WI Court of Appeals on the Parcel Rule and Just v. Marinette County

In Murr v. State of Wisconsin, the Wisconsin Court of Appeals has offered an instructive decision on how the parcel-as-a-whole rule applies to two contiguous, legally subdivided lots. Applying the traditional parcel-as-whole-rule in this context, the Wisconsin Court of Appeals affirmed a circuit court decision rejecting the owners’ claim that they suffered a taking as a result of a restriction on their ability to develop the (combined) lots. The decision also represents an interesting application of the Wisconsin Supreme Court’s landmark decision in Just v. Marinette County, 201 N.W.2d 761 (1972).

The basic facts: The Murr parents bought a lot on the St Croix River in 1960, and built a cabin on it; in 1963, they purchased the adjacent lot as an investment. Several years later the river was designated a federal Wild and Scenic River, and the county adopted a regulation designed to protect the river by prohibiting the individual development of adjacent, substandard lots held in common ownership; under these regulations, the Murrs could only build one new house on the two lots. The Murr parents transferred one lot to their children in 1994, and then transferred the second lot to them in 1995. The Murr children then sought a variance seeking to separately develop or sell each lot. The county board of adjustment denied the application, leading to the filing of a lawsuit under the Wisconsin Takings Clause.

The Court of Appeals first affirmed that the lots had to be viewed as a unit for the purpose of takings analysis, relying on what it called the “well-established rule that contiguous property under common ownership is considered as a whole regardless of the number of parcels contained therein.” To support this rule the court relied on two Wisconsin Supreme Court decisions, Zealy v. City of Waukesha,, 548 N.W.2d 528 (1996), and R .W. Docks & Slips v. State, 628 N.W.2d 781 (2001), and rejected the plaintiffs’ invitation to rely on cases addressing severance damages in the eminent domain context as a basis for departing from the parcel-as-a-whole rule in a regulatory takings case.

With the parcel issue resolved, the court then rejected the takings claim on the merits, ruling that the claim failed under either a categorical theory or under the ad hoc theory. Most interestingly, in addressing the so-called “character” factor under the ad hoc analysis, the court observed that the environmental-protection purpose of the regulation weighed against the takings claim. Relying on the decision in Just v. Marinette County; the court said: ”Just establishes that because of the strong public interest in preventing degradation of the natural environment, property owners advancing takings claims based on environmental legislation have a much more difficult time showing they were deprived of all or substantially all practical use of their property.”