The Penn Central test — reaffirmed in Lingle as the regulatory takings “benchmark” in all but a few cases — is one of those “factor” tests in which the trier of fact is supposed to examine three things: (1) the economic impact of the regulation on the property; (2) the interference with investment-backed expectations, and (3) the character of the government action. None of these factors is supposed to be dispositive.
In Noghrey v. Town of Brookhaven, No. D33861 (Feb. 21, 2012), the Appellate Divison of the New York Supreme Court, however, held otherwise, and overturned a jury’s verdict that the town’s zoning regulations worked a Penn Central taking because the loss of value determined by the jury wasn’t enough:
The jury was instructed that damages were to be assesed by determinng the value of the properties immediately before and immediately after the rezoning. The difference between those two values would be the plaintiff’s damages.Given the expert testimony, the lowest value which could be ascribed to [the property] prior to the rezoning was $775,500. The damages award of $360,000 represented only a 46% loss in value from that figure. Such a diminution in value cannot support a finding that a regulatory taking occurred (see Noghrey v Town of Brookhaven, 48 AD3d at 531-532 [and collected cases]). Accordingly, there was no fair interpretation of the evidence by which the jury could have found both that the rezoning effectuated a regulatory taking of Liberty Plaza and that the plaintiff’s damages as to that property were only $360,000.
Slip op. at 3. The opinion is one of those frustratingly cryptic decisions we’re used to seeing from the Appellate Division, and provides no real analysis of the issues or the existing caselaw.
Apparently, the loss of “only 46%” isn’t enough as a matter of law, regardless of the other two Penn Central factors, but the court doesn’t tell us why it thinks this is so. The opinion also conflates the determination of whether a taking has occured at all with the determination of the compensation owed, and it seems odd that the court is willing to overturn a jury’s verdict on what are “ad hoc factual inquiries,” the classic case where appeals courts are usually reluctant to second guess a jury’s conclusions.
But this marks the second time the Appellate Division has overturned a jury’s verdict in favor of the property owner. so perhaps we should not be surprised.
Noghrey v. Town of Brookhaven, No. D33861 (Feb. 21, 2012)