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De Facto Taking
By M. Robert Goldstein & Michael J. Goldstein
Inverse condemnation or de facto taking is a concept as old
as the law of eminent domain. Recently, however, it has been
"discovered" as if new and has come into vogue.
In fact, it is more talked of than applied. It is the taking
of property by means other than a formal appropriation. Since
it is not done by a piece of paper, which one can point to
and use to demonstrate there has been such a taking, the problem
area is usually to determine if in fact there has been a taking.
In the historic regulatory cases, when courts have set aside
invalid exercises of the police power, it has usually been
in terms of either the taking of property without due process
of law, the phraseology being used interchangeably.
While the courts, by so doing, have described a taking of
property in the constitutional sense, very rarely have they
equated it to, or decreed that, an appropriation or a condemnation
of that property has taken place, the so-called inverse condemnation,
or de facto, taking.
The basic premise has always been in the language of Forster
v. Scott, 1893, 136 NY 577, 584. "All that is beneficial
in property arises from its use, and the fruits of that use,
and whatever deprives a person of them, deprives him of all
that is desirable or valuable in the title or possession."
Courts of Appeals Ruling
The Court of Appeals has described when an appropriation has
taken place. In City of Buffalo v. J.W. Clement Co. 28 NY
2d 241, 321 NYS 2d( ??) It was described as one that requires
a physical entry by the condemnor, a physical ouster of the
owner, a legal interference with physical use, possession
or enjoyment of the property or a legal interference with
the owner's power of disposition of the property."
Even that is misleading since there have been many situations
in the cases which appear to meet these criteria, yet the
courts have not declared there to have been a taking, but
instead invalidated the offending statute or action. Usually
we find this in the zoning or other land regulatory cases.
Pennsylvania Coal co v. Mahon, 260 U.S. 393; Arverne Bay Construction
Co v. Thatcher, 1938, 278 NY 222; Rand v. City of N.Y., 1956,
3 Misc 2d 769, 155 NYS 753; Lutheran Church v. City of New
York, 1974, 35 NY 2d 121, 359 NYS 2d 7; Roer Construction
Corp v. City of New Rochelle, 1954, 207 Misc. 46, 136 NYS
2d 414.
Some of the cases have made clear in so many words that Clement
cannot be taken literally, attempting to explain why Fred
F. French Investing Co v. City of New York, 39 NY 2d 587,
385 NYS 2d 5; Horizon Adirondack Corp v State of N.Y. 88 Misc.
2d 619, 388 NYS 2d 235. The problem comes in reconciling the
broad language of Clement with what the courts have done and
finding the common element. The problem is that in not all
instances have the courts in New York been content to merely
declare the offending act, statute or regulation invalid.
In some instances a taking has been decreed.
Sample Case
The simplest and clearest type of case is where government
has ousted an owner from physical possession of his property
and put it to a public use. Such unequivocal acts usually
have caused the courts no trouble in making such a declaration.
Hyland Flying Service Inc v. State of N.Y. 54 AD 2d 278, 388
NYS 2d 444; Kahlen v. State of N.Y., 223 NY 383; Queensboro
Farm Products v State of N.Y. 6 Misc. 2d , 445, 448; 161 NYS
2d 989, 992; aff'd. 5 AD 2d 967; 171 NYS 2d 646, aff'd. Without
opinion 5 NY 2d 977, 184 NYS 2d 844; American Woolen Co. V.
State of N.Y.; United States v. Scusty, 328 U.S. (1946). But
not all such physical ousters have been deemed an appropriation.
In O'Brien v. City of Syracuse, 54 AD 2d 186, 388 NYS 2d 856,
where it was not, the distinction was made that the intrusion
had to be so extensive in scope or duration that it would
be regarded as a taking in fact. In that case a "temporary"
intrusion of a limited nature or a mere trespass was not deemed
a de facto taking.
This is to be contrasted to the situation in keystone Assoc
v. Moerdler, 19 NY 2d 78, 278 NYS 2d 185, where a statute
containing a 180 day moratorium on the issuance of a building
permit, in furtherance of a statutory scheme which was contemplated
as leading to a condemnation of property, was not only declared
invalid, but also deemed a temporary taking such as to mandate
compensation for the damages incurred during the period of
delay in issuing the building permit. The distinction drawn
by the court was that this was, in fact, a condemnation statute,
not one depending on the police power, and this appeared to
justify a declaration of a taking, albeit a limited one. A
distinction apparently was made that there would be a different
rule if this were solely a statute depending on the police
power.
Rule Spelled Out
This was spelled out in so many words in Fred F. French Investing
Co., Inc. V. City of New York, supra, where it was stated
at page 593 "...when the state 'takes,' that is appropriates,
private property for public use, just compensation must be
paid. In contrast, when there is only regulation of the use
of private property, no compensation need be paid. Of course,
and this is often the beginning of confusion, a purported
‘regulation' may impose so onerous a burden on the property
regulated that it has, in effect, deprived the owner of the
reasonable income productive or other private use of his property
and thus has destroyed its economic value. In all but exceptional
cases, nevertheless, such a regulation does not constitute
a ‘taking' and is therefore not compensable, but amounts
to a deprivation or frustration of property rights without
due process of law and is therefore invalid."
