Amicus Curiae Brief — Community Housing Improvement Program, et al., Petitioners v. City of New York, New York, et al.

Supreme Court briefJun 9, 2023

Ask Donna

What actually matters in this document.

Text

Nos. 22-1095, 22-1130

IN THE

Supreme Court of the United States

COMMUNITY HOUSING IMPROVEMENT PROGRAM, ET AL.,

Petitioners,

CITY OF NEW YORK, ET AL.,

___________

74 PINEHURST LLC, ET AL.,

Petitioners,

STATE OF NEW YORK, ET AL.,

On Petitions for Writs of Certiorari to the

United States Court of Appeals for the Second Circuit

BRIEF OF THE CHAMBER OF COMMERCE OF

THE UNITED STATES OF AMERICA AS

AMICUS CURIAE SUPPORTING PETITIONERS

ANDREW R. VARCOE

TYLER S. BADGLEY

U.S. CHAMBER LITIGATION

CENTER

1615 H Street, NW

Washington, DC 20062

WILLIAM M. JAY

Counsel of Record

BENJAMIN HAYES

GOODWIN PROCTER LLP

1900 N Street, NW

Washington, DC 20036

(202) 346-4000

wjay@goodwinlaw.com

Counsel for Amicus Curiae

June 9, 2023

TABLE OF CONTENTS

Page

INTEREST OF THE AMICUS CURIAE................... 1

INTRODUCTION AND SUMMARY OF

ARGUMENT .............................................................. 2

ARGUMENT .............................................................. 5

This Court Should Review And

Reverse The Second Circuit’s Dilution

Of The Per Se Takings Rule. ......................... 5

A. Property Owners Count On The

Per Se Rule: Government Cannot

Physically Occupy Private

Property Without Paying For It. ............ 5

B. The Second Circuit’s Constricted

View Of Per Se Takings

Discourages Investment By

Enabling Physical Invasions

Without Compensation. ........................ 10

II.

The Second Circuit’s Regulatory

Takings Holdings Also Warrant This

Court’s Review. ............................................ 16

A. The Court Should Reaffirm That A

Taking Occurs When The

Government Tries To Shift The

Cost Of Curing Social Problems

Onto Private Entities That Did

Not Cause Them.................................... 16

B. The Court’s Correction Of Its

Regulatory-Takings Jurisprudence

Is Urgently Needed. .............................. 21

CONCLUSION ......................................................... 23

TABLE OF AUTHORITIES

Page(s)

Cases:

Ark. Game & Fish Comm’n v. United States,

568 U.S. 23 (2012) ............................................... 8

Armstrong v. United States,

364 U.S. 40 (1960) ......................................... 4, 17

Bridge Aina Le’a, LLC v. Haw. Land Use

Comm’n,

141 S. Ct. 731 (2021) ....................................... 3, 7

Cedar Point Nursery v. Hassid,

141 S. Ct. 2063 (2021) ................ 1, 2, 3, 5, 6, 8, 9,

.................................................. 10, 11, 12, 14, 15

Dolan v. City of Tigard,

512 U.S. 374 (1994) ..................................... 18, 19

E. Enters. v. Apfel,

524 U.S. 498 (1998) ............................................. 8

First English Evangelical Lutheran Church

of Glendale v. Cnty. of L.A.,

482 U.S. 304 (1987) ............................................. 7

Horne v. Dep’t of Agric.,

576 U.S. 350 (2015) ................... 1, 7, 9, 13, 14, 15

Loretto v. Teleprompter Manhattan CATV

Corp.,

458 U.S. 419 (1982) ....................... 8, 9, 12, 13, 14

iii

Lucas v. S.C. Coastal Council,

505 U.S. 1003 (1992) ........................................... 9

Nollan v. California Coastal Comm’n,

483 U.S. 825 (1987) ........................................... 18

Penn Central Transp. Co. v. City of N.Y.,

438 U.S. 104 (1978) ............................. 4, 6, 21, 22

Pennell v. City of San Jose,

485 U.S. 1 (1988) ........................................... 4, 17

PruneYard Shopping Center v. Robins,

447 U.S. 74 (1980) ............................................. 13

In re Santiago-Monteverde,

22 N.E.3d 1012 (N.Y. 2014) .............................. 17

Store Safe Redlands Assocs. v. United

States,

35 Fed. Cl. 726 (1996) ..................................... 7, 8

Tyler v. Hennepin County,

No. 22-166 (slip op. May 25, 2023) ......... 1, 16, 17

Woodstone Ltd. P’ship v. City of Saint Paul,

No. 22-cv-1589, 2023 WL 3586077 (D.

Minn. May 22, 2023) ......................................... 20

Yee v. City of Escondido,

503 U.S. 519 (1992) ....................................... 7, 14

Other Authorities:

Steven N. Berger, Access for CATV Meets

the Takings Clause: The Per Se Takings

Rule of Loretto v. Teleprompter

Manhattan CATV Corp., 25 Ariz. L. Rev.

