Typically, Wisconsin happenings impact Texas most greatly in the area of football. However, a recent Wisconsin legal development, now before the Supreme Court, may well have implications for Texas landowners in the area of regulatory takings. Regulatory takings occur when a government regulation limits the potential uses of a property to such a degree that the property is effectively stripped of all economic value. In Joseph P. Murr et al v. Wisconsin, et al., the Murrs, siblings Joseph, Michael, Donna, and Peggy, argued that by prohibiting certain transactions, particular Wisconsin land ordinances had so deprived their property of value that a regulatory taking been inflicted.
In 1960, the Murr’s parents purchased Lot F and constructed a cabin on it. They purchased the adjacent Lot E three years later as an investment for development or sale. Lot E remains undeveloped to this day. In 1994, the Murr’s parents transferred ownership of Lot F to the siblings, followed by Lot E in 1995. As the parcels were adjacent, less than one acre in size, respectively, and now under common ownership, the title transfer triggered a St. Croix County land ordinance which merged the two lots. The same Ordinance also prohibits the sale or individual development of adjacent lots under common ownership unless an individual lot has an area of at least one acre. Several years later, the Murrs attempted to sell Lot E, and sought a variance to use or sell their lots separately. The Department of Natural Resources and county zoning administrators challenged the application, which was formally denied by the St. Croix County Board of Adjustment. The Murrs sought review and the trial court affirmed the Board’s decision. On appeal, the Wisconsin Court of Appeals affirmed the lower court’s decision.
The Murrs then brought action against the State and County, alleging that the Ordinance caused an uncompensated regulatory taking of their property. They argued that by restricting any sale of the parcels to a combination of the parcels only, the Ordinance deprived the Murrs of any value that Lot E might have possessed as an individual parcel. The Court determined that the effect of the Ordinance must be examined on the Murr’s property as a whole. The Court held that taken as a whole, the land still retained significant value even under the Ordinance, and that therefore, the Murrs did not suffer a compensable taking as a matter of law, which the Wisconsin Court of Appeals affirmed. The Supreme Court of Wisconsin declined to hear the Murr’s appeal of the Appellate Court’s decision.
The case has since then been granted review by the United States Supreme Court, and may have a direct impact on Texas landowners who have been denied use of their property by a City or County Ordinance.