Regulatory Takings After Lucas the Kansas Nuisance Exception
| Publication year | 1993 |
| Pages | 28 |
62 J. Kan. Bar Assn. November, 28 (1993). REGULATORY TAKINGS AFTER LUCAS THE KANSAS NUISANCE EXCEPTION
November, 1993
Neil R. Shortlidge [FNaa]
Copyright (c) 1993 by the Kansas Bar Association, Topeka, Kansas; Stephen P. Chinn and Neil R. Shortlidge
Introduction
On the last day of its 1992 Term, the United States Supreme Court decided Lucas v. South Carolina Coastal Council. [FN1] The Lucas majority opinion establishes what it refers to as a "categorical" rule of takings liability under the Fifth Amendment where a government regulation deprives a property owner of all economically beneficial or productive uses of the property. In keeping with its tradition of providing at least one exception for every rule, however, the Court states that a "categorical" taking will not be found where the limitations on land use effected by the regulation are derived from background principles of the State's law of property and nuisance.
This article examines the Lucas decision and its impact on regulatory takings doctrine. Thereafter, Kansas cases and statutes are examined to determine the potential application of the exception to the categorical rule based upon the restrictions that Kansas law of nuisance places upon land ownership. Finally, some practical implications of the new categorical rule and its exception are explored.
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Takings Law Prior to Lucas
The Just Compensation Clause of the Fifth Amendment to the United States Constitution prohibits the "taking" of private property "for public use, without just compensation." [FN2] The Fifth Amendment is applied to the States through the Fourteenth Amendment. [FN3] In Justice Holmes' famous opinion in Pennsylvania Coal Company v. Mahon, [FN4] the Court recognized that government could hardly go on if values incident to property could not be diminished to some extent without payment of just compensation for every change in the general law. [FN5] The Court noted, however, that while property may be regulated to a certain extent, if the regulation "goes too far" it will be regarded as a taking. [FN6] In the seventy years since Pennsylvania Coal, the courts, state and local governments and property owners have struggled unsuccessfully to define exactly when governmental regulation of land use "goes too far."
Beginning in the mid-1970s, the Court began accepting more regulatory takings cases, and some rules began to emerge. The "landmark" case of Penn Central Transportation Co. v. New York City, [FN7] established the criteria to be used in assessing when a regulation "goes too far." The Court acknowledged that it had been unable to develop any "set formula" for determining when governmental regulation requires compensation to property owners, and that the cases necessarily involved "essentially ad hoc, factual inquiries." [FN8] Although the ultimate determination must be resolved on a case-by-case basis, the Court held that certain factors had particular significance: the character of the governmental action, the economic impact on the property owner, and the regulation's interference with the property owner's investment-backed expectations. [FN9] The Penn Central multi-factor test assumed the legitimacy of the governmental action. Regulation may also constitute a taking if it does not substantially advance a legitimate governmental interest. [FN10]
For years, the governmental objectives sought to be achieved by the regulation were considered to be particularly significant. The Court had held that the police power is one of the most essential and least limitable of government's powers, [FN11] and that it may extend to any conceivable public purpose. [FN12] Beginning as early as 1887 in Mugler v. Kansas, [FN13] a case involving the forced closing of a brewery in Salina, and continuing for a century, [FN14] the Court had held that harmful or noxious uses may be totally eliminated without the requirement to pay just compensation. This principle had become known as the "nuisance exception" and was accepted by even the most property-rights oriented of the legal scholars writing on the takings issue. [FN15] Therefore, the governmental objective
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prong of the Penn Central test could be said to weigh particularly heavy where the governmental action was intended to prevent harm or some noxious use of land, as opposed to conferring a benefit on the public. [FN16]
In First English Evangelical Lutheran Church v. County of Los Angeles, [FN17] one of the so-called trilogy of cases decided on the last day of the 1987 Term, [FN18] the Court held that where a plaintiff is successful in establishing that governmental action constitutes a regulatory taking, damages are available as a remedy. The First English decision put to rest a long-standing debate among legal scholars as to the appropriate remedy for regulatory takings. Many commentators had urged that regulation which violated the Constitution was not a legitimate exercise of police power and thus invalidation of the offending regulation should be the remedy. [FN19]
Another series of cases explored the question of when a taking claim would be ripe for judicial review. In Agins v. City of Tiburon, [FN20] the Court rejected a facial challenge to a zoning ordinance which the California Supreme Court had determined, as a matter of state law, permitted the plaintiff to build as many as five houses on a five-acre parcel of land. The Court concluded that a taking determination could not be made until the plaintiff submitted a development plan to local officials for consideration. The following year, in San Diego Gas & Electric Co. v. City of San Diego, [FN21] the Court held that the judgment of the state court was not "final" because it had not determined whether a taking had in fact occurred.
