Amicus Curiae Brief — Murr v. Wisconsin, 136 S. Ct. 890 (2016) (No. 15-214)

Styne CO. ut, US.

FILED

APR 15 2016

OFFICE OF THECLERK |

No. 15-214

gnu The

Supreme Court of the Gnited States

.

JOSEPH P. MURR ET AL...

Petitioners,

Vv.

STATE OF WISCONSIN AND ST. CROIX COUNTY,

Respondents.

S

On Writ of Certiorari

to the Court of Appeals of Wisconsin,

District [iI

+

BRIEF OF AMICUS CURIAE

CHAMBER OF COMMERCE

OF THE UNITED STATES OF AMERICA

IN SUPPORT OF PETITIONERS

JOSEPH P. MURR ET AL.

+

U.S. CHAMBER LITIGATION Horvitz & LEVY LLP

CENTER, INC. JEREMY B. ROSEN

KATHRYN COMERFORD TODD FELIX SHAFIR

SHELDON GILBERT (Counsel of Record)

1615 H STREET, N.W. 15760 VENTURA BOULEVARD,

WASHINGTON, D.C. 20062 18TH FLOOR

(202) 463-5337 ENCINO, CALIFORNIA 91436

(818) 995-0800

fshafir@horvitzlevy.com

Counsel for Amicus Curiae

Cham ber of Commerce of the United States of America

+ new af Congre™

i

TABLE OF CONTENTS

Page

ee ill

INTEREST OF AMICUS CURIAE ................000c0000000 1

SUMMARY OF ARGUMENT......00....00.....ccccceeeeeeeeeeees 2

FET tncindtictinnsicnmniecastiensnenemessaneieninnisenrinnni 5

I. PENN CENTRAL’S MULTI-FACTOR

TEST FOR PARTIAL REGULATORY

TAKINGS HAS FOSTERED INCON-

SISTENT TAKINGS JURISPRUDENCE........ 5

Il. IN THE ABSENCE OF MEANINGFUL

GUIDANCE FROM THIS COURT

ABOUT HOW TO DEFINE THE

PARCEL AS A WHOLE, LOWER

COURTS HAVE OFTEN UTILIZED AD

HOC FACTUAL CONSIDERATIONS

TO INCONSISTENTLY DEFINE THE

STE SII cotvcreveressseseuertsecasesererees 11

It. THERELEVANT PARCEL SHOULD BE

DEFINED BY AN OBJECTIVE ASSESS-

MENT OF WHETHER THE TRACT OF

LAND HAS INDEPENDENT ECO-

ee 14

as

The “common ownership” test to

determine the relevant parcel, as

adopted by the Wisconsin Court of

Appeals, results in the arbitrary

and unpredictable extinction of

The relevant parcel of land here

should be defined based on an

objective test that examines the

land’s independent economic

il

TABLE OF AUTHORITIES

Cases

Andrus v. Allard,

444 U.S. 51 (1979) .........0.0sc-cececescececeseseeees

Ark. Game & Fish Comm'n v. United

States,

Ee Ee Se iccctctivcncetenscessiascannsnnss

Armstrong v. United States,

ee Ce i Git icconesccscscpcrerccenacccensteseess

Dunes W. Golf Club, LLC v. Town of

Mount Pleasant,

401 S.C. 280, 737 S.E.2d 601 (2013) .......

E. Enters. v. Apfel,

BD Cee Gree CP cccececcrcs nsec sesceveccoonceees

Giovanella v. Conservation Comm’n

of Ashland,

447 Mass. 720, 857 N.E.2d 451

Keystone Bituminous Coal Ass'n v.

DeBenedictis,

8, ee

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

544 U.S. 528 (2005)....-cecceccceccessesseseeeeneeees

Page(s)

1V

Loretto v. Teleprompter Manhattan

CATV Corp.,

LAE 15

Lost Tree Vill. Corp. v. United States,

707 F.3d 1286 (Fed. Cir. 20138) .................cccccsccee. 19

Lucas v. S.C. Coastal Council,

SS SE i cctcccccececescosscetescoscessncess passim

Nollan v. Cal. Coastal Comm'n,

CO ES 8, 10

Pa. Coal Co. v. Mahon,

ET 1,6

Palazzolo v. Rhode Island,

3 8 | _, eenne 4,13, 14,15

Penn Central Transportation Co. v. City

of New York,

I a ccclitidapesntelion passim

Tahoe-Sierra Pres. Council, Inc. v.

Tahoe Regi Planning Agency,

no cacnemnssnnnadensiie 2,4, 15

Williamson Cty. Reg’l Planning Comm’n

v. Hamilton Bank of Johnson City,

EN 10

Constitutions

United States Constitution, amend. V............. passim

Vv

Miscellaneous

Stephen Durden, Unprincipled

Principles: The Takings Clause

Exemplar, 3 Ala. C.R. & C.L. L. Rev.

