predicated upon 42 U. S. C. § 1983, and there is no requirement that a plaintiff exhaust administrative remedies before bringing a § 1983 action. Patsy v. Florida Board of Regents, 457 U. S. 496 (1982). The question whether administrative remedies must be exhausted is conceptually distinct, however, from the question whether an administrative action must be final before it is judicially reviewable. See FTC v. Standard Oil Co., 449 U. S. 232, 243 (1980); Bethlehem Steel Corp. v. EPA, 669 F. 2d 903, 908 (CA3 1982). See generally 13A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3532.6 (1984). While the policies underlying the two concepts often overlap, the finality requirement is concerned with whether the initial decisionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury; the exhaustion requirement generally refers to administrative and judicial procedures by which an injured party may seek review of an adverse decision and obtain a remedy if the decision is found to be unlawful or otherwise inappropriate. Patsy concerned the latter, not the former.
The difference is best illustrated by comparing the procedure for seeking a variance with the procedures that, under Patsy, respondent would not be required to exhaust. While it appears that the State provides procedures by which an aggrieved property owner may seek a declaratory judgment regarding the validity of zoning and planning actions taken by county authorities, see Fallin v. Knox County Bd. of Comm’rs, 656 S. W. 2d 338 (Tenn. 1983); Tenn. Code Ann. §§ 27-8-101, 27-9-101 to 27-9-113, and XX-XX-XXX to XX-XX-XXX (1980 and Supp. 1984), respondent would not be required to resort to those procedures before bringing its § 1983 action, because those procedures clearly are remedial. Similarly, respondent would not be required to appeal the Commission’s rejection of the preliminary plat to the Board of Zoning Appeals, because the Board was empowered, at most, to review that rejection, not to participate in the Commission’s decisionmaking.
Resort to those procedures would result in a judgment whether the Commission’s actions violated any of respondent’s rights. In contrast, resort to the procedure for obtaining variances would result in a conclusive determination by the Commission whether it would allow respondent to develop the subdivision in the manner respondent proposed. The Commission’s refusal to approve the preliminary plat does not determine that issue; it prevents respondent from developing its subdivision without obtaining the necessary variances, but leaves open the possibility that respondent may develop the subdivision according to its plat after obtaining the variances. In short, the Commission’s denial of approval does not conclusively determine whether respondent will be denied all reasonable beneficial use of its property, and therefore is not a final, reviewable decision.
A second reason the taking claim is not yet ripe is that respondent did not seek compensation through the procedures the State has provided for doing so.13 The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation. Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S., at 297, n. 40. Nor does the Fifth Amendment require that just compensation be paid in advance of, or contemporaneously with, the taking; all that is required is that a ” ‘reasonable, certain and adequate provision for obtaining compensation’ ” exist at the time of the taking. Regional Rail Reorganization Act Cases, 419 U. S. 102, 124-125 (1974) (quoting Cherokee Nation v. Southern Kansas R. Co., 135 U. S. 641, 659 (1890)). See also Ruckelshaus v. Monsanto Co., 467 U. S., at 1016; Yearsley v. W. A. Ross Construction Co., 309 U. S. 18, 21 (1940); Hurley v. Kincaid, 285 U. S. 95, 104 (1932). If the government has provided an adequate process for obtaining compensation; and if resort to that process “yield[s] just compensation,” then the property owner “has no claim against the Government” for a taking. Monsanto, 467 U. S., at 1013, 1018, n. 21. Thus, we have held that taking claims against the Federal Government are premature until the property owner has availed itself of the process provided by the Tucker Act, 28 U. S. C. § 1491. Monsanto, 467 U. S., at 1016-1020. Similarly, if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation.
The recognition that a property owner has not suffered a violation of the Just Compensation Clause until the owner has unsuccessfully attempted to obtain just compensation through the procedures provided by the State for obtaining such compensation is analogous to the Court’s holding in Parratt v. Taylor, 451 U. S. 527 (1981). There, the Court ruled that a person deprived of property through a random and unauthorized act by a state employee does not state a claim under the Due Process Clause merely by alleging the deprivation of property. In such a situation, the Constitution does not require predeprivation process because it would be impossible or impracticable to provide a meaningful hearing before the deprivation. Instead, the Constitution is satisfied by the provision of meaningful postdeprivation process. Thus, the State’s action is not “complete” in the sense of causing a constitutional injury “unless or until the state fails to provide an adequate postdeprivation remedy for the property loss.” Hudson v. Palmer, 468 U. S. 517, 532, n. 12 (1984). Likewise, because the Constitution does not require pretaking compensation, and is instead satisfied by a reasonable and adequate provision for obtaining compensation after the taking, the State’s action here is not “complete” until the State fails to provide adequate compensation for the taking.14
Under Tennessee law, a property owner may bring an inverse condemnation action to obtain just compensation for an alleged taking of property under certain circumstances. Tenn. Code Ann. § 29-16-123 (1980). The statutory scheme for eminent domain proceedings outlines the procedures by which government entities must exercise the right of eminent domain. §§ 29-16-101 to XX-XX-XXX. The State is prohibited from “enter[ing] upon [condemned] land” until these procedures have been utilized and compensation has been paid the owner, § 29-16-122, but if a government entity does take possession of the land without following the required procedures,
the owner of such land may petition for a jury of inquest, in which case the same proceedings may be had, as near as may be, as hereinbefore provided; or he may sue for damages in the ordinary way … .
The Tennessee state courts have interpreted § 29-16-123 to allow recovery through inverse condemnation where the “taking” is effected by restrictive zoning laws or development regulations. See Davis v. Metropolitan Govt. of Nashville, 620 S. W. 2d 532, 533-534 (Tenn. App. 1981); Speight v. Lockhart, 524 S. W. 2d 249 (Tenn. App. 1975). Respondent has not shown that the inverse condemnation procedure is unavailable or inadequate, and until it has utilized that procedure, its taking claim is premature.
- “[N]or shall private property be taken for public use, without just compensation.”
The Fifth Amendment’s prohibition, of course, applies against the States through the Fourteenth Amendment. Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 241 (1897); see also San Diego Gas & Electric Co. v. San Diego, 450 U. S. 621, 623, n. 1 (1981).
- The developer also submitted the preliminary plat that had been approved in 1973 and reapproved on several subsequent occasions, contending that it had the right to develop the property according to that plat. As we have noted, that plat did not indicate how all of the parcels would be developed. App. 84-85.
- The Board of Zoning Appeals was empowered:
“a. To hear and decide appeals on any permit, decision, determination, or refusal made by the [County] Building Commissioner or other administrative official in the carrying out or enforcement of any provision of this Resolution; and to interpret the Zoning map and this Resolution.
“c. To hear and decide applications for variances from the terms of this Resolution. Such variances shall be granted only where by reason of exceptional narrowness, shallowness, or shape of a specific piece of property which at the time of adoption of this Resolution was a lot of record, or where by reason of exceptional topographic situations or conditions of a piece of property the strict application of the provisions of this Resolution would result in practical difficulties to or undue hardship upon the owner of such property.” Plaintiff’s Ex. 9112.
See also Tenn. Code. Ann. §§ 13-7-106 to 13-7-109 (1980).
- Respondent also alleged that the Commission’s refusal to approve the plat violated respondent’s rights to substantive and procedural due process and denied it equal protection. The District Court granted a directed verdict to petitioners on the substantive due process and equal protection claims, and the jury found that respondent had not been denied procedural due process. App. 32. Those issues are not before us.
- Id., at 377; Tr. 238-243. Respondent claimed it was entitled to build 476 units: the 736 units allegedly approved in 1973 minus the 212 units already built or given final approval and minus 48 units that were no longer available because land had been taken from the subdivision for the parkway.
- Although the record is less than clear, it appears that the jury calculated the $350,000 award by determining a fair rate of return on the value of the property for the time between the Commission’s rejection of the preliminary plat in 1980 and the jury’s verdict in March 1982. See id., at 800-805; Tr. of Oral Arg. 25, 32-33. In light of our disposition of the case, we need not reach the question whether that measure of damages would provide just compensation, or whether it would be appropriate if respondent’s cause of action were viewed as stating a claim under the Due Process Clause.
- While respondent’s appeal was pending before the Court of Appeals, the parties reached an agreement whereby the Commission granted a variance from its cul-de-sac and road-grade regulations and approved the development of 476 units, and respondent agreed, among other things, to rebuild existing roads, and build all new roads, according to current regulations. App. to Brief for Petitioners 35.
- Judge Wellford dissented. 729 F. 2d, at 409. He did not agree that the evidence supported a finding that respondent’s property had been taken, in part because there was no evidence that respondent had formally requested a variance from the regulations. Even if there was a temporary denial of the “economically viable” use of the property, Judge Wellford would have held that mere fluctuations in value during the process of governmental decisionmaking are ” ‘incidents of ownership’ ” and cannot be considered a ” ‘taking,’ ” id., at 410, quoting Agins v. Tiburon, 447 U. S. 255, 263, n. 9 (1980). He also did not agree that damages could be awarded to remedy any taking, reasoning that the San Diego Gas dissent does not reflect the views of the majority of this Court, and that this Court never has awarded damages for a temporary taking where there was no invasion, physical occupation, or “seizure and direction” by the State of the landowner’s property. 729 F. 2d, at 411.
- The subdivision regulations in effect in 1980 and 1981 provided:
“Variances may be granted under the following conditions:
“Where the subdivider can show that strict adherence to these regulations would cause unnecessary hardship, due to conditions beyond the control of the subdivider. If the subdivider creates the hardship due to his design or in an effort to increase the yield of lots in his subdivision, the variance will not be granted.
“Where the Planning Commission decides that there are topographical or other conditions peculiar to the site, and a departure from their regulations will not destroy their intent.” CA App. 932.
- The Commission’s regulations required that
“Each applicant must file with the Planning Commission a written request for variance stating at least the following:
“a. The variance requested.
“b. Reason or circumstances requiring the variance.
“c. Notice to the adjacent property owners that a variance is being requested.
“Without the application any condition shown on the plat which would require a variance will constitute grounds for disapproval of the plat.” Id., at 933.
- Respondent’s predecessor-in-interest requested, and apparently was granted, a waiver of the 10% road-grade regulation for section VI of the subdivision. See Plaintiff’s Exs. 1078, 9094. The predecessor-in-interest wrote a letter on January 3, 1980, that respondent contends must be construed as a request for a waiver of the road-grade regulation for the entire subdivision:
“I contend that the road grade and slope question … is adequately provided for by both the [subdivision] Regulations and the Zoning Ordinance. In both, the Planning Commission is given the authority to approve roads that have grades in excess of 10%.
“In our particular case, it was common knowledge from the beginning that due to the character of the land involved that there would be roads that exceeded the 10% slope. In fact in our first Section there is a stretch of road that exceeds the 10%; therefore I respectfully request that this letter be made an official part of the Planning Commission Minutes of January 3, 1980 and further the Zoning Approval which has been granted be allowed to stand without any changes.” Defendants’ Ex. 96.
Even assuming, arguendo, that the letter constituted a request for a variance, respondent’s taking claim nevertheless is not ripe. There is no evidence that respondent requested variances from the regulations that formed the basis of the other objections raised by the Commission, such as those regulating the length of cul-de-sacs. Absent a final decision regarding the application of all eight of the Commission’s objections, it is impossible to tell whether the land retained any reasonable beneficial use or whether respondent’s expectation interests had been destroyed.
- The District Court’s instructions allowed the jury to find a taking if it ascertained that “the regulations in question as applied to [respondent’s] property denied [respondent] economically viable use of its property.” Tr. 2016. That instruction seems to assume that respondent’s taking theory was simply that its property was rendered valueless by the application of new zoning laws and subdivision regulations in 1980. The record indicates, however, that respondent’s claim was based upon a state-law theory of “vested rights,” and that the alleged “taking” was the Commission’s interference with respondent’s “expectation interest” in completing the development according to its original plans. The evidence that it was not economically feasible to develop just the 67 units respondent claims the Commission’s actions would limit it to developing was based upon the cost of building the development according to the original plan. The expected income from the sale of the 67 units apparently was measured against the cost of the 27-hole golf course and the cost of installing water and sewer connections for a large development that would not have had to have been installed for a development of only 67 units. App. 191-197; Tr. 690; see also id., at 2154-2155. Thus, the evidence appears to indicate that it would not be profitable to develop 67 units because respondent had made various expenditures in the expectation that the development would contain far more units; the evidence does not appear to support the proposition that, aside from those “reliance” expenditures, development of 67 units on the property would not be economically feasible.
We express no view of the propriety of applying the “economic viability” test when the taking claim is based upon such a theory of “vested rights” or “expectation interest.” Cf. Andrus v. Allard, 444 U. S. 51, 66 (1979) (analyzing a claim that Government regulations effected a taking by reducing expected profits). It is sufficient for our purposes to note that whether the “property” taken is viewed as the land itself or respondent’s expectation interest in developing the land as it wished, it is impossible to determine the extent of the loss or interference until the Commission has decided whether it will grant a variance from the application of the regulations.
- Again, it is necessary to contrast the procedures provided for review of the Commission’s actions, such as those for obtaining a declaratory judgment, see Tenn. Code Ann. §§ 29-14-101 to XX-XX-XXX (1980), with procedures that allow a property owner to obtain compensation for a taking. Exhaustion of review procedures is not required. See Patsy v. Florida Board of Regents, 457 U. S. 496 (1982). As we have explained, however, because the Fifth Amendment proscribes takings without just compensation, no constitutional violation occurs until just compensation has been denied. The nature of the constitutional right therefore requires that a property owner utilize procedures for obtaining compensation before bringing a § 1983 action.
- The analogy to Parratt is imperfect because Parratt does not extend to situations such as those involved in Logan v. Zimmerman Brush Co., 455 U. S. 422 (1982), in which the deprivation of property is effected pursuant to an established state policy or procedure, and the State could provide predeprivation process. Unlike the Due Process Clause, however, the Just Compensation Clause has never been held to require pretaking process or compensation. Ruckelshaus v. Monsanto Co., 467 U. S. 986, 1016 (1984). Nor has the Court ever recognized any interest served by pretaking compensation that could not be equally well served by post-taking compensation. Under the Due Process Clause, on the other hand, the Court has recognized that predeprivation process is of “obvious value in reaching an accurate decision,” that the “only meaningful opportunity to invoke the discretion of the decisionmaker is likely to be before the [deprivation] takes effect,” Cleveland Board of Education v. Loudermill, 470 U. S. 532, 543 (1985), and that predeprivation process may serve the purpose of making an individual feel that the government has dealt with him fairly. See Carey v. Piphus, 435 U. S. 247, 262 (1978). Thus, despite the Court’s holding in Logan, Parratt’s reasoning applied here by analogy because of the special nature of the Just Compensation Clause.
San Remo Hotel, L.P. v. City and County of San Francisco,
545 U.S. 323 (2005)
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Paul F. Utrecht argued the cause for petitioners. With him on the briefs was Andrew M. Zacks.
Seth P. Waxman argued the cause for respondents. With him on the brief were Andrew W. Schwartz, Fran M. Layton, Ellison Folk, Edward C. DuMont, and Therese M. Stewart.
Justice Stevens delivered the opinion of the Court.
This case presents the question whether federal courts may craft an exception to the full faith and credit statute, 28 U. S. C. § 1738, for claims brought under the Takings Clause of the Fifth Amendment.
Petitioners, who own and operate a hotel in San Francisco, California (hereinafter City), initiated this litigation in response to the application of a city ordinance that required them to pay a $567,000 “conversion fee” in 1996. After the California courts rejected petitioners’ various state-law takings claims, they advanced in the Federal District Court a series of federal takings claims that depended on issues identical to those that had previously been resolved in the state-court action. In order to avoid the bar of issue preclusion, petitioners asked the District Court to exempt from § 1738’s reach claims brought under the Takings Clause of the Fifth Amendment.
Petitioners’ argument is predicated on Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), which held that takings claims are not ripe until a State fails “to provide adequate compensation for the taking.” Id., at 195. Unless courts disregard § 1738 in takings cases, petitioners argue, plaintiffs will be forced to litigate their claims in state court without any realistic possibility of ever obtaining review in a federal forum. The Ninth Circuit’s rejection of this argument conflicted with the Second Circuit’s decision in Santini v. Connecticut Hazardous Waste Management Serv., 342 F. 3d 118 (2003). We granted certiorari to resolve the conflict, 543 U. S. 1032 (2004),1 and now affirm the judgment of the Ninth Circuit.
The San Remo Hotel is a three-story, 62-unit hotel in the Fisherman’s Wharf neighborhood in San Francisco. In December 1906, shortly after the great earthquake and fire destroyed most of the City, the hotel – then called the “New California Hotel” – opened its doors to house dislocated individuals, immigrants, artists, and laborers. The City officially licensed the facility to operate as a hotel and restaurant in 1916, and in 1922 the hotel was given its current name. When the hotel fell into financial difficulties and a “dilapidated condition” in the early 1970’s, Robert and Thomas Field purchased the facility, restored it, and began to operate it as a bed and breakfast inn. See San Remo Hotel, L. P. v. City and County of San Francisco, 100 Cal. Rptr. 2d 1, 5 (Cal. App. 2000) (officially depublished).
In 1979, San Francisco’s Board of Supervisors responded to “a severe shortage” of affordable rental housing for elderly, disabled, and low-income persons by instituting a moratorium on the conversion of residential hotel units into tourist units. San Francisco Residential Hotel Unit Conversion and Demolition Ordinance (hereinafter Hotel Conversion Ordinance or HCO) §§ 41.3(a)-(g), App. to Pet. for Cert. 195a-197a. Two years later, the City enacted the first version of the Hotel Conversion Ordinance to regulate all future conversions. San Francisco Ordinance No. 330-81, codified in § 41.1 et seq. Under the 1981 version of the HCO, a hotel owner could convert residential units into tourist units only by obtaining a conversion permit. And those permits could be obtained only by constructing new residential units, rehabilitating old ones, or paying an “in lieu” fee into the City’s Residential Hotel Preservation Fund Account. See §§ 41.12-41.13, App. to Pet. for Cert. 224a-231a. The City substantially strengthened the HCO in 1990 by eliminating several exceptions that had existed in the 1981 version and increasing the size of the “in lieu” fee hotel owners must pay when converting residential units. See 145 F. 3d 1095, 1099 (CA9 1998).
