STATE OF MINNESOTA
`
`IN SUPREME COURT
`
`A09-969
`
`
`
`Court of Appeals
`
`Leon S. DeCook, et al.,
`
`
`vs.
`
`Respondents,
`
`
`
`
`Rochester International Airport Joint
`Zoning Board,
`
`
`
`Appellant.
`
`Anderson, G. Barry, J.
`Took no part, Stras, J.
`
`
`
`
`
`Filed: March 30, 2011
`Office of Appellate Courts
`
`
`
`
`
`
`________________________
`
`Bradley J. Gunn, Howard A. Roston, Malkerson Gunn Martin, L.L.P., Minneapolis,
`Minnesota, for respondents.
`
`Clifford M. Greene, John M. Baker, Monte A. Mills, Greene Espel P.L.L.P, Minneapolis,
`Minnesota, for appellant.
`
`Susan L. Naughton, St. Paul, Minnesota, for amicus curiae League of Minnesota Cities.
`
`Aaron D. Van Oort, Melina K. Williams, Faegre & Benson L.L.P., Minneapolis,
`Minnesota, for amicus curiae Metropolitan Airports Commission.
`
`Lori Swanson, Attorney General, Erik M. Johnson, Assistant Attorney General, for
`amicus curiae State of Minnesota Commissioner of Transportation.
`
`Lee A. Henderson, Hessian & McKasy, P.A., Minneapolis, Minnesota, for amici curiae
`Gordon D. Galarneau and Penny S. Galarneau.
`
`Wm. Christopher Penwell, Anthony J. Gleekel, Mark Thieroff, Siegel, Brill, Greupner,
`Duffy & Foster, P.A., Minneapolis, Minnesota, for amici curiae Hampton K. O‘Neill,
`Kelley McC. O‘Neill, and James W. O‘Neill.
`________________________
`
`
`
`1
`
`

`
`S Y L L A B U S
`
`1.
`
`McShane v. City of Faribault, 292 N.W.2d 253 (Minn. 1980), governs
`
`whether an airport zoning board‘s decision to enact an ordinance creating runway safety
`
`zones that restrict land use is a regulatory taking under the Minnesota Constitution.
`
`2.
`
`The Minnesota Constitution, Article I, Section 13, which states that
`
`―[p]rivate property shall not be taken, destroyed or damaged for public use without just
`
`compensation therefor,‖ provides greater protection for property owners than the Takings
`
`Clause of the U.S. Constitution, Amendment V.
`
`3.
`
`Under McShane and the facts of and circumstances underlying this case, a
`
`$170,000 decrease in market value caused by an airport zoning ordinance establishing a
`
`runway Safety Zone A is a substantial and measurable diminution and must be
`
`compensated.
`
`Affirmed and remanded.
`
`ANDERSON, G. Barry, Justice.
`
`O P I N I O N
`
`This case arises from an airport zoning ordinance enacted in 2002 by appellant
`
`Rochester International Airport Joint Zoning Board. The ordinance increased the size of
`
`a runway safety zone that extended over property owned by respondents Leon S. and
`
`Judith M. DeCook. The ordinance also changed the restrictions within the safety zone to
`
`allow fewer land uses on the DeCooks‘ property and other land within the zone. The
`
`DeCooks alleged in an inverse-condemnation action that the Board‘s decision constituted
`
`a taking or damaging of private property for public use for which the DeCooks must be
`
`
`
`2
`
`

