What do they have in common? Nothing…except that when I was getting a new set of tires put on my car, I had time to read Murr v. Wisconsin, the recent U.S. Supreme Court 40-page decision in a property rights case involving a regulatory takings analysis.
The facts of the case are pretty simple. The Murrs purchased Lots E and F separately in the 1960s, transferring Lot F to a family plumbing business, but keeping ownership of Lot E in their own names. The Murrs transferred Lot F to their kids in 1994 and Lot E to the kids in 1995. The lots each had less than one acre available for development. The Murr kids brought the lots under common ownership (in other words, the kids owned both lots, unlike the parents, who owned one lot through a company and the other lot as individuals).
Once under common ownership, state and local rules forbidding separate sale or development of the lots came in to play. The Murr kids wanted to sell Lot E as part of an improvement plan for both lots, and requested variances from the local zoning authority. The zoning authority denied the variance request, and the state courts affirmed the denial of the variance request.
While the facts are simple, regulatory takings law is a jumbled mess. As the Supreme Court charitably put it,
This area of the law has been characterized by ‘ad hoc, factual inquiries, designed to allow careful examination and weighing of all the relevant circumstances.’”
In order to decide the Murr case, the majority had to decide what is the property to be considered in the takings analysis. In determining that no taking occurred, the majority announced an involved, multi-factor test. The Murr kids’ decision to take title to both lots was significant in the majority’s analysis.
Although not seriously concerned by the outcome the majority reached, the minority wrote that the majority’s new test actually weakens property rights.
Here’s what you should take away from Murr: the Murr kids’ voluntary conduct, in unifying the two parcels under common ownership and implicating state and local rules barring the lots’ separate sale or development, created a problem. A problem that could have been avoided by taking title to the lots separately instead of under common ownership.
U.S. Supreme Court Photo courtesy of Wikimedia Commons