William Becker v. City of Hillsboro, Missouri

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 23-3367
___________________________
William Becker; Darcy Lynch, co-trustees of the Antoinette Ogilvy Trust under the
will of George Ogilvy
Plaintiffs - Appellants
v.
City of Hillsboro, Missouri
Defendant - Appellee
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: September 25, 2024
Filed: January 7, 2025
____________
Before COLLOTON, Chief Judge, LOKEN and SHEPHERD, Circuit Judges.
____________
SHEPHERD, Circuit Judge.
The City of Hillsboro adopted land-use ordinances prohibiting new private
wells within City limits and prohibiting the use or construction of residences in the
City unless those residences are connected to the City water system. A local
landowner sued the City, arguing that the ordinances create an uncompensated
regulatory taking in violation of the Fifth and Fourteenth Amendments. The district

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court1 granted summary judgment to the City, rejecting the landowner’s claims, and
the landowner now appeals. Having jurisdiction under 28 U.S.C. § 1291, we affirm.
I.
This case centers around a 156-acre2 tract of land in Jefferson County,
Missouri. The Property is owned by the Antoinette Ogilvy Trust. Appellants,
siblings William Becker and Darcy Lynch, are co-trustees of the Trust.
The Property currently sits within but at the edge of the City of Hillsboro,
Missouri, but it has not always been a part of Hillsboro. In 2000, the Property was
voluntarily annexed into Hillsboro and zoned for residential use. Both of the
relevant annexation documents stated that the City “has the ability to furnish normal
municipal services to the area” (or a similar variation). The documents said nothing
about paying to connect those services.
As a part of the City of Hillsboro, the Property is subject to two key Hillsboro
regulations. The first was enacted in 1971, nearly three decades before the Trust
annexed the Property to Hillsboro. That regulation prohibits new private wells in
City limits. The second regulation was enacted in 2008, eight years after the
voluntary annexation. That regulation makes it unlawful to “occupy, use[,] or
otherwise live in” any residential structure “which is not being serviced by the [C]ity
water supply system or by an approved and functioning deep well.”
1 The Honorable Audrey G. Fleissig, United States District Judge for the
Eastern District of Missouri.
2 The Property was originally 176 acres but the owners sold about 20 acres of
it in 2021. The remaining 156 acres are at issue here.

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In 2020, after years of allowing the property to sit vacant, the trustees3 tried
to sell the Property. Becker stated that the initial attempts to sell the Property as a
single tract failed. Upon the recommendation of their real estate agent, the trustees
began marketing the Property in eight smaller lots instead. In 2021, the Trust sold
one of the lots to Josh and Julia Brown for $233,825, a price Becker claims was
based on the mistaken assumption by both the buyer and the seller that the Browns
would be able to drill a private well.
It was around that time that Becker claims the trustees first became aware of
the annexation and the applicable regulations. As the trustees further investigated
the effect of these regulations, they learned that the cost to extend the City water
system to the eight tracts of land would be substantial. In fact, per an expert appraisal
report the trustees requested, the estimated cost to connect water to all the proposed
lots is between $963,000 and $1,578,000,4 making development of the property “not
financially feasible.” The trustees claim that these water connection expenses have
deterred additional buyers from moving forward with purchasing some of the tracts
the trustees seek to sell.
The City water lines currently run to a spot about 228 feet away from the
Property. The City asserts it is willing and able to run water from that spot to within
20 feet of the trustees’ property line—at the trustees’ cost—enabling the trustees to
tap into the City’s water supply.5 This is the same process the neighboring Eagle
3 Becker and Lynch became the trustees in 2021, when their mother died.
4 There is a mismatch between the amount the expert report lists and the
amount the trustees admit to in summary judgment documents. The expert report
lists $1,578,000, while the trustees state the estimated cost is $1,575,000.
5 The trustees question the City’s ability to extend the water line, noting City
representatives testified that such an extension would require the City to obtain
easements either by agreement or by eminent domain. The trustees further highlight
testimony from a City representative noting that engineers might have to “figure out”
some “residual pressure” issues in connecting the water line. Even if both these

