Both facts and law in Murr v. Wisconsin are complicated. But in a nutshell, the Murrs, four siblings, inherited adjoining lots on the St. Croix River that their parents had purchased at separate times in the 1960s, building a home on one and keeping the other as an investment. Deeded and taxed separately, the two lots remained so to the present.
But in 1975 a local zoning ordinance combined the lots. The effect, as the Murrs discovered in 2004 when they sought to sell the investment lot (valued at $410,000), was to prohibit them from doing so unless they sold the other lot and house with it. So they sued under the Fifth Amendment’s Takings Clause, which prohibits the government from taking private property for public use without just compensation.
In effect, the ordinance had taken their right to sell that lot, one of the basic rights of property. The case is no more complicated than that. Under the Constitution’s Takings Clause they should have been compensated for their loss.
So, why did they lose? Here things get really complicated because the Court’s “regulatory takings” law is a morass. A 1922 decision, for example, held that if a regulation goes “too far” it constitutes a taking. Things haven’t gotten much clearer since, and Friday’s decision, written by Justice Anthony Kennedy, made it only worse.
In brief, to decide Murr the Court turned mainly to a 1978 decision, Penn Central v. New York, which had introduced a three‐part “balancing test” to determine whether a taking has occurred. Under it, a court must weigh a regulation’s economic impact on the property, its interference with investment‐backed expectations, and the character of the government action. And the crucial point here: Those factors must be applied to “the parcel as a whole.”
No one knows what those factors mean or how to apply them. But hold that last point, because a second precedent has to be considered.
In a 1992 decision, Lucas v. South Carolina Coastal Council, the Court held that an ordinance prohibiting the plaintiff from virtually all rightful uses of his property constituted a taking because it wiped out all of the property’s value. The problem with this “wipeout” rule, of course, is that most regulations leave at least some value in the property. When the dissent objected to the rule, Justice Antonin Scalia, writing for the Court, responded tersely, “Takings law is full of these ‘all or nothing’ situations.”