We use “takings,” “Takings Clause” and “Fifth Amendment rights” as a convenient shorthand for the right of property owners to object or obtain compensation when a government act has so interefered with their rights that it might as well have exercised eminent domain. Every now and then, we need a reminder that the Takings Clause of the U.S. Constitution’s Fifth Amendment is not necessarily the last line of defense for property owners.
Today, in Interstate Companies, Inc v. City of Bloomington, No. A10-481 (Nov. 9, 2010), the Minnesota Court of Appeals provided the nudge. In that case, the court held that the Minnesota Constitution’s takings clause provides “broader protection to property owners than the federal constitution.” Slip op. at 6. The text of Minnesota Constitution is broader than the Fifth Amendment in that it provides that “[p]rivate property shall not be taken, destroyed or damaged for public use without just compensation therefor, first paid or secured.” Minn. Const. art. I, § 13.
The court concluded that although the Penn Central three-part test “provides the basic framework for analysis” to determine whether the regulation effects a taking, the Minnesota constitution provides more protection because it requires compensation when property is “damaged” or “destroyed,” as well as “taken,” and thus “where land use regulations, such as the airport zoning ordinance here, are designed to benefit a specific public or governmental enterprise, there must be compensation to landowners whose property has suffered a substantial and measureable decline in market value as a result of the regulations.” Slip op. at 9 (quoting McShane v. City of Faribault, 292 N.W.2d 253, 258-59 (Minn. 1980) (footnote omitted)).
The Interstate Companies case involved claims that noise from the airport, a building mortatorium, and height restrictions resulted in a taking and inverse condemnation of the plaintiffs’ properties. The trial court granted the government’s motion for summary judgment. The court of appeals reversed, concluding that the evidence the plaintiffs presented, when viewed in the light most favorable to the property owners, pointed to the need for a trial, and not summary adjudication. The property owners submitted an appraisal that showed an approximate 50% decline in value attributable to the regulations, their own testimony that they expected their properties to be developed in roughly the same manner as that of their neighbors, and evidence that their properties were bearing more than their fair share of the burdens of the airport regulations.
Again, we are confronted with a summary judgment, in which the district court must view the facts in the light most favorable to appellants. Appellants raised fact issues about their reasonable investment expectations prior to enactment of the zoning ordinance and the development of the area around the airport. The market value study raises a fact question of whether appellants have suffered a “substantial and measurable decline in market value as a result of the regulation[ ].” [McShane, 292 N.W.2d] at 259. We conclude that genuine issues of material fact regarding whether the zoning regulation resulted in a substantial decline in market value remain, which precludes summary judgment.
Slip op. at 10-11. The court concluded:
The Minnesota Constitution provides broader protections to property owners than does the United States Constitution when property is taken, damaged, or destroyed for a public or governmental use. Courts must consider whether a property owner has suffered a substantial and measurable decline in property value because of a governmental regulation, and a private property owner may not be forced to a bear a burden for the benefit of the general public. Where the evidence is in controversy, the issue of whether a property owner has demonstrated a substantial diminution in value is a fact question for determination by the factfinder.
Slip op at 13.
Thanks to colleague Dwight Merriam for the heads up on this opinion.