An at page 595 it stated: "The sole exception to this
mild outcome occurs where the challenged measure is either
intended to eventuate in actual public ownership of the land
or has already caused government to encroach on the land with
trespassory consequences that are largely irreversible."
The court gave as an example of the exception Keystone Associates
v. Moerdler, supra.
Other courts have followed in this vein by refusing, in land
regulation cases, to decree that there has been a taking.
Jensen v. City of NY, 42 NY 2d 1029, 300 NYS 2d 645; Horizon
Adirondack Corp v. State of N.Y., 1936, 88 Misc. 2d 619, 388
NYS 2d 235.
This concept is not new in the law and even going back to
the elevated railroad, cases the nature of the remedy was
to apply for injunctive relief prohibiting the complained
of encroachment on the property rights involved or in the
alternative to compel the bringing of condemnation proceedings
to acquire the rights adversely affected. Story v. N.Y. Elevated
Railway Co., 1882, 90 NY 122; Pappenheim v. M.E.R. co., 1991,
128 NY 436. The concept of affording the purported taker the
choice of removing the encroachment or being subject to "inverse"
condemnation more recently found voice in Heyert v. Orange
& Rockland Utilities Inc., 1966, 17 NY 2d 352, 271, NYS
2d 201.
The common thread in the cases appears to be to deny a de
facto taking where the act or statute complained of was not
in contemplation of a actual condemnation, assuming either
a physical invasion or a direct legal restraint of the property's
use by the purported condemners. Where there has been a de
jure taking the courts have apparently felt freer to find
an earlier de facto taking for the purpose of awarding "just
compensation."
Of course, not all of these cases fall into such easy categories.
Thus, in Bartle v. State of N.Y., 1971, 51 Ad 2d 1080, 381
NYS 2d 144, removal of tenants because of the purported condemnor's
acts were deemed not a de facto taking where there was not
condemnation, while in, In re Warren Street, 1968, 58 Misc.
2d 1073, 298 NYS 2d 429, similar facts were held to be a de
facto taking for the purpose of fixing condemnation damages.
In Cicci v. State of N.Y., 1965, 31 AD 2d 733, 297 NYS 2d
291, the cancellation of a driveway permit because of a pending
condemnation was not deemed a de facto taking for the purpose
of awarding compensation, while in re Public Place, Borough
of Manhattan, 54 Misc. 2d 69, reversed on other grounds 24
AD 2d 243, 265 NYS 2d 150 (1965), the refusal to grant a building
permit was.
No Stand Taken
In cases such as In re 76 Crown Street Corp v City of New
York, 1971, 35 AD 2d 1005, 317 NYS 2d 978, the court refused
either to declare a de facto taking, although a taking was
supposedly planned (to this date it has not taken place),
or in the alternative to compel the city to either take or
demap the property (as in Jensen v. City of N.Y., supra),
yet forecast that when condemned, the courts would not permit
the condemned of acts to go uncompensated. The same occurred
in Cinco v. City of N.Y., 1968, 58 Misc. 2d 828, 296 NYS 2d
26, where the property was eventually condemned, and in Beau
Arts Properties Inc v. The United Nations Developemnt Corp.,
1972, 68 misc. 2d 785, 328 NYS 16, where it was not, Whether,
in fact, the forecast of increased compensation to make up
for the "condemnation blight" was accurate we cannot
state.
Needless to say there are exceptions. As an example in Tom
Sawyer Motor Inns, Inc v. County of Chemung, 1973, 39 App.
Div. 2d 4, 331 NYS 2d 154, aff'd 32 NY 2d 775, 344, NYS 2d
958, where what started out as a nuisance and trespass without
an intent to condemn was deemed a de facto taking because
of the inability to abate the nuisance. Othrs are Evans v.
City of Johnstow, 410, NYS 2d 199 (Fulton Co. Sup. Ct., 1978)
and Ferguson v. Village of Hamburg, 1936, 272 NY 237, also
involving what otherwise might have been deemed a permanent
nuisance. These decisions cite others as well.
Which brings us finally to the Tidal and Fresh Water Wetlands
Acts cases. There the land use regulations are such as to
prevent in many instances the beneficial use of the properties
os designated. The statutory scheme calls for a moratorium
on issuance of building permits while the regulations and
mapping takes place and later if the statute and regulations
with respect to specific properties are deemed confisccatory
then either a condemnation of the affected properties are
to take place or else their demapping. Thus, cases such as
St. Aubin v Giggan, 1976, 51 Ad 2d 1054, 381 NYS 2d 533, held
that although a moratorium of reasonable length was valid
(ct. Keystone Associates v. Moerdler, supra) the delay in
the instant case was a de facto taking, and cases such as
Spears v. Berle, 407 NYS 2d 590 (App. Div. 3rd Dpt.), held
that the refusal to permit the use of the property there was
an unconstitutional deprivation of property and ordered the
Commissioner to either grant an interim permit to use the
land or institute a condemantion proceeding. We, have difficulty
in justifying these result against the earlier cases. We fail
to see the difference between a moratorium even of reasonable
length under these acts in which building permits are denied
and the moratorium in Keystone Associates v. Moerdler. Yet
the courts have held such a moratorium valid as an exercise
of the police power.
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