Supreme Court undermines property rights

  • 26 June 2017
  • NormanL
Supreme Court undermines property rights

In a 5-3 decision, the Supreme Court held that government regulators do not always have to compensate property owners when new rules affect the value of the property. The background of the case reads like this:

In 2004, Murr and her siblings sought to sell one of two parcels of land that had been in the family for decades. Murr's parents bought the land in the 1960s, built a cabin on one parcel, and left the other parcel undeveloped as a long-term investment.

The family attempted to sell the vacant parcel to pay for renovations to the cabin, but were prevented from doing so by regulations restricting the use of land along rivers like the St. Croix approved by the state in the 1980s, long after the purchase of both lots.

Those regulations effectively gutted the value of the Murrs' property. The property was appraised at $400,000 before the Murrs tried to sell it. When the family came to the county, now the only eligible buyer, the county offered $40,000.

The Murrs filed a lawsuit against the state and county, arguing that they should be compensated for the lost value of the property, arguing the Fifth Amendment of the U.S. Constitution guarantees governments must compensate property owners when land is seized or otherwise made un-useful for public purposes.

To avoid liability in the case, the state and county told the Murrs they could combine the two parcels of land for regulatory purposes. This meant that even though the two pieces of land were separate and the Murr family paid taxes on them separately, the family would be unable to make a takings claim for one of the two parcels.

In short, they could sell both lots together, but not one or the other.

Lower courts agreed with the government interpretation and the Supreme Court on Friday upheld the court rulings.

Chief Justice Roberts issued a blistering dissent:

Put simply, today’s decision knocks the definition of “private property” loose from its foundation on stable state law rules and throws it into the maelstrom of multiple factors that come into play at the second step of the tak­ings analysis. The result: The majority’s new framework compromises the Takings Clause as a barrier between individuals and the press of the public interest.

The majority opinion was written by Justice Kennedy, who is rumored to be considering retirement. New Supreme Court Justice Gorsuch did not take part in the decision, because he was not a member of the Court when the case was briefed and argued.

We would hope that if Mr. Kennedy does decide to step down, the President will nominate someone who understands that private property is a fundamental right that must be protected against government whim.