Murr v. Wisconsin, 582 U.S. ___, 137 S. Ct. 1933 (2017) (U.S. Supreme Court)
Murr v. Wisconsin is a cornerstone modern takings case that clarifies how courts define the "relevant parcel"—the denominator—in regulatory takings analysis.
When adjacent, commonly owned, substandard lots are subject to a merger provision, should the lots be treated as a single "parcel" for regulatory takings analysis, and, under that definition, did the regulations effect a compensable taking under the Fifth Amendment?
In defining the "parcel as a whole" for regulatory takings analysis, courts should not rely mechanically on lot lines or formal title. Instead, they should apply a multifactor test that considers: (1) how state and local law treat the property (including lot-merger provisions and background principles of property and nuisance law); (2) the physical characteristics of the land (topography, environmental features, and contiguity); and (3) the value of the property under the challenged regulation, including the relationship between the regulated land and the owner's other holdings (synergies, reciprocal benefits, and retained uses). Where these factors indicate functional and legal integration, the lots may be treated as a single parcel. Once the relevant parcel is defined, courts apply Penn Central's ad hoc balancing to determine whether a taking occurred, considering: (a) the regulation's economic impact on the parcel as a whole; (b) the extent to which the regulation interferes with distinct, investment-backed expectations; and (c) the character of the government action.
The relevant parcel consists of both Lots E and F considered together, not Lot E in isolation. Applying Penn Central to the combined parcel, the regulations did not effect a compensable taking. The judgment of the Wisconsin Court of Appeals was affirmed.
Murr squarely addresses the "denominator problem"—how to define the property against which economic impact is measured in regulatory takings cases. By articulating a multifactor test that integrates state law, physical realities, and market relationships, the Court clarified that parcel definition is not controlled by formal lot lines. The case thereby shapes the application of Penn Central, often the decisive framework in modern takings disputes. For law students, Murr is essential for understanding (1) how parcel definition can drive takings outcomes; (2) how existing regulations inform reasonable, investment-backed expectations; and (3) why environmental and land-use controls frequently survive Penn Central when they are general, longstanding, and leave owners with significant, economically viable use. It also highlights the tension between predictability (favored by formal rules) and contextual fairness (favored by standards), a recurring theme across property and constitutional law.