The Fifth Amendment ends: "nor shall private property be taken for public use, without just compensation." It was the clause at issue in Barron (1833), and it reached the states in Chicago, Burlington & Quincy Railroad Co. v. Chicago (1897). It does not forbid taking property; it sets two conditions: the taking must be for a public use, and the owner must be paid just compensation (usually fair market value). Economic regulation otherwise gets rational basis review; the Takings Clause is a separate check.
Why it works
| Rule | Case | When |
|---|---|---|
| Physical occupation is a taking, however small | Loretto v. Teleprompter Manhattan CATV Corp. (1982) | a permanent physical occupation (a cable box on a roof) |
| Total loss of economic value is a taking | Lucas v. South Carolina Coastal Council (1992) | a rule leaves land with no economically beneficial use, unless background principles of property or nuisance law already forbade the use |
| Otherwise, balance | Penn Central Transportation Co. v. New York City (1978) | weigh the economic impact, interference with distinct investment-backed expectations, and the character of the government action |
In Penn Central Transportation Co. v. New York City (1978) New York's landmarks law blocked a tower above Grand Central Terminal; the owner could still use the terminal profitably and could transfer its development rights, so there was no taking. In Lucas v. South Carolina Coastal Council (1992) a coastal law barred building on two beachfront lots bought for homes, leaving them without economic use; that was a taking unless state property law already forbade such building. Conditions on building permits (exactions) must have an essential nexus and rough proportionality to the project's impacts (Nollan v. California Coastal Commission, 1987, and later cases).
Key idea
Worked example: Which test?
- No physical occupation, and not a total loss of value.
- So Penn Central balancing applies: a 40 percent loss, her expectations, and the character of a general zoning law.
- Courts usually find no taking in cases like this.
Answer: Penn Central balancing; likely not a taking.
Worked example: A tiny box
- A permanent physical occupation of property.
- Loretto: that is a taking regardless of size or public benefit.
- Just compensation is owed (it may be small).
Answer: Yes; compensation is owed.
Common mistake