Amicus Curiae Brief — Mount Clemens Recreational Bowl, Inc., et al., Petitioners v. Elizabeth Hertel, Director, Michigan Department of Health and Human Services, et al.

Nos. 24-757, 24-754

───────────────────────────

In the

Supreme Court of the United States

──────────────────────────

THE GYM 24/7 FITNESS, LLC,

Petitioner,

v.

MICHIGAN,

Respondent.

──────────────────────────

MOUNT CLEMENS RECREATIONAL BOWL, INC., ET AL.,

Petitioners,

v.

ELIZABETH HERTEL, Director, Michigan Department of Health

and Human Services, ET AL.,

Respondents.

──────────────────────────

ON PETITIONS FOR WRIT OF CERTIORARI TO

THE COURT OF APPEALS OF MICHIGAN

──────────────────────────

AMICUS CURIAE BRIEF OF

THE BUCKEYE INSTITUTE

IN SUPPORT OF PETITIONERS

──────────────────────────

David C. Tryon

Counsel of Record for Amicus Curiae

Elisé K. Yarnell

Alex M. Certo

THE BUCKEYE INSTITUTE

88 East Broad Street, Suite 1300

Columbus, OH 43215

(614) 224-4422

D.Tryon@BuckeyeInstitute.org

Attorneys for Amicus Curiae

i

QUESTION PRESENTED

Whether Penn Central Transp. Co. v. City of New

York, 438 U.S. 104 (1978), should be clarified or

overruled.

Amicus respectfully suggests that the Question

Presented should be modified to add the question: “If

overruled, what should replace the Penn Central test?”

ii

TABLE OF CONTENTS

QUESTION PRESENTED ............................................ i

TABLE OF CONTENTS .............................................. ii

TABLE OF AUTHORITIES........................................ iii

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

INTRODUCTION AND SUMMARY

OF THE ARGUMENT .................................................. 2

ARGUMENT ................................................................. 3

I. The Penn Central test was born of

happenstance, not reason .................................... 3

II. Penn Central has been applied inconsistently

at best .................................................................... 8

III. If the Court grants certiorari, it can consider

existing alternatives and invite others ............. 12

A. Petitioners’ “Reasonable Rate of Return”

Test ................................................................. 12

B. The Penn Central Dissent Test .................... 13

C. Judge Bibas’s Test ........................................ 16

D. Professor Epstein’s “Bundle of Rights”

Test ................................................................. 17

CONCLUSION ............................................................ 19

iii

TABLE OF AUTHORITIES

Cases

Appolo Fuels, Inc. v. United States,

381 F.3d 1338 (Fed. Cir. 2004) ............................... 10

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

568 U.S. 23 (2012)...................................................... 6

Armstrong v. United States,

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

Bettendorf v. St. Croix Cnty.,

631 F.3d 421 (7th Cir. 2011) ..................................... 9

Blackburn v. Dare Cnty.,

58 F.4th 807 (4th Cir. 2023) ............................... 8, 11

Bojicic v. DeWine,

No. 21-4123, 2022 WL 3585636 (6th Cir. Aug.

22, 2022) ................................................................... 11

Boom Co. v. Patterson, 98 U.S. 403 (1879) ............... 15

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

141 S. Ct. 731 (2021) ............................................... 16

CCA Assocs. v. United States,

667 F.3d 1239 (Fed. Cir. 2011) ............................... 10

Cedar Point Nursery v. Hassid,

594 U.S. 139 (2021) ................................................... 6

Colony Cove Props., LLC v. City of Carson,

888 F.3d 445 (9th Cir. 2018) ................................... 10

Dolan v. City of Tigard,

512 U.S. 374 (1994) ................................................... 6

iv

First Eng. Evangelical Lutheran Church of

Glendale v. Los Angeles Cnty., Cal., 482 U.S.