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Ridge Subdivision went through when developing, though Eagle Ridge had to pay
to extend the water about 3,000 feet, a City representative testified. The trustees
have not asked the City to run water to their property.
In 2022, the trustees sued the City of Hillsboro, alleging the City’s regulations
constituted takings in violation of the Missouri Constitution6 and the United States
Constitution and violated their Constitutional rights under 42 U.S.C. § 1983. They
sought damages for inverse condemnation and violation of constitutional rights
under § 1983. The § 1983 claim was resolved on a motion to dismiss. Both sides
moved for summary judgment on the taking claims.
The trustees moved for summary judgment first. They asserted that the City’s
regulations constitute a taking in three ways. First, they argued that the City’s
regulations constitute an effective permanent physical invasion of their property.
Second, they asserted that the regulations effectively deny them all economically
viable use of their property. If established, either of these first two types of takings
would be a per se taking, meaning the court would not need to consider any
mitigating factors to issue a decision in favor of the landowners. See Lingle v.
Chevron U.S.A., Inc., 544 U.S. 528, 538-39 (2005) (noting that per se regulatory
takings are the only type of regulatory takings not governed by Penn Central).
Finally, the trustees claimed that the regulations are a taking under the Supreme
Court’s balancing test for regulatory takings (the Penn Central test). See Penn Cent.
Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978).
statements are true, they only indicate that the City has not yet worked through the
logistics of extending the water; they do not negate the City’s assertion that it is able
to extend the water line if the trustees request.
6 Missouri courts analyze Missouri takings claims under the same framework
provided by the Supreme Court for Fifth Amendment takings. See Clay Cnty. ex
rel. Cnty. Comm’n of Clay Cnty. v. Harley & Susie Bogue, Inc., 988 S.W.2d 102,
107 (Mo. Ct. App. 1999) (“Missouri considers the same factors the Supreme Court
has considered in making a determination of whether a taking has occurred
under . . . the Missouri Constitution.”).

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A few weeks later, the City filed a motion for summary judgment as well. In
its memorandum in support of its motion, the City argued that the Penn Central test
governs and that its regulations do not constitute a taking because they pass that test.
A few days later, in a separate filing responding to the trustees’ motion, the City
further asserted that its regulations do not constitute a physical invasion of the
trustees’ property because the regulations do not require an actual occupation of the
property. The City also argued that the regulations do not deprive the Property of
all economically viable use, but instead merely required the developers to pay costs
associated with developing the property.
The district court denied the trustees’ motion and granted the City’s motion
for summary judgment. The court first rejected both of the trustees’ per se taking
claims, noting that the regulations do not involve or require any kind of physical
encroachment onto the trustees’ property and—by the trustees’ expert’s own
admission—do not deprive the Property of all economic value. The Court then
determined that no reasonable factfinder could conclude a taking exists under the
Supreme Court’s balancing test for regulatory takings.
II.
We review a grant of summary judgment de novo. Se. Ark. Hospice, Inc. v.
Burwell, 815 F.3d 448, 450 (8th Cir. 2016). “Summary judgment is appropriate if
there is no genuine dispute of material fact and a party is entitled to judgment as a
matter of law.” Huynh v. Dep’t of Transp., 794 F.3d 952, 958 (8th Cir. 2015). In
other words, “[t]he mere existence of a factual dispute is insufficient alone to bar
summary judgment; rather, the dispute must be outcome determinative under
prevailing law.” Holloway v. Pigman, 884 F.2d 365, 366 (8th Cir. 1989). We view
the evidence and draw all reasonable inferences in the light most favorable to the
nonmoving party. Corkrean v. Drake Univ., 55 F.4th 623, 630 (8th Cir. 2022).

