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Airspace and the takings clause.

  I. AIRSPACE RIGHTS AND THE POWER OF EMINENT DOMAIN
     A. Airspace Rights under Common Law
     B. Airspace Rights in Eminent Domain Proceedings
 II. VEILED AIRSPACE EASEMENTS AND REGULATORY TAKINGS LAW
     A. Examples of Veiled Airspace Easement Regulations
        1. Restricting Wind Farms to Protect Military Radar
        2. Imposing Height Restrictions to Create Buffers near Airports
        3. Imposing Height Restrictions to Prevent the Shading of
           Municipal Solar Energy Installations
        4. Using Height Restrictions to Preserve Scenic Views for
           Government Buildings
     B. Analysis of Veiled Airspace Easement Regulations under
        Existing Takings Law
        1. Per Se Physical Takings under Loretto?
        2. Total Regulatory Takings under Lucas?
        3. Partial Takings under Penn Central?
III. Filling the gap: a takings rule for veiled airspace
     Easement Regulations
     A. Element #1: Deprivation of a Possessory Interest in
        Airspace
     B. Element #2: Government Use of the Regulated Space
        1. Previous Calls for a Government Use Test:
           Enterpriser vs. Arbiter
        2. The Distinguishing Power of a Government Use
           Requirement
     C. Measuring Just Compensation
 IV. Benefits and Challenges of the Additional Takings
     Rule
     A. More Efficient Use of Airspace
     B. Greater Clarity in Takings Law
     C. Clearer Laws Regarding Airport Height Restrictions
     D. Clearer Takings Rules for Wind Energy Development
     E. Potential Criticisms of the Proposed Takings Rule
        1. A New Avenue for Frivolous Takings Claims?
        2. An Incentive to Excessively Restrict Airspace?
        3. An Invitation for New Takings Claims Against
            Airports?
Conclusion


INTRODUCTION

Without ever venturing into the open airspace above private land, public entities can use that space to preserve scenic views for government buildings, to deliver sunlight to publicly-owned solar panels, to transmit military radar signals, or to serve other valuable functions. (1) This ability for governments to use private airspace without physically invading it has important implications in the context of takings law. Public entities typically acquire private property through voluntary sales or eminent domain, compensating citizens for the acquired property. However, governments can sometimes secure their nonphysical uses of private airspace at far less expense by simply restricting the space rather than formally taking it. Through height restrictions or other land-use controls, public entities can take the equivalent of negative airspace easements tailored to serve their own interests. Such restrictions seek not to govern land use conflicts among private landowners but to conscript specific airspace into government service.

Regulations designed to keep airspace open so it can serve a non-trespassory government use typically are not compensable under existing regulatory takings law. Governments can often impose such restrictions without risking takings liability, even though the effective transfer of property rights resulting from such restrictions often mirrors that of an overt taking through eminent domain. Modern regulatory takings jurisprudence focuses heavily on whether the challenged government action involves a physical invasion of the claimant's property or whether it denies the claimant of all economically viable use of the parcel at issue. These shorthand tests, commonly known as the Loretto and Lucas rules, (2) succeed in detecting many types of government actions that warrant the payment of just compensation under the Takings Clause. However, neither of these rules accounts for instances when public entities restrict private airspace solely so that they can exploit it in ways that require no physical invasion. Landowners whose properties are subjected to such restrictions are thus left to argue their claims under the nebulous test set forth in Penn Central, (3) with slim chances of success. The legitimate police power restrictions of airspace upheld in Penn Central are materially different from the abuses of regulatory authority aimed at enhancing a public entity's own resource position that are described in this Article. (4) Unfortunately, most courts have heretofore been unable or unwilling to recognize this distinction when adjudicating takings claims over airspace. (5)

The imprecision of the Supreme Court's takings jurisprudence relating to airspace rights is increasingly problematic in this era of unprecedented competition for airspace. Airspace is a critical resource for renewable energy and sustainable development. Commercial wind turbines must extend hundreds of feet into rural skies to be fully productive. (6) Solar panels require vast amounts of open airspace to access direct sunlight. (7) And vertical development that extends high into urban airspace is a significant strategy for combating suburban sprawl. (8) As airspace grows ever more important in the coming years, conflicts between private citizens and governments over it will likely grow as well. Regulatory takings law in its present form is ill-equipped to fairly and efficiently govern these conflicts.

This Article draws attention to "veiled airspace easement regulations"--government-imposed restrictions that transfer the practical equivalent of negative airspace easements to public entities. Arguing that such regulations are exactly the sorts of government actions that the Takings Clause was intended to protect against, this Article advocates treating these regulations as compensable takings. Part I of this Article highlights courts' longtime recognition of airspace rights as constitutionally protected property, including such recognition within the parallel context of eminent domain proceedings. Part II describes four specific examples of situations in which governments can abuse their regulatory power to effectively acquire valuable interests in private airspace and explains how the unique attributes of airspace have led courts to overlook these scenarios in their takings jurisprudence. Part III suggests that the supreme Court should consider adopting an additional, supplemental takings rule that requires just compensation to landowners when regulations (i) deprive them of possessory interests in airspace (ii) for the primary purpose of securing the government's own exploitation of that space. Part III also discusses principles set forth in previous writings by Professors Joseph Sax and Jed Rubenfeld that could assist courts in distinguishing ordinary police power regulations of airspace from regulations involving such direct government exploitation of the restricted space that just compensation would be warranted under the proposed rule. Part IV argues that this new takings rule would add sorely-needed clarity to an ambiguous area of regulatory takings law and would promote more just and efficient allocations of airspace rights between public entities and private landowners.