SRE Se

Steven J. Eagle, Penn Central and Its

Reluctant Mu/ftis, 66 Baylor L. Rev. 1

AR EAAAEN al EE

Steven J. Eagle, Property Tests, Due

Process Tests and Regulatory

Takings Jurisprudence, 2007 B.Y.U.

ii ee TE cnctiaiicnsincipencnscnenvenecessesace

Steven J. Eagle, The Four-Factor Penn

Central Regulatory Takings Test,

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

Steven J. Eagle, The Parcel and Then

Some: Unity of Ownership and the

Parcel as a Whole, 36 Vt. L. Rev. 549

Richard A. Epstein, The Ebbs and Flows

in Takings Law: Reflections on the

Lake Tahoe Case, 2002 Cato Sup. Ct.

re rR cticdacesenintnnsvicianecccennses

Richard A. Epstein, The Seven Deadly

Sins of Takings Law: The Dissents in

Lucas v. South Carolina Coastal

Council, 26 Loy. L.A. L. Rev. 955

vl

Richard A. Epstein, The Takings Clause

and Partial Interests in Land: On

Sharp Boundaries and Continuous

Distributions, 78 Brook. L. Rev. 589

elena en A a 2, 3,9

John E. Fee, Of Parcels and Property, in

Taking Sides on Takings Issues 101

(Thomas E. Roberts, ed., 2000).......... 16, 17, 18, 19

John E. Fee, The Takings Clause as a

Comparative Right, 76 S. Cal. L.

a 6, 9, 13, 17

John E. Fee, Unearthing the Denomina-

tor in Regulatory Taking Claims, 61

U. Chi. L. Rev. 1535 (1994)......3, 13, 14, 16, 17, 19

Mark Fenster, The Stubborn

Incoherence of Regulatory Takings,

28 Stan. Envtl. L.J. 525 (2009)..............02...0.000 7,9

Gideon Kanner, Making Laws and

Sausages: A Quarter-Century

Retrospective on Penn Central

Transportation Co. v. City of New

York, 13 Wm. & Mary Bill Rts. J.

TENG TEE, ES CR 3, 7, 8, 9, 10, 11

Marc R. Lisker, Regulatory Takings and

the Denominator Problem,

27 Rutgers Ld. 663 (1996).......c.ccesccceseeeoeenes 14, 16

vil

James L. Oakes, ‘Property Rights’ in

Constitutional Analysis Today, 56

, Sn ae 8

Adam R. Pomeroy, Penn Central After

35 Years: A Three Part Balancing

Test or a One Strike Rule?, 22 Fed.

ESET 8, 10

R.S. Radford & Luke A. Wake,

Deciphering and Extrapolating:

Searching for Sense in Penn Central,

38 Ecology L.Q. 731 (2011) ........2.......cccceceeeeees 9, 10

1

INTEREST OF AMICUS CURIAE'

The Chamber of Commerce of the United States

of America (the Chamber) is the world’s largest

business federation, representing 300,000 direct

members and indirectly representing the interests of

more than three million businesses and professional

organizations of every size. The Chamber routinely

advocates for the interests of the business community

in courts across the nation by filing amicus curiae

briefs in cases implicating issues of vital concern to the

nation’s business community. This case is of

significant interest to the Chamber because it calls on

this Court to address the extent to which the United

States Constitution safeguards private property rights

against intrusive government regulations.

The Fifth Amendment provides that private

property shall not be taken without just compensation,

and “while property may be regulated to a certain

extent, if regulation goes too far it will be recognized as

a taking” for which the government owes

compensation. Pa. Coal Co. v. Mahon, 260 U.S. 393,

413-15 (1922). But lower courts today are muddled

over how to address such regulatory takings. The

appellate court below found no compensable taking of

‘ This brief was authored by amicus curiae and its

counsel, and was not authored in whole or in part by counsel for a

party. No one other than amicus curiae, its members, or its

counsel has made any monetary contribution to the preparation or

submission of this brief. All parties provided blanket written

consent to the filing of amicus curiae briefs, and this written

consent is on file with this Court.

2

one parcel of land here for the arbitrary and ad hoc

reason that petitioners also owned the adjoining parcel

of land.

This case is important to property owners,

including the Chamber’s members, who have an

interest in ensuring that the Fifth Amendment’s

Takings Clause continues to safeguard traditional

forms of property ownership in the United States.

