Murr v. Wisconsin
582 US ___ (2017)

Annotate this Case
Justia Opinion Summary

The St. Croix River, part of the boundary between Wisconsin and Minnesota, is protected under federal, state, and local law. State and local regulations prevent the use or sale of adjacent riverside lots under common ownership as separate building sites unless they have at least one acre of land suitable for development. Petitioners’ parents purchased adjacent Troy, Wisconsin lots separately in the 1960s, and transferred one lot to petitioners in 1994 and the other to petitioners in 1995. Each lot is over one acre, but because of the topography, each has less than one acre suitable for development; common ownership barred their separate sale or development. Petitioners unsuccessfully sought variances, then filed suit, alleging a regulatory taking. The state courts and U.S. Supreme Court rejected the claims, regarding the property as a single unit in assessing the effect of the challenged governmental action. The Court noted the flexibility inherent in regulatory takings jurisprudence. Courts must consider several factors. Wisconsin’s merger provision is a legitimate exercise of state power and the valid merger of the lots under state law informs the reasonable expectation that the lots will be treated as a single property. The lots are contiguous. Their terrain and shape make it reasonable to expect their range of potential uses might be limited. Petitioners could have anticipated regulation of the property, given its location along the river, which was regulated by federal, state, and local law long before they acquired the land. The restriction is mitigated by the benefits of using the property as an integrated whole, allowing increased privacy and recreational space, plus an optimal location for any improvements. This relationship is evident in the lots’ combined valuation.

Prior History
  • Syllabus  | 
  • Opinion (Anthony M. Kennedy)  | 
  • Dissent (Clarence Thomas)  | 
  • Dissent (John G. Roberts, Jr.)

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

MURR et al. v. WISCONSIN et al.

certiorari to the court of appeals of wisconsin

No. 15–214. Argued March 20, 2017—Decided June 23, 2017

The St. Croix River, which forms part of the boundary between Wisconsin and Minnesota, is protected under federal, state, and local law. Petitioners own two adjacent lots—Lot E and Lot F—along the lower portion of the river in the town of Troy, Wisconsin. For the area where petitioners’ property is located, state and local regulations prevent the use or sale of adjacent lots under common ownership as separate building sites unless they have at least one acre of land suitable for development. A grandfather clause relaxes this restriction for substandard lots which were in separate ownership from adjacent lands on January 1, 1976, the regulation’s effective date.

Petitioners’ parents purchased Lots E and F separately in the 1960’s, and maintained them under separate ownership until transferring Lot F to petitioners in 1994 and Lot E to petitioners in 1995. Both lots are over one acre in size, but because of their topography they each have less than one acre suitable for development. The unification of the lots under common ownership therefore implicated the rules barring their separate sale or development. Petitioners became interested in selling Lot E as part of an improvement plan for the lots, and sought variances from the St. Croix County Board of Adjustment. The Board denied the request, and the state courts affirmed in relevant part. In particular, the State Court of Appeals found that the local ordinance effectively merged the lots, so petitioners could only sell or build on the single combined lot.

Petitioners filed suit, alleging that the regulations worked a regulatory taking that deprived them of all, or practically all, of the use of Lot E. The County Circuit Court granted summary judgment to the State, explaining that petitioners had other options to enjoy and use their property, including eliminating the cabin and building a new residence on either lot or across both. The court also found that petitioners had not been deprived of all economic value of their property, because the decrease in market value of the unified lots was less than 10 percent. The State Court of Appeals affirmed, holding that the takings analysis properly focused on Lots E and F together and that, using that framework, the merger regulations did not effect a taking.

Held: The State Court of Appeals was correct to analyze petitioners’ property as a single unit in assessing the effect of the challenged governmental action. Pp. 6–20.

(a) The Court’s Takings Clause jurisprudence informs the analysis of this issue. Pp. 6–11.

(1) Regulatory takings jurisprudence recognizes that if a “regulation goes too far it will be recognized as a taking.” Pennsylvania Coal Co. v. Mahon, 260 U. S. 393 , 415. This area of the law is characterized by “ad hoc, factual inquiries, designed to allow careful examination and weighing of all the relevant circumstances.” Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U. S. 302 (citation and internal quotation marks omitted).

The Court has, however, identified two guidelines relevant for determining when a government regulation constitutes a taking. First, “with certain qualifications . . . a regulation which ‘denies all economically beneficial or productive use of land’ will require compensation under the Takings Clause.” Palazzolo v. Rhode Island, 533 U. S. 606 (quoting Lucas v. South Carolina Coastal Council, 505 U. S. 1003 ). Second, a taking may be found based on “a complex of factors,” including (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action. Palazzolo, supra, at 617 (citing Penn Central Transp. Co. v. New York City, 438 U. S. 104 ). Yet even the complete deprivation of use under Lucas will not require compensation if the challenged limitations “inhere . . . in the restrictions that background principles of the State’s law of property and nuisance already placed upon land ownership.” Lucas, 505 U. S., at 1029.