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The Fifth Amendment, as applied to the States through the Fourteenth
Amendment, “provides that private property shall not be taken for public use,
without just compensation.” Iowa Assur. Corp. v. City of Indianola, 650 F.3d 1094,
1097 (8th Cir. 2011) (quoting Lingle, 544 U.S. at 536). The purpose of the Takings
Clause is “to prevent the government from ‘forcing some people alone to bear public
burdens which, in all fairness and justice, should be borne by the public as a whole.’”
Palazzolo v. Rhode Island, 533 U.S. 606, 617-18 (2001) (citation omitted).
For decades, the Takings Clause was generally understood only to apply to
“direct appropriation[s]” of property, or “the functional equivalent of a ‘practical
ouster of [the owner’s] possession.’” Lucas v. S.C. Coastal Council, 505 U.S. 1003,
1014 (1992) (second alteration in original) (first quoting Legal Tender Cases, 79
U.S. (12 Wall.) 457, 551 (1871); then quoting N. Transp. Co. v. City of Chicago, 99
U.S. 635, 642 (1879)). That all changed in 1922 when the Supreme Court issued its
decision in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). See Lucas, 505
U.S. at 1014.
Mahon established the “general rule” that “while property may be regulated
to a certain extent, if regulation goes too far it will be recognized as a taking.” 260
U.S. at 415. Though recognizing that “[g]overnment hardly could go on” if
regulations are easily characterized as takings, the Court in Mahon noted that when
the diminution in value “reaches a certain magnitude,” the Fifth Amendment
requires the government to compensate the property owner for his loss. Id. at 413.
Fifty years later, the Supreme Court laid out what would become the default
test for determining whether a regulation constitutes a taking. See Penn Central, 438
U.S. at 130-31. The Penn Central Court crafted a test that focuses largely “upon the
particular circumstances [in each] case.” Id. at 124 (citation omitted). Under the
Penn Central balancing test, courts consider: (1) “the economic impact of the
regulation on the claimant,” (2) “the extent to which the regulation has interfered
with distinct investment-backed expectations,” and (3) “the character of the
governmental action.” Id.

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Furthermore, certain types of regulatory actions are per se regulatory
takings—meaning they are not subject to the Penn Central test. See Lingle, 544 U.S.
at 538. There are thus “four types” of regulatory takings. City of Indianola, 650
F.3d at 1097; see also Lingle, 544 U.S. at 538-39, 546-48. First, there are regulations
which “require[] an owner to suffer a permanent physical invasion of her property.”
City of Indianola, 650 F.3d at 1097 (citation omitted). These were first identified in
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982). See id.
Second, there are regulations that “completely deprive[] an owner of all
economically beneficial use of her property.” Id. (citation omitted). This type of
taking was identified in Lucas, 505 U.S at 1019. See id. Third, there are
“government requirement[s] that, without sufficient justification, require[] an owner
to ‘dedicate’ a portion of his property in exchange for a building permit.” Id. These
are known as “exactions.” See id. at 1097-98. Finally, there are all other regulations
which fail the Penn Central balancing test. See id.
The trustees allege that the City’s regulations constitute all four types of
taking. We analyze each in turn.
A.
The trustees first argue that the City’s regulations mandate a permanent
physical invasion of the property.
A regulation that “requires an owner to suffer a permanent physical invasion
of her property” is a taking. Id. at 1097 (citing Loretto, 458 U.S. at 419). In Loretto,
a New York apartment owner challenged a state law which required her to permit a
cable television company to install cable facilities on her property. 458 U.S. at 421.
The cable, which was slightly less than one-half inch in diameter, occupied portions
of her roof and the side of her building. Id. at 422. The Supreme Court determined
that such a “permanent physical occupation authorized by government is a taking.”
Id. at 426.

