Daily Development for
Thursday, November 30, 1995

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

EMINENT DOMAIN; INVERSE CONDEMNATION; CLAIM OF OWNERSHIP: For there to be a de facto taking through restriction of use or access to property, a government entity, acting pursuant to its power of eminent domain, must, by its conduct, substantially deprive an owner of use and enjoyment of property; there is no inverse condemnation if the agency is not acting pursuant to its eminent domain power. Moore v. Com., Dept. of Environ. Resources, 660 A.2d 677 (Pa.Cmwlth. 1995).

Department of Environmental Resources publicly claimed ownership rights in oil and gas estate, mistakenly believing that these rights had reverted to it. For a substantial period of time, the true owner was unable to lease the interests profitably because of the "cloud" of the Department's claim. The court held nevertheless that actions taken by the Department did not constitute a de facto taking because the Department acted under a belief that it was the owner of the property, and took no action as a condemnor.

"While it is true that the actual exercise of eminent domain is not a requisite to a de facto taking, where de facto takings have been found, either physical intrusion or the imminence or inevitability of condemnation, as that term is statutorily defined, has been an essential element. . . .

[I]n those cases where de facto takings have been found absent physical invasion or appropriation of property, the government body either exercised legislative or regulatory powers or engaged in activities that anticipated the acquisition or destruction of property for a public purpose; that is, for "activities...incident to massive, complex and time consuming programs launched by government to solve...the...problems that beset our society. . . . These anticipatory activities--for example, notice and publicity of intent to condemn, actual condemnation of surrounding properties, or prolonged restriction of access to property--amounted to exceptional circumstances depriving an owner of some of the value of his property."

As the owner actually got back the physical access to the oil and gas reserves undiminished (albeit after the market had turned), the court concluded that there was not a physical invasion or appropriation.

There is a strong dissent arguing that the invasion here is indistiguishable from other "takings" of property by governmental action found compensable in the past.

Comment: Should the ordinary "takings" jurisprudence of the U.S. Supreme Court be applicable here? Certainly there was no "nuisance like" activity being curtailed, and it seems admitted that valuable property rights were withheld from their owner by government action. The court does not expressly hold that there is no remedy, only that there has not been an "inverse condemnation" under Pennsylvania law. Final resolution of this issue will abide further appeals (assuming that the owner has the resources to pursue them.)

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. Contact Shawn Kaminsky at the ABA. (312) 988 5260.

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.