Regulatory Takings and Smart Growth

Douglas T. Kendall

Timothy J. Dowling

Community Rights Counsel

May 10, 2001

Cobb County, Georgia

Community Rights Counsel

Nonprofit public interest law firm

Assists counties and other local governments in defending land use controls and other community protections

Emphasis on takings cases

THE TAKINGS CLAUSE

U.S. Constitution: “Nor shall private property be taken for public use, without just compensation.” (Fifth Amendment)

Georgia Constitution: “Private property shall not be taken or damaged for public purposes without just and adequate compensation bring first paid.” (Article I, Section III, Par I)

Community Rights Counsel Success Stories

Lake Tahoe planning moratorium

Washington, DC historic preservation laws

Anchorage, AK fair housing laws

Riverside, CA fire safety protections

Pennsylvania mining restrictions

Rhode Island wetland protections

Bad News for Local Governments

Many takings lawsuits

Expensive and time-consuming to defend

Many landowner victories in the U.S. Supreme Court

Good News for Local Governments

Local governments win the vast majority of takings cases

Landowner wins in U.S. Supreme Court are narrow

Very strong arguments against an expansive interpretation of the Takings Clause

Five Themes for Litigating Regulatory Takings Cases

1. Narrow Text and Original Meaning

2. Judicial Respect for our Federal System

3. Judicial Deference to the Policymaking

Branches

4. Avoiding Unduly Harsh Fiscal Impacts

5. The Government as Guardian of Property

Rights and Property Values

Palazzolo v. Rhode Island (U.S.)

Review granted October 10, 2000

Oral argument February 26, 2001

Ruling by the end of June 2001

Palazzolo Coastal Wetlands Picture #3

Palazzolo v. Rhode Island (U.S.) Takings challenge to the denial of a permit to fill 18 acres of pristine coastal wetlands

Palazzolo seeks $3,150,000 based on profits expected from building 74 single-family homes

Rhode Island Supreme Court deemed the case unripe because:

(1) Palazzolo failed to apply for a permit to build the 74 homes; and

(2) Palazzolo failed to seek permission to fill less than 11 acres or to build on the upland portion of the property.

Four Factual Wrinkles in Palazzolo

1. The Nature of the Takings Claim: Subdivision vs. Beach Club Proposal?

2. The Number of Houses that May be Built:One or Several?

3. Palazzolo’s Acquisition Date: 1978 or 1959?

4. The Trial Court’s Nuisance Finding

The Background-Principles Issue

QUESTION PRESENTED:

”WHETHER A REGULATORY TAKINGS CLAIM IS CATEGORICALLY BARRED WHENEVER THE ENACTMENT OF THE REGULATION PREDATES THE CLAIMANT’S ACQUISITION OF THE PROPERTY."

Palazzolo: The Lucas Per Se Rule Issue

QUESTION PRESENTED:

”WHETHER THE REMAINING PERMISSIBLE USES OF REGULATED PROPERTY ARE ECONOMICALLY VIABLE MERELY BECAUSE THE PROPERTY RETAINS A VALUE GREATER THAN ZERO."

TAHOE-SIERRA PRESERVATION COUNCIL V. TAHOE REGIONAL

PLANNING AUTHORITY

Takings challenge to temporary planning moratoria in effect for 32 months

Lake Tahoe is one of the purest, most pristine lakes in the world

Nearby development causes the Lake to lose one foot of clarity every year

Claimants consist of about 450 landowners

Trial court found a taking

Appeals court reversed and ruled for the government

TAHOE-SIERRA PRESERVATION COUNCIL V. TAHOE REGIONAL

PLANNING AUTHORITY(continued)

Parcel-as-a-whole rule: Claimants cannot sever property rights into separate temporal dimensions.

A reasonable temporary ban on development does not constitute a taking.

MCQUEEN V. SOUTH CAROLINA COASTAL COUNCIL

McQueen bought two oceanfront lots in the 1960s

In 1977, South Carolina adopted rules that restrict the filling of coastal wetlands

McQueen took no action for 30 years after his purchase; the lots reverted to their natural condition

In 1991, the State denied McQueen permission to fill and develop the lots

It is undisputed that the permit denial extinguished all economically viable use of the land

Issue: Did McQueen’s inaction for thirty years reflect the lack of a reasonable expectation to develop that defeats his takings claim?