Penn Central Transportation Co. v. New York City

Penn Central Transportation Co. v. New York City
Supreme Court of the United States
Argued April 17, 1978 Decided June 26, 1978
Full case name	Penn Central Transportation Company, et al. v. New York City, et al.
Citations	438 U.S. 104 (more) 98 S. Ct. 2646; 57 L. Ed. 2d 631; 1978 U.S. LEXIS 39; 11 ERC (BNA) 1801; 8 ELR 20528
Prior history	Appeal from the Court of Appeals of New York
Holding
The application of the Landmarks Law to the Terminal property does not constitute a "taking" of appellants' property within the meaning of the Fifth Amendment as made applicable to the States by the Fourteenth Amendment.
Court membership
Chief Justice Warren E. Burger Associate Justices William J. Brennan, Jr. · Potter Stewart Byron White · Thurgood Marshall Harry Blackmun · Lewis F. Powell, Jr. William Rehnquist · John P. Stevens
Case opinions
Majority	Brennan, joined by Stewart, White, Marshall, Blackmun, Powell
Dissent	Rehnquist
Dissent	, joined by Burger, Stevens
Laws applied
U.S. Const. amend. V

Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) was a landmark United States Supreme Court decision on compensation for regulatory takings.

Events Leading Up to the Case

The New York City Landmarks Law

The New York City Landmarks Law was signed into effect by Mayor Robert F. Wagner, Jr., in 1965. This law was passed after New York citizens grew concerned over the loss of culturally significant structures such as the Pennsylvania Station, demolished in 1963. The Landmarks Law's purpose is to protect structures that are significant to the city and still retain their ability to be properly used. This law is enforced by the New York City Landmarks Preservation Commission.^[1]

Railroad Decline

Use of railroad systems saw its peak in the 1920s, and began to falter in the mid to late 1930s. World War II revitalized use of the railway systems in the early 1940s and brought the industry back to prior success. While this period saw nearly half of Americans using the railroad systems, by the late 40s there was once again a steep decline in railroad use. This put many of the railroad companies out of business and left others to find new ways to increase revenue. ^[2][3]

Early Proposals to Replace Grand Central Terminal

In 1954 New York Central Railroad began to look at proposed plans to replace the Grand Central Terminal. Early designs by William Zeckendorf and I. M. Pei included an ambitious 80-story, 4.8-million square foot tower that would be over 500 feet taller than the Empire State Building. ^[4] None of the early designs ever made it past the sketch phase and for the time being all plans to replace Grand Central Terminal were abandoned.

The Pan Am Building

In 1958 Erwin S. Wolfson created proposals to replace Grand Central Terminal's six-story office building just north of the Terminal. Erwin S. Wolfson developed the project in the early 1960's with the assistance of the architects Emery Roth and Sons, Walter Gropius and Pietro Belluschi.^[5] The Pan Am Building was completed in 1963 and bought Grand Central Terminal more time away from proposed reconstructions.

New York Central Railroad Merger with Pennsylvania Railroad

Despite increased office space, New York Central Railroad found itself facing bankruptcy in 1967 due to continued decline in railway use. Pennsylvania Railroad found itself in a similar position after the offices built following the demolition of Pennsylvania Station were no longer bringing the company sufficient income.

In 1968 New York Central Railroad merged with Pennsylvania Railroad to create the Penn Central Railroad company. The newly formed Penn Central began to look into updating the uses of the Grand Central Terminal in order to increase revenue and save the company from financial straits. ^[6]

Plans to Replace Grand Central Terminal

In mid 1968 Penn Central Railroad unveiled two designs by Marcel Breuer one of which would potentially be built atop Grand Central Terminal. The first design (Breuer I) was a 55-story tall office building to be constructed on top of Grand Central. This building was to be cantilevered above the existing structure allowing Grand Central to maintain its facade. The second design (Breuer II) called for the demolition of one of the sides of Grand Central in order to create a unified facade for a new 53-story office building. Both designs were submitted to the New York City Landmarks Preservation Commission after the structures met city zoning laws. ^[7]

NYC Landmarks Preservation Commission’s Rejections

Upon reviewing the submitted designs for Grand Central Terminal the Landmarks Preservation Commission rejected the plans on September 20th, 1968. Penn Central then filed for a Certificate of Appropriateness for both proposals but was again denied. The Landmarks Preservation Commission summarized their reason for rejecting both plans:

Breuer I

Breuer II

The Landmarks Preservation Commission did offer Penn Central the Transfer of Development Rights (TDRs) which would allow them to sell the air space above Grand Central Terminal to other Developers for their own use. Penn Central felt this was not enough to be considered just compensation for the loss of their land use. ^[8]

The Supreme Court Case

Penn Central Files Suit with New York Court of Appeals

After the New York City Landmark Preservation Commission rejected Penn Central's proposals for new use of the Grand Central Terminal, Penn Central filed a suit with the New York Court of Appeals against the city. In the suit they claimed the city's enactment of the Landmark Preservation Law was a regulatory taking under the Fifth Amendment and Fourteenth Amendment. Because Penn Central felt the City had taken their land and air rights away, they were looking to receive just compensation for the City's actions. The New York Court of Appeals ruled that Penn Central was not due just compensation on the grounds that the city had not taken the use of the property out of the hands of Penn Central. It was determined that Penn Central could maintain previous use of the site without any damaging effects. Penn Central appealed the ruling, which led to the Supreme Court Case.

