The Supreme Court
Protecting Land and Home
Most of the time when you see a story about a government entity “taking” someone's property it relates to the construction of a new road or for other public needs. In these cases, there is clear legal precedent that for the purposes of the public good, governments can “take” an owner's property provided they are offered just compensation. Many people who lose their homes to a new roadway or other public project, probably do not believe they have been given “just compensation.” Most states have a formula for compensation that has long been established through case law.
Regulatory taking or inverse condemnation means the government has regulated the use of a property to so great an extent that it no longer has an economically beneficial use for the owner—essentially condemning the land. When this happens the property may be consider “taken” without just compensation. Court cases filed on this issue generally involve denied wetlands permits, denied coastal development permits, denied zoning variances, and other denied development applications.
These types of takings are physical takings, in which the government acquires property for its own use. A second, less clearly defined type of taking is a regulatory taking. These types of takings involve regulations that prevent landowners from developing their property.
“… while property may be regulated to a certain extent, if the regulation goes too far it will be recognized as a taking.”
—Associate Justice Oliver Wendell Holmes in his opinion for the court in the precedent-setting “takings” case Pennsylvania Coal Co. v. Mahon in 1922
Case law surrounding regulatory taking and development planning is not as well formulated. Cases that made it all the way to U.S. Supreme Court in recent years relate primarily to attempts by state and local governments to control development along coastlines or in wetlands or regulatory taking. Even temporary building moratoria (or freezes) raised questions that made it to the Court.
I'm going to review three recent rulings. The oldest, Lucas v. South Carolina Coast, decided in 1992, involves the South Carolina coastline. Palazzolo v. Rhode Island, decided in 2001, involves development in Rhode Island wetlands. Tahoe-Sierra Preservation Council, Inc. et al. v. Tahoe Regional Planning Agency et al. involves temporary moratoria to halt construction for planning purposes.
Mandating Coastline Protection
David Lucas purchased two residential lots in 1986 on a South Carolina barrier island for $975,000. At the time he purchased the property, it was legal to build a single-family house on each of the lots with no special permits required.
Two years after he purchased the property, the state of South Carolina passed the Beachfront Management Act, which mandated that the South Carolina Coastal Council set a baseline for development along the seashore. Any property nearer the water than that baseline could not be developed. The baseline set made it impossible for David Lucas to develop his property.
Just the Facts
Pennsylvania Coal Co. v. Mahon, decided by the court in 1922, is the landmark case that states there are limits to a government's claim of exercising police power. In writing the opinion for the court Justice Holmes found that government's power to redefine the range of interest in a property was constrained by constitutional limits. He found that if the government could take property unrestrained without compensation under the guise of police power, “the natural tendency of human nature [would be] to extend the qualification more and more until at last private property disappear[ed].”
Lucas filed suit in state court claiming the baseline and its construction ban effected a “taking” of his property without just compensation, which was in violation of the Fifth Amendment to the Constitution. The state trial court ruled in favor of Lucas and ordered the state to pay him $1 million for his land. The South Carolina Supreme Court reversed that decision and said it was not a taking. In its ruling, the State Supreme Court said that preventing beach erosion was a valid exercise of police power “to prevent serious public harm,” so it did not require compensation.
Lucas appealed the South Carolina State Supreme Court's decisions to the United States Supreme Court, which ruled in Lucas' favor. Justice Scalia wrote in his opinion for the Court:
Justices Stevens and Blackmun wrote separate dissents to this opinion. Justice Souter stated that the writ in this case should not even have been granted. In his dissent, Stevens said:
Justice Blackmun wrote is his dissent that the decision was made before all the facts were in and the United States Supreme Court accepted a case that was not ready for decision:
As this case was working its way through the courts, some thought it would be a landmark ruling to strengthen private property rights, but it failed because new questions were raised about regulatory taking. This case only protected property rights in situations where regulation permanently denied all possible uses of the land. The Court continued to define the issue of regulatory taking, as shown in the next two cases.