Update: Here are my first thoughts on Murr - "Justice Kennedy's Social Justice Warrior Test for Takings Clause Property in Murr v. Wisconsin"

The title alone should tell you this was authored by Justice Kennedy, which means that, as we thought it might do, today the U.S. Supreme Court held in Murr v. Wisconsin, No. 15-214 (June 23, 2017) that in determining the "denominator" in regulatory takings cases -- in other words, what "property" owned by the plaintiff is the claimed diminution in value of the taken property compared -- that "a number of factors" make up the inquiry, including: (1) "the treatment of the land, in particular how it is bounded or divided, under state and local law" (i.e., title); (2) the "physical characteristics" of the property (your guess is as good as ours); and (3) the "value of the property under the challenged regulation" (same). Here's the heart of the majority opinion. See if you can figure it out:
As the foregoing discussion makes clear, no single consideration can supply the exclusive test for determining the denominator. Instead, courts must consider a number of factors. These include the treatment of the land under state and local law; the physical characteristics of the land; and the prospective value of the regulated land. The endeavor should determine whether reasonable expectations about property ownership would lead a landowner to anticipate that his holdings would be treated as one parcel, or, instead, as separate tracts. The inquiry is objective, and the reasonable expectations at issue derive from background customs and the whole of our legal tradition. Cf. Lucas, 505 U. S., at 1035 (KENNEDY, J., concurring) (“The expectations protected by the Constitution are based on objective rules and customs that can be understood as reasonable by all parties involved”).
First, courts should give substantial weight to the treatment of the land, in particular how it is bounded or divided, under state and local law. The reasonable expectations of an acquirer of land must acknowledge legitimate restrictions affecting his or her subsequent use and dispensation of the property. See Ballard v. Hunter, 204 U. S. 241, 262 (1907) (“Of what concerns or may concern their real estate men usually keep informed, and on that probability the law may frame its proceedings”). A valid takings claim will not evaporate just because a purchaser took title after the law was enacted. See Palazzolo, 533 U.S., at 627 (some “enactments are unreasonable and do not become less so through passage of time or title”). A reasonable restriction that predates a landowner’s acquisition, however, can be one of the objective factors that most landowners would reasonably consider in forming fair expectations about their property. See ibid. (“[A] prospective enactment, such as a new zoning ordinance, can limit the value of land without effecting a taking because it can be understood as reasonable by all concerned”). In a similar manner, a use restriction which is triggered only after, or because of, a change in ownership should also guide a court’s assessment of reasonable private expectations.
Second, courts must look to the physical characteristics of the landowner’s property. These include the physical relationship of any distinguishable tracts, the parcel’s topography, and the surrounding human and ecological environment. In particular, it may be relevant that the property is located in an area that is subject to, or likely to become subject to, environmental or other regulation. Cf. Lucas, supra, at 1035 (KENNEDY, J., concurring) (“Coastal property may present such unique concerns for a fragile land system that the State can go further in regulating its development and use than the common law of nuisance might otherwise permit”).
Third, courts should assess the value of the property under the challenged regulation, with special attention to the effect of burdened land on the value of other holdings.Though a use restriction may decrease the market value of the property, the effect may be tempered if the regulated land adds value to the remaining property, such as by increasing privacy, expanding recreational space, or preserving surrounding natural beauty. A law that limits use of a landowner’s small lot in one part of the city by reason of the landowner’s nonadjacent holdings elsewhere may decrease the market value of the small lot in an unmitigated fashion. The absence of a special relationship between the holdings may counsel against consideration of all the holdings as a single parcel, making the restrictive law susceptible to a takings challenge. On the other hand, if the landowner’s other property is adjacent to the small lot, the market value of the properties may well increase if their combination enables the expansion of a structure, or if development restraints for one part of the parcel protect the unobstructed skyline views of another part. That, in turn, may counsel in favor of treatment as a single parcel and may reveal the weakness of a regulatory takings challenge to the law.
Slip op. at 12-13.
We thought it would have made more sense simply to import the "three unities" test from straight takings (title, use, proximity). But instead, we get this, which appears to be a mishmash of ... whatever. In other words, the Penn Centralization of the larger parcel.
We'll have more, of course. Stay tuned.
Programming note: we'll be sponsoring a program at the ABA Annual Meeting in New York City on August 11, 2017 at the Hilton Midtown, Concourse E, entitled "Murr and Beyond: Implications for Regulatory Takings," featuring the arguing counsel for the parties. Ping me to sign up to attend.
Murr v. Wisconsin, No. 15-214 (U.S. June 23, 2017)