The genesis of this protracted dispute lies in the 1981 HCO’s requirement that each hotel “file an initial unit usage report containing” the “number of residential and tourist units in the hotel[s] as of September 23, 1979.” § 41.6(b)(1), App. to Pet. for Cert. 206a. Jean Iribarren was operating the San Remo Hotel, pursuant to a lease from petitioners, when this requirement came into effect. Iribarren filed the initial usage report for the hotel, which erroneously reported that all of the rooms in the hotel were “residential” units.2 The consequence of that initial classification was that the City zoned the San Remo Hotel as “residential hotel” – in other words, a hotel that consisted entirely of residential units. And that zoning determination ultimately meant that, despite the fact that the San Remo Hotel had operated in practice as a tourist hotel for many years, 145 F. 3d, at 1100, petitioners were required to apply for a conditional use permit to do business officially as a “tourist hotel,” San Remo Hotel, L. P. v. City and County of San Francisco, 27 Cal. 4th 643, 654, 41 P. 3d 87, 94 (2002).
After the HCO was revised in 1990, petitioners applied to convert all of the rooms in the San Remo Hotel into tourist use rooms under the relevant HCO provisions and requested a conditional use permit under the applicable zoning laws. In 1993, the City Planning Commission granted petitioners’ requested conversion and conditional use permit, but only after imposing several conditions, one of which included the requirement that petitioners pay a $567,000 “in lieu” fee.3 Petitioners appealed, arguing that the HCO requirement was unconstitutional and otherwise improperly applied to their hotel. See id., at 656, 41 P. 3d, at 95. The City Board of Supervisors rejected petitioners’ appeal on April 19, 1993.
In March 1993, petitioners filed for a writ of administrative mandamus in California Superior Court. That action lay dormant for several years, and the parties ultimately agreed to stay that action after petitioners filed for relief in Federal District Court.
Petitioners filed in federal court for the first time on May 4, 1993. Petitioners’ first amended complaint alleged four counts of due process (substantive and procedural) and takings (facial and as-applied)4 violations under the Fifth and Fourteenth Amendments to the United States Constitution, one count seeking damages under Rev. Stat. § 1979, 42 U. S. C. § 1983, for those violations, and one pendent state-law claim. The District Court granted respondents summary judgment. As relevant to this action, the court found that petitioners’ facial takings claim was untimely under the applicable statute of limitations, and that the as-applied takings claim was unripe under Williamson County, 473 U. S. 172.
On appeal to the Court of Appeals for the Ninth Circuit, petitioners took the unusual position that the court should not decide their federal claims, but instead should abstain under Railroad Comm’n of Tex. v. Pullman Co., 312 U. S. 496 (1941), because a return to state court could conceivably moot the remaining federal questions. See App. 67-68; see also 145 F. 3d, at 1101. The Court of Appeals obliged petitioners’ request with respect to the facial challenge, a request that respondents apparently viewed as an “outrageous act of chutzpah.” Id., at 1105. That claim, the court reasoned, was “ripe the instant the 1990 HCO was enacted,” id., at 1102, and appropriate for Pullman abstention principally because petitioners’ “entire case” hinged on the propriety of the planning commission’s zoning designation – the precise subject of the pending state mandamus action, 145 F. 3d, at 1105.5 The court, however, affirmed the District Court’s determination that petitioners’ as-applied takings claim – the claim that the application of the HCO to the San Remo Hotel violated the Takings Clause – was unripe. Because petitioners had failed to pursue an inverse condemnation action in state court, they had not yet been denied just compensation as contemplated by Williamson County. 145 F. 3d, at 1105.
At the conclusion of the Ninth Circuit’s opinion, the court appended a footnote stating that petitioners would be free to raise their federal takings claims in the California courts. If, however, they wanted to “retain [their] right to return to federal court for adjudication of [their] federal claim, [they] must make an appropriate reservation in state court.” Id., at 1106, n. 7 (citations omitted).6 That is precisely what petitioners attempted to do when they reactivated the dormant California case. Yet petitioners advanced more than just the claims on which the federal court had abstained, and phrased their state claims in language that sounded in the rules and standards established and refined by this Court’s takings jurisprudence. Petitioners claimed, for instance, that “imposition of the fee ‘fails to substantially advance a legitimate government interest’ and that ‘[t]he amount of the fee imposed is not roughly proportional to the impact’ of the proposed tourist use of the San Remo Hotel.” 27 Cal. 4th, at 656,41 P. 3d, at 95 (quoting petitioners’ second amended state complaint).7 The state trial court dismissed petitioners’ amended complaint, but the intermediate appellate court reversed. The court held that petitioners’ claim that the payment of the “in lieu” fee effected a taking should have been evaluated under heightened scrutiny. Under more exacting scrutiny, the fee failed this Court’s “essential nexus” and “rough proportionality” tests because, inter alia, it was based on the original flawed designation that the San Remo Hotel was an entirely “residential use” facility. See id., at 657-658, 41 P. 3d, at 96-97 (summarizing appellate court opinion) (internal quotation marks omitted).
The California Supreme Court reversed over the partial dissent of three justices.8 The court initially noted that petitioners had reserved their federal causes of action and had sought no relief for any violation of the Federal Constitution. Id., at 649, n. 1, 41 P. 3d, at 91, n. 1.9 In the portion of its opinion discussing the Takings Clause of the California Constitution, however, the court noted that “we appear to have construed the clauses congruently.” Id., at 664, 41 P. 3d, at 100-101 (citing cases). Accordingly, despite the fact that petitioners sought relief only under California law, the state court decided to “analyze their takings claim under the relevant decisions of both this court and the United States Supreme Court.” Ibid., 41 P. 3d, at 101.10
Applying the “reasonable relationship” test, the court upheld the HCO on its face and as applied to petitioners. As to the facial challenge, the court concluded that the HCO’s mandated conversion fees “bear a reasonable relationship to the loss of housing … in the generality or great majority of cases… .” Id., at 673, 41 P. 3d, at 107. With respect to petitioners’ as-applied challenge, the court concluded that the conversion fee was reasonably based on the number of units designated for conversion, which itself was based on petitioners’ own estimate that had been provided to the City in 1981 and had remained unchallenged for years. Id., at 678, and n. 17, 41 P. 3d, at 110-111, and n. 17. The court therefore reversed the appellate court and reinstated the trial court’s order dismissing petitioners’ complaint.
Petitioners did not seek a writ of certiorari from the California Supreme Court’s decision in this Court. Instead, they returned to Federal District Court by filing an amended complaint based on the complaint that they had filed prior to invoking Pullman abstention.11 The District Court held that petitioners’ facial attack on the HCO was not only barred by the statute of limitations, but also by the general rule of issue preclusion. See App. to Pet. for Cert. 85a-86a.12 The District Court reasoned that 28 U. S. C. § 1738 requires federal courts to give preclusive effect to any state-court judgment that would have preclusive effect under the laws of the State in which the judgment was rendered. Because California courts had interpreted the relevant substantive state takings law coextensively with federal law, petitioners’ federal claims constituted the same claims that had already been resolved in state court.
The Court of Appeals affirmed. The court rejected petitioners’ contention that general preclusion principles should be cast aside whenever plaintiffs “must litigate in state court pursuant to Pullman and/or Williamson County.” 364 F. 3d 1088, 1096 (CA9 2004). Relying on unambiguous Circuit precedent and the absence of any clearly contradictory decisions from this Court, the Court of Appeals found itself bound to apply general issue preclusion doctrine. Given that general issue preclusion principles governed, the only remaining question was whether the District Court properly applied that doctrine; the court concluded that it did. The court expressly rejected petitioners’ contention “that California takings law is not coextensive with federal takings law,” ibid., and held that the state court’s application of the “reasonable relationship” test was an “‘equivalent determination’ of such claims under the federal takings clause,” id., at 1098.13 We granted certiorari and now affirm.
Article IV, § 1, of the United States Constitution demands that “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.” In 1790, Congress responded to the Constitution’s invitation by enacting the first version of the full faith and credit statute. See Act of May 26, 1790, ch. 11, 1 Stat. 122.14 The modern version of the statute, 28 U. S. C. § 1738, provides that “judicial proceedings … shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State … .” This statute has long been understood to encompass the doctrines of res judicata, or “claim preclusion,” and collateral estoppel, or “issue preclusion.” See Allen v. McCurry, 449 U. S. 90, 94-96 (1980).15
The general rule implemented by the full faith and credit statute – that parties should not be permitted to relitigate issues that have been resolved by courts of competent jurisdiction – predates the Republic.16 It “has found its way into every system of jurisprudence, not only from its obvious fitness and propriety, but because without it, an end could never be put to litigation.” Hopkins v. Lee, 6 Wheat. 109, 114 (1821). This Court has explained that the rule
is demanded by the very object for which civil courts have been established, which is to secure the peace and repose of society by the settlement of matters capable of judicial determination. Its enforcement is essential to the maintenance of social order; for, the aid of judicial tribunals would not be invoked for the vindication of rights of person and property, if, as between parties and their privies, conclusiveness did not attend the judgments of such tribunals in respect of all matters properly put in issue and actually determined by them.
Southern Pacific R. Co. v. United States, 168 U. S. 1, 49 (1897).
As this case is presented to us, under our limited grant of certiorari, we have only one narrow question to decide: whether we should create an exception to the full faith and credit statute, and the ancient rule on which it is based, in order to provide a federal forum for litigants who seek to advance federal takings claims that are not ripe until the entry of a final state judgment denying just compensation. See Williamson County, 473 U. S. 172.17
The essence of petitioners’ argument is as follows: because no claim that a state agency has violated the federal Takings Clause can be heard in federal court until the property owner has “been denied just compensation” through an available state compensation procedure, id., at 195, “federal courts [should be] required to disregard the decision of the state court” in order to ensure that federal takings claims can be “considered on the merits in … federal court.” See Brief for Petitioners 8, 14. Therefore, the argument goes, whenever plaintiffs reserve their claims under England v. Louisiana Bd. of Medical Examiners, 375 U. S. 411 (1964), federal courts should review the reserved federal claims de novo, regardless of what issues the state court may have decided or how it may have decided them.
We reject petitioners’ contention. Although petitioners were certainly entitled to reserve some of their federal claims, as we shall explain, England does not support their erroneous expectation that their reservation would fully negate the preclusive effect of the state-court judgment with respect to any and all federal issues that might arise in the future federal litigation. Federal courts, moreover, are not free to disregard 28 U. S. C. § 1738 simply to guarantee that all takings plaintiffs can have their day in federal court. We turn first to England.
England involved a group of plaintiffs who had graduated from chiropractic school, but sought to practice in Louisiana without complying with the educational requirements of the State’s Medical Practice Act. 375 U. S., at 412. They filed suit in federal court challenging the constitutionality of the Act. The District Court invoked Pullman abstention and stayed the proceedings to enable the Louisiana courts to decide a preliminary and essential question of state law – namely, whether the state statute applied at all to chiropractors. 375 U. S., at 413.18 The state court, however, reached beyond the state-law question and held not only that the statute applied to the plaintiffs but also that its application was consistent with the Fourteenth Amendment to the Federal Constitution. The Federal District Court then dismissed the federal action without addressing the merits of the federal claim.
On appeal, we held that when a federal court abstains from deciding a federal constitutional issue to enable the state courts to address an antecedent state-law issue, the plaintiff may reserve his right to return to federal court for the disposition of his federal claims. Id., at 419. In that case, the antecedent state issue requiring abstention was distinct from the reserved federal issue. See id., at 418-419. Our discussion of the “typical case” in which reservations of federal issues are appropriate makes clear that our holding was limited to cases that are fundamentally distinct from petitioners’. “Typical” England cases generally involve federal constitutional challenges to a state statute that can be avoided if a state court construes the statute in a particular manner.19 In such cases, the purpose of abstention is not to afford state courts an opportunity to adjudicate an issue that is functionally identical to the federal question. To the contrary, the purpose of Pullman abstention in such cases is to avoid resolving the federal question by encouraging a state-law determination that may moot the federal controversy. See 375 U. S., at 416-417,and n. 7.20 Additionally, our opinion made it perfectly clear that the effective reservation of a federal claim was dependent on the condition that plaintiffs take no action to broaden the scope of the state court’s review beyond decision of the antecedent state-law issue.21
Our holding in England does not support petitioners’ attempt to relitigate issues resolved by the California courts. With respect to petitioners’ facial takings claims, the Court of Appeals invoked Pullman abstention after determining that a ripe federal question existed – namely, “the facial takings challenge to the 1990 HCO.” 145 F. 3d, at 1105.22 It did so because “‘land use planning is a sensitive area of social policy’” and because petitioners’ pending state mandamus action had the potential of mooting their facial challenge to the HCO by overturning the City’s original classification of the San Remo Hotel as a “residential” property. Ibid. Thus, petitioners were entitled to insulate from preclusive effect one federal issue – their facial constitutional challenge to the HCO – while they returned to state court to resolve their petition for writ of mandate.
Petitioners, however, chose to advance broader issues than the limited issues contained within their state petition for writ of administrative mandamus on which the Ninth Circuit relied when it invoked Pullman abstention. In their state action, petitioners advanced not only their request for a writ of administrative mandate, 27 Cal. 4th, at 653, 41 P. 3d, at 93, but also their various claims that the HCO was unconstitutional on its face and as applied for (1) its failure to substantially advance a legitimate interest, (2) its lack of a nexus between the required fees and the ultimate objectives sought to be achieved via the ordinance, and (3) its imposition of an undue economic burden on individual property owners. Id., at 672-676, 41 P. 3d, at 106-109. By broadening their state action beyond the mandamus petition to include their “substantially advances” claims, petitioners effectively asked the state court to resolve the same federal issues they asked it to reserve. England does not support the exercise of any such right.
Petitioners’ as-applied takings claims fare no better. As an initial matter, the Court of Appeals did not abstain with respect to those claims. Instead, the court found that they were unripe under Williamson County. The court therefore affirmed the District Court’s dismissal of those claims. 145 F. 3d, at 1106. Unlike their “substantially advances” claims, petitioners’ as-applied claims were never properly before the District Court, and there was no reason to expect that they could be relitigated in full if advanced in the state proceedings. See Allen, 449 U. S., at 101, n. 17. In short, our opinion in England does not support petitioners’ attempt to circumvent § 1738.
Petitioners’ ultimate submission, however, does not rely on England alone. Rather, they argue that federal courts simply should not apply ordinary preclusion rules to state-court judgments when a case is forced into state court by the ripeness rule of Williamson County. For support, petitioners rely on the Court of Appeals for the Second Circuit’s decision in Santini, 342 F. 3d, at 130.
In Santini, the Second Circuit held that parties “who litigate state-law takings claims in state court involuntarily” pursuant to Williamson County cannot be precluded from having those very claims resolved “by a federal court.” 342 F. 3d, at 130. The court did not rest its decision on any provision of the federal full faith and credit statute or our cases construing that law. Instead, the court reasoned that “[i]t would be both ironic and unfair if the very procedure that the Supreme Court required [plaintiffs] to follow before bringing a Fifth Amendment takings claim … also precluded [them] from ever bringing a Fifth Amendment takings claim.” Ibid. We find this reasoning unpersuasive for several reasons.
First, both petitioners and Santini ultimately depend on an assumption that plaintiffs have a right to vindicate their federal claims in a federal forum. We have repeatedly held, to the contrary, that issues actually decided in valid state-court judgments may well deprive plaintiffs of the “right” to have their federal claims relitigated in federal court. See, e. g., Migra v. Warren City School Dist. Bd. of Ed., 465 U. S. 75, 84 (1984); Allen, 449 U. S., at 103-104. This is so even when the plaintiff would have preferred not to litigate in state court, but was required to do so by statute or prudential rules. See id., at 104. The relevant question in such cases is not whether the plaintiff has been afforded access to a federal forum; rather, the question is whether the state court actually decided an issue of fact or law that was necessary to its judgment.
In Allen, the plaintiff, Willie McCurry, invoked the Fourth and Fourteenth Amendments in an unsuccessful attempt to suppress evidence in a state criminal trial. After he was convicted, he sought to remedy his alleged constitutional violation by bringing a suit for damages under 42 U. S. C. § 1983 against the officers who had entered his home. Relying on “‘the special role of federal courts in protecting civil rights’” and the fact that § 1983 provided the “only route to a federal forum,” the Court of Appeals held that McCurry was entitled to a federal trial unencumbered by collateral estoppel. 449 U. S., at 93. We rejected that argument emphatically.
The actual basis of the Court of Appeals’ holding appears to be a generally framed principle that every person asserting a federal right is entitled to one unencumbered opportunity to litigate that right in a federal district court, regardless of the legal posture in which the federal claim arises. But the authority for this principle is difficult to discern. It cannot lie in the Constitution, which makes no such guarantee, but leaves the scope of the jurisdiction of the federal district courts to the wisdom of Congress. And no such authority is to be found in § 1983 itself … . There is, in short, no reason to believe that Congress intended to provide a person claiming a federal right an unrestricted opportunity to relitigate an issue already decided in state court simply because the issue arose in a state proceeding in which he would rather not have been engaged at all.
Id., at 103-104 (footnote omitted).23
As in Allen, we are presently concerned only with issues actually decided by the state court that are dispositive of federal claims raised under § 1983. And, also as in Allen, it is clear that petitioners would have preferred not to have been forced to have their federal claims resolved by issues decided in state court. Unfortunately for petitioners, it is entirely unclear why their preference for a federal forum should matter for constitutional or statutory purposes.
The only distinction between this case and Allen that is possibly relevant is the fact that petitioners here originally invoked the jurisdiction of a Federal District Court, which abstained on Pullman grounds while petitioners returned to state court. But petitioners’ as-applied takings claims were never properly before the District Court because they were unripe. And, as we have already explained, the Court of Appeals invoked Pullman abstention only with respect to petitioners’ “substantially advances” takings challenge, which petitioners then gratuitously presented to the state court. At a bare minimum, with respect to the facial takings claim, petitioners were “in an offensive posture in [their] state-court proceeding, and could have proceeded first in federal court had [they] wanted to litigate [their “substantially advances”] federal claim in a federal forum.” Migra, 465 U. S., at 85, n. 7. Thus, the only distinction between this case and Allen is a distinction of no relevant significance.