689 (1983) ............................................................ 9

J. Peter Byrne, Ten Arguments for the

Abolition of the Regulatory Takings

Doctrine, 22 Ecology L.Q. 89 (1995) ................... 7

Steven J. Eagle, The Four-Factor Penn

Central Regulatory Takings Test, 118

Penn St. L. Rev. 601 (2014) ................................ 7

Jack Elbaum, A Rent Control Renaissance is

Underway in the US – and It’s Sure to

Make the Housing Shortage Worse,

Foundation for Economic Education

(May 25, 2023), https://fee.org/articles/arent-control-renaissance-is-underway-inthe-us-and-its-sure-to-make-thehousing-shortage-worse/ ................................... 20

Andrew Kenney, Rent Control could come to

some Colorado cities under a new bill

from state Democrats, CRP News (Jan.

24, 2023),

https://www.cpr.org/2023/01/24/coloradorent-control-bill/ ................................................ 20

Jan G. Laitos, Causation and the

Unconstitutional Conditions Doctrine:

Why the City of Tigard’s Exaction Was A

Taking, 72 Denv. U. L. Rev. 893 (1995) ........... 19

Carol M. Rose, Mahon Reconstructed: Why

the Takings Issue is Still a Muddle, 57 S.

Cal. L. Rev. 561 (1984) ........................................ 7

Joseph Story, Commentaries on the

Constitution of the United States (4th ed.

1873) .................................................................... 6

INTEREST OF THE AMICUS CURIAE1

The Chamber of Commerce of the United States of

America (“Chamber”) is the world’s largest business

federation. The Chamber represents approximately

300,000 direct members and indirectly represents the

interests of more than three million companies and

professional organizations of every size, in every industry sector, and from every region of the country. An

important function of the Chamber is to represent the

interests of its members in matters before Congress,

the Executive Branch, and the courts.

The Chamber regularly files amicus curiae briefs in

cases, like this one, that raise issues of concern to the

Nation’s business community, including cases defending constitutional protections for private property

rights against government infringement. To that end,

the Chamber filed amicus briefs supporting property

owners in Horne v. Department of Agriculture, 576 U.S.

350 (2015), Cedar Point Nursery v. Hassid, 141 S. Ct.

2063 (2021), and Tyler v. Hennepin County, No. 22-166

(slip op. May 25, 2023).

The Chamber has a strong interest in the issues in

this case. American businesses rely on stable, fair, and

predictable property rules—including in the area of

takings law. The decisions below are therefore of significant practical concern to the Chamber and its

members, which have a substantial interest in ensuring that property owners retain an adequate, efficient,

1 No counsel for any party authored this brief in whole or in part

and no entity or person, aside from amicus curiae, its members, or

its counsel, made any monetary contribution intended to fund the

preparation or submission of this brief. All parties received timely

notice of amicus’s intent to file this brief.

and prompt remedy against government takings of real

and personal property. The Second Circuit’s decisions

substantially weaken and undermine Fifth Amendment protections, with wide-ranging consequences for

business interests and private-property holders nationwide.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The “most treasured” of property rights is “[t]he

right to exclude,” Cedar Point Nursery v. Hassid, 141 S.

Ct. 2063, 2072 (2021). That right was taken away from

Petitioners. Their property is being locked up by law

to house strangers indefinitely. Yet the Second Circuit

held that they have no viable takings claim of any

stripe. This Court should grant certiorari.

New York’s Rent Stabilization Law (“RSL”) imposes

significant restrictions on the ability of landlords to exercise control over their properties—requiring landlords, except in narrow circumstances, to renew leases

on rental units in perpetuity (even to strangers to the

lease), and barring landlords from reclaiming possession of their properties for personal or other uses. Yet

the Second Circuit held that the RSL does not constitute a per se or regulatory taking of Petitioners’ properties. Its reasoning weakens property rights well beyond the boundaries of New York, sows further confusion among the lower courts, and reinforces governments’ practice of shifting the cost of remedying social

ills onto private parties. Those mistaken holdings warrant review, as to both per se and regulatory takings.

I. Physical invasions of private property by government are per se takings, and the government has a

“clear and categorical obligation” to pay just compensa-

tion for such invasions. Cedar Point Nursery, 141 S.

Ct. at 2071. That guarantee is what enables property

owners to finance, invest in, and improve their properties: they can be confident (and, therefore, lenders and

other investors can be confident) that the fruits of their

efforts and expense will not be confiscated for public

use. By contrast, once those invasions are treated as

just another regulatory taking, any hope of compensation becomes faint at best, thanks to the “vague and

indeterminate” standard currently governing regulatory-takings claims, which no one “has any idea how to

apply.” Bridge Aina Le’a, LLC v. Haw. Land Use

Comm’n, 141 S. Ct. 731, 731-732 (2021) (Thomas, J.,

dissenting from the denial of certiorari).