+

SUMMARY OF ARGUMENT

In Penn Central Transportation Co. v. City of

New York, 438 U.S. 104, 123-24 (1978), this Court

declined “to develop any ‘set formula’ for determining”

when a governmental regulation amounts to a taking

under the Fifth Amendment. Instead, the Court

decided that this determination of whether a

regulation had gone too far, and thereby stepped over

the constitutional line set by the Fifth Amendment,

should be made via “ad hoc, factual inquiries” through

a multi-factor balancing test. Jd. at 124.

For decades since Penn Central, this Court has

followed a “polestar” of ad hoc adjudication for “partial

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

Tahoe Reg Planning Agency, 535 U.S. 302, 326 & n.23

(2002) (citation omitted), “plungfing]” the Court’s

takings jurisprudence “into conceptual darkness” in the

form of a “mushy balancing test” that throws any

number of facts “into the hopper to determine whether

any compensation is owed at all,” Richard A. Epstein,

The Takings Clause and Partial Interests in Land: On

3

Sharp Boundaries and Continuous Distributions, 78

Brook. L. Rev. 589, 596, 608 (2013). The resulting

confusion has served to embolden regulators to pursue

rights-restricting policies. See, e.g., Gideon Kanner,

Making Laws and Sausages: A Quarter-Century

Retrospective on Penn Central Transportation Co. v.

City of New York, 13 Wm. & Mary Bill Rts. J. 679, 681

(2005).

Among the greatest mysteries fostered by this ad

hoc approach is how to define the unit of property

against which the Penn Central balancing test’s factors

must be measured. According to Penn Central, takings

jurisprudence “does not divide a single parcel into

discrete segments,” and the Penn Central balancing

test instead focuses on the property owner’s “parcel as

a whole.” 438 U.S. at 130-31. Consequently, because

the Penn Central factors require courts “to compare the

value that has been taken from the property with the

value that remains in the property, one of the critical

questions” that must be answered in order to apply the

balancing test “is determining how to define the unit of

property ‘whose value is to furnish the denominator of

the fraction” —a unit of property this Court called the

“parcel as a whole.” Keystone Bituminous Coal Ass’n

v. DeBenedictis, 480 U.S. 470, 497 (1987) (citations

omitted).

But the Court “has provided little guidance as to

what constitutes a ‘parcel as a whole,” especially in the

context of physical lots of land that can be identified on

a map. John E. Fee, Unearthing the Denominator in

Regulatory Taking Claims, 61 U. Chi. L. Rev. 1535,

1537 n.7, 1544 (1994) {hereinafter Fee, Unearthing the

Denominator]. In the absence of meaningful guidance

4

from this Court, lower courts disagree over how to

define the relevant parcel of property, Pet. 17-20—a

definition that can often be outcome determinative

under the balancing test, Steven J. Eagle, The Four-

Factor Penn Central Regulatory Takings Test, 118

Penn. St. L. Rev. 601, 631 (2014) [hereinafter Eagle,

Takings Test].

Thus, what constitutes the parcel as a whole has

remained a “difficult, persisting question” to this day,

Palazzolo v. Rhode Island, 533 U.S. 606, 631 (2001),

with enormous “uncertainty” generated due to

“inconsistent pronouncements by the Court” on this

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

1016 n.7 (1992). The Court’s failure to provide

consistent, meaningful guidance on how to define the

“parcel as a whole” has been evident across the full

spectrum of property rights—from air rights, Penn

Central, 438 U.S. at 129-31, to mining rights, Keystone,

480 U.S. at 496-99, to personal property, Andrus v.

Allard, 444 U.S. 51, 54, 64-66 (1979), and to a temporal

interest in developing land during a 32-month

moratorium on development, Tahoe-Sierra, 535 U.S. at

306, 321-32, to na_ne just a few examples. Because of

the lack of clear guidance from this Court, the lower

courts all too often engage in an overly-complicated

and rights-restrictive “balancing” in regulatory takings

cases.

This case presents the Court with an

opportunity to move toward a less ad hoc definition of

the “parcel as a whole.” The Court should adopt a clear

test defining the relevant parcel of a physical tract as

an identifiable segment of land that, but for the

challenged regulation, would have at least one

5

economically viable use when considered independent

of the surrounding tracts—an objective standard far

different from the arbitrary and discriminatory one

employed by the Court of Appeals of Wisconsin in this

case. At the very least, the Court should hold that

where the same person owns two adjoining tracts of

land and treats those tracts as distinct parcels of

property, the relevant parcel is the one tract that was

taken due to the regulatory scheme rather than both

lots—a standard that comports with this Court's

historical focus on landowners’ understanding of their

property rights.

*

ARGUMENT

I, PENN CENTRAL’S MULTI-FACTOR TEST

FOR PARTIAL REGULATORY TAKINGS

HAS FOSTERED INCONSISTENT

TAKINGS JURISPRUDENCE.

