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2010] Derailing Penn Central 875 to illustrate how the proposed analysis effectuates these policies. Finally, Part VI addresses the criticism that would likely emerge if the Court adopted such an alternative regulatory takings test. It seeks to confute such criticism by ultimately demonstrating that the proposed method of analysis offers the fairest and most easily understood solution to the confusing world of regulatory takings jurisprudence. I. The Evolution of Regulatory Takings Jurisprudence The Takings Clause of the Fifth Amendment provides: “[N]or shall private property be taken for public use, without just compensation.” 19 Prior to Pennsylvania Coal Co. v. Mahon, 20 the Supreme Court applied the Takings Clause solely to those circumstances where the government directly appropriated private property. 21 In Mahon, however, the Court, per Justice Holmes, altered its interpretation of the Fifth Amendment and held that “while property may be regulated to a certain extent, if a regulation goes too far it will be recognized as a taking.” 22 This landmark decision inevitably led to a question that legal scholars, even today, are unable to clearly and reliably answer: when does a regulation go too far? For the fifty-plus years following Mahon’s recognition of regulatory takings, the Court acknowledged that it was “unable to develop any ‘set formula’” for ascertaining when a taking requiring just compensation occurs. 23 In Penn Central Transportation Co. v. New York City, the Court noted that, “[i]n engaging in . . . ad hoc, factual inquiries[, its] decisions have identified several factors that have particular significance.” 24 Even in Penn Central, the Court never announced a fixed test to determine when a regulation effects a taking necessitating just compensation. 25 Three specific factors were, however, especially prominent in the Court’s decision: the economic impact on the claimant, the extent to which the regulation interfered with the claimant’s distinct investment-backed expectations, and the character of the gov- 19 U.S. CONST. amend. V. 20 Pa. Coal Co. v. Mahon, 260 U.S. 393 (1922). 21 See Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1014 (1992) (noting that, prior to Mahon, “it was generally thought that the Takings Clause reached only a ‘direct appropriation’ of property . . . or the functional equivalent of a ‘practical ouster of [the owner’s] possession’” (citations omitted)). 22 Mahon, 260 U.S. at 415. 23 Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124 (1978). 24 Id. 25 See John D. Echeverria, Is the Penn Central Three-Factor Test Ready for History’s Dustbin?, 52 LAND USE & ZONING DIG. 3, 4 (2000) (arguing that the three factors were not intended to be a “determinative” test for regulatory takings).
876 The George Washington Law Review [Vol. 78:870 ernmental action. 26 Despite the fact that the Court in Penn Central merely identified “factors that have particular significance,” 27 the Court cited these exact factors a year later in Kaiser Aetna v. United States. 28 These factors have come to be known as the Penn Central three-factor test. 29 Thereafter, however, the Court recognized a pair of per se rules that, in the author’s view, created doubt about the appropriate analysis for regulatory takings claims. In Loretto v. Teleprompter Manhattan CATV Corp., 30 the Court held that a taking occurs if the regulation causes a permanent physical occupation. 31 Subsequently, the Court established a second per se rule for regulatory takings in Lucas v. South Carolina Coastal Council, 32 holding that a taking occurs if the regulation denies the owner all economically viable use of the land. 33 It was arguable that the per se rules were meant to replace Penn Central as the sole source of regulatory takings analysis. 34 A significant amount of evidence indicated that the Court had indeed abandoned ad hoc balancing in favor of bright-line rules. First, the language in Penn Central stating that diminution in property value alone cannot establish a taking 35 cannot be reconciled with the holding of Lucas, 36 which states that a complete economic wipeout constitutes a per se taking. 37 Second, Justice Scalia, the Court’s chief proponent of bright-line rules, authored the majority opinion in Lucas, and to 26 Penn Cent., 438 U.S. at 124. 27 Id. 28 Kaiser Aetna v. United States, 444 U.S. 164, 174 (1979). 29 See Peterson, supra note 2, at 1317. 30 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). 31 See id. at 426 (holding that the mandatory installation of cable facilities on a property constituted a regulatory taking because the government intrusion was a permanent physical occupation). 32 Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992). 33 See id. (holding that a per se taking occurs “where regulation denies all economically beneficial or productive use of the land”). 34 See John D. Echeverria, Making Sense of Penn Central, 23 UCLA J. ENVTL. L. & POL’Y 171, 172–73 (2005) (noting that “the Court appeared poised to jettison the Penn Central analysis altogether. During the 1980’s and 1990’s, as an antidote to the chronic vagueness of the Penn Central framework, the Court attempted to develop a set of alternative, bright line tests”). 35 See Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 131 (1978) (recognizing that past decisions “uniformly reject the proposition that diminution in property value, standing alone, can establish a ‘taking’”). 36 See Echeverria, supra note 25, at 5 (questioning how Penn Central’s insistence that no diminution in property value is sufficient to establish a taking can be reconciled with Lucas’s bright-line rule that a taking occurs “where regulation denies all economically beneficial or productive use of land”). 37 See Lucas, 505 U.S. at 1019.
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