`
`compensated. After trial, a jury found that the 2002 ordinance diminished the value of
`
`the DeCooks‘ land by $170,000. The district court concluded that the diminution of
`
`value determined by the jury did not constitute a taking as a matter of law and entered
`
`judgment in favor of the Board. The DeCooks appealed, and the court of appeals
`
`reversed. The Board appealed. We affirm the court of appeals and remand to the district
`
`court to enter judgment in favor of the DeCooks.
`
`The DeCooks purchased 240 acres of land north of the Rochester International
`
`Airport for $159,600 in 1989. Approximately 19 acres of the land purchased by the
`
`DeCooks was subject to land-use regulations defined by Safety Zone A, the most
`
`restrictive safety zone established by ordinance in 1982 by the Board.1 Soon after buying
`
`
`1
`In 1945, the Legislature granted to local governments and joint airport zoning
`boards the authority to adopt and enforce zoning regulations near airports and established
`a process for the State to review and approve local airport regulations. Act of Apr. 16,
`1945, ch. 303, §§ 26–27, 1945 Minn. Laws 534, 567–69 (codified as amended at Minn.
`Stat. ch. 360 (2010)). Before a local body may adopt zoning regulations, it must submit
`its proposed ordinance to the Minnesota Commissioner of Transportation, who reviews
`the proposal to ensure that the local safety regulations satisfy minimum standards set by
`the Commissioner. See Minn. Stat. § 360.065, subd. 2. The local body may not enact its
`proposed ordinance without the approval of the Commissioner. Id.
`The State standards include three land use safety zones for the area surrounding an
`airport. See Minn. R. 8800.2400 (2009). Safety Zone A is the most restrictive zone and
`is currently defined to apply to a fan-shaped area extending from the end of a runway for
`a distance equal to two-thirds of the length of the runway. Id., subps. 5, 6(B). In Zone A,
`the State standards prohibit buildings and allow only uses such as agriculture, certain
`outdoor recreation, and automobile parking. Id., subp. 6(B). Safety Zone B, the next
`most restrictive zone, extends from the end of Safety Zone A for a distance equal to one-
`third of the length of the runway. Id., subps. 5, 6(C). Buildings are allowed in Safety
`Zone B, subject to restrictions on density, plot size, and height. Id. subp. 6(C). Safety
`Zone C, the least restrictive zone in the current standards, surrounds an airport and
`includes general restrictions on uses that may interfere with communications and other
`flight operations. Id., subps. 5, 6(A), (D).
`
`
`
`3
`
`

`
`the land, the DeCooks developed Oak Summit Golf Course. The DeCooks operated the
`
`golf course throughout the period at issue here, but the course is not subject to Safety
`
`Zone A. The 1982 ordinance, identified as Ordinance No. 3, applied Safety Zone A to
`
`the approach areas that radiated from the end of the airport‘s runways. At the time the
`
`DeCooks purchased their 240 acres, Ordinance No. 3 allowed land within Safety Zone A
`
`to be used for agriculture and for commercial or industrial sites, so long as those
`
`commercial or industrial sites were at least 20 acres in size. Ordinance No. 3 prohibited
`
`dwellings within Safety Zone A, and also prohibited a range of specific uses such as
`
`churches, trailer courts, campgrounds, and any use that brought more than 10 people to
`
`any one acre or more than 50 people to a commercial or industrial site.
`
`On September 18, 2002, the Board enacted Ordinance No. 4, the ordinance at
`
`issue in this case. Ordinance No. 4 changed the land-use regulations within Safety Zone
`
`A so that fewer uses were allowed than previously permitted under Ordinance No. 3. For
`
`example, although Ordinance No. 4 continued to prohibit dwellings within Safety Zone
`
`A, it also prohibited all ―buildings, temporary structures, exposed transmission lines, or
`
`other similar above-ground land use structural hazards.‖ Permissible land uses within
`
`Safety Zone A under Ordinance No. 4 included ―agriculture (seasonal crops)[,]
`
`horticulture, animal husbandry, raising of livestock, wildlife habitat, lighted outdoor
`
`recreation (non-spectator), cemeteries, and automobile parking,‖ and those uses that ―will
`
`not create, attract, or bring together an assembly of persons thereon.‖ The Board also
`
`increased the size of Safety Zone A. For the DeCook property, that meant a total of 47
`
`
`
`4
`
`

`
`acres was within Safety Zone A as defined by Ordinance No. 4—the 19 acres previously
`
`located within Safety Zone A as defined by Ordinance No. 3 and an additional 28 acres.
`
`Most of the DeCook property is outside Safety Zone A. The western 160 acres of
`
`the DeCooks‘ 240-acre parcel is zoned by Olmsted County as ―RC,‖ in which
`
`recreational and commercial uses are allowed. The eastern 80 acres of the DeCook
`
`parcel is zoned by the City of Rochester as ―M1,‖ in which commercial and light
`
`industrial development is allowed. The M1 zoning underlies all of the property subject to
`
`Safety Zone A under Ordinance No. 4. Oak Summit Golf Course stretches across the RC
`
`land and part of the M1 land.
`
`The DeCooks commenced this action in 2005. The DeCook complaint alleged
`
`that Ordinance No. 4 was ―designed to specifically benefit a public or governmental
`
`enterprise,‖ caused ―a substantial and measurable decline‖ in the market value of the
`
`DeCooks‘ property, and constituted ―a constitutional compensable taking under the
`
`principles of McShane v. City of Faribault,‖ 292 N.W.2d 253, 258–59 (Minn. 1980). In
`
`McShane, we resolved a regulatory takings claim brought by the owner of land subject to
`
`runway safety-zone regulations near the Faribault Municipal Airport. We held that
`
`―where land use regulations, such as the airport zoning ordinance here, are designed to
`
`benefit a specific public or governmental enterprise, there must be compensation to
`
`landowners whose property has suffered a substantial and measurable decline in market
`
`value as a result of the regulations.‖ 292 N.W.2d at 258–59.
`
`The district court granted the Board‘s motion for summary judgment, and the
`
`DeCooks appealed. DeCook v. Rochester Int’l Airport Joint Zoning Bd. (DeCook I), No.
`
`
`
`5
`
`

