Indiana Law Review


Notes

First Church Decides Compensation is Remedy for
Temporary Regulatory Takings—Local Governments are

*'Singing the Blues"

An important United States Supreme Court decision in 1987 estab-
lished a doctrine which affects thousands of determinations of local

zoning boards and local legislative bodies throughout the country. In

First English Evangelical Lutheran Church of Glendale v. County of
Los Angeles,^ the Court held that the Constitution requires governments

to compensate landowners for temporary regulatory takings rather than

allowing a court to merely invalidate the regulation.^ Through amici

briefs, government at all levels had opposed this outcome. Therefore,

when the decision was made, government decisionmakers feared the door
was open to numerous lawsuits that would either cost government millions

or shut down regulation of land use. Developers and landowners, on
the other hand, were jubilant.

The amount of government regulation of land use has grown over

time. Two centuries ago, landowners were free to develop property as
they pleased, unless the use constituted a nuisance or the landowner had

entered into covenants restricting the property's use. But as the country

became more populated and great cities emerged, the need to protect

public health and safety through use of government's police power

brought on regulation. Zoning as a valid exercise of police power was

upheld by the Supreme Court in 1926.^ Over the years, land-use regulation

has grown and intruded on the private property rights of landowners

in order to further the social, economic, and environmental needs of

the community. In the last ten to fifteen years, landowners have begun

to argue that these actions are confiscations of the owners' right to use

their land.

Because First Church expands the meaning of the Takings or Just

Compensation Clause,"^ it is considered a landmark decision. The Court

had never before decided that compensation was the remedy for a

•107 S. Ct. 2378 (1987).

^Id. at 2389. A temporary regulatory taking is a regulation that is declared by a
court to be invalid as a taking for which the remedy is damages for the use of the

property for the interim period between the date the regulation effected a taking and the

date the court declared the regulation invalid. See infra note 59 and text accompanying

notes 49-63, 91-96.

^Village of Euclid v. Ambler ReaUy Co., 272 U.S. 365 (1926).

'*"[N]or shall private property be taken for public use, without just compensation."

U.S. Const, amend. V, § 1, cl. 5. The clause is referred to as both the Takings Clause

and the Just Compensation Clause.

901



902 INDIANA LAW REVIEW [Vol. 21:901

"temporary regulatory taking." Although the decision was narrow, it

will have a profound psychological effect on lower court rulings, and

on local land-use decisions. To already strapped local governments, the
fear of the cost of compensating landowners for being found to have

taken all use of the landowners' property may cause local decisionmakers
to choose not to regulate when they would have prior to First Church.

The decision of the Court in First Church spoke only to the remedy

issue; it did not specifically find in this situation that there had been

a taking. Accordingly, the case was remanded for a determination of

the taking issue. However, the major problem that remains is to ascertain

the factors or the test for determining whether there has been a taking.

The Court needs to resolve that and other issues. This Note examines

the First Church decision as part of the evolution of the Takings or

Just Compensation Clause and the effect of the decision on local planners

and decisionmakers. The first section provides a context for the First

Church decision, which is then analyzed in the second section. The third

section presents what issues are yet to be resolved, including what

constitutes a taking, whether alternatives in lieu of compensation may
be substituted, when a taking begins, and whether a challenger must
have a final decision and exhaust all state and local procedures for

compensation before the challenge is ripe for adjudication. Because most

land-use decisions are made at the local level, the final section focuses
on the practical consequences to the local decisionmaker and planner,

and concludes that government may still impose police power regulations
to protect pubhc health and safety within limits without fear of being

required to compensate the landowner.

I. Introduction to Concepts

A. Why Property Rights Should be Protected

One object of American government is to protect the individual's
accumulation of wealth as a way to encourage industriousness and
productiveness. Another object is to promote the common welfare.^ "The
implication of this view is that property is to be protected only up to

the bounds of some conception of civil and social responsibility."^ The

tension between these two philosophies of property helps explain the

"takings" issue. Any court in deciding a takings case is determining
how much to protect expectations of gain and the bundle of property

^See generally Rose, Mahon Reconstructed: Why the Takings Issue is Still a Muddle,
57 S. Cal. L. Rev. 561 (1984).

'Id. at 592.



1 988] TEMPORAR Y REGULA TOR Y TAKINGS 903

rights (economic rights and legal relations) of an individual and how
much to protect the community for the benefit of all (civic and social
responsibility).

"Property rights" means both economic rights and legal relations.

Economic rights include not only property in the sense of land and
things, but also "new property," for example, entitlements, and other
government benefits. The legal relations relevant to property include the
rights "to use," "to manage," "to the income," "to the capital," and

"to security."^ These legal relations are subject to limitations such as

the duty not to use the property so as to harm others.^

B. The Original Meaning of the Just Compensation Clause

Prior to the adoption of the United States Constitution and the Bill

of Rights, the colonies frequently took private property for public use.^

No colony, except Massachusetts,'^ paid compensation when it built a
public road across unimproved land although the landowner was com-

pensated for roads across improved land.'' When James Madison drafted
the Bill of Rights, although no state had requested it, Madison included

a clause that provided for compensation on his own initiative. '^ Madison
intended the clause "nor shall private property be taken for pubHc use,

without just compensation"'^ to have a narrow meaning, to apply only

to the federal government and only to physical takings."'

'A. HoNORE, Ownership, in Oxford Essays in Jurisprudence 107-47 (A. Guest
ed. 1961). For a more complete formulation based on Honore's work, see Oakes, "Property

Rights" in Constitutional Analysis Today, 56 Wash. L. Rev. 583, 589-90 (1981). The

Court in Ruckleshaus v. Monsanto Co., 467 U.S. 986, 1001-03 (1984), discusses the

difficulty of defining property.

Tor a list of limitations, see Oakes, supra note 7, at 589-90.
^According to the ideology of the revolution, such takings were justified to advance

the common good. See generally F. Bosselman, D. Callies, & J. Banta, The Taking
Issue, 82-105 (1973) [hereinafter The Taking Issue]; Note, The Origins and Original
Significance of the Just Compensation Clause of the Fifth Amendment, 94 Yale L. J.

694 (1985) [hereinafter Note, Original Significance]. See also Stoebuck, A General Theory
of Eminent Domain, Al Wash. L. Rev. 553 (1972); Note, Civil Rights for the Propertied

Class: The Development of Inverse Condemnation in the Federal Courts, 55 Tul. L. Rev.

897, 900-01 (1981).

'°See The Taking Issue, supra note 9, at 695 (quoting the original Mass. Const.
Art. X (1780)).

"5^e Note, Original Significance, supra note 9, at 695.

'^All other provisions in the Bill of Rights were requested by at least two states.

E. DuMBAULD, The Bill of Rights and What It Means Today 161-65 (1957) (listing
the sources of the provisions of the Bill of Rights).

'^U.S. Const, amend. V, § 1, cl.5. This Amendment was adopted in 1791.
'^Barron v. Baltimore, 32 U.S. (7 Pet.) 243 (1833). "[T]he fifth amendment must

be understood as restraining the power of the general government, not as applicable to

the states." Id. at 247. See Note, Original Significance, supra note 9, at 708.



904 INDIANA LAW REVIEW [Vol. 21:901

The federal government did not take property for public use until

80 years later in the 1870's but prior to that state officials did condemn
land for use by the federal government.'^ State governments could abridge

property rights for public use in order to promote the common good,
and it was the practice in several of the states to acquire land without

compensation.'^ The Just Compensation Clause was made applicable to
the states as well as the federal government through adoption of the

fourteenth amendment in 1868'^ and by Supreme Court interpretation
29 years later in Chicago, Burlington & Quincy R.R, Co. v. Chicago. ^^

Although the fourteenth amendment does not mention "just compen-
sation," the Court incorporated compensation for physical takings through

the Due Process Clause to apply to the states.

C Antecedents to the Temporary Regulatory Taking of Land
In order to understand fully the decision the Court reached in First

Church, it is necessary to briefly examine the evolution of "takings"

and "just compensation" from the original meaning to quite different

meanings today.

1. Eminent Domain and Just Compensation.—Federal, state, and
most local government units have the power of eminent domain over

property within their jurisdiction, power of a sovereign to condemn
private property for pubhc use without the consent of the owner. '^

Originally, the only meaning of the Just Compensation Clause was that

the fifth amendment limits eminent domain power by requiring just
compensation for property taken. Continuing to the present, when a
private property owner refuses to sell property which the government

wants for a public purpose, the government may condemn the property,
provide the owner with just compensation, and take the property against

the owner's wishes.^° The government only need compensate if what is

'^Stoebuck, supra note 9, at 559 n.l8.

'""See 3 P. Nichols, Eminent Domain § 8.1[1] n.lO (3d ed. 1985).
''"No State . . . shall . . . deprive any person of . . . property, without due process

of law ... ." U.S. Const, amend. XIV, § 1, cl. 3.

'466 U.S. 226, 241 (1897). In other words, just compensation did not apply to the

states for the first 100 years.

'4 P. Nichols, supra note 16, at § 1.11. See generally Stoebuck, supra note 9.

^°Government can wait until the cost is established before making a decision to

proceed with acquiring the property.

Until taking, the condemnor may discontinue or abandon his effort. The de-
termination of the award is an offer subject to acceptance by the condemnor

and thus gives to the user of the sovereign power of eminent domain an

opportunity to determine whether the valuations leave the cost of completion

within his resources.

Danforth v. United States, 308 U.S. 271, 284 (1939).



