'Economic Impact' in Regulatory Takings Law

40 Pages Posted: 16 Feb 2013  

Steven J. Eagle

George Mason University - Antonin Scalia Law School, Faculty

Date Written: February 15, 2013

Abstract

In Penn Central Transportation Co. v. City of New York the Supreme Court stated that the existence of a regulatory taking would be determined through “essentially ad hoc, factual inquiries,” and that one of three factors of “particular significance” was the economic impact of the regulation on the claimant. This article examines the conceptual problem whereby the Fifth Amendment requires compensation for the taking of property and not a fraction of its owner’s worth. The fact that economic impact of stringent regulations is greater when parcels are smaller has led to a complex “parcel as a whole” test that conflates impact with another Penn Central test, owner’s expectations. Furthermore, application of the impact test to parcels held as investment property might vitiate the temporary taking. The Federal Circuit’s recent abandonment of its prior “return on equity” approach is emblematic of this problem.

Measuring the economic impact upon owners also is complex where government condemns part of an owner’s parcel, leading to difficulties in computing severance damages. Broad assertions that “offsetting benefits” conferred upon property owners by government actions reduce the impact of regulations also requires clarification.

The article concludes that unresolved issues and complexities in adjudicating the “economic impact of the regulation on the claimant” test provide an additional reason why the conceptually incoherent Penn Central doctrine must be replaced.

Keywords: Arkansas Game Fish Commission, Armstrong, CCA Associates, Carol Rose, Chevron U.S.A. Inc., Constitution, contracts clause, fairness, Fee, John Echeverria, just, justice, Kaiser Aetna, Lingle, Margaret Radin, private property, Rehnquist, takings, U.S., United States Supreme Court, William Wade

JEL Classification: K11, R38, R52, R58

Suggested Citation

Eagle, Steven J., 'Economic Impact' in Regulatory Takings Law (February 15, 2013). West-Northwest Journal of Environmental Law & Policy, Forthcoming; George Mason Law & Economics Research Paper No. 13-15. Available at SSRN: https://ssrn.com/abstract=2218723

Steven J. Eagle (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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