Court Reverses Determination that Rezoning Constituted an Unconstitutional Taking

Last week the Appellate Division Second Department reversed and remitted for retrial a 42 USC 1983 regulatory takings claim in the case Noghrey v. Town of Brookhaven. Plaintiff had purchased 2 parcels in 1985 that were zoned for shopping plazas with the intention of building shopping plazas. After adopting a moratorium to study the zoning of these parcels and others, the Town rezoned plaintiff’s property to residential use. Plaintiff then brought a regulatory takings claim. A trial was held and the jury found a partial taking based upon the Supreme Court’s ruling in Penn. Cent. Transportation v. City of New York.

The Appellate Division reversed and remanded the case for a new trial finding that the jury charge on the takings issue was inadequate. The Court stated that for there to be even a partial taking, the diminution in value must be “one step short of complete.” Noting that courts have rejected cases where the diminution in value even “approached or exceeded 90% of the pre-regulation value” the Court found the trial court failed to explain to the jury the true standard to be applied.

In remitting the case the Court ordered a new trial and directed that the trial court instruct the jury that “mere diminution in value” is not adequate to prove a taking. Rather the jury should be instructed that the test is whether the regulation has left only a “bare residue” of economic value.