The Penn Central Transportation Co. v. New York City case in 1977 was a landmark decision by the U.S Supreme Court that established the "Penn Central Test" for determining whether a governmental regulation constitutes a 'taking' under the Fifth Amendment of the Constitution, which would require just compensation. The dispute arose when Penn Central Transportation Company was denied permission to construct an office tower over Grand Central Terminal due to its designation as a historic landmark by New York City's Landmarks Preservation Commission. The company argued this denial constituted a taking because it significantly diminished their property value without compensation. However, the court ruled against them stating that while they were not allowed to build above it, they could still use and profit from Grand Central Station itself; thus no unconstitutional taking had occurred.

The dissenting opinion in the Penn Central Transportation Co. v. New York City case argued that the decision by New York City's Landmarks Preservation Commission to designate Grand Central Terminal as a landmark, thereby preventing Penn Central from constructing a multi-story office building above it, constituted an unconstitutional taking of private property without just compensation under the Fifth Amendment. The dissent contended that this designation severely diminished the economic value of Penn Central's air rights over Grand Central and imposed on them an unfair burden for achieving public goals - preserving historical landmarks - which should be borne by society at large rather than individual property owners. They further suggested that such restrictions could deter future investment in historic properties due to fears of similar regulatory limitations.