The Second Circuit did not dispute that this case

involves just such a physical occupation of private

property, but it held that just by becoming landlords,

Petitioners lost the right to pursue a per se takings

claim. That is an extraordinary constriction of the per

se rule that government occupation requires compensation. Leasing a single apartment to a specific individual for a short, defined period now justifies permanent

or indefinite impairment of the right to exclude. New

York allows landlords no way out, and the Second Circuit allows them no compensation. The court’s rationale will have far-reaching negative consequences,

as it threatens to justify permanent, governmentbacked occupation of all kinds of private property—

from rental cars to cyberspace.

This Court’s review is needed now. By validating

the RSL, the Second Circuit has created a massive disincentive for anyone considering putting property to

productive use. Other jurisdictions have taken, or are

pursuing, steps to enact similar restrictions into law.

See p. 15, infra. The Second Circuit’s decisions will only embolden additional governments to follow suit. The

Court should not allow these intrusions on private

property and the Second Circuit’s dilution of the per se

takings doctrine to be replicated nationwide.

II. This case also presents a prime opportunity for

the Court to clarify its regulatory-takings jurisprudence and to place meaningful limits on governments’

ability to compel private parties to foot the bill to alleviate public harms they did not cause.

The Takings Clause embodies the principle that the

government may not “[f]orce some people alone to bear

public burdens” that “should be borne by the public as

a whole.” Armstrong v. United States, 364 U.S. 40, 49

(1960). That principle requires compensation when the

government regulates private property in the absence

of a “cause-and-effect relationship between the property use restricted by the regulation and the social evil

that the regulation seeks to remedy.” Pennell v. City of

San Jose, 485 U.S. 1, 20 (1988) (Scalia, J., concurring

in part and dissenting in part). The RSL violates that

principle by capping rent based in part on tenants’

ability to pay—a status that is in no way caused by the

landlords whom the RSL regulates. Yet the Second

Circuit dismissed this consideration out of hand. The

Court should take this opportunity to reaffirm this

principle as a key part of its regulatory-takings jurisprudence.

This case also presents the opportunity to correct

lower courts’ misunderstanding of regulatory-takings

doctrine more generally. Although the Second Circuit

purported to apply this Court’s decision in Penn Central Transportation Co. v. City of New York, 438 U.S.

104 (1978), its expansive rationale gives the green light

to broad categories of government regulation without

compensation. This Court’s intervention is needed to

prevent the already meager protections of current regulatory-takings doctrine from being rendered altogether toothless.

ARGUMENT

This Court Should Review And Reverse

The Second Circuit’s Dilution Of The Per

Se Takings Rule.

The Second Circuit erred in holding that the onerous restrictions in the RSL do not result in a per se taking under the Fifth Amendment. See CHIP Pet. 9-20;

74 Pinehurst Pet. 18-24. That error is a significant one

that warrants this Court’s review. This is the type of

case that calls out for the clarity and certainty that

come with treatment as a per se taking. By holding

that a property owner can forfeit the protection of the

per se takings doctrine simply by engaging in ordinary

economic activity, the Second Circuit allowed state and

local governments to legislate the indefinite occupation

of private property without compensation. Allowing

that threat to hang over property owners undermines

the security of property rights and discourages investment. (This case also presents an opportunity for this

Court to clarify its regulatory-takings jurisprudence,

which we discuss in Section II below.)

A. Property Owners Count On The Per Se

Rule: Government Cannot Physically

Occupy Private Property Without Paying

For It.

“As John Adams tersely put it, ‘[p]roperty must be

secured, or liberty cannot exist.’” Cedar Point Nursery,

141 S. Ct. at 2071 (quoting Discourses on Davila, in 6

Works of John Adams 280 (C. Adams ed. 1851)). Our

Constitution provides that security by guaranteeing

just compensation when government takes private

property for public use—“an affirmance of a great doctrine established by the common law for the protection

of private property.” 2 Joseph Story, Commentaries on

the Constitution of the United States 547 (4th ed. 1873).

This fundamental protection—that the “government

must pay for what it takes,” Cedar Point Nursery, 141

S. Ct. at 2071—gives property owners certainty in their

ownership. For instance, businesses that own property

can invest in improving it because they know that their

labors and expense will not disappear overnight

through government confiscation. But that certainty

would erode if government could take effective possession without paying. That is why this Court has consistently treated government-authorized physical invasions of property as per se takings, rather than subjecting them to the complex, fact-intensive inquiry that

applies to government regulations affecting the use or

value of private property. When it comes to outright

occupation, only the per se rule offers property owners

an adequately robust guarantee of compensation that

is necessary to fully secure their property rights.