I. Airspace Rights and the Power of Eminent Domain

Airspace, the layer of open space that blankets the earth's surface, is a complex and oft-forgotten natural resource. Airspace is as immovable and unique as land but differs in that it is also totally invisible and intangible. (9) Given airspace's peculiar attributes, it is unsurprising that courts and legal scholars have long struggled to formulate rules to govern its use. (10)

For centuries, neighbors have quarreled over conflicting uses of the airspace above their land. (11) Common law doctrines and statutory rules have gradually evolved to address many of these conflicts among private landowners. (12) However, as the function of government has expanded over time, (13) public entities have increasingly made uses of airspace as well. When a government's use of private airspace clashes with a landowner's use of the space, perplexing legal questions can arise. Should the airspace rights in dispute receive the same property protections commonly afforded to surface land? And under what conditions should the law permit public entities to confiscate or interfere with those rights?

The Takings Clause of the Fifth Amendment is the obvious launching point for analyzing conflicts between governments and citizens over private airspace. Its brief language prohibits governments from taking "private property ... for public use, without just compensation." (14) A threshold question that arises out of this language is whether the assets at issue in any regulatory taking case are legally cognizable "property" at all. (15) As the following parts show, longstanding case law and more than 70 years of compensated takings of airspace easements through eminent domain are evidence that airspace rights are indeed "property" under the Takings Clause. (16)

A. Airspace Rights under Common Law

Landowners have long held common law property rights in the low-altitude airspace above their parcels. (17) The origins of modern airspace law date as far back as the 1300s, when the Italian jurist Cino da Pistoia wrote, "Cuius est solum, eius est usque ad coelum," (18) or "[to] whomsoever the soil belongs, he owns also to the sky." (19) This simple "ad coelum doctrine" distributes airspace rights based on ownership of the surface land situated immediately below the space. The doctrine appeared in Coke's commentaries (20) and in Blackstone's commentaries, (21) securing its place within English and American common law. (22) By the early 1900s, courts in the United States were applying it to find trespass for even minor intrusions into neighboring airspace. (23)

The United states Congress and the courts clarified the scope of landowners' airspace rights in the early twentieth century when airplanes began taking to the skies. (24) Federal legislation enacted during that period carefully defined "navigable airspace," which generally encompasses all space situated more than 500 feet above the ground, (25) and designated that space as a nationally-shared common area for modern flight. (26) Although the Supreme Court acknowledged navigable airspace legislation in United States v. Causby in 1946, characterizing navigable airspace as a "public highway" for air travel, (27) the Court emphasized that landowners still held property interests in the non-navigable airspace above their parcels. In the Court's words, a "landowner owns at least as much of the space above the ground as he can occupy or use in connection with the land[,]" and the "fact that he does not occupy it in a physical sense--by the erection of buildings and the like--is not material" to determining the scope of ownership. (28) In the decades since Causby, courts' frequent recognition of private airspace rights in the context of view easements, (29) condominium laws, (30) and solar access easements (31) has left little doubt that rights in non-navigable airspace are a legitimate form of property and that sub-adjacent landowners inherently possess those rights. (32)

B. Airspace Rights in Eminent Domain Proceedings

Courts' unwavering treatment of airspace rights as property under eminent domain law is further evidence that landowners hold property interests in the non-navigable airspace above their land. Eminent domain authority enables public entities to acquire private property for public use when they are unable to obtain it through a voluntary sale. (33) When appropriately exercised, (34) the eminent domain power deters landowners whose properties are needed for a public use from "holding out" for excessively high sale prices and thereby impeding worthwhile public projects. (35) Eminent domain proceedings typically conclude with a private party's formal conveyance of a property interest to a government party, who pays some agreed-upon or court-determined amount of "just compensation" in return. (36)

Public agencies routinely pay just compensation to acquire airspace interests through eminent domain, engaging in essentially the same process they use to take interests in surface land. For instance, governments have been condemning airspace easements near airports for flight paths since shortly after the advent of modern aviation. Most airplanes require lengthy stretches of low-altitude airspace for takeoffs and landings, so takings of airspace easements through eminent domain often accompany airport construction and expansion projects. (37) Provisions expressly authorizing such takings of airspace easements upon payment of just compensation were included within the Uniform Airports Act of 1935, (38) and legislatures in twelve states had enacted laws authorizing the practice by 1941. (39) Governments also occasionally use eminent domain to condemn easements for scenic views. (40) This long history of airspace easement condemnations is further evidence that airspace rights are legally protected property under the Takings Clause.

II. Veiled Airspace Easements and Regulatory Takings Law

Although airspace rights generally enjoy robust protection under property law and within eminent domain proceedings, they are far less respected in the context of regulatory takings claims. This disparate treatment of airspace rights exists in part because modern regulatory takings laws fail to acknowledge that governments can appropriate and even exploit airspace for their own benefit without ever physically invading it. Overlooking the distinctive attributes of airspace, existing regulatory takings rules inadequately protect private citizens against restrictions that effectively take negative easements across their airspace to benefit government entities. (41) Below are four examples of situations when these "veiled airspace easement regulations" have arisen or could arise and a discussion of why such regulations often are not compensable under existing takings law.

