TAKINGS CLAUSE

TAKINGS CLAUSE

The Takings Clause of the Fifth Amendment provides that private property cannot be taken for public use without just compensation. It serves as a check on the government’s eminent domain power.

PROPERTY INTERESTS

A person must have a property interest to challenge a governmental action as an unconstitutional taking. Property subject to the protection of the Takings Clause includes real property (e.g., fee simple, easement, lien, leasehold), tangible personal property, and intangible property (e.g., contract and patent rights, trade secrets).

TYPES OF TAKINGS

1. Physical

2. Recharacterization

3. Regulatory

4. Exaction

Physical

• Seizure of property is the classic application of the Takings Clause, and the primary challenge is whether the owner has received just compensation.

• A physical taking may also arise from damage to or destruction of property.

Recharacterization

This type of taking arises when the government recharacterizes private property as public property

Regulatory

A regulation that adversely affects a person’s property interest is generally not a taking. However, a regulation constitutes a taking (i.e., is a per se taking) when it results in (1) a permanent physical occupation of the property by the government or a third party or (2) a permanent total loss of the property’s economic value.

Exaction

Exacting promises from a developer does not violate the Takings Clause if there is (1) an essential nexus between legitimate state interests and the conditions imposed on the property owner and (2) rough proportionality between the burden imposed on the property owner and the impact of the proposed development.

JUST COMPENSATION

When a taking occurs, the government must provide just compensation, which is the fair market value at the time of the taking. This is measured in terms of the loss to the owner—not the benefit to the government.

Process of Taking

1. Did the goverment take private property? (physical, recharacterization, regulatory, exaction)? No. No taking. If Yes, then go to #2.

2. Was the taking for public use? (rationally related to a legitimate public purpose)? If yes, then go #3.

3. Did the government provide just compensation? (fair market value at the time of the taking)? If no, then unconstitutional.

4. Constitutional