304 (1987) ................................................................. 10

Goldblatt v. Hempstead,

369 U.S. 590 (1962) ................................................... 5

Good v. United States,

189 F.3d 1355 (Fed. Cir. 1999) ................................. 9

Horne v. Dep’t of Agric.,

576 U.S. 350 (2015) ................................................... 6

Kavanau v. Santa Monica Rent Control Bd.,

941 P.2d 851 (Cal. 1997) ........................................... 7

Lingle v. Chevron U.S.A. Inc.,

544 U.S. 528 (2005) ................................................... 7

Loretto v. Teleprompter Manhattan CATV Corp.,

458 U.S. 419 (1982) ................................................... 6

Lucas v. S.C. Coastal Council,

505 U.S. 1003 (1992) ................................................. 6

Meyer v. Amerada Hess Corp.,

541 F. Supp. 321 (D.N.J. 1982) .............................. 13

Mugler v. Kansas,

123 U.S. 623 (1887) ................................................. 15

Murr v. Wisconsin,

582 U.S. 383 (2017) ................................................... 7

Nekrilov v. City of Jersey City,

45 F.4th 662 (3d Cir. 2022) ........................... 8, 16, 17

Nollan v. Cal. Coastal Comm’n,

483 U.S. 825 (1987) ................................................... 6

Northern Securities Co. v. United States,

193 U.S. 197 (1904) ................................................... 2

v

Paradissiotis v. United States,

49 Fed. Cl. 16 (2001).................................................. 5

Penn Cent. Transp. Co. v. City of New York,

438 U.S. 104 (1978) ................................. 5, 13, 14, 15

Philip Morris, Inc. v. Reilly,

312 F.3d 24 (1st Cir. 2002) ................................. 8, 11

RDB Properties, LLC v. City of Berwyn,

844 F. App’x 878 (7th Cir. 2021) ............................ 10

Resolution Tr. Corp. v. Town of Highland Beach,

18 F.3d 1536 (11th Cir. 1994) ................................. 13

Sheetz v. Cnty. of El Dorado, Cal.,

601 U.S. 267 (2024) ................................................... 7

Stop the Beach Renourishment, Inc. v. Fla. Dep’t of

Env’t Prot., 560 U.S. 702 (2010) ............................... 7

Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l

Plan. Agency, 535 U.S. 302 (2002) ..................... 7, 10

United Gas Pipe Line Co. v. FERC,

618 F.2d 1127 (5th Cir. 1980) ................................. 13

United States v. Cress,

243 U.S. 316 (1917) ................................................. 14

United States v. Dickinson,

331 U.S. 745 (1947) ................................................. 14

United States v. Gen. Motors Corp.,

323 U.S. 373 (1945) ................................................. 13

Warren Tr. v. United States,

107 Fed. Cl. 533 (2012)............................................ 10

Yancey v. United States,

915 F.2d 1534 (Fed. Cir. 1990) ............................... 12

vi

Yellow Cab Co. v. City of Chicago,

938 F. Supp. 500 (N.D. Ill. 1996) ............................ 13

Youpee v. Babbitt,

67 F.3d 194 (9th Cir. 1995) ..................................... 12

Statutes

28 U.S.C. § 1257(a) ....................................................... 3

Act of June 27, 1988, Pub. L. 100-352 102 Stat.

662 (1998) ................................................................... 3

Other Authorities

1 William Blackstone, Commentaries (1765) ........... 16

Adam R. Pomeroy, Penn Central After 35 Years:

A Three Part Balancing Test or A One Strike

Rule?, 22 Fed. Circuit B.J. 677 (2013) ..................... 7

J. Peter Byrne, Penn Central in Retrospect:

The Past and Future of Historic Preservation

Regulation, 33 Geo. Envtl. L. Rev. 399 (2021)

............................................................................. 3, 4, 8

Jed Rubenfeld, Usings, 102 Yale L.J. 1077,

(1993) ........................................................................ 17

Lewis F.

Powell Jr., Penn Central

Transportation Company v. New York City

(1977) .......................................................................... 4

Matthew 7:26–27 ........................................................... 3

Richard A. Epstein, Lucas v. South Carolina

Coastal Council: A Tangled Web of

Expectations, 45 Stan. L. Rev. 1369 (1993) ..... 18, 19

vii

Richard A. Epstein, Lucas v. South Carolina

Coastal Council: Brief of the Institute for

Justice as Amicus Curiae in Support of

Petitioner, 25 Loy. L.A. L. Rev. 1233 (1992) .... 17, 18

Steven J. Eagle, Regulatory Takings (4th ed.

2009) ........................................................................... 5

Steven J. Eagle, The Four-Factor Penn Central

Regulatory Takings Test, 118 Dick. L. Rev.

601 (2014) ............................................................... 7, 8

1

INTEREST OF AMICUS CURIAE1

Amicus curiae The Buckeye Institute was founded

in 1989 as an independent research and educational

institution—a think tank—whose mission is to

advance free-market public policy in the states. The

Buckeye Institute accomplishes the organization’s

mission by performing timely and reliable research on

key issues, compiling and synthesizing data,

formulating free-market policy solutions, and

marketing those policy solutions for implementation

in Ohio and replication throughout the country. The

Buckeye Institute is a nonpartisan, non-profit, taxexempt organization as defined by I.R.C. § 501(c)(3).

