BRAZIL Trends and Developments Contributed by: Márcio Pina Marques, Marina Cristina Rios Silveira de Oliveira and Gustavo Assis de Oliveira, Advocacia Bettiol
104, 1978), in which the Supreme Court established a multi-factor test to determine when a regulatory taking occurs. The court stated that regulatory taking cases must be analysed through ad hoc, factual enquiries, considering three principal factors: (i) the economic impact of the regulation; (ii) the degree of interference with investment-backed expectations; and (iii) the character of government action. On several subsequent occasions, the court has relied on the concept of reasonable investment-backed expectations. This was first articulated in Penn Cen- tral In Ruckelshaus v Monsanto Co (467 US 986, 1984) when the court recognised that the disclosure of data protected by statutory confidentiality guarantees could constitute a taking, as it affected the economic value of trade secrets grounded in investment-backed expectations. In Lucas v South Carolina Coastal Coun- cil (1994), a property owner purchased two residential lots on the Isle of Palms intending to build houses. A subsequent state law prohibited permanent con- struction in the area for environmental protection pur- poses, substantially eliminating the economic value of the property. The Supreme Court held that a total deprivation of economic value constituted a taking requiring just compensation. These precedents demonstrate that the central focus of the analysis lies primarily in the owner’s expecta- tions regarding the use of the property, particularly when investments are made in reasonable reliance on a regulatory framework that is subsequently altered in a manner that prevents the intended use of the asset. Building upon this reasoning, the Supreme Court in Eastern Enterprises v Apfel (524 US 498, 1998) rejected the retroactive imposition of disproportion- ate financial burdens. In Lingle v Chevron USA Inc (544 US 528, 2005), the court clarified that the focus of the Takings Clause lies on the severity of the bur- den imposed on property rights, rather than on the effectiveness or reasonableness of the public policy adopted. In recent years, the United States Supreme Court has continued to reinforce the importance of the Takings Clause as a safeguard of property rights. In Sheetz v County of El Dorado , California (601 US, 2024), a
property owner was required to pay an impact fee of USD23,420 as a condition for obtaining a build- ing permit for a residence. After paying under protest, the owner argued that the requirement constituted an unconstitutional taking. State courts rejected the claim on the grounds that the charge had been imposed by statute rather than administrative action. The Supreme Court unanimously held that the Takings Clause does not distinguish between legislative and administrative acts and demanded the case for further analysis. Landmark cases such as those described above – addressing regulations that diminish property value or prevent owners from using their property – dem- onstrate that interference with property rights is not limited to the formal transfer of ownership but may also arise from regulatory measures that restrict the exercise of property rights. Under the interpretation of the Fifth Amendment, even when property is taken for public purposes, compensation remains constitution- ally required. In Brazil, both the Federal Supreme Court ( Supremo Tribunal Federal or STF) and the Superior Court of Jus- tice ( Superior Tribunal de Justiça or STJ) have ruled on numerous cases involving regulatory takings through indirect expropriation; however, the two courts have adopted distinct approaches to the matter. The STJ has consolidated the understanding that indirect expropriation requires an effective dispos- session of property rights. According to the Court, indirect expropriation is not characterised merely by the enactment of regulatory or declaratory acts; rather, it requires either a factual encroachment by the State upon the asset or the imposition of restrictions of such magnitude that they irreversibly extinguish the pre- rogatives inherent to ownership (REsp No 1.524.056/ ES, Reporting Justice Og Fernandes, March 13, 2018; and AgRg in REsp No 1.192.971/SP, Reporting Justice Humberto Martins, September 3, 2010). Conversely, the STF recognises that the duty to com- pensate arises imperatively whenever an act of State authority results in the total deprivation of property rights. The Court’s settled case law emphasises that the individual dimension of the harm suffered by the owner constitutes the determining criterion for the
75 CHAMBERS.COM
Powered by FlippingBook