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TAKINGS CLAIMS: AN EMPTY THREAT?
Tuesday, August 28, 2012
(
This article is written for the general public and is intended as a general discussion of the areaof taking claims in New York State. It is not intended as legal advice to any specific town board or individual. In addition, it is assumed in this discussion that in enacting a protective zoningordinance or a moratorium, the town board has followed proper procedures.)
Philip T. Simpson, Esq.
1
Gas drillers and their allies frequently threaten town boards with
lawsuits for a “taking” if
a town passes zoning that bans fracking
2
. Right now, this is an empty threat. As long as the NewYork State Department of Environmental Conservation has not issued permits for fracking,threats of a taking lawsuit are only threats, intended to intimidate.However, if the DEC issues permits for fracking operations within a town beforeprotective zoning or a moratorium has been enacted, a taking claim will pose a substantial risk.In these instances a court might find that the zoning or moratorium does apply to alreadypermitted wells and the town could be held liable for monetary damages. This is why it is urgentfor towns that want to prohibit fracking to pass proper zoning resolutions as soon as possible.While there are many kinds of takings claims, most of them should not be of concern to
town boards that restrict fracking. I’ll describe each them
briefly before discussing the one typeof takings claim that could be a real cause of concern - a taking claim for a pre-existing non-conforming use
, also known as a “grandfather taking”.
Taking Claims
–
Based on the U.S. ConstitutionTaking claims are claims by property owners against government entities for depriving anowner of property without just compensation. The basis of a taking claim is in the FifthAmendment to the U.S. Constitution. Among other protections, the Fifth Amendment states:
“
nor shall private property be taken for public use, without just compensation
.”
3
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2In general, government has the right to take private property for public use, provided thatit pays just compensation to the owner. A common example of this is a condemnationproceeding, where private property is taken by government for a public improvement and thegovernment is prepared to pay the owner just compensation. This is not, generally speaking,subject to a claim of taking unless the government takes private property without paying justcompensation. Zoning prohibitions and moratoria are not seizures of property and except in thecircumstances described in this article are not a taking under the Fifth Amendment.Types of Taking ClaimsThe law on taking claims is created through court decisions rather than in statutes. TheU.S. Supreme Court and New York
’s highest court, the
Court of Appeals, now recognize severaldifferent types of taking claims created by the courts. Of course directly appropriating propertycan be considered a taking, but most taking claims involve some form of regulatory action by agovernment entity.1) Physical TakingWhere government action results in a permanent physical occupation of the property,even as little as one cubic foot, there is a taking that requires compensation. This is referred to as
a “physical taking.” An example of this type of taking
was the case of
Loretto v. Teleprompter Manhattan CATV Corp.
4
In
Loretto
, a New York law required landlords to allow cable television companies toinstall cable facilities in landlords
’
buildings. The law effectively allowed the landlords onedollar as compensation. A landlord sued, claiming that any physical occupation authorized bygovernment is necessarily a taking, regardless of the amount of property taken.
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3The U.S. Supreme Court agreed, and held that a physical invasion of even one cubic foot
(the approximate amount of space in the landlord’s building occupied by the cable com
pany) wasa taking that required payment of just compensation.Zoning laws that prohibit or restrict specified activities on land within a town do notresult in a physical occupation of the land. For this reason, the
Loretto
style taking claim (actualphysical occupation) does not apply to local zoning laws and should not be a concern to townboards.2) Total TakingWhen government regulation deprives the owner of all economically beneficial use of theproperty, so that the owner cannot do anything with the property other than own it, there is a
taking. This is referred to as a “total” taking. An example of a total taking was
Lucas v. SouthCarolina Coastal Council
.
5
In
Lucas
, the property owner purchased two beach-front parcels, intending to build ahome on each one. However a coastal protection statute, that was passed after the ownerpurchased the land, prevented the owner from building any permanent habitable structure on theland.
The U.S. Supreme Court found that this was the “rare” case where a regulation deprived
an owner of all economically beneficial use of the property, and was therefore a taking for whichcompensation was required. Because the taking was a total deprivation of all economically viableuses of the land, compensation was required regardless of whether the public interest waspromoted by the regulation.
A “total” taking would
not apply to a town zoning law that completely bans subsurfacedrilling or mining, because it still leaves the owner the ability to make money from other uses of
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