Do Owners Have a Fair Chance of Prevailing Under the Ad Hoc Regulatory Takings Test of Penn Central Transportation Company?

Abstract

Recent Supreme Court decisions on regulatory takings show a shift from per se categorical tests to the ad hoc balancing test of Penn Central Transportation Co. v. City of New York and a recognition that the area of regulatory takings is so complex that no substantive rule is possible. This shift occurred despite criticisms that Penn Central approach is so vague that it does not provide predictable results and that it is unfair. The evaluation of these criticisms in terms of the results under the Penn Central approach is not a simple matter. One way to evaluate the results is to assess whether this approach is fair procedurally and fair in application. The Penn Central test is, at least, not an obvious sham; owners have prevailed in some cases. However, showing at least some victories for owners is a weak defense of the fairness of the results under the Penn Central approach. A stronger defense would address harder questions, such as: How often do owners succeed? Is this rate of success sufficient to conclude that the process is fair in terms of the treatment of owners vis a vis regulators? Does the process take too long?

This article addresses these harder questions. Part I summarizes the Penn Central approach and the Supreme Court's recent recommitment to the approach. Part II discusses the results of a random survey of cases citing Penn Central. This discussion focuses on the questions of how often owners litigate and prevail under the Penn Central test, how long the process takes, and to what extent, if any, the results of the survey support the fairness of the process approach of Penn Central. The article concludes the data do not indicate that the Penn Central approach has been applied unfairly.

Keywords: regulatory takings test, regulatory taking, Penn Central, balancing test

JEL Classification: K00, K11