Penn Central Transportation Co. v. New York City

Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978), is a landmark decision of the United States Supreme Court.

New York City’s Landmarks Preservation Commission designated Grand Central Terminal as a landmark, preventing Penn Central from constructing a 55-story office tower above the terminal. Penn Central sued, arguing that the designation constituted a taking of its air rights without just compensation.

Significance

Justice Brennan’s 6-3 opinion articulated the multi-factor ‘Penn Central test’ for regulatory takings. Courts should consider: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation interferes with distinct investment-backed expectations; and (3) the character of the governmental action. The Court found that the landmarks law allowed Penn Central to continue using the terminal profitably and did not constitute a taking. The Penn Central test remains the primary framework for analyzing regulatory takings claims.

Category

US Federal Case Law