PENN CENTRAL TRANSPORTATION CO. v. NEW YORK CITY

Landowner (P) v. City (D)

438 U.S. 104 (1978).

NATURE OF CASE: Takings suit.

FACT SUMMARY: Penn Central (P) claimed that New York’s (D) Landmarks Preservation Law, as applied to the Grand Central Terminal, constituted a taking of the "air space" above their property without just compensation.

CONCISE RULE OF LAW: In determining whether a particular action has affected a taking, the court focuses both on the character of the action and the parcel as a whole.

FACTS: Under New York’s (D) Landmarks Preservation Law, a building designated as a landmark was thereafter subject to certain restrictions, including that the owner seek approval from the Preservation Commission before making any alterations of its exterior. Grand Central Terminal was designated as such a landmark. Its owner, Penn Central (P), entered into a lease with UGP whereby UGP was to construct a multistory office building above the terminal. The Commission rejected the plan and Penn Central (P) brought suit, claiming the application of the Landmarks Law constituted a taking of the "air space" above their property without just compensation in violation of the Fifth and Fourteenth Amendments.

ISSUE: In determining whether a particular action has effected a taking, does the court focus both on the character of the action and the parcel as a whole?

HOLDING AND DECISION: (Brennan, J.) Yes. In determining whether a particular action has effected a taking, the court focuses both on the character of the action and the parcel as a whole. The law does not interfere in any way with the present uses of the terminal; rather, its designation as a landmark permits Penn Central (P) to utilize the property as it has been used for the past 65 years and thus does not interfere with Penn Central’s (P) primary expectation as to its use. This permits Penn Central (P) to both profit and to receive a reasonable return on its investment and does not constitute a taking. Affirmed.

DISSENT: (Rehnquist, J.) A multimillion-dollar loss has been imposed on Penn Central (P) that it uniquely felt and is not offset by any benefits. The Landmarks Commission has thus imposed a substantial cost on a minute percentage of the building for the general benefit. It is exactly this imposition of general costs on a few individuals for the public whole at which the taking protection is aimed.

EDITOR’S ANALYSIS: The primary purpose behind the Takings Clause is to prevent the government from requiring some individuals to bear public burdens that should be borne by the public as a whole. The determination of what constitutes a taking is decided on a case-by-case basis.

NOTES:

 

Case Revised 3-5-2001

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