U.S. Supreme Court hears arguments in dispute over St. Croix riverfront lot

WASHINGTON – A Wisconsin family's lengthy bid to sell property on the St. Croix River went to the U.S. Supreme Court on Monday, as justices posed tough questions to attorneys for the landowners and to the government regulators who blocked the transaction.

The children of William and Margaret Murr sought to pay for improvements to a cabin passed down from their parents by selling a parcel of land next door. But laws intended to preserve the shoreline of the federally protected river prohibited the family from breaking up the lots, classifying them instead as one.

The four siblings — Joseph, Michael and Donna Murr and Peggy Heaver — claimed that St. Croix County was interfering with their private property rights under the Fifth Amendment. The 1.25-acre lot in question, purchased by the family in 1963, is in Troy Township south of Hudson.

"The fundamental unfairness in this case is illustrated by one fact: If anyone else in the world other than the Murr siblings owned [the neighboring lot], that owner could sell or develop it," their attorney, John Groen, argued before the court. "But the Murrs cannot."

That's because the law restricting the sale took effect in 1975, nearly 20 years before the Murrs' parents conveyed the property to them in a way that brought the lots into "common ownership" and made them ineligible for a grandfather exemption.

The family believes the empty lot in question, with river views, is worth $400,000.

Eight members of the court heard the hourlong oral arguments the same day that hearings began before the Senate Judiciary Committee to confirm federal appeals Judge Neil Gorsuch to replace the late Justice Antonin Scalia.

"I'm supposed to know the zoning regulations, and when I buy a house, when I buy a piece of land, I'm buying subject to [those] regulations," said Justice Elena Kagan.

Justice Sonia Sotomayor later pressed the issue, saying the Murrs bought the property knowing exactly what they were doing.

"You buy everything subject to regulation," she said. "You may not choose to look at it, but you should."

Groen said the Murrs were a "normal American family" that understood when you buy property and it's zoned for residential use in a subdivision, you get to use it.

"And you get to pass it on to your kids," Groen added.

Richard Lazarus, attorney for St. Croix County, argued that no court in the nation has held that such government acts amount to a "taking" of property. He said the value of the "luxury" land at the bend of the river, given its private waterfront location, was so great that it almost offset the loss of not having a home developed on the second lot.

Sotomayor voiced skepticism. "Why would anybody pay $400,000 for a lot they can't build on?" she asked.

Lazarus said that if somebody owned only that lot, they could qualify for a hardship exemption and develop the property. He noted that the difference is that the Murrs own both properties, which are highly valuable combined, and not being able to build a second home only decreased that worth by 9 percent.

Chief Justice John Roberts said it was a "little quirky" that the owners weren't permitted to treat the parcels of land as two. If they had recorded the properties in separate names they would be in an entirely different situation, he said.

Wisconsin Solicitor General Misha Tseytlin said that most people bring these lots under common ownership because they want to build a single, bigger house on a bluff, as had already happened with eight property owners in the St. Croix area. He said the merger of the lots makes it easier to meet other local restrictions.

Tseytlin added that Wisconsin wants to slowly phase out small, so-called substandard parcels, as people end up taking lots in common ownership.

"Well, they won't after today … or if you win," said Chief Justice Roberts, as people in the courtroom laughed.

But Groen said that the notion that the combined lot is valuable because it's on the waterfront "is ignoring the fundamental aspects that the valuation in a residential lot is because you can build on it. And that is what has been taken from the Murrs. They previously had two building sites; now they have one."

The Murrs' parents bought both properties in the early 1960s and transferred ownership to their children in 1994. The legal battle began 10 years ago when the county denied the Murrs' variance requests. The siblings appealed the case to the nation's high court in April 2016.

Former Vice President Walter Mondale, who as a U.S. senator co-sponsored the Wild and Scenic Rivers Act in 1968 protecting the St. Croix, signed onto an amicus brief with two environmental advocacy groups backing Wisconsin and St. Croix County in the case.

Maya Rao • 612-673-4210