The Buckeye Institute files and joins amicus briefs

that are consistent with its mission and goals.

Consistent with its mission, The Buckeye Institute

seeks to promote the constitutional design of limited

powers in the federal government, which preserves

states’ ability to develop and enact such policies. The

Buckeye Institute is concerned by the ineffectiveness

of the Penn Central test for determining what is a

regulatory taking that entitles a property owner to

just compensation under the Fifth Amendment. This

case—arising as it does under a unique set of

circumstances that used government regulation to

temporarily deprive business owners of all

economically viable use of their property—provides an

excellent vehicle to reconsider how courts should

1 Pursuant to Supreme Court Rule 37.6, no counsel for any party

authored this brief in whole or in part and no entity or person,

aside from amicus curiae made any monetary contribution toward

the preparation or submission of this brief. Counsel timely

provided the notice required by Rule 37.2.

2

evaluate such claims. The Buckeye Institute submits

this brief to urge the Court to grant certiorari to

consider the question presented and invite the parties

to present alternative frameworks for consideration.

INTRODUCTION AND

SUMMARY OF THE ARGUMENT

The Court’s opinion in Penn Central is an excellent

illustration of Justice Holmes’ famous saying that

“[g]reat cases, like hard cases make bad law.”

Northern Securities Co. v. United States, 193 U.S. 197,

364 (1904) (Holmes, J., dissenting). “For great cases

are called great, not by reason of their real importance

in shaping the law of the future, but because of some

accident of immediate overwhelming interest which

appeals to the feelings and distorts the judgment.” Id.

(Holmes, J., dissenting). Arriving at the Court through

the now-obsolete appeal-as-of-right procedure, Penn

Central involved an iconic New York City landmark, a

limited record, and a dearth of lower court opinions

applying the relevant constitutional provision. The

resulting decision held together the Court’s 6-3

majority but did little more to guide the federal

judiciary in the wide range of cases that implicate the

doctrine of regulatory takings.

Now, nearly half a century later, lower courts

struggle to apply the Penn Central factors with any

consistency, and this Court has developed a preference

for expanding its “per se” physical taking

jurisprudence over clarifying those Penn Central

factors. Penn Central became a “great case” by

“accident” but has done a poor job of “shaping the law.”

Id. (Holmes, J., dissenting). It is time to change the

regulatory takings status quo. Amicus urges the court

3

to grant certiorari to consider alternative Takings

Clause tests grounded in the Constitution. Amicus

presents several possible analytical approaches for the

Court’s consideration.

ARGUMENT

I. The Penn Central test

happenstance, not reason.

was

born

of

A house built on sand shall fall. See Matthew 7:26–27.

Buildings, bridges, and roads require a solid

foundation. Without one, sooner or later they will fall.

Likewise, legal tests without solid foundations

eventually crumble and fall. The regulatory takings

test known as the Penn Central doctrine lacks such a

foundation. It was born of expediency and without

solid constitutional support.

Penn Central’s history provides insight into its

lackluster performance as “the” regulatory takings

test. Penn Central came to the Court under 28 U.S.C.

§ 1257(a) as a mandatory appeal2—not a discretionary

petition for certiorari. See J. Peter Byrne, Penn

Central in Retrospect: The Past and Future of Historic

Preservation Regulation, 33 Geo. Envtl. L. Rev. 399,

413 (2021). But for that statute, it is unlikely we would

have the regulatory takings test known as “Penn

Central.” As Justice Powell’s law clerk recognized in

his jurisdictional memo, “It would be great if there

were a way out of this appeal, so that the issue could

percolate. Unfortunately, the court seems stuck.” Id.

2 Mandatory appeals to the U.S. Supreme Court were eliminated

in 1988. Act of June 27, 1988, Pub. L. 100-352, § 3, 102 Stat. 662

(1998).

4

at 413 (citation omitted). The jurisdictional memo

lamented that “[i]f this case were here on cert, the

paucity of relevant precedents would be one factor

militating strongly in favor of a denial. However,

because the issue is here on appeal, because the case

raises issues of constitutional importance, and

because the opinion below is . . . questionable,” the

memo recommended full briefing and argument on the

merits. Id. Justice Powell himself seemed to agree

with his clerk, writing, “Important const. issue and

very little authority.” Id. (quoting Lewis F. Powell Jr.,

Penn Central Transportation Company v. New York

City

at

9

(1977)

(Powell

Papers),

https://tinyurl.com/mtc2cvuw). According to Justice

Powell’s papers, only five justices voted to note

probable jurisdiction. Id.

