Regulatory Takings

The Tennessee Supreme Court released an interesting new opinion on Aug 31. It deals with the time within which a claim of overbroad zoning or planning regulation must be brought against a city government. In B & B Enterprises v City of Lebanon, the Court ruled that even in the face of an appeal from an adverse administrative decision, the plaintiff must file within one year. Failure to do so results in loss of the claim.

In B & B, a long standing dispute between the developer and the City of Lebanon, the plaintiff appealed the denial of its application for subdivision approval and ultimately won. However, after winning the appeal, it also decided to sue for a temporary taking. The Supreme Court ruled that the suit for the temporary take was filed too late. It had to be filed within one year of the original decision denying the subdivision application.

In passing, the Court notes two important items. First, it indicates that the availability of a takings claim based on overbroad regulations under the Tennessee Constitution has not yet been decided. "Currently, we have recognized only two types of takings claims – physical occupation takings claims and nuisance-type takings claims." For the purpose of ruling on B & B, the Court presumed that the Tennessee Constitution permitted such a claim. For what it's worth, if the Court concludes at some future point that a regulatory take claim is not available under Tennessee law, the plaintiffs in such cases will have a remedy in federal court.

Second, the Court points out that "inverse condemnation claims are likewise limited to physical takings." Presumably this means that a regulatory taking must be presented as a claim directly under the Tennessee Constitution, if at all. The ultimate ramifications of this point is not clear, but it suggests that a regulatory take is not bound by the restrictions of an inverse condemnation claim.

By the way, the Court defines a regulatory take as well: "A regulatory taking results when a governmental regulation places such a burdensome restriction on a landowner’s use of its property that the government has for all intents and purposes 'taken' the property." A straight forward definition, but serviceable.

The law of regulatory takes here in Tennessee is just getting underway. It will be interesting to see how it progresses.