A. Examples of Veiled Airspace Easement Regulations

1. Restricting Wind Farms to Protect Military Radar

Regulations aimed at protecting the United States Armed Forces' use of private airspace have significantly hindered wind energy development in recent years. Federal Aviation Administration (FAA) regulations allow the Department of Defense (DOD) to challenge proposed commercial wind turbine installations that they believe could interfere with military radar. (42) The FAA has enforced these regulations against wind farm developers, (43) even when the commercial turbines targeted are well within landowners' privately 41. At least one other commentator has argued that airspace rights receive inadequate protection under current law. See Eagle, supra note 76, at 943 (arguing that there is "no substantial reason why property interests such as those involving upper-floor condominiums" or "air rights" should be excluded from stronger takings protections than exist under current law). held non-navigable airspace, (44) and even when the proposed turbines would be sited dozens of miles away from any military base. (45) According to the American Wind Energy Association, almost as much wind energy generating capacity as was actually built in the United States in 2009 was "abandoned or delayed because of radar concerns raised by the military and the [FAA]." (46) The FAA's highly-publicized delay of a $2 billion wind energy project in Oregon in 2010 showcased how threatening these military radar-focused restrictions have been to the wind energy industry. (47) In many cases, the DOD could have avoided these conflicts with wind energy developers by installing relatively inexpensive upgrades to its aging radar systems. (48)

Wind energy is an increasingly integral part of the United States' long-term energy strategy. Wind energy generation helps to reduce the nation's reliance on fossil fuels, improves trade balances, and provides greater economic stability. (49) State and federal laws aimed at encouraging renewable energy have helped to drive a significant increase in demand for wind energy over the past decade. (50) Even in the face of the FAA regulations just described and persistent turmoil in the national economy, wind energy development accounted for more than 35% of all new electric generating capacity added in the United states between 2007 and 2011, exceeding the new capacity of nuclear and coal systems combined. (51)

In regions that are ideally suited for commercial-scale wind energy projects, an FAA objection that ultimately thwarts a wind farm project can deprive a single rural landowner of hundreds of thousands of dollars of potential income under a wind energy lease. (52)When the FAA impedes or halts a wind energy project solely to keep private airspace open for military use, it is effectively using its regulatory power to take airspace easements for the DOD without just compensation.

2. Imposing Height Restrictions to Create Buffers near Airports

Airport development is another context in which veiled takings of airspace easements arise. Public airport construction and expansion projects inherently involve government acquisitions of real property. If a project requires additional, privately-owned surface land to extend a runway, the public entity engaged in the project generally must exercise its eminent domain power and pay just compensation to the owner to obtain the land. (53) Governments also typically purchase avigation easements (54) for the airport's low-altitude glide paths for takeoffs and landings. (55) However, existing case law is less clear regarding whether municipalities must compensate landowners in connection with height restrictions imposed to create airspace buffer areas adjacent to those flight paths. (56) Although airplanes may not regularly traverse these areas, airports must keep them open as a precaution against instances when planes veer outside of flight paths due to weather, aircraft malfunctions, or other unpredictable factors. (57)

Multiple lawsuits arose recently when Clark County, Nevada, imposed new height restrictions to accommodate expanded runways at the McCarran International Airport. (58) The airport is situated close to the Las Vegas Strip--an area renowned for its glitzy hotel towers and casinos. (59) Clark County's new "transition zone" height restrictions were specifically tailored to convert airspace above several private parcels near the airport into flight path buffer areas. (60) The restrictions severely limited the development potential of the burdened properties near the strip, diminishing property values and imposing substantial financial losses on landowners. (61)

Ordinances like those challenged in Clark County that restrict building heights so that private airspace can serve a specific airport function are effectively veiled takings of airspace easements. The economic value transferred from landowners to the government is essentially the same regardless of whether a public entity restricts airspace for a regular aircraft flight path or merely for a buffer or transition zone. Restrictions imposed for either purpose prohibit citizens from occupying their airspace solely so that the government can exploit the space without paying for it.

3. Imposing Height Restrictions to Prevent the Shading of Municipal Solar Energy Installations

Veiled takings of airspace easements could eventually arise in connection with municipal solar energy installations as well. In recent years, local governments have increasingly installed photovoltaic solar panels and other solar energy systems on publicly owned buildings. (62) Most solar energy devices need direct sunlight access to be fully productive, and protecting such access often requires that some airspace above neighboring property be kept clear of trees or buildings to prevent shading. (63) As government-owned solar energy systems become ever more prevalent, some municipalities could seek to secure solar access protection for their systems through new height restrictions tailored to that purpose. (64) Although no widely publicized instances of this type of veiled taking of a solar access easement have surfaced yet, (65) the persistent growth of municipally-owned solar energy systems suggests that such regulations could appear in the coming years. (66)

A hypothetical example helps to illustrate this potential type of veiled airspace easement regulation. Suppose that the fictional city of Suntown had plans to install rooftop solar panels on its two-story city hall in a downtown area that had long been subject to a 120-foot height restriction. Although no existing buildings were tall enough to shade the city's new solar panel array, city officials worried that buildings constructed in the area in future years might shade the panels and dramatically reduce their productivity. Suntown considered protecting against future shading by acquiring solar access easements from nearby landowners through voluntary purchases or eminent domain. (67) However, the city ultimately determined that it could obtain the same solar access protection at far less expense by tightening the area's height restriction instead. The city thus amended its zoning ordinance to limit building heights on two blocks located immediately south of city hall to just 60 feet instead of 120 feet.