When it came to reaching a decision on the merits,

the Court struggled to find any constitutional

underpinnings for the “rule” or “doctrine” that it

ultimately formulated:

While this Court has recognized that the

“Fifth Amendment’s guarantee . . . [is]

designed to bar Government from forcing

some people alone to bear public burdens

which, in all fairness and justice, should

be borne by the public as a whole,”

Armstrong v. United States, 364 U.S. 40,

49 (1960), this Court, quite simply, has

been unable to develop any “set formula”

for determining when “justice and

fairness” require that economic injuries

caused by public action be compensated

by the government, rather than remain

5

disproportionately concentrated on a few

persons.

Penn Cent. Transp. Co. v. City of New York, 438 U.S.

104, 123–24 (1978) (quoting Goldblatt v. Hempstead,

369 U.S. 590, 594 (1962)). Ultimately, the Court

examined its patchwork of “ad hoc” factual

determinations in cases that allowed governments to

take one or more sticks in the bundle of property rights

without compensation and deduced a “several” factor

test to explain when “regulatory” takings were just

regulation and not really takings. The first and second

factors3 are “[t]he economic impact of the regulation

on the claimant and, particularly, the extent to which

the regulation has interfered with distinct

investment-backed expectations.” Id. at 124. The third

is “the character of the governmental action,” because

a “physical invasion” is more likely to be a “taking.”

Id.; see also id. at 128 (noting that government

“acquisitions of resources” for uniquely public

functions are “takings”). The analysis also seems to

consider public benefit or harm avoided. See id. at 127.

Since deciding Penn Central, the Court has often

avoided applying it. Justice Scalia distinguished

between the “ad hoc, factual inquiries” promoted by

Penn Central and the “categorical treatment

Some have questioned whether these are more accurately

interpreted as a single factor, given the sentence structure. See

Steven J. Eagle, Regulatory Takings 334 n.181 (4th ed. 2009)

(citing Paradissiotis v. United States, 49 Fed. Cl. 16, 20 n.4 (2001))

(“That Penn Central encompasses three principal factors is not

logically its only—or its preferred—reading. The extent of

[interference with] an owner’s ‘investment-backed expectation’

might be a subset of the ‘economic impact’ of [the]

restrictions . . . .”).

3

6

appropriate . . . where

regulation

denies

all

economically beneficial or productive use of land.”

Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015

(1992). Building permit conditions earned their own

“rough proportionality” test. See Dolan v. City of

Tigard, 512 U.S. 374 (1994); Nollan v. Cal. Coastal

Comm’n, 483 U.S. 825 (1987) (citing Penn Central

favorably but not applying its factors). Similar ad hoc

non-Penn Central treatment was afforded temporary

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

568 U.S. 23 (2012) (citing Penn Central favorably

without analyzing the “factors”; on remand, the

Federal Circuit ignored Penn Central altogether).

In recent years, the Court has increasingly

gravitated toward finding per se physical takings

whenever it finds for the property owner. See, e.g.,

Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021)

(declining to apply Penn Central and holding that a

California regulation granting union organizers the

right to access agricultural employers’ property for up

to three hours per day, 120 days per year effected a per

se physical taking); Horne v. Dep’t of Agric., 576 U.S.

350 (2015) (holding that a regulation imposing a raisin

reserve requirement was a per se physical taking not

subject to the Penn Central analysis); Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419

(1982) (holding that a regulation that required

installation of a cable box on another’s property was a

permanent physical occupation that required

compensation).

The closest the Court has come to applying the

Penn Central factors in the past quarter century is to

approve them at a high level or in passing. In one case,

7

the petitioners did not preserve any Penn Central

argument, and the Court rejected the invitation to

create any per se rules for temporary regulatory

takings. Tahoe-Sierra Pres. Council, Inc. v. Tahoe

Reg’l Plan. Agency, 535 U.S. 302 (2002). In another,

the Court rejected the “substantially advances

legitimate state interests” test and directed lower

courts to apply Penn Central instead—but again, did

not apply it. Lingle v. Chevron U.S.A. Inc., 544 U.S.

528, 548 (2005). See also Sheetz v. Cnty. of El Dorado,

Cal., 601 U.S. 267, 274 (2024) (summarizing the Penn

Central approach in passing); Stop the Beach

Renourishment, Inc. v. Fla. Dep’t of Env’t Prot., 560

U.S. 702, 716 n.6 (2010) (same). But see Murr v.

Wisconsin, 582 U.S. 383, 405 (2017) (reducing the

Penn Central analysis to a single alternative

paragraph).

Predictably, such lack of guidance has resulted in

widespread confusion as to how Penn Central applies.

Is it a balancing test, a totality of the circumstances

test, or a required checklist? See, e.g., Adam R.