1988] TEMPORARY REGULATORY TAKINGS 905

taken is private property; it need not compensate for collateral interests

and expectations.^' Just compensation in eminent domain has come to
mean a fair market value standard of what a willing buyer would pay
to a willing seller. ^^ Although eminent domain may only be used to take
private land for public use, the courts are liberal in determining what

constitutes public use,^^ and the low-level of scrutiny test is whether the

government's exercise of eminent domain power is rationally related to

a conceivable pubHc purpose.^^

2. Inverse Condemnation and Physical Invasion.—The United States
Supreme Court has not read the Takings Clause literally nor in its

original meaning,-^ Rather, the Court has expanded the meaning grad-

ually. From the eminent domain context, the concept of just compensation
expanded into what is now called inverse condemnation. When govern-
ment causes damage to privately owned real property by negligent acts,
the owner may not have the ability to recover damages because the
government may have sovereign immunity from tort Hability. To avoid
this inequitable result, plaintiffs converted the request for damages into

a claim of attempted acquisition. However, the parallel to a tort cause

of action remains, including compensation as damages and the need for

proving causation. ^^ By converting the property damage into an attempted

^'United States v. Willow River Power Co., 324 U.S. 499, 511 (1945) (claimant's

interest in high water level to maintain its power head is not a right protected by law);

United States v. General Motors Corp., 323 U.S. 373, 378 (1945) (the fifth amendment

concerns itself with the physical thing and not with collateral interests which may be
incident to ownership).

^^United States v. Miller, 317 U.S. 369, 374 (1943). In a situation where market

value is impossible to determine, other standards such as replacement, relocation or

substitute costs will be considered. United States v. Fifty Acres of Land, 469 U.S. 24

(1984); United States v. 564.54 Acres of Land, 441 U.S. 506, 508-09 (1979).

^^Berman v. Parker, 348 U.S. 26 (1954).

Once the object is within the authority of Congress, the means by which it will

be attained is also for Congress to determine. Here one of the means chosen

is the use of private enterprise for redevelopment of the area. Appellants argue

that this makes the project a taking from one businessman for the benefit of

another businessman. But the means of executing the project are for Congress

and Congress alone to determine, once the public purpose has been established.

Id. at 33.

^^Hawaii Housing Auth. v. Midkiff, 467 U.S. 229 (1984). "[Wjhere the exercise of

the eminent domain power is rationally related to a conceivable public purpose, the Court

has never held a compensated taking to be proscribed by the Public Use Clause." Id. at

241.

2'Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 142 (1978) (Rehnquist,
J., dissenting), reh'g denied, 439 U.S. 883 (1978) ("Because the Taking Clause of the

Fifth Amendment has not always been read literally, however, the constitutionality of

appellees' actions requires a closer scrutiny . , . .").

^^See Ragsdale, A Synthesis and Integration of Supreme Court Precedent Regarding
the Regulatory Taking of Land, 55 UMKC L. Rev. 213, 219-22 (1987).



906 INDIANA LAW REVIEW [Vol. 21:901

acquisition, plaintiffs could argue that the Takings Clause applies and

is self-executing; that is, a property owner does not need to have statutory

consent to recover from government as was necessary for a tort recovery.

A landowner suing for property damages can claim that government has
acquired the property without paying just compensation for it.^^ If the

landowner prevails, government is forced to compensate the landowner,

but in so doing, it will receive title to the property.

Physical intrusion or occupation of the land by government was

essential in early cases. ^^ Thereafter, the concept of taking by government

action when the government damaged or intruded was expanded to
include government burdening of the airspace above privately owned
property causing damage to the owners' use of their property. ^^

The term "inverse condemnation" appeared in the 1960's.^° It is

called inverse because the landowner rather than the government institutes

the proceedings for condemnation. More specifically, inverse condem-
nation is a cause of action against government to recover the value of

property taken (the opposite of eminent domain under which government

institutes a cause of action against the private property owner to take

the land and the court determines the value of the property to be

taken). 3>

3. Police Power Regulation.—Police power regulations are statutes
or ordinances enacted by government (either state legislatures, or local

councils, boards and commissions) which impose duties or limits upon

those regulated in order to promote, protect and prevent harm to public
interests in health, safety, order, morals and general welfare. A state
is said to inherently have poHce powers because such powers were left

to the states in our constitutional system.^^ A law duly passed by a state

^^See D. Hagman & J. Juergensmeyer, Urban Planning and Land Development
Control Law § 24.3 (2d ed. 1986).

^^Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166 (1871) (a dam constructed
for flood control had caused land to be flooded that had not been purchased by the

government).

^'United States v. Causby, 328 U.S. 256 (1946). The Court held that U.S. aircraft

flying in and out of a nearby Air Force base, thus rendering a chicken business unprofitable

and preventing the owners from sleeping at night, was "as much an appropriation of the
use of the land as a more conventional entry upon it." Id. at 264.

^°See Bauman, The Supreme Court, Inverse Condemnation, and the Fifth Amendment:
Justice Brennan Confronts the Inevitable in Land Use Controls, 15 Rutgers L. J. 15,
45 (1983).

^'United States v. Clarke, 445 U.S. 253 (1980). Inverse condemnation is a "shorthand

description of the manner in which a landowner recovers just compensation for a taking

of his property when condemnation proceedings have not been instituted." Id. at 257.

^^Thurlow V. Massachusettes, 46 U.S. 504, 527 (1847) (the License Cases). See generally

R. Rotunda, J. Nowak, & J. Young, 2 Treatise on Constitutional Law, Substance
AND Procedure § 15.1 at 31 (1986). See Ragsdale, supra note 26, at 223.



1988] TEMPORARY REGULATORY TAKINGS 907

legislative branch of government is valid unless it violates a provision

of the United States Constitution or the state's constitution having to

do with the rights of individuals or unless it interferes with a power

allocated to the federal government by the United States Constitution."

If a regulation is not valid, the remedy is to invalidate the regulation. ^"^

Zoning became a judicially sanctioned police power early in the 1900's."

4. The Blending of Two Different Doctrines, the Idea that the Taking
Clause is a Restraint on Police Power.—The first suggestion that a police
power regulation could be a "taking" of property under the fifth amend-

ment came in 1887 in Mugler v. Kansas.^^ The Supreme Court rejected

the argument:

A prohibition simply upon the use of property for purposes that
are declared, by valid legislation, to be injurious to the health,

morals, or safety of the community, cannot, in any just sense,

be deemed a taking or an appropriation of property for the

public benefit. . . . The power which the States have of pro-

hibiting such use by individuals of their property, ... is not

—

and, consistently with the existence and safety of organized

society, cannot be—burdened with the condition that the State
must compensate such individual owners for pecuniary losses

they may sustain, by reason of their not being permitted, by a
noxious use of their property, to inflict injury upon the com-

munity.^^

In cases that challenged the use of police power to regulate land use,

the Supreme Court employed substantive due process analysis. ^^ The

Court's rejection of the suggestion that a police power regulation could

"The burden of proof is on the one challenging the law. See Cook, What is the

Police Power?, 7 Colum. L. Rev. 322 (1907).

^^Lake Shore & M.S.R. Co. v. Smith, 173 U.S. 684, 699 (1899).
^Willage of Eudid v. Ambler Realty Co., 272 U.S. 365 (1926).
^^123 U.S. 623 (1887) (owner of a brewery contended that a statute prohibiting

manufacture and sale of intoxicating beverages was invalid under the Due Process Clause

as a taking of property). See infra note 109 and text accompanying notes 108-17.

''Id. at 668-69.

''See Hadacheck v. Sebastian, 239 U.S. 394 (1915); Euclid, 111 U.S. 365; Nectow

V. Cambridge, 277 U.S. 183 (1928). Today for substantive due process analysis in gov-

ernment actions which do not limit "fundamental" constitutional rights, when the plaintiff

presents a prima facie case of an arbitrary and irrational regulation, the government must

prove 1) the regulation serves a public purpose, 2) the means employed by the regulation

bear a reasonable relation to the purpose the regulation seeks to achieve, 3) the means

do not unduly burden the individual affected by the regulation, and 4) the public interest

in the regulation outweighs the harm to the individual. See Hodel v. Indiana, 452 U.S.

314, 331-33 (1981). See generally R. Rotunda, J. Now^ak, & J. Young, supra note 32,
at 61-64.



908 INDIANA LAW REVIEW [Vol. 21:901

be a taking was not challenged for 35 years, until Justice Holmes stated

in dictum in Pennsylvania Coal Co. v. Mahon^^ that an exercise of
police power could at some point become a "taking. '"^° It should not

be understated; this was a radical idea at the time/' It should also be

noted that Justice Holmes used the Contract Clause'^^ and the Due Process
Clause"*^ in arriving at the decision; the Court did not find a taking

which required just compensation. "^"^ The next Supreme Court case in

which both due process and takings analysis were used to suggest a

regulatory taking was Goldblatt v. Town of Hempstead'^^ in 1962.
In the 1970's, more than 50 years after Pennsylvania Coal Co. v.

Mahon, landowners began to allege that regulations had effected an
inverse condemnation for which just compensation (rather than invali-

dation) was due.'^^ Although it has not been the holding of any United

States Supreme Court case since then/^ the Supreme Court has cited

^^260 U.S. 393 (1922). The Court held that a state statute exceeded the police power

and contravened the rights of the coal-owner under the Contract Clause and the Due

Process Clause of the fourteenth amendment. Id. at 413. "We assume, of course, that
the statute was passed upon the conviction that an exigency exists that would warrant

the exercise of eminent domain." Id. at 416.

'*°"[W]hile property may be regulated to a certain extent, if regulation goes too far

it will be recognized as a taking." Id. at 415. The meaning of Justice Holmes' statement

is unclear; it may mean simply that the regulation would be invalid, or that compensation
would be due. Compare Williams, Smith, Siemon, Mandelker & Babcock, The White
River Junction Manifesto, 9 Vt. L. Rev. 193, 208-14 (1984) [hereinafter White River

Junction Manifesto] with Bauman, supra note 30, at 38-44.

^'See Roberts, Mining with Mr. Justice Holmes, 39 Vand. L. Rev. 287, 294 (1986).

"•^''No State shall . . . pass any . . . Law impairing the Obligation of Contracts
. . .

." U.S. Const, art. I, § 10.

*^See supra note 17.

'''*"But obviously the implied limitation must have its limits, or the contract and due

process clauses are gone." Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).

Justice Holmes went on to say, if the regulation violates these, government may acquire
the property by eminent domain. Id. See generally Note, Takings Law—Is Inverse Con-
demnation an Appropriate Remedy for Due Process Violations?—San Diego Gas & Electric
Co. V. City of San Diego, 450 U.S. 621 (1981), 57 Wash. L. Rev. 551, 557 n.42 (1982).