Suntown's new height restriction ordinance would effectively create solar access easements in favor of the city. The ordinance would prohibit landowners from occupying their airspace solely so that the city could use the space to provide sunlight access for its solar panels.

4. Using Height Restrictions to Preserve Scenic Views for Government Buildings

Municipalities could conceivably even impose land use restrictions as a means of securing view easements for government properties. Scenic views can substantially bolster a property's value. (68) Countless private landowners have thus protected valuable views on their properties by purchasing easements or covenants that prevent neighbors from building structures or growing trees that would impair the views. Of course, municipalities also hold title to land, and occasionally they too have an interest in preserving scenic views for their own parcels. Armed with regulatory authority, municipal governments could potentially impose height restrictions as a means of protecting scenic views on their properties without having to compensate neighbors. (69)

A fact pattern similar to that described for Suntown above illustrates how veiled takings of airspace easements could arise in the view easement context. Suppose that the hypothetical city of Beachville planned to erect a new government building with large windows specifically designed to showcase picturesque views of a nearby ocean beach. City officials feared that owners of private parcels situated between the building and the beach could eventually build structures that blocked the building's views. Rather than purchasing view easements from the owners through eminent domain, (70) Beachville decided to secure view protections less expensively by imposing new height restrictions in the area that were tailored to prohibit any new structures from blocking the city building's views. Like Suntown's solar access-driven height restrictions, such laws would transfer the equivalent of negative airspace easement rights to Beachville without any exercise of eminent domain authority or payment of just compensation.

B. Analysis of Veiled Airspace Easement Regulations under Existing Takings Law

When regulations like those described above effectively transfer private property interests to governments, citizens often turn to the law of regulatory takings for a remedy. (71) Regulatory takings law "aims to identify regulatory actions that are functionally equivalent to the classic taking." (72) Its rules are intended to prevent public entities from using their regulatory power to "acquire rights in private property which [they] may only acquire by purchase or by the exercise of ... eminent domain." (73)

Modern regulatory takings law traces its beginnings to the 1922 Supreme Court case of Pennsylvania Coal Co. v. Mahon. (74) Justice Oliver Wendell Holmes famously declared in his majority opinion in Mahon that, "while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." (75) In the 89 years since Mahon, the Court has repeatedly grappled with the question of how far is "too far" in the context of a regulatory takings claim. The Court's much-maligned jurisprudence of this question (76) is presently distillable into a set of three general categories of compensable regulatory takings that are familiar to practitioners and scholars in land use law. (77) Two of the three categories, labeled per se takings, involve relatively straightforward rules that can greatly simplify the adjudication of claims within their scope. (78) The third category of regulatory takings involves a cumbersome multi-factor, ad hoc test aimed at identifying those government actions that are functionally equivalent to classic takings but that fall outside the parameters of the two per se rules. (79) As the following Parts show, many veiled airspace easement regulations like those imposed by the FAA, Clark County, Suntown, and Beachville (80) are unlikely to fit within any of these three familiar categories of regulatory takings.

1. Per Se Physical Takings under Loretto?

Courts are unlikely to view veiled airspace easement regulations as per se "physical takings" of airspace rights under current law because such regulations arguably involve no physical occupation or invasion of private property.

Loretto v. Teleprompter Manhattan CATV Corp.8 is commonly cited for the rule that a regulation can effect a per se physical taking if it requires an owner to suffer a "permanent physical occupation" of private property. (82) The permanent physical occupation in Loretto resulted from a regulation allowing a television cable company to install cable equipment on the roof and side of a private apartment building. (83) Even though the cable equipment occupied only a small area on the claimant's building and had minimal impacts on the property's overall value, the Loretto Court held that the regulation triggered a taking. (84) The Supreme Court has since reiterated the Loretto rule, emphasizing that it applies "regardless of whether the interest that is taken constitutes an entire parcel or merely a part thereof." (85)

The Court has similarly classified the regular flying of government airplanes through private airspace as a compensable per se physical taking "no matter how small" the airspace invasion at issue. (86) In United States v.

Causby, the Court awarded just compensation to landowners when recurrent military overflights substantially interfered with their chicken farm. (87) The Causby Court held that the military's use of private airspace as a glide path for airplanes amounted to the compensable taking of an easement, even though the overflights did not totally destroy the value of the claimants' property. (88) According to the Court, the fact that the overflights "would limit the utility of the land and cause a diminution in its value" was enough to trigger a compensable taking. (89)

Like the military overflights in Causby, veiled airspace easement regulations involve governmental use of private airspace and can result in substantial financial injury to owners of that space. (90) Nonetheless, such regulations likely are not compensable takings under Loretto or Causby because they involve no physical invasion or occupation of private space. (91) This strong emphasis on actual physical invasion under modern takings jurisprudence has drawn sharp criticism from takings scholars over the years (92) and is partly to blame for the current shortcomings in regulatory takings law related to airspace. By allowing cases to hinge largely on the question of physical invasion, existing takings rules under-protect citizens against regulations imposed to secure private airspace for non-physical government uses.