Perhaps the most significant of the ripeness cases is Williamson County Regional Planning Comm. v. Hamilton Bank. [FN22] The Hamilton Bank decision established a two-pronged ripeness test. First, the landowner challenging the land-use regulation must seek all available regulatory relief from the local government, such as variances, prior to bringing a taking claim. [FN23] Second, since the Fifth Amendment only proscribes takings without just compensation, where state law provides a mechanism for an award of compensation, such as through an inverse condemnation action, that remedy first must be pursued. [FN24] McDonald, Sommers & Frates v. County of Yolo, [FN25] added to the first facet of Hamilton Bank by holding that a taking claim was not ripe where the landowner had submitted a single development application, and had sought no further relief, thereby preventing a final determination as to how the regulations would be applied to the property. [FN26] Yolo has been commonly understood as requiring rejection of a taking claim based upon a single development application, unless it can be established that subsequent applications would be futile. [FN27]
Facts of the Lucas Case
Before discussing how the Lucas decision altered regulatory takings law, it is, of course, necessary to understand the factual background of the decision. David Lucas purchased two residential lots on the Isle of Palms, a South Carolina barrier island, for $975,000 in December 1976. Beginning in the late 1970s, Lucas and others began construction of the Wild Dune Development on the Isle of Palms. The lots at issue in the case were two of the last four pieces of vacant parcels in the development. The lots were located approximately 300 feet from the beach. Under state law at the time of purchase, no permit was required for development of the two lots. [FN28]
Concerns about beach erosion, with its attendant hazards to life and property, had prompted South Carolina to enact protective legislation in 1977. The focus of the 1977 legislation was the establishment of designated "critical areas." [FN29] In 1988, pursuant to the recommendations of a blue ribbon committee, the South Carolina Legislature enacted the Beachfront Management Act. [FN30] The Act set forth extensive findings and justifications for the legislation, including findings as to the necessity for preservation of the beach/dune system in order to protect life and property from storm damage, to conserve wildlife resources, and to promote tourism. The Act's principal mechanism to accomplish these objectives was a prohibition on construction of habitable structures within an area defined as the distance from the mean high-water mark to a setback line established on the basis of "the best scientific and historical data" available. [FN31]
Pursuant to the legislation, the South Carolina Coastal Council determined the baseline, and Lucas' two lots fell entirely within the protected area. The area of the Wild
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Dune Development had been notoriously unstable. In the prior years, all or part of Lucas' property was part of the beach or flooded daily by the tides. In the period between 1981 and 1983, twelve emergency orders had been issued to sandbag property located in the subdivision.
Lucas did not challenge the Coastal Council's determination that his properties were located within the protected area established under the Act, as was his right to do pursuant to the statute. [FN32] Rather, he filed suit in the South Carolina Court of Common Pleas, contending that the Beachfront Management Act's prohibition on construction of habitable structures within the protected area effected a taking of his property without just compensation. Apparently basing its conclusion upon testimony from Lucas' appraisal expert that the highest and best use of the properties-luxury, single-family residential development-was unavailable, the trial court found the property to be "valueless" [FN33]...
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