Pomeroy, Penn Central After 35 Years: A Three Part

Balancing Test or A One Strike Rule?, 22 Fed. Circuit

B.J. 677, 678–80 (2013) (discussing alternative

approaches to applying Penn Central). How many

factors are there, really? See, e.g., Kavanau v. Santa

Monica Rent Control Bd., 941 P.2d 851, 860 (Cal. 1997)

(identifying ten additional relevant considerations

from the Court’s precedents); Steven J. Eagle, The

Four-Factor Penn Central Regulatory Takings Test,

118 Dick. L. Rev. 601 (2014) (interpreting Penn

Central with four factors instead of three).

8

Jurists and legal commentators alike concur that

Penn Central raises more questions than it answers.

See, e.g., Nekrilov v. City of Jersey City, 45 F.4th 662,

682 (3d Cir. 2022) (Bibas, J., concurring) (observing

that “the lack of rules and guidance” regarding how to

apply the Penn Central factors “invites chaos”); Philip

Morris, Inc. v. Reilly, 312 F.3d 24, 36 (1st Cir. 2002)

(“[T]he jurisprudence in this area is convoluted and

subject to various interpretations.”); Eagle, The Four–

Factor Penn Central Regulatory Takings Test, supra,

at 605 (“[T]he Penn Central doctrine, with its lack of

objective criteria, does not impart knowledge of the

legal rights and obligations of either property owners

or public officials, resulting in protracted litigation

and arbitrary outcomes.” (footnotes omitted)).

II. Penn

Central

has

inconsistently at best.

been

applied

Amicus recognizes that the Court typically awaits

adequate percolation in the lower courts before

addressing thorny issues like the question presented.

But here, percolation is not the answer. Penn Central

was born out of limited percolation, see Byrne, supra,

at 413, and—of course—no hindsight. Since then, even

when courts have puzzled over the proper application

of Penn Central and recognized that it is the opposite

of clear, they lack authority to create alternatives

while Penn Central (and subsequent decisions

endorsing it) remain good law. E.g., Blackburn v. Dare

Cnty., 58 F.4th 807, 813 (4th Cir. 2023) (“Combine an

ad hoc balancing test with an open-ended factor and

you’re left with doctrine that is a ‘veritable mess.’ But

we must do our best.” (citation omitted)), cert. denied,

144 S. Ct. 277 (2023). It is thus not surprising that few

9

jurists have suggested alternatives. They likewise

lack the liberty of considering alternatives suggested

by commentators. The best the Court will get with the

benefit of time is more of the same uncertainty.

That is what Penn Central has given the regulatory

takings doctrine: uncertainty. That uncertainty plays

out in the analysis under each of the factors.

1. Investment-Backed Expectations. For this factor,

having obtained similar permits in the past may not

be enough; if the plaintiff knew that regulatory

approval was required, a court may still hold that he

lacks “reasonable, investment-backed expectations.”

See, e.g., Good v. United States, 189 F.3d 1355, 1361–

62 (Fed. Cir. 1999) (“In view of the regulatory climate

that existed when Appellant acquired the subject

property, Appellant could not have had a reasonable

expectation that he would obtain approval to fill ten

acres of wetlands in order to develop the land.”). And

the Seventh Circuit (applying federal law to interpret

the Wisconsin constitution) disregarded a plaintiff ’s

investment-backed expectations in being able to

maintain his business, long-permitted by local zoning,

merely because he had no right to transfer the

business. Bettendorf v. St. Croix Cnty., 631 F.3d 421,

425 (7th Cir. 2011) (“Bettendorf knew the conditional

language of the ordinance restricted his ability to

recoup the value of his commercial investments when

he was ready to sell.”); see also id. at 431 (Hamilton,

C.J., dissenting in relevant part) (comparing the

majority’s decision to forcing “a widow with a life

estate in her residence” to leave her property).

10

2. Economic Impact. How lower courts will

approach the economic impact factor is also uncertain.

Diminution of value up to 92% was insufficient to

effect a taking in Appolo Fuels, Inc. v. United States,

381 F.3d 1338, 1348, 1351 (Fed. Cir. 2004). See also

Colony Cove Props., LLC v. City of Carson, 888 F.3d

445, 451 (9th Cir. 2018) (“Thus, we have observed that

diminution in property value because of governmental

regulation ranging from 75% to 92.5% does not

constitute a taking.”); Warren Tr. v. United States, 107

Fed. Cl. 533, 569 (2012) (“[A]n 82% diminution of

value would not be a sufficient economic impact” even

under a Penn Central analysis.). Temporary takings

make the analysis even harder: The Federal Circuit

looks at the economic impact not only during the

taking period but as compared to the value of the

property as a whole after the taking period ended.

