Been meaning to post this one for a while. In TMS Enterprises, Ltd. v. Cleveland, the Ohio Court of Appeals affirmed a judgment requiring the City of Cleveland to institute appropriation proceedings after downzoning property purchased for use as a used-car dealership from retail to residential.
The most interesting part of the opinion is the court’s recognition that although the trial court applied the wrong takings test (relying on Agins instead of Penn Central), the result was still correct.
Agins, you say? What gives? We all know that in Lingle, the U.S. Supreme Court held that the “fails to substantially advance a legitimate state interest” test for whether there’s been a taking was repudiated, recasting that inquiry as a question of due process. But maybe the trial court’s reliance on the outdated Agins test wasn’t so off the mark … after all, in Sheetz, the entire Court signed onto this:
In any event, the Ohio appellate court didn’t see it that way even if it held no harm, no foul. Although Agins was not applicable, the court held that under Penn Central, the rezoning significantly reduced the property’s value, interfered with the owner’s reasonable investment-backed expectations, and was sufficiently burdensome to require compensation.
The property owner had purchased the parcel when used-car sales were permitted, obtained permits, and invested roughly $40,000 toward development before the city changed the zoning. The court had already held in an earlier appeal that the owner possessed a vested right in the prior zoning classification.
The court concluded that even though the rezoning served legitimate planning objectives, forcing this owner alone to absorb the costs of the regulatory change went “too far,” and affirmed the writ compelling the city to commence eminent domain proceedings and pay just compensation (remember, this is Ohio where they don’t recognize inverse condemnation as a cause of action — instead you sue for a writ of mandamus to compel the government to institute eminent domain).
Nevertheless, both economic factors weigh in favor of TMS and “[u]ltimately, the Penn Central balancing test is designed to ‘ascertain whether . . . it is unfair to force the property owner to bear the cost of the regulatory action.’” AWMS, 2026-Ohio-1487, at ¶ 55, quoting Rose Acre Farms, Inc. v. United States, 559 F.3d 1260, 1282 (Fed.Cir. 2009). Accordingly, we find that there is no genuine issue of material fact as to whether a taking has occurred; therefore, the trial court did not err by declaring that a taking occurred.
Slip op. at 19.
Check it out.
TMS Enterprises, Ltd. v. Cleveland, No. 115774 (Ohio. App. Aug. 20, 2026)
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