The Fifth Amendment to the U.S. Constitution, in part, states that “[N]or shall private property be taken for public use, without just compensation.” This is called the Takings Clause of the 5th Amendment. “One of the principal purposes of the Takings Clause is ‘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.’” Dolan v. City of Tigard (1994) 512 U.S. 374, 114 S. Ct. 2309. The Takings Clause applies to state governments, via the 14th Amendment, as well as the federal government. Brown v. Legal Foundation of Washington (2003) 538 U.S. 216, 123 S. Ct. 1406. The Takings Clause does not stop the government from taking private property; it simply requires that the government pay for what it takes. U.S. v. Jones (1883) 109 U.S. 513, 3 S. Ct. 346.
The language of the Takings Clause is simple, but almost every word of it has created a huge body of law. The following questions are basic to Takings Clause jurisprudence.
First, is a particular taking a government action? Property owners sued for alleged reduction in value to the property from the installation of wireless equipment on utility poles near their property. The Court found no Takings Clause issue, because the wireless communications company was not a governmental entity. Merrick Gables Association, Inc. v. Town of Hempstead (E.D.N.Y. 2010) 691 F. Supp. 2d 355. The Tahoe Regional Planning Agency was a state actor, subject to Takings Clause liability, even though it was not a state or a subdivision of a state. Committee for Reasonable Regulation of Lake Tahoe v. Tahoe Regional Planning Agency (D. Nev. 2004) 311 F. Supp. 2d 972.
Second, since the government can only take private property for “public uses”, what are the limits of “public uses?” In the hugely controversial decision, Kelo v. City of New London (2005) 545 U.S. 469, 124 S. Ct. 2655, the Supreme Court held that a local government could take a private home and give it to a private developer, if the government’s stated purpose was economic redevelopment.
Third, what sort of government regulations and actions equals a taking? If the government takes title to a property, then the taking is obvious. But what happens if, rather than taking title, the government regulates the property owner’s use of his or her property so much that its economic value is diminished? Is that a taking? The courts have long wrestled with this question. The U.S. Supreme Court has held that regulations equal a taking “if its effects are so complete as to deprive the owner of all or most of his interest in the subject matter…” U.S. v. General Motors Corp. (1945) 323 U.S. 373, 378, 65 S. Ct. 357. The Supreme Court has admitted, however, that “this Court has generally ‘been unable to develop any “set formula” for determining when “justice and fairness” require that economic injuries caused by public action’ ” must be deemed a compensable taking.” Ruckelhaus v. Monsanto Co. (1984) 467 U.S. 986, 1005, 104 S. Ct. 2862. Instead, the determination of when regulations equals a taking remains a case-by-case subjective quetion.
Fourth, what kind of property is covered by the Takings Clause? In general, only property which is legally protected is covered by the Takings Clause. U.S. v. Willow River Power Co. (1945) 324 U.S. 499, 65 S. Ct. 761. Only transferable values are compensable under the Takings Clause. Likins-Foster Monterey Corp. v. U.S. (9th Cir. 1962) 308 F. 2d 595. Property owners were held to have property rights protected under the Takings Clause in their contractual and regulatory rights to prepay and exit federal housing programs after 20 years and to repossess real property. Cienega Gardens v. U.S. (Fed. Cir. 2003) 331 F. 3rd 1319. The government was held not to have violated the Takings Clause, when it used an architect’s plans to build ships, when the architect had no contractual right to own the plans. J.J. Henry Co. v. U.S. (Ct. Claims 1969) 411 F. 2d 1246.
Fifth, what is just compensation? The simple answer is that “just compensation” equals the “full monetary equivalent” of the property taken. U.S. v. Reynolds (1970) 397 U.S. 14, 90 S. Ct. 803. The correct measure of damages is “the difference between the value of the property before and after” the government taking. U.S. v. Virginia Electric and Power Co. (1961) 365 U.S. 624, 632; 81 S. Ct. 784.