Also known as: character of governmental action · Penn Central factor
Written by attorneys — see sources below.
A factor in regulatory takings analysis that examines whether government interference with property takes the form of a physical invasion or instead arises from a public program that adjusts the benefits and burdens of economic life to promote the common good.
Caleb Chang purchased an aging riverside warehouse intending to convert it into luxury lofts. After the city designated the building a protected industrial heritage site, Chang could no longer demolish the structure but retained the ability to operate it as a commercial storage facility and lease roof space for solar panels. The designation advanced a legitimate preservation goal without physically occupying the property.
Caitlin Crowley acquired beachfront land to construct vacation homes. A state coastal council barred all permanent construction to protect dunes. Crowley retained the ability to use the parcel for temporary camping and recreation. The restriction reflected a broad environmental program rather than a targeted physical appropriation of the site.
In 1986, petitioner David H. Lucas purchased two residential lots on the Isle of Palms in Charleston County, South Carolina, for $975,000. He intended to construct single-family homes on the parcels, which at the time were zoned for such use and required no building permit for development. No portion of the lots qualified as a critical area under then-existing coastal zone legislation. Subsequently, in 1988, the South Carolina Legislature enacted the Beachfront Management Act. The legislation established a baseline and prohibited construction of occupable improvements seaward of a line drawn 20 feet landward of that baseline, directly affecting Lucas's parcels by barring any permanent habitable structures. Lucas filed an action in the Court of Common Pleas alleging that the Act's restrictions effected a taking of his property without just compensation. Following a bench trial, the court determined that the prohibition rendered the lots valueless and ordered the state to pay just compensation in the amount of $1,232,387.50. The Supreme Court of South Carolina reversed the trial court's judgment. It accepted the legislature's findings that new construction threatened public resources and concluded that a regulation designed to prevent serious public harm could not constitute a taking. The United States Supreme Court granted certiorari to review the South Carolina Supreme Court's decision.
View caseCarmen Choi operated a coal company that had long ago ceased mining operations. A federal statute retroactively required her to fund health benefits for retired miners never employed by her firm. The obligation arose from a legislative scheme reallocating industry-wide costs rather than from any physical invasion of company assets.
Eastern Enterprises was organized as a Massachusetts business trust in 1929 under the name Eastern Gas and Fuel Associates. Until 1965, Eastern conducted extensive coal mining operations centered in West Virginia and Pennsylvania. As a signatory to each National Bituminous Coal Wage Agreement executed between 1947 and 1964, Eastern made contributions of over $60 million to the 1947 and 1950 Welfare and Retirement Funds. In 1963, Eastern decided to transfer its coal-related operations to a subsidiary, Eastern Associated Coal Corp. The transfer was completed by the end of 1965. It was described in Eastern's federal income tax return as an agreement by EACC to assume all of Eastern's liabilities arising out of coal mining and marketing operations in exchange for Eastern's receipt of EACC's stock. Eastern retained its stock interest in EACC through a subsidiary corporation, Coal Properties Corp., until 1987. It received dividends of more than $100 million from EACC during that period. In 1987, Eastern sold its interest in Coal Properties Corp. to Peabody Holding Company, Inc. Following enactment of the Coal Industry Retiree Health Benefit Act of 1992, the Commissioner of Social Security assigned to Eastern the obligation for Combined Fund premiums respecting over 1,000 retired miners who had worked for the company before 1966. The assignment rested on Eastern's status as the pre-1978 signatory operator for whom the miners had worked for the longest period of time. Eastern's premium for a 12-month period exceeded $5 million. Eastern responded by suing the Commissioner, as well as the Combined Fund and its trustees, in the United States District Court for the District of Massachusetts. Eastern asserted that the Coal Act, either on its face or as applied, violates substantive due process and constitutes a taking of its property in violation of the Fifth Amendment. The District Court granted summary judgment for respondents on all claims. The Court of Appeals for the First Circuit affirmed. The Supreme Court granted certiorari.
View caseCamila Cervantes owned an apartment building subject to a city rent-control law that capped increases below market rates. The ordinance applied uniformly to all rental properties to stabilize housing costs. It adjusted economic burdens across landlords and tenants without authorizing any government entry onto the premises.
In 1997, the State of Hawaii had a highly concentrated wholesale oil market due to its small size and isolation over 1,600 miles from the mainland, with only two refineries and six gasoline wholesalers operating in the state. Chevron U.S.A. Inc. was the largest refiner and marketer, controlling 60 percent of the in-state gasoline market and 30 percent of the wholesale market on Oahu. Gasoline was sold at retail through approximately 300 service stations, about half leased by oil companies to independent lessee-dealers. Chevron operated 64 such lessee-dealer stations under arrangements where it leased land, constructed stations, and leased them to dealers while setting wholesale prices and requiring supply contracts. In June 1997, the Hawaii Legislature enacted Act 257, which capped the rent oil companies could charge lessee-dealers at 15 percent of gross profits from gasoline sales plus 15 percent of other product sales, and imposed other restrictions on station ownership. Thirty days after enactment, Chevron filed suit in the United States District Court for the District of Hawaii against the Governor and Attorney General, challenging the rent cap. The parties stipulated that the cap would reduce aggregate rent on 11 of Chevron's stations by about $207,000 per year but allow increases on the remaining 53, potentially raising overall rental income by nearly $1.1 million annually, and that Chevron had not recovered station maintenance costs through rent alone over the past 20 years. The District Court granted summary judgment to Chevron. On appeal, the Ninth Circuit vacated the judgment and remanded the case. After a one-day bench trial featuring competing expert economists, the District Court entered judgment for Chevron. The Ninth Circuit affirmed, and the Supreme Court granted certiorari in 2004.