"'369 U.S. 590, 594-96 (1962). The Court recognized the Mahon formulation that
a "regulation cannot be so onerous as to constitute a taking which constitutionally requires

compensation," however, it found no need to decide that question because of lack of

evidence that the regulation reduced the value of the lot in question. The Court then

proceeded to use traditional due process analysis to reach its decision (citing Lawton v.

Steele, 152 U.S. 133, 137 (1894)). For an explanatory model designed to explicitly combine

substantive due process and takings analysis see Costonis, Presumptive and Per Se Takings:

A Decisional Model for the Taking Issue, 58 N.Y.U. L. Rev. 465 (1983).
"^HFH Ltd. V. Superior Ct., 15 Cal.3d 508, 542 P.2d 237, 125 Cal. Rptr. 365 (1975),

cert, denied, 425 U.S. 904 (1976). See Ragsdale, supra note 26, at 230.

"'The cases involving land use regulation, in which the landowner has claimed a

taking, that have reached the Supreme Court since Mahon have either upheld the regulation



1988] TEMPORARY REGULATORY TAKINGS 909

Holmes' "too far" doctrine in other decisions."^^ The effect of Holmes'

doctrine is to limit poHce power land-use regulatory authority by declaring

that the Constitution will trump its exercise at some point. The Takings

Clause has come a long way from its original meaning as a restraint
on the federal government physically taking land for public purposes

without payment, to the idea of its use as a restraint on government

regulation in the land use and zoning context. First Church moved the
meaning of the clause a step further.

5. A New Doctrine.—A new doctrine, temporary regulatory taking,
formed the basis for requiring just compensation as a remedy in First

Church. Justice Brennan initiated the "temporary taking" idea in his

1981 dissent in San Diego Gas & Electric Co. v. City of San Diego:^^

The fact that a regulatory "taking" may be temporary, by virtue
of the government's power to rescind or amend the regulation,
does not make it any less of a constitutional "taking." Nothing
in the Just Compensation Clause suggests that "takings" must

be permanent and irrevocable. Nor does the temporary reversible
quality of a regulatory "taking" render compensation for the

time of the "taking" any less obligatory. This Court more than

once has recognized that temporary reversible "takings" should

be analyzed according to the same constitutional framework

apphed to permanent irreversible "takings. "^°

One of the cases cited to support Justice Brennan's statement was United
States V. Causby,^^ a 1946 Supreme Court case in which frequent low-

level flights of Army and Navy airplanes effected a "taking" of an air
easement over a chicken farm. In Causby, it was not clear whether the

taking was a temporary or a permanent taking. "Since on this record

it is not clear whether the easement taken is a permanent or a temporary

one, it would be premature for us to consider whether the amount of

or not decided the issue. See Nollan v. California Coastal Comm'n, 107 S. Ct. 3141

(1987) (condition required for granting of a building permit); Keystone Bituminous Coal

Ass'n V. DeBenedictis, 107 S. Ct. 1232 (1987) (state regulation of coal mining); MacDonald,

Sommer, & Frates v. Yolo County, 106 S.Ct. 2561 (1986) (proposed subdivision); Williamson
County Regional Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985) (residential
cluster zoning); San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621 (1981)
(open-space plan); Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978) (historic
preservation zoning); Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962) (ordinance
prohibiting use of land for gravel mining below water table).

^«5ee, e.g., Agins v. Tiburon, 447 U.S. 255, 260 (1980); Andrus v. Allard, 444 U.S.

51, 66 (1980); Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 127 (1978).
^^450 U.S. 621 (1981) (Brennan, J., dissenting).

5°M at 657.
^'328 U.S. 256 (1946). See supra note 29 and accompanying text.



910 INDIANA LAW REVIEW [Vol. 21:901

the award made by the Court of Claims was proper."" Justice Brennan
cited three World War II cases in which the government was required
to compensate property owners for temporary use and occupation of

their property—eminent domain cases which involved temporary physical
use for which lease payments were due."

Justice Brennan feared that if the remedy for a regulation that goes

"too far" was merely the invalidation of the regulation and not money
damages, government would not exercise restraint. Government, Justice

Brennan warned, could prolong decisionmaking, and make landowners
run the gauntlet repeatedly. ^"^ The Court and critics may be, as one
commentator said, willing to live with the "petty larceny of police power"

regulations but not with highway robbery. ^^

Justice Brennan may have wanted to be fair to landowners and to
increase regulatory decisions which lead to efficient resource allocations.

Fairness to landowners affected by land-use regulation implies compen-

sation for their losses caused by the regulation. Economists speak of

decisions which efficiently utilize resources by internalizing external costs

and benefits, or imposing on decisionmakers all the effects of their

decisions. ^^ A remedy that requires a damage award or compensation
to an injured landowner influences governmental decisionmakers' be-

havior by imposing the threat of liability for government's regulatory

actions. ^^ It increases efficiency in decisionmaking by forcing decision-

''San Diego Gas, 450 U.S. at 657 (Brennan, J., dissenting) (quoting Causby, 328

U.S. at 268) (emphasis in original).

^'Kimball Laundry Co. v. United States, 338 U.S. 1 (1949); United States v. Petty

Motor Co., 327 U.S. 372 (1946); United States v. General Motors Corp., 323 U.S. 373

(1945).

''*See San Diego Gas, 450 U.S. at 655 (Brennan, J., dissenting). A City Attorney
of Thousand Oaks, Cahfornia, was quoted by Justice Brennan as a glaring example of

this tactic:

If legal preventive maintenance does not work, and you still receive a claim

attacking the land use regulation, or if you try the case and lose, don't worry

about it. All is not lost. One of the extra 'goodies' contained in the recent

[California] Supreme Court case . . . appears to allow the City to change the

restriction in question, even after trial and judgment, make it more reasonable,

more restrictive, or whatever, and everybody starts over again.

Id. at 655 n.22 (quoting Longtin, Avoiding and Defending Constitutional Attacks on Land

Use Regulations (Including Inverse Condemnation), 38B NIMLO Municipal L. Rev. 175,
192 (1975)).

"Roberts, supra note 41, at 291 (noting that one week before the Pennsylvania Coal

Co. V. Mahon decision Justice Holmes deleted the "petty larceny" phrase from his opinion).
^^See R. MusGRAVE & P. Musgrave, Public Finance in Theory and Practice 60-

80 (1973). Cf. W. FiscHEL, The Economics of Zoning Laws \\6-\T1 (1985) (argues for
a property rights approach as an alternative to traditional economic analysis).

'"'The knowledge that a municipality will be liable for all of its injurious conduct.



1988] TEMPORARY REGULATORY TAKINGS 911

makers to weigh the costs and benefits of regulation. ^^

The remedy Justice Brennan fashioned was one of interim compen-

satory damages:

In my view, once a court estabHshes that there was a regulatory
''taking," the Constitution demands that the government entity

pay just compensation for the period commencing on the date
the regulation first effected the "taking," and ending on the

date the government entity chooses to rescind or otherwise amend
the regulation. ^^

Justice Brennan later denied in a footnote that the remedy was a damages

remedy;^° however, upon his first statement of the remedy, the footnote

included a discussion of interim damages,^' and, in addition, a discussion

followed ending with his statement that "[i]nvalidation unaccompanied

by payment of damages would hardly compensate the landowner for

any economic loss suffered during the time his property was taken. "^^

Therefore, the theory of a "temporary regulatory taking" is that, if a

court holds a government has taken by regulating, the government may
keep the regulation and file eminent domain actions, amend the regulation
to make it acceptable to the court, or rescind the regulation; nonetheless,
government pays damages for the period the property was "taken." In

reaching its decision in First Church, the majority adopts Justice Bren-

nan's temporary regulatory taking doctrine and remedy as formulated

in the dissenting opinion in San Diego Gas.^^

whether committed in good faith or not, should create an incentive for officials who may
harbor doubts about the lawfulness of their intended actions to err on the side of protecting

citizens' constitutional rights." Owen v. City of Independence, 445 U.S. 622, 651-52 (1980).
'^Sometimes regulatory policies are designed to impose external costs on others in

order to keep the government and society in general from bearing those costs, such as

regulations designed to induce polluters to internalize the costs of their activities. If

government liability is used as a policy tool to deter the passing of regulations, however,

such liability may instead provide an incentive for government inaction because no liability
attaches to a decision not to act, resulting in inefficiency. The efficiency argument can

go either way. See generally Sterk, Government Liability for Unconstitutional Land Use
Regulations, 60 Ind. L. J. 113 (1984).

^'San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 653 (1981)(Brennan,
J., dissenting). In a footnote. Justice Brennan explains that under his rule, he would give

the government entity whose police power regulation was found to be in violation of the

Takings Clause the option upon the court's ruling to then amend the offending regulation
or to use eminent domain powers to condemn the property. Id. at 653 n.l9.

"^Id. at 659 n.24.

"•'Id. at 655 n.20.

"/<i. at 656 (emphasis added).

"See infra note 74. Justices Marshall, Powell, and Stewart joined Justice Brennan

in his dissent in San Diego Gas, while Justice Rehnquist, writing separately, indicated



912 INDIANA LAW REVIEW [Vol. 21:901

II. Analysis of First Church

The Supreme Court ruled June 9, 1987, for the first time that a
government that prohibits all use of a property by enactment of a land-

use regulation must pay compensation for the period of time between

the "taking" and the date when a court holds that the property has
been taken. The decision modified existing law, adding compensation
for a "temporary regulatory taking. "^"^ Prior to the decision, the Cal-

ifornia Supreme Court had declared invalidation of the regulation to be
the appropriate remedy. ^^

A. The Court Did Not Find a Taking

The First English Evangehcal Lutheran Church of Glendale owned
a twenty-one acre tract of land nestled in a canyon in Los Angeles

County. Upon the land was situated a church camp, "Lutherglen",
which was used by church members and by handicapped children and
adults. On February 9 and 10, 1978, following a forest fire that denuded
acres of forest upstream, a rainstorm dropped eleven inches of rain on

the camp and the surrounding area and caused a flash flood which took
ten lives and destroyed much property. The flood wiped out Lutherglen's
dining hall, two bunkhouses, a caretaker's lodge, an outdoor chapel,

and a footbridge across the creek. ^^ The flood was the second major
flood in the twenty year period the church had owned the property. ^^

In response to the flood, Los Angeles County enacted an interim

flood control ordinance which placed building restrictions on twelve acres
of the property located on flat land in the floodway. All of the plaintiff's

buildings had been located on this land in the floodway. Thus, the

church sought compensation alleging that the ordinance prohibited all

use of its property. The California courts ruled against the church
receiving compensation, citing a 1979 case, Agins v. City of Tiburon^^

(upheld by the United States Supreme Court in 1980 on procedural

grounds), in which the remedy available was limited to overturning the

land-use regulation, not compensation.

support for Justice Brennan's dissent, but joined the majority in dismissing for "want

of a final judgment." Id. at 636. In First Church, the majority consisted of Chief Justice

Rehnquist, who wrote the opinion, Justices Brennan, Marshall, Powell, Scalia, who replaced
Stewart on the Court, and White, who appears to have switched sides.