“For the Framers of our Constitution, the

principles of good government started with the

protection of private property—that guardian of all

other rights.” Richard A. Epstein, The Ebbs and Flows

in Takings Law: Reflections on the Lake Tahoe Case,

2002 Cato Sup. Ct. Rev. 5, 5 (2001-2002) [hereinafter

Epstein, Ebbs and Flows]. Among these protections,

the Fifth Amendment’s Takings Clause guarantees

“that private property shall not be taken for a public

use without just compensation,” Armstrong v. United

States, 364 U.S. 40, 49 (1960), thereby guarding

against the “natural tendency of human nature” to

seize more and more private property through the

6

exercise of the government’s “police power,” Pa. Coal

Co., 260 U.S. at 415. The Takings Clause has therefore

served as one of the foundations for our nation’s

political stability. Epstein, Ebbs and Flows, supra, at

5.

For much of its initial history, there was

relatively little debate about the meaning of the

Takings Clause. John E. Fee, The Takings Clause as a

Comparative Right, 76 S. Cal. L. Rev. 1003, 1009

(2003) [hereinafter Fee, Comparative Right]. This

changed with the rise of modern government, id., as

governmental regulation sharply increased in the late

nineteenth century and in the twentieth century,

Steven J. Eagle, Penn Central and Its Reluctant

Muftis, 66 Baylor L. Rev. 1, 9-14 (2014).

Confronted with this flood of ever-growing

regulatory laws, this Court warned that “[wle are in

danger of forgetting that a strong public desire to

improve the public condition is not enough to warrant

achieving the desire by a shorter cut than the

constitutional way of paying for the change,” and thus

explained that “if regulation goes too far it will be

recognized as a taking” under the Fifth Amendment.

Pa. Coal Co., 260 U.S. at 415-16. Ever since, this

Court has struggled with “how to discern how far is ‘too

far.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538

(2005).

In Penn Central, the Court stated that it was

“unable to develop any ‘set formula’ for determining”

when a regulation amounts to a taking under the Fifth

Amendment, and insisted that this determination must

be made through “essentially ad hoc, factual inquiries”

7

that would depend largely on the circumstances of each

case. 438 U.S. at 124. In doing so, Penn Central

explained that these fact-based inquiries were to be

guided by “several factors,” namely (1) “[t]he economic

impact of the regulation,” (2) “the extent to which the

regulation has interfered with distinct investment-

backed expectations,” and (3) “the character of the

governmental action.” Id.

“The Court gave no clue as to the meaning of the

language used in the formulation of these factors, what

sort of evidence would tend to prove their existence,

what weight to assign to each of them, and how they

translate into a proper inverse condemnation cause of

action that, if proved, would entitle the aggrieved

plaintiff to relief as a matter of law.” Kanner, supra, at

690.

Since Penn Central, this Court has adopted

categorical formulas that deem regulatory actions to be

“per se takings for Fifth Amendment purposes” where

the “government requires an owner to suffer a

permanent physical invasion of her property” and

where regulations “completely deprive an owner of ‘all

economically beneficial usfe]’ of her property.” Lingle,

544 U.S. at 538 (citation omitted). Outside those

contexts, however, this Court continues to insist that

“regulatory takings challenges are [to be] governed” by

Penn Central's multi-factor test. Id.

Penn Central’s “indeterminate, inclusive

balancing test” provides a “chaotic foundation” for

takings jurisprudence. Mark Fenster, The Stubborn

Incoherence of Regulatory Takings, 28 Stan. Envtl. LJ.

525, 576 (2009). “Under Penn Central's vague, multi-

8

factor approach one cannot reliably tell what ‘the law’

is, and how it applies to the controversy at hand

without first taking years to let judges have a go at it

on an ad hoc basis in each of the many factual variants

of regulatory impositions on rights of private property

ownership.” Kanner, supra, at 691. Thus, as the late

U.S. Circuit Judge James Oakes explained, Penn

Central “permits purely subjective results, with the

conflicting precedents simply available as makeweights

that may fit pre-existing value judgments as to the

relative worth of the legislation as opposed to the

importance or dollar value of the property rights at

stake.” James L. Oakes, ‘Property Rights’ in

Constitutional Analysis Today, 56 Wash. L. Rev. 583,

613 (1981).

As a result, the Penn Central test has generated

a “regulatory takings jurisprudence” that “has long

been infamous for its incoherence.” Steven J. Eagle,

Property Tests, Due Process Tests and Regulatory

Takings Jurisprudence, 2007 B.Y.U. L. Rev. 899, 899

(2007) [hereinafter Eagle, Property Tests]. “Even the

wisest lawyers would have to acknowledge great

uncertainty about the scope of this Court’s takings

jurisprudence.” Nollan v. Cal. Coastal Comm'n, 483

U.S. 825, 866 (1987) (Stevens, J., dissenting).

