Murr v. Wisconsin: Will the Takings Clause be Redefined?

On March 20th, 2017, the United States Supreme Court heard a case that addressed a familiar issue: property rights. Though many people may consider property rights a clearly defined issue, Murr v. Wisconsin would highlight just how vague much of the law surrounding ownership and takings is. This case involves a family, the Murrs, who inherited two lots from their parents: one with a home, and one without. One would think that, because these lots deeded and taxed individually, they would be treated as separate properties. Taxation is a legal, regulatory action. Common sense indicates that all other legal, regulatory action would follow similar procedures.

Back in 2004, the four Murr children decided to sell the open lot, which was originally intended to be an investment. Thanks to a zoning ordinance, they were unable to build on the lot or to sell it individually. This new ordinance treated the two lots as one, given their common ownership. The Murrs’ $410,000 lot was effectively rendered useless. It continued to be taxed separately. The law, of course, seems to be in conflict: are the lots separate, or not? Under what circumstances might the government be allowed to create arbitrary differences in the law without much of a compelling legal reason?

As it turns out, the Murrs were not the first to experience such difficulty. In effect, their property had been taken from them. They had no practical use for an empty lot that could never be sold. Financially, the $410,000 lot was worth nothing. They had been victim to a crafty loophole, which allowed de facto taking of land through unnecessary regulation. The fifth amendment’s eminent domain clause seems to address such cases, as it mandates just compensation for government’s taking of private property for public use. The law recognizes several categories of “takings”, including intangible property such as contract rights. Indeed, it has addressed the issue of takings by regulation, most notably in two past cases.

In 1947, the Supreme Court ruled in United States v. Dickinson that “property is taken in the constitutional sense when [progress is] made upon an owner’s use of it to an extent” that the owner may no longer use it for its specified purpose. Despite this seemingly strong ruling in favor of property rights, takings through regulation has continued to be confusing. If a local government imposes health regulations that impact a property’s value, for example, they are typically not required to compensate the property’s owners. While it would be impossible to compensate for every government action that affects land value (such as bulldozing a nearby park), the case at hand clearly violated the Murrs’ rights according to Dickinson.

More recently, this topic was revisited in the case of Penn Central v. New York. This case, argued in 1978, ruled that a government’s decision to designate a property as a historical landmark (therefore impeding further development by the owners) was made with the general welfare of the city in mind, and was not a taking. More importantly, this case created the idea of a “parcel as a whole”, which is up for debate in Murr. “Parcel as a whole” referred to the entire city block as a landmark site, rather than the specific property at hand, for the purpose of considering takings. In Murr, the Court will have to decide whether the same logic can be justly applied to two contiguous lake-front properties. It is important to point out the differences in reasoning here. In Penn Central, there was historical and logical merit in defining the takings as an entire “parcel”. The same merit is less evident in the case of two lots owned by a family. Secondly, it hardly seems as if the takings clause applied in Murr serves to benefit public welfare.

The Court has plenty of precedent at its disposal, as well as plenty of gray area to clarify. Property and regulation are two of the most broad terms in policy and law. Balancing the two seems to only spawn new legal issues. However, it seems to be in the spirit of the fifth amendment if the Court rules that the Murrs’ property rights were violated; such a ruling would be a win for property rights, and a larger win for everyday citizens over tricky, intrusive government actions.

 

Audrey Kornkven, originally from Minnesota, is a freshman. She is majoring in economics at Duke.

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