Modern jurisprudence to determine whether a regulatory taking has occurred centers around the ad hoc factor-based test that the Supreme Court of the United States laid out in Penn Central Transp.
Pennsylvania Coal Co. v. Mahon involved an action by an individual landowner who sought to prevent a mining operation from violating this law, undermining his or her home.
[6] In contrast, a regulation restricting the use of property to further legitimate public ends, will not be considered a taking merely because it impairs the value or the utility of that land.
Moreover, the Court had held that an act compelling holders of contracts that called for payment in gold or silver to accept as legal tender "mere promises to pay dollars" was unconstitutional because it deprived "such persons of property without due process of law" under the Fifth Amendment.
The due process clause of the fourteenth amendment has historically been a major vehicle for the increased federal judicial review of the constitutionality of state activity.
We find early justices of the Supreme Court puzzling over this, for example, in Mugler v. Kansas, 123 U.S. 623 (1887): It is not a little remarkable that, while this provision has been in the constitution of the United States as a restraint upon the authority of the federal government for nearly a century, and while during all that time the manner in which the powers of that government have been exercised has been watched with jealousy, and subjected to the most rigid criticism in all its branches, this special limitation upon its powers has rarely been invoked in the judicial forum or the more enlarged theater of public discussion.
The Court wrote: ... [T]he character of the governmental action involved here leans heavily against finding a taking; the Commonwealth of Pennsylvania has acted to arrest what it perceives to be a significant threat to the common welfare.
[t]here is no record in this case to support a finding, similar to the one the Court made in Pennsylvania Coal, that the Subsidence Act makes it impossible for petitioners to profitably engage in their business.
These restrictions are "properly treated as part of the burden of common citizenship".Notably, the Keystone decision bears four dissents: Justices Rehnquist, Powell, O'Connor and Scalia.
The most straightforward example of this principle occurs when the government must condemn or destroy property to prevent spread of disease or other threat to the public health or safety.
When a governmental entity imposes these types of health and safety regulations, it may not be 'burdened with the condition that [it] must compensate such individual owners for pecuniary losses they may sustain, by reason of their not being permitted, by a noxious use of their property, to inflict injury upon the community.
At any rate, loss of future profits – unaccompanied by any physical property restriction – provides a slender reed upon which to rest a takings claim.
That holding was eventually overruled by the U.S. Supreme Court a few years later in First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987).
The U.S. Supreme Court held: The application of a general zoning law to particular property effects a taking if the ordinance does not substantially advance legitimate state interests, see Nectow v. Cambridge, 277 U.S. 183, 188 (1928), or denies an owner economically viable use of his land, see Penn Central Transp.
Although no precise rule determines when property has been taken, see Kaiser Aetna v. United States, 444 U.S. 164 (1979), the question necessarily requires a weighing of private and public interests.
In its decision, the Supreme Court held that in order to be within the regulatory authority of the United States, these semi-aquatic characteristics would have to be the result of frequent flooding by the nearby navigable waters.
In the Penn Central case, the Supreme Court had described a three-prong balancing test, which required a case-by-case analysis to determine if there had been a regulatory taking.
Lucas had purchased two residential lots on a South Carolina barrier island, intending to build single-family homes such as those on the immediately adjacent parcels.
The court further clarified, however, that a regulation is not a taking if it is consistent with "restrictions that background principles of the State's law of property and nuisance already placed upon ownership."
To win its case, respondent cannot simply proffer the legislature's declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common-law maxim such as sic utere tuo ut alienum non laedas, but must identify background principles of nuisance and property law that prohibit the uses Lucas now intends in the property's present circumstances.Lucas was remanded to the South Carolina Supreme Court which in turn remanded it to the trial court for a valuation trial.
On the question of whether the plaintiff could proceed with a taking claim after he acquired the property in his personal capacity from his corporation after the regulations were already in place, the Court held that he could.
As Justice Kennedy, writing for the majority said, Were the Court to accept that rule, the postenactment transfer of title would absolve the State of its obligation to defend any action restricting land use, no matter how extreme or unreasonable.
The Coastal Commission had asserted that the public easement condition was imposed to promote the legitimate state interest of diminishing the "blockage of the view of the ocean" caused by construction of the larger house.
The Supreme Court of Florida held that the holdings of Nollan and Dolan did not apply because they involved exaction demands for land, as opposed to money.
But when an action does not fall into a category addressed by one of these tests, the Court relies primarily on an ad hoc inquiry into the specifics of such individual case.
This test was established in Penn Central v. City of New York, which described the most relevant factors to be the owners investment-backed expectations, the economic impact of the regulation, and the character of the government action.
The policy underlying the whole parcel rule is that it is "essential to an interpretation of the takings clause that leaves any room for public planning and regulation of land uses.
"[13] The development of regulatory takings jurisprudence is notable for the contribution made by public interest advocates from both the conservationist and property rights advocacy camps.
[14] One of the more prominent advocates on behalf of property rights has been the Pacific Legal Foundation, which represented the landowners in Nollan v. California Coastal Commission, Suitum v. Tahoe Regional Planning Authority, Palazzolo v. Rhode Island, Koontz v. St. Johns Water Management District, and Murr v. Wisconsin.
On the other side of the debate, the State of Hawaii was represented by Vermont Law School Professor John Echeverria in Lingle v. Chevron, and who has worked with the Audubon Society and Community Rights Council.