Disappointed Expectations: How the Supreme Court Failed to Clean Up Takings Law in Murr V. Wisconsin
This article examines the recently decided case Murr v. Wisconsin, demonstrating how the Supreme Court’s decision dodged the hard questions latent in applying the “parcel-as-a-whole” test of Penn Central Transportation Co. v. City of New York to two contiguous parcels that for some limited period of time came under common ownership by different routes. The first part examines how the case should have been decided under Penn Central and concludes that Chief Justice John Roberts, the primary dissenter, had by far the better of the argument in insisting that state property lines should govern in preference to the complex facts-and-circumstances test championed by Justice Anthony Kennedy, who wrote for the Court. A simple mistake in conveyancing, easily avoided, should not wipe out development rights that any other owner could possess over the undeveloped parcel.
The second part of this article attacks the dominant Penn Central test that makes the availability of any compensation turn on the ratio of the value taken to the full value of the parcel. The same political considerations that justify a per se compensation rule (subject to a police-power exception) in physical cases apply equally in the regulatory context, given that both circumstances present opportunities for majoritarian abuses. The article then examines many of the cases cited in Penn Central, and some decided after it, in relation to the taking of partial interests in land, be they air rights, mineral rights, liens, or covenants and concludes that a simple rule that sets compensation equal to the fair market value of the property lost outperforms on administrative and welfare grounds the Penn Central test. That test fails because it ignores huge private losses created by takings so long those losses do not result in a sufficient diminution of the property’s value, a standard that is nowhere either articulated or defended. As such, Penn Central should be overruled or cut down in size.
