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."
The LIABILITY comes from the lawsuit filed by the Murr’s against the state and county.
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.
So to try and avoid the lawsuit or large payouts, the government said they could sell both the properties, not just one.
The republicans are such willing accomplices.
“The property was appraised at $400,000 before the Murrs tried to sell it.”
One of the many fake facts in the article.
Elect no more female SCOTUS judges. They do not think.
Wait a few decades before more female judges.
A 50/50 female male SCOTUS would be devastating.
Women socialize thought, sadly.
Disappointed that you post an article full of errors instead of posting the actual decision...
I believe the reason Gorsuch did not participate is because he was not on the court yet when the issue was argued before the court by each side.
It is an exception that the plaintiff is forced to take a lower price than market. My job at one time included evaluation of the cost of “making someone whole.”
Most often this would include such costs as providing a renter with suitable housing if they were forced to move.
This meant providing the tenant with comparable housing. But the standard was “suitable” housing which meant that the house/apt into which they moved had to meet minimum federal standards of suitable.
Hence, a family of 6 in a two bedroom house would move into
a 5 or 6 room house since children could not share a bedroom.
There are other ripoffs of the government. About 50 yrs ago I was urban renewed out in Chicago and got 3 grand for my trouble. Since I was a college student at the time it probably cost me two hundred dollars, if the robbery of the last night there, is not counted.
Too bad the subject in this suit did not sell when the price was alleged to be 400,000. It would also be interesting to know what value the country was using to calculate the taxes paid at the last payment. Are they going to reduce the taxes to those applicable to 40gs?
Many of these cases along the waters become subject to the Clean Water Act and its discharge permit requirements which often means a septic field cannot be used so the area must be sewered. This is terribly expensive since generally few hook-ups per mile of sewer means the owners get hit with hook-up fees in the thousands of dollars.
Because it was never appraised at $400know...
Actually, it all started with the feds ...
So how much was it appraised for?
The knew the restrictions when they got it.
“right to subdivide.”
Most every municipality puts restrictions on sub-dividing.
Actually, the same restrictions the are fighting made their other lot more valuable. These people want it both ways.
$40,000.
“Considering the valuation of the property as a single lot versus two
separate lots, the court found the market value of the
property was not significantly affected by the regulations
because the decrease in value was less than 10 percent.”
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 property was appraised at $400,000 before it was discovered that because of regs put in place 20 years after they bought the two lots, the only legal buyer, the county, offered them only $40,000, take it or leave it.
So dropping the worth of one lot from $400,000 to $40,000 isn’t a taking.
And the market value they’re talking about is after devaluation due to the ‘new’ rules.
“The property was appraised at $400,000 before it was discovered that because of regs put in place 20 years after they bought the two lots, “
It was appraised at $40k, not $400k. The regs were put in place AFTER they obtained the lots.
“So dropping the worth of one lot from $400,000 to $40,000 isn’t a taking.”
It was never worth $400,000.
“And the market value they’re talking about is after devaluation due to the ‘new’ rules.”
The ‘new’ rules were put in place over 30 years ago! Besides, the ‘new’ rules probably increased the value of the improved lot and the value of the two lots considered together.
“So dropping the worth of one lot from $400,000 to $40,000 isn’t a taking.”
They can sell the two similar lots together for almost $700k. The building is almost worthless.
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