CCA Assocs. v. United States, 667 F.3d 1239, 1246–47

(Fed. Cir. 2011); see also First Eng. Evangelical

Lutheran Church of Glendale v. Los Angeles Cnty.,

Cal., 482 U.S. 304, 318–19 (1987) (recognizing that

temporary takings are compensable); Tahoe-Sierra,

535 U.S. at 323 (drawing a hard distinction between

physical takings and regulatory takings). But

property owners claiming diminution of value to their

property from the loss of parking spaces they did not

own still received a full Penn Central analysis in RDB

Properties, LLC v. City of Berwyn, 844 F. App’x 878,

881–82 (7th Cir. 2021) (affirming dismissal of the

claims).

11

3. Character of the Government Action. Apart from

the physical intrusion and appropriation that earn per

se treatment, it is likewise not clear what “character

of the government action” weighs in favor of finding a

taking. Especially in the context of unprecedented

pandemic regulations, courts applying Penn Central

have contorted themselves to conclude that no

compensable taking occurred. One county passed an

ordinance that barred property owners from entering

their property for 45 days, with only 4 days’ notice.

Blackburn, 58 F.4th at 814. The Fourth Circuit held

that was not “functionally equivalent to an ouster”

because property owners could have entered their

property before the ordinance took effect, and they

also retained the right to rent to anyone already inside

the county. Another case applied Penn Central to a

Covid-business-shutdown takings claim: The Sixth

Circuit affirmed dismissal at the pleadings stage

solely because the action was a temporary response to

protect public health—despite acknowledging that the

first two factors weighed in the plaintiffs’ favor and

despite rejecting the district court’s per se rule that

“no state response to a public-health emergency could

be a taking.” Bojicic v. DeWine, No. 21-4123, 2022 WL

3585636, at *9 (6th Cir. Aug. 22, 2022).

Even in the few cases where property owners

prevail, application of the factors is not consistent. The

First Circuit has described the “character of the

government action” factor as dispositive even when

the other two factors were met. Philip Morris, Inc., 312

F.3d at 45 (explaining that “different factors can be

dispositive” in different cases). Another case found a

taking

even

when

the

“investment-backed

expectations” element was “not implicated.” Youpee v.

12

Babbitt, 67 F.3d 194, 199–200 (9th Cir. 1995), aff’d,

519 U.S. 234 (1997). And in a third case, the Federal

Circuit affirmed the Claims Court’s finding of a taking

without even explicitly considering the “character of

the government action” factor. Yancey v. United States,

915 F.2d 1534, 1540–42 (Fed. Cir. 1990) (noting only

that “the nature of governmental activity” does not

“conclusively foreclose[ ] all claims for just

compensation”).

Many more examples of inconsistent and confusing

treatment exist where those come from. The only gain

from waiting is more confusion. A better solution is to

grant the petition for certiorari to solicit and consider

alternatives.

III. If the Court grants certiorari, it can consider

existing alternatives and invite others.

With the lower courts currently bound by Penn

Central, regulatory takings litigation provides little

opportunity for interested parties and jurists to

propose and advocate for alternative frameworks for

takings claims. A grant of certiorari here would

provide a new opportunity for ideas and analyses

outside the Penn Central framework. The Buckeye

Institute has identified the following four tests for

determining whether regulation rises to the level of a

“taking” and suggests that the Court invite discussion

of these and others.

A. Petitioners’ “Reasonable Rate of Return”

Test

Petitioners have proposed a “reasonable rate of

return” test for evaluating when a regulation’s effect

on property rights rises to the level of a “taking.” See

13

Pet. for Cert. at 28–32 (filed Jan. 14, 2025). This

proposed test has the benefit of using a common

economic concept that courts and jurors would be

familiar with from other contexts. See, e.g., United

Gas Pipe Line Co. v. FERC, 618 F.2d 1127 (5th Cir.

1980) (utility rates); Yellow Cab Co. v. City of Chicago,

938 F. Supp. 500 (N.D. Ill. 1996) (taxicab rates); Meyer

v. Amerada Hess Corp., 541 F. Supp. 321 (D.N.J. 1982)

(gas station franchise); Resolution Tr. Corp. v. Town of

Highland Beach, 18 F.3d 1536 (11th Cir.) (real

property; affirming jury verdict based in part on

expert testimony on the reasonable rate of return),

reh’g en banc granted, opinion vacated, 42 F.3d 626

(11th Cir. 1994). Petitioners’ briefs speak well for

themselves and need no elaboration here.