1. Physical invasions of property are per se takings.

By contrast, the Second Circuit applied this Court’s

“regulatory takings” jurisprudence, but that body of

law applies to claims that the government has taken

property by “restrict[ing] an owner’s ability to use his

own property.” Cedar Point Nursery, 141 S. Ct. at

2071. Whether a government restriction on the use of

property constitutes a regulatory taking has long been

governed by an “essentially ad hoc, factual inquir[y],”

Penn Cent. Transp. Co., 438 U.S. at 124, which requires courts to undertake “complex factual assess-

ments of the purposes and economic effects of government actions,” Yee v. City of Escondido, 503 U.S. 519,

523 (1992), and to grapple with whether “a restriction

on the use of property went ‘too far,’” Horne v. Dep’t of

Agric., 576 U.S. 350, 360 (2015). “As one might imagine, nobody—not States, not property owners, not

courts, nor juries—has any idea how to apply this

standardless standard.” Bridge Aina Le’a, 141 S. Ct. at

731 (Thomas, J., dissenting from the denial of certiorari) (internal quotation marks omitted); accord First

English Evangelical Lutheran Church of Glendale v.

Cnty. of L.A., 482 U.S. 304, 340 n.17 (1987) (Stevens,

J., dissenting) (describing regulatory-takings jurisprudence as “open-ended and standardless”).2

Under current precedent, that ad hoc, fact-intensive

inquiry is neither predictable nor certain. A property

owner challenging government action as a regulatory

taking faces a daunting task of navigating the complex

regulatory-takings framework—with no reliable way to

assess in advance the likelihood that it will be compensated for the government’s incursion on its property.

See Store Safe Redlands Assocs. v. United States, 35

2 See also, e.g., Steven J. Eagle, The Four-Factor Penn Central

Regulatory Takings Test, 118 Penn St. L. Rev. 601, 602 (2014) (describing the regulatory-takings doctrine as “a compilation of moving parts that are neither individually coherent nor collectively

compatible”); J. Peter Byrne, Ten Arguments for the Abolition of

the Regulatory Takings Doctrine, 22 Ecology L.Q. 89, 102 (1995)

(describing the regulatory-takings jurisprudence as an “unworkable muddle” that “has generated a plethora of inconsistent and

open-ended formulations that have failed to make sense”); Carol

M. Rose, Mahon Reconstructed: Why the Takings Issue is Still a

Muddle, 57 S. Cal. L. Rev. 561, 562 (1984) (“[C]ommentators propose test after test to define ‘takings,’ while courts continue to

reach ad hoc determinations rather than principled resolutions.”).

Fed. Cl. 726, 729 (1996) (noting that this Court’s “regulatory taking cases” are “so fact specific that general

predictability is made very difficult”). And the continued lack of clarity in the Court’s regulatory-takings jurisprudence fosters a constant stream of unpredictable

decisions resolving litigation in this arena—further increasing the price-tag for businesses seeking to vindicate their property rights against government regulatory action. See E. Enters. v. Apfel, 524 U.S. 498, 541

(1998) (Kennedy, J. concurring in the judgment and

dissenting in part) (“Cases attempting to decide when a

regulation becomes a taking are among the most litigated and perplexing in current law”).

2. In sharp contrast, this Court’s per se takings

doctrine provides a bedrock of clarity for property owners. Simply put: when the government “physically acquires private property for a public use”—whether by

using “its power of eminent domain to formally condemn property,” by “physically tak[ing] possession of

property without acquiring title to it,” or by “occup[ying] property” in some other way—“the Takings

Clause imposes a clear and categorical obligation to

provide the owner with just compensation.” Cedar

Point Nursery, 141 S. Ct. at 2071. In those circumstances, the ad hoc inquiry under the regulatorytakings doctrine “has no place”; the “invariable rule[]”

recognizes a taking and requires compensation. Id. at

2072; Ark. Game & Fish Comm’n v. United States, 568

U.S. 23, 31 (2012).

The Court has repeatedly applied this “clear and

categorical” rule to deem physical invasions of property

to be takings, whatever form those physical invasions

may take. See Loretto v. Teleprompter Manhattan

CATV Corp., 458 U.S. 419, 423-424, 434-435, 438

(1982) (holding that a law requiring landlords to allow

cable companies to install equipment on their buildings

was a per se taking); Horne, 576 U.S. at 355, 357-362

(holding that a law requiring raisin growers to set

aside a certain percentage of their harvest was a per se

taking); Cedar Point Nursery, 141 S. Ct. at 2071-2074

(holding that a law requiring property owners to allow

union officials on their premises was a per se taking).

This “simple, per se rule,” Cedar Point Nursery, 141

S. Ct. at 2071, offers the predictability and certainty

lacking in current regulatory-takings jurisprudence—

serving as a “ray of light in the otherwise shadowy areas of ‘takings’ law.” Steven N. Berger, Access for

CATV Meets the Takings Clause: The Per Se Takings

Rule of Loretto v. Teleprompter Manhattan CATV

Corp., 25 Ariz. L. Rev. 689, 703 (1983). The per se rule

allows businesses and other property owners to invest

in and manage their properties secure in the

knowledge that any government invasion will require

compensation at fair market value—regardless of the

scope or extent of the physical occupation, Loretto, 458

U.S. at 438 n.16, and “no matter how weighty the public purpose behind it,” Lucas v. S.C. Coastal Council,

505 U.S. 1003, 1015 (1992). And if the government refuses to pay, vindicating that right is a relatively

straightforward matter, without the costly complexity

that a regulatory-takings challenge entails.