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This rule is limited to “permanent physical occupations”—that is, regulations
that do not “simply take a single ‘strand’ from the ‘bundle’ of property rights,” but
rather “chop[] through the bundle, taking a slice of every strand.” Id. at 435, 441.
Loretto’s “very narrow” holding did not “question the equally substantial authority
upholding a State’s broad power to impose appropriate restrictions upon an owner’s
use of his property.” Id. at 441.
In this case, the district court correctly determined that the regulations at issue
do not involve a permanent physical invasion of the property. The applicable
ordinance requires all residential structures in the City to be “serviced by the city
water supply system or an approved and functioning deep well,” but do not require
the trustees to dedicate to the City either the water lines themselves or the land on
which they sit.7 Nor do the trustees point to any regulation obligating the landowners
to build any residential structures. Unlike in Loretto, in which the apartment owner
was forbidden from interfering with the installation of the cable on her property, here
the trustees may prohibit anyone from entering their property by choosing not to
build residential structures on their property. See 458 U.S. at 423, 426. The
regulation is thus the type of “appropriate restriction[] upon an owner’s use of his
property” that the Loretto Court did not question. See id. at 441.
7 The trustees assert without citation that the regulations require “a permanent
dedication of those improvements and the land on which they sit to the City.”
Appellants’ Br. 22. This assertion appears to be based on the City’s alleged history
of conditioning development on a dedication of utility easements. See Appellants’
Br. 7. However, the trustees have not established that there is an affirmative
obligation on them to dedicate the improvements, the land, or any easements to the
City absent development. Because the trustees have not supported their position
with evidence, they are unable to overcome summary judgment on this issue. See
Bedford v. Doe, 880 F.3d 993, 996 (8th Cir. 2018) (noting that “the burden on the
movant ‘may be discharged by “showing”—that is, pointing out to the district
court—that there is an absence of evidence to support the nonmoving party’s case’”)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).

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The trustees are not being compelled to tolerate a permanent physical
occupation because they are not being compelled to do anything at all. This case is
similar to City of Indianola. In that case, this Court held that an ordinance requiring
certain vehicles to be enclosed by a fence in all outdoor areas was not a taking under
Loretto because “[b]y its own terms, the ordinance does not require [the landowner]
to permit either the City or any third party to enter the property and install a fence.”
City of Indianola, 650 F.3d at 1098. So long as the landowner “still may choose
whether to build the fence or forgo placing more than one vehicle outside, he cannot
establish the required compliance necessary for a Loretto claim.” Id. So too here,
the trustees still may choose whether to build a structure and comply with the
ordinance or forgo building a structure. The trustees argue that this case is
distinguishable from City of Indianola because absent compliance here, they “cannot
make any use of their Property, other than leaving it vacant and idle.” But the
trustees point to no case law in support of this position, and their purported factual
distinction is not supported by the record; the trustees may still use the Property as
is for recreational purposes, or they could sell it. To the extent the trustees argue
that their inability to use the Property without succumbing to the City regulations
deprives them of all use of the Property, that argument is resolved in Part II.B, infra.
Because the trustees have not established that the regulations require them to
suffer “a permanent physical invasion,” they have not established a per se regulatory
taking under Loretto. See id. at 1097.
B.
The trustees next argue that the regulations constitute takings because they
deprive the trustees of all economically beneficial use of their property.
The Supreme Court has established that “when the owner of real property has
been called upon to sacrifice all economically beneficial uses in the name of the
common good, that is, to leave his property economically idle, he has suffered a
taking.” Lucas, 505 U.S. at 1019. Thus in Lucas, in which the trial court determined

