Penn Central v. NY City Case Brief

Summary of Penn Central v. NY City, S. Ct 438 US 104 [1978]

Relevant Facts: Penn owned Grand Central Terminal in NY which is located midtown Manhattan. Originally a 20 story office tower was to have been located above the Terminal it was never constructed. NY designated the Terminal as a landmark. Penn and UGP later sought to construct an office bldg atop the Terminal and filed an application w/ the Commn. The Commn denied both their requests.

Legal Issue(s): Whether the restrictions imposed by NY city’s law upon appellant’s proposed construction on the Terminal site constitutes a taking of appellant’s property for public use w/i the meaning of the 5th Amendment?

Court’s Holding: No

Procedure: S. Ct Tr granted injunction; App Div reversed; Ct of App Affirmed; Pl appealed; US S Ct Affirmed.

Law or Rule(s): Nor shall private property be taken for public use w/o just compensation.

Court Rationale: Taking jurisprudence does not divide a single parcel into discrete segments (air, space, etc) and attempt to determine whether rights in a particular segment have been entirely abrogated. The Ct focuses on both the character of the action and on the nature and extent of the interference w/ rights in the parcel as a whole. Diminution of the value of the Terminal does not by itself constitute a taking. The fact that the Landmark Law has a more severe impact on some landowners than others does not itself mean that the law effects a taking. Zoning laws often impact some more than others and have been held valid. The NYC law is not invalid by its failure to provide just compensation. We must now consider whether the interference is of such a magnitude that “there must be an exercise of eminent domain and compensation to sustain it" The law does not interfere w/ the present uses and the Pls retain the ability to obtain a reasonable return on its investment. Nothing the Commn has said or done suggest that they intend to prohibit any construction. The restrictions imposed are substantially related to the promotion of the general welfare and not only permits reasonable beneficial use but affords opportunities to further enhance to properties.

Plaintiff’s Argument: Any substantial restriction imposed pursuant to a landmark law must be accompanied by just compensation to remain constitutional. Pl’s development rights severely restrict and limit the Pl’s ability to earn a reasonable return on the investment w/i the property.

Defendant’s Argument: There was no “taking” since the Law had not transferred control of the property to the city, but only restricted appellants’ exploitation of it; and that there was no denial of due process because the same use of the Terminal was permitted as before.

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