A central dynamic of the Court’s regulatory takings jurisprudence thus is its flexibility. This is a means to reconcile two competing objectives central to regulatory takings doctrine: the individual’s right to retain the interests and exercise the freedoms at the core of private property ownership, cf. id., at 1027, and the government’s power to “adjus[t] rights for the public good,” Andrus v. Allard, 444 U. S. 51 . Pp. 6–9.

(2) This case presents a critical question in determining whether a regulatory taking has occurred: What is the proper unit of property against which to assess the effect of the challenged governmental action? The Court has not set forth specific guidance on how to identify the relevant parcel. However, it has declined to artificially limit the parcel to the portion of property targeted by the challenged regulation, and has cautioned against viewing property rights under the Takings Clause as coextensive with those under state law. Pp. 9–11.

(b) Courts must consider a number of factors in determining the proper denominator of the takings inquiry. Pp. 11–17.

(1) The inquiry is objective and should determine whether reasonable expectations about property ownership would lead a landowner to anticipate that his holdings would be treated as one parcel or as separate tracts. First, courts should give substantial weight to the property’s treatment, in particular how it is bounded or divided, under state and local law. Second, courts must look to the property’s physical characteristics, including the physical relationship of any distinguishable tracts, topography, and the surrounding human and ecological environment. Third, courts should assess the property’s value under the challenged regulation, with special attention to the effect of burdened land on the value of other holdings. Pp. 11–14.

(2) The formalistic rules for which the State of Wisconsin and petitioners advocate do not capture the central legal and factual principles informing reasonable expectations about property interests. Wisconsin would tie the definition of the parcel to state law, but it is also necessary to weigh whether the state enactments at issue accord with other indicia of reasonable expectations about property. Petitioners urge the Court to adopt a presumption that lot lines control, but lot lines are creatures of state law, which can be overridden by the State in the reasonable exercise of its power to regulate land. The merger provision here is such a legitimate exercise of state power, as reflected by its consistency with a long history of merger regulations and with the many merger provisions that exist nationwide today. Pp. 14–17.

(c) Under the appropriate multifactor standard, it follows that petitioners’ property should be evaluated as a single parcel consisting of Lots E and F together. First, as to the property’s treatment under state and local law, the valid merger of the lots under state law informs the reasonable expectation that the lots will be treated as a single property. Second, turning to the property’s physical characteristics, the lots are contiguous. Their terrain and shape make it reasonable to expect their range of potential uses might be limited; and petitioners could have anticipated regulation of the property due to its location along the river, which was regulated by federal, state, and local law long before they acquired the land. Third, Lot E brings prospective value to Lot F. The restriction on using the individual lots is mitigated by the benefits of using the property as an integrated whole, allowing increased privacy and recreational space, plus an optimal location for any improvements. This relationship is evident in the lots’ combined valuation. The Court of Appeals was thus correct to treat the contiguous properties as one parcel.

Considering petitioners’ property as a whole, the state court was correct to conclude that petitioners cannot establish a compensable taking. They have not suffered a taking under Lucas, as they have not been deprived of all economically beneficial use of their property. See 505 U. S., at 1019. Nor have they suffered a taking under the more general test of Penn Central, supra, at 124. Pp. 17–20.

2015 WI App 13, 359 Wis. 2d 675, 859 N. W. 2d 628, affirmed.

Kennedy, J., delivered the opinion of the Court, in which Ginsburg, Breyer, Sotomayor, and Kagan, JJ., joined. Roberts, C. J., filed a dissenting opinion, in which Thomas and Alito, JJ., joined. Thomas, J., filed a dissenting opinion. Gorsuch, J., took no part in the consideration or decision of the case.

Primary Holding

A valid merger under state law of contiguous lots with limited individual uses means that the lots should be regarded as a single unit in determining whether a government action regarding the property was a regulatory taking.

Disclaimer: Justia Annotations is a forum for attorneys to summarize, comment on, and analyze case law published on our site. Justia makes no guarantees or warranties that the annotations are accurate or reflect the current state of law, and no annotation is intended to be, nor should it be construed as, legal advice. Contacting Justia or any attorney through this site, via web form, email, or otherwise, does not create an attorney-client relationship.

Disclaimer: Official Supreme Court case law is only found in the print version of the United States Reports. Justia case law is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.