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that the Act “deprive[d] [the landowner] of any reasonable economic use of the lots,”
rendering them “valueless,” the Supreme Court found a compensable taking. Id. at
1009, 1027 (first alteration in original) (citation omitted).
But a landowner cannot succeed on a Lucas claim if the landowner’s property
still has substantial value following the regulation. See Palazzolo, 533 U.S. at 616.
“Diminution in property value, standing alone,” does not establish a taking. Penn
Central, 438 U.S. at 131. In Palazzolo, the landowner sought to develop his
waterfront parcel, but his plans were rejected due to wetland regulations. 533 U.S.
at 611. The landowner argued that the regulations diminished his property value
such that he was left with only “a few crumbs of value,” thus constituting a
regulatory taking under Lucas. Id. at 631 (citation omitted). The property was worth
roughly $3.15 million (according to the landowner’s own calculations) at the time it
was taken and retained only $200,000 in development value under the State’s
wetlands regulations. Id. at 616, 630-31. But despite the significant reduction in
value, the Supreme Court rejected the landowner’s takings argument, noting that the
regulations still permitted the landowner to build a substantial residence on an
18-acre parcel of the land and thus did not leave his property “economically idle.”
Id. at 631 (citation omitted). The alleged taking was not compensable because the
landowner was left with more than a “token interest.” See id.
Here, the district court correctly rejected the trustees’ claim of a taking under
Lucas. Unlike the regulations in Lucas, the regulations in this case do not bar the
trustees from erecting any permanent habitable structures; they merely impose
water-system requirements on those who choose to erect structures in the City. Even
the trustees’ own expert did not suggest that the property was rendered valueless by
the City’s ordinances. Rather, the trustees asserted that the effect of the ordinances
“reduced the Property’s value from $1,550,000 to $477,000, or about 70%.”
Appellants’ Br. 26. This is both a greater residual value than in
Palazzolo—$477,000 here compared to $200,000 in Palazzolo—and a smaller
percentage decrease than in Palazzolo—roughly 70% here compared to nearly 94%
in Palazzolo. Thus, even accepting the numbers the trustees relied on without

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citation in their brief, the trustees’ property here has not been deprived of all
economic value and does not constitute a regulatory taking under Lucas and
Palazzolo. The trustees’ argument that Palazzolo is distinguishable because that
landowner could still develop a portion of its property is unavailing; here, the
trustees can develop all of their property so long as they comply with the regulation.
As the Supreme Court has recognized, “the property owner necessarily expects the
uses of his property to be restricted, from time to time, by various measures newly
enacted by the State in legitimate exercise of its police powers.” Lucas, 505 U.S. at
1027. It is only when those regulations eliminate all economically valuable use that
Lucas requires compensation, and the trustees have failed to establish that
Hillsboro’s regulations render their property valueless.
C.
Third, the trustees argue that the City’s regulations amount to an
impermissible exaction.
Exactions are “land-use decisions conditioning approval of development on
the dedication of property to public use.” City of Monterey v. Del Monte Dunes at
Monterey, Ltd., 526 U.S. 687, 702 (1999). Such conditions are impermissible unless
they satisfy a two-pronged test. See Sheetz v. Cnty. of El Dorado, 601 U.S. 267,
275 (2024). First, there must be an “essential nexus” between the permit condition
and a legitimate state interest. Nollan v. Cal. Coastal Comm’n, 483 U.S. 825, 837
(1987). Second, there must be “rough proportionality” between the condition and
the projected impact of the proposed development. Dolan v. City of Tigard, 512
U.S. 374, 391 (1994). The trustees claim that the City’s ordinance fails both prongs,
constituting a taking under exaction analysis.
This Court declines to reach this issue because, as the district court correctly
determined, the trustees did not sufficiently raise the issue below. In its
memorandum in support of its motion for summary judgment, the trustees noted that

