US justices side with government in property rights case (UPDATE)

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WASHINGTON (AP) — The U.S. Supreme Court has ruled against a Wisconsin family in a property-rights case, making it easier for government officials to restrict development in environmentally vulnerable places.

The 5-3 ruling on Friday involved the family’s attempts to sell part of its land along the St. Croix River. The Murr family had planned to use the proceeds from the sale of the empty lot to pay for improvements to a cabin that sits on adjacent land.

County officials had barred the sale because conservation rules treat the two lots as a single property that can’t be divided.

The family claimed those rules essentially stripped the land of its value and asked the government for compensation. The government argued that it’s fair to view the property as a whole and said the family is owed nothing.

Justice Anthony Kennedy, joining the court’s liberal members, called the government’s action “a reasonable land-use regulation” meant to preserve the river and surrounding land. He said the property as a whole remains valuable. He also found that the family, given the regulations that were in place even before the acquired the lost, could have no reasonable expectation that they would be able to sell or develop the lots separately.

In dissent, Chief Justice John Roberts said the majority had undermined the Constitution’s protections for private-property owners. He said the court should have relied on state property lines to define the relevant parcel of land rather than taking into account outside considerations.

The case was watched closely by property-rights and business groups that say it should be easier for landowners to get compensation when government regulations restrict land use. More than 100 cities and counties throughout the U.S. have similar “merger” restrictions that treat adjacent properties as one if they have the same owner.

The dispute began when four siblings from the Murr family tried to sell the vacant lot in 2004 to pay for improvements to a rustic cabin that sits on the plot next door. Their father had bought the two 1.25-acre lots separately in the 1960s and both parcels had been taxed separately. Later, in the 1990s, the lots were later transferred to his children.

When blocking the contemplated sale of the vacant parcel, county officials had cited regulations from 1976 that bar new construction on lots in the area to prevent overcrowding and pollution. A “grandfather” clause exempted existing owners, but the county said it could not apply to the Murrs’ empty lot when it was being considered by itself, but rather only when that lot was taken together with the family’s other land.

The Murrs wanted the government to pay what the vacant property is worth — it was assessed at $400,000 — since local regulations prevent them from building on it.

Friday’s ruling leaves in place a decision by the state Court of Appeals, which had sided with St. Croix County Circuit Court Judge Scott Needham. Still, the Supreme Court noted that the lower court’s decision had not, as the Murrs and other had argued, created a bright-line rule stipulating that whenever adjacent parcels are at issue, regardless of their zoning or when they were acquired, they should be considered together.

Even so, the decision could have consequences for property owners, especially those who buy an adjacent parcel to give themselves a bigger yard but then later decide to sell the land off as a way to stash away money for retirement.  The case could affect developers, who often buy parcels over time for large-scale developments.

For both groups, the decision suggests that governments may not have to provide compensation when they later adopt lot-size minimums, lot-merger requirements or other regulations that might prevent sales from taking place.

The case was closely watched by property rights and business groups, including the Wisconsin Realtors Association, which called on the court to make it easier for landowners to get compensation when government regulations restrict land use. More than 100 cities and counties throughout the U.S. have similar “merger” restrictions that treat two adjacent properties as one if they have the same owner.

The Pacific Legal Foundation, a conservative land-rights group that represented the Murrs, called the ruling a disappointment for property owners. John Groen, the group’s executive vice president and general counsel, said the court “did not recognize the fundamental unfairness” to the family of having the two properties combined.

Ellen Denzer, community development director for St. Croix County, praised the ruling. She said the county “always tried to be very fair to the Murr family and also follow the rules for how we manage the lands along the St. Croix River and protect the wetlands.”

Staff writer Erika Strebel contributed to this story