2. Total Regulatory Takings under Lucas?

The sorts of airspace restrictions described in Part II.A above are also unlikely to trigger compensable takings under the familiar per se rule set forth by the Supreme Court in Lucas v. South Carolina Coastal Council. (93) The Lucas rule requires that governments justly compensate private citizens whenever their regulations deprive citizens of "all economically beneficial uses" of their property. (94) At first glance, the Lucas rule may seem like a more promising approach to challenging veiled airspace easement regulations than the Loretto rule because the Lucas rule requires no evidence of a physical invasion. Justice Scalia specifically described the Lucas rule as an identifier of restrictions that, "from a landowner's point of view, [are] the equivalent of a physical appropriation." (95) Veiled airspace easement regulations often fit that description. (96) However, for the reasons that follow, United States courts' established approach to applying the Lucas rule excludes veiled airspace easement regulations from its purview.

The perpetual challenge in applying the Lucas rule is that of defining the property to which its "all economically beneficial use" test should apply. The Court had no difficulty defining the relevant property in Lucas because the claimant in that case held an undivided fee simple interest in a clearly-defined parcel and the challenged regulation precluded economically viable use of all of it. (97) Unfortunately, identifying the relevant property for takings analysis under the Lucas rule is not always so straightforward. As Justice Scalia famously noted in his majority opinion in Lucas:
   Regrettably, the rhetorical force of our "deprivation of all
   economically feasible use" rule is greater than its precision,
   since the rule does not make clear the "property interest" against
   which the loss of value is to be measured.... Unsurprisingly, this
   uncertainty regarding the composition of the denominator in our
   "deprivation" fraction has produced inconsistent pronouncements by
   the Court. (98)


This persistent uncertainty regarding how to determine the appropriate "denominator" for a Lucas analysis has been the focus of much legal scholarship over the years and continues to complicate applications of the Lucas rule. (99)

Most veiled airspace easement regulations are unlikely to constitute compensable takings under the Lucas rule because courts are reluctant to designate airspace rights alone as the "denominator" when applying the rule. The Court famously declined to isolate airspace rights from the fee estate for purposes of takings analysis in Penn Central Transportation Co. v. City of New York (100) The joint plaintiffs in Penn Central were owners of Manhattan's famous Grand Central Terminal and lessees of rights in the airspace above it. When the City of New York refused to approve a proposal for an office tower above the terminal because of the site's historic landmark status under a city ordinance, (101) the plaintiffs filed a claim arguing that the ordinance took their airspace rights--a "valuable property interest"--without just compensation. (102) The Court ultimately dismissed the claim, effectively rejecting the notion that airspace can be considered separately from the fee estate for regulatory takings analysis. Writing for the majority, Justice Brennan declared:

'Taking' jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated.... (103)

In the decades following Penn Central, the Court has reiterated that claimants may not "conceptually sever" specific property interests such as airspace rights from the fee estate for purposes of takings analysis. (104) This rule against analyzing airspace separately from the fee estate precludes just compensation under Lucas for most veiled airspace easement regulations. Because landowners whose properties are burdened by such regulations usually retain some possessory rights in their parcel's surface, the regulations do not destroy all economically viable use of their land and would not ordinarily trigger compensation under the Lucas rule. (105)

3. Partial Takings under Penn Central?

Claimants who cannot establish compensable regulatory takings under Loretto or Lucas are relegated to arguing their claims under the ad hoc test set forth in Penn Central Transportation Co. v. City of New York. (106) Most veiled airspace easement regulations are also unlikely to trigger compensable takings under this Penn Central test.

As mentioned above, the regulatory takings claim in Penn Central centered on the expensive column of airspace situated directly above New York City's historic Grand Central Terminal. (107) The Penn Central court analyzed the claim using multi-factor test that required "essentially ad hoc, factual inquiries" (108) into the "economic impact" of the regulation at issue, the "extent to which it has interfered with investment-backed expectations," and the "character of the governmental action" involved. (109) Upon weighing each of these factors, the Court ultimately held that no just compensation was due for the severe airspace restrictions resulting from the city's landmark preservation ordinance. (110)

Some veiled airspace easement regulations could conceivably be deemed compensable takings under the Penn Central test. The Supreme Court has emphasized in the years following Penn Central that takings that deprived owners of less than all economically viable use of their property were sometimes compensable under the test, (111) and under the right circumstances a court applying it might determine that a veiled taking of an airspace easement warranted just compensation. (112)

However, the basic characteristics of such regulations make it difficult to successfully challenge them under Penn Central. For example, courts weighing the "economic impact" of a regulation under the Penn Central test tend to consider the entire fee estate rather than looking solely at impacts on airspace or some other discrete stick in the claimant's bundle of rights. (113) Landowners generally retain surface rights under veiled airspace easement regulations, so the economic impact of such restrictions is often comparatively small, reducing the prospect of just compensation. (114) Inquiries into whether a veiled airspace easement regulation substantially interferes with "investment-backed expectations" are also unlikely to favor the awarding of just compensation because in most instances landowners can continue their existing property uses under such regulations. (115) And the significant discretion afforded to courts under the Penn Central test's nebulous factors invites uncertainty and expense capable of deterring even the strongest of claimants from seeking compensation under the test. (116)

Unfortunately, the Penn Central test often provides the only plausible line of argument for victims of veiled takings of airspace easements under current law. For the reasons just described, this heavy reliance on the Penn Central test to identify veiled takings of airspace easements makes it difficult for modern takings laws to ensure fair and efficient allocations of airspace rights between private citizens and their governments.

