Posted: 23 Jul 2007
The Supreme Court's most recent regulatory takings decisions suggest that, despite the notorious indeterminacy of the Penn Central analysis, a more predictable Penn Central framework is slowly emerging. This article offers a comprehensive description of the modern Penn Central analysis based on the latest guidance from the Supreme Court, in particular the decision in Lingle v. Chevron USA. Consideration of the "economic impact" factor should focus on whether a claimant has suffered a very substantial diminution in value ("well in excess of 85%," in the language of one leading opinion) based on a comparison of the value of the property with and without the regulation at issue, and/or whether the claimant is able to recoup his original investment in the property. Under the "reasonable investment-backed expectations" factor, notwithstanding the rejection of the absolute "notice rule" in Palazzolo, a taking claim should almost always fail if the claimant purchased the property with notice of the regulation. Otherwise, the expectations analysis should focus on whether the claimant has been able to carry out her original intentions in purchasing the property, the nature of the regulatory environment at the time of purchase, and the forseeability of public concerns associated with the claimant's proposed property use. The analysis of the "character factor," generally considered the most amorphous aspect of the Penn Central framework, should focus primarily on whether the regulation is targeted or general in application, the likely magnitude of the reciprocal benefits generated by the regulation, and whether the regulation is designed to protect other citizens or the community from harm.
Keywords: regulatory takings, Penn Central, Lingle, Chevron
Suggested Citation: Suggested Citation
Echeverria, John D., Making Sense of Penn Central. UCLA Journal of Environmental Law & Policy, Vol. 23, No. 2, 2005; Georgetown Law and Economics Research Paper No. 1001750; Georgetown Public Law Research Paper No. 1001750. Available at SSRN: https://ssrn.com/abstract=1001750