*^First English Evangelical Lutheran Church of Glendale v. County of Los Angeles,

107 S. Ct. 2378, 2383 (1987).

«Agins V. City of Tiburon, 24 Cal.3d 266, 598 P.2d 25, 157 Cal. Rptr. 372 (1979),

aff'd on other grounds, 447 U.S. 255 (1980).

"^First Church, 107 S. Ct. at 2381.

^'Brief of Appellee at 7, First Church (No. 85-1199).

^24 Cal. 3d 266, 598 P.2d 25, 157 Cal. Rptr. 372 (1979), aff'd on other grounds,

441 U.S. 255 (1980).



1988] TEMPORARY REGULATORY TAKINGS 913

The Supreme Court in First Church did not say that a flood control
ordinance is on its face a taking, or that this ordinance as applied is

a taking. Because the church did not challenge the flood control ordinance

facially, facial validity was not an issue or a question decided. Rather,

the church alleged that this ordinance as appHed denied the landowner

all use of its property; nevertheless, the Court did not decide the as-

applied question on the merits but remanded for the CaHfornia Court

of Appeal to decide whether the flood control ordinance denied all use.^^

B. The First Church Decision

1. The Claim for Compensation was Properly Presented.—The Su-
preme Court in First Church wanted to decide the remedy issue, an

issue not reached in four previous cases before the sharply divided court

since 1980.^^ The Court could have again refused to decide the issue by

^'The Court rejected the suggestion that

[W]e must independently evaluate the adequacy of the complaint and resolve

the takings claim on the merits before we can reach the remedial question. . . .
We accordingly have no occasion to decide whether the ordinance at issue
actually denied appellant all use of its property .... [The question remains]

open for decision on the remand we direct today.
First Church, 107 S. Ct. at 2384-85.

Most local flood control ordinances based on solid technical information and accurate

hydrological studies that have been challenged have been upheld. See Plater, The Takings

Issue in a Natural Setting: Floodlines and the Police Power, 52 Tex. L. Rev. 201, 233

n.61 (1974). Ordinances were upheld in Turner v. Town of Walpole, 409 N.E.2d 807
(Mass. App. 1980) and Turnpike Reality Co. v. Town of Dedham, 362 Mass. 221, 284
N.E.2d 891 (1972), cert, denied, 409 U.S. 1108 (1973). See generally R. Anderson,

American Law^ of Zoning § 9.49 (3 ed. 1986). The Federal flood insurance statute

discourages floodplain development by requiring local governments, as a precondition to

issuance of subsidized insurance policies, to adopt local flood control ordinances. 42 U.S.C.

§ 4015 (1982 & Supp. 1983). See infra note 172.
^"The Court had been chided for this lack of decision, see, e.g., Sallet, Regulatory

"Takings" and Just Compensation: The Supreme Court's Search for a Solution Continues,

18 Urb. Law. 635 (1986). "Legal scholars with a flair for the arcane may discover whether
the Court has now set a record for futility by deciding four cases without once reaching

the issue for which review was granted." Id. at 655.

The four cases were MacDonald, Sommer, & Frates v. Yolo County, 106 S. Ct.
2561 (1986) (5-4 decision); Williamson County Regional Planning Comm'n v. Hamilton
Bank, 473 U.S. 172 (1985); San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S.
621 (1981) (5-4 decision); and Agins v. Tiburon, 447 U.S. 255 (1980). In Agins, the United

States Supreme Court ruled the regulation did not effect a taking and, therefore, did not

reach the remedy issue. 447 U.S. 255. In Yolo County, the court held lower court rulings

left open the possibility that some development would be permitted, and, without reaching

the taking issue, the remedy issue was not ripe. 106 S.Ct. 2561. In Williamson County,

the Court held the landowner was required to "resort to the procedure for obtaining

variances [that] would result in a conclusive determination by the Commission whether it



914 INDIANA LAW REVIEW [Vol. 21:901

ruling there was no taking as a matter of law, or it could have found

the case was not ripe for decision. Instead, in First Church, the Court

noted that the complaint alleged that a regulation had denied the land-

owner all use,^* that the California Court of Appeal in an unreported

decision assumed the complaint sought "damages for the uncompensated

taking of all use,"^^ and that the California Supreme Court denied

review. Therefore, the United States Supreme Court found the consti-

tutional question squarely presented without the need to independently

evaluate the adequacy of the complaint or resolve the taking claim on

the merits before reaching the remedial question. ^^

2. The Just Compensation Clause of the Fifth Amendment Provides
Compensation for a Temporary Regulatory Taking.—The issue the United
States Supreme Court decided was whether the payment of damages is

required for the period of time prior to the ultimate invalidation of the

challenged regulation during which a regulation denies a landowner all

use of his land.^"^ Chief Justice Rehnquist, writing for the majority of

six Justices, found guidance in the same cases from the World War II
period cited by Justice Brennan in San Diego Gas.^^ "These cases reflect

the fact that 'temporary' takings which, as here, deny a landowner all

use of his property, are not different in kind from permanent takings,

for which the Constitution clearly requires compensation."^^ The opinion

would allow [the landowner] to develop the subdivision in the manner . . . proposed."

473 U.S. at 193. Also, the landowner "did not seek compensation through the procedures

the State has provided for doing so." Id. at 194. In San Diego Gas, the Court held that

no final judgment had been entered in the state court and "further proceedings are

necessary to resolve the federal question whether there has been a taking at all." 450

U.S. at 633.

^'In Williamson County, the Court had required a final decision by the lower courts

that the land-use regulation was a "taking" before the issue was ripe. 473 U.S. at 186.

Following that, in Yolo County, the dissent suggested the issue was not premature if the

landowner's pleading sufficiently alleged there had been a final decision denying all

reasonable economic beneficial use. 106 S. Ct. at 2572. Subsequently in Eirst Church, the

majority accepted Yolo County's dissenting opinion that an allegation was all that was

necessary. 107 S. Ct. at 2384.

^^In the California trial court, the defendant county moved to strike (Cal. Code

Crv. Proc. § 436) the allegation in the complaint as irrelevant. The trial court granted

the motion, and the CaUfornia Court of Appeal affirmed. 107 S. Ct. at 2384. In contrast,

in Yolo County the California Court of Appeal read the trial court opinion as a demurrer

(Cal. Code Civ. Proc. § 430.10(3)) which challenges the sufficiency of the pleadings,

therefore, not admitting the conclusions of the complaint. 106 S. Ct. at 2563.

''Eirst Church, 107 S. Ct. at 2384-85. See supra note 69.

^""[WJe beUeve . . . [the Supreme Court of California] has truncated the [Takings

Clause] rule by disallowing damages that occurred prior to the ultimate invalidation of

the challenged regulation." Id. at 2387 (emphasis added).

'^Id. See supra note 53 and accompanying text.

''Id. at 2388.



1 988] TEMPORAR Y REGULA TOR Y TAKINGS 9 1

5

regarded two earlier cases which denied compensation for the regulatory

"taking" of property prior to invahdation as "cases merely stand[ing]

for the unexceptional proposition that the valuation of property which

has been taken must be calculated as of the time of the taking. . . ."^^

The Court's statement of the holding was, "We merely hold that where
the government's activities have already worked a taking of all use of

property, no subsequent action by the government can relieve it of the

duty to provide compensation for the period during which the taking

was effective. "^^

The Court reversed the California Court of Appeal and remanded

the case for that court to decide on the merits if the church had been

denied all use^^ and, if so, whether the denial might be non-compensable

on the theory of the state's authority to enact safety regulations, ^°

directing attention to the police power regulatory cases, Goldblatt v.

Town of Hampstead,^^ Hadacheck v. Sebastian,^^ and Mugler v. Kansas.^^

3. Justice Steven's Dissent.—Justice Stevens wrote the dissenting
opinion, in which he was joined in part by Justices Blackmun and

O'Connor. ^"^ The dissent concluded that the majority had acted impru-

dently by deciding the remedy issue when a decision could have been
avoided because no lower court had decided there was a taking. Justice

Stevens stressed that this appellant was not "entitled to compensation

as a result of the flood protection regulation that the County enacted. "^^

Citing Keystone Bituminous Coal Association v. DeBenedictis^^ and Mu-
gler V. Kansas,^^ he argued that government may protect the health and
safety of the community.^^ Stevens wrote, "As far as the United States

''Id. The cases were Danforth v. United States, 308 U.S. 271 (1939), and Agins v.

Tiburon, 447 U.S. 255 (1980).

'^First Church, 107 S. Ct. at 2389.

'''Id.

'''Id. at 2384-85.

«'369 U.S. 590 (1962). See supra notes 45, 47, & infra note 99.
^^239 U.S. 394 (1915). See infra note 109.

«n23 U.S. 623 (1887). See supra note 36 & infra note 109.
^''Justices Blackmun and O'Connor did not join in Justice Steven's discussion of

whether a temporary taking that goes too far always constitutes a constitutional taking

even if in effect only for a limited period of time. First Church, 107 S. Ct. at 2393-96,

or in his discussion of preference for the Due Process Clause in protecting property owners
from unfair and dilatory government decisionmaking. Id. at 2398-99. For discussion of

the Due Process Clause in relation to land-use regulations, see Note, Testing the Con-
stitutional Validity of Land Use Regulations: Substantive Due Process as a Superior
Alternative To Takings Analysis, 57 Wash. L. Rev. 715 (1982).