Commentators have therefore repeatedly

pointed out that takings jurisprudence under Penn

Central is “little more than muddled and incoherent, if

not incomprehensible, rhetoric.” Adam R. Pomeroy,

Penn Central After 35 Years: A Three Part Balancing

Test or a One Strike Rule?, 22 Fed. Cir. B.J. 677, 678

(2013); accord, e.g., Stephen Durden, Unprincipled

Principles: The Takings Clause Exemplar, 3 Ala. C.R.

9

& C.L. L. Rev. 25, 27-28 (2013); Eagle, Takings Test,

supra, at 632; Richard A. Epstein, The Seven Deadly

Sins of Takings Law: The Dissents in Lucas v. South

Carolina Coastal Council, 26 Loy. L.A. L. Rev. 955, 966

(1993); Fee, Comparative Right, supra, at 1006;

Fenster, supra, at 576; R.S. Radford & Luke A. Wake,

Deciphering and Extrapolating: Searching for Sense in

Penn Central, 38 Ecology L.Q. 731, 732 (2011).

As one commentator has observed, “[wle

properly think of law as a set of coherent rules that

govern the conduct of people and institutions, that

lawyers can explain to clients, and that enable citizens

to ascertain which of their expectations are

enforceable, and which courses of action on their part

are legal vel non,” and therefore Penn Central's “overtly

ad hoc decision-making regime is antithetical to a rule

of law.” Kanner, supra, at 724-25. “[T]o say that ‘the

law’ is unknowable without first engaging in a lengthy

and costly multi-year litigation process that leads to ad

hoc results arrived at after the court of last resort first

makes ‘actual inquiries’ years after the trial has been

completed, is to say that there is no law worthy of the

name.” Jd. at 725.

That this ad hoc approach has yielded

inconsistent and unpredictable results, particularly

among the lower courts, has not gone unnoticed by

many Justices of this Court. See, e.g., E. Enters. v.

Apfel, 524 U.S. 498, 540-41 (1998) (Kennedy, J.,

concurring & dissenting) (with respect to “the

regulatory takings concept,” “it is fair to say it has

proved difficult to explain in theory and to implement

in practice,” and “[c]jases attempting to decide when a

regulation becomes a taking” under Penn Central's test

10

“are among the most litigated and perplexing in

current law”); Nollan, 483 U.S. at 866 (Stevens, J.,

dissenting) (acknowledging the “great uncertainty”

generated by “this Court’s takings jurisprudence’);

Williamson Cty. Reg’ Planning Comm'n v. Hamilton

Bank of Johnson City, 473 U.S. 172, 199 n.17 (1985)

(Blackmun, J.) (acknowledging that “{t]he attempt to

determine when regulation goes so far that it becomes,

literally or figuratively, a ‘taking” under this Court’s

jurisprudence “has been called the ‘lawyer’s equivalent

of the physicist’s hunt for the quark” (citation

omitted)).

In short, “regulatory takings law is in disarray”

today. Pomeroy, supra, at 678. Due to the “vagueness

and unpredictability” of Penn Central's factors, takings

law “has become an economic paradise for specialized

lawyers, a burden on the judiciary, as well as an

indirect impediment to would-be home builders, and an

economic disaster for would-be home buyers and for

society at large.” Kanner, supra, at 681 (footnote

omitted); see also Radford & Wake, supra, at 732.

Given “the absence of discernable rules” in Penn

Central, lawyers advising both regulators and

landowners “are unable to ascertain which facts of the

controversy will prove to be the operative, much less

decisive, [considerations] nor the prospective likelihood

of litigational success or failure.” Kanner, supra, at

692; accord Radford & Wake, supra, at 736. This has

“encouraged regulators to pursue policies that have

sharply reduced the supply of housing and are

implicated in the ongoing, mind-boggling escalation in

home prices,” Kanner, supra, at 681, to name just one

economic consequence of the ongoing confusion.

11

Moreover, Penn Central’s “fuzzy” multi-factor

test “encourages litigation,” generating a “climate of

uncertainty” that too often prompts the government to

“resist even meritorious claims, playing the odds and

counting on the courts’ propensity to rule in their favor

for sometimes unarticulated, ideological, or fiscal

reasons.” Id. at 682, 692.