The second reason we find petitioners’ argument unpersuasive is that it assumes that courts may simply create exceptions to 28 U. S. C. § 1738 wherever courts deem them appropriate. Even conceding, arguendo, the laudable policy goal of making federal forums available to deserving litigants, we have expressly rejected petitioners’ view. “Such a fundamental departure from traditional rules of preclusion, enacted into federal law, can be justified only if plainly stated by Congress.” Kremer v. Chemical Constr. Corp., 456 U. S. 461, 485 (1982). Our cases have therefore made plain that “an exception to § 1738 will not be recognized unless a later statute contains an express or implied partial repeal.” Id., at 468 (citing Allen, 449 U. S., at 99). Even when the plaintiff’s resort to state court is involuntary and the federal interest in denying finality is robust, we have held that Congress “must ‘clearly manifest’ its intent to depart from § 1738.” 456 U. S., at 477.
The same concerns animate our decision here. Congress has not expressed any intent to exempt from the full faith and credit statute federal takings claims. Consequently, we apply our normal assumption that the weighty interests in finality and comity trump the interest in giving losing litigants access to an additional appellate tribunal. As we explained in Federated Department Stores, Inc. v. Moitie, 452 U. S. 394 (1981):
[W]e do not see the grave injustice which would be done by the application of accepted principles of res judicata. ‘Simple justice’ is achieved when a complex body of law developed over a period of years is evenhandedly applied. The doctrine of res judicata serves vital public interests beyond any individual judge’s ad hoc determination of the equities in a particular case. There is simply ‘no principle of law or equity which sanctions the rejection by a federal court of the salutary principle of res judicata.’
Id., at 401 (quoting Heiserv. Woodruff, 327 U. S. 726, 733 (1946)).
Third, petitioners have overstated the reach of Williamson County throughout this litigation. Petitioners were never required to ripen the heart of their complaint – the claim that the HCO was facially invalid because it failed to substantially advance a legitimate state interest – in state court. See Yee v. Escondido, 503 U. S. 519, 534 (1992). Petitioners therefore could have raised most of their facial takings challenges, which by their nature requested relief distinct from the provision of “just compensation,” directly in federal court.24 Alternatively, petitioners had the option of reserving their facial claims while pursuing their as-applied claims along with their petition for writ of administrative mandamus. Petitioners did not have the right, however, to seek state review of the same substantive issues they sought to reserve. The purpose of the England reservation is not to grant plaintiffs a second bite at the apple in their forum of choice.
With respect to those federal claims that did require ripening, we reject petitioners’ contention that Williamson County forbids plaintiffs from advancing their federal claims in state courts. The requirement that aggrieved property owners must seek “compensation through the procedures the State has provided for doing so,” 473 U. S., at 194, does not preclude state courts from hearing simultaneously a plaintiff’s request for compensation under state law and the claim that, in the alternative, the denial of compensation would violate the Fifth Amendment of the Federal Constitution. Reading Williamson County to preclude plaintiffs from raising such claims in the alternative would erroneously interpret our cases as requiring property owners to “resort to piecemeal litigation or otherwise unfair procedures.” MacDonald, Sommer & Frates v. Yolo County, 477 U. S. 340, 350, n. 7 (1986).
It is hardly a radical notion to recognize that, as a practical matter, a significant number of plaintiffs will necessarily litigate their federal takings claims in state courts. It was settled well before Williamson County that “a claim that the application of government regulations effects a taking of a property interest is not ripe until the government entity charged with implementing the regulations has reached a final decision regarding the application of the regulations to the property at issue.” 473 U. S., at 186. As a consequence, there is scant precedent for the litigation in federal district court of claims that a state agency has taken property in violation of the Fifth Amendment’s takings clause. To the contrary, most of the cases in our takings jurisprudence, including nearly all of the cases on which petitioners rely, came to us on writs of certiorari from state courts of last resort.25
Moreover, this is not the only area of law in which we have recognized limits to plaintiffs’ ability to press their federal claims in federal courts. See, e. g., Fair Assessment in Real Estate Assn., Inc. v. McNary, 454 U. S. 100, 116 (1981) (holding that taxpayers are “barred by the principle of comity from asserting § 1983 actions against the validity of state tax systems in federal courts”). State courts are fully competent to adjudicate constitutional challenges to local land-use decisions. Indeed, state courts undoubtedly have more experience than federal courts do in resolving the complex factual, technical, and legal questions related to zoning and land-use regulations.
At base, petitioners’ claim amounts to little more than the concern that it is unfair to give preclusive effect to state-court proceedings that are not chosen, but are instead required in order to ripen federal takings claims. Whatever the merits of that concern may be, we are not free to disregard the full faith and credit statute solely to preserve the availability of a federal forum. The Court of Appeals was correct to decline petitioners’ invitation to ignore the requirements of 28 U. S. C. § 1738. The judgment of the Court of Appeals is therefore affirmed.
It is so ordered
Chief Justice Rehnquist, with whom Justice O’Connor, Justice Kennedy, and Justice Thomas join, concurring in the judgment.
I agree that the judgment of the Court of Appeals should be affirmed. Whatever the reasons for petitioners’ chosen course of litigation in the state courts, it is quite clear that they are now precluded by the full faith and credit statute, 28 U. S. C. § 1738, from relitigating in their 42 U. S. C. § 1983 action those issues which were adjudicated by the California courts. See Migra v. Warren City School Dist. Bd. of Ed., 465 U. S. 75, 84 (1984); Allen v. McCurry, 449 U. S. 90, 103-105 (1980). There is no basis for us to except from § 1738’s reach all claims brought under the Takings Clause. See, e. g., Kremer v. Chemical Constr. Corp., 456 U. S. 461, 485 (1982). I write separately to explain why I think part of our decision in Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), may have been mistaken.
In Williamson County, the respondent land developer filed a § 1983 suit in federal court alleging a regulatory takings claim after a regional planning commission disapproved respondent’s plat proposals, but before respondent appealed that decision to the zoning board of appeals. Id., at 181-182. Rather than reaching the merits, we found the claim was brought prematurely. Id., at 200. We first held that the claim was “not ripe until the government entity charged with implementing the regulations [had] reached a final decision regarding the application of the regulations to the property at issue.” Id., at 186. Because respondent failed to seek variances from the planning commission or the zoning board of appeals, we decided that respondent had failed to meet the final-decision requirement. Id., at 187-191. We then noted a “second reason the taking claim [was] not yet ripe”: “respondent did not seek compensation through the procedures the State [had] provided for doing so.” Id., at 194. Until the claimant had received a final denial of compensation through all available state procedures, such as by an inverse condemnation action, we said he could not “claim a violation of the Just Compensation Clause.” Id., at 195-196.
It is not clear to me that Williamson County was correct in demanding that, once a government entity has reached a final decision with respect to a claimant’s property, the claimant must seek compensation in state court before bringing a federal takings claim in federal court. The Court in Williamson County purported to interpret the Fifth Amendment in divining this state-litigation requirement. See, e. g., id., at 194, n. 13 (“The nature of the constitutional right … requires that a property owner utilize procedures for obtaining compensation before bringing a § 1983 action”). More recently, we have referred to it as merely a prudential requirement. Suitum v. Tahoe Regional Planning Agency, 520 U. S. 725, 733-734 (1997). It is not obvious that either constitutional or prudential principles require claimants to utilize all state compensation procedures before they can bring a federal takings claim. Cf. Patsy v. Board of Regents of Fla., 457 U. S. 496, 516 (1982)(holding that plaintiffs suing under § 1983 are not required to have exhausted state administrative remedies).26
The Court today attempts to shore up the state-litigation requirement by referring to Fair Assessment in Real Estate Assn., Inc. v. McNary, 454 U. S. 100 (1981). Ante, at 347. There, we held that the principle of comity (reflected in the Tax Injunction Act, 28 U. S. C. § 1341) bars taxpayers from asserting § 1983 claims against the validity of state tax systems in federal courts. 454 U. S., at 116. Our decision that such suits must be brought in state court was driven by the unique and sensitive interests at stake when federal courts confront claims that States acted impermissibly in administering their own tax systems. Id., at 102-103, 107-113. Those historically grounded, federalism-based concerns had led to a longstanding, “fundamental principle of comity between federal courts and state governments …, particularly in the area of state taxation,” a principle which predated the enactment of § 1983 itself. Id., at 103, 107-114. We decided that those interests favored requiring that taxpayers bring challenges to the validity of state tax systems in state court, despite the strong interests favoring federal court review of alleged constitutional violations by state officials. Id., at 115-116.
The Court today makes no claim that any such longstanding principle of comity toward state courts in handling federal takings claims existed at the time Williamson County was decided, nor that one has since developed. The Court does remark, however, that state courts are more familiar with the issues involved in local land-use and zoning regulations, and it suggests that this makes it proper to relegate federal takings claims to state court. Ante, at 347. But it is not apparent that any such expertise matches the type of historically grounded, federalism-based interests we found necessary to our decision in Fair Assessment. In any event, the Court has not explained why we should hand authority over federal takings claims to state courts, based simply on their relative familiarity with local land-use decisions and proceedings, while allowing plaintiffs to proceed directly to federal court in cases involving, for example, challenges to municipal land-use regulations based on the First Amendment, see, e. g., Renton v. Playtime Theatres, Inc., 475 U. S. 41 (1986); Young v. American Mini Theatres, Inc., 427 U. S. 50 (1976), or the Equal Protection Clause, see, e. g., Cleburne v. Cleburne Living Center, Inc., 473 U. S. 432 (1985); Village of Belle Terre v. Boraas, 416 U. S. 1 (1974). In short, the affirmative case for the state-litigation requirement has yet to be made.
Finally, Williamson County’s state-litigation rule has created some real anomalies, justifying our revisiting the issue. For example, our holding today ensures that litigants who go to state court to seek compensation will likely be unable later to assert their federal takings claims in federal court. Ante, at 346-347. And, even if preclusion law would not block a litigant’s claim, the Rooker-Feldman doctrine might, insofar as Williamson County can be read to characterize the state courts’ denial of compensation as a required element of the Fifth Amendment takings claim. See Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U. S. 280 (2005). As the Court recognizes, ante, at 346-347, Williamson County all but guarantees that claimants will be unable to utilize the federal courts to enforce the Fifth Amendment’s just compensation guarantee. The basic principle that state courts are competent to enforce federal rights and to adjudicate federal takings claims is sound, see ante, at 347, and would apply to any number of federal claims. Cf. 28 U. S. C. § 2254 (providing for limited federal habeas review of state-court adjudications of alleged violations of the Constitution). But that principle does not explain why federal takings claims in particular should be singled out to be confined to state court, in the absence of any asserted justification or congressional directive.27
* * *
I joined the opinion of the Court in Williamson County. But further reflection and experience lead me to think that the justifications for its state-litigation requirement are suspect, while its impact on takings plaintiffs is dramatic. Here, no court below has addressed the correctness of Williamson County, neither party has asked us to reconsider it, and resolving the issue could not benefit petitioners. In an appropriate case, I believe the Court should reconsider whether plaintiffs asserting a Fifth Amendment takings claim based on the final decision of a state or local government entity must first seek compensation in state courts.
- Although petitioners asked this Court to review two separate questions, our grant of certiorari was limited exclusively to the question whether “a Fifth Amendment Takings claim [is] barred by issue preclusion based on a judgment denying compensation solely under state law, which was rendered in a state court proceeding that was required to ripen the federal Takings claim?” Pet. for Cert. i. Thus, we have no occasion to reach petitioners’ claim that, under California law, the substantive state takings law decision of the California Supreme Court was not entitled to preclusive effect in federal court. See Brief for Petitioners 19-21.
- It seems that despite this initial classification, the San Remo Hotel has operated as a mixed hotel for tourists and long-term residents since long before the HCO was enacted. According to the California Supreme Court, in “a 1992 declaration by [petitioners], Iribarren filed the ‘incorrect’ initial unit usage report without their knowledge. They first discovered the report in 1983 when they resumed operation of the hotel. They protested the residential use classification in 1987, but were told it could not be changed because the appeal period had passed.” San Remo Hotel, L. P. v. City and County of San Francisco, 27 Cal. 4th 643, 654, 41 P. 3d 87, 94 (2002).
- The application specifically required petitioners (1) to pay for 40 percent of the cost of replacement housing for the 62 lost residential units; (2) to offer lifetime leases to any then-current residential users; and (3) to “obtain variances from floor-area ratio and parking requirements.” Id., at 656, 41 P. 3d, at 95.
- Specifically, count 3 alleged that the HCO was facially unconstitutional under the Takings Clause because it “fails to substantially advance legitimate government interests, deprives plaintiffs of the opportunity to earn a fair return on its investment, denies plaintiffs economically viable use of their property, and forces plaintiffs to bear the public burden of housing the poor, all without just compensation.” First Amended and Supplemental Complaint, No. C-93-1644-DLJ (ND Cal., Jan. 24, 1994), p. 20, ¶ 49. Count 4, which advanced petitioners’ as-applied Takings Clause violation, was predicated on the same rationale. Id., at 21.
- The Court of Appeals did not answer the question whether this claim was barred by the statute of limitations, as the District Court had held.
- The reservation discussed in the Ninth Circuit’s opinion was the common reservation of federal claims made in state litigation under England v. Louisiana Bd. of Medical Examiners, 375 U. S. 411, 420-421 (1964).
- With respect to claims that a regulation fails to advance a legitimate state interest, see generally Lingle v. Chevron U. S. A. Inc., 544 U. S. 528, 540-545 (2005). With respect to “rough proportionality” claims, see generally Nollan v. California Coastal Comm’n, 483 U. S. 825 (1987); Dolan v. City of Tigard, 512 U. S. 374 (1994).
- Justice Baxter and Justice Chin opined that because some hotel rooms had been previously rented to tourists, the “in lieu” payment was excessive. 27 Cal. 4th, at 691, 41 P. 3d, at 119-120. Justice Brown opined that a 1985 statute had effectively superseded the HCO and disagreed with the majority’s analysis of the constitutional issues. Id., at 699, 700-704, 41 P. 3d, at 125-128.
- “Plaintiffs sought no relief in state court for violation of the Fifth Amendment to the United States Constitution. They explicitly reserved their federal causes of action. As their petition for writ of mandate, as well, rests solely on state law, no federal question has been presented or decided in this case.” Id., at 649, n. 1, 41 P. 3d, at 91, n. 1.
- See also id., at 665, 41 P. 3d, at 101 (“[I]t is the last mentioned prong of the high court’s takings analysis that is at issue here” (emphasis added)).
- The third amended complaint, which was filed on November 14, 2002, alleged two separate counts. See App. 88-93. Count 1 alleged that the HCO was facially unconstitutional and unconstitutional as applied to petitioners because (a) it failed “to substantially advance legitimate government interests”; (b) it forced petitioners “to bear the public burden of housing the poor”; and (c) it imposed unreasonable conditions on petitioners’ request for a conditional use permit (the in lieu fee and the required lifetime leases to residential tenants). Id., at 88-89. Count 2 sought relief under 42 U. S. C. § 1983 based on (a) extortion through the imposition of the $567,000 fee; (b) an actual taking of property under Penn Central Transp. Co. v. New York City, 438 U. S. 104 (1978); (c) the failure of the HCO as applied to petitioners to advance legitimate state interests; (d) the City’s requirement that petitioners bear the full cost of providing a general public benefit (public housing) without just compensation.
- The District Court found that most of petitioners’ as-applied claims amounted to nothing more than improperly labeled facial challenges. See App. to Pet. for Cert. 82a-85a. The remainder of petitioners’ as-applied claims, the court held, was barred by the statute of limitations. Id., at 84a-85a.
- California courts apply issue preclusion to a final judgment in earlier litigation between the same parties if “(1) the issue decided in the prior case is identical with the one now presented; (2) there was a final judgment on the merits in the prior case, and (3) the party to be estopped was a party to the prior adjudication.” 364 F. 3d, at 1096. The court reasoned that the California Supreme Court’s decision satisfied those criteria because petitioners’ takings challenges “raised in state court are identical to the federal claims … and are based on the same factual allegations.” Ibid. Our limited review in this case does not include the question whether the Court of Appeals’ reading of California preclusion law was in error.
- “This statute has existed in essentially unchanged form since its enactment just after the ratification of the Constitution … .” Allen v. McCurry, 449 U. S. 90, 96, n. 8 (1980).
- “Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action. Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case.” Id., at 94 (citations omitted).
- “The authority of the res judicata, with the limitations under which it is admitted, is derived by us from the Roman law and the Canonists.” Washington, Alexandria, & Georgetown Steam-Packet Co. v. Sickles, 24 How. 333, 341 (1861); see also id., at 343 (noting that the rule also has its pedigree “[i]n the courts upon the continent of Europe, and in the courts of chancery and admiralty in the United States and Great Britain, where the function of adjudication is performed entire by a tribunal composed of one or more judges …”).
- We did not grant certiorari on many of the issues discussed by the parties and amici. We therefore assume for purposes of our decision that all other issues in this protracted controversy have been correctly decided. We assume, for instance, that the Ninth Circuit properly interpreted California preclusion law; that the California Supreme Court was correct in its determination that California takings law is coextensive with federal law; that, as a matter of California law, the HCO was lawfully applied to petitioners’ hotel; and that under California law, the “in lieu” fee was imposed evenhandedly and substantially advanced legitimate state interests.
- We stressed in England that abstention was essential to prevent the district court from deciding “‘questions of constitutionality on the basis of preliminary guesses regarding local law.’” 375 U. S., at 416, n. 7 (quoting Spector Motor Service, Inc. v. McLaughlin, 323 U. S. 101, 105 (1944)).
- 375 U. S., at 420 (describing the “typical case” as one in which “the state courts are asked to construe a state statute against the backdrop of a federal constitutional challenge”).
- As we explained in Allen, 449 U. S., at 101-102, n. 17, “[t]he holding in England depended entirely on this Court’s view of the purpose of abstention in such a case: Where a plaintiff properly invokes federal-court jurisdiction in the first instance on a federal claim, the federal court has a duty to accept that jurisdiction. Abstention may serve only to postpone, rather than to abdicate, jurisdiction, since its purpose is to determine whether resolution of the federal question is even necessary, or to obviate the risk of a federal court’s erroneous construction of state law.” (Emphasis added and citations omitted.)
- 375 U. S., at 419 (“[I]f a party freely and without reservation submits his federal claims for decision by the state courts, litigates them there, and has them decided there, then … he has elected to forgo his right to return to the District Court”).
- Petitioners’ facial challenges to the HCO were ripe, of course, under Yee v. Escondido, 503 U. S. 519, 534 (1992), in which we held that facial challenges based on the “substantially advances” test need not be ripened in state court – the claims do “not depend on the extent to which petitioners are deprived of the economic use of their particular pieces of property or the extent to which these particular petitioners are compensated.” Ibid.
