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In the late 1990s the city of New London, Connecticut, confronted severe economic decline after the 1996 closure of the Naval Undersea Warfare Center, which had employed more than 1,500 people. The city's unemployment rate stood nearly double the state average and its population had dropped below 24,000 residents from a 1970 high of 30,000. State and local officials therefore designated the Fort Trumbull peninsula for targeted economic revitalization. In 1998 the New London Development Corporation, a private nonprofit entity, was reactivated to prepare a redevelopment plan covering roughly 90 acres. The plan divided the area into seven parcels designated for a waterfront conference hotel and marinas, retail and entertainment space, research and office facilities, parking and park support, residential units, a Coast Guard museum, and additional office and retail uses. The city council formally approved the plan in January 2000 and authorized the NLDC to acquire needed parcels by purchase or, if necessary, by eminent domain. Petitioners Susette Kelo, Wilhelmina Dery, and seven other owners held fifteen properties within parcels 3 and 4A; ten of those parcels were occupied by the owners or their family members and none was alleged to be blighted. After negotiations with the NLDC failed, the corporation initiated condemnation proceedings against the remaining properties in November 2000. In December 2000 the petitioners filed suit in New London Superior Court asserting that the proposed takings violated the public-use limitation of the Fifth Amendment. Following a seven-day bench trial the Superior Court entered a permanent restraining order barring condemnation of the parcel 4A properties but denied relief as to the parcel 3 properties. Both sides appealed to the Connecticut Supreme Court, which upheld the validity of all challenged takings. The United States Supreme Court granted certiorari to review the federal constitutional question.

In 1965 New York City enacted the Landmarks Preservation Law, which created an eleven-member Landmarks Preservation Commission and authorized it to designate buildings at least thirty years old that possess special historical or aesthetic interest. The law required owners of designated landmarks to obtain Commission approval before altering exterior architectural features and imposed an affirmative duty to keep those features in good repair. In August 1967 the Commission designated Grand Central Terminal a landmark and the city tax block it occupies a landmark site; the Board of Estimate confirmed the designation the following month. Penn Central Transportation Co. and its affiliates owned the Terminal, an eight-story Beaux-Arts structure completed in 1913 that served as the main station for the New York Central and Harlem lines. On January 22, 1968, Penn Central entered a fifty-year renewable lease with UGP Properties, Inc., under which UGP agreed to construct a multistory office building cantilevered above the Terminal and to pay Penn Central at least three million dollars annually after construction. Penn Central and UGP submitted two plans prepared by architect Marcel Breuer: Breuer I, a fifty-five-story tower resting on the Terminal roof, and Breuer II Revised, a fifty-three-story building that would have removed part of the 42d Street facade. After four days of hearings at which over 80 witnesses testified, the Commission denied this application as to both proposals. Penn Central filed suit in New York Supreme Court, Trial Term, seeking a declaratory judgment, injunctive relief, and damages for a temporary taking. The trial court granted the injunctive and declaratory relief. The Appellate Division reversed, holding that Penn Central had failed to prove deprivation of all reasonable beneficial use. The New York Court of Appeals affirmed, concluding that the Terminal could still earn a reasonable return and that transferable development rights provided significant compensation. The Supreme Court noted probable jurisdiction.

In 1978 John Rudzewicz, a Michigan resident and senior partner in a Detroit accounting firm, was approached by Brian MacShara about jointly applying for a Burger King franchise in the Detroit area. They submitted their application to Burger King’s Birmingham, Michigan district office, which forwarded it to the company’s Miami headquarters. During the ensuing four months Rudzewicz and MacShara negotiated with both the Birmingham district office and Miami headquarters over site-development fees, building design, computation of monthly rent, and assignment of liabilities. With some misgivings they obtained limited concessions from the Miami headquarters, signed the final agreements, and commenced operations in June 1979 for the Drayton Plains facility. The agreements stated that the franchise relationship was established in Miami and governed by Florida law, required all royalty, advertising, and rent payments to be sent to Miami, and obligated Rudzewicz to attend training in Miami. MacShara completed the training course there and the franchisees purchased $165,000 in equipment from Burger King’s Miami division. The Drayton Plains restaurant enjoyed steady business during the summer of 1979 but patronage declined after a recession began later that year. Rudzewicz and MacShara fell far behind on their monthly payments to Miami. Burger King headquarters sent notices of default and conducted prolonged negotiations by mail and telephone with the franchisees, but the negotiations failed and headquarters terminated the franchise. Rudzewicz and MacShara refused to vacate and continued to operate the facility as a Burger King restaurant. Burger King commenced suit in the United States District Court for the Southern District of Florida in May 1981. It invoked diversity and federal trademark jurisdiction. Burger King alleged breach of the franchise agreements by failure to make required payments in Miami together with trademark infringement. The district court denied Rudzewicz’s motion to dismiss for lack of personal jurisdiction, conducted a three-day bench trial, entered judgment against Rudzewicz and MacShara jointly and severally for $228,875 in contract damages, ordered them to close the restaurant or surrender possession, and awarded costs and attorney’s fees. Rudzewicz appealed to the Court of Appeals for the Eleventh Circuit, which reversed on the ground that the circumstances left Rudzewicz without reasonable notice of suit in Florida. The Supreme Court granted certiorari to review the jurisdictional ruling.

The Nollans own a beachfront lot in Ventura County, California. A concrete seawall approximately eight feet high separates the beach portion of their property from the rest of the lot. The historic mean high tide line determines the lot's oceanside boundary. The Nollans originally leased their property with an option to buy, and the building on the lot was a small bungalow totaling 504 square feet. The Nollans' option to purchase was conditioned on their promise to demolish the bungalow and replace it. On February 25, 1982, they submitted a permit application to the California Coastal Commission proposing to demolish the existing structure and replace it with a three-bedroom house. The Commission informed them that the permit would be granted subject to the condition that they allow the public an easement to pass across a portion of their property bounded by the mean high tide line and their seawall. On June 3, 1982, the Nollans filed a petition for writ of administrative mandamus in the Ventura County Superior Court to invalidate the access condition. The court remanded the case to the Commission for a full evidentiary hearing. After the hearing, the Commission reaffirmed the condition. The Superior Court ruled in favor of the Nollans on statutory grounds and directed that the permit condition be struck. While the Commission's appeal to the California Court of Appeal was pending, the Nollans tore down the bungalow, built the new house, and bought the property. The Court of Appeal reversed the Superior Court. The Nollans appealed to this Court, raising only the constitutional question.