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SCOTUS to Decide Wisconsin Property Rights Dispute

SCOTUS to Decide Wisconsin Property Rights Dispute

Wisconsin is again in the nation’s legal spotlight in a long-standing property rights dispute, calling into question one of the most heavily-litigated and oft-misunderstood constitutional provisions – the takings clause of the Fifth Amendment. The Fifth Amendment prohibits governmental takings of private property without just compensation.

Over the years, the high court has expanded the takings doctrine to include instances when a regulation promulgated by a governmental entity “goes too far” so as to render private property valueless. The “goes too far” analysis is a famously vague legal standard conceived by the renowned Chief Justice Oliver Wendell Holmes. However, before a court even reaches this nebulous question, it must first address the threshold issue of defining the relevant unit of property for purposes of the analysis. Unsurprisingly, the lower courts have struggled with this task.

For decades, the Murr family owned two adjacent 1¼ acre parcels on the shores of Lake St. Croix, located just south of River Falls along the Wisconsin-Minnesota border. A summer cottage was built on one of the lots titled in the name of William Murr, and the other lot, titled in the name of the Murr family plumbing company, remained vacant. In the early 1990’s, the late Murrs bequeathed the two parcels to their six children. In 2004, the Murr siblings elected to sell their vacant lot in order to finance improvements to the existing cottage. However, the Murrs later discovered that a 1970’s-era zoning regulation stated that any contiguous, substandard lots under common ownership would merge into a single parcel for purposes of sale and/or redevelopment. This meant that the Murrs now had a single 2½ acre parcel rather than two adjacent 1¼ acre lots.

It is estimated that the vacant parcel, if sold separately, would be worth somewhere in the neighborhood of $400,000. However, it contributes only $40,000 in added value to the cottage parcel when both parcels are viewed as a whole. Accordingly, the Murrs argue that the 1970’s regulation, by forcing a merger of the properties at issue, “goes too far” so as to constitute a governmental taking requiring just compensation.

On March 20, 2017, the United States Supreme Court heard oral argument in Murr v. Wisconsin to address whether the property should be treated as two separate parcels defined by their lot lines or a single unified parcel under the zoning ordinance’s merger provision for purposes of Holmes’ “goes too far” analysis. Its decision could have a substantial impact on the methodology used by lower courts to define a unit of property, but it is unlikely that it will end the age-old debate over the takings clause.

As a private property owner, you are entitled to just compensation for the value of the property taken by a governmental entity. John M. Kelly, Attorney at Law, LLC is home to over 42 years of experience advocating for landowners in eminent domain litigation and advising clients on the many complexities of takings and other related property laws.