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the City might argue its regulations imposed a “reasonable condition.” To this point,
the trustees stated:
This contention is mistaken for several reasons. First, the Trust is not
seeking any permits from the City, but rather merely to sell the Property
for potential development by others. Second, even if construed as the
Trust indirectly seeking building permits for future purchasers of the
Property, the imposition of this alleged “condition” fails to
meet . . . [Dolan and Nollan]. . . . In this case, the exaction of $500,000
plus the dedication of land for the purpose of extending the City’s water
system is (1) totally unrelated to any impact . . . and (2) totally
disproportionate to any such impact . . . .
The trustees claim this proves they raised the exaction claim because they used the
phrase “exaction” and cited both Nollan and Dolan. But those references and
citations were made in the context of arguing that the regulations are not
impermissible exactions because the Trust is not seeking permits from the City.
Furthermore, the trustees made no reference to exactions, Nollan, or Dolan in their
Amended Complaint. It is well-settled that “[a] party may not assert new arguments
on appeal of a motion for summary judgment.” O.R.S. Distilling Co. v.
Brown-Forman Corp., 972 F.2d 924, 926 (8th Cir. 1992); see also N. Bottling Co.,
Inc. v. Pepsico, Inc., 5 F.4th 917, 922 (8th Cir. 2021) (“[A] party’s failure to raise
an argument before a trial court typically waives that argument on appeal.”).
Because the trustees failed to raise the exactions argument to the district court, we
decline to consider it on appeal.
D.
Lastly, the trustees argue that there are enough factual disputes8 to warrant a
jury trial on whether the regulations constitute a taking under Penn Central.
8 In their summary judgment filings, the trustees asserted that the regulations
constitute a taking under Penn Central as a matter of law; they did not argue that the
case should go to trial because of factual disputes. However, the trustees did
maintain there were several disputes of fact.

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Under Penn Central, courts consider three factors to determine whether a
regulatory scheme constitutes a compensable taking: (1) the regulation’s economic
impact, (2) the interference of the regulation with investment-backed expectations,
and (3) the character of the government action. See Heights Apartments, LLC v.
Walz, 30 F.4th 720, 734 (8th Cir. 2022) (citing Penn Central, 438 U.S. at 124).
Courts give “primary” consideration to the first two factors while considering the
third factor as potentially “relevant in [discerning] whether a taking has occurred.”
Hawkeye Commodity Promotions, Inc. v. Vilsack, 486 F.3d 430, 441-42 (8th Cir.
2007) (quoting Lingle, 544 U.S. at 538-39).
1.
As a preliminary matter, the parties here dispute how to characterize the
property under Penn Central. The trustees seek to apply the Penn Central factors
based on the cost to hook up City water to eight different subdivided lots within the
parcel, as that’s how they hope to sell the tract. In other words, the trustees attempt
to characterize the parcel as eight separate lots for purposes of Penn Central analysis.
The City asserts the impact should be calculated based on the cost to hook up water
to the parcel as a whole, treating the parcel as just one lot. This dispute thus involves
“the difficult, persisting question of what is the proper denominator in the takings
fraction.” Palazzolo, 533 U.S. at 631. Put another way:
[b]ecause our test for regulatory taking requires us to compare the value
that has been taken from the property with the value that remains in the
property, one of the critical questions is determining how to define the
unit of property ‘whose value is to furnish the denominator of the
fraction.’
Murr v. Wisconsin, 582 U.S. 383, 395 (2017) (alteration in original) (citation
omitted).

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This is known as the denominator problem, and the Supreme Court has
addressed it. See Murr, 582 U.S. at 395. In Murr, the Court was tasked with
determining “the proper unit of property against which to assess the effect of the
challenged governmental action.” Id. In other words, the Court had to determine
whether to evaluate a takings claim by considering a piece of property as one single
lot or as multiple separate lots. And “[a]s commentators have noted, the answer to
this question may be outcome determinative.” Id.
The Supreme Court announced a multi-factor test, in which “no single
consideration can supply the exclusive test for determining the denominator.” Id. at
397. Courts are to consider a number of factors, including: (1) “the treatment of the
land under state and local law,” (2) “the physical characteristics of the land,” and (3)
“the prospective value of the regulated land.” Id. The Court further directed the
inquiry to be an “objective” inquiry of “whether reasonable expectations about
property ownership would lead a landowner to anticipate that his holdings would be
treated as one parcel, or, instead, as separate tracts.” Id. This analysis is undertaken
by courts as “a question of law based on underlying facts.” See Lost Tree Vill. Corp.
v. United States, 707 F.3d 1286, 1292 (Fed. Cir. 2013); see also Murr, 582 U.S. at
405 (noting that courts define the parcel).
Here, the Murr factors favor treating the parcel as one singular lot. As to the
first prong of the Murr test, the land is still characterized as one parcel under local
law.9 On the second prong, courts look to the “physical relationship of any
distinguishable tracts, the parcel’s topography, and the surrounding human and
ecological environment.” Murr, 582 U.S. at 398. Here, Jefferson County maps show
that the parcel is contiguous, divided only by one road. And third, assessing “the
9 The lot that was sold to the Browns is characterized separately from the
remaining 156 acres still owned by the trustees. The trustees further argue that they
are not required to seek approval from the City to subdivide their property into lots
of five acres or more. But even if the trustees are not legally compelled to subdivide
their property with the City, the fact that the property has not formally or legally
been subdivided is still relevant to the Murr analysis.

