A decision has been made in a prolonged lawsuit that wound its way through the highest courts in Wisconsin and landing before the U.S. Supreme Court in 2016. This June, the highest court in the country agreed with the Wisconsin courts and ruled against a large family.
A beloved vacation cottage in need of repair
Seven siblings received two adjacent lots on the shores of Lake St. Croix as a gift from their parents in the 1990s. A three-bedroom cottage sits on one of the lots and has been in use as the family vacation home since their parents purchased and built on the property in the 1960s. The other lot has always remained vacant.
The siblings decided to remodel the 1960s cottage since it had been flooded a few times and needed extensive upgrades. As none of them had sufficient money for the large project, the decision was made to sell the vacant lot for the needed cash.
Land use regulations at odds with a proposed sale
As most waterfront landowners in Wisconsin know, the Department of Natural Resources (DNR), St. Croix County and other governmental agencies impose strict shoreline development and conservation regulations.
When taking into account the slope preservation, floodplain, right of way and wetlands restrictions, it was determined that only .5 acres of the family’s vacant parcel was developable. According to state regulations, at least one acre must be developable in order for a new buyer to build on the vacant lot. This reduced the value of the lot, and the siblings decided to fight back.
A convoluted legal dispute
The siblings filed a lawsuit, alleging that the governmental regulations constituted a wrongful use of eminent domain — a “taking” without just compensation. The government countered, holding the position that the family could have taken advantage of a loophole in the law that would have allowed them to develop the vacant parcel by deeding the two lots to different owners.
Since all of the children owned both lots, the two lots were merged into a single lot by state law. The lawsuit would have turned out differently if some of the siblings were deeded the lot with the cottage and the others the vacant lot.
By concluding that the lots were merged for purposes of development, the court decided in favor of the governmental agencies. The representative for the family before the U.S. Supreme Court stated, “[w]e are disappointed that the court did not recognize the fundamental unfairness to the [family members] of having their separate properties combined, simply to avoid the protection of the Takings Clause.”
Why does the ruling matter to other landowners?
The merger issue in the case caught the interest of property rights advocates, state governments, industry groups and legal foundations across the country. Many of the organizations filed paperwork in support of the family’s position in the case, hoping that the court would clarify what a ‘property’ is in the realm of regulatory takings claims. Instead, the majority of the court opined that a number of factors must be considered when treating a property as a single lot or separate parcels.
While many people may feel that the ruling is appropriate to protect and preserve the nation’s scenic waterways, others were hoping to gain more protection for personal use of privately owned properties. The court’s decision did not create clear guidelines for other owners.