B. The Penn Central Dissent Test

The Penn Central dissent proposed a general rule

that any destruction of the right to possess, use, or

dispose of the physical property can constitute a

taking. Penn Cent. Transp. Co., 438 U.S. at 142–143

(Rehnquist, J., dissenting). Joined by Chief Justice

Burger and Justice Stevens, then-Justice Rehnquist

first broadly defined “property” as “the group of rights

inhering in the citizen’s relation to the physical thing,

as the right to possess, use and dispose of it . . . every

sort of interest the citizen may possess.” Id.

(Rehnquist, J., dissenting) (quoting United States v.

Gen. Motors Corp., 323 U.S. 373, 377–78 (1945))

(emphasis omitted). “Taking,” he reasoned, refers to

“the deprivation of the former owner,” the “destruction

of property” rights. Id. at 143–44 (Rehnquist, J.,

dissenting).

14

In practice, a taking might be conceptualized as

“nonconsensual servitude not borne by any

neighboring or similar properties.” Id. at 143

(Rehnquist, J., dissenting). “Property is taken in the

constitutional sense when inroads are made upon an

owner’s use of it to an extent that, as between private

parties, a servitude has been acquired.” Id. at 146

(Rehnquist, J., dissenting) (quoting United States v.

Dickinson, 331 U.S. 745, 748 (1947)). Justice

Rehnquist also looked at the investment return on the

property, explaining, “The Court has frequently held

that, even where a destruction of property rights

would not otherwise constitute a taking, the inability

of the owner to make a reasonable return on his

property requires compensation under the Fifth

Amendment.” Id. at 149 (Rehnquist, J., dissenting)

(emphasis in original). However, he went on to explain

that

the converse is not true. A taking does

not become a noncompensable exercise of

police power simply because the

government in its grace allows the owner

to make some “reasonable” use of his

property. “[I]t is the character of the

invasion, not the amount of damage

resulting from it, so long as the damage

is substantial, that determines the

question whether it is a taking.”

Id. (Rehnquist, J., dissenting) (quoting United States

v. Cress, 243 U.S. 316, 328 (1917)). Justice Rehnquist

noted that in conducting the analysis, the “Fifth

Amendment must be applied with ‘reference to the

uses for which the property is suitable, having regard

15

to the existing business or wants of the community, or

such as may be reasonably expected in the immediate

future.” Id. at 143 n.6 (Rehnquist, J., dissenting)

(emphasis omitted) (quoting Boom Co. v. Patterson, 98

U.S. 403, 408 (1879)).

The only exceptions he recognized were for

nuisance—if “the forbidden use is dangerous to the

safety, health, or welfare of others”—id. at 145

(Rehnquist, J., dissenting) (emphasis added), and

regulations with broad application that “secure[ ] an

average reciprocity of advantage,” such as zoning

regulations, id. at 147 (Rehnquist, J., dissenting).

Zoning regulations are not a taking because they do

not single out one property, and because those who are

restricted benefit from the restrictions on others. See

id. at 138–42, 147–48 (Rehnquist, J., dissenting). The

nuisance exception recognizes that prohibiting uses

that are “injurious to the health, morals, or safety of

the community, cannot, in any just sense, be deemed a

taking or an appropriation of property for the public

benefit.” Id. at 144 (Rehnquist, J., dissenting) (quoting

Mugler v. Kansas, 123 U.S. 623, 688–689 (1887)). If the

government is preventing a noxious use, it is not

relevant that it is singling out a piece of property. Id.

at 145. In this conception, the nuisance exception “is

not coterminous with the police power itself. The

question is whether the forbidden use is dangerous to

the safety, health, or welfare of others.” Id. (Rehnquist,

J., dissenting) (emphasis added).

16

C. Judge Bibas’s Test

In response to Justice Thomas’s recent invitation,

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

141 S. Ct. 731, 731 (2021) (Thomas, J., dissenting from

denial of cert.) (describing Penn Central as a

“standardless standard”), Third Circuit Judge

Stephanos Bibas recently proposed another

alternative in his concurring opinion in Nekrilov, 45

F.4th 662. Returning to the text of the Fifth

Amendment, Judge Bibas focused on the Foundingera understanding of three separate concepts:

“taking,” “private property,” and “for public use,

without just compensation.” Nekrilov, 45 F.4th at 683

(Bibas, J., concurring).

Judge Bibas reasoned that the right to property

“extended beyond physical possession” to include “free

use enjoyment, and disposal of all of [one’s]

acquisitions, without any control or diminution.” Id.

