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U.S. Supreme Court Refuses to Review Regulatory Takings Issue
Posted Date: July 22, 2003

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The United States Supreme Court recently declined without
opinion to hear, under its discretionary review
authority, a New Hampshire Supreme Court decision
addressing the issue of the Fifth Amendment's "takings
clause." Although case law on this subject is still
evolving, a taking is generally regarded as an action or
condition that prevents a property owner from exercising
his or her rights to sell, rent, transfer, develop, or
otherwise reap the benefits of real property ownership.
Where a taking occurs, compensation may be required. The
issue of when government regulation of property amounts
to a taking requiring compensation has been debated in
many court decisions.

The combined cases of Henry Torromeo v. Town of Freemont
and MDR Corporation v. Town of Freemont, 813 A.2d 389
(N.H., 2002), involved plaintiffs who had been denied
building permits under a growth control ordinance
subsequently found to be invalid for procedural reasons
under state law. They alleged a temporary taking and
sought damages. The New Hampshire Supreme Court found
that the state trial court erred in ruling that
plaintiffs could recover damages because of economic loss
due to a growth control ordinance that was subsequently
found to be procedurally invalid rather than
unconstitutional. 813 A.2d 391-92. (The basis for the
earlier, procedural invalidity was that the town had not
adopted a capital improvement program, a prerequisite for
that type of ordinance under state law.) Absent an
unconstitutional taking, the Court stated, "This case
presents merely the type of municipal error for which
judicial reversal is the only remedy." 813 A.2d at 392.
As the U.S. Supreme Court has decided not to consider the
case, the state court's ruling stands. You can review the
New Hampshire Supreme Court's decision in its entirety on
the Regulatory Barriers Clearinghouse Web site at:
http://www.huduser.gov/rbc/search/rbcdetails.asp?DocId=603

U.S. HUD's Regulatory Barriers Clearinghouse will
endeavor to keep you informed on this and other topics of
interest to the affordable housing community. If you're
aware of a similar issue, or of any state or local
regulatory barrier to affordable housing, send us an
email at rbcsubmit@huduser.gov. To see some of the 1,700+
barriers and solutions we've collected so far, visit us
at www.regbarriers.org ...and help make affordable housing
a solution we can all live with.  
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