As explained below, the Chamber urges the

Court to resist the temptation to define the relevant

parcel here in the same ad hoc fashion that it treats

the Penn Central factors themselves. Instead, the

Court should adopt a clear definition of the relevant

parcel for the category of cases in which property

owners maintain that regulations took a tract of land.

ll. IN THE ABSENCE OF MEANINGFUL

GUIDANCE FROM THIS COURT ABOUT

HOW TO DEFINE THE PARCEL AS A

WHOLE, LOWER COURTS HAVE OFTEN

UTILIZED AD HOC FACTUAL CONSID-

ERATIONS TO INCONSISTENTLY DE-

FINE THE RELEVANT PARCEL.

Since Penn Central never explained precisely

what its multiple factors meant or how they were

supposed to guide the ad hoc factual inquiries that

Penn Central called for, this Court, lower courts, and

litigants have struggled to impart meaningful

substance to Penn Central’s balancing test. See

Kanner, supra, at 681-82, 690. Among the most

confounding and important questions fostered by Penn

Central's test is how to define the so-called “parcel as a

whole.”

12

In Penn Central, the property owners argued

that a regulatory law went too far, and therefore

amounted to a taking under the Fifth Amendment,

because it restricted their “air rights” above their

property. 438 U.S. at 128-30. In effect, the owners

argued that they could “establish a ‘taking’ simply by

showing that they have been denied the ability to

exploit a property interest that they heretofore had

believed was available for development,” an argument

this Court deemed “untenable.” Jd. at 130. According

to Penn Central, ““Taking’ jurisprudence does not

divide a single parcel into discrete segments and

attempt to determine whether rights in a particular

segment have been entirely abrogated.” Jd. Instead,

the Penn Central factors focus on an owner’s “rights in

the parcel as a whole.” Jd. at 130-31.

As the dissent prophesied in Penn Central, the

definition of the relevant parcel has since become the

linchpin to the Penn Central multi-factor test. See id.

at 149 n.13 (Rehnquist, J., dissenting) (explaining that

courts would need to “define the particular property

unit that should be examined”); see also Keystone, 480

U.S. at 514-15 (Rehnquist, C.J., dissenting) (“The need

to consider the effect of regulation on some identifiable

segment of property [under Penn Central] makes all

important the admittedly difficult task of defining the

relevant parcel.”); Epstein, Ebbs and Flows, supra, at

22.

This is so because one of the “critical” threshold

questions that must be answered before applying the

Penn Central factors is “how to define the unit of

property” against which the factors are meant to be

measured. Keystone, 480 U.S. at 497; accord, e.g.,

13

Giovanella v. Conservation Comm'n of Ashland, 447

Mass. 720, 725, 857 N.E.2d 451, 456 (2006); Dunes W.

Golf Club, LLC v. Town of Mount Pleasant, 401 S.C.

280, 305, 737 S.E.2d 601, 614 (2013).

Much as Penn Central declined to explain the

meaning of its factors, Penn Central likewise did not

decide “how to determine the relevant parcel of land”

against which its factors were to be measured. Fee,

Unearthing the Denominator, supra, at 1535-36. And

in the decades since, the Court “has provided only

minimal guidance” on this issue, “[rlepeated([ly]

admoni[shing] [lower courts] to use the ‘parcel as a

whole” while “do[ing] little to define the contours of

that whole parcel in any particular case.” Giovanella,

447 Mass. at 726, 857 N.E.2d at 456. As a result, the

vital question of what constitutes the parcel as a whole

has remained a “difficult, persisting question” to this

day, Palazzolo, 533 U.S. at 631, in no small measure

because “the rhetorical force” of this Court’s prior

precedent has been far “greater than its precision” on

this issue, with the resulting “uncertainty” producing

“Inconsistent pronouncements by the Court,” Lucas,

505 U.S. at 1016 n.7. Indeed, the problem of defining

the relevant parcel has become a “conceptual black

hole.” Dunes W. Golf Club, LLC, 401 S.C. at 306, 737

S.E.2d at 615 (citation omitted); accord Fee,

Comparative Right, supra, at 1032.

Moreover, in the absence of meaningful guidance

from this Court on the definition of the relevant parcel,

lower courts have “used a variety of fact-specific and

often inconsistent methods to define the :relevant

parcel,” especially in cases (like the one here) where

property owners have claimed that government

14

regulations took physical tracts of land. Fee,

Unearthing the Denominator, supra, at 1545-49; see

also Steven J. Eagle, The Parcel and Then Some: Unity

of Ownership and the Parcel as a Whole, 36 Vt. L. Rev.

549, 564 (2012); Marc R. Lisker, Regulatory Takings

and the Denominator Problem, 27 Rutgers L.J. 663,

668 (1996). This ad hoc approach to defining the parcel

as a whole is unsurprising given that the concept of

such a parcel derives from, and is meant to influence,

the equally ad hoc, fact-specific Penn Central factors.

