Takings Clause & Eminent Domain Bar Exam

Takings Clause: Deceptively Simple, Frequently Tested

The Fifth Amendment states: "nor shall private property be taken for public use, without just compensation." That is 15 words, but they generate an enormous amount of bar exam material.

This guide is part of our Constitutional Law complete framework.

The Three Elements of a Taking

Every takings analysis requires three questions:

Is there a taking? (Physical or regulatory)
Is it for a public use?
Has the government paid just compensation?

Physical vs. Regulatory Takings

Type	Definition	Test	Key Case
Physical Taking	Government physically appropriates or permanently occupies private property	Per se taking -- always requires just compensation	Loretto v. Teleprompter Manhattan CATV (1982)
Regulatory Taking	Government regulation restricts property use so severely it functions like a taking	Penn Central three-factor balancing test (or per se if total economic destruction)	Penn Central v. NYC (1978), Lucas v. SC Coastal Council (1992)

Physical Takings: The Easy Cases

When the government physically takes or permanently occupies property, it is always a taking regardless of the size or economic impact:

Loretto: A law requiring landlords to allow cable boxes on their property was a per se physical taking -- even though the box was tiny
Condemnation proceedings (eminent domain) are the classic physical taking

Exam Trap: Temporary physical invasions (like flooding) may also constitute takings, depending on duration and severity (Arkansas Game & Fish Commission v. United States).

Regulatory Takings: The Hard Cases

Most bar exam takings questions involve regulatory takings. Two tests apply:

Per Se Regulatory Taking (Lucas)

A regulation that deprives the owner of ALL economically beneficial use of the property is a per se taking (Lucas v. South Carolina Coastal Council, 1992).

Exception: Not a taking if the restricted use was already prohibited by background principles of property or nuisance law.

Penn Central Balancing Test

For regulations that reduce but do not eliminate property value, courts balance three factors:

Economic impact on the property owner
Interference with investment-backed expectations
Character of the government action (physical invasion vs. regulatory adjustment)

Trigger: "A regulation reduced the property's value by X%..." -- this is a Penn Central question. There is no magic percentage; courts weigh all three factors.

Conditions on Development Permits

When the government conditions approval of a development permit on the owner dedicating property or paying a fee, two additional tests apply:

Test	Question	Case
Essential Nexus (Nollan)	Is there a logical connection between the condition and the government's regulatory interest?	Nollan v. California Coastal Commission (1987)
Rough Proportionality (Dolan)	Is the condition roughly proportional to the impact of the proposed development?	Dolan v. City of Tigard (1994)

Example: A city conditions a building permit on the developer dedicating 10% of the land for a public walkway. Under Nollan, is there a nexus between the building and the walkway? Under Dolan, is the 10% dedication proportional to the building's impact on pedestrian traffic?

Public Use Requirement

The government can only take property for public use. After Kelo v. City of New London (2005), "public use" is interpreted very broadly:

Public use includes public purpose -- even transferring property to another private party if it serves economic development
Courts give substantial deference to legislative determinations of public purpose
Many states have enacted statutes restricting Kelo-style takings

Exam Trap: Students often think Kelo means the government can take property for any reason. The taking must still serve a public purpose -- pure private benefit with no public rationale would fail.

Just Compensation

When a taking is found, the government must pay fair market value at the time of the taking.

Measure: What a willing buyer would pay a willing seller
Not included: Sentimental value, relocation costs, loss of business goodwill (in most jurisdictions)
Partial takings: Compensation for the part taken plus any diminution in value of the remainder

Exactions and Monetary Takings

In Koontz v. St. Johns River Water Management District (2013), the Supreme Court held that the Nollan/Dolan framework applies to monetary exactions (fees), not just physical dedications of property. If the government demands money as a condition for a permit, there must be a nexus and rough proportionality.

Practice Questions

Question 1

"A city enacts a historic preservation ordinance that prevents an owner from demolishing a landmark building. The regulation reduces the building's value by 60%."

Analysis: This is a Penn Central question. The regulation does not destroy ALL economic value (not Lucas). Balance: (1) 60% reduction is significant but not total; (2) the owner may have expected historic preservation rules when purchasing; (3) the regulation adjusts property rights without physical invasion. Under Penn Central, this regulation likely survives -- similar to the actual Penn Central case.

Question 2

"A new coastal regulation prohibits all construction on beachfront lots. An owner who purchased the lot for $500,000 can now only use it for recreation."

Analysis: This is a Lucas per se taking. The regulation eliminates ALL economically beneficial use (no building permitted). Unless the state can show that the prohibition was already embedded in background principles of property/nuisance law, the government must pay just compensation equal to fair market value.

Key Takeaways

Physical taking = per se taking (always compensable)
Regulatory taking: total wipeout = Lucas per se; partial reduction = Penn Central balancing
Permit conditions: Nollan nexus + Dolan proportionality
Public use = broad "public purpose" after Kelo
Just compensation = fair market value

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