January 15, 2016

Supreme Court agrees to hear PLF "relevant parcel" case

By John M. Groen Executive Vice President and General Counsel

For almost 25 years since Lucas v. South Carolina Coastal Council, it has been well established that government agencies commit an unconstitutional taking when their regulations deprive a property owner’s land of “all economically viable use.” But when a property owner owns two or more adjacent legal parcels, courts have split on whether the government may avoid takings liability by entirely prohibiting development on one parcel while allowing the owner to develop the others. The determination of the “relevant parcel” for takings purposes makes all the difference in many cases.

That is why the Supreme Court today granted PLF’s petition for certiorari in the case of Murr v. State of Wisconsin & St. Croix County. Our clients, siblings Donna Murr, Joseph Murr, Michael Murr, and Peggy Heaver, inherited from their parents two adjacent lots that sit along Lake St. Croix in St. Croix County, Wisconsin. These two lots were created separately and are distinct legal parcels. The Murr family had a three-bedroom recreational cabin on the first lot and had purchased the second lot later, intending to hold it for investment purposes. But when the Murr children inherited the parcels, they discovered that a County ordinance prohibited development of the separate lot, even though any other owner would have been able to develop it. In fact, the Murrs would not even be able to sell their adjacent parcel unless they combined it with their existing lot.

Because the County ordinance had effectively deprived them of all economic use of their second parcel, the Murrs argued that a taking had occurred under Lucas. The Wisconsin Court of Appeals disagreed. The court applied the “parcel as a whole” rule, holding that since the Murrs had been permitted to develop the other parcel, they had not been deprived all economic use of their property. Under this rationale, a property owner that owns 100 adjacent one acre lots has not suffered a per se taking if the government prohibits development on 99 of them, allowing the owner to use only a small portion of his land.

Recognizing the importance of this issue, the Court granted the Murrs’ petition. It will now decide whether courts are required to combine separate and distinct legal parcels for the purpose of takings analysis. PLF argues that each parcel should be considered on its own. Otherwise, the more adjacent property you own, the more the government can render useless without having to pay for it. We are thrilled that the Supreme Court has agreed to decide what has been called “the most significant unresolved question” in takings law, and we look forward to litigating this case in support of the Murrs and property owners nationwide.

You can read our press release here.

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Murr v. Wisconsin

The Murr family owned two separately deeded lots that were purchased independently by their parents in the 1960s. They built a small cabin on one lot and held the other one as an investment for the future. But when the time came to sell, subsequently enacted regulations forbade the Murrs from making any productive use of the vacant lot – and without any use, it had no value they could sell. PLF represents in the Murrs in a lawsuit arguing that the regulation was an uncompensated taking because it took away all the use and value of the lot. The courts ruled against the family because they owned the adjacent lot with the cabin, and therefore hadn’t lost everything.

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