3. 12/8/2016 inversecondemnation.com: In New York's Second Department, Apparently There Is An Expiration Date On The Takings Clause
http://www.inversecondemnation.com/inversecondemnation/2016/12/innewyorksseconddepartmentapparentlythereisanexpirationdateonthetakingscl… 3/4
NY: Reasonable
Probability That
Wetlands
Designation Is A
Regulatory
Taking Under
Raisin Round
Up
NY App: Taking
Invalidated
Because Town
Segmented
Environmental
Review
Wisconsin App:
Two Parcels
Can Be Treated
As One For
Regulatory
Takings
Supreme Court of the State of New York
Appellate Division: Second Judicial Department
D50614
O/hu
AD3d Submitted - October 21, 2016
JOHN M. LEVENTHAL, J.P.
ROBERT J. MILLER
HECTOR D. LASALLE
VALERIE BRATHWAITE NELSON, JJ.
2015-00095 DECISION & ORDER
Monroe Equities, LLC, appellant, v State of New York,
respondent.
(Claim No. 121673)
James G. Sweeney, P.C., Goshen, NY, for appellant.
EricT. Schneiderman, AttorneyGeneral, New York, NY(Steven C. Wu and Valeria
Figueredo of counsel), for respondent.
Appeal by the claimant from an order of the Court of Claims (Stephen J. Mignano,
J.) dated August 25, 2014. The order, insofar as appealed from, denied the claimant’s motion for
summary judgment on the issue of liability and, upon searching the record, awarded the defendant
summary judgment dismissing the claim.
ORDERED that the order is affirmed insofar as appealed from, with costs.
In 2005, the claimant acquired title to an undeveloped 16.81-acre parcel of real
property in the Village and Town of Monroe, designated as Tax Map Section 37, Block 1, Lot 26.2.
The property is in the RR 1.5 ac zoning district, for which permissible uses include, “Single Family
detached dwellings on lots of 3 or more acres in size.” In 2006, the claimant applied for approval
to develop the property by subdividing it into three lots and then constructing a single-family
dwelling on each lot. The proposal included installation of a septic system for each of the three
dwellings. The property is located within the Lake Mombasha watershed, and is subject to
watershed protection regulations promulgated on November 9, 1920, by the New York State
Department of Health (hereinafter the DOH) pursuant to article 11 of the Public Health Law. As
relevant here, the watershed regulations prohibit the placement of a subsurface sewage disposal
December 7, 2016 Page 1.
MONROE EQUITIES, LLC v STATE OF NEW YORK
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Posted on December 8, 2016 in ▪ Inverse condemnation, ▪ Regulatory takings | Permalink
![12/8/2016 inversecondemnation.com: In New York's Second Department, Apparently There Is An Expiration Date On The Takings Clause
http://www.inversecondemnation.com/inversecondemnation/2016/12/innewyorksseconddepartmentapparentlythereisanexpirationdateonthetakingscl… 1/4
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December 8, 2016
In New York's Second Department, Apparently There Is An Expiration Date On The
Takings Clause
What is is about the U.S. Supreme Court's decision in Palazzolo v. Rhode Island, 533 U.S. 601 (2001), that so many
lower courts just don't get?
We've read the opinion (multiple times, we assure you), and it seems straightforward enough to us: acquisition of land
after the time the government imposes an allegedly restrictive regulation does not deprive the owner of the ability to
challenge the restrictive regulation as a taking. The Court held that prohibiting the a takings challenge would result in a
"windfall" to the government, allowing the state to "shape and define property rights and reasonable investmentbacked
expectations." Id. at 626. Thus, because the state cannot "put an expiration date on the Takings Clause," the Court held
that "[f]uture generations, too, have a right to challenge unreasonable limitations on the use and value of land." Id. at
627.
Well the message isn't quite getting through to New York's Second Appellate Department (doinkdoink). In Monroe
Equities, LLC v. State of New York, No. 201600095 (Dec. 7, 2016), the court attempted to distinguish Palazzolo in a
case in which the State Department of Health's watershed regulations prohibit installation of a septic system on the
plaintiff's residentiallyzoned land. Without a sewage system, the local government cannot subdivide the land.
The owner alleged a Lucas total wipeout taking. The Court of Claims rejected the owner's motion for summary judgment
on liability, and instead (after the court's own research) dismissed the case because the offending watershed regulations
had been adopted 85 years before the plaintiff purchased the property in 2005. Thus, the regulations were a Lucas
"background principle" and the owner never owned the right to use the land to install a sewage system.
The Appellate Division affirmed, concluding that "the right to install a septic system was never part of the 'bundle of
rights' the claimant acquired with title to the property and the claimant cannot succeed on its takings claim." Slip op. at
3. The opinion relied on two New York cases to support that conclusion, Soon Duck Kim v. City of New York, 90 N.Y.2d 1
(1997), and Gazza v. New York State Dep't of Envtl. Conservation, 89 N.Y.2d 603 (1997). But as Professor Steven Eagle
has written (see here and here, for example), it is unlikely that these rulings survived the U.S. Supreme Court's Palazzolo
ruling four years later.
Not to be deterred, the Appellate Division tried to distinguish that case:
Contrary to the claimant’s contention, the United States Supreme Court’s decision in Palazzolo v Rhode Island (533
US 606) does not compel a contrary result. In Palazzolo, the Supreme Court declined to adopt a blanket rule that
purchasers with notice have no compensation right when a claim becomes ripe and it expressly stated that a
regulatory takings claim “is not barred by the mere fact that title was acquired after the effective date of the state
imposed restriction” (id. at 609). Nevertheless, the Court emphasized that it had “no occasion to consider the
precise circumstances when a legislative enactment can be deemed a background principle of state law or whether
those circumstances are present here. It suffices to say that a regulation that otherwise would be unconstitutional
absent compensation is not transformed into a background principle of the State’s law by mere virtue of the passage
of title” (id. at 629630). Resolution of the instant claim does not rely upon application of a blanket rule. As
discussed above, the record establishes that the right to install a septic system was never part of the bundle of rights
acquired by the claimant.
Slip op. at 34.](https://image.slidesharecdn.com/90e02364-30a2-4f8a-a9d1-77afc5ec3e31-161214193957/85/inverse-condemnation-blog-hat-tips-me-20161208-1-320.jpg)