''First Church, 107 S. Ct. at 2391.

*M07 S. Ct. 1232 (1987). See infra note 115 and accompanying text.

^^23 U.S. 623 (1887). See supra note 36 and text accompanying note 37, & infra
note 109 and text accompanying notes 108-17.

''First Church, 107 S. Ct. at 2391.



916 INDIANA LAW REVIEW [Vol. 21:901

Constitution is concerned, the claim that the ordinance was a taking of

[the church's property] should be summarily rejected on its merits. "^^

The dissent regarded as a distortion of precedent the majority's

conclusion that all ordinances which would be a "taking" if in effect

permanently, necessarily were a "taking" if in effect temporarily. The

question, according to the dissent, is whether a "temporary" regulation

was so severe that a taking occurred during the period before the

regulation was invaUdated; only extreme regulations are "takings." Only

where a "major portion of the property's value" is taken away is there

an actual taking. ^°

C A New Remedy

Compensation for a "temporary regulatory taking" is a new remedy.

"Temporary regulatory taking" means the taking that occurs in the

interim period after enactment or the effective date of the regulation,

but before the regulation is held unconstitutional, which holding forces

the government to choose either to amend or rescind the regulation, or
to exercise eminent domain powers. However, a very similar remedy was

available prior to the First Church decision using either the Takings

Clause^^ or substantive due process analysis,^^ and Section 1983.^^ If a

regulation is declared invahd on substantive due process grounds, the

landowner can then file a Section 1983 suit for damages for the interim

period during which the regulation was in effect. The primary difference

between the two remedies is that the new remedy is based on the United

States Constitution, while the Section 1983 claims are statutory. One
problem with the new remedy is that a regulation cannot be invalidated
without requiring a damage award, a separation which might be ap-
propriate in some cases. The goal of the landowner may not be to win
damages, but to get the unwanted regulation rescinded.

''Id. at 2393.

"^Id. at 2393-96.

'•Hernandez v. City of Lafayette, 643 F.2d 1188 (5th Cir. 1981).

Since the just compensation clause applies to the states through the due process

clause of the fourteenth amendment ... an action for damages will lie under

§ 1983 in favor of any person whose property is taken for public use without

just compensation by a municipality through a zoning regulation that denies the

owner any economically viable use thereof.

Id. at 1200. See generally Madsen & DeMeo, Private Property Rights and Local Government
Land Use Control: 42 U.S.C. § 1983 as a Remedy Against Unconstitutional Deprivations

of Property, 1 J. Land Use & Entl. L. 427 (1985).
'^Lake Country Estates v. Tahoe Regional Planning Agency, 440 U.S. 391 (1985).
'^42 U.S.C. § 1983 (1982). See generally D. Hagman & J. Juergensmeyer, supra

note 27, at 311-17 & 845-73.



1988] TEMPORARY REGULATORY TAKINGS 917

1. ''Temporary*' Means Interim.—The word "temporary" in tem-
porary regulatory taking is an inaccuracy of speech. An additional
confusion regarding the word "temporary" is the fact that in First
Church, the "temporary" regulation was replaced with a permanent

regulation. More specifically, the challenged regulation was a temporary
emergency ordinance enacted on January 11, 1979, to be in effect while

a permanent ordinance was being drafted, hearings were being held, and

the ordinance was being adopted. In spite of this fact, the church's

claims were based on the temporary ordinance and were not amended
to reflect the permanent ordinance adopted on August 11, 1981.^'* In

the opinion. Chief Justice Rehnquist states that a "temporary" regulatory

taking is one later invalidated by a court. ^^ A distinction in duration is
used as if it were a difference in kind of taking, when really the Court
is promulgating a new remedy for a different time period—the period
before a court invalidates a regulation. The correct word is interim

because the holding in First Church was that a regulation, whether in

effect for a short or a long duration (one use of "temporary"), whether

replaced by another regulation or not (another use of "temporary"), //
invalidated by a court leads in every case to the government paying for

the interim "use" of the property. ^^

2. ''All Use*' as a Standard or Test.—The Court utilized the phrase
"all use" in the holding of First Church. "We merely hold that where
the government's activities have already worked a taking of all use of

property, no subsequent action by the government can relieve it of the

duty to provide compensation for the period during which the taking

was effective. "^^ Undoubtedly, a challenger will find it difficult to prove

that a regulation took all use. Possibly, the Court could have meant

that unless all use has been denied, no compensation is required. ^^

Although such an argument can be made, a more hkely reason for

choosing the phrase is that it was taken from the complaint to avoid

^"•Brief of Appellee at 10-13, First English Evangelical Lutheran Church of Glendale

V. County of Los Angeles, 107 S. Ct. 2378 (1987) (No. 85-1199).

''First Church, 107 S. Ct. at 2383.

''Id. at 2389.

'''Id. (emphasis added).

''**A11 zoning will permit the owner some use, even if the use is only agricultural,

open space, or wetland. The zoning may restrict buildings but still provide for uses which
have some economic value, e.g., archery ranges, arboretums, athletic fields, beaches,

boarding horses, boat rental, campgrounds, fishing and casting ponds, greenhouses, golf

courses, golf driving ranges, parks, pastures, playgrounds, polo fields, riding and hiking

trails, riding academies, stables, rodeos, ski lifts, tows, and runs, swimming pools, tennis

courts, volleyball courts, and so forth. See generally P. Rohan, 6 Zoning and Land Use
Controls (1987). In addition, restrictions may effect only part and not all of a property.
See generally R. Anderson, supra note 69, at § 17.01-17.79.



918 INDIANA LAW REVIEW [Vol. 21:901

Stating what the standard for finding a taking is because the Court has

said it has no clear standard or test.^^

Various statements of a test for finding a taking have appeared in

the cases. Justice Holmes in Mahon used "diminution in value. "'^ Since
then, there have been many formulations; the one closest to "all use"
is found in United States v. General Motors Corp.,^^^ where the Court

noted, "[when the] effects [of government's actions] are so complete as

to deprive the owner of all or most of his interest in the subject matter,

[it amounts] to a taking. "'^^ A formulation of a test more favorable
to a challenger is interference with the investor's investment-backed

expectations. '^^ In MacDonald, Sommer, & Frates v. Yolo County, ^^"^

the Supreme Court wrote, "Our cases have accordingly 'examined the
"taking" question by engaging in essentially ad hoc, factual inquiries

that have identified several factors—such as the economic impact of the
regulation^ its interference with reasonable investment-backed expectation,

and the character of the governmental action—that have particular sig-

^Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978).
The question of what constitutes a "taking" for purposes of the Fifth Amendment
has proved to be a problem of considerable difficulty. . . . [T]his Court, quite

simply, has been unable to develop any "set formula" for determining when

"justice and fairness" require that economic injuries caused by public action

be compensated by government .... Indeed, we have frequently observed that

whether a particular restriction will be rendered invalid by the government's

failure to pay for any losses proximately caused by it depends largely "upon

the particular circumstances [in that] case."

Id. at 123-24. Accord MacDonald, Sommer & Frates v. Yolo County, 106 S. Ct. 2561
(1986). "To this day we have no 'set formula to determine where regulation ends and

taking begins.' " (quoting Goldblatt v. Town of Hempstead, 369 U.S. 590, 594 (1962)).
Id. at 2566.

'°°Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922).
Government hardly could go on if to some extent values incident to property

could not be diminished without paying for every such change in the general

law. As long recognized, some values are enjoyed under an implied limitation

and must yield to the police power. But obviously the implied limitation must

have its limits, or the contract and due process clauses are gone. One fact for

consideration in determining such hmits is the extent of the diminution. When
it reaches a certain magnitude, in most if not in all cases there must be an

exercise of eminent domain and compensation to sustain the act.

Id. at 413.

'°'323 U.S. 373 (1945).

'"^M at 378.

^°^See Williamson County Regional Planning Comm'n v. Hamilton Bank, 473 U.S.
172, 175 (1985); Penn Central, 438 U.S. at 127. But see Mandelker, Investment-Backed

Expectations: Is There a Taking?, 31 J. of Urb. & Contemp. L. 3 (1987) (the author
argues the Court should abandon the investment-backed expectations taking factor).

'0^106 S. Ct. 2561 (1986).



1 988] TEMPORAR Y REGULA TOR Y TAKINGS 9 1

9

nificance.' "'^^ More recently in Agins v. City of Tiburon,^^^ the Supreme
Court stated that "[t]he appUcation of a general zoning law to particular

property effects a taking if [(1)] the ordinance does not substantially

advance legitimate state interests, or [(2)] denies an owner economically

viable use of his land."*^^ Where the phrase "all use" came from and
what the Court meant is certainly not clear.

III. What Remains Unresolved

The First Church decision left important unresolved issues that will

be argued about in the future. Most importantly, the Court has yet to
resolve what a taking is. Two lines of cases, the Mugler line and the
Mahon line, lead to different formulations of the answer. The older
Mugler V. Kansas^^^ line established that proper use of government's

police power in passing appropriate regulations is not a taking:

A prohibition simply upon the use of property for purposes that
are declared, by vahd legislation, to be injurious to the health,

morals, or safety of the community, cannot, in any just sense,

be deemed a taking or an appropriation of property for the

public benefit. . . . The exercise of the police power by . . .

prohibition of its use in a particular way, whereby its value

becomes depreciated, is very different from taking property for

public use, or from depriving a person of his property without

due process of law.^°^

The more recent Pennsylvania Coal Co. v. Mahon^^^ line argues that

a regulation that goes "too far" can be a taking.'^* Although the two

•o^M at 2566 (quoting Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979)).

'M47 U.S. 255 (1980).

'°'Id. at 260 (citations omitted).

'°«123 U.S. 623 (1887). See supra note 36. The attempt to distinguish "regulation"

from "taking" has been said to be the "most haunting jurisprudential problem in the

field of contemporary land-use law— . . . one that may be the lawyers' equivalent of the
physicists' hunt for the quark." C. Haar, Land Use Planning 766 (1977).

