## Facts

- The Murr family owned two adjacent riverfront lots (Lots E and F) along the St. Croix River in Wisconsin, originally purchased under separate titles.
- The lots sat in a federally protected river corridor subject to extensive federal, state, and local shoreland and environmental regulation.
- Wisconsin and St. Croix County applied a lot-merger rule under which adjacent lots in common ownership could not be separately sold or developed unless each had at least one acre of developable land.
- Although each lot exceeded one acre in total size, each had less than one acre of land suitable for development due to topography and environmental constraints.
- After the siblings came to own both lots, the lots were treated as merged for development and sale purposes.
- The siblings sought to sell Lot E separately while retaining the existing cabin on Lot F; the local board denied variances, concluding the lots could not be separately sold or developed.
- The owners sued, alleging a regulatory taking as to Lot E because the rules prevented separate sale or separate improvement of that lot.

## Issues

1. In a regulatory takings claim, how should courts determine the relevant “parcel as a whole” when an owner holds two contiguous, commonly owned, legally distinct lots.
2. Whether applying Wisconsin’s lot-merger and development restrictions, evaluated against the properly defined parcel, effected a taking requiring just compensation.

## Decision

- The Supreme Court affirmed (5–3) and held that the contiguous commonly owned lots could be evaluated as a single parcel for Takings Clause purposes in the circumstances presented.
- The Court adopted a multi-factor approach to defining the relevant parcel, rejecting a rule that the denominator is fixed solely by formal lot lines.
- Treating the property as one parcel, the Court held the regulations did not effect a compensable taking because the owners retained substantial use and value, including continued residential and recreational use of the combined property.
- The dissent argued courts should generally use established lot lines to define the relevant parcel and warned the majority’s test permits unpredictable results and denominator manipulation through regulation.

## Legal Principles

- The Takings Clause inquiry generally evaluates the impact of regulation on the “parcel as a whole,” not on an isolated segment.
- To determine the relevant parcel when contiguous, commonly owned lots are involved, courts may consider:
  - State and local law (including merger provisions and background property-law rules);
  - Physical characteristics (contiguity, topography, and environmental features); and
  - The property’s prospective value and uses when treated together, including effects on reasonable owner expectations.
- In regulatory takings analysis, a per se taking may occur if regulation denies all economically beneficial use; otherwise, courts apply Penn Central factors (economic impact, interference with investment-backed expectations, and character of the government action).
- Valid state lot-merger rules may inform reasonable expectations about whether adjacent under-sized lots in common ownership will be treated as a single property for takings analysis.

## Conclusion

Murr held that, for regulatory takings purposes, contiguous lots in common ownership may be combined into a single parcel based on a multi-factor inquiry emphasizing state law, land characteristics, and reasonable expectations; evaluated as a whole, the restrictions at issue did not require compensation.


Murr v. Wisconsin, 137 S. Ct. 1933 (2017)