Can a government define a piece of land as a building parcel, collect taxes on it from the owners for years, then abruptly tell them they can’t use it, sell it or be compensated for it?
The U.S. Supreme Court will answer that question when it rules this year on a case concerning a piece of land along the St. Croix River, near Minnesota’s Twin Cities.
WND reported the Murr family concedes there are specific situations in which the government is allowed to obtain private property, but it must compensate the owner.
Donna Murr and her siblings, Joseph Murr, Michael Murr and Peggy Heaver, brought the lawsuit after they were barred from developing their vacant riverfront lot and a state appellate court ruled they weren’t entitled to Fifth Amendment compensation, because they also own a neighboring lot with a recreational cabin on it.
The Murrs’ parents, who owned a plumbing company, bought the waterfront lot in 1960 and built a family cabin. Later, they bought an adjacent lot as an investment.
Then, in the mid-1970s, new land-use regulations were imposed reducing the area of land that could be developed. The land would have been grandfathered for development because it previously was subdivided, but the state has a rule that considers all lots under the same ownership as one lot.
So the fact that development is now banned on the lot, on which the family has paid taxes for decades, means nothing because they also own the adjacent lot and there’s a cabin there, PLF said.
If someone else owned the second parcel, it could be built on or sold. But the state said the family’s ownership of both lots means they really have only one.
“The ruling … offends the letter and spirit of the Constitution’s ban on uncompensated takings, by allowing government to deprive people of the use of their land simply because they happen to own another lot next to it,” said PLF attorney John Groen.
“This is a case where a family purchased two separate pieces of property,” the brief explains to the justices. “Like the typical family, the Murrs certainly understood what they were buying in 1960 and 1963. They knew that they had purchased two separate residential parcels, and each was a separate fee interest. They knew that each parcel could be managed, conveyed, mortgaged, leased, or developed, independent of each other. Those are the normal rights that any American family would understand they receive when they buy a residential lot.”
That’s why family members were “quite flabbergasted” when informed that the government had taken their right to build on the land or to sell it.
“People understand the basic unfairness of what happened to the Murrs. People rely on their title to property. People are making important decisions, and major investments, when they buy property. … Just as the Murrs’ parents’ purchase of Lot E was separate and independent of their prior purchase of Lot F, so should they be able to sell Lot E independently and separately from Lot F. This concept of fungible real estate is well ingrained in the mindset of American property owners.”
The two lots became “discrete and separate” when the government established its boundaries in 1959, the lawyers argue. The family “had a legitimate claim of entitlement to the separateness of Lot E because it was created and approved by government as an independent parcel.”
The regulations that later were imposed allowed for parcels to be grandfathered, unless the owner also owned an adjacent lot, the lawyers said.
“The facts here are simple. These are two separate and distinct parcels, and the history of the Murrs’ purchase, use, and plans for the parcels do not warrant overriding the usual presumption of separateness to combine the parcels into one for purposes of the Takings Clause. The Wisconsin court ignored these facts and relied on a single fact – the Murrs happen to own contiguous parcels. But reliance on that fact alone is arbitrary and discriminates against the Murrs.”
They continue: “Lot E would be grandfathered as a separate building site for any other owner. For example, if the Murrs’ parents had given Lot E to William Murr’s best friend, the grandfather clause would protect Lot E as a pre-existing legal building site. But that same protection does not extend to the Murr siblings.”
PLF noted that although the case focuses on the St. Croix County land, the case “challenges an abuse that has been known to happen nationwide: where regulators forbid the use of private property, and also fail to provide ‘just compensation,’ on the excuse that the owner also happens to own the neighboring parcel of property.”
“In our brief to the Supreme Court, PLF argues for the Murrs that Takings Clause jurisprudence, and simple common sense and fairness, dictate that these two parcels should be considered as what they are – legally independent, discrete, and separate properties,” said PLF General Counsel John Groen. “Therefore, the government cannot escape its liability for a taking when it denies all use of the investment parcel. These parcels were purchased at separate times, for separate purposes, and they have never been used or developed together. Under these circumstances, the regulatory impact should be analyzed based on the effect on the investment parcel alone.”