See Eagle, Takings Test, supra, at 632.

The Court now has an opportunity to define the

“parcel as a whole’ concept” in the commonly-recurring

context raised by this case, Pet. i, and to thereby

finally settle the “persisting question of what is the

proper denominator in the takings fraction,” Palazzolo,

533 U.S. at 631, in the setting of physical tracts of land

where the question arises most often and spawns the

greatest division among lower courts.

lil, THE RELEVANT PARCEL SHOULD BE

DEFINED BY AN OBJECTIVE ASSESS-

MENT OF WHETHER THE TRACT OF

LAND HAS INDEPENDENT ECONOMIC

VIABILITY.

The Court should adopt an objective, clear

definition for what constitutes the relevant parcel

where, as here, property owners are subject to a partial

regulatory taking of a physical tract of land. Such a

categorical approach is rooted in the historical

safeguards for these traditional property rnghts that

were recorded as part of the constitutional protection

afforded by the Fifth Amendment. See Lucas, 505 U.S.

15

at 1016 n.7, 1027-28. A categorical approach also finds

support in recent decisions from this Court that have

embraced less ad hoc tests to decide challenges to

regulations that infringe on physical tracts of land. See

Ark. Game & Fish Comm'n v. United States, 133 S. Ct.

511, 518 (2012); Lucas, 505 U.S. 1014-19, 1027-32;

Loretto v. Teleprompter Manhattan CATV Corp., 458

U.S. 419, 427-36 (1982); see also Tahoe-Sierra, 535 U.S.

at 330-32 (fee simple estate is a real property interest

defined by objective geographic considerations). An

objective definition for the relevant parcel where the

parcel in question consists of a fee simple estate in land

would better ensure that traditional property rights in

physical tracts of land continue to receive the

protection they have long enjoyed under the law.

A. The “common ownership” test to

determine the relevant parcel, as adopted

by the Wisconsin Court of Appeals, results

in the arbitrary and unpredictable

extinction of property rights.

The ordinance in question here prevents

petitioners from selling or developing a physical lot of

land. See Pet. App. B-9. That constitutes a takings

challenge to a regulation that governs the fee simple

estate in land. See Tahoe-Sierra, 535 U.S. at 331-32

(“a permanent deprivation of the owner’s use of the

entire area [of a fee simple estate] is a taking of ‘the

parcel as a whole,’ whereas a temporary restriction” on

development during a particular time period is not the

whole parcel); Palazzolo, 533 U.S. at 627-28 (stripping

successive landowner’s right to transfer his interest in

a physical tract of land purchased by a prior owner

“would work a critical alteration to the nature of

16

property” since the “right to transfer [an] interest in

land is a defining characteristic of the fee simple

estate” (citation omitted)). The “fee simple interest” in

a physical “tract” of land “is an estate with a rich

tradition of protection at common law’—one that

American property owners have long been familiar

with and the protection of which was part of the

“historical compact recorded in the Takings Clause

that has become part of our constitutional culture.”

Lucas, 505 U.S. at 1016 n.7, 1027-28.

In defining the relevant parcel and deciding

whether the ordinance at issue amounted to a

regulatory taking, the Court of Appeals of Wisconsin,

conducting the “ad hoc factual, traditional takings

inquiry” called for by a “partial taking[s]” analysis,

concluded that the relevant parcel in this case

consisted of both Lots E and F and that no partial

taking occurred. Pet. App. A-9 to A-11, A-14 to A-18.

The court arrived at this conclusion by focusing on

what it considered to be a key fact: petitioners’ common

ownership of these two adjacent lots. Id. Other courts,

in similar circumstances, have reached different

results by looking to equally ad hoc factual

considerations. Pet. 17-20 (collecting a sample of lower

courts’ inconsistent approaches to defining the relevant

parcel in cases where tracts of land are at issue); see

also John E. Fee, Of Parcels and Property, in Taking

Sides on Takings Issues 101, 110-16 (Thomas E.

Roberts, ed., 2000) [hereinafter Fee, Of Parcels and

Property]; Lisker, supra, at 667-68, 706-19; Fee,

Unearthing the Denominator, supra, at 1545-57.

Defining the relevant parcel based on common

ownership of contiguous tracts of land, as the Court of

17

Appeals did here, “does little to serve the policies

underlying the Takings Clause” because, “[a]s a

standard of just compensation, it is simply illogical.”

Fee, Of Parcels and Property, supra, at 112. Simply

put, this common ownership criterion “results in

arbitrary treatment of landowners and harmful

distortions of real estate markets.” Id.

