(CN) – The Supreme Court on Friday ruled 5-3 that a Wisconsin family’s adjacent, commonly owned properties must be considered a single parcel of land for the purpose of analyzing the local government’s taking of the property.
Joseph Murr, Michael Murr, Donna Murr and Peggy Heaver challenged a Wisconsin court’s ruling that a land ordinance does not constitute an uncompensated taking of their property.
Their parents bought land in 1960, built a cabin on it and transferred the title to their plumbing company, according to court records. Three years later, the Murrs’ parents bought an adjacent lot, which has stayed vacant since 1963.
The Murrs’ parents transferred both lots to them in 1994 and 1995. The 1995 transfer of the second lot brought the two lots under common ownership and merged them, court records show.
A Wisconsin ordinance prohibits the individual development or sale of adjacent lots that are under common ownership unless a lot has at least an acre of developable land.
However, under state law, if abutting, commonly owned lots don’t each have at least one acre of developable land, they together constitute a single, buildable lot.
The Murrs eventually decided to sell the vacant lot. The Wisconsin Department of Natural Resources and St. Croix County zoning staff opposed the Murrs’ application and it was denied after a public hearing.
After a failed appeals process, the Murrs sued Wisconsin and St. Croix County, claiming the ordinance in question caused an uncompensated taking of their property because the vacant lot can’t be sold or developed as a separate lot.
The Fifth Amendment of the U.S. Constitution has a provision called the Takings Clause, which says that private property cannot be taken for public use without fair compensation.
The circuit court found that the Murrs’ claim was time-barred because the ordinance had immediate economic effects when it was enacted in the mid-1970s. The court also found that there was no illegal taking because the property as a whole could be used for residential and other purposes.
Both lots combined retained significant value based on an appraisal, the circuit court ruled.
The Murrs appealed the ruling but the Wisconsin Court of Appeals upheld the lower court’s decision in December 2014.
“The undisputed facts establish that the Murrs’ property, viewed as a whole, retains beneficial and practical use as a residential lot. Accordingly, we conclude they have not alleged a compensable taking as a matter of law,” the per curiam appeals court ruling states.
In a petition filed in August 2015, the Murrs asked the U.S. Supreme Court to address whether the “parcel as a whole” concept from its landmark 1978 decision in Penn Central Transportation Co. vs. City of New York means that two legally distinct but commonly owned land parcels must be combined for the purposes of a takings analysis.
The Supreme Court agreed to hear the case in January 2016.
A year and a half later, the high court ruled 5-3 Friday that the Wisconsin Court of Appeals correctly analyzed the Murrs’ property as a single unit.
Justice Anthony Kennedy, writing for the majority, said the Murrs did not establish a compensable taking by Wisconsin or St. Croix County.
“Like the ultimate question [of] whether a regulation has gone too far, the question of the proper parcel in regulatory takings cases cannot be solved by any simple test,” he wrote. “Courts must instead define the parcel in a manner that reflects reasonable expectations about the property. Courts must strive for consistency with the central purpose of the Takings Clause: 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.’”
Applying that principle, Kennedy said of the Murrs’ property, “Treating the lot in question as a single parcel is legitimate for purposes of this takings inquiry, and this supports the conclusion that no regulatory taking occurred here.”
Kennedy was joined in the majority by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.
Chief Justice John Roberts dissented, and was joined by Justices Clarence Thomas and Samuel Alito.
Roberts said he disagreed with the majority’s analysis of other factors besides state and local law, including physical characteristics of the land and its prospective value.
“I would stick with our traditional approach: State law defines the boundaries of distinct parcels of land, and those boundaries should determine the ‘private property’ at issue in regulatory takings cases. Whether a regulation effects a taking of that property is a separate question, one in which common ownership of adjacent property may be taken into account,” he wrote. “Because the majority departs from these settled principles, I respectfully dissent.”
Justice Thomas also wrote a separate, single-page dissenting opinion.
“In my view, it would be desirable for us to take a fresh look at our regulatory takings jurisprudence, to see whether it can be grounded in the original public meaning of the Takings Clause of the Fifth Amendment or the Privileges or Immunities Clause of the Fourteenth Amendment,” he said.
Justice Neil Gorsuch took no part in the consideration or decision of the Murrs’ case.