Also known as: categorical per se takings · per se taking · categorical taking
Written by attorneys — see sources below.
A categorical rule under the Takings Clause that automatically requires just compensation when government action completely eliminates all economically beneficial use of property or effects a permanent physical occupation. The rule treats such total deprivations like physical appropriations without regard to the government's purpose or the regulation's duration in most instances.
Camila Cervantes bought two oceanfront parcels intending to build homes. A state coastal statute then prohibited all permanent habitable structures on the lots. A trial court found the lots had no remaining economic value. The regulation effects a categorical per se taking because it wipes out all productive use.
Cedar Creek Farms owned shoreline property and planned immediate development. A regional agency imposed successive moratoria lasting thirty-two months while it prepared a land-use plan. The moratoria delayed but did not permanently eliminate all economic use, so they do not trigger a categorical per se taking.
Central Dynamics deposited client funds in an IOLTA account. State rules required the interest to be paid to a legal foundation rather than the firm. The compelled transfer of the interest constitutes a categorical per se taking of personal property.
In 1984, the Supreme Court of Washington adopted rules requiring lawyers to deposit client funds nominal in amount or expected to be held for a short period of time into IOLTA accounts. The interest earned is paid to the Legal Foundation of Washington for use in providing legal services to the indigent. Petitioner Allen Brown is a lawyer who maintains an IOLTA account, and petitioner Greg Hayes is one of his clients. In 1990, Hayes recovered a judgment in an action for nonpayment of overtime wages entitling him to a payment of $4,000 in attorney's fees that could not be paid immediately, so the funds were placed in an IOLTA account. In August 1996, Hayes made an earnest money deposit of $2,000 and a further payment of $12,793.32 in connection with a real estate purchase closed on August 30, 1996, with the money going into an IOLTA account. In May 1997, Brown made a payment of $90,521.29 that remained in escrow for two days, generating an estimated $4.96 in interest ultimately paid to the Foundation. In 1994, Brown and Hayes filed this action in the United States District Court for the Western District of Washington seeking a declaration that the IOLTA program violated the Fifth Amendment and an injunction against its continued operation. The District Court granted summary judgment to respondents after finding that petitioners could not make any net return on the interest accrued in the accounts. The Court of Appeals for the Ninth Circuit affirmed, and the Supreme Court granted certiorari.
View caseCassandra Cooper owned an apartment building. A city ordinance required landlords to permit installation of cable television equipment on rooftops for a nominal fee. The permanent physical occupation of even a small portion of the property is a categorical per se taking.
In 1970, Teleprompter Manhattan CATV Corp. obtained a permit from New York City to operate a cable television system in Manhattan. It entered into an agreement with the prior owner of a five-story apartment building at 303 West 105th Street to install cables on the roof in exchange for a flat fee of $50 per year. The installation included a cable slightly less than one-half inch in diameter and approximately 30 feet in length running along the roof about 18 inches above the surface. It also included directional taps measuring approximately 4 inches by 4 inches by 4 inches on the front and rear of the roof. Two large silver boxes were placed along the roof cables. Additional cable was extended another 4 to 6 feet. All components were attached by screws or nails penetrating the masonry at approximately two-foot intervals. In 1971, Jean Loretto purchased the building. At the time of purchase the cable installation was already in place as part of a larger network serving adjacent buildings, though Loretto did not discover its existence until after she took possession. Two years later Teleprompter connected a noncrossover line by dropping a cable down the front of the building to serve Loretto's own tenants. In 1973 the New York Legislature enacted section 828 of the Executive Law, effective January 1, 1973, which prohibited landlords from interfering with cable television installations on their property, barred landlords from demanding payment from tenants for permitting service, and limited any payment from a cable company to an amount the State Commission on Cable Television determined to be reasonable; the Commission later set the presumptive fee at a one-time $1 payment. In 1976 Loretto filed a class action against Teleprompter in New York Supreme Court on behalf of all owners of real property in the state on which Teleprompter had placed cable components, alleging trespass and a taking without just compensation and seeking damages and injunctive relief; the City of New York, which had granted Teleprompter an exclusive franchise for parts of Manhattan, intervened as a defendant. The Supreme Court, Special Term, granted summary judgment to Teleprompter and the city. The Appellate Division affirmed without opinion. The New York Court of Appeals upheld the statute. The Supreme Court of the United States noted probable jurisdiction.