- We expressed similar views in Migra v. Warren City School Dist. Bd. of Ed., 465 U. S. 75, 84 (1984):
“Although such a division may seem attractive from a plaintiff’s perspective, it is not the system established by § 1738. That statute embodies the view that it is more important to give full faith and credit to state-court judgments than to ensure separate forums for federal and state claims. This reflects a variety of concerns, including notions of comity, the need to prevent vexatious litigation, and a desire to conserve judicial resources.”
- In all events, petitioners may no longer advance such claims given our recent holding that the “‘substantially advances’ formula is not a valid takings test, and indeed … has no proper place in our takings jurisprudence.” Lingle, 544 U. S., at 548.
- See, e. g., Dolan, 512 U. S., at 383; Yee, 503 U. S., at 526; Nollan, 483 U. S., at 830; First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U. S. 304, 310-311 (1987); Penn Central, 438 U. S., at 120-122. Indeed, Justice Holmes’ famous “too far” formulation, which spawned our regulatory takings jurisprudence, was announced in a case that came to this Court via a writ of certiorari to Pennsylvania’s highest court. Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 415 (1922).
- In creating the state-litigation rule, the Court, in addition to relying on the Fifth Amendment’s text, analogized to Ruckelshaus v. Monsanto Co., 467 U. S. 986 (1984), and Parratt v. Taylor, 451 U. S. 527 (1981). As several of petitioners’ amici in this case have urged, those cases provided limited support for the state-litigation requirement. See Brief for Defenders of Property Rights et al. as Amici Curiae 9-12; Brief for Elizabeth J. Neumont et al. as Amici Curiae 10-14.
- Indeed, in some States the courts themselves apply the state-litigation requirement from Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U. S. 172 (1985), refusing to entertain any federal takings claim until the claimant receives a final denial of compensation through all the available state procedures. See, e. g., Breneric Assoc. v. City of Del Mar, 69 Cal. App. 4th 166, 188-189, 81 Cal. Rptr. 2d 324, 338-339 (1998); Melillo v. City of New Haven, 249 Conn. 138, 154, n. 28, 732 A. 2d 133, 143, n. 28 (1999). This precludes litigants from asserting their federal takings claim even in state court. The Court tries to avoid this anomaly by asserting that, for plaintiffs attempting to raise a federal takings claim in state court as an alternative to their state claims, Williamson County does not command that the state courts themselves impose the state-litigation requirement. Ante, at 346. But that is so only if Williamson County’s state-litigation requirement is merely a prudential rule, and not a constitutional mandate, a question that the Court today conspicuously leaves open.
Dolan v. City of Tigard,
512 U.S. 374, 114 S. Ct. 2309 (1994).
David B. Smith, Tigard, OR, for petitioner.
Timothy V. Ramis, Portland, OR, for respondent.
Edwin S. Kneedler, Washington, DC, for U.S., as amicus curiae by special leave of the Court.
Chief Justice Rehnquist delivered the opinion of the Court.
Petitioner challenges the decision of the Oregon Supreme Court which held that the city of Tigard could condition the approval of her building permit on the dedication of a portion of her property for flood control and traffic improvements. 317 Ore. 110, 854 P.2d 437 (1993). We granted certiorari to resolve a question left open by our decision in Nollan v. California Coastal Comm’n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), of what is the required degree of connection between the exactions imposed by the city and the projected impacts of the proposed development.
The State of Oregon enacted a comprehensive land use management program in 1973. Ore.Rev.Stat. ss 197.005-197.860 (1991). The program required all Oregon cities and counties to adopt new comprehensive land use plans that were consistent with the statewide planning goals. ss 197.175(1), 197.250. The plans are implemented by land use regulations which are part of an integrated hierarchy of legally binding goals, plans, and regulations. ss 197.175, 197.175(2)(b). Pursuant to the State’s requirements, the city of Tigard, a community of some 30,000 residents on the southwest edge of Portland, developed a comprehensive plan and codified it in its Community Development Code (CDC). The CDC requires property owners in the area zoned Central Business District to comply with a 15% open space and landscaping requirement, which limits total site coverage, including all structures and paved parking, to 85% of the parcel. CDC, ch. 18.66, App. to Pet. for Cert. G-16 to G-17. After the completion of a transportation study that identified congestion in the Central Business District as a particular problem, the city adopted a plan for a pedestrian/bicycle pathway intended to encourage alternatives to automobile transportation for short trips. The CDC requires that new development facilitate this plan by dedicating land for pedestrian pathways where provided for in the pedestrian/bicycle pathway plan.1
The city also adopted a Master Drainage Plan (Drainage Plan). The Drainage Plan noted that flooding occurred in several areas along Fanno Creek, including areas near petitioner’s property. Record, Doc. No. F, ch. 2, pp. 2-5 to 2-8; 4-2 to 4-6; Figure 4-1. The Drainage Plan also established that the increase in impervious surfaces associated with continued urbanization would exacerbate these flooding problems. To combat these risks, the Drainage Plan suggested a series of improvements to the Fanno Creek Basin, including channel excavation in the area next to petitioner’s property. App. to Pet. for Cert. G-13, G-38. Other recommendations included ensuring that the floodplain remains free of structures and that it be preserved as greenways to minimize flood damage to structures. Record, Doc. No. F, ch. 5, pp. 5-16 to 5-21. The Drainage Plan concluded that the cost of these improvements should be shared based on both direct and indirect benefits, with property owners along the waterways paying more due to the direct benefit that they would receive. Id., ch. 8, p. 8-11. CDC Chapters 18.84 and 18.86 and CDC s 18.164.100 and the Tigard Park Plan carry out these recommendations.
Petitioner Florence Dolan owns a plumbing and electric supply store located on Main Street in the Central Business District of the city. The store covers approximately 9,700 square feet on the eastern side of a 1.67-acre parcel, which includes a gravel parking lot. Fanno Creek flows through the southwestern corner of the lot and along its western boundary. The year-round flow of the creek renders the area within the creek’s 100-year floodplain virtually unusable for commercial development. The city’s comprehensive plan includes the Fanno Creek floodplain as part of the city’s greenway system.
Petitioner applied to the city for a permit to redevelop the site. Her proposed plans called for nearly doubling the size of the store to 17,600 square feet and paving a 39-space parking lot. The existing store, located on the opposite side of the parcel, would be razed in sections as construction progressed on the new building. In the second phase of the project, petitioner proposed to build an additional structure on the northeast side of the site for complementary businesses and to provide more parking. The proposed expansion and intensified use are consistent with the city’s zoning scheme in the Central Business District. CDC s 18.66.030, App. to Brief for Petitioner C-1 to C-3.
The City Planning Commission (Commission) granted petitioner’s permit application subject to conditions imposed by the city’s CDC. The CDC establishes the following standard for site development review approval:
“Where landfill and/or development is allowed within and adjacent to the 100-year floodplain, the City shall require the dedication of sufficient open land area for greenway adjoining and within the floodplain. This area shall include portions at a suitable elevation for the construction of a pedestrian/bicycle pathway within the floodplain in accordance with the adopted pedestrian/bicycle plan.” CDC s 18.120.180.A.8, App. to Brief for Respondent B-45 to B-46.
Thus, the Commission required that petitioner dedicate the portion of her property lying within the 100-year floodplain for improvement of a storm drainage system along Fanno Creek and that she dedicate an additional 15-foot strip of land adjacent to the floodplain as a pedestrian/bicycle pathway.2 The dedication required by that condition encompasses approximately 7,000 square feet, or roughly 10% of the property. In accordance with city practice, petitioner could rely on the dedicated property to meet the 15% open space and landscaping requirement mandated by the city’s zoning scheme. App. to Pet. for Cert. G-28 to G-29. The city would bear the cost of maintaining a landscaped buffer between the dedicated area and the new store. Id., at G-44 to G-45.
Petitioner requested variances from the CDC standards. Variances are granted only where it can be shown that, owing to special circumstances related to a specific piece of the land, the literal interpretation of the applicable zoning provisions would cause “an undue or unnecessary hardship” unless the variance is granted. CDC s 18.134.010, App. to Brief for Respondent B-47.3 Rather than posing alternative mitigating measures to offset the expected impacts of her proposed development, as allowed under the CDC, petitioner simply argued that her proposed development would not conflict with the policies of the comprehensive plan. Id., at E-4. The Commission denied the request.
The Commission made a series of findings concerning the relationship between the dedicated conditions and the projected impacts of petitioner’s project. First, the Commission noted that “[i]t is reasonable to assume that customers and employees of the future uses of this site could utilize a pedestrian/bicycle pathway adjacent to this development for their transportation and recreational needs.” City of Tigard Planning Commission Final Order No. 91-09 PC, App. to Pet. for Cert. G-24. The Commission noted that the site plan has provided for bicycle parking in a rack in front of the proposed building and “[i]t is reasonable to expect that some of the users of the bicycle parking provided for by the site plan will use the pathway adjacent to Fanno Creek if it is constructed.” Ibid. In addition, the Commission found that creation of a convenient, safe pedestrian/bicycle pathway system as an alternative means of transportation “could offset some of the traffic demand on [nearby] streets and lessen the increase in traffic congestion.” Ibid.
The Commission went on to note that the required floodplain dedication would be reasonably related to petitioner’s request to intensify the use of the site given the increase in the impervious surface. The Commission stated that the “anticipated increased storm water flow from the subject property to an already strained creek and drainage basin can only add to the public need to manage the stream channel and floodplain for drainage purposes.” Id., at G-37. Based on this anticipated increased storm water flow, the Commission concluded that “the requirement of dedication of the floodplain area on the site is related to the applicant’s plan to intensify development on the site.” Ibid. The Tigard City Council approved the Commission’s final order, subject to one minor modification; the city council reassigned the responsibility for surveying and marking the floodplain area from petitioner to the city’s engineering department. Id., at G-7.
Petitioner appealed to the Land Use Board of Appeals (LUBA) on the ground that the city’s dedication requirements were not related to the proposed development, and, therefore, those requirements constituted an uncompensated taking of her property under the Fifth Amendment. In evaluating the federal taking claim, LUBA assumed that the city’s findings about the impacts of the proposed development were supported by substantial evidence. Dolan v. Tigard, LUBA 91-161 (Jan. 7, 1992), reprinted at App. to Pet. for Cert. D-15, n. 9. Given the undisputed fact that the proposed larger building and paved parking area would increase the amount of impervious surfaces and the runoff into Fanno Creek, LUBA concluded that “there is a ‘reasonable relationship’ between the proposed development and the requirement to dedicate land along Fanno Creek for a greenway.” Id., at D-16. With respect to the pedestrian/bicycle pathway, LUBA noted the Commission’s finding that a significantlylarger retail sales building and parking lot would attract larger numbers of customers and employees and their vehicles. It again found a “reasonable relationship” between alleviating the impacts of increased traffic from the development and facilitating the provision of a pedestrian/bicycle pathway as an alternative means of transportation. Ibid.
The Oregon Court of Appeals affirmed, rejecting petitioner’s contention that in Nollan v. California Coastal Comm’n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), we had abandoned the “reasonable relationship” test in favor of a stricter “essential nexus” test. 113 Ore.App. 162, 832 P.2d 853 (1992). The Oregon Supreme Court affirmed. 317 Ore. 110, 854 P.2d 437 (1993). The court also disagreed with petitioner’s contention that the Nollan Court abandoned the “reasonably related” test. 317 Ore., at 118, 854 P.2d, at 442. Instead, the court read Nollan to mean that an “exaction is reasonably related to an impact if the exaction serves the same purpose that a denial of the permit would serve.” 317 Ore., at 120, 854 P.2d, at 443. The court decided that both the pedestrian/bicycle pathway condition and the storm drainage dedication had an essential nexus to the development of the proposed site. Id., at 121, 854 P.2d, at 443. Therefore, the court found the conditions to be reasonably related to the impact of the expansion of petitioner’s business. Ibid.4 We granted certiorari, 510 U.S. 989, 114 S.Ct. 544, 126 L.Ed.2d 446 (1993), because of an alleged conflict between the Oregon Supreme Court’s decision and our decision in Nollan, supra.
The Takings Clause of the Fifth Amendment of the United States Constitution, made applicable to the States through the Fourteenth Amendment, Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239, 17 S.Ct. 581, 585, 41 L.Ed. 979 (1897), provides: “[N]or shall private property be taken for public use, without just compensation.”5 One of the principal purposes of the Takings Clause is “to bar 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.” Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554 (1960). Without question, had the city simply required petitioner to dedicate a strip of land along Fanno Creek for public use, rather than conditioning the grant of her permit to redevelop her property on such a dedication, a taking would have occurred. Nollan, supra, 483 U.S., at 831, 107 S.Ct., at 3145. Such public access would deprive petitioner of the right to exclude others, “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” Kaiser Aetna v. United States, 444 U.S. 164, 176, 100 S.Ct. 383, 391, 62 L.Ed.2d 332 (1979).
On the other side of the ledger, the authority of state and local governments to engage in land use planning has been sustained against constitutional challenge as long ago as our decision in Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926). “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law.” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413, 43 S.Ct. 158, 159, 67 L.Ed. 322 (1922). A land use regulation does not effect a taking if it “substantially advance[s] legitimate state interests” and does not “den [y] an owner economically viable use of his land.” Agins v. City of Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106 (1980).6
The sort of land use regulations discussed in the cases just cited, however, differ in two relevant particulars from the present case. First, they involved essentially legislative determinations classifying entire areas of the city, whereas here the city made an adjudicative decision to condition petitioner’s application for a building permit on an individual parcel. Second, the conditions imposed were not simply a limitation on the use petitioner might make of her own parcel, but a requirement that she deed portions of the property to the city. In Nollan, supra, we held that governmental authority to exact such a condition was circumscribed by the Fifth and Fourteenth Amendments. Under the well-settled doctrine of “unconstitutional conditions,” the government may not require a person to give up a constitutional right-here the right to receive just compensation when property is taken for a public use-in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property. See Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972); Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811 (1968).
Petitioner contends that the city has forced her to choose between the building permit and her right under the Fifth Amendment to just compensation for the public easements. Petitioner does not quarrel with the city’s authority to exact some forms of dedication as a condition for the grant of a building permit, but challenges the showing made by the city to justify these exactions. She argues that the city has identified “no special benefits” conferred on her, and has not identified any “special quantifiable burdens” created by her new store that would justify the particular dedications required from her which are not required from the public at large.
In evaluating petitioner’s claim, we must first determine whether the “essential nexus” exists between the “legitimate state interest” and the permit condition exacted by the city. Nollan, 483 U.S., at 837, 107 S.Ct., at 3148. If we find that a nexus exists, we must then decide the required degree of connection between the exactions and the projected impact of the proposed development. We were not required to reach this question in Nollan, because we concluded that the connection did not meet even the loosest standard. Id., at 838, 107 S.Ct., at 3149. Here, however, we must decide this question.
We addressed the essential nexus question in Nollan. The California Coastal Commission demanded a lateral public easement across the Nollans’ beachfront lot in exchange for a permit to demolish an existing bungalow and replace it with a three-bedroom house. Id., at 828, 107 S.Ct., at 3144. The public easement was designed to connect two public beaches that were separated by the Nollan’s property. The Coastal Commission had asserted that the public easement condition was imposed to promote the legitimate state interest of diminishing the “blockage of the view of the ocean” caused by construction of the larger house.
We agreed that the Coastal Commission’s concern with protecting visual access to the ocean constituted a legitimate public interest. Id., at 835, 107 S.Ct., at 3148. We also agreed that the permit condition would have been constitutional “even if it consisted of the requirement that the Nollans provide a viewing spot on their property for passersby with whose sighting of the ocean their new house would interfere.” Id., at 836, 107 S.Ct., at 3148. We resolved, however, that the Coastal Commission’s regulatory authority was set completely adrift from its constitutional moorings when it claimed that a nexus existed between visual access to the ocean and a permit condition requiring lateral public access along the Nollans’ beachfront lot. Id., at 837, 107 S.Ct., at 3148. How enhancing the public’s ability to “traverse to and along the shorefront” served the same governmental purpose of “visual access to the ocean” from the roadway was beyond our ability to countenance. The absence of a nexus left the Coastal Commission in the position of simply trying to obtain an easement through gimmickry, which converted a valid regulation of land use into ” ‘an out-and-out plan of extortion.’ ” Ibid., quoting J.E.D. Associates, Inc. v. Atkinson, 121 N.H. 581, 584, 432 A.2d 12, 14-15 (1981).
No such gimmicks are associated with the permit conditions imposed by the city in this case. Undoubtedly, the prevention of flooding along Fanno Creek and the reduction of traffic congestion in the Central Business District qualify as the type of legitimate public purposes we have upheld. Agins, 447 U.S., at 260-262, 100 S.Ct., at 2141-2142. It seems equally obvious that a nexus exists between preventing flooding along Fanno Creek and limiting development within the creek’s 100-year floodplain. Petitioner proposes to double the size of her retail store and to pave her now-gravel parking lot, thereby expanding the impervious surface on the property and increasing the amount of storm water runoff into Fanno Creek.
The same may be said for the city’s attempt to reduce traffic congestion by providing for alternative means of transportation. In theory, a pedestrian/bicycle pathway provides a useful alternative means of transportation for workers and shoppers: “Pedestrians and bicyclists occupying dedicated spaces for walking and/or bicycling … remove potential vehicles from streets, resulting in an overall improvement in total transportation system flow.” A. Nelson, Public Provision of Pedestrian and Bicycle Access Ways: Public Policy Rationale and the Nature of Private Benefits 11, Center for Planning Development, Georgia Institute of Technology, Working Paper Series (Jan. 1994). See also Intermodal Surface Transportation Efficiency Act of 1991, Pub.L. 102-240, 105 Stat.1914 (recognizing pedestrian and bicycle facilities as necessary components of any strategy to reduce traffic congestion).
The second part of our analysis requires us to determine whether the degree of the exactions demanded by the city’s permit conditions bears the required relationship to the projected impact of petitioner’s proposed development. Nollan, supra, 483 U.S., at 834, 107 S.Ct., at 3147, quoting Penn Central Transp. Co. v. New York City, 438 U.S. 104, 127, 98 S.Ct. 2646, 2660, 57 L.Ed.2d 631 (1978) (” ‘[A] use restriction may constitute a “taking” if not reasonably necessary to the effectuation of a substantial government purpose’ “). Here the Oregon Supreme Court deferred to what it termed the “city’s unchallenged factual findings” supporting the dedication conditions and found them to be reasonably related to the impact of the expansion of petitioner’s business. 317 Ore., at 120-121, 854 P.2d, at 443.
