At last, some clarity: the potential long-term impact of Lingle v. Chevron and the separation of takings and substantive due process.

AuthorBarros, D. Benjamin
  1. INTRODUCTION

    Regulatory takings often is considered one of the most doctrinally confused areas of constitutional law. Bucking its general habit of adding to this confusion with every takings case that it hears, the Supreme Court recently provided some clarity to takings doctrine in Lingle v. Chevron U.S.A. Inc. (1) Indeed, this clarity has the potential to make Lingle far more significant than Kelo v. City of New London, (2) which has dominated the commentary about the Court's recent takings decisions. (3) This clarity may also have the counterintuitive effect of helping property rights advocates more than the short-term defeat in Lingle hurt them. (4)

    Lingle involved a narrow (though important) issue of takings law, and the degree of clarity it provided is, on the surface, modest. The Court had suggested in dicta in prior takings cases that a regulation may violate the Just Compensation Clause (5) if it does not substantially advance a state interest. The core question presented in Lingle was whether this "substantially advance" test was a takings test or a substantive due process test. The Court answered that the substantially advance test is a substantive due process test that has no place in takings doctrine. (6) On initial inspection, therefore, Lingle simply ties up one relatively small loose end in takings law. Part II of this Essay discusses this narrow issue at the core of Lingle, and concludes that the Court's holding on this issue was correct.

    The primary purpose of this Essay, however, is to argue that a closer look at Lingle reveals that it has tremendous potential to clarify takings doctrine more broadly. Part III discusses this potential, which largely comes from Lingle's recognition that many of the Court's early cases involving what today look like regulatory takings issues were in fact concerned with substantive due process issues. Citation to these older cases has caused substantive due process concepts, like the substantially advance test, to bleed into takings law. This cross-pollination has caused difficulty for courts and commentators who have attempted to square these older cases with contemporary takings doctrine. Part III argues that the simple recognition that cases like Village of Euclid v. Ambler Realty Co. (7) and Nectow v. City of Cambridge (8) were substantive due process cases that should have no meaningful role in takings law goes a long way in clarifying what has been a confusing mass of contradictory caselaw. Part III further argues that the recognition that the substantive due process and regulatory takings doctrines ask different questions leads to the conclusion that the character of the government act should have little or no role in regulatory takings analysis. Taking this broader view of Lingle's significance suggests that Lingle may have long-term benefits for the property rights advocates who were the putative losers in the case, because property rights advocates have more to gain than takings opponents from the clear separation of substantive due process and takings law.

    This Essay concludes that by drawing a clear line between substantive due process and takings doctrine, Lingle has the potential to become a very influential decision and to bring a degree of clarity to a muddled area of law.

  2. THE TIMELY END OF THE SUBSTANTIALLY ADVANCE TEST

    Lingle's core doctrinal holding is a rejection of the substantially advance test as a part of takings doctrine. The test is generally attributed to the 1980 case Agins v. City of Tiburon, (9) but has its origins in the Penn Central Transportation Co. v. City of New York case decided two years earlier. (10) As articulated in Agins, the test suggested that "[t]he application of a general zoning law to particular property effects a taking if the ordinance does not substantially advance legitimate state interests." (11) This formulation, which was dicta in both Penn Central and Agins, was repeated as dicta in a number of subsequent regulatory takings cases. (12) Prior to Lingle, however, the Court never had the opportunity to address the substantially advance test on the merits. (13)

    Lingle, which squarely presented the validity of the substantially advance test, involved Chevron's challenge to a Hawaii rent control law that limited the rent charged by oil companies to the operators of service stations. (14) Chevron conceded that its return on investment under the Hawaii statute satisfied any constitutional standard, (15) and instead based its taking argument exclusively on the argument that the statute failed to substantially advance a legitimate state interest.

    The gist of Chevron's substantially advance argument was that the Hawaii statute simply would not work as intended. Hawaii argued to the district court that "the rent cap was intended to prevent concentration of the retail gasoline market--and, more importantly, resultant high prices for consumers--by maintaining the viability of independent lessee-dealers." (16) The district court accepted Hawaii's argument about the intent of the statute, but also accepted Chevron's argument that the statute would not be effective in achieving its asserted goal. The district court therefore granted summary judgment to Chevron on the basis that the statute did not "substantially advance a legitimate state interest, and as such, effect[ed] an unconstitutional taking in violation of the Fifth and Fourteenth Amendments." (17)

    On appeal, the Ninth Circuit vacated the grant of summary judgment on the basis that the efficacy of the statute presented a genuine issue of material fact and remanded to the district court for a trial on the merits. (18) The trial was limited to the testimony of competing economics experts. (19) After hearing this testimony, the district court entered judgment for Chevron, again concluding that the statute simply wouldn't work as intended. (20) The Ninth Circuit affirmed over the dissent of one judge. (21)

    Thus, by the time the case reached the Supreme Court, the Hawaii statute had been held to be an unconstitutional taking because the trial court concluded, based on its finding that one economics expert was more credible than the other, that the Hawaii legislature had done something stupid. (22) The Supreme Court, understandably unimpressed with the proceedings below, concluded that the district court, based on a battle of expert economists, had improperly substituted its judgment for that of the Hawaii legislature. (23)

    After seeing the substantially advance test in action, the Court had little difficulty concluding that it was a substantive due process test that has no place in takings doctrine. (24) Indeed, the substantially advance test had its roots in three cases involving substantive due process review of land-use regulations: Village of Euclid v. Ambler Realty Co., Nectow v. City of Cambridge, and Goldblatt v. Town of Hempstead. (25) As the Court explained in Lingle, the citation of Nectow and Goldblatt in Agins was understandable. (26) After deciding that zoning was not a facial violation of substantive due process in Euclid, but that zoning could violate substantive due process as applied in Nectow, the Court had largely stayed out of the land-use business for fifty years, with Goldblatt being the only notable exception. Left with little guidance from Justice Holmes' "cryptic opinion" (27) in the seminal regulatory takings case Pennsylvania Coal Co. v. Mahon, (28) the substantive due process precedents were a likely place to look for authority on the constitutionality of zoning laws. The result of this citation to Euclid, Nectow, and Goldblatt, however, was the accidental incorporation of the substantive due process substantially advance standard into takings law. (29)

    While acknowledging that its regulatory takings precedents "cannot be characterized as unified," (30) the Court in Lingle did draw out the essential characteristics of the takings inquiry. The Court described the regulatory takings question as whether the regulation is "so onerous that its effect is tantamount to a direct appropriation or ouster." (31) As a result, the various takings tests have focused on identifying "regulatory actions that are functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Accordingly, each of these tests focuses directly upon the severity of the burden that government imposes upon private property rights." (32)

    The regulatory takings inquiry, in other words, focuses on the regulation's effect on the private property at issue and asks whether that effect is functionally equivalent to a physical taking. The substantially advance test, in contrast, "reveals nothing about the magnitude or character of the burden a particular regulation imposes upon private property rights." (33) Instead, consistent with its substantive due process roots, the substantially advance test asks whether the government act advances a legitimate state interest-the functional equivalent of the substantive due process question of whether a state action is a legitimate exercise of the state's police power. (34)

    The Court's analysis in Lingle is convincing. The Court's description of how the substantially advance test bled into takings law through careless citation to substantive due process precedent is correct, and can be easily traced...

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