III. FILLING THE GAP: A TAKINGS RULE FOR VEILED AIRSPACE EASEMENT REGULATIONS

How could the Supreme Court best address the deficiencies in its takings jurisprudence relating to airspace? As renewable energy and sustainable development strategies steadily increase landowner competition for scarce airspace, (117) the temptation for public entities to secure airspace use rights through regulation will only grow. Courts could help to deter this practice by embracing an additional, supplemental takings rule that distinguishes veiled airspace easement regulations from ordinary land use controls and requires governments that impose the former to justly compensate affected citizens. If carefully designed, such a rule could fill a significant gap in takings law without materially disrupting existing takings jurisprudence.

The Court has emphasized on multiple occasions that its regulatory takings rules seek above all to identify government actions that are functionally equivalent to classic takings under eminent domain. (118) Regulatory takings can occur in myriad contexts and disguises, and the facts and circumstances that give rise to them are seldom the same from case to case. Crafting a manageable set of rules that is capable of rooting out the full subset of regulations that warrant just compensation under the Takings Clause from a vast spectrum of diverse government activities is thus extremely difficult, if not impossible. (119)

The Court has at least tentatively settled upon its present, imperfect two-part approach to detecting compensable regulatory takings. On the one hand, the Court has set forth the amorphous multi-factor test in Penn Central, which gives courts broad discretion to sniff out compensable takings through highly fact-specific inquiries and comparatively loose analysis. (120) On the other hand, the Court has adopted the Lucas and Loretto rules--bright-line tests that allow for relatively low-cost identification of the most obvious regulatory takings and thereby spare a large subset of takings claimants from having to argue their claims under Penn Central's cumbersome ad hoc test. (121)

A major shortcoming of the Court's two-part approach to regulatory takings law is that it systematically underprotects citizens against compensation-worthy regulations that happen to fall outside the Lucas and Loretto rules. The only option available to victims of such regulations is risky litigation under Penn Central's ambiguous and discretionary factors. Facing such an uncertain course, some legitimate takings claimants are apt to never file claims at all, allowing government exploitation of private property to continue unchecked.

Over the years, commentators have offered up several broad ideas for improving takings law, and some of those approaches, if adopted, might well have provided for just compensation to victims of veiled takings of airspace easements. (122) However, the simplest and least disruptive way to improve upon the Supreme Court's existing two-part approach to takings law as it relates to airspace would be to introduce an additional carve-out rule to supplement the existing categorical taking rules under Lucas and Loretto. This new rule could be narrowly tailored to protect citizens against the sorts of regulations described in Part II.A above without unduly constraining governments' legitimate regulation of airspace. Specifically, the new rule could require just compensation for government actions that (i) deprived citizens of possessory interests in airspace to (ii) facilitate a public entity's own exploitation of that space. The following two Parts discuss each element of this proposed rule.

A. Element #1: Deprivation of a Possessory Interest in Airspace

As a threshold matter, any new takings rule for veiled airspace easement regulations would need to require a showing that the challenged government action deprived the claimant of a valuable property interest. (123) Proving deprivation of a property interest is admittedly not as straightforward for veiled takings of airspace easements as it is in most other takings cases. Veiled airspace easement regulations involve no government invasion or occupation of private property, so they tend not to produce hard physical evidence of deprivation. Rather, they involve more subtle losses of airspace rights under height restrictions or other land use controls that prohibit possessory use of the restricted space. (124) The scope of acceptable means for establishing deprivation in the veiled airspace easement regulation context would thus need to be broad enough to encompass cases involving neither physical contact with the restricted space nor interference with existing surface uses. Claimants would need to be able to satisfy this first prong by showing no more than a loss of possessory airspace rights equivalent to those forfeited under a negative airspace easement. (125)

This liberal standard for establishing deprivation of private property would more closely resemble the standard in Loretto than that in Lucas because it would require only proof of deprivation of airspace rights--rights amounting to less than a fee simple or fully-severed estate. (126) Admittedly, the sorts of permanent physical occupations that can trigger Loretto takings tend to make for stronger takings arguments than can be made against veiled airspace easement regulations. Permanent physical occupations not only deprive citizens of possession and physical use of the occupied property; they also effectively divest citizens of rights to exclude another party from those areas. In contrast, veiled airspace easement regulations involve no physical intrusion and would not ordinarily give rise to a trespass claim. (127) In that sense, the higher deprivation standard in Lucas requiring evidence of a loss of economically viable use of an entire fee estate might seem more appropriate.

However, excessive focus on whether a government action involves a physical invasion distracts attention from the basic objective of the Lucas and Loretto rules. Above all, such rules are intended to be shorthand tools for identifying cases that are functionally equivalent to classic takings, (128) and the economic transfers resulting from veiled airspace easement regulations can resemble classic takings as much as the physical occupations and total deprivations that trigger just compensation under Loretto and Lucas. From the perspective of a private landowner, the economic loss suffered from a prohibition on physical airspace uses--no buildings, trees, wind turbines, or anything else within the restricted space--is often the same regardless of whether a government entity ever invades the space. (129) The burden on a landowner whose property is subjected to a veiled airspace easement regulation closely mirrors that of a servient owner under a negative airspace easement in that neither can make possessory use of the space. (130) Likewise, the practical benefits inuring to governments under such regulations resemble those of grantees under negative easements. (131) When public entities exercise their eminent domain power to formally take airspace easements for airport flight paths, they must compensate landowners for those rights regardless of whether the private landowner retains some interest in the surface. (132) Why not, then, award just compensation when a public entity seeks to improve its own resource position by securing similar airspace easement rights under the guise of land use regulation?

