Regulatory Takings: Definition of the Penn Central Test

📚 Quick Study Guide: Penn Central Test

• 💡 Regulatory Taking: Occurs when government regulation goes "too far" and effectively takes private property for public use without formal condemnation, requiring just compensation under the Fifth Amendment.
• 📜 Penn Central Transportation Co. v. City of New York (1978): This landmark U.S. Supreme Court case established the primary "ad hoc" (case-by-case) factual inquiry for determining if a regulation constitutes a compensable taking.
• 🔬 The Three Factors of the Penn Central Test (Ad Hoc Factual Inquiry):
  • 💰 1. Economic Impact of the Regulation on the Claimant: Assesses the severity of the financial burden imposed on the property owner. How much value has been lost? Is it a significant diminution or a severe impact?
  • 📈 2. Extent to which the Regulation has Interfered with Distinct Investment-Backed Expectations: Examines whether the owner had reasonable, primary expectations for the use of their property that are now frustrated by the regulation. These aren't mere hopes, but reasonable expectations based on existing law and practices.
  • 🏛️ 3. Character of the Governmental Action: Considers the nature of the government's intervention. Is it a physical invasion (which is usually a "per se" taking)? Or is it a broad public program designed to adjust the benefits and burdens of economic life to promote the common good (less likely to be a taking, especially if it prevents harmful uses)?
• ✅ Purpose: To distinguish between a mere regulation that adjusts property rights for the public welfare and a compensable regulatory taking.

✍️ Practice Quiz: Regulatory Takings & Penn Central

Choose the best answer for each question.

1. What is the primary purpose of the Penn Central Test?

1. To determine if a physical occupation of property has occurred.
2. To assess whether a government regulation constitutes a compensable taking.
3. To calculate the amount of just compensation owed in an eminent domain case.
4. To establish the market value of property before a government action.

2. Which of the following is NOT one of the three primary factors considered in the Penn Central Test?

1. The economic impact of the regulation on the claimant.
2. The extent to which the regulation interferes with distinct investment-backed expectations.
3. The fair market value of the property prior to the regulation.
4. The character of the governmental action.

3. In the context of the Penn Central Test, what do "distinct investment-backed expectations" primarily refer to?

1. The owner's personal hopes for future property appreciation.
2. Reasonable, primary expectations for the use of property based on existing law and practices.
3. The speculative future profits anticipated from the property.
4. The government's expected revenue from the regulated property.

4. The "character of the governmental action" factor primarily distinguishes between:

1. State-level and federal-level regulations.
2. Regulations that prevent harmful uses and those that facilitate public use through physical invasion.
3. Zoning ordinances and environmental protection laws.
4. Actions taken by legislative bodies versus executive agencies.

5. A severe diminution in property value due to a regulation would most directly relate to which Penn Central factor?

1. Character of the governmental action.
2. Distinct investment-backed expectations.
3. Economic impact of the regulation on the claimant.
4. Public purpose of the regulation.

6. Which U.S. Supreme Court case established the ad hoc factual inquiry known as the Penn Central Test?

1. Lucas v. South Carolina Coastal Council
2. Nollan v. California Coastal Commission
3. Dolan v. City of Tigard
4. Penn Central Transportation Co. v. City of New York

7. If a government regulation leads to a permanent physical occupation of private property, how does the Penn Central Test typically apply?

1. The Penn Central Test is the sole method used, examining all three factors equally.
2. The regulation is usually considered a per se taking, making the full Penn Central analysis less critical.
3. The economic impact factor is the only one considered, ignoring investment-backed expectations.
4. The government action is automatically deemed non-compensable under such circumstances.