When Is A Regulatory Denial a Regulatory Taking? Not Very Often, At Least in Massachusetts

On Tuesday, the Massachusetts Appeals Court denied a regulatory takings claim brought by a plaintiff whose development plans for her property in Falmouth were denied by the Falmouth Conservation Commission.  Plaintiff’s evidence showed that the property was worth $700,000, if developable, and $60,000, if not.  

The Court ruled, in conformity with the “vast majority” of decisions in other states, that there is no right to a jury trial on the question whether a regulatory taking has occurred. This question is obscure, arcane, boring, and the decision seems correct.

On the merits, the decision is probably right, though the notion that the plaintiff would receive a “windfall” if compensated, because her parents bought the lot for $49,000 in 1975 and it’s now worth $60,000 even after the alleged taking, seems somewhere between silly and downright offensive.

I’d still like to put regulatory takings jurisprudence on a firmer footing.  I’ve been making this argument since 2009, but I’m hoping that someday, somewhere, some judge will listen.  Here’s the idea, adopted from my then law school professor, Guido Calabresi.

The rationale behind the Wetlands Protection Act is that certain activities harm the public good by damaging important public resources.  Sounds like a nuisance to me.  What happened was that, as we started basing our environmental regulatory programs on statutes, rather than on common law, the common law ceased developing in the way that it had over centuries.  We don’t have to figure out any more whether new development would constitute a nuisance, because we can simply prohibit it under the WPA.

To me, though, it would make more sense to utilize the lens of nuisance law.  We should ask whether, in the absence of the WPA, the common law would have advanced in such a way that developments that harm wetlands resources would now be considered a nuisance.  If so, then no compensation is due.  No one is  entitled to compensation for having to abate a nuisance.

Rather than trying to figure out the extent to which a regulation interferes with someone’s “investment-backed expectations,” why not figure out whether we are just making landowners conform to expected norms of behavior or whether we are instead simply imposing on one person the costs necessary to obtain a general benefit?

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