`
`A06-2170, 2007 WL 2178046, at *1 (Minn. App. July 31, 2007), rev. denied (Minn. Oct.
`
`24, 2007). The court of appeals held that, as in McShane, the DeCooks ―must be
`
`compensated if their property has suffered a substantial and measurable decline in market
`
`value as a result of [Ordinance No. 4].‖ Id. at *3. The court held that whether a
`
`diminution in value occurred, and the extent of any diminution, were questions of fact,
`
`while the question of ―whether the diminution is substantial‖ was a question of law. Id.
`
`at *4. The court rejected the district court‘s conclusion that we would reach a different
`
`decision in this case than we did when we considered the ―strikingly similar‖ facts of
`
`McShane in 1980. Id. at *3. The court also cited a footnote to our decision in Wensmann
`
`Realty Inc. v. City of Eagan, 734 N.W.2d 623 (Minn. 2007), in which we said we did not
`
`consider McShane to be ― ‗different from or inconsistent with the flexible approach to
`
`takings‘ ‖ adopted by the U.S. Supreme Court in cases interpreting the Takings Clause of
`
`the U.S. Constitution. DeCook I, 2007 WL 2178046, at *3 n.2 (quoting Wensmann, 734
`
`N.W.2d at 641 n.14). The court of appeals reversed, id. at *1, 5, and we denied review.
`
`On remand, the case went to trial in November 2008. The parties disputed the
`
`development potential of the DeCooks‘ property subject to Safety Zone A given the
`
`physical features of the land. The Board‘s appraiser set the value of the diminution
`
`caused by Ordinance No. 4 at $110,000, and the Board asked the jury to return a verdict
`
`of no more than that amount. The DeCooks‘ appraiser set the diminution caused by
`
`Ordinance No. 4 at $425,000. The DeCooks asked the jury to return a verdict for that
`
`amount, or for an amount between $110,000 and $425,000. On November 6, 2008, the
`
`
`
`6
`
`

`
`jury, by special verdict, found Ordinance No. 4 diminished the value of the DeCooks‘
`
`property by $170,000.
`
`The district court then decided the diminution found by the jury did not constitute
`
`a compensable taking as a matter of law. The court rejected the DeCooks‘ argument that
`
`McShane created a ―different and unique test‖ for takings claims in Minnesota. Rather,
`
`the court applied and balanced the factors established by the Supreme Court in Penn
`
`Central Transportation Co. v. City of New York, 438 U.S. 104 (1978): the economic
`
`impact of the regulation on the claimant; the extent to which the regulation interfered
`
`with distinct investment-backed expectations; and the character of the governmental
`
`action. The court relied upon Wensmann in adopting this approach, noting that our
`
`footnote discussing McShane stated that ―[a]ny unfairly unequal distribution of the
`
`regulatory burden may be considered in appropriate cases under the character factor of
`
`the Penn Central approach and then balanced along with the other relevant factors.‖
`
`Wensmann, 734 N.W.2d at 641 n.14. The court found each Penn Central factor weighed
`
`against the DeCooks. In its discussion of the economic-impact factor, the court
`
`compared the $170,000 diminution with both the $2.77 million value of the land set by
`
`the Board‘s appraiser and with Leon DeCook‘s testimony that his property had a before-
`
`damage value of $4.8 million and held that the economic impact of a decrease in value of
`
`either 3.5% or 6.14% (depending on the starting value) was ―minimal.‖ In its discussion
`
`of the character of the government action, the court cited McShane and concluded the
`
`DeCooks had not suffered ―a substantial decline‖ as a result of the ordinance, in part
`
`because the ordinance did not affect the ―primary use‖ of the DeCook property. The
`
`
`
`7
`
`

