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In an article published on August 12 in Law360, John Walk details the June 23 U.S. Supreme Court opinion in Cedar Point Nursery v. Hassid, which set important new precedent on regulatory property takings.

Under the Fifth and 14th Amendments, private land may not be taken through governmental action without payment of just compensation. Based on years of precedent, takings have been divided in to three categories, including (1) actions involving a physical invasion or taking of the landowner’s property (2) actions depriving the landowner of all economically feasible use of their land; and, (3) other governmental action whereby the landowner’s use of the property is diminished in some respect but, nonetheless, some economically viable use remains. “Regulatory taking” relates to the latter. 

In addressing the impact of the Cedar Point Nursery decision, Walk points to precedent a 1978 Supreme Court case dealing with Penn Central Transportation’s interest in constructing a 50-story office building within the airspace above Grand Central Station. The project was not approved despite meeting zoning requirements because the Landmarks Preservation Commission said it would compromise the architectural integrity of this historic structure. “The Supreme Court rejected Penn Central’s takings claim based upon a test involving a balancing of the landowner’s reasonable investment-backed expectations and the government’s interest in historic preservation, regulating land use, or promoting health, safety and welfare,” Walk said. 

At question in the Cedar Point Nursery matter was whether the California law requiring Cedar Point Nursery to allow labor organizers access to its property in order to solicit its laborers to join a union amounted to a use restriction subject to the Penn Central analysis. The Supreme Court rejected two lower court’s decisions by determining Cedar Point was entitled to just compensation for a taking of property and that the Penn Central balancing test did not apply. 

Walk explores each case and the legal reasoning of the Justices, even retroactively applying the decision in Cedar Point to the Penn Central case to highlight differences. He also detailed further takeaways for the future of land use law. 

For the full article, Law360 subscribers may click here.

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