In short, the per se rule is a straightforward one:

Occupation requires compensation. The certainty that

the rule provides enables businesses and other property owners to use, develop, and invest in their property

without the risk of having their labors and resources

voided by government confiscation.

B. The Second Circuit’s Constricted View Of

Per Se Takings Discourages Investment

By Enabling Physical Invasions Without

Compensation.

The Second Circuit’s decisions undermine the substantial benefits flowing from this Court’s per se takings rule, by rejecting per se claims in precisely the

context in which the per se rule was meant to apply—a

physical invasion of private property. See Cedar Point

Nursery, 141 S. Ct. at 2071. The result is the degradation of that “most treasured” of property rights—“[t]he

right to exclude.” Id. at 2072. If not corrected, the

lower court’s decisions will have far-reaching negative

effects and will lay the groundwork for other governments to adopt similarly intrusive laws. Even the possibility that a jurisdiction might follow the Second Circuit’s lead will affect owners’ incentives to put their

property to productive use—unless this Court steps in.

1. The Second Circuit did not seriously dispute

that the RSL entails physical occupations of property

for public use—for example, its requirement for indefinite renewals of leases means that the governmentfavored occupant can stay permanently. Yet the court

of appeals treated the RSL’s restrictions as mere regulations on the use of property—rather than physical

takings. That was largely because Petitioners voluntarily entered into limited-term leases with tenants

sometime in the past. See CHIP Pet. App. 18a (reasoning that Petitioners “voluntarily invited third parties to

use their properties” (emphasis added)); 74 Pinehurst

Pet. App. 6a (same). On the Second Circuit’s reasoning, that was enough to surrender the Takings Clause’s

protection against permanent occupation—the right to

exclude is gone and all that matters is the govern-

ment’s power to regulate the price. And even if the

government-controlled rent makes the whole enterprise a money-losing one, there is no exit—no way to

regain the right to exclude. That sweeping rationale

will have damaging ramifications for businesses and

the security of their property rights—undermining the

important values of predictability and clarity the per se

rule fosters, and relegating property owners to the costly, inefficient, and unpredictable tangle of this Court’s

regulatory-takings jurisprudence.

In any jurisdiction that follows the Second Circuit’s

reasoning, entering the rental market will mean passing the point of no return. Governments will be free to

intrude on virtually any rental property, both real and

personal, without the “clear and categorical obligation

to provide the owner with just compensation,” Cedar

Point Nursery, 141 S. Ct. at 2071—simply because the

property owner has granted a limited license to a third

party. It makes no difference how fleeting or restricted

the invitation; according to the Second Circuit, any

property owner that invites third parties onto its property automatically has opened itself up to a permanent

government-mandated expansion of that limited license, with no recourse to the important protections of

the per se takings rule.

That reasoning has dangerous implications. For

example, the government could require a rental car

company to permanently lease its vehicles to existing

or future renters, without effecting a physical taking,

so long as the lessee paid some amount of rent—

controlled, of course, by the government. And that

same dynamic could carry over to a host of other business arrangements—the company that leases its

equipment for construction projects, the IT company

that rents out cloud space, the landowner that leases

property for cattle grazing or natural gas exploration.

All of these property owners (and more) will, under the

Second Circuit’s rule, be deemed to have relinquished

the important protections of the per se takings rule and

opened themselves up to permanent occupation of their

property merely for having granted a limited license to

select members of the public.

2. This Court’s decisions illustrate why the Second

Circuit was wrong to conclude that property owners

give up their right to exclude unless they actually exclude everyone. For example, in Loretto this Court

held that the government effected a per se taking by

requiring landlords to allow cable companies to install

equipment on their properties. 458 U.S. at 423. Under

the Second Circuit’s rationale, if a building owner had

allowed any equipment to be installed on the premises,

even temporarily, the government could have mandated that it allow the cable equipment—and without effecting a per se taking. Or consider Cedar Point Nursery, in which the Court found a per se taking where the

government required an agricultural business to allow

union officials on its property for up to three hours per

day, 120 days a year. 141 S. Ct. at 2069. By the court

of appeals’ rationale, if Cedar Point Nursery had voluntarily allowed union officials onto its premises for

one hour a year, the government could impose the exact same requirement at issue in that case, but without

a physical taking having occurred. Neither can be correct: “The right of a property owner to exclude a

stranger’s physical occupation of his land cannot be so

easily manipulated.” Loretto, 458 U.S. at 439 n.17; see

also Cedar Point Nursery, 141 S. Ct. at 2076 (“property

rights ‘cannot be so easily manipulated’”).