The city required that petitioner dedicate “to the City as Greenway all portions of the site that fall within the existing 100-year floodplain [of Fanno Creek] … and all property 15 feet above [the floodplain] boundary.” Id., at 113, n. 3, 854 P.2d, at 439, n. 3. In addition, the city demanded that the retail store be designed so as not to intrude into the greenway area. The city relies on the Commission’s rather tentative findings that increased storm water flow from petitioner’s property “can only add to the public need to manage the [floodplain] for drainage purposes” to support its conclusion that the “requirement of dedication of the floodplain area on the site is related to the applicant’s plan to intensify development on the site.” City of Tigard Planning Commission Final Order No. 91-09 PC, App. to Pet. for Cert. G-37.
The city made the following specific findings relevant to the pedestrian/bicycle pathway:
“In addition, the proposed expanded use of this site is anticipated to generate additional vehicular traffic thereby increasing congestion on nearby collector and arterial streets. Creation of a convenient, safe pedestrian/bicycle pathway system as an alternative means of transportation could offset some of the traffic demand on these nearby streets and lessen the increase in traffic congestion.” Id., at G-24.
The question for us is whether these findings are constitutionally sufficient to justify the conditions imposed by the city on petitioner’s building permit. Since state courts have been dealing with this question a good deal longer than we have, we turn to representative decisions made by them.
In some States, very generalized statements as to the necessary connection between the required dedication and the proposed development seem to suffice. See, e.g., Billings Properties, Inc. v. Yellowstone County, 144 Mont. 25, 394 P.2d 182 (1964) ; Jenad, Inc. v. Scarsdale, 18 N.Y.2d 78, 271 N.Y.S.2d 955, 218 N.E.2d 673 (1966). We think this standard is too lax to adequately protect petitioner’s right to just compensation if her property is taken for a public purpose.
Other state courts require a very exacting correspondence, described as the “specifi[c] and uniquely attributable” test. The Supreme Court of Illinois first developed this test in Pioneer Trust & Savings Bank v. Mount Prospect, 22 Ill.2d 375, 380, 176 N.E.2d 799, 802 (1961).7 Under this standard, if the local government cannot demonstrate that its exaction is directly proportional to the specifically created need, the exaction becomes “a veiled exercise of the power of eminent domain and a confiscation of private property behind the defense of police regulations.” Id., at 381, 176 N.E.2d, at 802. We do not think the Federal Constitution requires such exacting scrutiny, given the nature of the interests involved.
A number of state courts have taken an intermediate position, requiring the municipality to show a “reasonable relationship” between the required dedication and the impact of the proposed development. Typical is the Supreme Court of Nebraska’s opinion in Simpson v. North Platte, 206 Neb. 240, 245, 292 N.W.2d 297, 301 (1980), where that court stated:
“The distinction, therefore, which must be made between an appropriate exercise of the police power and an improper exercise of eminent domain is whether the requirement has some reasonable relationship or nexus to the use to which the property is being made or is merely being used as an excuse for taking property simply because at that particular moment the landowner is asking the city for some license or permit.”
Thus, the court held that a city may not require a property owner to dedicate private property for some future public use as a condition of obtaining a building permit when such future use is not “occasioned by the construction sought to be permitted.” Id., at 248, 292 N.W.2d, at 302.
Some form of the reasonable relationship test has been adopted in many other jurisdictions. See, e.g., Jordan v. Menomonee Falls, 28 Wis.2d 608, 137 N.W.2d 442 (1965); Collis v. Bloomington, 310 Minn. 5, 246 N.W.2d 19 (1976) (requiring a showing of a reasonable relationship between the planned subdivision and the municipality’s need for land); College Station v. Turtle Rock Corp., 680 S.W.2d 802, 807 (Tex.1984); Call v. West Jordan, 606 P.2d 217, 220 (Utah 1979) (affirming use of the reasonable relation test). Despite any semantical differences, general agreement exists among the courts “that the dedication should have some reasonable relationship to the needs created by the [development].” Ibid. See generally Note ” ‘Take’ My Beach Please!”: Nollan v. California Coastal Commission and a Rational-Nexus Constitutional Analysis of Development Exactions, 69 B.U.L.Rev. 823 (1989); see also Parks v. Watson, 716 F.2d 646, 651-653 (CA9 1983).
We think the “reasonable relationship” test adopted by a majority of the state courts is closer to the federal constitutional norm than either of those previously discussed. But we do not adopt it as such, partly because the term “reasonable relationship” seems confusingly similar to the term “rational basis” which describes the minimal level of scrutiny under the Equal Protection Clause of the Fourteenth Amendment. We think a term such as “rough proportionality” best encapsulates what we hold to be the requirement of the Fifth Amendment. No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development.8
Justice STEVENS’ dissent relies upon a law review article for the proposition that the city’s conditional demands for part of petitioner’s property are “a species of business regulation that heretofore warranted a strong presumption of constitutional validity.” Post, at 2325. But simply denominating a governmental measure as a “business regulation” does not immunize it from constitutional challenge on the ground that it violates a provision of the Bill of Rights. In Marshall v. Barlow’s, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), we held that a statute authorizing a warrantless search of business premises in order to detect OSHA violations violated the Fourth Amendment. See also Air Pollution Variance Bd., of Colo. v. Western Alfalfa Corp., 416 U.S. 861, 94 S.Ct. 2114, 40 L.Ed.2d 607 (1974); New York v. Burger, 482 U.S. 691, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987). And in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), we held that an order of the New York Public Service Commission, designed to cut down the use of electricity because of a fuel shortage, violated the First Amendment insofar as it prohibited advertising by a utility company to promote the use of electricity. We see no reason why the Takings Clause of the Fifth Amendment, as much a part of the Bill of Rights as the First Amendment or Fourth Amendment, should be relegated to the status of a poor relation in these comparable circumstances. We turn now to analysis of whether the findings relied upon by the city here, first with respect to the floodplain easement, and second with respect to the pedestrian/bicycle path, satisfied these requirements.
It is axiomatic that increasing the amount of impervious surface will increase the quantity and rate of storm water flow from petitioner’s property. Record, Doc. No. F, ch. 4, p. 4-29. Therefore, keeping the floodplain open and free from development would likely confine the pressures on Fanno Creek created by petitioner’s development. In fact, because petitioner’s property lies within the Central Business District, the CDC already required that petitioner leave 15% of it as open space and the undeveloped floodplain would have nearly satisfied that requirement. App. to Pet. for Cert. G-16 to G-17. But the city demanded more-it not only wanted petitioner not to build in the floodplain, but it also wanted petitioner’s property along Fanno Creek for its greenway system. The city has never said why a public greenway, as opposed to a private one, was required in the interest of flood control.
The difference to petitioner, of course, is the loss of her ability to exclude others. As we have noted, this right to exclude others is “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” Kaiser Aetna, 444 U.S., at 176, 100 S.Ct., at 391. It is difficult to see why recreational visitors trampling along petitioner’s floodplain easement are sufficiently related to the city’s legitimate interest in reducing flooding problems along Fanno Creek, and the city has not attempted to make any individualized determination to support this part of its request.
The city contends that the recreational easement along the greenway is only ancillary to the city’s chief purpose in controlling flood hazards. It further asserts that unlike the residential property at issue in Nollan, petitioner’s property is commercial in character, and therefore, her right to exclude others is compromised. Brief for Respondent 41, quoting United States v. Orito, 413 U.S. 139, 142, 93 S.Ct. 2674, 2677, 37 L.Ed.2d 513 (1973) (” ‘The Constitution extends special safeguards to the privacy of the home’ “). The city maintains that “[t]here is nothing to suggest that preventing [petitioner] from prohibiting [the easements] will unreasonably impair the value of [her] property as a [retail store].” PruneYard Shopping Center v. Robins, 447 U.S. 74, 83, 100 S.Ct. 2035, 2042, 64 L.Ed.2d 741 (1980).
Admittedly, petitioner wants to build a bigger store to attract members of the public to her property. She also wants, however, to be able to control the time and manner in which they enter. The recreational easement on the greenway is different in character from the exercise of state-protected rights of free expression and petition that we permitted in PruneYard. In PruneYard, we held that a major private shopping center that attracted more than 25,000 daily patrons had to provide access to persons exercising their state constitutional rights to distribute pamphlets and ask passers-by to sign their petitions. Id., at 85, 100 S.Ct., at 2042. We based our decision, in part, on the fact that the shopping center “may restrict expressive activity by adopting time, place, and manner regulations that will minimize any interference with its commercial functions.” Id., at 83, 100 S.Ct., at 2042. By contrast, the city wants to impose a permanent recreational easement upon petitioner’s property that borders Fanno Creek. Petitioner would lose all rights to regulate the time in which the public entered onto the greenway, regardless of any interference it might pose with her retail store. Her right to exclude would not be regulated, it would be eviscerated.
If petitioner’s proposed development had somehow encroached on existing greenway space in the city, it would have been reasonable to require petitioner to provide some alternative greenway space for the public either on her property or elsewhere. See Nollan, 483 U.S., at 836, 107 S.Ct., at 3148 (“Although such a requirement, constituting a permanent grant of continuous access to the property, would have to be considered a taking if it were not attached to a development permit, the Commission’s assumed power to forbid construction of the house in order to protect the public’s view of the beach must surely include the power to condition construction upon some concession by the owner, even a concession of property rights, that serves the same end”). But that is not the case here. We conclude that the findings upon which the city relies do not show the required reasonable relationship between the floodplain easement and the petitioner’s proposed new building.
With respect to the pedestrian/bicycle pathway, we have no doubt that the city was correct in finding that the larger retail sales facility proposed by petitioner will increase traffic on the streets of the Central Business District. The city estimates that the proposed development would generate roughly 435 additional trips per day.9 Dedications for streets, sidewalks, and other public ways are generally reasonable exactions to avoid excessive congestion from a proposed property use. But on the record before us, the city has not met its burden of demonstrating that the additional number of vehicle and bicycle trips generated by petitioner’s development reasonably relate to the city’s requirement for a dedication of the pedestrian/bicycle pathway easement. The city simply found that the creation of the pathway “could offset some of the traffic demand … and lessen the increase in traffic congestion.”10
As Justice Peterson of the Supreme Court of Oregon explained in his dissenting opinion, however, “[t]he findings of fact that the bicycle pathway system ’could offset some of the traffic demand’ is a far cry from a finding that the bicycle pathway system will, or is likely to, offset some of the traffic demand.” 317 Ore., at 127, 854 P.2d, at 447 (emphasis in original). No precise mathematical calculation is required, but the city must make some effort to quantify its findings in support of the dedication for the pedestrian/bicycle pathway beyond the conclusory statement that it could offset some of the traffic demand generated.
Cities have long engaged in the commendable task of land use planning, made necessary by increasing urbanization, particularly in metropolitan areas such as Portland. The city’s goals of reducing flooding hazards and traffic congestion, and providing for public greenways, are laudable, but there are outer limits to how this may be done. “A strong public desire to improve the public condition [will not] warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.” Pennsylvania Coal, 260 U.S., at 416, 43 S.Ct., at 160.
The judgment of the Supreme Court of Oregon is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Justice Stevens, with whom Justice Blackmun and Justice Ginsburg join, dissenting.
The record does not tell us the dollar value of petitioner Florence Dolan’s interest in excluding the public from the greenway adjacent to her hardware business. The mountain of briefs that the case has generated nevertheless makes it obvious that the pecuniary value of her victory is far less important than the rule of law that this case has been used to establish. It is unquestionably an important case.
Certain propositions are not in dispute. The enlargement of the Tigard unit in Dolan’s chain of hardware stores will have an adverse impact on the city’s legitimate and substantial interests in controlling drainage in Fanno Creek and minimizing traffic congestion in Tigard’s business district. That impact is sufficient to justify an outright denial of her application for approval of the expansion. The city has nevertheless agreed to grant Dolan’s application if she will comply with two conditions, each of which admittedly will mitigate the adverse effects of her proposed development. The disputed question is whether the city has violated the Fourteenth Amendment to the Federal Constitution by refusing to allow Dolan’s planned construction to proceed unless those conditions are met.
The Court is correct in concluding that the city may not attach arbitrary conditions to a building permit or to a variance even when it can rightfully deny the application outright. I also agree that state court decisions dealing with ordinances that govern municipal development plans provide useful guidance in a case of this kind. Yet the Court’s description of the doctrinal underpinnings of its decision, the phrasing of its fledgling test of “rough proportionality,” and the application of that test to this case run contrary to the traditional treatment of these cases and break considerable and unpropitious new ground.
Candidly acknowledging the lack of federal precedent for its exercise in rulemaking, the Court purports to find guidance in 12 “representative” state court decisions. To do so is certainly appropriate.11 The state cases the Court consults, however, either fail to support or decidedly undermine the Court’s conclusions in key respects.
First, although discussion of the state cases permeates the Court’s analysis of the appropriate test to apply in this case, the test on which the Court settles is not naturally derived from those courts’ decisions. The Court recognizes as an initial matter that the city’s conditions satisfy the “essential nexus” requirement announced in Nollan v. California Coastal Comm’n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), because they serve the legitimate interests in minimizing floods and traffic congestions. Ante, at 2317-2318.12 The Court goes on, however, to erect a new constitutional hurdle in the path of these conditions. In addition to showing a rational nexus to a public purpose that would justify an outright denial of the permit, the city must also demonstrate “rough proportionality” between the harm caused by the new land use and the benefit obtained by the condition. Ante, at 2319. The Court also decides for the first time that the city has the burden of establishing the constitutionality of its conditions by making an “individualized determination” that the condition in question satisfies the proportionality requirement. See Ibid.
Not one of the state cases cited by the Court announces anything akin to a “rough proportionality” requirement. For the most part, moreover, those cases that invalidated municipal ordinances did so on state law or unspecified grounds roughly equivalent to Nollan ‘s “essential nexus” requirement. See, e.g.,
Simpson v. North Platte, 206 Neb. 240, 245-248, 292 N.W.2d 297, 301-302 (1980) (ordinance lacking “reasonable relationship” or “rational nexus” to property’s use violated Nebraska Constitution); J.E.D. Associates, Inc. v. Atkinson, 121 N.H. 581, 583-585, 432 A.2d 12, 14-15 (1981) (state constitutional grounds). One case purporting to apply the strict “specifically and uniquely attributable” test established by Pioneer Trust & Savings Bank v. Mount Prospect, 22 Ill.2d 375, 176 N.E.2d 799 (1961), nevertheless found that test was satisfied because the legislature had decided that the subdivision at issue created the need for a park or parks. Billings Properties, Inc. v. Yellowstone County, 144 Mont. 25, 33-36, 394 P.2d 182, 187-188 (1964). In only one of the seven cases upholding a land use regulation did the losing property owner petition this Court for certiorari. See Jordan v. Menomonee Falls, 28 Wis.2d 608, 137 N.W.2d 442 (1965), appeal dism’d, 385 U.S. 4, 87 S.Ct. 36, 17 L.Ed.2d 3 (1966) (want of substantial federal question). Although 4 of the 12 opinions mention the Federal Constitution-2 of those only in passing-it is quite obvious that neither the courts nor the litigants imagined they might be participating in the development of a new rule of federal law. Thus, although these state cases do lend support to the Court’s reaffirmance of Nollan ‘s reasonable nexus requirement, the role the Court accords them in the announcement of its newly minted second phase of the constitutional inquiry is remarkably inventive.
In addition, the Court ignores the state courts’ willingness to consider what the property owner gains from the exchange in question. The Supreme Court of Wisconsin, for example, found it significant that the village’s approval of a proposed subdivision plat “enables the subdivider to profit financially by selling the subdivision lots as home-building sites and thus realizing a greater price than could have been obtained if he had sold his property as unplatted lands.” Jordan v. Menomonee Falls, 28 Wis.2d, at 619-620, 137 N.W.2d, at 448. The required dedication as a condition of that approval was permissible “[i]n return for this benefit.” Ibid. See also Collis v. Bloomington, 310 Minn. 5, 11-13, 246 N.W.2d 19, 23-24 (1976) (citing Jordan ); College Station v. Turtle Rock Corp., 680 S.W.2d 802, 806 (Tex.1984) (dedication requirement only triggered when developer chooses to develop land). In this case, moreover, Dolan’s acceptance of the permit, with its attached conditions, would provide her with benefits that may well go beyond any advantage she gets from expanding her business. As the United States pointed out at oral argument, the improvement that the city’s drainage plan contemplates would widen the channel and reinforce the slopes to increase the carrying capacity during serious floods, “confer[ring] considerable benefits on the property owners immediately adjacent to the creek.” Tr. of Oral Arg. 41-42.
The state court decisions also are enlightening in the extent to which they required that the entire parcel be given controlling importance. All but one of the cases involve challenges to provisions in municipal ordinances requiring developers to dedicate either a percentage of the entire parcel (usually 7 or 10 percent of the platted subdivision) or an equivalent value in cash (usually a certain dollar amount per lot) to help finance the construction of roads, utilities, schools, parks, and playgrounds. In assessing the legality of the conditions, the courts gave no indication that the transfer of an interest in realty was any more objectionable than a cash payment. See, e.g., Jenad, Inc. v. Scarsdale, 18 N.Y.2d 78, 271 N.Y.S.2d 955, 218 N.E.2d 673 (1966); Jordan v. Menomonee Falls, 28 Wis.2d 608, 137 N.W.2d 442 (1965); Collis v. Bloomington, 310 Minn. 5, 246 N.W.2d 19 (1976). None of the decisions identified the surrender of the fee owner’s “power to exclude” as having any special significance. Instead, the courts uniformly examined the character of the entire economic transaction.
It is not merely state cases, but our own cases as well, that require the analysis to focus on the impact of the city’s action on the entire parcel of private property. In Penn Central Transp. Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), we stated that takings jurisprudence “does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated.” Id., at 130-131, 98 S.Ct., at 2662. Instead, this Court focuses “both on the character of the action and on the nature and extent of the interference with rights in the parcel as a whole.” Ibid. Andrus v. Allard, 444 U.S. 51, 100 S.Ct. 318, 62 L.Ed.2d 210 (1979), reaffirmed the nondivisibility principle outlined in Penn Central, stating that “[a]t least where an owner possesses a full ‘bundle’ of property rights, the destruction of one ‘strand’ of the bundle is not a taking, because the aggregate must be viewed in its entirety.” 444 U.S., at 65-66, 100 S.Ct., at 327.13 As recently as last Term, we approved the principle again. See Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., 508 U.S. 602, 644, 113 S.Ct. 2264, 2290, 124 L.Ed.2d 539 (1993) (explaining that “a claimant’s parcel of property [cannot] first be divided into what was taken and what was left” to demonstrate a compensable taking). Although limitation of the right to exclude others undoubtedly constitutes a significant infringement upon property ownership, Kaiser Aetna v. United States, 444 U.S. 164, 179-180, 100 S.Ct. 383, 393, 62 L.Ed.2d 332 (1979), restrictions on that right do not alone constitute a taking, and do not do so in any event unless they “unreasonably impair the value or use” of the property. PruneYard Shopping Center v. Robins, 447 U.S. 74, 82-84, 100 S.Ct. 2035, 2041-2042, 64 L.Ed.2d 741 (1980).