`
`court concluded that the DeCooks had not met their burden of proving the lost value ―was
`
`a substantial decrease that is manifestly unfair to require them to sustain,‖ and held that
`
`there was no taking as a matter of law.
`
`The DeCooks appealed. In a divided decision, the court of appeals reversed and
`
`remanded for judgment in favor of the DeCooks. DeCook v. Rochester Int’l Airport Joint
`
`Zoning Bd. (DeCook II), No. A09-969, 2010 WL 1850268, at *5 (Minn. App. May 11,
`
`2010). The majority held that McShane was the law of the case under DeCook I and
`
`rejected the Board‘s argument that, under Wensmann, McShane was ―merely . . .
`
`instructive in considering the character factor under Penn Central.‖ DeCook II, 2010 WL
`
`1850268, at *4. The majority concluded that the $170,000 diminution resulted from the
`
`unequal burden that Safety Zone A placed on the DeCooks‘ property. Id. at *5. The
`
`dissent stated that the majority erred by not measuring the amount of diminution against
`
`the overall value of the property before damage and agreed with the district court‘s
`
`decision that the proportional diminution is ― ‗minimal‘ and ‗does not significantly
`
`interfere with the DeCooks‘ legitimate property interests.‘ ‖ Id. at *6 (Johnson, J.,
`
`dissenting). The Board sought review, which we granted.
`
`The parties in this appeal do not dispute the question of fact resolved by the jury:
`
`that Ordinance No. 4 caused a $170,000 decrease in the value of the DeCooks‘ property.
`
`The parties disagree over what law we should apply to that fact in order to resolve this
`
`dispute. The DeCooks ask us to interpret and apply the Takings Clause in the Minnesota
`
`Constitution rather than the Takings Clause in the U.S. Constitution. The DeCooks argue
`
`that, in Minnesota, McShane controls regulatory takings claims arising from airport
`
`
`
`8
`
`

`
`safety-zone ordinances.2 The Board contends the flexible Penn Central analysis controls
`
`the outcome of this case, regardless of whether the case is analyzed under the state or
`
`federal constitution. We turn first to the question of which analysis controls.
`
`A.
`
`The Minnesota Constitution provides that ―[p]rivate property shall not be taken,
`
`destroyed or damaged for public use without just compensation.‖ Minn. Const. art. I,
`
`§ 13. The language of the Minnesota Constitution is broader than the Takings Clause of
`
`the Fifth Amendment to the U.S. Constitution: ―nor shall private property be taken for
`
`public use, without just compensation.‖ U.S. Const. amend. V; State by Humphrey v.
`
`Strom, 493 N.W.2d 554, 558 (Minn. 1992) (describing the Minnesota takings provision
`
`as ―broader than the language of the federal constitution‖). In limited circumstances,
`
`government regulation of private property may result in a taking even though the
`
`government has not directly appropriated nor physically invaded the property. See
`
`Wensmann, 734 N.W.2d at 632 (citing Penn. Coal Co. v. Mahon, 260 U.S. 393, 414–15
`
`(1922)). Whether a governmental entity‘s action constitutes a regulatory taking is a
`
`question of law that we review de novo. Wensmann, 734 N.W.2d at 631; Alevizos v.
`
`Metro. Airports Comm’n (Alevizos I), 298 Minn. 471, 484, 216 N.W.2d 651, 660–61
`
`(Minn. 1974).
`
`
`2
`The DeCooks also argue that McShane controls under the doctrine of the law of
`the case because of the court of appeals decision in DeCook I. The doctrine of the law of
`the case is discretionary and does not bar us from reviewing an earlier decision of the
`court of appeals. Peterson v. BASF Corp., 675 N.W.2d 57, 66 (Minn. 2004). We elect
`not to apply the doctrine in this case but will instead resolve whether McShane controls
`as a matter of law.
`
`
`
`9
`
`