Of course, a chief risk of expanding the scope of categorical takings protections is that doing so could open the floodgates for more takings claims that could excessively constrain governments' ability to regulate. From the early stages of its regulatory takings jurisprudence, the Supreme Court has taken great pains to prevent the Takings Clause from unduly stifling land use regulatory authority. Justice Holmes famously encapsulated this caution in his statement in Mahon that "government could hardly go on" under regulatory takings rules that too liberally awarded just compensation. (133) The second prong of the proposed takings rule for veiled airspace easement regulations described immediately below is expressly aimed at limiting the rule's applicability and thereby mitigating this risk.

B. Element #2: Government Use of the Regulated Space

In addition to showing that the challenged regulation deprived them possessory use of their airspace, claimants under the proposed takings rule for veiled airspace easement regulations would have to prove that the government actually exploited the restricted space for its own benefit. Such non-incidental government use of private property is what makes veiled airspace easement regulations "functionally equivalent to the classic taking" and distinguishes them from ordinary police power restrictions. (134)

Local governments have been using height restrictions and other land use controls for nearly a century to coordinate airspace uses among landowners and thereby promote the general welfare of the citizenry. (135) Conventional height restrictions compel all landowners in the restricted area to forfeit possessory rights in some of the airspace above their parcels but also benefit all landowners by ensuring open space above neighboring parcels. (136) This "reciprocity of advantage" among landowners is a familiar characteristic of the sorts of legitimate police power regulations that tend not to trigger compensable takings. (137)

Regulatory takings laws seek not to hinder valuable police power regulation but to target those restrictions by which "private property is being pressed into some form of public service under the guise of mitigating serious public harm." (138) Restrictions conforming to this description resemble classic takings by eminent domain and warrant the payment of just compensation under the Takings Clause.

1. Previous Calls for a Government Use Test: Enterpriser vs. Arbiter

Professor Joseph Sax highlighted the distinction between ordinary police power regulations and laws that facilitate governmental use of private property in a 1962 law review article that advocated broad use of this distinction in regulatory takings law. In Sax's view:
   [W]hen an individual or limited group in society sustains a
   detriment to legally acquired existing economic values as a
   consequence of government activity which enhances the economic
   value of some governmental enterprise, then the act is a taking,
   and compensation is constitutionally required; but when the
   challenged act is an improvement of the public condition through
   resolution of conflict within the private sector of the society,
   compensation is not constitutionally required. (139)


Sax expounded on the important difference between the government's role as an enterpriser and its role as an arbiter of private disputes, noting that the government as an enterpriser:

"... operates in a host of areas, requiring money, equipment and real estate. It maintains an army which must be fed and clothed and supplied; it builds and maintains bridges and roads and buildings, and for these it must have land and other economic resources ..." (140)

In contrast, the government in its role as an arbiter merely "mediates the disputes of various citizens and groups within society ..., defining standards to reconcile differences among the private interests in the community." (141)

The FAA, Clark County, Suntown, and Beachville restrictions described in Part II.A above (142) would each qualify as compensable takings under Sax's government use test. Each aims not to resolve conflicts confined within the private sector but to economically benefit some specific government enterprise--the sort of government use that Sax argued made some regulations functionally equivalent to classic takings and worthy of just compensation under the Takings Clause. (143) However, although Sax's arguments were a notable contribution to the regulatory takings debate, (144) the Supreme Court ultimately declined to embrace them and instead adopted its current pair of shorthand rules focused on physical invasion and total deprivation, and its ad hoc Penn Central test. (145)

In 1993, nearly thirty years after Sax published his article, Professor Jed Rubenfeld made a similar case for greater emphasis on government use in regulatory takings law. (146) Rubenfeld argued that current laws paid too much attention to the word "taken" in the Takings Clause and not enough to the phrase "public use." (147) He advocated requiring just compensation in all cases of what he called government "usings"--situations where "the state ha[d] in effect taken over property and exploited it for some government-dictated use." (148)

Unfortunately, by 1993 the Court had already laid down its rules in Penn Central, Loretto, and Lucas, all of which pay minimal attention to the question of government use of the allegedly taken property. (149) One possible reason for the Court's rejection of any government use test is that identifying a compensable level of government use involves a more discretionary inquiry than is required to show physical invasion or arguably even total deprivation of economically beneficial use. (150) The Lucas and Loretto rules are convenient in that they require no government use analysis, allowing courts to quickly identify many types of compensable regulatory takings without any inquiry into whether the government ever used the allegedly taken property. (151)

Unfortunately, the Lucas and Loretto rules fail to protect against the sorts of takings of airspace rights that are the focus of this Article. Thus, even though the proposed rule for veiled takings of airspace easements would require a more discretionary government use analysis, such analysis would apply in only the small subset of takings cases involving airspace. The additional complexity in this narrow range of circumstances under the supplemental rule seems justifiable, given that the rule would spare claimants in these contexts from having to rely on arguments under Penn Central's ambiguous factors.