The Court’s narrow focus on one strand in the property owner’s bundle of rights is particularly misguided in a case involving the development of commercial property. As Professor Johnston has noted:
“The subdivider is a manufacturer, processer, and marketer of a product; land is but one of his raw materials. In subdivision control disputes, the developer is not defending hearth and home against the king’s intrusion, but simply attempting to maximize his profits from the sale of a finished product. As applied to him, subdivision control exactions are actually business regulations.” Johnston, Constitutionality of Subdivision Control Exactions: The Quest for A Rationale, 52 Cornell L.Q. 871, 923 (1967).14
The exactions associated with the development of a retail business are likewise a species of business regulation that heretofore warranted a strong presumption of constitutional validity.
In Johnston’s view, “if the municipality can demonstrate that its assessment of financial burdens against subdividers is rational, impartial, and conducive to fulfillment of authorized planning objectives, its action need be invalidated only in those extreme and presumably rare cases where the burden of compliance is sufficiently great to deter the owner from proceeding with his planned development.” Id., at 917. The city of Tigard has demonstrated that its plan is rational and impartial and that the conditions at issue are “conducive to fulfillment of authorized planning objectives.” Dolan, on the other hand, has offered no evidence that her burden of compliance has any impact at all on the value or profitability of her planned development. Following the teaching of the cases on which it purports to rely, the Court should not isolate the burden associated with the loss of the power to exclude from an evaluation of the benefit to be derived from the permit to enlarge the store and the parking lot.
The Court’s assurances that its “rough proportionality” test leaves ample room for cities to pursue the “commendable task of land use planning,” ante, at 2322-even twice avowing that “[n]o precise mathematical calculation is required,” ante, at 2319, 2322-are wanting given the result that test compels here. Under the Court’s approach, a city must not only “quantify its findings,” ante, at 2322, and make “individualized determination[s]” with respect to the nature and the extent of the relationship between the conditions and the impact, ante, at 2319, 2320, but also demonstrate “proportionality.” The correct inquiry should instead concentrate on whether the required nexus is present and venture beyond considerations of a condition’s nature or germaneness only if the developer establishes that a concededly germane condition is so grossly disproportionate to the proposed development’s adverse effects that it manifests motives other than land use regulation on the part of the city.15 The heightened requirement the Court imposes on cities is even more unjustified when all the tools needed to resolve the questions presented by this case can be garnered from our existing case law.
Applying its new standard, the Court finds two defects in the city’s case. First, while the record would adequately support a requirement that Dolan maintain the portion of the floodplain on her property as undeveloped open space, it does not support the additional requirement that the floodplain be dedicated to the city. Ante, at 2320-2322. Second, while the city adequately established the traffic increase that the proposed development would generate, it failed to quantify the offsetting decrease in automobile traffic that the bike path will produce. Ante, at 2321-2322. Even under the Court’s new rule, both defects are, at most, nothing more than harmless error.
In her objections to the floodplain condition, Dolan made no effort to demonstrate that the dedication of that portion of her property would be any more onerous than a simple prohibition against any development on that portion of her property. Given the commercial character of both the existing and the proposed use of the property as a retail store, it seems likely that potential customers “trampling along petitioner’s floodplain,” ante, at 2320, are more valuable than a useless parcel of vacant land. Moreover, the duty to pay taxes and the responsibility for potential tort liability may well make ownership of the fee interest in useless land a liability rather than an asset. That may explain why Dolan never conceded that she could be prevented from building on the floodplain. The city attorney also pointed out that absent a dedication, property owners would be required to “build on their own land” and “with their own money” a storage facility for the water runoff. Tr. of Oral Arg. 30-31. Dolan apparently “did have that option,” but chose not to seek it. Id., at 31. If Dolan might have been entitled to a variance confining the city’s condition in a manner this Court would accept, her failure to seek that narrower form of relief at any stage of the state administrative and judicial proceedings clearly should preclude that relief in this Court now.
The Court’s rejection of the bike path condition amounts to nothing more than a play on words. Everyone agrees that the bike path “could” offset some of the increased traffic flow that the larger store will generate, but the findings do not unequivocally state that it will do so, or tell us just how many cyclists will replace motorists. Predictions on such matters are inherently nothing more than estimates. Certainly the assumption that there will be an offsetting benefit here is entirely reasonable and should suffice whether it amounts to 100 percent, 35 percent, or only 5 percent of the increase in automobile traffic that would otherwise occur. If the Court proposes to have the federal judiciary micro-manage state decisions of this kind, it is indeed extending its welcome mat to a significant new class of litigants. Although there is no reason to believe that state courts have failed to rise to the task, property owners have surely found a new friend today.
The Court has made a serious error by abandoning the traditional presumption of constitutionality and imposing a novel burden of proof on a city implementing an admittedly valid comprehensive land use plan. Even more consequential than its incorrect disposition of this case, however, is the Court’s resurrection of a species of substantive due process analysis that it firmly rejected decades ago.16
The Court begins its constitutional analysis by citing Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239, 17 S.Ct. 581, 585, 41 L.Ed. 979 (1897), for the proposition that the Takings Clause of the Fifth Amendment is “applicable to the States through the Fourteenth Amendment.” Ante, at 2316. That opinion, however, contains no mention of either the Takings Clause or the Fifth Amendment;17 it held that the protection afforded by the Due Process Clause of the Fourteenth Amendment extends to matters of substance as well as procedure,18 and that the substance of “the due process of law enjoined by the Fourteenth Amendment requires compensation to be made or adequately secured to the owner of private property taken for public use under the authority of a State.” 166 U.S., at 235, 236-241, 17 S.Ct., at 584, 584-586. It applied the same kind of substantive due process analysis more frequently identified with a better known case that accorded similar substantive protection to a baker’s liberty interest in working 60 hours a week and 10 hours a day. See Lochner v. New York, 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937 (1905).19
Later cases have interpreted the Fourteenth Amendment’s substantive protection against uncompensated deprivations of private property by the States as though it incorporated the text of the Fifth Amendment’s Takings Clause. See, e.g., Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470, 481, n. 10, 107 S.Ct. 1232, 1240, n. 10, 94 L.Ed.2d 472 (1987). There was nothing problematic about that interpretation in cases enforcing the Fourteenth Amendment against state action that involved the actual physical invasion of private property. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 427-433, 102 S.Ct. 3164, 3172-3175, 73 L.Ed.2d 868 (1982); Kaiser Aetna v. United States, 444 U.S., at 178-180, 100 S.Ct., at 392-393. Justice Holmes charted a significant new course, however, when he opined that a state law making it “commercially impracticable to mine certain coal” had “very nearly the same effect for constitutional purposes as appropriating or destroying it.” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 414, 43 S.Ct. 158, 159, 67 L.Ed. 322 (1922). The so-called “regulatory takings” doctrine that the Holmes dictum20 kindled has an obvious kinship with the line of substantive due process cases that Lochner exemplified. Besides having similar ancestry, both doctrines are potentially open-ended sources of judicial power to invalidate state economic regulations that Members of this Court view as unwise or unfair.
This case inaugurates an even more recent judicial innovation than the regulatory takings doctrine: the application of the “unconstitutional conditions” label to a mutually beneficial transaction between a property owner and a city. The Court tells us that the city’s refusal to grant Dolan a discretionary benefit infringes her right to receive just compensation for the property interests that she has refused to dedicate to the city “where the property sought has little or no relationship to the benefit.”21 Although it is well settled that a government cannot deny a benefit on a basis that infringes constitutionally protected interests-“especially [one’s] interest in freedom of speech,” Perry v. Sindermann, 408 U.S. 593, 597, 92 S.Ct. 2694, 2697, 33 L.Ed.2d 570 (1972)-the “unconstitutional conditions” doctrine provides an inadequate framework in which to analyze this case.22
Dolan has no right to be compensated for a taking unless the city acquires the property interests that she has refused to surrender. Since no taking has yet occurred, there has not been any infringement of her constitutional right to compensation. See Preseault v. ICC, 494 U.S. 1, 11-17, 110 S.Ct. 914, 921-924, 108 L.Ed.2d 1 (1990) (finding takings claim premature because property owner had not yet sought compensation under Tucker Act); Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U.S. 264, 294-295, 101 S.Ct. 2352, 2370, 69 L.Ed.2d 1 (1981) (no taking where no one “identified any property … that has allegedly been taken”).
Even if Dolan should accept the city’s conditions in exchange for the benefit that she seeks, it would not necessarily follow that she had been denied “just compensation” since it would be appropriate to consider the receipt of that benefit in any calculation of “just compensation.” See Pennsylvania Coal Co. v. Mahon, 260 U.S., at 415, 43 S.Ct., at 160 (noting that an “average reciprocity of advantage” was deemed to justify many laws); Hodel v. Irving, 481 U.S. 704, 715, 107 S.Ct. 2076, 2082, 95 L.Ed.2d 668 (1987) (such ” ‘reciprocity of advantage’ ” weighed in favor of a statute’s constitutionality). Particularly in the absence of any evidence on the point, we should not presume that the discretionary benefit the city has offered is less valuable than the property interests that Dolan can retain or surrender at her option. But even if that discretionary benefit were so trifling that it could not be considered just compensation when it has “little or no relationship” to the property, the Court fails to explain why the same value would suffice when the required nexus is present. In this respect, the Court’s reliance on the “unconstitutional conditions” doctrine is assuredly novel, and arguably incoherent. The city’s conditions are by no means immune from constitutional scrutiny. The level of scrutiny, however, does not approximate the kind of review that would apply if the city had insisted on a surrender of Dolan’s First Amendment rights in exchange for a building permit. One can only hope that the Court’s reliance today on First Amendment cases, see ante, at 2317 (citing Perry v. Sindermann, supra, and Pickering v. Board of Ed. of Township High School Dist. 205, Will Cty., 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811 (1968)), and its candid disavowal of the term “rational basis” to describe its new standard of review, see ante, at 2319, do not signify a reassertion of the kind of superlegislative power the Court exercised during the Lochner era.
The Court has decided to apply its heightened scrutiny to a single strand-the power to exclude-in the bundle of rights that enables a commercial enterprise to flourish in an urban environment. That intangible interest is undoubtedly worthy of constitutional protection-much like the grandmother’s interest in deciding which of her relatives may share her home in Moore v. East Cleveland, 431 U.S. 494, 97 S.Ct. 1932, 52 L.Ed.2d 531 (1977). Both interests are protected from arbitrary state action by the Due Process Clause of the Fourteenth Amendment. It is, however, a curious irony that Members of the majority in this case would impose an almost insurmountable burden of proof on the property owner in the Moore case while saddling the city with a heightened burden in this case.23
In its application of what is essentially the doctrine of substantive due process, the Court confuses the past with the present. On November 13, 1922, the village of Euclid, Ohio, adopted a zoning ordinance that effectively confiscated 75 percent of the value of property owned by the Ambler Realty Company. Despite its recognition that such an ordinance “would have been rejected as arbitrary and oppressive” at an earlier date, the Court (over the dissent of Justices Van Devanter, McReynolds, and Butler) upheld the ordinance. Today’s majority should heed the words of Justice Sutherland:
“Such regulations are sustained, under the complex conditions of our day, for reasons analogous to those which justify traffic regulations, which, before the advent of automobiles and rapid transit street railways, would have been condemned as fatally arbitrary and unreasonable. And in this there is no inconsistency, for while the meaning of constitutional guaranties never varies, the scope of their application must expand or contract to meet the new and different conditions which are constantly coming within the field of their operation. In a changing world, it is impossible that it should be otherwise.” Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 387, 47 S.Ct. 114, 118, 71 L.Ed. 303 (1926).
In our changing world one thing is certain: uncertainty will characterize predictions about the impact of new urban developments on the risks of floods, earthquakes, traffic congestion, or environmental harms. When there is doubt concerning the magnitude of those impacts, the public interest in averting them must outweigh the private interest of the commercial entrepreneur. If the government can demonstrate that the conditions it has imposed in a land use permit are rational, impartial and conducive to fulfilling the aims of a valid land use plan, a strong presumption of validity should attach to those conditions. The burden of demonstrating that those conditions have unreasonably impaired the economic value of the proposed improvement belongs squarely on the shoulders of the party challenging the state action’s constitutionality. That allocation of burdens has served us well in the past. The Court has stumbled badly today by reversing it.
I respectfully dissent.
Justice Souter, dissenting.
This case, like Nollan v. California Coastal Comm’n, 483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987), invites the Court to examine the relationship between conditions imposed by development permits, requiring landowners to dedicate portions of their land for use by the public, and governmental interests in mitigating the adverse effects of such development. Nollan declared the need for a nexus between the nature of an exaction of an interest in land (a beach easement) and the nature of governmental interests. The Court treats this case as raising a further question, not about the nature, but about the degree, of connection required between such an exaction and the adverse effects of development. The Court’s opinion announces a test to address this question, but as I read the opinion, the Court does not apply that test to these facts, which do not raise the question the Court addresses.
First, as to the floodplain and greenway, the Court acknowledges that an easement of this land for open space (and presumably including the five feet required for needed creek channel improvements) is reasonably related to flood control, see ante, at 2317-2318, 2320, but argues that the “permanent recreational easement” for the public on the greenway is not so related, see ante, at 2320-2321. If that is so, it is not because of any lack of proportionality between permit condition and adverse effect, but because of a lack of any rational connection at all between exaction of a public recreational area and the governmental interest in providing for the effect of increased water runoff. That is merely an application of Nollan ‘s nexus analysis. As the Court notes, “[i]f petitioner’s proposed development had somehow encroached on existing greenway space in the city, it would have been reasonable to require petitioner to provide some alternative greenway space for the public.” Ante, at 2321. But that, of course, was not the fact, and the city of Tigard never sought to justify the public access portion of the dedication as related to flood control. It merely argued that whatever recreational uses were made of the bicycle path and the 1-foot edge on either side were incidental to the permit condition requiring dedication of the 15-foot easement for an 8-foot-wide bicycle path and for flood control, including open space requirements and relocation of the bank of the river by some 5 feet. It seems to me such incidental recreational use can stand or fall with the bicycle path, which the city justified by reference to traffic congestion. As to the relationship the Court examines, between the recreational easement and a purpose never put forth as a justification by the city, the Court unsurprisingly finds a recreation area to be unrelated to flood control.
Second, as to the bicycle path, the Court again acknowledges the “theor[etically]” reasonable relationship between “the city’s attempt to reduce traffic congestion by providing [a bicycle path] for alternative means of transportation,” ante, at 2318, and the “correct” finding of the city that “the larger retail sales facility proposed by petitioner will increase traffic on the streets of the Central Business District,” ante, at 2321. The Court only faults the city for saying that the bicycle path “could” rather than “would” offset the increased traffic from the store, ante, at 2322. That again, as far as I can tell, is an application of Nollan, for the Court holds that the stated connection (“could offset”) between traffic congestion and bicycle paths is too tenuous; only if the bicycle path “would” offset the increased traffic by some amount could the bicycle path be said to be related to the city’s legitimate interest in reducing traffic congestion.
I cannot agree that the application of Nollan is a sound one here, since it appears that the Court has placed the burden of producing evidence of relationship on the city, despite the usual rule in cases involving the police power that the government is presumed to have acted constitutionally.24 Having thus assigned the burden, the Court concludes that the city loses based on one word (“could” instead of “would”), and despite the fact that this record shows the connection the Court looks for. Dolan has put forward no evidence that the burden of granting a dedication for the bicycle path is unrelated in kind to the anticipated increase in traffic congestion, nor, if there exists a requirement that the relationship be related in degree, has Dolan shown that the exaction fails any such test. The city, by contrast, calculated the increased traffic flow that would result from Dolan’s proposed development to be 435 trips per day, and its Comprehensive Plan, applied here, relied on studies showing the link between alternative modes of transportation, including bicycle paths, and reduced street traffic congestion. See, e.g., App. to Brief for Respondent A-5, quoting City of Tigard’s Comprehensive Plan (” ‘Bicycle and pedestrian pathway systems will result in some reduction of automobile trips within the community’ “). Nollan, therefore, is satisfied, and on that assumption the city’s conditions should not be held to fail a further rough proportionality test or any other that might be devised to give meaning to the constitutional limits. As Members of this Court have said before, “the common zoning regulations requiring subdividers to … dedicate certain areas to public streets, are in accord with our constitutional traditions because the proposed property use would otherwise be the cause of excessive congestion.” Pennell v. San Jose, 485 U.S. 1, 20, 108 S.Ct. 849, 862, 99 L.Ed.2d 1 (1988) (SCALIA, J., concurring in part and dissenting in part). The bicycle path permit condition is fundamentally no different from these.
In any event, on my reading, the Court’s conclusions about the city’s vulnerability carry the Court no further than Nollan has gone already, and I do not view this case as a suitable vehicle for taking the law beyond that point. The right case for the enunciation of takings doctrine seems hard to spot. See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1076, 112 S.Ct. 2886, 2925, 120 L.Ed.2d 798 (1992) (statement of SOUTER, J.).
- CDC s 18.86.040.A.1.b provides: “The development shall facilitate pedestrian/bicycle circulation if the site is located on a street with designated bikepaths or adjacent to a designated greenway/open space/park. Specific items to be addressed [include]: (i) Provision of efficient, convenient and continuous pedestrian and bicycle transit circulation systems, linking developments by requiring dedication and construction of pedestrian and bikepaths identified in the comprehensive plan. If direct connections cannot be made, require that funds in the amount of the construction cost be deposited into an account for the purpose of constructing paths.” App. to Brief for Respondent B-33 to B-34.
- The city’s decision includes the following relevant conditions: “1. The applicant shall dedicate to the City as Greenway all portions of the site that fall within the existing 100-year floodplain [of Fanno Creek] ( i.e., all portions of the property below elevation 150.0) and all property 15 feet above (to the east of) the 150.0 foot floodplain boundary. The building shall be designed so as not to intrude into the greenway area.” App. to Pet. for Cert. G-43.