The Supreme Court Decision

On April 17, 1978 the case was argued in front of the United States Supreme Court. As previously mentioned, Penn Central stated that the Fifth and Fourteenth Amendment should uphold their rights and allow for the city’s actions to be considered a regulatory taking. If it was ruled that these actions were indeed a taking, then Penn Central would be entitled to just compensation for their loss. The city further bolstered their argument stating that Penn Central had shown no proof that they could not continue to use the current property to their benefit.

On June 26, 1978 the Supreme Court, like the New York Court of Appeals, found that the city’s restrictions on land use for Grand Central Terminal was not a taking and therefore did not require just compensation.

Cited Cases and Reasoning in the Decision

• The Court stated that there was no set formula in dealing with the Fifth Amendment and affirmed that cases involving the rights of said Amendment varied depending on the situation.
  • Armstrong v. United States, 438 U.S. 104, 124 (1960)
  • United States v. Central Eureka Mining Co., 357 U.S. 155, 168 (1958)

• While Penn Station citied several cases in which air right restrictions led to compensation, the Court did not consider the citations applicable to the case because Grand Central Terminal was a landmark site.
  • Goldblatt v. Hempstead, 369 U.S. 590 (1962)
  • Gorieb v. Fox, 274 U.S. 603 (1927)

• In the debate of the air space above Grand Central Terminal being taken from the city, the Court cited several cases in which the land owners were indeed due just compensation.
  • United States v. Causby, 328 U.S. 256 (1946)
    • In this case a farmer was no longer able to use his land as a chicken farm due to air traffic that was developed just over the farm. Because this destroyed the farmer's present use, it was ruled a taking.
  • Portsmouth Co. v. United States, 260 U.S. 327 (1922)
    • The United States military installed a firing range within earshot of a land owner. This new found noise disruption was found to be a taking.
  • With these citations in mind, the Court pointed out that in the present case, no current use of the land was being damaged as a result of the restrictions.

• Penn Central cited Euclid v. Ambler Realty Co. showing how blocking the industrial usage of the land cost Amber Realty Co. dearly. The Supreme Court found the case irrelevant, stating that the restrictions imposed on zoning and land use are the same across the entire city, and not varying as in the case of Euclid.
  • Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926)
  • Gorieb v. Fox, 274 U.S. 603, 608 (1927)
  • Welch v. Swasey, 214 U.S. 91 (1909)

The case is perhaps best summarized in Section II-C of the Opinion of the Court.

See also

• List of United States Supreme Court cases, volume 438
• Grand Central Terminal
• Penn Central
• Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002)

References

Bibliography

• Levy, Robert A.; Mellor, William H. (2008). "Taking Property by Regulation". The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom. New York: Sentinel. pp. 169–180. ISBN 9781595230508. 
• Schlichting, Kurt C. Grand Central Terminal: Railroads, Engineering, and Architecture in New York City. Baltimore, MD: JHU P, 2001.
• PENN CENTRAL TRANSP. CO. V. NEW YORK CITY. No. 438 U.S. 104. US Supreme Court. 26 June 1978.
• "Grand Central Station." Archiseek. 2007. The American Institute of Architects. 12 May 2008 <http://usa.archiseek.com/newyork/newyork/grandcentralstation.html>.
• Duerksen, Christopher J. A Handbook on Historic Preservation Law. Baltimore, MD: Conservation Foundation, 1983. 351-376.
• Davis, Christina R. "About LPC." New York City Landmarks Preservation Commission. 2008. Government of New York City. 11 May 2008 <http://www.nyc.gov/html/lpc/html/about/about.shtml>.
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• Kayden, Jerold S. "Celebrating Penn Central." Planning Magazine June 2003.
• Miller, Julia H. A Layperson's Guide to Historic Preservation Law. Washington D.C.: National Trust, 2000. 22-27.
• "Penn Central History." Penn Central Railroad Historical Society 4 Apr. 2008. TainWeb.Com. 15 May 2008 <http://pcrrhs.org/history.html>.
• Schlichting, Kurt C. Grand Central Terminal: Railroads, Engineering, and Architecture in New York City. Baltimore, MD: JHU P, 2001.
• "The MetLife Building." Tishman Speyer. 2008. 12 May 2008 <http://www.tishmanspeyer.com/properties/Property.aspx?id=57>.
• Weiss, Lois. "Air Rights Case Headed for Supreme Ct. Review - Transferable Development Rights for Grand Central Terminal, New York, New York." Real Estate Weekly 4 May 1994.
• Boyd, Lydia, and Lynn Pritcher. "Brief History of the U.S. Passenger Rail Industry." Duke University Libraries: Digital Collection. 25 Jan. 2008. Duke University. 10 May 2008 <http://library.duke.edu/digitalcollections/adaccess/rails-history.html>.
• Dukeminier, Jesse, James E. Krier, Gregory S. Alexander, & Michael H. Schill."Property" 6th ed. Aspen Publishers. New York: 2006.