Eminent Domain (Update)

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One of the most challenging and enduring puzzles in American constitutional law is how one distinguishes a compensable taking of property from a legitimate and noncompensable exercise of the police power. To suggest the Supreme Court's approach to the question, Harry N. Scheiber, author of the Encyclopedia' s principal article on eminent domain, looked back and away from the Court to Chief Justice lemuel shaw of Massachusetts. Shaw had observed in 1839 that much depends "upon the nature of the exigencies as they arise, and the circumstances of individual cases." As of 1985, Scheiber concluded, Shaw's view "lacked prescriptive potential, but it has proved remarkably accurate in predicting the direction that the law would take—and the perplexities that would beset the best efforts of lawmakers and judges to produce definitive formulae."

Even in 1985, however, there were at least some "definitive formulae" by which to identify regulatory takings. First, it had long been thought that government regulatory action resulting in physical invasion of private property should always be regarded as a taking, no matter how trivial the intrusion, and this per se rule was firmly endorsed by the Court in loretto v. teleprompter, inc. (1982), at least if the government invasion was "permanent." A second per se rule—that government regulation of nuisancelike activity was never to be regarded as a taking, no matter how substantial the burden of the regulation—was also clear enough.

Neither of these per se rules could be of much importance in the modern regulatory state, for modern regulation seldom results in physical invasions and commonly reaches beyond the mere control of nuisances. Yet, in this broad and important middle ground, the Court in 1985 was self-consciously drawing the line between takings and the police power in just the ad hoc fashion that Shaw had long ago foreseen. The two per se rules aside, the Court's approach was one of balancing a number of considerations, including the mix and breadth of benefits and burdens worked by a regulation, its economic impact, and the extent of its interference with concrete investment-backed expectations. The ad hoc approach played into the two per se rules as well, because temporary physical invasions were to be examined in terms of balancing and because the characterization of something as a nuisance is itself a matter of more or less.

Have matters changed since 1985? The answer depends in large part on three cases decided by the Court in 1987: Nollan v. California Coastal Commission, Keystone Bituminous Coal Association v. DeBenedictis, and First English Evangelical Lutheran Church v. County of Los Angeles. Unfortunately, the meaning of these cases is hardly clear. Some analysts see in them an unwelcome move away from ad hoc balancing. In their view, the Court has now confirmed the two per se rules mentioned above and added more, such that the law of regulatory takings is being resolved into a series of categorical "either-ors." Either a regulation (controlling other than nuisances) is categorically a taking because it results in a permanent physical invasion, specifically undermines a distinct investment-backed expectation, or totally eliminates the property's economic value, or it is categorically not a taking at all. But other commentators see in the 1987 decisions yet more evidence that the Court remains unable to develop what Scheiber called "definitive formulae."

The foregoing disagreement aside, there are other puzzles in the takings cases of 1987. Nollan found a taking where the regulatory authority had conditioned a development permit on the property owners' dedication of a lateral easement of public passage across their land. This decision suggests that some regulatory programs will be subjected to heightened judicial scrutiny in the course of determining takings questions, but it is far from clear how broadly this suggestion should be read. Keystone Bituminous, in the course of upholding Pennsylvania's Subsidence Act against a takings claim, seems to overrule the opinion of Justice oliver wendell holmes, jr. , inPennsylvania Coal Company v. Mahon (1922), the centerpiece of regulatory takings law; yet the Court never says as much. And Justice john paul stevens, in his dissent in First English Evangelical Lutheran Church, poses a nice problem for the Court's endorsement in that case of inverse condemnation as a remedy for regulatory takings.

First English finally announced what had been anticipated ever since the dissenting opinion of Justice william j. brennan in San Diego Gas and Electric Company v. City of San Diego (1981). First English holds that in the event of regulatory takings, property owners are entitled to the just compensation required by the Fifth Amendment, including interim damages for the period the offending regulation remains in effect. "Once a court determines that a taking has occurred, the government retains the whole range of options already available—amendment of the regulation, withdrawal of the invalidated regulation, or exercise of eminent domain." But amendment or withdrawal no longer permits the government to escape liability, as it did before. Once the taking has occurred, "no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective."

Of all that the Court has decided about takings since 1985, only the remedy of inverse condemnation appears to be clear, yet even it is cloudy. The cloud looms because of the Court's admonition that it is not dealing "with the quite different questions that would arise in the case of normal delays in obtaining building permits, changes in zoning ordinances, and the like which are not before us." Here a temporary loss of use might not be a taking at all. But how, Justice Stevens wonders, is one to draw the line between such "everyday regulatory inconveniences" and compensable temporary takings? In any event, if a regulation can affect a significant percentage of some property's value without being held a taking—and this is clearly the law—then why should a regulation not be allowed to affect as well a significant percentage of the property's useful life?

The law of takings seems little clearer today than it did in 1985, inverse condemnation in principle aside.

James E. Krier

(see also: Environmental Regulation and the Constitution; Property Rights; Regulatory Agencies.)


Symposium 1988 The Jurisprudence of Takings. Columbia Law Review 88:1581–1794.