- CDC s 18.134.050 contains the following criteria whereby the decisionmaking authority can approve, approve with modifications, or deny a variance request:
“(1) The proposed variance will not be materially detrimental to the purposes of this title, be in conflict with the policies of the comprehensive plan, to any other applicable policies and standards, and to other properties in the same zoning district or vicinity;
“(2) There are special circumstances that exist which are peculiar to the lot size or shape, topography or other circumstances over which the applicant has no control, and which are not applicable to other properties in the same zoning district;
“(3) The use proposed will be the same as permitted under this title and City standards will be maintained to the greatest extent possible, while permitting some economic use of the land;
“(4) Existing physical and natural systems, such as but not limited to traffic, drainage, dramatic land forms, or parks will not be adversely affected any more than would occur if the development were located as specified in the title; and
“(5) The hardship is not self-imposed and the variance requested is the minimum variance which would alleviate the hardship.” App. to Brief for Respondent B-49 to B-50.
- The Supreme Court of Oregon did not address the consequences of petitioner’s failure to provide alternative mitigation measures in her variance application and we take the case as it comes to us. Accordingly, we do not pass on the constitutionality of the city’s variance provisions.
- Justice STEVENS’ dissent suggests that this case is actually grounded in “substantive” due process, rather than in the view that the Takings Clause of the Fifth Amendment was made applicable to the States by the Fourteenth Amendment. But there is no doubt that later cases have held that the Fourteenth Amendment does make the Takings Clause of the Fifth Amendment applicable to the States, see Penn Central Transp. Co. v. New York City, 438 U.S. 104, 122, 98 S.Ct. 2646, 2658, 57 L.Ed.2d 631 (1978); Nollan v. California Coastal Comm’n, 483 U.S. 825, 827, 107 S.Ct. 3141, 3143, 97 L.Ed.2d 677 (1987). Nor is there any doubt that these cases have relied upon Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979 (1897), to reach that result. See, e.g., Penn Central, supra, 438 U.S., at 122, 98 S.Ct., at 2658 (“The issu[e] presented … [is] whether the restrictions imposed by New York City’s law upon appellants’ exploitation of the Terminal site effect a ‘taking’ of appellants’ property for a public use within the meaning of the Fifth Amendment, which of course is made applicable to the States through the Fourteenth Amendment, see Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239, 17 S.Ct. 581, 585, 41 L.Ed. 979 (1897)”).
- There can be no argument that the permit conditions would deprive petitioner of “economically beneficial us[e]” of her property as she currently operates a retail store on the lot. Petitioner assuredly is able to derive some economic use from her property. See, e.g., Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019, 112 S.Ct. 2886, 2895, 120 L.Ed.2d 798 (1992); Kaiser Aetna v. United States, 444 U.S. 164, 175, 100 S.Ct. 383, 390, 62 L.Ed.2d 332 (1979); Penn Central Transp. Co. v. New York City, supra, 438 U.S., at 124, 98 S.Ct., at 2659.
- The “specifically and uniquely attributable” test has now been adopted by a minority of other courts. See, e.g., J.E.D. Associates, Inc. v. Atkinson, 121 N.H. 581, 585, 432 A.2d 12, 15 (1981); Divan Builders, Inc. v. Planning Bd. of Twp. of Wayne, 66 N.J. 582, 600-601, 334 A.2d 30, 40 (1975); McKain v. Toledo City Plan Comm’n, 26 Ohio App.2d 171, 176, 270 N.E.2d 370, 374 (1971); Frank Ansuini, Inc. v. Cranston, 107 R.I. 63, 69, 264 A.2d 910, 913 (1970).
- Justice STEVENS’ dissent takes us to task for placing the burden on the city to justify the required dedication. He is correct in arguing that in evaluating most generally applicable zoning regulations, the burden properly rests on the party challenging the regulation to prove that it constitutes an arbitrary regulation of property rights. See, e.g., Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926). Here, by contrast, the city made an adjudicative decision to condition petitioner’s application for a building permit on an individual parcel. In this situation, the burden properly rests on the city. See Nollan, 483 U.S., at 836, 107 S.Ct., at 3148. This conclusion is not, as he suggests, undermined by our decision in Moore v. East Cleveland, 431 U.S. 494, 97 S.Ct. 1932, 52 L.Ed.2d 531 (1977), in which we struck down a housing ordinance that limited occupancy of a dwelling unit to members of a single family as violating the Due Process Clause of the Fourteenth Amendment. The ordinance at issue in Moore intruded on choices concerning family living arrangements, an area in which the usual deference to the legislature was found to be inappropriate. Id., at 499, 97 S.Ct., at 1935.
- The city uses a weekday average trip rate of 53.21 trips per 1,000 square feet. Additional Trips Generated = 53.21 X (17,600-9,720). App. to Pet. for Cert. G-15.
- In rejecting petitioner’s request for a variance from the pathway dedication condition, the city stated that omitting the planned section of the pathway across petitioner’s property would conflict with its adopted policy of providing a continuous pathway system. But the Takings Clause requires the city to implement its policy by condemnation unless the required relationship between petitioner’s development and added traffic is shown.
- Cf. Moore v. East Cleveland, 431 U.S. 494, 513-521, 97 S.Ct. 1932, 52 L.Ed.2d 531 (1977) (STEVENS, J., concurring in judgment).
- In Nollan the Court recognized that a state agency may condition the grant of a land use permit on the dedication of a property interest if the dedication serves a legitimate police-power purpose that would justify a refusal to issue the permit. For the first time, however, it held that such a condition is unconstitutional if the condition “utterly fails” to further a goal that would justify the refusal. 483 U.S., at 837, 107 S.Ct., at 3148. In the Nollan Court’s view, a condition would be constitutional even if it required the Nollans to provide a viewing spot for passers-by whose view of the ocean was obstructed by their new house. Id., at 836, 107 S.Ct., at 3148. “Although such a requirement, constituting a permanent grant of continuous access to the property, would have to be considered a taking if it were not attached to a development permit, the Commission’s assumed power to forbid construction of the house in order to protect the public’s view of the beach must surely include the power to condition construction upon some concession by the owner, even a concession of property rights, that serves the same end.” Ibid.
- Similarly, in Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470, 498-499, 107 S.Ct. 1232, 1249, 94 L.Ed.2d 472 (1987), we concluded that “[t]he 27 million tons of coal do not constitute a separate segment of property for takings law purposes” and that “[t]here is no basis for treating the less than 2% of petitioners’ coal as a separate parcel of property.”
- Johnston’s article also sets forth a fair summary of the state cases from which the Court purports to derive its “rough proportionality” test. See 52 Cornell L.Q., at 917. Like the Court, Johnston observed that cases requiring a “rational nexus” between exactions and public needs created by the new subdivision-especially Jordan v. Menomonee Falls, 28 Wis.2d 608, 137 N.W.2d 442 (1965)-“stee[r] a moderate course” between the “judicial obstructionism” of Pioneer Trust & Savings Bank v. Mount Prospect, 22 Ill.2d 375, 176 N.E.2d 799 (1961), and the “excessive deference” of Billings Properties, Inc. v. Yellowstone County, 144 Mont. 25, 394 P.2d 182 (1964). 52 Cornell L.Q., at 917.
- Dolan’s attorney overstated the danger when he suggested at oral argument that without some requirement for proportionality, “[t]he City could have found that Mrs. Dolan’s new store would have increased traffic by one additional vehicle trip per day [and] could have required her to dedicate 75, 95 percent of her land for a widening of Main Street.” Tr. of Oral Arg. 52-53.
- See, e.g., Ferguson v. Skrupa, 372 U.S. 726, 83 S.Ct. 1028, 10 L.Ed.2d 93 (1963).
- An earlier case deemed it “well settled” that the Takings Clause “is a limitation on the power of the Federal government, and not on the States.” Pumpelly v. Green Bay Co., 13 Wall. 166, 177, 20 L.Ed. 557 (1872).
- The Court held that a State “may not, by any of its agencies, disregard the prohibitions of the Fourteenth Amendment. Its judicial authorities may keep within the letter of the statute prescribing forms of procedure in the courts and give the parties interested the fullest opportunity to be heard, and yet it might be that its final action would be inconsistent with that amendment. In determining what is due process of law regard must be had to substance, not to form.” Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 234-235, 17 S.Ct. 581, 584, 41 L.Ed. 979 (1897).
- The Lochner Court refused to presume that there was a reasonable connection between the regulation and the state interest in protecting the public health. 198 U.S., at 60-61, 25 S.Ct., at 544. A similar refusal to identify a sufficient nexus between an enlarged building with a newly paved parking lot and the state interests in minimizing the risks of flooding and traffic congestion proves fatal to the city’s permit conditions in this case under the Court’s novel approach.
- See Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S., at 484, 107 S.Ct., at 1241 (explaining why this portion of the opinion was merely “advisory”).
- Ante, at 2317. The Court’s entire explanation reads: “Under the well-settled doctrine of ‘unconstitutional conditions,’ the government may not require a person to give up a constitutional right-here the right to receive just compensation when property is taken for a public use-in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property.”
- Although it has a long history, see Home Ins. Co. v. Morse, 20 Wall. 445, 451, 22 L.Ed. 365 (1874), the “unconstitutional conditions” doctrine has for just as long suffered from notoriously inconsistent application; it has never been an overarching principle of constitutional law that operates with equal force regardless of the nature of the rights and powers in question. See, e.g., Sunstein, Why the Unconstitutional Conditions Doctrine is an Anachronism, 70 B.U.L.Rev. 593, 620 (1990) (doctrine is “too crude and too general to provide help in contested cases”); Sullivan, Unconstitutional Conditions, 102 Harv.L.Rev. 1415, 1416 (1989) (doctrine is “riven with inconsistencies”); Hale, Unconstitutional Conditions and Constitutional Rights, 35 Colum.L.Rev. 321, 322 (1935) (“The Supreme Court has sustained many such exertions of power even after announcing the broad doctrine that would invalidate them”). As the majority’s case citations suggest, ante, at 2316, modern decisions invoking the doctrine have most frequently involved First Amendment liberties, see also, e.g., Connick v. Myers, 461 U.S. 138, 143-144, 103 S.Ct. 1684, 1688, 75 L.Ed.2d 708 (1983); Elrod v. Burns, 427 U.S. 347, 361-363, 96 S.Ct. 2673, 2684, 49 L.Ed.2d 547 (1976) (plurality opinion); Sherbert v. Verner, 374 U.S. 398, 404, 83 S.Ct. 1790, 1794, 10 L.Ed.2d 965 (1963); Speiser v. Randall, 357 U.S. 513, 518-519, 78 S.Ct. 1332, 1338, 2 L.Ed.2d 1460 (1958). But see Posadas de Puerto Rico Associates v. Tourism Co. of P.R., 478 U.S. 328, 345-346, 106 S.Ct. 2968, 2979, 92 L.Ed.2d 266 (1986) (“[T]he greater power to completely ban casino gambling necessarily includes the lesser power to ban advertising of casino gambling”). The necessary and traditional breadth of municipalities’ power to regulate property development, together with the absence here of fragile and easily “chilled” constitutional rights such as that of free speech, make it quite clear that the Court is really writing on a clean slate rather than merely applying “well-settled” doctrine. Ante, at 2316.
- The author of today’s opinion joined Justice Stewart’s dissent in Moore v. East Cleveland, 431 U.S. 494, 97 S.Ct. 1932, 52 L.Ed.2d 531 (1977). There the dissenters found it sufficient, in response to my argument that the zoning ordinance was an arbitrary regulation of property rights, that “if the ordinance is a rational attempt to promote ‘the city’s interest in preserving the character of its neighborhoods,’ Young v. American Mini Theatres [Inc.,] 427 U.S. 50, 71 [96 S.Ct. 2440, 2452, 49 L.Ed.2d 310 (1976) ] (opinion of STEVENS, J.), it is … a permissible restriction on the use of private property under Euclid v. Ambler Realty Co., 272 U.S. 365 [47 S.Ct. 114, 71 L.Ed. 303 (1926) ], and Nectow v. Cambridge, 277 U.S. 183 [48 S.Ct. 447, 72 L.Ed. 842 (1928) ].” Id., 431 U.S., at 540, n. 10, 97 S.Ct., at 1956, n. 10. The dissent went on to state that my calling the city to task for failing to explain the need for enacting the ordinance ”place[d] the burden on the wrong party.” Ibid. (emphasis added). Recently, two other Members of today’s majority severely criticized the holding in Moore. See United States v. Carlton, 512 U.S. 26, 40-42, 114 S.Ct. 2018, 2027, 129 L.Ed.2d 22 (1994) (SCALIA, J., concurring in judgment); see also id., at 39, 114 S.Ct. at 2020 (SCALIA, J., concurring in judgment) (calling the doctrine of substantive due process “an oxymoron”).
- See, e.g., Goldblatt v. Hempstead, 369 U.S. 590, 594-596, 82 S.Ct. 987, 990, 8 L.Ed.2d 130 (1962); United States v. Sperry Corp., 493 U.S. 52, 60, 110 S.Ct. 387, 393-394, 107 L.Ed.2d 290 (1989). The majority characterizes this case as involving an “adjudicative decision” to impose permit conditions, ante, at 2390, n. 8, but the permit conditions were imposed pursuant to Tigard’s Community Development Code. See, e.g., s 18.84.040, App. to Brief for Respondent B-26. The adjudication here was of Dolan’s requested variance from the permit conditions otherwise required to be imposed by the Code. This case raises no question about discriminatory, or “reverse spot,” zoning, which “singles out a particular parcel for different, less favorable treatment than the neighboring ones.” Penn Central Transp. Co. v. New York City, 438 U.S. 104, 132, 98 S.Ct. 2646, 2663, 57 L.Ed.2d 631 (1978).
4.6. German Takings Law
Summary of German Law Relating to Compensation Resulting from Land Use Planning
From the Basic Law for the Federal Republic of Germany (Grundgesetz, GG)
Article 14 [Property, inheritance, expropriation]
- Property and the right of inheritance shall be guaranteed. Their content and limits shall be defined by the laws.
- Property entails obligations. Its use shall also serve the public good.
- Expropriation shall only be permissible for the public good. It may only be ordered by or pursuant to a law that determines the nature and extent of compensation. Such compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected. In case of dispute respecting the amount of compensation, recourse may be had to the ordinary courts.
The following is a brief summary adapted from Takings International: A Comparative Perspective on Land Use Regulations and Compensation Rights, Rachelle Alterman, ed., American Bar Association, 2010. The chapter on the Federal Republic of Germany was authored by Gerd Schmidt-Eichstaedt.
Under the Basic Law, compensation for expropriation must be provided for in a law that expropriates. But even regulations that are not deemed expropriating may require compensation under other laws. Namely, sections 39-44 of the Federal Building Code (Baugesetzbuch) provide for compensation for injuries from land use planning. Such causes of action are distinct from those claiming injury from unlawful action under civil law.
Land Use Plans that Designate Private Property for Public Uses
Under German planning law, binding land-use plans (or B-plans) may be relied upon by developers, and developments that comply with these plans will usually be permitted. These plans may also designate privately held property for public uses, such as roads, schools, and environmental protection. Actually making the public use requires the government to resort to expropriation procedures, but often the lands are purchased through voluntary negotiation.
A problem arises when there is a long interval between the plan and the realization of the public use. As might be guessed, it often takes time to move from planning stages to implementation. If it’s reasonable for the landowner to keep using his property during this period, then he must do so. He may not make improvements that increase the value of the property, and thus what the public must pay when the planned public use is ready to be implemented, without the consent of the government. If, on the other hand, maintaining the current use is infeasible, the landowner may initiate a claim for transfer of title, which would result in compensation. Lesser, but still substantial, impacts on the current use may trigger compensation for what is lost.
Land use plans that grant public rights to walk or drive through property also result in compensation, at least where the property’s value is reduced significantly.
Land Use Plans that Alter Permitted Private Uses
Under section 42 of the Federal Building Code, a landowner is entitled to develop according to a B-plan for a period of seven years after the plan’s adoption. If the plan is altered during that time, landowners are entitled to compensation for the reduction in property values, whether or not they have developed in accordance with the plan. After seven years have elapsed, a change in the plan will lead to compensation only if (1) it reduces the value of a use the landowner is actually making, (2) the amended plan designates the landowner’s property for a public use, or (3) the uses the amended plan allows the landowner to make are insubstantial. If development is made impossible by factors outside of the developer’s control, such as a development moratorium, then this period is added to the seven years. And again, to the extent a plan interferes with a current use, compensation is generally required, no matter how long it has been since the plan was last changed.
In the United States, changes in plans that lead to less valuable uses are called “downzonings.” And current uses that do not comply with the new plan are called non-conforming uses. Many jurisdictions in the U.S. permit non-conforming uses to continue, despite the new zoning, for a certain period, until the landowner changes the use, or until the ownership of the property changes.
Not all downzonings in Germany are permitted. Courts may strike them down as “balancing errors” if they are not justified by what Schmidt-Eichstaedt calls “solid town planning principles.” This would amount to a substantive attack on the plan, rather than a claim that an otherwise legitimate plan triggered a compensation obligation.
Developers may also seek compensation for specific development expenditures made in reliance on an existing plan that was later amended. This would result in compensation for engineering and architectural services, for example, to the extent the new plan reduces their value.
Finally, German law authorizes municipalities to freeze development during the preparation of a new plan. Without this authority, developers might rush to develop, perhaps unwisely, and in ways that will make implementation of the new plan and its goals difficult. The Federal Building Code authorizes a freeze when a municipality decides to prepare or amend a B-plan. This freeze lasts for two years, but may be extended for an additional year. A fourth year may be added to the freeze if “special circumstances” so require. No compensation is owed for development forestalled by the freeze.
Excerpt from Gregory S. Alexander, Property as a Fundamental Constitutional Right? The German Example, 88 Cornell L. Rev. 733 (2003)
Unlike the U.S. Supreme Court, the German Constitutional Court has been clear about the legal source used in defining what interests are protected as constitutional property.1 For Article 14 purposes, the Basic Law itself defines the meaning of the term “ownership” (Eigentum). Constitutional property is not limited to those interests defined as property by nonconstitutional law (that is, the German Civil Code.) The Constitutional Court has clearly and consistently stated that the term “ownership” (or “property”) has a broader meaning under Article 14 than it has for private law purposes under the Civil Code.
