"[W]e have frequently observed that whether a particular restriction will be rendered invalid by the government's failure to pay for any losses proximately caused by it depends largely upon the particular circumstances [in that] case." --Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 124 (1978).

"[A] 'totality of the circumstances' analysis masks intellectual bankruptcy." --Thomas Merrill, "The Economics of Public Use," 72 Cornell L. Rev. 61, 92 (1986).

Introduction

In Penn Central Transportation Co. v. City of New York, the U.S. Supreme Court famously observed that it had been "unable to develop any 'set formula' for determining when 'justice and fairness' require" payment under the Takings Clause, and that it was therefore compelled to rely on "essentially ad hoc, factual inquiries." In an apparent effort to begin to give some content to regulatory takings analysis, the Court identified three factors with "particular significance" in a takings case: (1) the "economic impact" of the government action, (2) the extent to which the action "interferes with distinct investment-backed expectations," and (3) the "character" of the action. Yet, over the following twenty-five years, the Court has provided little guidance on the meaning and proper application of these three factors, perpetuating the essentially ad hoc approach to takings analysis and contributing to the widespread view that regulatory takings is an especially confused field of law. The Court's failure to come to grips with the meaning of Penn Central is especially striking in view of the substantial progress the Court has made recently in resolving other questions about regulatory takings doctrine. The next "big thing"--perhaps the last big thing --in regulatory takings law will be resolving the meaning of the Penn Central factors.