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value of the property under the challenged regulation,” see id., the trustees have
admitted that it would cost more (and thus decrease the value of the property more)
to extend the water to all eight proposed subdivided lots than to just one parcel.
Furthermore, there is no clear limiting principle to the trustees’ argument; if the
trustees are permitted to treat their property as eight parcels for purposes of takings
analysis, they could also argue their property should be treated as 16, or 32, or 64
different parcels needing water connections. The lot was purchased as one lot,
annexed to the City as one lot, inherited by the trustees as one lot, and initially
advertised for sale as one lot until the trustees decided it would better sell subdivided.
The trustees have not provided sufficient justification to begin treating it as eight
different lots now.
2.
Considering the trustees’ property as a whole, the district court was correct to
determine that no reasonable fact finder could conclude that the regulations here
constitute a taking under the Penn Central balancing test.
The first prong of the Penn Central balancing test considers “the regulation’s
economic effect on the landowner.” See Palazzolo, 533 U.S. at 617.
Here, the district court correctly found that this factor weighs in favor of the
City because the trustees failed to demonstrate the regulations impose a significant
economic impact on the parcel as a whole. At summary judgment, “[t]he moving
party can satisfy its burden in either of two ways: it can produce evidence negating
an essential element of the nonmoving party’s case, or it can show that the
nonmoving party does not have enough evidence of an essential element of its claim
to carry its ultimate burden of persuasion at trial.” Bedford, 880 F.3d at 996. In this
case, the trustees have presented no evidence that there is a significant economic
impact in connecting City water to the property as a whole. The trustees
acknowledged in a deposition that they had not considered what it would cost to run
water to just one point of the tract, and that they had only inquired with the City

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about connecting water to all eight subdivided parts of the property. The expert
report that the trustees rely on does not consider the cost to run water just 228 feet
to the nearest point of the Property. And even the expert’s affidavit asserted only
that “the cost to the Trust of extending the City water system to the Property made
the development for that highest and best use economically unfeasible,” with no
mention of the economic impact for a use other than subdivided lots. But the fact
that an ordinance “deprives the property of its most beneficial use does not render it
unconstitutional” if the “ordinance is otherwise a valid exercise of the town’s police
powers.” Goldblatt v. Town of Hempstead, 369 U.S. 590, 592 (1962). Because the
trustees have not met their burden of establishing a severe economic impact on the
whole parcel as a result of the regulations, this prong favors the City.
The second prong of the Penn Central test considers whether and how much
the regulation of the trustees’ property interfered with the trustees’ “reasonable
investment-backed expectations.” See Palazzolo, 533 U.S. at 617. A reasonable
investment-backed expectation requires “more than a ‘unilateral expectation or an
abstract need.’” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984) (citation
omitted). The reasonableness of an expectation may be shaped by “the regulatory
regime in place at the time the claimant acquires the property.” Palazzolo, 533 U.S.
at 633 (O’Connor, J., concurring); see also Murr, 582 U.S. at 405 (“Petitioners
cannot claim that they reasonably expected to sell or develop their lots separately
given the regulations which predated their acquisition of both lots.”). Investment-
backed expectations are often “informed by the law in force in the State in which the
property is located.” See Ark. Game & Fish Comm’n v. United States, 568 U.S. 23,
38 (2012).
Here, the trustees failed to show that the City’s regulation interfered with
reasonable, investment-backed expectations. The trustees assert that they had an
expectation that the Property could be developed without paying to connect to the
City water. But they have not shown how this expectation was reasonable and
investment-backed rather than “unilateral.” The ordinance prohibiting construction
of new private wells had been in place for nearly 30 years when the Trust voluntarily