'°^123 U.S. at 668-69. Mugler, who owned a brewery, was convicted of making beer
without a license during prohibition. He claimed the state's statute violated the fifth and
fourteenth amendments and that the regulation of his use was a taking of property without

just compensation. Justice Harlan found a valid exercise of regulatory authority to protect

the public health, safety and morals.

Other cases in this line are Hadacheck v. Sebastian, 239 U.S. 394 (1915) (a ban on

a brickyard within a residential area which had grown up around it; the brickyard had

become a health hazard because it produced fumes, gases, smoke and dust) and Goldblatt

V. Town of Hempstead, 369 U.S. 590 (1962). See supra note 45.
"°260 U.S. 393 (1922).

'"M at 415. See supra notes 39-40 and accompanying text.



920 INDIANA LAW REVIEW [Vol. 21:901

appear to conflict, Mahon did not overturn Mugler. In writing about
the just compensation issue, commentators have argued that one of these

Unes of cases was controlhng and the other did not apply. Those who
argued for compensation as a remedy "heard" Mahon and Justice
Brennan's dissent in San Diego Gas,^^^ and found the Mugler line not

controlling.''^ Those who argued for invahdation only and opposed
compensation as a remedy "heard" Mugler and found Justice Holmes'

statement in Mahon "metaphoric.""^
The fact is, the two are not mutually exclusive; the Court is still

following both lines as evidenced by two decisions handed down in
19S1—First Church, which descends from the Mahon line, and Keystone
Bituminous, ^^^ which descends from the Mugler line. In Keystone Bi-

tuminous, the Court held that a Pennsylvania regulation of coal mining

was a valid exercise of the state's police power to protect public health

and welfare. "Many cases before and since Pennsylvania Coal have
recognized that the nature of the State's action is critical in takings

analysis."''^ The Court explicitly rejected the assertion that Pennsylvania

Coal overruled Mugler and the Mugler line of cases which focus on the

state's legitimate interest in regulating.''^

Another unresolved issue is whether alternatives to compensation

may be substituted for compensation. Alternatives in lieu of compensation
could work to a property owner's advantage without as great a cost to

"^San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621 (1981). See supra
text accompanying notes 59-62.

"^5^e Bauman, supra note 30.

"'*5ee White River Junction Manifesto, supra note 40, at 212 n.62 (quoting Justice

Breitel in Fred F. French Investing Co. v. City of New York, 39 N.Y.2d 587, 594, 350
N.E.2d 381, 385, 385 N.Y.2d 5, 8 (1976), who said the metaphor Holmes used should
not be confused with the reality which was that the regulatory measure was an invalid

exercise of police power under the due process clause).

"^Keystone Bituminous Coal Ass'n v. DeBenedictis, 107 S. Ct. 1232 (1987) (5-4

decision). At first reading, the facts of Keystone Bituminous seem very similar to the

facts of Pennsylvania Coal Co. v. Mahon, but the majority opinion distinguishes the

cases on two bases:

First, unlike the Kohler Act, the character of the governmental action involved

here leans heavily against finding a taking; the Commonwealth of Pennsylvania

has acted to arrest what it perceives to be a significant threat to the common
welfare. Second, there is no record in this case to support a finding, similar

to the one the Court made in Pennsylvania Coal, that the Subsidence Act makes

it impossible for petitioners to profitably engage in their business, or that there

has been undue interference with their investment-backed expectations.

Id. at 1242.

Chief Justice Rehnquist, who wrote the dissenting opinion in Keystone Bituminous,
is unpersuaded that either reason makes this case distinguishable. Id. at 1253.

'"*M at 1244.

'''Id.



1 988] TEMPORAR Y REGULA TOR Y TAKINGS 92

1

government. An example, transferable development rights, was used in
Penn Central Transportation Co. v. New York City.^^^ It is not clear
what the Court meant in First Church, but it appears to have ruled

out alternatives when it noted, "[only compensation] meet[s] the demands
of the Just Compensation Clause."''^

An additional issue concerns the possibility of government enacting
moratoria without liability for compensation. "Pauses for planning and

deciding" moratoria have been considered valid exercises of police power

if in effect only for a limited time. However, in one sense, a moratorium

would deprive an owner of all use for a defined period, and therefore,

after the First Church decision, arguably would be impossible without

payment of compensation. ^^^ Conversely, an argument can be made that
courts are not likely to invahdate such moratoria, and, unless a regulation

is ultimately invalidated by a court, compensation is not required.

The Court also failed to delineate clearly when a "taking" begins
in a temporary regulatory taking. The analysis of when a taking begins
benefits from dividing time into three periods—before the regulation is
enacted or becomes effective, from that time until the regulation is

invalidated by the court, and after invalidation. The Court had said

that normal delays in the first period are acceptable. •^' In the second

period, just compensation is the remedy.'^ The Court in First Church

says a taking begins when a regulation is adopted or becomes effective,
but, if those dates are not the same, the Court does not say which date

is the time when a taking begins. '^^ A more appropriate time in some
cases may be when the landowner applies unsuccessfully for a permit
to begin development or when the decisionmaking body refuses a land-
owner's petition.

In developing the new temporary regulatory taking remedy, two

issues appear to have been resolved, but counsel seeking innovative

arguments may still want to attack them. One issue that appears to be
resolved is the proper measure of the amount of compensation. In past

debate, one suggestion has been the difference between the market value

"H38 U.S. 104 (1978), reh'g denied, 439 U.S. 883 (1978).

"Tirst English Evangelical Lutheran Church of Glendale v. County of Los Angeles,

107 S. Ct. 2378, 2388 (1987). However, at this point the opinion was arguing that

invalidation was not sufficient; therefore, perhaps the Court would allow alternatives to

compensation.

^^^See White River Junction Manifesto, supra note 40, at 218.

'^'First Church, 107 S. Ct. at 2389.

'^^Id.

^^Ud. at 2388. In First Church, the interim ordinance was adopted by the County

of Los Angeles in January, 1979, and became effective immediately. Thus, the dates were

the same and there was no need for the Court to explain which it meant.



922 INDIANA LAW REVIEW [Vol. 21:901

as regulated and the market value if unregulated.'^"* Another suggestion

has been "fair compensation. "'^^ The Court decided to apply a rental

or lease value, the "value of use of land during the period. "'^^ Another

issue that appears to be resolved is whether government receives any

interest in the challenger's land if a temporary regulatory taking is

found. '2^ In the dissenting opinion in San Diego Gas, Justice Brennan

said the payment is not for ownership but for the temporary use.'^^ The

Supreme Court in First Church held "that invalidation . . . without

payment of fair value for the use of the property . . . would be a

constitutionally insufficient remedy. "'^^ Government apparently receives

no interest because nothing really is "taken"; the property is only used.

Prior to First Church, an issue thought to be resolved was that a

challenger must have a final decision and exhaust all state or local

procedure by which it might obtain just compensation. Although the

Court in First Church chose to formulate a new remedy by assuming

without deciding that the complaint alleged a taking of all use, rather

than requiring the church to have a final decision and exhaust state and

local procedure for compensation, the rule should be settled based on

precedent. In MacDonald, Sommer & Frates v. Yolo County, ^^^ the Court
held landowners must obtain a final decision regarding an application

of a zoning ordinance to their property before it is possible to tell

whether the land retains any reasonable beneficial use.'^' In addition,

the majority in First Church declared that a claim is not ripe for review

until the litigant seeking compensation has sought compensation through

^^'^See generally Note, Affirmative Relief for Temporary Regulatory Takings, 48 U.

Pitt. L. Rev. 1215, 1221-27 (1987) (the author argues that affirmative relief, the power

of the court to order government action, coupled with a damages remedy is superior to

either invalidation or compensation alone); Ragsdale, supra note 26, at 231.

^^^See Costonis, "Fair" Compensation and the Accommodation Power: Antidotes for

the Taking Impasse in Land Use Controversies, 75 Col. L. Rev. 1021, 1052 (1975). "Fair"

compensation, according to Professor Costonis, is a middle level of compensation based

on a reasonable beneficial use standard rather than a highest and best use standard.

'^^First Church, 107 S. Ct. at 2388.

'2'If there is a name for it, the interest taken by a land-use regulation would be a

negative easement in gross. See Humback, A Unifying Theory for the Just-Compensation
Cases: Taking, Regulation and Public Use, 34 Rut. L. Rev. 243, 250 (1982).

'^»San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 658 (1981). Justice
Brennan identifies the interest taken: "[W]here the 'taking' already effected is temporary

and reversible and the government wants to halt the 'taking' . . . 'abandonment [of the

regulation] . . . merely results in an alteration of the property interest taken—from full
ownership to one of temporary use and occupation. . . .' " M (quoting United States v.
Dow, 357 U.S. 17, 26 (1958)).

'^•"First Church, 107 S. Ct. at 2389 (emphasis added).

•3°477 U.S. 340 (1986).

'''Id. at 350.



1988] TEMPORARY REGULATORY TAKINGS 923

the procedures the state has provided. '^^ Nevertheless, the majority ig-

nored this requirement in reaching the decision because of its perception

of the procedural posture of the case. However, the rule based on the

Supreme Court's own declarations and holding should be that a challenger
must have a final decision and exhaust state or local procedure for

compensation before a challenge is ripe for adjudication.

IV. The Practical Consequences of First Church to Local
Planners and Decisionmakers'"

Government at all levels is concerned about the effect the First

Church decision will have. All levels of government filed amici briefs'^"*

before the Supreme Court. The legal daily and monthly press '^^ prom-

inently featured articles about the decision. Justice Stevens, in his dissent,

suggested that although the Court's decision would spawn a great deal

of unproductive litigation, the duty to defend these challenges would

have significant adverse impact on the land-use regulatory process. '^^

Justice Stevens concluded his dissenting opinion, warning:

The policy implications of today's decision are obvious and, I

fear, far reaching. Cautious local officials and land-use planners

'^^First Church, 107 S. Ct. 2378 at 2384 n.6 (quoting Williamson County Regional

Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985)). Cf. Paratt v. Taylor, 451
U.S. 527, 544 (1981) (Section 1983 requires exhaustion of state common law remedies).
See Note, Ripeness for the Taking Clause: Finality and Exhaustion in Williamson County

Regional Planning Commission v. Hamilton Bank of Johnson City, 13 Ecology L. Q.
625, 639-42 (1986).