Although the Court looks to the Basic Law to define the range of protected interests, its approach is not one of direct textual interpretation. Rather, it identifies the substantive interests that animate the Basic Law as a whole. These interests serve as criteria used to distinguish those interests that count as constitutional property from those that do not. This strategy, although textually rooted, differs in important ways from the “originalist” and “traditionalist” approaches favored by conservative American judges and constitutional scholars. The German approach avoids temporally freezing the meaning of constitutional property in any particular historical moment, permitting Article 14’s protection over time to embrace new and unprecedented sorts of interests.
Behind this approach to defining the constitutional limits of governmental power over property is a certain level of distrust of the market as a reliable mechanism for serving the public good (Gemeinwohl) with respect to particular sorts of resources. This has been especially so with respect to natural resources. The Court has been remarkably solicitous of environmental regulations aimed at protecting natural resources that the Court has characterized as basic to human existence.
An important example of this development is the notorious series of “Groundwater Cases” (Naβsausskiesungsentscheidungen), litigated before the federal Supreme Civil Court (Bundesgerichtshof) as well as the Constitutional Court. These cases, especially the Constitutional Court’s opinion, are among the most widely discussed constitutional property cases in Germany of the past several decades and are worth reflecting on to consider what they indicate about current German legal attitudes toward property, the market, and the public weal.
The litigation concerned the constitutional validity of the 1976 amendments to the Federal Water Resources Act (Wasserhaushaltgesetz), first enacted in 1957. The most important of these amendments was a provision requiring anyone wishing to make virtually any use of surface or groundwater to obtain a permit. That amendment represented an extension of the Act’s basic premise, which declared that
the attainment of a sensible and useful distribution of the surface water and groundwater, in quantity and quality, for the whole Federal Republic … [can be achieved only] if the free disposition by private owners is restricted and if the interest of the public weal is the starting point for all action.
Under the Act, the owner of the surface has no entitlement to such a use permit; indeed, the permit must be denied wherever the proposed use threatens the “public weal.”
The plaintiff, who owned and operated a gravel pit, applied for a permit to use the water beneath his land. He had previously taken groundwater for decades for the purpose of extracting gravel, but the city denied him permission to continue doing so because his quarry operation threatened the city’s water wells. He sued for damages, claiming that the permit denial was an uncompensated expropriation of his property that is unconstitutional under Article 14 of the Basic Law.
The federal Supreme Civil Court, the highest civil court in Germany, held that the permit denial indeed violated the plaintiff’s constitutional property right and that the amendment to the Water Resources Act was unconstitutional under Article 14(1). Under German law, however, only the Constitutional Court has the authority to declare statutes unconstitutional, so the Supreme Civil Court was required to submit the case to the Constitutional Court. The latter Court held that the Water Resources Act was constitutional and that the permit denial was not an expropriation of the plaintiff’s constitutionally protected property. In the course of a long and extraordinarily complicated opinion, the Court squarely rejected a conception of property that identifies as its primary function the maximization of individual wealth. The Court stated, “From the constitutional guarantee of property the owner cannot derive a right to be permitted to make use of precisely that which promises the greatest possible economic advantage.” The Court acknowledged that the constitutional guarantee of property in Article 14(1) prohibits the legislature from undermining the basic existence of the right embedded in the private law of property in a way that removes or substantially impairs the guaranteed zone of freedom under Article 14. The guarantee of the legal institution of property, the Court continued, is not encroached on, however, when the security and defense of resources that are vital to the common welfare of the public are placed under the authority of the public, rather than the private, legal order.
Water is such a resource. The Court stated that, whatever the meaning of ownership for private law purposes, the constitutional meaning of land ownership has never entailed ownership of water below the surface. Legal rights concerning ground water are not determined by, or at least not primarily by, the ordinary rules of property law under the Civil Code (Bürgerliches Gesetzbuch, or BGB), because property rights in groundwater are inherently and historically public, not private, in character.2 Private rights in land end when they reach the water level. Consequently, the Water Resources Act, in subjecting the owner’s ability to exploit groundwater to a permit system, did not take from landowners any property right (Anspruch) that they ever had under the Constitution.
So, the German Constitutional Court regards water as special, too important to be left completely to the market, or private ordering, to allocate. One is left, though, to answer the nagging question of why water is special. Why, exactly, do private property rights not extend to groundwater in the same way that they do to land? A coherent, substantive answer to this question is absolutely necessary if one is to assuage the Supreme Civil Court’s entirely understandable fear that regulatory measures like the Federal Water Law have effectively erased the line between the social obligation of ownership, on the one hand, and expropriation, on the other. If regulatory measures limiting or even eliminating private rights to resources can always be rationalized as simply expressions of the Sozialbindung, then hardly any protection against uncompensated expropriations under Article 14(3) would remain. The doctrine of regulatory takings (enteignungsgleicher Eingriff) would be emptied of all content. In Justice Holmes’s terms, it would be impossible to say that a regulation “goes too far.”
Unfortunately, it was just at this most crucial stage that the Constitutional Court’s analysis broke down. The Court relied on two factors, history and social need, to explain why property rights in water are so limited–why groundwater is essentially or inherently public in character. Historically, the Court pointed out, German private law has separated property rights concerning land and water. This separation was constitutionally authorized at least since the time of the German constitution of 1871, the Court noted. Fine, but that does not answer the question; it only changes the character of the question. Why has it historically been constitutional to assign property rights in land to the private realm and rights in water to the public realm?
The Court gave more extended consideration to the functional role of water in society. As part of its reasoning that the Water Law falls within the “contents and limits” (Inhalt und Schranken) of ownership of land, a matter over which the legislature has complete regulatory authority,3 the Court emphasized that social changes occurring in this century have necessitated certain adjustments in the legal regulation of water. Water has always been a vital resource to society, the Court pointed out, but it has become even more so in modern German society.] As the Court observed, the processes of growing industrialization, urbanization, and construction have increased the scarcity and social importance of water. The Court declared that
water is one of the most important bases of all of human, animal, and plant life. [Today] it is used not only for drinking and personal use, but also as a factor of industrial production. Because of these simultaneous yet diverse demands, it was previously established as a matter of constitutional law that an orderly water management scheme was vital for the population as well as for the overall economy.
At this point, one wants to say, yes, water is essential to life, but so are many other resources. Would the Court be prepared to hold that the Basic Law does not recognize private property rights in all other natural resources that are necessary for life? Indeed, what about land, which clearly also is essential to the existence of animals and plants? Are we to surmise that private ownership of land is somehow being put in jeopardy? That hardly seems likely. The point is that it begs the question simply to declare that because certain resources are essential to human existence, the constitutional status of property rights in those resources must somehow be different from property rights in other resources.
There are, however, important differences between water and land. The most obvious respect in which subterranean water differs from land, of course, is water’s “fugitive,” or ambient character. Whereas land is necessarily immobile, underground water is not. The Constitutional Court alluded to this factor when discussing the functional significance of water. The Court emphasized that, as a human resource, water is now vital both for purposes of drinking and industry, and the increase in these social uses has brought the two more and more in conflict with each other. This is especially true in the case of groundwater, the Court noted. In that context, there is an inevitable conflict between commercial uses such as excavation of subsurface resources and the community interest in protecting both the supply and quality of subterranean water. The constitutional status of water must be determined by taking into account the need to reconcile these conflicting social interests. The Court concluded that the first priority must be to preserve the quality of drinking water; industrial uses of groundwater, such as the discharge of chemicals into it, simply cannot be left to the discretion of each owner of land parcels. Why? Why not rely on the market, predicated on private property rights, to achieve an efficient allocation of groundwater?
Although the Court’s answer here was a bit murky, its reasoning echoes points that some American property scholars have made concerning the limits of the market as a means of allocating rights in groundwater. These scholars have pointed out that, left as a commons, groundwater involves major problems with externalities, or spillover effects. Self-interest is not a reliable means of protecting a resource whose use, especially given the resource’s fugitive character, has substantial external effects. As Eric Freyfogle has stated, “In the case of water, … many external harms affect ecosystems and future generations, or are otherwise uncertain in scope and infeasible to calculate or trace.” Flowing water, Freyfogle points out, is “communally embedded,” both in a social and an ecological sense. The ecological community includes “soils, plants, animals, microorganisms, nutrient flows, and hydrological cycles.” These two communities are themselves so interdependent that a threat to one is a threat to the other. Under these circumstances, any individual use of water profoundly affects the entire community and directly implicates the common weal.
As the Constitutional Court stated, the major legal question is whether shifting water regulation from the private to the public realm can be constitutionally justified. The argument was made that individual rights in groundwater are constitutionally inseparable from ownership of the surface. Rejecting this argument, the Court stated that federal regulation of groundwater use would not effectively empty landownership of all its content (Substanzentleerung des Grundeigentums). Landownership would not become completely subordinated to the social obligation. Merely subjecting the owner’s right to use groundwater to regulatory approval does not remove the entire use-interest from the bundle of rights. Even if it did, the Court reasoned, there would be no constitutional violation because the right to use groundwater is not a twig that is essential to private ownership of the land. The Court stated that ownership of land is valuable primarily with respect to use of the surface, not subterranean water. Even with respect to the surface, the Constitution permits regulation of various uses: “The constitutionally guaranteed right to property does not permit the owner to make use of just that use having the greatest economic value.”
The Court’s second basis for the constitutional validity of the Federal Water Law did not involve the constitutional property right itself, but instead drew from the principle of equality. Article 3 of the Constitution secures a principle of equality (das Gleichbehandlungsgebot), which the Court has repeatedly stated informs the meaning of other constitutional values, including property. The plaintiff had argued that the Federal Water Law arbitrarily burdened him, thus violating his Article 3 equality right, because his quarry was located close to groundwater while other quarry owners were not affected. The Court had little difficulty dismissing that objection, pointing out that the regulation affected all similarly situated quarry owners equally.
Similarly, the regulation did not violate the constitutional principle of proportionality (Verhaltnismäβigkeit), because no particular owner was singled out to bear a disproportionate share of the burden necessary to achieve the benefits sought by the statute.
The final significant aspect of the case concerns the recurrent problem of legal transitions. The Federal Water Law denied the plaintiff a legal right that he once had and had previously exercised; he had been quarrying gravel since 1936, and under the law existing at that time, the right of property clearly protected the right to use groundwater. The Court directly confronted the familiar dilemma: stability versus dynamism. On the side of stability, the Court stated,
It would be incompatible with the content of the Constitution if the government were authorized suddenly and without any transitional period to block the continued exercise of property rights that had required substantial capital investment. Such a law … would upset confidence in the stability of the legal order, without which responsible structuring and planning of life would be impossible in the area of property ownership.
The Court was equally frank about the need to avoid freezing the distribution of property rights extant at any given time:
The constitutional guarantee of ownership exercised by the plaintiff does not imply that a property interest, once recognized, would have to be preserved in perpetuity or that it could be taken away only by way of expropriation [i.e., with compensation]. [This Court] has repeatedly ruled that the legislature is not faced with the alternative of either preserving old legal positions or taking them away in exchange for compensation every time an area of law is to be regulated anew.
The Constitution resolves this dilemma, the Court said, by permitting the legislature to “restructure individual legal positions by issuing an appropriate and reasonable transition rule whenever the public interest merits precedence over some justified expectation, based on continuity of practice, in the continuance of a vested right.” The statute followed this constitutionally sanctioned path by providing a grace period of five years, during which owners could continue to use groundwater without a permit. Because the Act did not take effect until thirty-one months after its enactment, the claimant effectively had almost eight years of continued use. Moreover, owners could get an extension if they had filed for a permit. The consequence of these provisions in the instant case, the Court noted, was that the plaintiff had been able to continue his gravel operations for some seventeen years after the statute’s enactment. Under these circumstances, the statute’s transition provisions reasonably accommodated the plaintiff’s economic interest.
German constitutional scholars have debated whether the “Groundwater Cases” made obsolete the concept of a regulatory taking (enteignungsgleicher Eingriff, or equivalent expropriation). In American terms, the question is whether there remains an inverse condemnation action available to property owners. It is understandable why some scholars believe that there is not. The Court did, after all, permit the legislature to wipe away, without compensation, a discrete property right that had once been expressly recognized. How could there be any circumstance, then, in which the legislative obliteration of a legally recognized property interest would trigger the obligation to compensate? How could there be any circumstance in which the legislature has “gone too far” ?
One distinguished German scholar has argued that the case, properly read, does not abolish the idea of compensation for regulatory takings. He points out that the Constitutional Court never mentioned the doctrine of regulatory takings anywhere in its opinion. More significantly, subsequent developments in the case reveal that the possibility of compensation for a regulatory taking is far from dead. Following the Constitutional Court’s decision, the case went back to the Supreme Court. That Supreme Court awarded the plaintiff compensation. It did so on the theory that, although the basic principle of property protection emerges from constitutional principles, the particulars of protection must be determined based on nonconstitutional law (einfaches Recht). The relevant nonconstitutional basis for state liability in the case, said the Court, is the principle of individual sacrifice (Aufopferungsgedanke). If governmental action sacrifices an individual for the benefit of the general public, the state is liable to compensate the individual in an action that is similar to, but not technically, an “expropriation,” as used in Article 14(3).4
This debate has continued without any clear resolution, leaving this aspect of German state liability law (Staatshaftungsrecht) in considerable confusion. Whatever its legal basis, the Supreme Civil Court’s decision does seem to leave open the possibility of monetary compensation for regulatory takings. More interestingly, it creates the possibility of compensation without a taking in cases in which justice seems to demand it even though the Constitution does not.
Three final comparative points about the “Groundwater Cases” need to be made. First, the case makes clear that the German Constitutional Court, like its American counterpart, has rejected what in American takings literature has become known as “conceptual severance.” Conceptual severance, a term first coined by Margaret Jane Radin, means that every incident of ownership, every twig in the bundle of rights, is itself ownership. The implication of conceptual severance, of course, would be to strengthen vastly the bite of the Takings Clause, because virtually every regulation affecting private ownership of any resource would become a taking of ownership itself. The U.S. Supreme Court’s reaction to conceptual severance has been somewhat ambiguous, but the German Court clearly rejected it, at least with respect to the relationship between land and subsurface resources. In fact, none of the Court’s decisions under its constitutional property clause provides any basis at all for supposing that the Court is prepared to entertain such an approach.
The second point concerns the Court’s statement in the “Groundwater Cases” that the constitutional right to property does not guarantee the right to exploit the resource for its highest economic value. This statement indicates that German constitutional protection of property is not rooted either in notions of wealth maximization or libertarianism. Eliminating those two possible theoretical bases of constitutional protection of property has important implications for determining how a wide variety of contemporary American takings disputes would be resolved under German law. Wetlands regulation is an obvious example. Landowners (especially farmers) whose parcels include regulated wetlands have been very vocal in recent years about their supposed constitutional right to capture the full potential market value of the affected land. Using the Takings Clause, they have challenged wetlands regulations precisely on the ground that they deprive the owner of the ability to put the land to its highest economic use. Whether or not German courts might find another basis for striking down wetlands regulations, they clearly would reject the basic premise of the attack on American wetlands regulations.
The third respect in which American property lawyers can learn from the “Groundwater Cases” concerns the approach that the German Court took to determine that the property interest in question was what Carol Rose has called “inherently public property.” The Court focused on both the social necessity of the resource and the degree of social interdependence associated with the resource and the conditions of contemporary society. What the Court implicitly said was the following: Any use of flowing water by any single person or group of persons affects both the social and ecological communities in multiple ways, and it is unrealistic to suppose that any given owner will take into account all of these external effects. Indeed, precisely because of the intensity of the social and ecological interdependence that characterizes flowing water, no owner can possibly take into account all or even most of the external effects of a given use when choosing among possible uses. The consequences of any given use by an individual are both wildly unpredictable and profoundly felt by the entire community. Under such circumstances of intense interdependency, the boundary between meum and tuum is both meaningless and dangerously misleading. A resource whose use so profoundly affects the interdependent social and natural communities is inherently public and can only be regulated by public norms as expressions of the common will. Under this view, the German Federal Water Law at issue in the “Groundwater Cases” is not redistributive. It does not take an asset from A and give it to B. Rather, the statute is premised on the understanding that groundwater, for constitutional purposes at least, is now and always has been both A’s and B’s. It is not the state’s property, but property that is “inherently public.”
- For a lucid and insightful discussion of the muddled state of American constitutional doctrine on this question, see Thomas W. Merrill, The Landscape of Constitutional Property, 86 Va. L. Rev. 885 (2000). The difference between the American and German experiences may be due in part to the fact that the German Basic Law has a single property clause and a single property-dependent doctrine, while the American Constitution has two property clauses (the Fifth and Fourteenth Amendments) and three property-dependent doctrines (the takings doctrine of the Fifth Amendment and the procedural-due-process and substantive-due-process doctrines of the Fourteenth Amendment). Of course, the mere existence of multiple references to property in the American Constitution does not necessitate a multiplicity of meanings.
- The Supreme Civil Court had reasoned that ownership of land confers ownership of water below the land relying on a provision of the Civil Code that states that “[t]he right of the owner of a parcel of land extends to the space above the surface and to the resources below the surface,” § 905 BGB. American property lawyers will recognize this norm as the counterpart to the common-law maxim usque ad coelum et ad infernos (up to the sky and down to the depths). The Constitutional Court never questioned that this is correct as a matter of private law, but it concluded that the constitutional meaning of property is not determined solely by the private-law meaning, but is determined by the constitution itself. BVerfGE 58 at 335.
- This statement requires an important caveat: Under Article 14(1), the legislature has sole competence to define the “contents and limits” of ownership, see Grundgesetz [GG] art. 14(1) (F.R.G.), but Article 19(2) requires that the Constitutional Court define the essence of the constitutionally protected property right, Grundgesetz [GG] art. 19(2) (F.R.G.) (“In no case may the essential content of a basic right be encroached upon.”).
- What really seems to be going on here is a tug-of-war game between the Constitutional Court and the Supreme Civil Court, with the latter taking a more expansive view of the state’s obligation to compensate private owners for governmental encroachment of their property interests. In American terms, the conflict is somewhat analogous to the difference between the views of Justice Brennan and Chief Justice Rehnquist in the Penn Central case. See Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978). Ossenbühl has expressed the interesting idea that the alternative, nonconstitutional basis for compensation in cases of regulatory takings should be customary law. That is, the concept of enteigungsgleicher Eingriff should be separated from Article 14 of the Grundgesetz and treated as a matter of customary law.