582 U.S. 383 (2017)
The Murr family petitioners are two sisters and two brothers who own two adjacent lots along the Lower St. Croix River in Troy, Wisconsin.1 Their parents purchased Lot F in 1960, transferred it to the family plumbing company, and purchased neighboring Lot E in 1963, holding it in their own names.2 The parents conveyed Lot F to the petitioners in 1994 and Lot E in 1995.3
The lots are contiguous, with similar topography featuring a steep bluff that limits developable land to less than one acre on each lot despite their 1.25-acre sizes. In 1972, the St. Croix River received federal protection under the Wild and Scenic Rivers Act, prompting Wisconsin to authorize rules in 1976 that limit development to preserve the river's scenic qualities. The regulations require at least one acre of suitable land for separate building sites and include a merger provision that bars the separate sale or development of adjacent substandard lots under common ownership. A grandfather clause preserves the right to develop substandard lots that were in separate ownership on the regulation's effective date of January 1, 1976.4
After the lots came under common ownership through the 1994 and 1995 transfers, the merger rules prevented the petitioners from selling or developing Lot E separately.5 The petitioners sought variances from the St. Croix County Board of Adjustment to allow separate sale or use of the lots and to relocate the cabin on Lot F, but the board denied the requests.6 The Wisconsin Court of Appeals upheld the denial, determining that the ordinance effectively merged the lots.7
The petitioners then filed an action in the Circuit Court of St. Croix County, claiming the regulations effected a regulatory taking by depriving them of all or practically all use of Lot E.8 The parties submitted appraisals showing a combined regulated value of $698,300, a value of $771,000 if treated as two buildable lots, $373,000 for Lot F alone with improvements, and $40,000 for Lot E as undevelopable. The circuit court granted summary judgment to the respondents, noting that the petitioners retained options such as preserving or relocating the cabin or building a new residence on the combined property, and that the value decrease was less than 10 percent.
The Wisconsin Court of Appeals affirmed the judgment, holding that the takings analysis must consider the petitioners' property as a whole rather than Lot E in isolation. The court found that the petitioners could not reasonably expect separate treatment of the lots given the regulations in place when they acquired them.9 The Supreme Court of Wisconsin denied discretionary review, after which the U.S. Supreme Court granted certiorari to consider the definition of the parcel in this regulatory takings context.10
Whether the parcel for regulatory takings analysis consists of both Lots E and F?11
Courts must consider the treatment of the land under state and local law, the physical characteristics of the land, and the prospective value of the regulated land when defining the parcel, to determine whether reasonable expectations about property ownership would lead a landowner to anticipate that holdings would be treated as one parcel or separate tracts.12
Yes. The treatment of the property under state and local law indicates petitioners' property should be treated as one because the regulations merged Lots E and F when the 1994 and 1995 transfers brought them under common ownership.13 The physical characteristics of the property support its treatment as a unified parcel because the lots are contiguous along their longest edge with rough terrain and narrow shape that limit potential uses.14 The prospective value that Lot E brings to Lot F supports considering the two as one parcel because the combined valuation of $698,300 far exceeds the summed value of the separate regulated lots.15
The parcel for regulatory takings analysis consists of both Lots E and F.16
Whether the state and local regulations effected a taking of the petitioners' property?17
A regulation effects a taking if it denies all economically beneficial or productive use of land or if under the Penn Central factors the economic impact is severe, the regulation interferes with reasonable investment-backed expectations, and the character of the governmental action supports finding a taking.18
No. Petitioners have not suffered a taking under Lucas because they have not been deprived of all economically beneficial use of their property.19 They can use the property for residential purposes including an enhanced larger improvement.20 The value has decreased by less than 10 percent.21 Petitioners have not suffered a taking under Penn Central because the economic impact is not severe.22
They could not reasonably have expected to sell or develop the lots separately given the regulations which predated their acquisition of both lots.23 The governmental action was a reasonable land-use regulation enacted as part of a coordinated effort to preserve the river and surrounding land.24
The state and local regulations did not effect a taking of the petitioners' property.25
Related opinions on this issue
Justice Thomas dissents because although he joins the Chief Justice's dissent applying this Court's regulatory takings precedents, which no party has asked the Court to reconsider, the Court has never purported to ground those precedents in the Constitution as it was originally understood.26 It would be desirable to take a fresh look at the regulatory takings jurisprudence to see whether it can be grounded in the original public meaning of the Takings Clause of the Fifth Amendment or the Privileges or Immunities Clause of the Fourteenth Amendment.27