Ohio Supreme Court Preview: Standing to Bring a Partial Regulatory Takings Claim

Update: On August 30, 2012, the Court handed down a merit decision in Moore v. Middletown. Read the analysis here.

Update: The merit decision in Clifton v. Village of Blanchester was handed down March 1, 2012 . Read the analysis of the decision here.

On September 6, the Ohio Supreme Court is set to hear oral arguments in Clifton v. Village of Blanchester and Moore et al. v. City of Middletown. Both cases are on appeal from the 12th District Court of Appeals, and both cases deal with the partial regulatory takings doctrine under the Fifth Amendment. The issue in both cases is whether a nonresident contiguous landowner (a person whose property is outside of but immediately adjacent to a municipality) has standing to sue a municipality for zoning ordinances that negatively impact the landowner’s property.

A basic takings clause violation occurs when the government takes private property for public use, without “just compensation,” but a violation may still occur even when the property is not actually taken away from the landowner. A regulatory taking occurs when a government regulation interferes with the use of one’s property to the extent that it mimics an outright taking through eminent domain. A regulation is a taking “per se” if it involves a physical invasion of another’s property or if it deprives the landowner of all economically beneficial use of the property.

A regulation that meets neither of these criteria may nonetheless constitute a “partial” taking, as explained by the U.S. Supreme Court in Penn Central Transportation Co. v. New York City (1978). There, the owners of Grand Central Station were prevented from constructing an office building in the airspace over Grand Central Station because of a historic landmark ordinance which prohibited major changes or alterations to buildings designated as historic landmarks. Although the Court held that Penn Central did not have a valid claim for compensation under the takings clause, it explained that government restrictions on property use may constitute a “taking” depending on the economic impact of the regulation, the extent of interference with the landowner’s investment-backed expectations, and the character of the governmental action.

In Penn Central and most other partial regulatory takings cases, the plaintiffs owned land directly subject to a city’s zoning ordinances. But what happens when such an ordinance has incidental effects on adjacent landowners outside the city’s jurisdiction?

In Clifton v. Village of Blanchester, the plaintiff owned land straddling the city limits of Blanchester. He sold a portion of the land within the city limits to a machine tools company, and retained the rest of his land outside the city limits. He farmed this land and intended to sell it to a developer in the future for a housing development. The land within the city limits, now owned by the machine company, was previously under a light residential zoning type that prohibited nuisances such as noise, dust, smoke, odors and industrial traffic, meaning that the industry could peaceably coexist with a neighboring residential development. However, in 2002, Blanchester changed the zoning of that parcel to allow for heavy industry. This would reduce the value and attractiveness of Clifton’s contiguous property as a site for future residential development. Clifton sued the city, arguing that its re-zoning reduced the value of his land.

The Twelfth District Court of Appeals held that Clifton did not have standing because the ordinances neither actually rezoned his property nor prevented him from continuing to farm the land or from selling it in the future. Clifton argued in his brief in support of jurisdiction that this reasoning directly conflicts with the Supreme Court’s ruling last year in State ex rel. Gilbert v. Cincinnati, where it held that a regulatory takings claim does not automatically fail even if some economically viable use of the property still exists. Finally, the court ruled that even if he did have standing, the mere diminution in his property’s value, without more, was not a taking under Penn Central.

In Moore v. City of Middleton, the plaintiffs’ property was located in Monroe and bordered a parcel of land in Middletown which was zoned as low-density residential. Middletown re-zoned that land to a general industrial classification in order to allow a coke plant to be built on the site. Applying essentially the same reasoning as it had in Clifton, the 12th District held that the plaintiffs could not sue when their property had not been physically invaded or deprived of all economically beneficial uses.

The central issue in both cases is the plaintiffs’ standing to sue under a “partial” regulatory taking theory. Under this theory, the plaintiffs would not have to show a physical invasion or 100% deprivation of economically beneficial use of the property. The plaintiffs argue that the partial regulatory takings doctrine should be extended to apply to them, even though the ordinances in question affected adjacent land rather than the plaintiffs’ land. In addition, the harm suffered is not interference with a current, ongoing use of the land, but rather with the “investment-backed expectations” of the plaintiffs in the future use of their land. On the other hand, both plaintiffs invested significant resources by relying on the previous zoning ordinances and suffered significant diminutions in the value of their property.

My thanks to my Research Assistant Greg Kendall, a 2L at the University of Cincinnati College of Law, for his work on this post.

Briefs and Documents

Clifton v. Village of Blanchester Documents:

Moore v. City of Middletown Documents:

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