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annexed the Property to the City. While the trustees’ claim “is not barred by the
mere fact that [the Property was annexed] after the effective date of the [regulation],”
see Palazzolo, 533 U.S. at 630, that timing is not “immaterial,” id. at 633 (O’Connor,
J., concurring). The reasonableness of the trustees’ expectations is shaped by the
“regulatory regime” that was in place when the Trust annexed the
Property—including the ordinance prohibiting private wells. See id. This regulatory
regime is further exemplified by evidence showing that at least some other
landowners (including the neighboring Eagle Ridge subdivision developer and two
individuals who lived outside the City and wanted to tap into the City’s water
system) paid the costs of connecting to the water system. The fact that the second
relevant regulation—the one prohibiting use or occupation of a residential
structure—was not implemented until after the Property was annexed does not
change this conclusion; the prior existence of the ordinance prohibiting new private
wells was sufficient to provide notice that City property is subject to water
regulation, and the trustees’ primary complaint is directed at the first regulation, not
the second.10 The trustees’ “right to improve property” here “is subject to the
reasonable exercise of state authority,” which includes the enforcement of
Hillsboro’s land-use restrictions. See Palazzolo, 533 U.S. at 627.
The final prong of the Penn Central test considers the “character of the
governmental action.” 438 U.S. at 124. This includes inquiring into “whether it
amounts to a physical invasion or instead merely affects property interests through
‘some public program adjusting the benefits and burdens of economic life to promote
the common good.’” Lingle, 544 U.S. at 539 (quoting Penn Central, 438 U.S. at
124).
Here, the district court correctly determined that this factor also favors the
City. As discussed in section II.A supra, the regulation amounts to a limitation on
use, not to a “physical invasion.” See Lingle, 544 U.S. at 539. Moreover, City
10 For instance, in Becker’s deposition, he testified that “Josh Brown’s
intention would have been to just have a well” and another interested purchaser
likewise wants a private well.

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representatives testified that the prohibition on new private wells was likely passed
in part to prevent water contamination within City limits and to protect depletion of
the aquifer. Weighty public interests alone are not sufficient to transform a per se
regulatory taking into a permissible regulation. See Lucas, 505 U.S. at 1015 (noting
that Loretto and Lucas takings are compensable even when there is a significant
public interest). However, the government interest is appropriately taken into
consideration under Penn Central analysis. See Murr, 582 U.S. at 405 (determining
the third Penn Central prong favored the government in part because the
governmental action was enacted as a part of an “effort to preserve the river and
surrounding land”); see also Penn Central, 438 U.S. at 125 (noting that the Supreme
Court has permitted land-use regulations when the public interest would be
promoted by doing so). Thus, this final prong also favors the City.
III.
The Takings Clause is intended “to prevent the government from ‘forcing
some people alone to bear public burdens which, in all fairness and justice, should
be borne by the public as a whole.’” Palazzolo, 533 U.S. at 617-18 (citation
omitted). But here, the trustees seek to have the public bear the burden of
guaranteeing the trustees the highest and best use of their Property. Rather than pay
the cost to connect City water like at least one similarly situated developer has done,
the trustees are attempting to transfer their development costs to the City. Neither
common sense nor the Takings Clause requires the City to bear this burden.
For the foregoing reasons, we affirm the judgment of the district court in its
entirety.
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