Copyright (c) 2014 Mark Shapiro
Inverse condemnation (sometimes called eminent domain) is a legal phrase which describes a situation when the government takes private property and does not pay compensation to the property owner as is required by the Fourteenth and Fifth Amendments to the US Constitution.
One of my many judgment articles: I'm a Judgment Broker, not a lawyer, and this article is my opinion based on my experience within California, please consult with a lawyer if you need legal advice.
In certain jurisdictions, inverse condemnation also includes damaging property. In order to get paid, the owner of the property often needs to start a lawsuit our government. With these kind of situations, the property owner will be the plaintiff, and that's the reasons the action is considered to be inverse, because the position of the parties will be reversed. This is in contrast to the more common situation of a direct condemnation, when the government is the plaintiff, that sues an owner in order to take their personal property.
Government seizures can be of a physical nature, (for example, flooding, the taking of land, deprivation of land access, keeping of land after a lease to our government expires, removing access, removal of ground-based support, etc.) or taking because of a regulation (when the laws become so onerous that they make the regulated property unusable by the property owner for any reasonable or economical purposes).
Sometimes inverse condemnation is just too much and becomes a controversy. See Pennsylvania Coal Company versus Mahon, 260 U.S. 393 (1922), where the property owner lost marketability and value, denying them the benefits of property ownership with no payment.
Unfortunately, the US Supreme Court hasn't elaborated on what "too far" means. But, the court has defined three situations where inverse condemnation occurs:
1) Physical occupation or seizures.
2) The reduction of a property's utility or value to the degree that it is no longer capable of being viable.
3) For a precondition to issuing some permit, our government demands that a property owner give their personal property to our government, even when there is no rational reason to do so. See Nollan versus California Coastal Co., 483 U.S. 825 (1987).
Because of the 3 circumstances called "per se" regulatory seizures, the decision whether or not property was taken is created by judicial consideration of 3 factors:
1) The type of government regulations.
2) Any economic effect of the regulations on a owner's property.
3) The extent to which the regulations interfere with the owner's reasonable, investment-backed expectations.
These three factors are known as the "three-factor Penn Central test", (named after Penn Central Transportation Company versus City of New York, 438 US 104, 124 ). The Penn Central decision was criticized because of it's controversial "taking issue" decision, as its 3-factor approach was so unclear that it made the decision almost impossible for lawyers to know prior to filing a lawsuit, what factors would be considered decisive by the court, and the way apply the three factors.
Public utilities such as railroads are granted the power of condemnation (sometimes called eminent domain) by state laws, and they can be liable for inverse damaging or seizing of private property during their activities. This includes taking property (e.g., supplies for our military forces during wartime); intellectual property (e.g., patents, copyrights, etc.); and certain contracts.
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Mark Shapiro - Judgment Broker - www.JudgmentReferral.com - where Judgments go to get Recovered!
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