Penn Central Transportation Company

The property is not completely worthless, so I lose under Lucas.

When dealing with a partial regulatory taking, we abandon categorical rules and plunge into the complex ad hoc balancing test established in Penn Central Transportation Company v.

New York City.

This is arguably the most important, heavily litigated test in modern property law.

Let's ground this test in the actual historical facts because the context illuminates why the test exists.

Penn Central owned Grand Central Terminal in Manhattan.

It is a stunning historic Beaux-Arts building.

The company wanted to generate revenue by constructing a massive fifty-story modern office tower directly on top of the historic terminal.

But what if the regulation just reduces the value by sixty percent?

Then we apply the Penn Central balancing test.

The court looks at three factors, the economic impact of the regulation on the owner, the extent to which it interferes with distinct investment-backed expectations, and the character of the government action.

It is incredibly difficult for a property owner to win a Penn Central balancing test.

Finally, we must flag exactions.

This is when a developer asks for a building permit, and the city says, "We will grant the permit on the condition that you dedicate a portion of your land to the city for a public park." The Supreme Court in Nollan and Dolan set a strict limit here.

They used Donald Trump.

But how Donald Trump got rich for the first time in his life was in the middle 1970s when the Penn Central Railroad went bankrupt.

It was a people hauler.

It was a hauling cargo.

So in that context, the products are red and white wheat, liquid sugar, all of these items that would have actually been coming into a... a cereal plant in the real world.

And in this case, it was a Michigan plant served by the Grand Trunk and Penn Central.

These were multiple shifts a day that were churning through all of this product in the real world.

And so I had to have something that was going to be a template to work off of so that I could choose the rolling stock, choose the products I was going to be producing, choose the commodities that were going to be coming in and out, et cetera.

It's a little bit of that original.

So for instance, the Battle Creek, Michigan plant, kind of looking at that as an initial template for, okay, how many yards were there? There were actually a couple.

There was one for Penn Central, one for Grand Trunk.

How many buildings were there? What was going in and out of each building? Trying to figure out that taking that template and trying to work it into a space where I could have somewhat similar operations.

And they connected to the Pennsylvania Railroad, which had a branch line that came over from Bedford.

And they continued to operate freight service in and around the town of Everett until all the way up until 1982 and by that point there really wasn't much freight business left and the old Pennsylvania railroad had gone through Penn Central and gone to Conrail and Conrail abandoned that line in 1982 and shut it down so that's when the Everett Railroad ceased operations.

I purchased the company for scrap metal in 1983, and we subsequently dismantled the original Huntington Broadtop tracks down there.

And at the same time, we're able to purchase part of the old Bedford branch from Conrail and relocate under the Everett Railroad name, still operating under our 1954 charter.

We lived on School Street in Mansfield, and we could see the trains going by.

I mean, most of my early recollections were some Penn Central and then later Conrail and Amtrak and, and the MBTA, of course, were, were the primary, uh, operations.

But yeah, I can, those are my fond memories of growing up in Mansfield when I was a kid.

Yeah, you definitely grew up in a great railroading area, being Mansfield, Mass, and that, that, uh, that line between Boston and New York there.

I think- I, I don't think our cases support that.

Well, the most recent I th- I would go back to, for instance, at the earliest expression, the Penn Central case, which used the term parcel as a whole, and from which the parcel as a whole discussion has emerged.

And then most recently in Justice Scalia's concurring opinion in the Sudderth decision- We don't generally get our law out of concurring opinions.

Yikes.

Then when I was in college going to school at Michigan State, you know, I had my summers off and I landed a job working summers for the railroad.

I worked for Penn Central.

Oh, my

gosh.

And then Penn Central became Conrail.

And my title those summers was track man.

And I swung a hammer and changed rails and lugged railroad ties around and did all that kind of stuff for three summers in a row.