As one commentator posits by way of example to

demonstrate the common ownership criterion’s

arbitrary nature, “suppose that five individuals each

own equally sized beachfront lots. In addition, they

each own private homes. But whereas the first four

owners live across town, the fifth has her home on a lot

directly behind her beach lot.” Fee, Unearthing the

Denominator, supra, at 1552. “If a regulation were

enacted restricting all viable use of the beachfront

property, the first four would be compensated while the

fifth might not,” since the first four do not commonly

own two adjacent lots of land whereas the fifth owner

does. Id. “Focusing on contiguous common ownership

therefore makes takings cases turn upon the

randomness of whether real estate interests are

contiguous, or instead on the cleverness of landowners

in keeping real estate interests’ sufficiently

fragmented.” Fee, Of Parcels and Property, supra, at

113; see also Fee, Comparative Right, supra, at 1032

(“[T]he quantity of property an owner holds should

have nothing to do with whether a regulation of one

part of an owner’s property is a taking of that part.”).

This example is not merely an academic

hypothetical. It is what happened in this lawsuit and

what occurs all too often in takings cases involving

tracts of land. For decades, Lots E and F were not

18

under common ownership. Pet. Br. 3-4. But, in the

1990s, both lots were transferred to petitioners,

resulting in petitioners becoming the common owners

of these two contiguous lots. Pet. Br. 4. Under the

Court of Appeals’ common ownership rationale here,

the two lots were distinct parcels of property for

decades but the mere happenstance of their having

been transferred to common owners in the 1990s

transformed the two lots overnight into a single,

merged parcel. See Pet. App. A-17. Property rights

should not evaporate on such an arbitrary whim.

B. The relevant parcel of land here should be

defined based on an objective test that

examines the land’s independent economic

viability.

Rather than countenance the type of arbitrary

and discriminatory ad hoc criteria for defining relevant

parcels like the common ownership standard invoked

by the Court of Appeals here—criteria that are wholly

inconsistent with the protection the law has generally

afforded to traditional fee simple interests in tracts of

land—the definition of the relevant parcel in cases

involving physical tracts of land should objectively

focus on “the property itself and its relation to the

community.” Fee, Of Parcels and Property, supra, at

116; see also Eagle, Property Tests, supra, at 941

(“What is needed is an objective definition of the

property right; one that neither favors, nor readily

could be manipulated by, either owner or government

actor.”).

Specifically, “any identifiable segment of land”

should be considered the relevant parcel “if prior to

19

regulation it could have been put to at least one

economically viable use,” independent of any adjacent

tracts. Fee, Unearthing the Denominator, supra, at

1557.

If the tract of land identified by the property

owner meets this standard, it serves as the relevant

parcel. Id.; accord Fee, Of Parcels and Property, supra,

at 117 (“[A] whole parcel is one that is large enough

that even if it were the owner's only real property, it

would be feasible and profitable to use for some

independent enterprise.”). “Only by focusing on the

land itself, rather than on the paper transactions of

owners and government, can disparate treatment of

landowners be avoided.” Fee, Of Parcels and Property,

supra, at 117.

At a minimum, this Court should make clear

that adjoining tracts of land under common ownership

are distinct parcels where they have been treated as

distinct tracts of land by the property owners, since

this approach best conforms to the Court’s history of

focusing on landowners’ understanding of their

property rights. See Lucas, 505 U.S. at 1027 (“[O]ur

‘takings’ jurisprudence ... has traditionally been

guided by the understandings of our citizens regarding

the content of, and the State’s power over, the ‘bundle

of rights’ that they acquire when they obtain title to

property.”); see also id. at 1035 (Kennedy, J.,

concurring) (Takings Clause “protects private

expectations to ensure private investment”); Lost Tree

Vill. Corp. v. United States, 707 F.3d 1286, 1293 (Fed.

Cir. 2013) (“[E]ven when contiguous land is purchased

in a single transaction, the relevant parcel may be a

subset of the original purchase where the owner

20

develops distinct parcels at different times and treats

the parcels as distinct economic units.”), petition for

cert. filed (U.S. Mar. 22, 2016) (No. 15-1192).

e -

CONCLUSION

The judgment of the Court of Appeals of

Wisconsin should be reversed.

Respectfully submitted,

U.S. CHAMBER LITIGATION HORVITZ & LEVY LLP

CENTER, INC. JEREMY B. ROSEN

KATHRYN COMERFORD TODD FELIX SHAFIR

SHELDON GILBERT (Counsel of Record)

1615 H STREET, N.W. 15760 VENTURA BOULEVARD,

WASHINGTON, D.C. 20062 18TH FLOOR

(202) 463-5337 ENCINO, CALIFORNIA 91436

(818) 995-0800

fshafir@horvitzlevy.com

Counsel for Amicus Curiae

Chamber of Commerce

of the United States of America

April 15, 2016