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Loretto v. Teleprompter Manhattan CATV Corp.

    Brief Fact Summary.

    N.A

     

    Synopsis of Rule of Law.

    When the government permanently and physically occupies the premises, the government’s actions constitute a taking, which requires the government to pay just compensation, even if the government is using the land to serve a public interest or if the taking only has a minor economic impact on the property owner.

     

    Facts.

    Loretto (plaintiff) purchased a five-story apartment building in New York City. Under New York law, a landlord must permit a cable television company to install its cable facilities upon his property. In the present case, Teleprompter Manhattan CATV Corp. (defendant) installed cable facilities that occupied portions of Loretto’s roof and the side of her building. Prior to 1973, Teleprompter routinely obtained permission from building landlords to install its cable facilities. In 1973, New York passed a law, which prohibited interference by a landlord in the installation of cable and the acceptance of payment from a cable company. Loretto brought suit in New York state court alleging that the installation of cable facilities on her building by Teleprompter was an unconstitutional taking of her property. The New York trial court upheld the constitutionality of the New York law, and the court of appeals affirmed. The decision was affirmed by the Supreme Court of New York, and Loretto appealed to the United States Supreme Court.

     

    Issue.

    Whether the government’s actions constitute a taking, which requires the government to pay just compensation, even if the government is using the land to serve a public interest or if the taking only has a minor economic impact on the property owner when the government permanently and physically occupies the premises, the government’s actions constitute a taking.

     

    Held.

    Yes, the government’s actions constitute a taking, which requires the government to pay just compensation, even if the government is using the land to serve a public interest or if the taking only has a minor economic impact on the property owner when the government permanently and physically occupies the premises, the government’s actions constitute a taking.

     

    Dissent.

    The majority provides no guidance as to when a permissible state regulation ends and an unconstitutional taking begins. It is difficult to distinguish “temporary” physical occupations whose constitutionality is subject to a rigid balancing process, and “permanent” physical occupations, which are held to be takings without regard to other factors that a court might ordinarily examine. The majority errs in attempting to distinguish between a “permanent occupation” and a “temporary invasion.” This arbitrary distinction will have significant consequences for the future of legislative judgments concerning landlord-tenant relationships.

     

    Discussion.

    Both precedent and historical circumstances support the rule that a minor but permanent, physical occupation of an owner’s property, authorized by government constitutes a “taking.” A permanent physical occupation requires compensation for the property owner because it is more serious and intrusive than either a temporary intrusion or an intrusion that merely restricts the use of property. A permanent physical occupation requires payment of just compensation because it destroys the property owner’s opportunity to exercise three basic property rights: (1) the owner may no longer fully possess the property or exclude others from possessing it; (2) the owner can no longer exclude others from using his or her property, and cannot make any personal non-possessory uses of it; and (3) the owner cannot properly dispose of the property because a permanent physical occupation typically strips the property of most or all of its economic value. Appling these factors to the present case, the bolting of cable wires and boxes to the building, as well as the complete occupancy of space immediately above and upon the roof and along the building’s exterior wall satisfies the test for finding a “permanent physical occupation” by Teleprompter Manhattan CATV Corp. of Loretto’s property. It does not matter in the present case that the area “taken” by the cable company is relatively small. The mere fact that cable equipment is permanently installed on the building by a third party with governmental permission means that the action constitutes a taking of Loretto’s property that requires just compensation under the Fifth and Fourteenth Amendments. The decisions of the lower courts are reversed.

     


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