(Bibas, J., concurring) (quoting 1 William Blackstone,

Commentaries 134 (1765)). He further reasoned that

founding-era uses of the term “take” and the concept

of “taking” likewise include “both physical seizure and

non-physical deprivation.” Id. at 684 (Bibas, J.,

concurring) (citing historical sources). From these

observations, Judge Bibas concluded that a taking

includes any deprivation of a property right,

“regardless of whether they involved physical

intrusions.” Id. at 684 (Bibas, J., concurring).

Judge Bibas then turns to the phrase “for public

use.” Id. (Bibas, J., concurring). Citing a contemporary

dictionary, he concluded that the term “means

pressing property into a government-approved use,”

but would not include “bans or limits.” Id. (Bibas, J.,

17

concurring) (citing Jed Rubenfeld, Usings, 102 Yale

L.J. 1077, 1114–18, 1150 (1993)). This component

supports the distinction between compensable takings

and merely “preventing a nuisance.” Id. (Bibas, J.,

concurring). Judge Bibas proposed relying on “the

historical common law” for the scope of permissible

regulations to “forbid[ ] nuisances and impose[ ]

regulatory burdens on land use.” Id. at 686 (Bibas, J.,

concurring).

D. Professor Epstein’s “Bundle of Rights”

Test

A fourth alternative, proposed by Professor

Richard Epstein, focuses on protecting property rights

as a “bundle of rights.” Every law student learns that

real property rights consist of a bundle of sticks, with

each stick representing a right; the bundle is

equivalent to owning the entire property. Each stick or

even twig can be transferred or conveyed. The “bundle

of sticks” or “bundle of rights” test is “one of strict

proportion: the greater the taking, the greater the

restriction, then the greater the compensation that

must be paid.” Richard A. Epstein, Lucas v. South

Carolina Coastal Council: Brief of the Institute for

Justice as Amicus Curiae in Support of Petitioner, 25

Loy. L.A. L. Rev. 1233, 1243 (1992). This theory does

not distinguish between physical takings and

regulatory takings. It asks only whether one of the

rights has been burdened.

The “bundle of rights” test rejects Penn Central’s

“investment-backed expectations” factor and Lucas’s

all-economically-beneficial-uses test. See Richard A.

Epstein, Lucas v. South Carolina Coastal Council: A

Tangled Web of Expectations, 45 Stan. L. Rev. 1369

18

(1993). The present owner’s expectation neither

increases nor decreases the number or nature of the

rights in the bundle. And a “landowner’s predictions of

impending regulation hardly amount to an acceptance

of the risk of the economic consequences.” Id. at 1385.

Expectations may depend on many things, including

when and how the landowner acquired the property.

But those expectations should not matter. “Only one

thing is relevant: The greater the taking, the greater

the payment. What is taken is what counts; what is

retained, or the ratio between retained and taken

property, is irrelevant [to whether the taking is

compensable] (except for determining any potential

severance damages).” Id. at 1376. Thus, Epstein

argued in his Lucas amicus brief that “government

takings of any sort constitute a transaction. . . . The

Fifth Amendment allows the government to compel a

landowner into the “sale” but then mandates just

compensation for that transaction.” Epstein, Brief of

the Institute for Justice as Amicus Curiae in Support

of Petitioner, supra, at 1242. Allowing the taking is

enough to protect the public interest; the government

need not also have the power “to compel the

surrender . . . without payment of any compensation.”

Id.

However, Professor Epstein’s theory still

anticipates

“regulatory”

takings

without

compensation when the restriction is “inherent in the

law of nuisance.” Id. Nuisance law emanates from

both statutory and common law. And looking at the

laws of nuisance, “[w]hatever land uses may be

forbidden by neighbors under nuisance law without

compensation may similarly be forbidden by the state

19

without compensation.” Epstein, A Tangled Web,

supra, at 1389.

***

Penn Central need not dictate the state of Takings

Clause jurisprudence indefinitely. Its origin is

unmoored from the text and history, and its

application is inconsistent and uncertain, but

alternatives exist. A grant of certiorari here would

invite the analysis needed to rebuild the law of

regulatory takings on the solid foundation of the

Constitution.

CONCLUSION

The Buckeye Institute therefore urges the Court to

grant the petition for certiorari.

Respectfully submitted,

David C. Tryon

Counsel of Record for Amicus Curiae

Elisé K. Yarnell

Alex M. Certo

THE BUCKEYE INSTITUTE

88 East Broad Street, Suite 1300

Columbus, OH 43215

(614) 224-4422

D.Tryon@BuckeyeInstitute.org

Attorneys for Amicus Curiae

February 18, 2025