Relevant Parcel Question on the U.S. Supreme Court Docket for 2016

by: Joseph Grather
19 Jan 2016

Last week, the Court granted a cert. petition, which presented the following question:

“In a regulatory taking case, does the “parcel as a whole” concept as described in Penn Central Transportation Company v. City of New York, 438 U.S. 104, 130-31 (1978), establish a rule that two legally distinct, but commonly owned contiguous parcels, must be combined for takings analysis purposes?” A copy of the petition is available here.

The case involves two one acre water-front parcels on the St Croix River in Hudson Wisconsin owned by the Murr family.  The lots were purchased by the patriarch at different times, by different entities, and only one was developed with a residential structure.  The two parcels were eventually conveyed to the children and at the time the case commenced were in common ownership.  The children had plans to improve the existing house, and were going to sell the adjacent parcel to implement their plans.

But they learned that the zoning ordinance changed during their ownership, which prevented development of the vacant parcel.  However, there was an exception. “Under the ordinance, a grandfather clause provides that any lot created prior to January 1, 1976, as was Lot E, may still be developed as a single family residence but only if the lot “is in separate ownership from abutting lands.””  The problem is that the Murrs’ own abutting land.

The Murrs argued before the Wisconsin courts that the unimproved parcel was separately owned, separately taxed and purchased was owned by a separate entity for investment purposes at the time the ordinance was adopted, therefore, absent relief, the regulatory action results in a uncompensated taking of their one acre building lot.  The Wisconsin Courts disagreed finding analogous “parcel as a whole” cases.  Simply, the court looked at the economic viability of the two parcels as combined, and found that together, they were not rendered valueless by the regulation at issue.

The property owners  then petitioned the United States Supreme Court for review, and their initial prayer has been answered.  Clearly the question goes all the back to Justice Holmes opinion in Pennsylvania Coal v. Mahon, where the court did not look at the parcel as a whole, but found a taking and where the regulation denied all use of a portion of the owner’s property.

We’ll keep you posted.