View caseCarlos Castillo owned a mobile home park. A city rent-control ordinance limited pad rents and transferred substantial value to tenants upon sale of homes. The regulation does not effect a categorical per se taking because it regulates rates rather than authorizing a physical occupation.
John K. Yee and Irene Yee own the Friendly Hills and Sunset Terrace Mobile Home Parks in Escondido, California. In 1988 the voters of Escondido approved Proposition K, a rent control ordinance that reset rents to 1986 levels and barred increases without city council approval after consideration of eleven enumerated factors such as the Consumer Price Index, comparable pad rents, capital improvements, property taxes, and operating expenses. A few months after the ordinance took effect the Yees filed suit in San Diego County Superior Court, alleging that the ordinance deprived them of all use and occupancy of their property and granted tenants and their successors the right to occupy it permanently; they sought six million dollars in damages, a declaratory judgment, and an injunction. The complaint was filed against the background of California's Mobilehome Residency Law, enacted in 1978, which restricts the grounds on which a park owner may terminate a tenancy, prohibits requiring removal of a mobile home upon sale, bars transfer fees, and prevents disapproval of a purchaser who can pay the rent. Eleven other park owners filed identical suits against the city; by stipulation the twelve cases were consolidated for appeal and submitted on the briefs and argument in the Yee case alone. The Superior Court sustained the city's demurrer and dismissed all complaints. The California Court of Appeal affirmed the dismissals. The California Supreme Court denied review. Eight of the park owners, including the Yees, petitioned for certiorari, which the United States Supreme Court granted in 1991 to address a conflict between the decision below and holdings of the Third and Ninth Circuits in similar mobile-home rent-control cases. The Yees' complaint and opposition to the demurrer relied on the Ninth Circuit's decision in Hall v. Santa Barbara. They asserted that the combined state and local measures transferred to tenants the right to occupy pads indefinitely at below-market rents while preventing park owners from selecting incoming tenants or changing the use of their land without extended notice.
View caseCrown Pharmaceuticals grew and processed crops subject to a federal marketing order. The order required delivery of a portion of the crop to the government with only a contingent interest in later proceeds. The compelled physical appropriation of personal property is a categorical per se taking.
The Agricultural Marketing Agreement Act of 1937 authorizes the Secretary of Agriculture to promulgate marketing orders to help maintain stable markets for particular agricultural products. Under the resulting California Raisin Marketing Order, growers must give a percentage of their crop to the Government free of charge in years when the Committee sets a reserve requirement. The Raisin Administrative Committee determined the allocation at 47 percent in 2002-2003 and 30 percent in 2003-2004. Growers generally ship their raisins to a handler. The handler physically separates the reserve raisins due the Government, pays the growers only for the free-tonnage raisins, and packs and sells the free-tonnage raisins. The Raisin Committee acquires title to the reserve raisins that have been set aside and decides how to dispose of them in its discretion. Proceeds from Committee sales are principally used to subsidize handlers who sell raisins for export. Raisin growers retain an interest in any net proceeds after deductions for export subsidies and the Committee's expenses. The Hornes are both raisin growers and handlers. They handled their own raisins and raisins produced by other growers, paying those growers in full for all of their raisins, not just the free-tonnage portion. In 2002 the Hornes refused to set aside any raisins for the Government. The Government assessed a fine equal to the market value of the missing raisins—about $480,000—and an additional civil penalty of just over $200,000 for disobeying the order. When the Government sought to collect the fine, the Hornes sued, arguing that the reserve requirement was an unconstitutional taking under the Fifth Amendment. This Court previously held that the Hornes could present their constitutional defense and remanded for consideration on the merits. On remand, the Ninth Circuit viewed the reserve requirement as a use restriction rather than a per se taking. The Supreme Court granted certiorari.
View caseA regulation qualifies when it deprives the owner of all economically beneficial or productive use of land unless background principles of nuisance or property law already prohibited the use at the time of acquisition.
Supporting sources
No. Courts must weigh the duration of the restriction, the government's planning purposes, the owner's reasonable expectations, and effects on value to decide whether compensation is required.
Supporting sources
Any government-authorized permanent physical occupation, however small, is a per se taking, while most regulatory limits on use are evaluated under a multi-factor balancing test unless they eliminate all economic value.
Supporting sources
…compensation was required. Regulations that deny the owner of land all economically beneficial use of his property constitute a categorical taking for which compensation is required under the Fifth Amendment, unless the prohibited use interests were not part of the owner's title to begin with. The trial court's finding that the…