A rule applying the sort of government use test advocated by Professors Sax and Rubenfeld to the narrow context of airspace restrictions would also arguably be consistent with the Supreme Court's existing jurisprudence. In fact, the Penn Central Court specifically made use of this government use distinction to distinguish the facts in Penn Central from those in Causby. The majority in Penn Central noted that, in Causby, the "government, acting in an enterprise capacity,... appropriated part of [the claimants'] property for some strictly governmental purpose." (152) In contrast, the New York landmark ordinance at issue in Penn Central neither "exploit[ed]" the Grand Central Terminal "parcel for city purposes nor facilitate[d] nor ar[ose] from any entrepreneurial operations of the city." (153)

2. The Distinguishing Power of a Government Use Requirement

The government use requirement described above would enable the proposed additional takings rule to differentiate ordinary police power regulations of airspace from the sorts of compensation-worthy rules imposed by Suntown, Beachville, Clark County, and the FAA. This distinguishing power is easy to recognize when the rule is applied to the New York City landmark preservation ordinance challenged in Penn Central (54) That ordinance's restriction on building above Grand Central Terminal effectively deprived the Penn Central claimants of possessory use of some highly valuable airspace, (155) meeting the first prong of the proposed rule. However, the restriction was motivated by a general public interest in historic preservation, (156) and the city government neither exploited nor sought to exploit the restricted space. The Penn Central claimants would have thus been unable to satisfy the government use prong and avail themselves of the proposed takings rule.

Suppose instead that New York City's prohibition on development above the Grand Central Terminal was motivated solely by the city's desire to preserve scenic views for a nearby city government office tower. Under those facts, the city would have been exercising its regulatory power to enable it to exploit private airspace and materially improve the city government's own resource position, so the restriction would have been compensable under the proposed rule. This sort of government exploitation of airspace is more akin to the action that triggered a compensable taking in Causby--a case in which the United States military had not "merely destroyed property" but was "using a part of it for the flight of its planes." (157)

A comparison of two recent restrictions on commercial wind energy further demonstrates how the proposed rule's government use requirement could differentiate compensable veiled airspace easement regulations from ordinary land use controls. On the one hand, consider the county ordinance recently challenged in Zimmerman v. Board of County Commissioners of Wabaunsee County}558 Zimmerman arose when the Board of Commissioner of Wabaunsee County, Kansas, adopted an ordinance prohibiting commercial wind energy development throughout the county. (159) The undisputed impetus for the ordinance was a general concern that wind energy development would compromise the aesthetic appeal of the county's pristine rural areas, including portions of the scenic Flint Hills. (160) The ordinance effectively deprived rural landowners of possessory use of the airspace above their land and would have thus satisfied the first element of the proposed takings rule. (161)

However, the ordinance would not have satisfied the second element of the rule because it was not adopted to enable some government entity to exploit the restricted space for its own benefit. The ordinance did not improve the resource position of the county government or of any other government enterprise and was aimed solely at preserving general aesthetic benefits for the county's citizenry.

In contrast, consider the FAA wind farm restrictions described in Part II.A.1 above, which seek to prevent interference with military radar. (162) Like the ordinance at issue in Zimmerman, the FAA restrictions deprive landowners of valuable possessory airspace interests and would thus satisfy the first element of the proposed rule. However, the FAA restrictions differ from the Wabaunsee County ordinance in that they are driven solely by a federal entity's desire to keep the airspace clear to serve the entity's own purposes--an overt government use of the space. (163) Even if a wind energy developer held all the state and local approvals required to develop its wind farm, an FAA restriction based on a request from the DOD could still hinder the project. Such restrictions are aimed not at governing airspace conflicts among private landowners, but rather at securing privately-owned resources for use by a specific government entity. Restrictions motivated by this sort of government self-interest contrast starkly with conventional police power restrictions like the Wabaunsee County ordinance and merit the payment of just compensation. (164)

C. Measuring Just Compensation

Successful claimants under the supplemental takings rule advocated in this Article would obviously be entitled to just compensation from the government entity that imposed the challenged regulation. Like landowners in most other types of takings cases, these claimants would bear the burden of establishing the amount of just compensation due. (165) Valuing easements can be difficult, since most types of easements are infrequently bought and sold. (166) However, the compensation amount could be determined through the same sorts of valuation methods commonly used for takings of easements through eminent domain. In those situations, compensation is typically determined by measuring the difference in the value of the burdened landowner's property before and after imposition of the easement. (167) Amounts calculated through such an approach would at least roughly approximate the value of the possessory use rights destroyed by the restriction.

In the context of wind energy development, a compensation amount determined under the "before and after" method just described would roughly reflect the present value of the projected revenue stream that would have accrued to the claimant under a wind energy lease on the restricted property. (168) For height restrictions in urban areas like those in Clark County, Suntown, or Beachtown, the estimated profitability of potential development within the restricted airspace would similarly be reflected in the compensation amount. (169)
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Title Annotation:I. Airspace Rights and the Power of Eminent Domain through III. Filling the gap: A Takings rule for Veiled Airspace Easement Regulations C. Measuring Just Compensation, p. 421-455
Author:Rule, Troy A.
Publication:Washington University Law Review
Date:Feb 1, 2013
Words:8344
Previous Article:The lawmaking family.
Next Article:Airspace and the takings clause.
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