Takings Clause in the United States

Introduction to Takings Clause

The Fifth Amendment, adopted in 1791, includes a declaration that “private property” is not to be “taken for public use, without just compensation.

Under the Takings Clause, courts allow two distinct types of suit. Condemnation (also “formal
condemnation”) occurs when a government or private entity formally invokes its power of
eminent domain by filing suit to take a specified property, upon payment to the owner of just
compensation. By contrast, a taking action (also “inverse condemnation”) is the procedural reverse.

It is a suit by a property holder against the government, claiming that government conduct has effectively taken the property notwithstanding that the government has not filed a formal condemnation suit. A typical taking action complains of severe regulation of land use, though the Takings Clause reaches all species of property, real and personal, tangible and intangible. The taking action generally demands that the government compensate the property owner, just as when government formally exercises eminent domain.

No debate on the proper balance between private property rights and conflicting societal needs is complete without noting the Takings Clause.

History of the Takings Clause

This “taking clause”originally applied only to the federal government and not to the states. However, the Supreme Court long ago decided that section 1 of the Fourteenth Amendment (1868), which prohibits any state from “depriv[ing] any person of property without due process of law,” has (in effect) made the Fifth Amendment taking clause applicable to state and local governments.

Until the late 19th century, then, this clause was applied by the Supreme Court only to
condemnation: the formal exercise by government of its eminent domain power to take property coercively, upon payment of just compensation to the property owner. In such condemnation suits, there is no issue as to whether the property is “taken” in the Fifth Amendment sense; the government concedes as much by filing the action.

The only question, typically, is what constitutes “just compensation.”
Beginning in the 1870s, the Supreme Court gave its imprimatur to a different use of the Takings
Clause. When the sovereign appropriated or caused a physical invasion of property, as when a
government dam flooded private land, the Court found that the property had been taken just as surely as if the sovereign had formally condemned. Therefore, it said, the property owner should be allowed to vindicate his constitutional right to compensation in a suit against the government.
In contrast with condemnation actions, then, such takings actions have the property owner sue
government rather than vice-versa; hence the synonym “inverse condemnation actions.” The key issue in takings actions is usually whether, given all the circumstances, the impact of the
government action on a particular property amounts to a taking in the constitutional sense. Only if a taking is found does the question of just compensation arise.

The 1870s marked the Supreme Court’s first clear acknowledgment, then, that the Takings Clause is not
only a constraint on the government’s formal exercise of eminent domain, but the basis as well
for suits by property owners challenging government conduct not attended by such formal
exercise. However, until 1922 the Court believed such “inverse condemnation” suits to be
confined to government appropriations or physical invasions of property. Cases involving the
impacts of government water projects (flooding, reduced access, etc.) were typical. When cases
involving mere restrictions on the use of property reached the Court, they were tested under due
process, scope of the police power, or ultra vires theories.

In 1922, in the most historically important taking decision (Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, delivered in 1922), the Supreme Court extended the availability of takings actions from government appropriations and physical invasions of property, as described above, to the mere regulation of property use.

This critical expansion of takings jurisprudence to “regulatory takings” acknowledged that purely regulatory interferences with property rights can have economic and other consequences for property owners as significant as appropriations and physical invasions. The regulatory taking concept opened up vast new legal possibilities for property owners, and underlies many of the Supreme Court’s takings decisions from the 1970s on.

The ascendancy of the regulatory taking concept since the 1970s is hardly surprising. Starting
with the advent of comprehensive zoning in the early 20th century, federal, state, and local
regulation of private land use has become pervasive. Beyond comprehensive zoning, the past 70 years have seen explosive growth in the use of historic preservation restrictions, open-space zoning, dedication and exaction conditions on building permits, nature preserves, wildlife habitat preservation, wetlands and coastal zone controls, mining restrictions, and so on. Regulation of non-real-estate property has also proliferated. In the Supreme Court, the appointment of several conservative justices since the 1970s has prompted a new scrutiny of government conduct vis-à-vis the private property owner.