In fact, the Court has already rejected reasoning

nearly identical to that employed by the Second Circuit

here. In Loretto, the Court dismissed the argument

that the government’s actions were not a physical taking because the landlord could avoid the regulation by

exiting the rental-property market, an option that does

not meaningfully exist under the RSL. 458 U.S. at 419

n.17 (“[A] landlord’s ability to rent his property may

not be conditioned on his forfeiting the right to compensation for a physical occupation.”). In other words,

a landlord’s voluntary decision to enter the rental

market did not give the government permission to occupy its property, nor did it blur the government’s per

se obligation to pay for any such occupation. The Court

reaffirmed that principle in Horne—holding that the

Horne family did not forfeit a per se takings claim by

choosing to sell raisins, rather than using their grapes

for another purpose (e.g., making wine) outside the

scope of the challenged government order. See 576

U.S. at 365. So too here: Petitioners did not relinquish

the protections of the per se takings rule by engaging in

a business the government has chosen to regulate.

3. The Second Circuit justified denying Petitioners

a per se right to compensation for the invasion of their

property rights, on the theory that their businesses

were open to the public—like the shopping center in

PruneYard Shopping Center v. Robins, 447 U.S. 74

(1980), and unlike in Horne and Cedar Point Nursery.

See CHIP Pet. App. 18a-19a. But the shopping center

in PruneYard welcomed some 25,000 patrons per day.

See 447 U.S. at 77-78. Renting a single apartment to a

particular tenant for a limited time is the exact opposite of an open invitation to the public—yet the Second

Circuit wrongly perceived no distinction.

Petitioners’ rental properties were no more “open to

the public”—and no less protected by the per se takings

rule—than a rental car leased to a specific individual

or an Airbnb. Indeed, if it were otherwise, this Court’s

decision in Loretto could not have come out as it did, as

the plaintiff in that case owned and rented units in a

five-story apartment building. 458 U.S. at 421-422.

The Second Circuit relied on Yee v. City of Escondido, supra, to sidestep this Court’s decisions in Loretto,

Horne, and Cedar Point Nursery, reasoning that

“[n]one of them concerns a statute that regulates the

landlord-tenant relationship” and relying on the

“State’s longstanding authority to regulate that relationship.” CHIP Pet. App. 21a; see also 74 Pinehurst

Pet. App. 6a (same). That is a misreading of Yee and,

in any event, is irreconcilable with this Court’s later

decisions in Horne and Cedar Point Nursery. See CHIP

Pet. 14-16; 74 Pinehurst Pet. 21-24.

In addition, the Second Circuit assumed that a history of government regulation in a particular area can

defeat the applicability of the per se takings rule, but

that misunderstands the purpose of the Takings

Clause and is a recipe for diluting property rights. The

Takings Clause is not a bar on government regulation;

it only dictates that when government regulates in a

particular way (by taking private property), it has a

“clear and categorical obligation to provide the owner

with just compensation.” Cedar Point Nursery, 141 S.

Ct. at 2071. Thus, the fact of regulation (even extensive regulation) in a particular commercial context is

no reason to deem the protections of the per se takings

rule inapplicable. For example, in both Horne and Cedar Point Nursery, the commercial activity involved

had long been subject to regulation. See Horne, 576

U.S. at 355 (agricultural regulations dating back to

1937); Cedar Point Nursery, 141 S. Ct. at 2069 (regulation of labor relations dating back to 1975). Nonetheless, in both cases the Court found the government’s

efforts to invade private property to be per se takings,

without any indication that decades of prior regulation

diminished the applicability of that doctrine. Nor

should it here.

The decisions below impermissibly narrow the scope

of the physical takings doctrine for any property owner

who has engaged in a basic form of economic activity.

That is significant not only in New York and within the

Second Circuit, but throughout the country. The Second Circuit excused the RSL from the per se rule based

on decisions that property owners made well before the

2019 amendments to the RSL were even proposed.

Thus, any property owner in a jurisdiction that might

follow the Second Circuit’s rule is already seeing the

certainty of its property rights erode: deciding to enter

the rental market today, even as a tentative experiment, could mean living with an unwelcome tenant indefinitely. This Court should grant certiorari to prevent those harms from being replicated nationwide.

The risk of that contagion is high. As the petitions

explain, other jurisdictions have enacted or are considering enacting similar laws governing rental properties. See CHIP Pet. 23-24 (discussing and collecting

laws); 74 Pinehurst Pet. 35 (similar). The Second Circuit’s decisions will only embolden more governments

to follow suit and to be even more aggressive in restricting property rights each time they do—confident

that businesses and other property owners wishing to

obtain compensation will face the costly and burden-

some hurdles imposed by this Court’s regulatorytakings jurisprudence. See pp. 6-8, supra. The Court

should not allow those harms to take root.

II.

The Second Circuit’s Regulatory Takings

Holdings Also Warrant This Court’s

Review.