'"The author uses the word "local" to include cities, towns, municipal corporations,

counties, water, fire, and other special-purpose units called "special districts."

'^"The brief for the United States was filed by the Solicitor General and an Assistant

Attorney General. A brief was filed for the states of California, Alaska, Arkansas, Florida,
Hawaii, lUinois, Maine, Massachusetts, Minnesota, Mississippi, Missouri, New Hampshire,
New York, North Dakota, Oklahoma, South CaroUna, South Dakota, Texas, Utah,
Vermont, Virginia, Washington, Wyoming, and the Commonwealth of Puerto Rico. The

county level was represented by the National Association of Counties, joined by a diverse

group of city, city management, planning, legislative, gubernatorial and mayoral national

associations. A brief was filed by a number of California cities. In addition to government,
a brief was filed by a group of environmental, conservation, park, historic preservation,

and natural resource national organizations in support of the County of Los Angeles.

(Five amici curiae briefs were filed in support of the church.)

'''See, e.g., Callies, Takings Clause— Take Three, 73 ABA J., 48 (1987); Guskind,
Takings Stir Up a Storm, Planning, Sept. 1987, at 5; Sallet, Court Expands "Takings"
Clause, Legal Times, Sept. 14, 1987, at 25; Merrill, Takings Clause Re-Emerges, But No
Clear Pattern Seen, Nat'l Law Journal, Aug. 17, 1987 at 5-8; Supreme Court Holds
Compensation Is Due, Zoning News, June 1987, at 1.

'^^First English Evangelical Lutheran Church of Glendale v. County of Los Angeles,

107 S. Ct. 2378, 2389-80 (1987).



924 INDIANA LAW REVIEW [Vol. 21:901

may avoid taking any action that might later be challenged and
thus give rise to a damage action. Much important regulation
will never be enacted /^^ even perhaps in the health and safety

area. Were this result mandated by the Constitution, these serious
implications would have to be ignored. But the loose cannon

the Court fires today is not only unattached to the Constitution,

but it also takes aim at a long line of precedents in the regulatory

takings area. It would be the better part of valor simply to

decide the case at hand instead of igniting the kind of Htigation

explosion that this decision will undoubtedly touch off.*^^

Chief Justice Rehnquist was aware the decision would impede en-

actment of land-use regulations:

We realize that even our present holding will undoubtedly lessen
to some extent the freedom and flexibility of land-use planners
and governing bodies of municipal corporations when enacting
land-use regulations. But such consequences necessarily flow from

any decision upholding a claim of constitutional right; many of
the provisions of the Constitution are designed to hmit the

flexibility and freedom of governmental authorities and the Just

Compensation Clause of the Fifth Amendment is one of them.'^^

Both sides agree the decision has serious implications for the land-use

regulatory process.

A. Land- Use Decisions Are Made Primarily at the Local Level

Almost all land-use decisions are made at the local level. ''*° The
decisions are primarily case by case dispute resolution influenced by

notions of economic efficiency and legal fairness. Most people in local

communities want local government to promote growth and development

'"There is real concern that planners will chose not to act. A survey of 300 members
of the National Association of County Planning Directors showed that forty-eight percent

would adopt zoning regulations modeled on the provision upheld in Goldblatt v. Town
of Hempstead, 369 U.S. 590 (1962), which closed a sand and gravel mine. However, if

damages were to be awarded as well as invalidation of the regulation, only eight percent

said they would, while eighty-three percent would chose not to act. Sallet, The Problem

of Municipal Liability for Zoning and Land-Use Regulation, 31 Cath. U. L. Rev. 465,

478 (1982). The cost of one suit, if it would have been lost, was $36 million. Id. at 478

n.91.

''^First Church, 107 S. Ct. at 2399-2400 (footnote omitted).

'^'M at 2389.

"^The state of Hawaii is an exception; a state land-use commission makes the land-

use decisions. Haw. Rev. Stat. § 205-1 to 37 (1985). In addition, a few states have set
up for all or for part of the state regional land-use commissions which review decisions

of local government for regional impacts. W. Fischel, supra note 56, at 26.



1988] TEMPORARY REGULATORY TAKINGS 925

which will generate tax revenue, but to control and guide development,

and to mitigate harmful impacts. Land has value because land use has
value, and therefore, it follows that restrictions on use reduce the ec-

onomic value of the land.

State courts rather than federal courts provide most of the judicial

review of land-use decisions. All the zoning cases in the 40 years after

Nectow V. City of Cambridge^'^^ were decided at the state level. '^^ Although
all state courts rely on the same United States Supreme Court decisions,

the states have interpreted those decisions differently. For example, one

commentator has characterized the CaHfornia courts as being "exceed-

ingly deferential to land-use controls adopted by local government. "'"^^

The process of land-use decisionmaking usually involves staff re-

commendations, appointed or elected legislative or quasi-judicial boards

or commissions holding pubHc hearings, two sides (petitioners and re-

monstrators), often represented by attorneys, presenting their case, and

ultimately voting requiring a majority or supermajority to decide.''^'* Land-

use planners work with the community to design a comprehensive land-

use plan which is a map document designed to distribute classes of land
uses, e.g., residential, commercial, industrial."*^ Zoning ordinances are

laws prescribing permitted uses and standards within each district for

building height, bulk, setbacks, density, and so forth. ^'^^ Each parcel of

property is, therefore, in a zoning class with restrictions on the use and

'^'277 U.S. 183 (1928).

"*2See R. Ellickson & A. Tarlock, Land-Use Controls 67 (1981).
'^^See id., at 75.

"^The author served for nearly five years on the Metropolitan Development Com-
mission for the City of Indianapolis. Ind. Code § 36-7-4-202 (1988). State law generally

grants specific authority to local governmental units to perform certain functions. The

Metropolitan Development Commission consists of nine appointed and unpaid commission

members drawn from the general population. The Commission approves planning and

zoning ordinances for the city which are then sent to the City-County Council for adoption,

and then to the Mayor for his signature. Among other duties, it also hears requests for
rezonings. Indianapolis, Ind. Code § 2-229 (1983). The task of the Commission is

formidable. Trying to follow as much as possible plans that have previously been adopted,
trying to arrive at equitable decisions, realizing a decision may mean a lot of money to
someone, and trying to foresee what will be the best solution overall for the community

in the long run is difficult. In addition, who wants to decide where the trash may go
(landfill siting), and where the smut may go (Adult Entertainment Ordinance)?

For an excellent discussion of the usual parties in interest in land-use disputes

(developers, neighbors, and third party non-beneficiaries), the relative strengths (the cards

are often stacked against neighbors, heavily stacked against third party non-beneficiaries),

and the influence on public decisions of the need for local tax revenue (there is an inherent

bias in the system in favor of proposals that generate tax revenue), see White River

Junction Manifesto, supra note 40, at 197-208. For comic relief, see id., at 194 n.lO.

'^'See R. Anderson, supra note 69, at §§ 9.02, 23.11.

''"See id. § 9.12.



926 INDIANA LAW REVIEW [Vol. 21:901

with prescribed standards for development. A landowner who wants a
change requests a rezoning (e.g., residential to commercial), a variance

(e.g., height greater than the standard), conditional use, administrative

approval, special permit or other means to change or vary the zoning

restrictions on the property. •'^^ Large developments may use a provision
called a Planned Unit Development.'^^ Of course, land-use regulation
includes more than zoning; it also includes environmental, flood, signage,

safe building, and historic preservations controls. The list is not exclusive,

but rather shows the magnitude of local land-use regulatory decisions

that are affected by the First Church decision.

Local land-use decisionmakers are criticized for responding irration-

ally and unfairly; decisions are often made on the basis of who howls
the loudest. But the American public prefers land-use decisions to be

made locally where they have the most influence.''*^ Local decisionmaking
bodies are often mediators of competing interests, deciding each case

on it own facts. The process is not perfect but it does allow people to
be heard.

B. Local Governments Are in a Vulnerable Position

The impact of the new liability for damages is heightened because
local governments are already in a vulnerable position. As the following

four sub-sections elaborate, local governments are vulnerable because

they may not have the sovereign immunity that the federal and state
governments enjoy, because they are subject to substantial costs under

both Section 1983 and antitrust actions, and because they are "caught

in the middle," between litigants, and between being required to regulate

and being liable if they do.

7. Tort Liability.—Historically, sovereign immunity applied to state
and local governments as a complete defense against tort claims. '^°

Between 1957 and 1979, at least 28 states judicially abolished sovereign

immunity and at least six states legislatively abolished or severely limited

it.'^' Therefore, in some states a litigant can now raise tort theories
(assumption of duty, common law negligence, interference with economic
and business relationships, and statutory negHgence) against local gov-

ernments.'"

^''See id. §§ 4.27, 19.06, 20.02, 21.01, 34.22.

^'^^See id. § 11.12. A Planned Unit Development permits a mix of residential, com-
mercial, and sometimes industrial uses within a large tract of land under one ownership.

'*^See Rose, Planning and Dealing: Piecemeal Land Controls as a Problem of Local
Legitimacy, 71 Calif. L. Rev. 837, 911 (1983).

^^°See R. Ellickson & A. Tarlock, supra note 142, at § 26.01, 26.02.
'''See id.

'"Se^ 18 E. McQuiLLiN, The Law of Municipal Corporations § § 53.02b, 53.16
(3d ed. 1984).



1988] TEMPORARY REGULATORY TAKINGS 927

2. Section 1983 Liability .^^^—Originally enacted to protect the civil
rights of newly freed slaves, Section 1983 has practically become a federal

tort law. '5^ In 1978, the Supreme Court held in Monell v. New York
City Department of Social Services^^^ that municipalities were "persons"

and, therefore, subject to suit under Section 1983 for land-use regulations.

