Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 6

Vinton Watson, an avid race car driver, owned and kept several figure eight racing cars in an unenclosed parking lot. The City of Indianola subsequently adopted a landuse ordinance requiring the enclosure of "figure eight cars," among other racing vehicles, when two or more such cars are present. Watson sued the City, arguing that the ordinance created an uncompensated regulatory taking by requiring him to install a fence and thereby reducing the overall value of the property. The district court applied the takings standard from Penn Central and found for the City. The court determined that the erection of a fence did not cause a "physical invasion" and that the City had passed the ordinance for a legitimate public purpose, namely, the promotion of "community aesthetics." On appeal, Watson argued that the court should have applied the alternative regulatory taking test that courts apply to physical invasions of private property, as in Nollan and Dolan. Who is right? What public policies are implicated? [Iowa Assurance Corp. v. City of Indianola, Iowa, 650 F.3d 1094 (8th Cir. 2011).]