Regulatory Takings Since the Supreme Court Trilogy

Publication year1991
CitationVol. 20 No. 9 Pg. 1841
20 Colo.Law. 1841
Colorado Lawyer

1991, September, Pg. 1841. Regulatory Takings Since the Supreme Court Trilogy


Vol. 20, No. 9, Pg. 1841

Regulatory Takings Since the Supreme Court Trilogy

by Thomas Fenton Smith

In 1987, the U.S. Supreme Court rendered three decisions that it was hoped would clarify the confusion present in takings law. Some authorities believed that the "trilogy" cases would signal a decidedly pro-development trend in the treatment of land use regulation in the courts. While the hope of clarification has not been fulfilled, neither has the pro-development prediction.

This article focuses on the fundamental attributes of regulatory takings and the broad parameters within which such claims recently have been litigated.


Prior to the Court's decision in First English Evangelical Church v. County of Los Angeles,(fn1) in most jurisdictions (including Colorado), the sole remedy for the overregulation of land was invalidation of the offending regulation.(fn2) First English held that a complaint seeking only monetary damages properly stated a claim for relief. However, the Court gave explicit recognition to the "nuisance exception" to regulatory takings (discussed below).

In Nollan v. California Coastal Commission,(fn3) the Court gave close scrutiny to the "rational nexus" between a development exaction and its purpose, ultimately invalidating the land dedication requirement imposed on the developer in that case. However, Nollan is also noteworthy for recognizing that development exactions and impact fees may be constitutional.

In Keystone Bituminous Coal Association v. DeBenedictis,(fn4) the Court found that deference must be paid to the legislative determination that a statute served important public interests. In rejecting the takings claim, the Court also found that a reasonable use remained in the "bundle of rights" associated with the subject property as a whole.

While it is difficult to evaluate the chilling effect of First English and Nollan on local government decision-making, the reported decisions of the state and federal courts do not demonstrate that those cases and Keystone have increased significantly the risk of local government liability in the field of land use regulation. The availability of a damages remedy for the overregulation of land may have made the courts more reluctant to find that a regulatory taking has occurred.

Ironically, Keystone may have the greatest long-term significance of the three cases. As the Court noted, facial takings challenges almost always will fail. The Court's affirmation of the bundle of rights theory significantly tempers the effects of First English and Nollan.

Recent cases demonstrate that the circumstances in which a taking will be found to have occurred are circumscribed by significant procedural and substantive requirements in the wake of the Supreme Court trilogy. However, the results continue to be unpredictable.

What Constitutes a Regulatory Taking

A regulatory taking occurs in cases where government regulation does not substantially advance legitimate state interests or denies the owner economically viable use of the land.(fn5) These requirements sometimes are referred to as the "legitimacy test" and the "economic impact test," respectively.

While the trilogy cases make use of this two-part test, in other cases courts have applied a three-factor test in determining if a taking occurs. These often are referred to as the Penn Central(fn6) factors. They are as follows: (1) the character of the governmental action; (2) the economic impact of the regulation; and (3) the extent to which the regulation interferes with reasonable investment-backed expectations. It is not clear how the Penn Central factors relate to the...

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