Removal of Highway Access Not a Compensable Taking

In a recent decision involving an inverse condemnation claim, the Wisconsin Court of Appeals determined that removal of highway access from a parcel of land used for trucking and warehousing did not constitute a compensable taking. See, Erdman v. DOT, Appeal
No. 2012AP727, May 23, 2013.

The property is located at the Intersection of State Highway 26 and Banker Road in the Town of Jefferson. In 1994, the DOT acquired 2.7 acres of the property, eliminating access to Highway 26. However, the property had access to Banker Road, which had direct access to the highway. Three years later, Douglas Erdman purchased the land. Ten years later, in 2007, the DOT subsequently constructed an overpass on Highway 26, eliminating access to the highway from Banker Road. As a result, trucks from Erdman’s business had to drive a circuitous, 2.8-mile route to gain access to Highway 26.

To constitute a compensable taking, the Wisconsin inverse condemnation statute, § 32.10, requires either (1) an actual physical occupation by the condemning authority or (2) a government-imposed restriction that deprives the owner of all, or substantially all, of the beneficial use of the property. See, E-L Enters., Inc. v. Milwaukee Metro. Sewerage Dist., 210 WI 58, ¶ 37. In this case, however, the landowner could not prove a “physical occupation” by the DOT. A physical occupation occurred in 1994 when DOT acquired 2.7 acres and the direct Highway 26 access from the previous property owner, but there was no similar taking in 2008 from Erdman when the access to Highway 26 from Banker Road was removed. Thus, Erdman had to prove that “all, or substantially all, beneficial use of the property” was lost. Erdman suffered a significant loss to be sure—the jury found a loss of almost $500,000 as a result of the 2007 DOT project—but that loss was not compensable because there was no “taking” within the meaning of the inverse condemnation statute in 2007.

Erdman argued that DOT “occupied” his access rights via a two-stage process: the first stage occurring in 1994 with the actual fee taking, and the second stage in 2007 when access to Highway 26 from Banker Road was removed. While this is a novel argument, Erdman failed to cite any authority for the proposition, likely because there is none. The Court of Appeals focused solely on the DOT’s current highway improvement project which involved no actual physical occupation of Erdman’s property. Thus, Erdman sustained a non-compensable loss of almost $500,000.

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