`
`When we evaluate whether a government regulation of private property is a
`
`taking, our task is to determine whether ― ‗justice and fairness require that the economic
`
`injuries caused by public action be compensated by the government.‘ ‖ Wensmann, 734
`
`N.W.2d at 632 (quoting Palazzolo v. Rhode Island, 533 U.S. 606, 633 (2001)). Our
`
`inquiry must be ― ‗highly fact-specific, depending on the particular circumstances
`
`underlying each case.‘ ‖ Id. (quoting Westling v. Cnty. of Mille Lacs, 581 N.W.2d 815,
`
`823 (Minn. 1998)). Our analysis ―relies heavily on reasoning by analogy to previous
`
`takings cases,‖ Zeman v. City of Minneapolis, 552 N.W.2d 548, 552 n.3 (Minn. 1996),
`
`and we rely upon our cases interpreting and analyzing the Minnesota Constitution when
`
`property owners have sought compensation under its provisions.
`
`We have often applied Penn Central to decide a regulatory takings case under the
`
`Minnesota Constitution. See, e.g., Wensmann, 734 N.W.2d at 633; Zeman, 552 N.W.2d
`
`at 552 & n.3. Penn Central did not establish any set formula for deciding whether a
`
`taking occurred. The Court indicated, however, that the inquiry should include the
`
`economic impact of the regulation on the claimant, the extent to which the regulation
`
`interferes with distinct investment-backed expectations, and the character of the
`
`government action. Penn Cent., 438 U.S. at 124. But Penn Central is not the only test.
`
`For example, in Johnson v. City of Minneapolis, 667 N.W.2d 109, 115–17 (Minn. 2003),
`
`we declined to apply Penn Central to a takings claim because we decided the property
`
`owners were entitled to compensation under the Minnesota Constitution—regardless of
`
`the outcome under Penn Central. But we did apply Penn Central in Wensmann, 734
`
`N.W.2d at 633–42, in part because the property owner did not argue that the case
`
`
`
`10
`
`

`
`required us to interpret the Minnesota Constitution differently than the U.S. Constitution.
`
`Id. at 632 n.5, 633.
`
`Here, the DeCooks ask us to interpret and apply the Minnesota Constitution
`
`differently than the U.S. Constitution. In doing so, we are necessarily guided by our
`
`earlier, and seminal, airport zoning decision, McShane. In the end, we conclude
`
`McShane controls the result here.
`
`The McShanes initiated an inverse-condemnation action against the City of
`
`Faribault, Rice County, and the Faribault-Rice County Joint Airport Zoning Board after
`
`the Board enacted an ordinance that applied a Safety Zone A and a Safety Zone B to land
`
`that the McShanes owned near the Faribault Municipal Airport. McShane, 292 N.W.2d
`
`at 255. The ordinance prohibited above-ground structures in Safety Zone A and ―[i]t
`
`[was] undisputed that commercial development [in Zone A] would be out of the
`
`question.‖ Id. Less-restrictive regulations applied within Safety Zone B, which covered
`
`an approach area farther from the runway than Safety Zone A. Id. at 256. The parties‘
`
`experts disagreed on the extent to which the ordinance decreased the value of the
`
`McShanes‘ property but agreed the diminution was ―substantial.‖3 Id.
`
`In McShane, we drew a distinction between zoning regulations such as those that
`
`implement comprehensive land-use plans, under which ―a reciprocal benefit and burden
`
`
`3
`The landowners‘ expert set the total loss at $360,000, or 67% of the $522,000
`value ―when put to its highest and best use, commercial development.‖ McShane, 292
`N.W.2d at 256. The defendants‘ experts valued the Zone A loss at 50% of the initial
`value and the Zone B loss at 9.3%. Id.
`
`
`
`
`11
`
`

