What is a Taking?

Due Processes and Takings Clauses

The Fifth Amendment to the United States Constitution, made applicable to the states by the 14th Amendment, provides that

No person shall be…deprived of life, liberty, or property, without due process of law [the “Due Process Clause”]; nor shall private property be taken for public use, without just compensation [the “Takings Clause”].  

The Due Process Clause and Land Use Regulation

Since the 1920s, the United States Supreme Court has made clear that the Due Process Clause permits a state or local government to adopt zoning and other land-use regulations that are reasonably related to the state’s power to protect the public health, safety, and general welfare (the “police power”)1. U.S. Supreme Court decisions have recognized that the police power includes a broad range of purposes, including the protection of aesthetic, scenic, and cultural values and the conservation of natural resources2.  In the unusual case where a land-use regulation or action does not satisfy this Due Process police power standard, the regulation or action is invalid from the beginning, and no Takings Clause question arises.

The Takings Clause and Land Use Regulation

A government regulation or action that satisfies the Due Process standard may still raise questions under the Takings Clause. The most familiar example is a government’s use of eminent domain proceedings for direct condemnation of property for public uses such as highway construction.  Vermont eminent domain statutes implement the Takings Clause by establishing procedures to be used by state or local governments for identifying and valuing the land to be taken and for resolving disputes about the amount of compensation to be paid3.

If a regulation or action other than formal eminent domain proceedings that is permissible under the Due Process Clause because it is reasonably related to a police power purpose “goes too far” and significantly affects the use or value of property, it may be found to be a “regulatory taking.” The owner then may have a right to compensation under the Takings Clause4.  (Chapter I, Article 2, of the Vermont Constitution is a provision similar to the Takings Clause.  In deciding regulatory takings cases under either the U.S. or the Vermont Constitution, the Vermont Supreme Court looks to the U.S. Supreme Court’s Fifth Amendment decisions for precedent5).

When Is Regulation a Taking?

A land owner who claims that land-use regulation affecting his property is a regulatory taking may sue the government imposing the regulation for “inverse condemnation” to seek compensation for the loss of value caused by the regulation.
In a recent decision, the U.S. Supreme Court clarified and narrowed the scope of regulatory takings in two important ways6.  The Court rejected the principle stated in an earlier decision  that, similar to a Due Process Clause test, regulation could be a taking if it did not “substantially advance” a governmental purpose.  The Court said that a regulatory taking will be found only when the effect on the property owner is the “functional equivalent” of the actual taking of title by eminent domain proceedings.  The Court defined four types of regulatory takings, identified in its prior decisions, that would meet the “functional equivalent” test”.

  • A “Loretto” taking occurs when government physically occupies property permanently in however minor a way without bringing eminent domain proceedings7.
  • A “Lucas” taking occurs when government regulation or action eliminates all economically viable use of the property.  The land owner must prove, however, that there is no alternative use that would preserve some value for the land.  Moreover, even where regulation deprives land of all economically viable use, no compensation may be due if the purpose is to prevent a nuisance or other use that would be forbidden by “background principles” of existing law8.
  • A “Nollan-Dolan” taking, called an “exaction,” occurs when government, as a condition of granting a land use permit, requires a dedication by the landowner of some part of the property to the public and there is not an “essential nexus” between the dedication and reasons for which the government might have denied the permit altogether (Nollan), and the condition is not “roughly proportional” to the specific adverse impact of the development (Dolan)9.
  • A “Penn Central” taking occurs when government regulation or action that has a significant economic impact on the land owner has an effect on the owner’s “investment-backed expectations” and is governmental action that  imposes an undue burden on the landowner10.

Continue reading to learn how to Avoid a Regulatory Taking

1 Village of Euclid v. Ambler Realty Co., 272U.S. 365 (1926).  Summaries of the cases cited in the footnotes are found in Data Box Two.  Material for further reference is listed at the end of this paper.
2 See Berman v. Parker, 348 U.S. 26 (1954); Tahoe-Sierra Preservation Council, Inc., v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002).
3 For example, under a procedure established in 24 V.S.A. §§ 2801-2813 towns may condemn lands for various purposes.
4 Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).
5 See Chioffi v. City of Winooski, 165 Vt. 37, 676 A.2d 786 (1996) (U.S. Constitution); Killington Ltd. v. State, 164 Vt. 253, 668 A.2d 1278 (1995) (Vermont Constitution).
6 Lingle v. Chevron, 544 U.S. 528 (2005).
7 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).
8 Lucas v. South Carolina Coastal Council, 505 U.S. 1003. (1992).
9 Nollan v. California Coastal Commission, 483 U.S. 825 (1987); Dolan v. Tigard, 512 U.S. 374 (1994).
10 Penn Central Transp co. v. New York City, 438 U.S. 104 (1978).