The Second Circuit’s distortion of the physical takings doctrine is reason enough to grant the petitions

and reverse the decisions below. But the court of appeals’ rulings on Petitioners’ regulatory-takings claims

likewise warrant this Court’s review, as they offer the

Court a prime opportunity to provide much-needed

clarity in this area of takings law and to impose meaningful limits on governments’ ability to shift the cost of

redressing public problems on private parties not responsible for those harms. Granting both questions

would also compel respondents to defend the complete

denial of compensation here, rather than resist the per

se holding while hinting that perhaps some future ideal

plaintiff might win under Penn Central. Recently, in

Tyler v. Hennepin County, supra, the Court granted

both questions presented (one addressing the Takings

Clause and one the Excessive Fines Clause) even

though the takings argument was sufficient for reversal. The Court should likewise grant on both questions

here.

A. The Court Should Reaffirm That A Taking

Occurs When The Government Tries To

Shift The Cost Of Curing Social Problems

Onto Private Entities That Did Not Cause

Them.

As the petitions explain, the Takings Clause embodies the bedrock principle that the government cannot

“[f]orce some people alone to bear public burdens

which, in all fairness and justice, should be borne by

the public as a whole.” Armstrong, 364 U.S. at 49; see

also Tyler, slip op. 14 (same). The RSL provides public

assistance at private expense, off the government’s

books, by forcing landlords to accept payment based on

the tenants’ need. That states a takings claim.

The RSL’s draconian restrictions mandate that the

New York rate-setting agency fix the maximum rent

landlords can charge based, at least in part, on tenants’

ability to pay, CHIP Pet. 7, 24-25—a requirement New

York courts have candidly deemed a “local public assistance benefit.” In re Santiago-Monteverde, 22 N.E.3d

1012, 1015-1016 (N.Y. 2014). As Justice Scalia explained in his concurring and dissenting opinion in

Pennell v. City of San Jose, joined by Justice O’Connor,

whether a burden is “public”—and therefore one that

the public must pay to alleviate—must be determined

by assessing whether there is a “cause-and-effect relationship between the property use restricted by the

regulation and the social evil that the regulation seeks

to remedy.” 485 U.S. at 20; see CHIP Pet. 26. Under

this principle, rent control premised on the tenant’s financial condition—unrelated to the reasonableness of

the landlord’s rent based on market factors—

constitutes a regulatory taking. Pennell, 485 U.S. at

21. In those circumstances, the landlord is being

forced to bear a “public burden[],” Armstrong, 364 U.S.

at 49, which it did not create. See CHIP Pet. 24-34; accord 74 Pinehurst Pet. 30-31.

The Second Circuit refused to apply that principle

to the RSL—or even to discuss it in any meaningful

way. Instead, the court of appeals cursorily dismissed

the argument on the theory that it “has never been

adopted by the Supreme Court.” CHIP Pet. App. 22a-

23a n.25. That premise is incorrect—the principle discussed in Pennell has been applied by this Court in

cases that remain good law to this day—and in any

event is an incomplete answer to the constitutional

question.

The Court applied the cause-and-effect rationale a

year before Pennell, in Nollan v. California Coastal

Commission, 483 U.S. 825 (1987). In that case, the

Court addressed whether a government could condition

approval of a building permit for construction of a

beachfront home on the property owners’ granting a

public “easement to pass across a portion of their property.” Id. at 828. The Court observed that in a case

where approving the permit would result in blocking

the public’s view of the beach, the government could

permissibly condition the approval on the landowners’

“provid[ing] a viewing spot on their property for passersby with whose sighting of the ocean their new house

would interfere.” Id. at 836. Such a condition could be

said to redress a harm caused by the landowner’s proposed use of the property. But the “evident constitutional propriety disappears … if the condition … utterly fails” to redress the problem caused by the property.

Id. at 837. In that case, the Court held, the condition

constitutes a taking—an effort to “obtain[] an easement to serve some valid governmental purpose, but

without payment of compensation.” Id.

The Court reapplied the same cause-and-effect

principle in Dolan v. City of Tigard, 512 U.S. 374

(1994). There, the government sought to condition approval of development on the landowner turning part

of its property into “greenway” and granting the city a

public recreational easement. Id. at 381-382, 394.

The development did not encroach on existing green-

way. Id. at 394. The Court held that there was no

connection between the city’s stated purpose, reducing

flooding problems, and enabling “recreational visitors

[to] trampl[e] along petitioner’s floodplain easement,”

id. at 393. Therefore, the city’s effort to require the

easement, without compensation, violated the Takings

Clause. Id. at 396.

Although these cases involved unconstitutionalconditions claims, the theory of takings law underlying

those decisions is exactly the same theory embraced by

Justice Scalia and Justice O’Connor in Pennell—a government regulation is a taking, rather than a legitimate exercise of the police power, if it seeks to burden

a private entity’s property to alleviate a social problem

not attributable in any sense to that property. As one

scholar has explained: Dolan was “a takings case” and

“its importance lies in the Court’s explicit adoption” of

the “takings analysis” “articulated by Justice Scalia in

his dissent in Pennell v. City of San Jose: causation.”

Jan G. Laitos, Causation and the Unconstitutional

Conditions Doctrine: Why the City of Tigard’s Exaction

Was A Taking, 72 Denv. U. L. Rev. 893, 895-896, 905907 (1995); accord CHIP Pet. 33 (discussing additional

academic literature).

