On June 23, 2017, the U.S. Supreme Court issued its decision in Murr v. Wisconsin, 137 S.Ct. 1933 (2017), 582 U.S. __ (2017). The decision was the most important property rights case of the term. The court agreed with the state's holding that two lots adjacent to the St. Croix River should be considered as one parcel for a regulatory takings analysis. The majority decision was written by Justice Anthony Kennedy who began his decision by noting that “the classic example of a property taking by the government is when the property has been occupied or otherwise seized.” In Murr, the petitioners contended that governmental entities took their real property, a vacant lot, not by some physical occupation, but instead by enacting burdensome regulations that forbid its improvement or separate sale because it is classified as substandard in size. The state, on the other hand, argued that there was no regulatory taking because petitioners own an adjacent lot. It argued that the regulations, in effecting a merger of the property, permit the continued residential use of the property including for a single improvement to extend over both lots.

The facts are not that complicated. The Murrs own two 1.25 acre waterfront lots. The first lot, Lot F, was purchased in 1960 by the Murr parents, and then transferred into the ownership of the family business in 1961. The second lot, Lot E, was purchased in the name of the Murrs' parents in 1963. The family built a cabin on Lot F, but Lot E remained as vacant land.

In 1975, the City passed regulations that prohibited an owner from developing or selling parcels that had a “net project area” of less than 1 acre. Lot E did not meet this requirement since it had a steep terrain which prevented building on part of the 1.25 acre parcel. The local law prohibited the sale or development as separate lots unless the same size requirement was complied with.