`
`accru[es] to all landowners from the planned and orderly development of land use,‖ and
`
`zoning regulations enacted ―for the sole benefit of a governmental enterprise,‖ such as the
`
`Faribault airport. Id. at 257–58. We referred to the former as ―arbitration‖ regulations
`
`and gave as an example regulations that implement a comprehensive land-use plan. Id. at
`
`258. For the latter—which we called ―enterprise‖ regulations—we held that ―where land
`
`use regulations, such as the airport zoning ordinance here, are designed to benefit a
`
`specific public or governmental enterprise, there must be compensation to landowners
`
`whose property has suffered a substantial and measurable decline in market value as a
`
`result of the regulations.‖ Id. at 258–59.4
`
`
`4
`We cited Penn Central as support for the distinction we made in McShane
`between ―arbitration‖ and ―enterprise‖ regulations. 292 N.W.2d at 258. We did not
`directly cite a particular page of Penn Central, but Penn Central does support our
`conclusion in McShane.
`Penn Central dealt with New York City‘s denial of a request from the owners of
`Grand Central Terminal to build a 55-story office tower over the landmark building. See
`Penn Cent., 438 U.S. at 117–18. The Supreme Court distinguished between that case and
`United States v. Causby, ―in which government, acting in an enterprise capacity, has
`appropriated part of [private] property for some strictly governmental purpose.‖ Penn
`Cent., 438 U.S. at 135 (emphasis added) (citing Causby, 328 U.S. 256 (1946)). The
`appropriation in Causby was of the airspace above a chicken farm by low-flying bombers
`and other military aircraft landing on a nearby runway. Causby, 328 U.S. at 258–59.
`The taking was the destruction of the ability to use the land as a chicken farm, even
`though other uses remained:
`
`
`[T]he land is appropriated as directly and completely as if it were used for
`the runways themselves. . . . The path of glide for airplanes might reduce a
`valuable factory site to grazing land, an orchard to a vegetable patch, a
`residential section to a wheat field. Some value would remain. But the use
`of the airspace immediately above the land would limit the utility of the
`land and cause a diminution in its value.
`
`
`
`
`
`(Footnote continued on next page.)
`
`12
`
`

`
`We did not expressly hold in McShane that the test we announced there, for
`
`takings claims stemming from airport ordinances establishing runway safety zones,
`
`applied when relief is sought under the broader language of the Minnesota Constitution.
`
`But a review of the McShane briefs to this court, and the precedent upon which we relied,
`
`make clear that the McShane test applies when relief is sought under the Minnesota
`
`Constitution in airport zoning cases. For example, in McShane, we relied on Alevizos I, a
`
`case in which we held noise pollution from aircraft flights could amount to a taking under
`
`the Minnesota Constitution:
`
`Every landowner must continue to endure that level of inconvenience,
`discomfort, and loss of peace and quiet which can be reasonably anticipated
`by any average member of a vibrant and progressive society. But when
`those interferences reach the point where they cause a measurable decrease
`in property market value, it is reasonable to assume that, considering the
`permanency of the air flights, a property right has been, if not ‗taken or
`destroyed,‘ at the very least ‗damaged,‘ for which our constitution requires
`that compensation be paid.
`
`
`
`(Footnote continued from previous page.)
`Id. at 262. In Penn Central, the Supreme Court put cases such as Causby in a different
`analytical category:
`
`
`Apart from the fact that Causby was a case of invasion of airspace that
`destroyed the use of the farm beneath and this New York City law has in
`nowise impaired the present use of the Terminal, the Landmarks Law
`neither exploits appellants‘ parcel for city purposes nor facilitates nor arises
`from any entrepreneurial operations of the city. The situation is not
`remotely like that in Causby where the airspace above the property was in
`the flight pattern for military aircraft. The Landmarks Law‘s effect is
`simply to prohibit appellants or anyone else from occupying portions of the
`airspace above the Terminal, while permitting appellants to use the
`remainder of the parcel in a gainful fashion.
`
`
`Penn Cent., 438 U.S. at 135.
`
`
`
`13
`
`

`
`Alevizos I, 298 Minn. at 486–87, 216 N.W.2d at 662, cited in part in McShane, 292
`
`N.W.2d at 259.
`
`We see no reason to abandon the rule we announced in McShane, and therefore we
`
`hold that McShane provides the appropriate analysis to determine whether the enactment
`
`of an airport ordinance restricting land use within runway safety zones amounts to a
`
`regulatory taking under the Minnesota Constitution. When an airport ordinance regulates
`
`land use within runway safety zones, ―there must be compensation to landowners whose
`
`property has suffered a substantial and measurable decline in market value as a result of
`
`the regulations.‖ McShane, 292 N.W.2d at 258–59. Whether a diminution in value has
`
`occurred, and the extent of diminution, are questions of fact and, in this case, were
`
`resolved by the jury in favor of the landowner. Whether the diminution is substantial is a
`
`question of law, and we turn to that legal issue next.5
`
`
`5
`To decide the case before us, we need only affirm that, under McShane, when an
`airport ordinance establishing a Safety Zone A or a Safety Zone B causes a measurable
`diminution in the value of private property within the zone, then the Minnesota
`Constitution requires compensation to the property owner if the diminution is substantial.
`Airport runway safety zoning is arguably sui generis: In addition to the significant safety
`considerations uniquely and obviously attendant to airports, airport safety zoning,
`particularly Zone A provisions, impose draconian limitations on what are frequently large
`parcels of private property. See supra, note 1.
`Outside the context of airport safety zoning, we have not often—nor recently—
`drawn a distinction between arbitration and enterprise regulations. Cf. Spaeth v. City of
`Plymouth, 344 N.W.2d 815, 821 (Minn. 1984) (holding that McShane does not apply
`when the government has physically appropriated property); City of Mankato v. Hilgers,
`313 N.W.2d 610, 613 (Minn. 1981) (holding that McShane does not apply when the
`government commenced condemnation proceedings to acquire land within a runway
`Zone A rather than enact land-use regulations); Pratt v. State, Dept. of Natural Res., 309
`N.W.2d 767, 774 (Minn. 1981) (finding that State prohibition on mechanical harvesting
`of wild rice had both enterprise and arbitration functions and stating that in McShane,
`(Footnote continued on next page.)
`
`
`
`14
`
`

