Justices side with government in property rights case

AP News
Posted: Jun 23, 2017 1:54 PM
Justices side with government in property rights case

WASHINGTON (AP) — The Supreme Court on Friday ruled against a Wisconsin family in a property rights case that makes it easier for government officials to restrict development in environmentally sensitive areas.

The 5-3 ruling involved the family's effort to sell part of its land along the scenic St. Croix River. They planned to use the proceeds from an empty lot to pay for improvements on a cabin that sits on adjacent land.

County officials had barred the sale because conservation rules treat the two lots as a single property that can't be divided.

The family claimed those rules essentially stripped the land of its value and asked the government for compensation. The government argued that it's fair to view the property as a whole and said the family is owed nothing.

Justice Anthony Kennedy, joining the court's four liberal members, called the government's action "a reasonable land-use regulation" meant to preserve the river and surrounding land. He said the property as a whole remains valuable and the family could not claim they expected to sell or develop the lots separately given regulations that existed before they acquired the lots.

The case was closely watched by property rights and business groups that say it should be easier for landowners to get compensation when government regulations restrict land use. More than 100 cities and counties across the U.S. have similar "merger" restrictions that treat two adjacent properties as one if they have the same owner.

At issue is the constitutional requirement that private property can't be taken for public use "without just compensation."

The dispute began when four siblings from the Murr family tried to sell the vacant lot in 2004 to pay for improvements on a rustic cabin that sits on the plot next door. Their father had purchased the two 1.25-acre lots separately in the 1960s and both parcels had been taxed separately. The lots were later transferred to his children in the 1990s.

County officials blocked the sale, citing 1976 regulations that bar new construction on lots in the area to prevent overcrowding and pollution. A "grandfather" clause exempted existing owners, but the county said it didn't apply to the Murrs' empty lot alone since it was connected to the family's other land.

The Murrs wanted the government to pay what the vacant property is worth — it was assessed at $400,000 — since the regulations prevented them from building on it. A Wisconsin appeals court sided with the county, saying zoning rules did not take away the property's value because the Murrs could still use both lots as a vacation property or sell them as a whole.

To resolve the case, Kennedy relied on a multi-factor test that includes state and local laws, the reasonable expectations of the landowners, the physical characteristics of the property, and the effect of the regulation on the land's value.

Taking all those factors into account, the Murrs "have not been deprived of all economically beneficial use of their property," Kennedy said.

In dissent, Chief Justice John Roberts said the majority had undermined the Constitution's protections for private property owners, making it easier for government to win such disputes.

"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," Roberts said.

The Pacific Legal Foundation, a conservative land rights group that represented the Murrs, called the ruling a disappointment for property owners. John Groen, the group's executive vice president and general counsel, said the court "did not recognize the fundamental unfairness" to the family of having the two properties combined.

Ellen Denzer, community development director for St. Croix County, praised the ruling. She said the county "always tried to be very fair to the Murr family and also follow the rules for how we manage the lands along the St. Croix River and protect the wetlands."

Justice Neil Gorsuch took no part in deciding the case, which was argued before he joined the court.