Posted on 06/23/2017 2:20:20 PM PDT by Sopater
When governments issue regulations that undermine the value of property, bureaucrats don't necessarily have to compensate property holders, the Supreme Court ruled Friday.
The court voted 5-3, in Murr V. Wisconsin, a closely watched Fifth Amendment property rights case. The case arose from a dispute over two tiny parcels of land along the St. Croix River in western Wisconsin and morphed into a major property rights case that drew several western states into the debate before the court.
Chief Justice John Roberts, in a scathing dissent, wrote that ruling was a significant blow for property rights and would give greater power to government bureaucrats to pass rules that diminish the value of property without having to compensate property owners under the Firth Amendment's Takings Clause.
"Put simply, today's decision knocks the definition of 'private property' loose from its foundation on stable state law rules," Roberts wrote. The ruling "compromises the Takings Clause as a barrier between individuals and the press of the public interest."
Donna Murr, in a statement provided by the Pacific Legal Foundation, the libertarian law firm that represented the family in the case, said her family was disappointed by the result.
"It is our hope that property owners across the country will learn from our experience and not take their property rights for granted," Murr said. "Although the outcome was not what we had hoped for, we believe our case will demonstrate the importance of taking a stand and protecting property rights through the court system when necessary."
In 2004, Murr and her siblings sought to sell one of two parcels of land that had been in the family for decades. Murr's parents bought the land in the 1960s, built a cabin on one parcel, and left the other parcel undeveloped as a long-term investment.
The family attempted to sell the vacant parcel to pay for renovations to the cabin, but were prevented from doing so by regulations restricting the use of land along rivers like the St. Croix approved by the state in the 1980s, long after the purchase of both lots.
Those regulations effectively gutted the value of the Murrs' property. The property was appraised at $400,000 before the Murrs tried to sell it. When the family came to the county, now the only eligible buyer, the county offered $40,000.
The Murrs filed a lawsuit against the state and county, arguing that they should be compensated for the lost value of the property, arguing the Fifth Amendment of the U.S. Constitution guarantees governments must compensate property owners when land is seized or otherwise made un-useful for public purposes.
To avoid liability in the case, the state and county told the Murrs they could combine the two parcels of land for regulatory purposes. This meant that even though the two pieces of land were separate and the Murr family paid taxes on them separately, the family would be unable to make a takings claim for one of the two parcels.
In short, they could sell both lots together, but not one or the other.
Lower courts agreed with the government interpretation and the Supreme Court on Friday upheld the court rulings.
"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," Justice Anthony Kennedy wrote in the majority opinion. "They have not been deprived of all economically beneficial use of their property."
Justices Stephen Breyer, Elena Kagan, Ruth Bader Ginsberg, and Sonia Sotomayor joined Kennedy in the majority opinion, while conservative justices Clarence Thomas and Samuel Alito joined Chief Justice John Roberts' dissent. The Supreme Court's newest member, Justice Neil Gorsuch, did not participate in the case.
The ruling could have implications that go well beyond the 2.5 acres of land in Wisconsin.
Several western states filed amicus briefs in the case on behalf of the Murr family (as did the Reason Foundation, which publishes this blog). Though states like Nevada and Arizona did not have a direct interest in the Murrs' ability to sell their vacant land, they saw the case as having important implications for conflicts over federal lands.
Many state governments own contiguous lots and large bodies of water near areas owned by the federal government (military bases, national parks, etc). If those government bodies are allowed to merge contiguous lots for regulatory purposes, the federal government could impose severe restrictions on state land and wouldn't have to pay consequences, warned Ilya Somin, a professor of law at George Mason University who authored the amicus brief on behalf of those western states.
Writing Friday at The Washington Post about the ruling, Somin said it is "likely to create confusion and uncertainty going forward."
"In at least some cases, today's indeed ruling allows the government to avoid compensating property owners for the taking of their land, merely because they also own the lot next door," he writes. "But the vague nature of the test established by the Court makes it very hard to figure out exactly when that might happen."
With Friday being the 12th anniversary of the infamous decision in Kelo v. New London (in which the Supreme Court upheld an objectionable use of eminent domain), Somin jokes that maybe property rights advocates should hope the court doesn't release any more rulings on June 23.
Roberts, in his dissenting opinion, stressed that the court's ruling in Murr could allow for "ad hoc, case-specific consideration" of takings claims, thus undermining constitutional protections that should be consistent and predictable for property owners. Meaning more leeway for governments to do what Wisconsin did to the Murrs.
"The result is that the government's goals shape the playing field," Roberts wrote, "even before the contest over whether the challenged regulation goes 'too far' even gets underway."
“When the family came to the county, now the only eligible buyer, the county offered $40,000.”
LOL! Article is so full if fake news.
“So dropping the worth of one lot from $400,000 to $40,000 isn’t a taking.”
The developed lot was appraised for about $370k. The value of both together was appraised to be almost $700k.
Both lots are very similar. That means the second lot if sold with the first would be about $330k. At least according to the dude’s appraiser.
reason for Justice term limit of 18 years or be reconfirmed?
Purchase of lots occurred in the 1960’s. Regulations impacting land use along the river occurred 1980’s. Sale of a lot, adjoining their lot with a cabin, contemplated in 2004. Taxes on a $400,000 lot would be different than a $40,000 lot. What does the tax payment record support?
What was the history of real estate valuation used by the county/state for property tax purposes all the preceding decades??? Once the regulations which impacted property valuation came into force, was a reassessment on value for tax purposes made—were the accessed property taxes reduced? Was the local government negligent in interpretation or application of a law impacting real estate value, thus taxing the property at an inappropriate rate?
“You are an idiot. They originally purchased the lot in 1959, when there were no restrictions. “
You’re the idiot for believing the click-bait article. They didn’t get the lots till the 1990’s.
“Why don’t you actually contribute to the conversation”
I have. I have given specifics and referred those in error to read the actual decision.
But some here prefer to argue instead of looking up the facts.
FACT: "Lot F was conveyed to them in 1994, and Lot E was conveyed to them in 1995."
Stop posting comments when you not only don't know the facts, but are specifically stating incorrect facts."
According to the dude's appraiser ...
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$40k.
“houses in the area are around $600k+. “
An old cabin in the flood-plain only feet from the edge of the river and has been flooded at least five times does not add any value to the lot.
“Nice to see Roberts pulled his head out on this one. “
You obviously did not read his ‘dissent’.
Roberts:
The Court today holds that the regulation does not effect ataking that requires just compensation. This bottom-line conclusion does not trouble me; the majority presents a fair case that the Murrs can still make good use of bothlots, and that the ordinance is a commonplace tool topreserve scenic areas, such as the Lower St. Croix River, for the benefit of landowners and the public alike.
“Regardless, IMHO, the ruling is WRONG! “
All justices agreed that it was the correct legal decision.
Roberts: The Court today holds that the regulation does not effect ataking that requires just compensation. This bottom-line conclusion does not trouble me; the majority presents a fair case that the Murrs can still make good use of bothlots, and that the ordinance is a commonplace tool topreserve scenic areas, such as the Lower St. Croix River, for the benefit of landowners and the public alike.
Thomas: I join THE CHIEF JUSTICE’s dissent because it correctly applies this Court’s regulatory takings precedents, whichno party has asked us to reconsider. The Court, however, has never purported to ground those
“A local community where any of these five ‘
Seven. All agreed that the decision was legally warranted.
There is the enemy of freedom folks. The Federal Courts from top to bottom.
“Um, no. It was appraised at $400k before the county said he couldn’t sell it. “
Um, no. It was never appraised at $400k.
And the county never said they couldn’t sell it.
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