`
`B.
`
`The task of determining ―whether a taking has occurred is highly fact-specific,
`
`depending on the particular circumstances underlying each case.‖ Wensmann, 734
`
`N.W.2d at 632 (quotation omitted). As previously discussed, under McShane a
`
`landowner must be compensated if his or her property sustains a substantial and
`
`measurable decline in market value as a result of the application of an airport safety zone
`
`ordinance to the property. In McShane, the parties agreed the loss of value was
`
`substantial. 292 N.W.2d at 256. The parties here do not so agree. The DeCooks contend
`
`that the $170,000 decline in market value is substantial, citing ―common sense‖ and a
`
`definition of ―substantial‖ as ―[o]f real worth and importance; of considerable value;
`
`valuable.‖ See Black’s Law Dictionary 1428 (6th ed. 1990). The Board contends the lost
`
`value is not substantial given that, depending on property valuations adopted in
`
`evaluating the loss, the DeCooks have suffered a loss of either 6.4% or 3.5% of the total
`
`value of the property and such a deprivation is essentially de minimis.
`
`As the Board notes, McShane specifically warned that not ―every landowner who
`
`is in some way limited or inconvenienced by [airport zoning] regulation is entitled to
`
`compensation.‖ 292 N.W.2d at 259. It may well be that, in some other regulatory
`
`
`(Footnote continued from previous page.)
`―the governmental enterprise function of a regulation was not just predominant but
`exclusive. Whether a regulation effects a taking is rarely so simple an issue.‖). In
`Wensmann, a case that did not deal with airport zoning, we noted in dicta that the
`enterprise-arbitration distinction may be considered by a court when it assesses the
`character of the government action as a factor to be balanced in a Penn Central
`analysis—along with the economic impact of the regulation and the extent of any
`interference with distinct, investment-backed expectations. 734 N.W.2d at 633, 641 n.14.
`
`
`
`15
`
`

`
`takings dispute, arithmetic calculations such as those urged by the Board will be
`
`persuasive.
`
`But here, evaluating the facts and circumstances underlying this case, we conclude
`
`the $170,000 diminution in the value of the DeCook property caused by Ordinance No. 4
`
`is substantial. Not only is there merit to the argument advanced by the DeCooks—that by
`
`any definition $170,000 in damages is substantial—it is also worth noting that the
`
`damages awarded by the jury exceeded the purchase price paid by the DeCooks for the
`
`entire 240-acre parcel less than 15 years before enactment of Ordinance No. 4, which
`
`caused the diminution in value suffered by the DeCooks.6 Because we conclude as a
`
`matter of law that the application of Safety Zone A to the DeCooks‘ property resulted in a
`
`substantial diminution in the value of the DeCooks‘ property, we hold that a regulatory
`
`taking occurred under the Minnesota Constitution.
`
`We affirm the court of appeals and remand to the district court to enter judgment
`
`in favor of the DeCooks.
`
`Affirmed and remanded.
`
`
`
`STRAS, J., took no part in the consideration or decision of this case.
`
`
`6
`Ordinance No. 4 applied Safety Zone A to land that had been outside the Safety
`Zone A established by Ordinance No. 3. The underlying zoning of the land to which
`Ordinance No. 4 applied Safety Zone A for the first time would have allowed commercial
`and light industrial development. After Ordinance No. 4, there are few possible uses for
`the land—chiefly agriculture and similar activities.
`
`
`
`16