As a result of these factors, the Court since the late 1970s has turned its attention toward the
takings issue with vigor. Through the 1980s and 1990s, property owner plaintiffs scored several
major victories; by and large, the substantive doctrine of takings shifted to the right. In 2000-
2005, however, the Court’s decisions moved the analytical framework in a more government – friendly direction. The pendulum may yet be swinging again: the three takings cases decided by
the Court during its 2012-2013 term were all decided in favor of the property owner, though
mostly as to narrow issues. (1)

Interpretation

For Professor Bruce Ackerman “it is only after resolving certain philosophical issues that one can make sense of [such a] constitutional question, let alone pretend to expound a correct constitutional answer.” He argues that analysts “must become philosophers if they wish to remain lawyers.” (2)

Justice Scalia said, in the Lucas v. South Carolina Coastal Commission (1990) case, that the authors of the taking clause had no thought that the clause would ever be applied to cases of “mere” regulation or quasi-tort:

“Prior to Justice Holmes’ exposition in Pennsylvania Coal Co. v. Mahon,260 U.S. 393 (1922), it was generally thought that the Takings Clause reached only a “direct appropriation” of property, or the functional equivalent of a “practical ouster of [the owner’s] possession.” Justice Holmes recognized in Mahon, however, that if the protection against physical appropriations of private property was to be meaningfully enforced, the government’s power to redefine the range of interests included in the ownership of property was necessarily constrained by constitutional limits. If, instead, the uses of private property were subject to unbridled, uncompensated qualification under the police power, “the natural tendency of human nature [would be] to extend the qualification more and more until at last private property disappeared.” These considerations gave birth in that case to the oft-cited maxim that, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”

Justice Brennan’s opinion for the Court in Penn Central Transportation Company v. New York (1978) was, regarding this subject:

“While this Court has recognized that the Fifth Amendment’s guarantee . . . [is] designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole, this Court, quite simply, has been unable to develop any “set formula” for determining when “justice and fairness” require that economic injuries caused by public action be compensated by the government, rather than remain disproportionately concentrated on a few persons. Indeed, we have frequently observed that whether a particular restriction will be rendered invalid by the government’s failure to pay for any losses proximately caused by it depends largely “upon the particular circumstances [in that] case.”

Takings Clause Supreme Court Case Law

Finding the line between government interferences with property that are takings and those that are not has occupied the Supreme Court in most of the decisions about this subject. The
Supreme Court’s decisions in these takings actions reach back to 1870, and are divided in this
report into three periods.
The modern period, 1978 to the present, has seen the Court settle into a taxonomy of four
fundamental types of takings—total regulatory takings, partial regulatory takings, physical
takings, and exaction takings. The Court in this period also has sought to develop criteria for
these four types, and to set out ripeness standards and clarify the required remedy. In the
preceding period, 1922 to 1978, the Court first announced the regulatory taking concept—the
notion that government regulation alone, without appropriation or physical invasion of property, may be a taking if sufficiently severe. During this time, however, it proffered little by way of regulatory takings criteria, continuing rather its earlier focus on appropriations and physical occupations.

In the earliest period of takings law, 1870 to 1922, the Court saw the Takings Clause
as protecting property owners only from appropriations and physical invasions, two forms of
government interference with property seen by the Court as most functionally similar to an
outright condemnation of property. During this infancy of takings law, regulatory restrictions
were tested under other, non-takings theories, such as whether they were within a state’s police
power, and were generally upheld.

Supreme Court Formal Condemnation Cases

The headline-grabbing Supreme Court opinion in Kelo v. City of New London (545 U.S. 469, 2005) is principally a formal condemnation case.

Supreme Court Inverse Condemnation Cases

Most of the more important Supreme Court decisions addressing issues with special relevance to takings are in the side of inverse condemnation actions.

Eminent Domain and the Takings Clause

Leading Case Law

Among the main judicial decisions on this topic:

Kelo v. City of New London, Conn.

Information about this important court opinion is available in this American legal Encyclopedia.

References

Resources

Notes

Takings Decisions of the U.S. Supreme Court: A Chronology, Congressional Research Service, Robert Meltz (December 9, 2013)
Bruce A. Ackerman, Private Property and the Constitution, New Haven: Yale University Press, 1974, at 5.

Takings Clause