The Second Circuit thus erred in dismissing the

reasoning of Justice Scalia and Justice O’Connor in

Pennell as the mere musings of dissenting Justices

that have no place in the Court’s takings jurisprudence. As subsequent decisions have elaborated, see

CHIP Pet. 29-30, the separate opinion in Pennell simply collected principles that are already part of the

Court’s takings jurisprudence.

The court of appeals nonetheless opined that the

principles articulated in Justice Scalia’s Pennell opin-

ion are “in tension (if not conflict)” with this Court’s decision in Penn Central—despite coming nearly a decade

later. CHIP Pet. App. 22a n.25. This observation only

underscores the extent to which lower courts’ reading

of Penn Central has blurred or omitted fundamental

takings principles. The longstanding principle at

stake—that government cannot impose the cost of fixing social ills onto property owners who did not cause

them—deserves to be restored to prominence in regulatory-takings jurisprudence.

The need for that correction is particularly pressing

now, as governments across the country are engaged in

renewed efforts to impose rent controls, see p. 15, supra,3 and may seek to emulate the RSL by doing so

based on tenant ability to pay. The Court should grant

review to ensure that its regulatory-takings jurisprudence is not a dead letter and that governments do not

enjoy complete license to shift the costs of public benefits onto private parties.

3 See Woodstone Ltd. P’ship v. City of Saint Paul, No. 22-cv-1589,

2023 WL 3586077, at *1 (D. Minn. May 22, 2023) (noting that

Minneapolis had authority to impose rent controls since 1984, but

did not invoke that authority until 2021); Andrew Kenney, Rent

Control could come to some Colorado cities under a new bill from

state

Democrats,

CRP

News

(Jan.

24,

2023),

https://www.cpr.org/2023/01/24/colorado-rent-control-bill/; Jack

Elbaum, A Rent Control Renaissance is Underway in the US – and

It’s Sure to Make the Housing Shortage Worse, Foundation for

Economic Education (May 25, 2023), https://fee.org/articles/a-rentcontrol-renaissance-is-underway-in-the-us-and-its-sure-to-makethe-housing-shortage-worse/.

B. The Court’s Correction Of Its RegulatoryTakings Jurisprudence Is Urgently

Needed.

Even setting aside the significance of the ability-topay criterion to the takings analysis here, this is an

appropriate case to restore some clarity to the core

Penn Central analysis. The amorphousness of that line

of cases has led courts to exclude vast swaths of onerous government regulation from the Takings Clause’s

protection altogether. See pp. 6-8, supra. The decisions below only exacerbate those problems.

Take, for example, the Second Circuit’s application

of the third Penn Central factor—the “character of the

governmental action,” 438 U.S. at 124. As this Court

stated in Penn Central, this factor is designed to differentiate between government “interference” that “can be

characterized as a physical invasion” of property, rather than an effort to “adjust[] the benefits and burdens of economic life to promote the common good.” Id.

But despite the clear physical nature of the RSL’s

mandates, the Second Circuit held that the character

of the RSL’s restrictions nonetheless weighed against

finding a regulatory taking merely because the RSL is

“part of a comprehensive regulatory regime” that

serves “important public interests.” CHIP Pet App.

26a-27a; see also 74 Pinehurst Pet App. 16a (similar).

That re-conception guts the entire point of the third

Penn Central factor—and in the process will insulate

huge portions of government action from the restrains

of the Takings Clause. After all, most government action could be said to advance some important public interest—and courts typically defer to legislatures on

those judgments. The Second Circuit’s rationale thus

twists this Penn Central factor into a blank check for

government regulation, rather than a tool for assessing

the parallels between the government’s action and

physical invasions.

The court of appeals’ application of the second Penn

Central factor—the interference with “investmentbacked expectations,” 438 U.S. at 124—is similarly

problematic. The court reasoned that because New

York has long regulated rental properties, Petitioners

should “have anticipated” that “those regulations …

could change yet again.” 74 Pinehurst Pet. 14a. The

court relied on that rationale even though Petitioners’

takings theory is that the recent amendments to the

RSL were a shift in kind, not merely degree, from the

prior restrictions. See 74 Pinehurst Pet. 5-7. Thus,

under the Second Circuit’s theory, businesses will automatically lack cognizable investment-backed expectations solely because they operate in a heavily regulated area of the economy—no matter how dramatically a new government regulation departs from the status quo.

Without this Court’s intervention, the confusion in

regulatory-takings doctrine will persist, and the Penn

Central analysis will continue to be used to insulate

substantial amounts of onerous government regulation

from the important protections of the Takings Clause,

while enabling governments to continually shift the

cost of alleviating public harms onto private parties in

no way responsible for the ills being redressed. The

Court should grant review to correct the Second Circuit’s misunderstanding of the Takings Clause’s protection against uncompensated regulatory takings.

CONCLUSION

The Court should grant the petitions for certiorari.

Respectfully submitted.