Protecting Property Interests and Rights in Eminent Domain Actions and Government Takings: Part III – Regulatory Taking

This blog post is part III in a series of posts to assist private property owners with protecting their property interests and rights in eminent domain actions and government takings.

• Part I provided a general overview of eminent domain and the government’s ability to take private property for public use.
• Part II discussed Florida law on the allowable scope for the taking of private property, which is determined by the element of reasonable necessity.

This post will address regulatory takings that affect private property rights.

What is a Regulatory Taking? 

A regulatory taking does not involve the physical seizing of property but involves the government control of property through laws, ordinances and regulations.  It is a legislative action or other type of governmental regulation that completely deprives an owner of all economically beneficial use of his or her property.  St. Johns River Water Management Dist. v. Koontz, 77 So.3d 1220 (Fla. 2012).  When the impact of the regulation and its economic effect on the property owner render the regulation equivalent to an eminent domain proceeding, requiring the government to pay just compensation, then a regulatory taking has occurred.  The dispossession of title from the property owner is not required for a regulatory taking to have occurred.  Am. Jur. 2d, § 746.

Many government actions disrupt private property rights in one form or another, but they fail to meet the elements of a compensable regulatory taking.  A compensable regulatory taking pursuant to the U.S. and Florida Constitutions requires the following:  (1) the regulation deprives the landowner of substantially all beneficial use of his or her property, or (2) the regulation is not reasonably necessary to effectuate a substantial government purpose.  Major v. City of St. Petersburg, 864 So.2d 1145 (Fla. 2d DCA 2003).  These are difficult elements to satisfy, making it tough for a regulation impacting a person’s property to rise to the level of a compensable taking.

Has a Regulatory Taking Occurred? 

A court deciding whether a regulatory taking has occurred must conduct a very fact-specific analysis based on the unique circumstances of each case.  The court will consider several factors:

1. the type of governmental action involved;
2. the economic impact of that action; and
3. the regulations interference with reasonable investment-backed expectations.

Collins v. Monroe County, 118 So.3d 872 (Fla. 3d DCA 2013); Coventry First, LLC v. State of Florida, 30 So.3d 552 (Fla. 1^st DCA 2010).  Zoning regulations could constitute a taking if the effect is to deprive the property owner of all beneficial use of his or her property.  Bensch v. Metropolitan Date County, 541 So.2d 1329 (Fla. 3d DCA 1989).  A general zoning law may also be considered a taking if it fails to advance substantially legitimate state interests while also depriving land of its use.  Id.

Proving that a compensable regulatory taking occurred has been a difficult task for private property owners.  For example, a regulation temporarily forbidding the sale, use and discharge of fireworks was found not to be a compensable taking of a firework retailer’s property because the retailer maintained ownership of its fireworks inventories and could relocate those inventories to its out-of-state locations where sales were permitted.  See Scott v. Galaxy Fireworks, Inc., 111 So.3d 898 (Fla. 2d DCA 2012).  Moreover, the denial of a permit depriving a property owner of a particular use of his property that he deems the most profitable use does not amount to a regulatory taking.  See Alachua Land Investors, LLC v. City of Gainesville, 107 So.3d 1154 (Fla. 1^st DCA 2013).

When drastically affected by a government regulation, property owners should also be aware of the Bert J. Harris, Jr., Private Property Rights Protection Act, which is found at Section 70.001, Florida Statutes.  This Act establishes a separate cause of action for property owners to assert when a governmental regulation inordinately burdens his or her property but does not rise to the level of a taking under the Florida or U.S. Constitutions.  See Fla. Stat. § 70.001.  Under this Act, a property owner can seek compensation for the actual loss to the fair market value of his or her property caused by the government action.  Id.  Stayed tuned for Part IV in this series, which discusses how just compensation is determined.