Clarity Coming to Vexing Property Rights Issue

November 7, 2016

A case critical to protecting private property rights in the United States has gotten caught up in the political stalemate over the U.S. Supreme Court. However,  it should get its hearing next year and be decided by summer, according to John Groen, principal attorney at the nonrofit Pacific Legal Foundation, who will be arguing the for the plaintiffs.

Groen told attendees Saturday at the 2016 REALTORS® Conference & Expo in Orlando, Fla., that the case, Murr v. Wisconsin, is expected to be a defining one in a decades-long battle over an issue referred to in the legal profession as “parcel as a whole.” The term refers to how government treats a property when it imposes regulatory restrictions that affect its value. Governments have held that if their restrictions don’t affect the parcel as a whole, but rather just separate parcels, even though they share common ownership, they aren’t bound by the clause in the U.S. Constitution requiring just compensation to the impacted owner.

In the Murr case, a family that owned two parcels adjacent to one another was prohibited from selling one of the parcels because it was never improved and thus was considered substandard by the St. Croix (Wisc.) county government. If the family wanted to sell the property, the government said, they had to sell the parcel that the Murrs lived on along with it, effectively treating the two properties as a single parcel, or parcel as a whole. Treated in that way, the government wasn’t bound to provide just compensation for the regulatory “taking” it had imposed on the family.

The Murrs lost a lawsuit challenging the government’s treatment of the two properties as a single parcel, but the U.S. Supreme Court earlier this year selected the case for a hearing. (The National Association of REALTORS® filed an amicus brief on behalf of the Murrs in the unsuccessful state case.)

The Supreme Court  was due to hear the case in October but it was rescheduled for next year. Groen speculated that the delay was caused by the death of Associate Justice Antonin Scalia, which left the Court with eight justices and risked stalemating the case in a 4-4 tie.

He encouraged REALTORS® to keep their eye on the outcome, because the “parcel as a whole” issue has been one of the most persistent challenges to private property rights over the past few decades, and clarity on it is badly needed. The hearing is now scheduled for April and a decision is expected in June.

—Robert Freedman, REALTOR® Magazine