The U.S. Supreme Court building is pictured in Washington, D.C. Photo by REUTERS/Carlos Barria.

Supreme Court seems divided in property rights dispute

Nation

The U.S. Supreme Court building is pictured in Washington, D.C. Photo by REUTERS/Carlos Barria.

WASHINGTON— A divided Supreme Court struggled on Monday over a property rights dispute that could make it tougher for state and local governments to limit development in coastal areas.

The case involves a family's effort to sell part of its riverfront land in Wisconsin. The family planned to use the money from a vacant lot they own to pay for improvements on a cabin that sits on the parcel next door.

But county officials nixed the sale for violating local conservation rules and treated the lots as a single property that can't be split up. The family says that's unfair and claims the government should pay what the vacant parcel is worth — up to $400,000. The government argues that when viewed as a whole, the land remains quite valuable and the family is owed nothing.

The case has drawn interest from property rights and business groups that say such rules let the government avoid paying landowners for restricting land use. The Constitution requires compensation if government regulations take away a property's economic value.

During a one-hour argument, the court's four liberal justices seemed to side with state and local officials, while conservative justices were generally more skeptical. Justice Anthony Kennedy — often a swing vote in close cases — asked tough questions of both sides.

More than 100 cities and counties across the U.S. have similar "merger" restrictions that treat two adjacent properties as one if they have the same owner.

READ MORE: Justices to hear property rights dispute over family's land
The Murrs' lawyer, John Groen, told the justices the lots should be viewed as "independent, discrete, and separate parcels" because that is the way they were originally drawn up and have been taxed for years.

But Justice Elena Kagan said the Murrs seem to want to rely on state law as it originally drew up the property lines, but ignore revisions to the law that treat side-by-side lots as a single parcel if they have the same owner.

"If we're looking to state law, let's look to state law, the whole ball of wax," Kagan said.

Wisconsin Solicitor General Misha Tseytlin argued that the two lots "have merged for all relevant purposes under state law." He said state officials also considered as a factor the reasonable expectations of the property owners.

Chief Justice John Roberts said it seemed "a little quirky" that the Murrs are not allowed to treat the properties separately, but if they had purchased them under separate names they would be in "an entirely different situation."

The case began in 2004, when four siblings in the Murr family wanted to sell a vacant lot on the banks of the St. Croix River to pay for improvements on a rustic cabin that sits on the parcel next door. Their father had purchased the two 1.25-acre lots separately in the 1960s and had paid taxes separately. The lots were later transferred to the Murr siblings in the 1990s.

County officials blocking the sale point to regulations passed in 1976 that bar new construction on lots in the area to prevent overcrowding and pollution. A "grandfather" clause exempted existing owners. But the county won't apply that exemption to the Murrs' empty lot alone, since it is connected to the family's other land.

The Murrs had viewed the vacant property as a long-term investment and say it has been assessed at $400,000.

A Wisconsin appeals court sided with the county, saying zoning rules did not take away the property's value because the Murrs could still use both lots as a vacation property or sell them as a whole.

A ruling is expected by June.

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