It is not every day that the Justices of the Supreme Court engage in an extended discussion about the nature of property rights. Given that real estate law varies by state, this practice area generally gets relegated to the shadows of the Court’s docket and the United States Reports. On the morning of Monday, March 20, 2017, we real estate litigators finally had our day in the Supreme Court sun when the Court heard argument in Murr v. Wisconsin, Supreme Court Docket No. 15-214. In Murr, the Court granted certiorari on a question that has confounded the federal judiciary for decades: How do we define the “denominator” in a regulatory takings claim? What is the property that has been potentially, constructively, taken by regulation?
In discussing how to answer this question, the justices explored how property rights come to be defined by state law but also found it exceedingly difficult to keep this threshold question of definition separate from the merits—whether a taking had occurred. This confusion of issues was caused by the particular facts presented, the positions of some of the parties, and the greater legal reality that property rights are increasingly, effectively, defined by regulatory law. As the Wisconsin Solicitor General noted at argument, one thing that all parties could agree upon is that this “area of the law is incredibly complicated.” Nevertheless, March 20 was a good day for real estate litigators, and we must watch, with great concern, how the Court decides Murr because it could have enormous effects on zoning throughout the country.