"Congress did intend municipalities and other local government units

to be included among those persons to whom section 1983 applies. "'^^

In addition to actions against local government, government officials

may be sued in their official or individual capacity.'" Although state
and local legislators and judges have absolute immunity for acts within

the scope of official duties, local government officials may not be immune
for enforcement actions which can be characterized as administrative

rather than legislative*^^ and for actions with mahcious intent. '^^ Even

if damage awards are minimal, local government can be held hable for

attorney fees which can be substantial. '^^ The availability of attorney

fees has dramatically increased the amount of this kind of litigation.'^'

3. Antitrust Liability.—In 1978, the Supreme Court decided in City
of Lafayette v. Louisiana Power & Light Co.^^^ that a city's regulatory
activity, unHke a state's, is not exempt from antitrust liability. Cities

'"42 U.S.C. § 1983 (1982) provides:

Every person who, under color of any statute, ordinance, regulation, custom,

or usage, of any State or Territory or the District of Columbia, subjects or

causes to be subjected, any citizen of the United States or other person within

the jurisdiction thereof to the deprivation of any rights, privileges, or immunities

secured by the Constitution and laws, shall be liable to the party injured in an

action at law, suit in equity, or other proper proceeding for redress.

See generally Madsen & DeMeo, supra note 91.
^^'*See D. Hagman & J. Jeurgensmeyer, supra note 27, at 845.
'^^36 U.S. 658 (1978).

'^*M at 690 (emphasis in original).

'"Owen V. City of Independence, 445 U.S. 622 (1980). Although individual government

officials may be sued, their actions do not cause vicarious liability of the government
unit on respondeat superior theory unless they act under an official government custom

or policy. The dissent in First Church expressed apprehensiveness. "I am afraid that any
decision by a competent regulatory body may establish a 'policy or custom' and give rise
to liability after today." First English Evangelical Lutheran Church of Glendale v. County

of Los Angeles, 107 S. Ct. 2378, 2400 n.l7 (1987) (Stevens, J., dissenting).

'5«Scheuer v. Rhodes, 416 U.S. 232 (1974).

'5'Procunier v. Navarette, 434 U.S. 555, 566 (1978).

'^Civil Rights Attorney's Fees Awards Act of 1976, Pub. L. 94-559, 90 Stat. 2641

(codified at 42 U.S.C. § 1988 (1982)).

'*'5ee M. Gelfand, Federal Constitutional Law^ and American Local Govern-
ment, XV (1984).

'"435 U.S. 389 (1978). See generally Hovenkamp & Mackerron, Municipal Regulation
and Federal Antitrust Policy, 32 U.C.L.A. L. Rev. 719 (1985).



928 INDIANA LAW REVIEW [Vol. 21:901

became targets for antitrust suits, many involving land-use regulation J^^

Antitrust law is designed to foster action in private markets; land-use

regulatory controls may interfere with the free operation of supply and
demand. Treble damage judgments were awarded against local
government'^"* until Congress passed the Local Government Antitrust Act

of 1984.'^^ Although local governments and their officials are immune
from damage claims, they may still be sued for antitrust violations with
injunctive relief as the remedy. Comphance with the injunction can be
very costly to carry out.^^^

4. Caught in the Middle.—Finally, local government is in a vul-
nerable position because it is caught in the middle, subject to suit for

land-use decisions by both developers (petitioners) and neighbors or

"public interest" lawyers in the land-use field (remonstrators).'^^ Most

of the suits are filed by developers. Fewer suits are filed by public

interest lawyers because public interest law is underfunded but the threat

always is present. '^^ However, public interest lawyers usually do not

pursue individual's claims. Suits filed by "neighbors" are rare because

neighbors generally are not organized and lack funds to litigate. '^^

Additionally, a new way that local government is caught in the
middle is that it may be required to regulate by federal or state law,
but after First Church it is also subject to damages if the regulation

goes "too far."'^^ In some instances, environmental, flood control, safe
building, and similar ordinances are required by federal or state laws.'^'

'"See Mason City Center Assocs. v. City of Mason City, 468 F. Supp. 737 (N.D.
Iowa 1979), affd in part, rev'd in part, 671 F.2d 1146 (8th Cir. 1982); Cedar-Riverside

Assocs., Inc. V. United States, 459 F. Supp. 1290 (D. Minn. 1978), aff'd on other grounds

sub nom. Cedar-Riverside Assocs. v. City of Minneapolis, 606 F.2d 254 (8th Cir. 1979).

•^Community Communications Co. v. City of Boulder, 455 U.S. 40 (1982).

'^Tub. L. 98-544, 98 Stat. 2750 (1984) (codified at 15 U.S.C. §§ 35, 36 (Supp. IV

1985)). Section 3(a) says, "No damages, interest on damages, costs, or attorney's fees
may be recovered under section 4, 4A, or 4C of the Clayton Act . . . from any local
government, or official or employee thereof acting in an official capacity." 15 U.S.C.

§ 35(a) (Supp. IV 1985).

^^See D. Hagman & J. Jeurgensmeyer, supra note 27, at 907-09.
'^^See generally Hall, Defending the Urban Environment: A Practitioner's View, 55

U.M.K.C. L. Rev. 251 (1987).

'^^Court-awarded attorney fees are available in some states and for cases brought

under the Clean Air Act, the Clean Water Act, and other environmental legislation passed

after 1970. Id. at 262. See generally M. Derfner «& A. Wolf, Court Aw^arded Attorneys
Fees (1985).

'^'See White River Junction Manifesto, supra note 40, at 197-208.

'™The Advisory Commission on Intergovernmental Relations has identified more than

35 major federal regulatory statutes aimed at or implemented by state and local governments.

Some of them have an impact on zoning. Beam, From Law to Rule: Exploring the Maze
of Intergovernmental Regulation, ACIR, Spring 1983, Vol. 9, No. 2, at 7-22.

'^'Examples of federal laws which mandate local government to pass local ordinances



1 988] TEMPORAR Y REGULA TOR Y TAKINGS 929

Even when not required, federal and state law may provide benefits to
local government and local beneficiaries for passage by government of

such regulation. An example is flood protection regulations which make
landowners ehgible for federal flood insurance. '^^

V. Conclusion

Despite the dour predictions of Justice Stevens, the gravity of the

First Church decision to the governmental amici, and the banner headlines

of the press, local government need not be overly concerned that the

ruling will bankrupt local government and, as a result, cease regulating

land use. Why? First Church is an important but narrow decision. It
merely said compensation is the remedy for temporary regulatory tak-

ings. ^^^ However, the decision in Keystone Bituminous^'"^ shows that state

and local governments may regulate as long as the state's interest in
the regulation is a valid exercise of the poUce power to protect public

health and safety. Such regulations are not likely to be held to be a

"taking"; therefore, the remedy will not be imposed by the courts.

Moreover, a heavy burden is on a landowner who claims that a land-
use regulation works an unconstitutional taking of property because the

landowner has to prove a regulatory taking. '^^ Finally, the test or standard

include the National Environmental Policy Act of 1969, and the Clean Air Act Amendments

of 1970. An example of a state law is the California Coastal Act which requires local
government within the coastal zone to prepare and submit a local coastal plan including

land use plans, zoning ordinances, and zoning district maps. Cal. Pub. Res. Code §
30500(a) (1986).

'^^Congress enacted a federal flood control policy designed to make those who develop
flood hazard areas responsible for the results of their own actions. To implement this

policy, the federal flood insurance program is intended to be self-financing with those

who use flood prone land paying insurance premiums to cover the cost of disaster relief.

42 U.S.C. §§ 4001, 4002 (1982). For landowners to be eligible for the insurance, local

governments must adopt flood control ordinances. Local government is required to designate

property eligible for flood insurance by preparing maps defining flood prone areas. Local

governments also are required to guide development with building standards and to control

use with a permit system for all new construction within the designated areas. 44 C.F.R.

§ 60.3(b) (1987).

'"5ee supra text accompanying note 78.

'^^Keystone Bituminous Coal Ass'n v. DeBenedictis, 107 S. Ct. 1232 (1987). See supra

note 115 and text accompanying notes 115-17.

'"For example, the lower court on remand could yet decide the regulation substantially

furthered a legitimate police power purpose. Land-use regulations do not affect takings

if they substantially advance legitimate state interests and do not deny landowners eco-

nomically viable use of their land. Nollan v. California Coastal Comm'n, 107 S. Ct.

3141, 3146 (1987) (5-4 decision). Furthermore, the Court in Nollan said government is

permitted to do more than simply regulate; it may impose conditions for the issuance of

a land-use permit as long as a rational nexus exists between the condition and the purpose



930 INDIANA LAW REVIEW [Vol. 21:901

for finding a taking is unclear, leaving government attorneys free to

argue about what a challenger must show before compensation is due.'^^

As long as local governments proceed cautiously, enacting only those
regulations that meet legitimate health, safety, and welfare needs, and

do so fairly and without unnecessarily burdening landowners or taking

away all use, they have little chance of having to pay compensation.

Private property rights should be protected, but the public needs reg-

ulation of land use for health, safety, and general welfare reasons.

Courts must balance those interests. If government oversteps legitimate

need or denies economically viable use, acts unfairly in how it regulates,
or unnecessarily burdens landowners when a less burdensome way to
accompHsh the legitimate goal is possible, then a sanction is necessary.

The sanction will deter "inefficient" decisions and encourage "efficient"

decisions.

The United States Supreme Court in First Church said the Just

Compensation Clause of the fifth amendment establishes such a sanction,

a right of a landowner'^^ to be compensated as a remedy for temporary

regulatory takings. If such an interim "taking" is found, a right to

compensation for the "use" of the land is found in the clause. The

Supreme Court continues to try to find an appropriate balance between

property rights of the individual and legitimate health and safety needs

of the public.

Carol Kirk

of the building restriction. In Nollan, the Court held the essential nexus did not exist.

Id. at 3148. See generally Peterson, Land Use Regulatory "Takings" Revisited: The New
Supreme Court Approaches, 39 Hastings L. J. 335, 352-56 (1988); Falik & Shimko, The
"Takings" Nexus—The Supreme Court Chooses a New Direction in Land- Use Planning:
A View from California, 39 Hastings L. J. 359, 376-96 (1988).

"^See supra text accompanying notes 97-107.

'^^Landowner, not property owner, is correct because other kinds of property besides

land (in particular new property, such as entitlements and benefits) are not included. More

specifically, Chief Justice Rehnquist treats "new property" differently than traditional

property rights. Note, Justice Rehnquist 's Theory of Property, 93 Yale L. J. 541 (1984).