80. Will the owners of the beach houses be likely to prevail?

The Fifth Amendment prohibits governmental taking of private property «for public use without just compensation.» As such, both state and federal governments have the right to take private property for public use as long as «just compensation» is paid. This power is known as the right of «eminent domain.» The scope of a governmental taking encompasses not only physical appropriations of property, but also any governmental action that significantly damages property or impairs its use. See, e.g., United States v. Causby, 328 U.S. 256 (1946).

The Supreme Court has construed the requirement of «public use» quite broadly. A use will be held to be «public» as long as it is rationally related to a legitimate public purpose, such as health, welfare, safety, moral, social, economic, political, or aesthetic ends. See Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984). The property need not be open to the general public after the taking, either. The fact that the property is turned over to some private user does not prevent the use from being a public one as long as the public can be expected to derive some benefit (e.g., economic development) from the use.

Regulations or use restrictions on private property by the government will also constitute a taking if there is a denial of all economic value of the land because such a regulation is equivalent to a physical appropriation.

B is correct. Even though the government is planning to sell the property to a private entity, the use will increase the city's tourist trade and revive the local economy. Therefore, the building of a hotel will qualify as a public use, and the owners are not likely to prevail in their claim.

A is incorrect. This answer reaches the correct answer with the wrong reasoning, as well as misstates the law. If the government takes private property under its eminent domain power, the property owner can challenge it on grounds other than sufficiency of the compensation, including whether the taking is not for a proper «public use.»

C is incorrect. This is also a misstatement of the law. The Court has held that a public entity may, in fact, seize the property of one person to transfer it to another private party. See Hawaii Hous. Auth. v. Midkiff, 467 U.S. 229 (1984). Both federal and state governments have the power to take private property from its owners in the course of furthering some societal interest. Here, the city is not taking the property to transfer it, intact, to other private parties for their own benefit. Rather, the city is taking the property in order to use the land to build a luxury hotel, in an effort to revive the local economy and increase the tourist trade.

D is incorrect. If a government regulation denies a landowner all economic use of his land, the regulation may be considered a taking. This standard is used to determine if a use restriction amounts to a taking. In this question, the facts are clear that there was a taking. The element at issue is whether the taking was considered public use.