View caseCharlotte Chung developed a private marina connected to a bay. Federal regulators required public access through the marina channels as a condition of permit approval. The requirement opened previously private waters to general navigation and constituted a direct physical invasion of the developer's property rights.
In the early 1960s, Kaiser Aetna's predecessor leased a 6,000-acre area including Kuapa Pond on the island of Oahu from the Bishop Estate for subdivision development known as Hawaii Kai. Kuapa Pond was a shallow lagoon covering 523 acres that extended approximately two miles inland from Maunalua Bay, was separated from the Pacific Ocean by a barrier beach, and had been used historically as a private fishpond under Hawaiian law following the 1848 Great Mahele land division. Kaiser Aetna dredged the pond to an average channel depth of six feet, constructed an eight-foot-deep channel through the barrier beach to connect it to the bay and ocean, erected retaining walls, built bridges, and eliminated the original sluice gates to create the Hawaii Kai Marina for pleasure boats. The Army Corps of Engineers issued a permit for the dredging and filling operations that expressly provided the marina would be a private facility not open to the general public. At the time of trial, a marina-style community of approximately 22,000 persons surrounded the pond, including 1,500 waterfront lot lessees who paid fees for maintenance and security, and Kaiser Aetna controlled access while generally prohibiting commercial use except for limited promotional vessels. In 1972 a dispute arose when the Corps asserted regulatory authority under the Rivers and Harbors Appropriation Act and claimed the pond had become navigable waters of the United States open to the public. The United States filed suit in the United States District Court for the District of Hawaii seeking a declaration of public access rights and an injunction requiring Kaiser Aetna to allow such access. The District Court found that Kuapa Pond had not been navigable prior to the improvements, held that the pond was subject to Corps regulation but that the Government lacked authority to open it to the public without compensation, and denied the requested injunction. The Court of Appeals for the Ninth Circuit reversed, holding that the marina was subject to the federal navigational servitude and that no compensation was required. The Supreme Court granted certiorari to consider whether the Government's assertion of a public right of access amounted to a taking of private property.
View caseCassandra Cooper owned coal-bearing land subject to a statute requiring support pillars to remain in place to prevent surface subsidence. The rule protected overlying homes and roads as part of a general program balancing mining interests with public safety. It restricted extraction methods without physically occupying the mineral estate.
Beginning well over 100 years ago, landowners in western Pennsylvania began severing title to underground coal and the right of surface support while retaining or conveying away ownership of the surface estate. Approximately 90 percent of the coal that petitioners mine or will mine was severed from the surface in the period between 1890 and 1920. When acquiring or retaining the mineral estate, petitioners or their predecessors typically acquired the right to deposit wastes, provide drainage and ventilation, erect surface facilities, and obtained waivers of claims for damages resulting from coal removal. In 1966 the Pennsylvania Legislature enacted the Bituminous Mine Subsidence and Land Conservation Act after concluding that existing subsidence legislation had failed to protect public safety, land conservation, municipal tax bases, and land development. Section 4 of the Act prohibits mining that causes subsidence damage to public buildings and noncommercial buildings used by the public, dwellings used for human habitation, and cemeteries that were in place on April 17, 1966. The Department of Environmental Resources applies a formula that generally requires 50 percent of the coal beneath protected structures to remain in place. Section 6 authorizes the Department to revoke a mining permit if removal of coal causes damage to a protected structure and the operator has not repaired the damage, satisfied any claim, or deposited security equal to the reasonable cost of repair within six months. Petitioners are an association of coal mine operators and four corporations engaged in underground mining of bituminous coal in western Pennsylvania. Their members and the corporate petitioners own, lease, or control substantial coal reserves and support estates beneath surface property affected by the Act. In 1982, petitioners filed a civil rights action in the United States District Court for the Western District of Pennsylvania seeking to enjoin officials of the DER from enforcing the Subsidence Act and its implementing regulations. The parties entered a stipulation of facts on the facial challenge and filed cross-motions for summary judgment. The District Court granted respondents' motion in 1984. The Court of Appeals affirmed in 1985. The Supreme Court granted certiorari in 1986. Stipulations established that enforcement of the 50 percent rule would require petitioners to leave approximately 27 million tons of coal in place across 13 mines containing over 1.46 billion tons total. This amount represents less than 2 percent of the coal in those mines. Petitioners did not claim that any specific mine had become unprofitable since the Act's passage.
View caseThe character factor asks whether the government action amounts to a physical invasion of property or instead represents a general regulatory program that reallocates economic benefits and burdens for the public good. Courts treat physical invasions as more likely to require compensation. A preservation ordinance that leaves the owner with continued beneficial use typically weighs against finding a taking under this factor.
Supporting sources
The character factor is weighed together with economic impact and interference with investment-backed expectations. A regulation with the character of historic preservation that serves a legitimate public purpose and leaves reasonable beneficial use will often tip the overall balance against compensation even when economic impact and expectation interference are present.
No. Landmark designations frequently apply to individual structures yet are routinely upheld when they advance preservation goals and leave the owner with viable use. The character inquiry focuses on the nature of the action as a land-use control rather than on whether the measure targets a single parcel.
…on the claimant, the extent to which the regulation has interfered with distinct investment-backed expectations, and the character of the governmental action are all relevant. A The economic impact of the regulation on appellants is not severe. The Landmarks Law does not prevent the terminal from being used as a railroad terminal. It does not…