Murr v. Wisconsin

The Murr family owned two adjacent waterfront lots along the St. Croix River in Wisconsin, one with a cabin and one vacant. State and local regulations barred the separate sale or development of the vacant lot because of a merger provision treating commonly owned adjacent lots as a single parcel. The Murrs sought to sell the vacant lot to fund cabin improvements but were denied. They sued, claiming the regulation effected an unconstitutional taking of their property without just compensation. The Supreme Court had to determine the proper "denominator" in the takings analysis: whether the two lots should be viewed as a single parcel or as distinct lots when assessing the regulation's economic impact.

In a 5-3 decision authored by Justice Kennedy, the Supreme Court affirmed the Wisconsin Court of Appeals and held that no compensable taking had occurred. The Court adopted a flexible, multi-factor test to determine the relevant parcel, considering the treatment of the land under state law, the physical characteristics of the land, and the prospective value of the regulated parcel. Applying these factors, the Court concluded that the two lots should be treated as a single parcel, and because the Murrs retained significant value and use of the combined property, the regulation did not constitute a taking. Justice Thomas, Alito, and Chief Justice Roberts dissented.

The central dispute focused on defining the appropriate unit of property for a regulatory takings claim under the Fifth Amendment. The question was whether two adjacent, commonly owned lots should be merged into a single parcel for the purpose of evaluating the economic impact of a land-use restriction, or if each lot should be considered a separate and distinct property interest. This "denominator" issue was critical because if the lots were treated separately, the regulation deprived the owners of all economically beneficial use of one lot, amounting to a per se taking.

The decision provided a new, fact-intensive framework for analyzing regulatory takings but was criticized for creating uncertainty for property owners and governments alike. By rejecting a bright-line rule in favor of a multi-factor test, the ruling made it more difficult for landowners to succeed on takings claims involving adjacent parcels under common ownership. Critics argued the decision weakened Fifth Amendment protections, while supporters contended it prevented landowners from artificially manufacturing takings claims through strategic lot segmentation. The case remains a key precedent in the ongoing tension between private property rights and government land-use regulation.