Lucas v. South Carolina Coastal Council: the categorical and other "exceptions' to liability for Fifth Amendment takings of private property far outweigh the "rule".

AuthorSugameli, Glenn P.

    To what extent do federal, state, and local government regulations implicate the Takings Clause of the Fifth Amendment to the U.S. Constitution (stating that "nor shall private property be taken for public use, without just compensation").(1) Much of the continuing judicial and scholarly debate on this issue has focused on the Supreme Court's 1992 decision in Lucas v. South Carolina Coastal Council.(2)

    In 1993 I published a law review article that examined Lucas and all of the cases that had cited it in the year since it was decided.(3) I engaged in a bit of provocative hyperbole in naming the article Takings Issues in Light of Lucas v. South Carolina Coastal Council: A Decision Full of Sound and Fury Signifying Nothing. I concluded that "the holding in Lucas is very narrow" and that "the case has very little practical effect on regulation of real property" (although it "has considerable practical effect in undercutting takings claims involving personal property")(4)

    Cases decided in the years since my article appeared have largely supported the narrowness of the circumstances in which the Lucas liability "rule" will have any effect on regulation of land. Moreover, the takings exceptions described in Lucas far outweigh the liability "rule" for both land and personal property claims. State and federal courts have denied a number of land takings claims based upon these "exceptions." Case law has not yet fully fleshed out the parameters of these exceptions, however, leaving considerable room for expansion.

    David Lucas, and the mining and timber industries and the American Farm Bureau Federation in amicus briefs,(5) argued that there is no nuisance exception to the Fifth Amendment's requirement that private property not be taken without just compensation.(6) On June 29, 1992, the United States Supreme Court unanimously rejected their argument. Justice Scalia wrote an opinion for a bare majority of the Court, in which Chief Justice Rehnquist and Justices White, O'Connor, and Thomas joined.(7) Justice Kennedy filed an opinion concurring in the judgment,(8) Justices Blackmun(9) and Stevens(10) filed dissenting opinions, and Justice Souter fried a separate statement.(11)

    The majority opinion reversed the South Carolina Supreme Court's decision (which had found no taking)(12) and remanded for a determination of whether the state's 1988 Beachfront Management Act(13) had effected a taking by banning all permanent habitable structures forward of the setback line that lay entirely landward of Lucas's property.(14) Lucas had purchased the property in 1986, two years prior to passage of the Act.(15) Because of the procedural posture of the case, Justice Scalia's majority opinion assumed, but did not hold, that the trial court was correct in finding that the statute deprived the plaintiff of all economically viable use and value of his land.(16)

    The Court held that it is never a taking to prohibit those activities that the claimant did not have the right to do under "background principles of the State's law of property and nuisance,(17) even if such a prohibition deprives a landowner of a// economic use and value of the land.(18) As Justice Scalia explained in the nuisance portion of this ruling,

    [al law or decree with such an effect must, in other words, do no more than duplicate the result that could have been achieved in the courts--by adjacent landowners (or other uniquely affected persons) under the State's law of private nuisance, or by the State under its complementary power to abate nuisances that affect the public generally, or otherwise.(19) Justice Scalia described "[t]he principal `otherwise'" as the "destruction of `real and personal property, in cases of actual necessity, to prevent the spreading of a fire' or to forestall other grave threats to the lives and property of others."(20) In addition, the Court stated that perhaps "a law of general application that ... destroys the value of land without being aimed at land ... cannot constitute a ... taking."(21)

    Previously, in Penn Central Transportation Co. v. New York City (Penn Central),(22) the Supreme Court analyzed takings claims using the following three factors: 1) the character of the governmental action, 2) the regulation's economic impact, and 3) interference with reasonable investment-backed expectations.(23) The Lucas Court revised the analysis in Penn Central by stating that

    [there are] two discrete categories of regulatory action [that are] compensable without case-specific inquiry into the public interest advanced in support of the restraint. The first encompasses regulations that compel the property owner to suffer a physical "invasion" of his property. In general (at least with regard to permanent invasions), no matter how minute the intrusion, and no matter how weighty the public purpose behind it, we have required compensation.(24) The Supreme Court has limited this category to cases that truly involve permanent physical invasions that result from compulsion.(25) The second category, which is the focus of this Article, includes actions that essentially are "the equivalent of a physical appropriation."(26) These actions "den[y] all economically beneficial or productive use of land."(27)

    My 1993 article noted that the Supreme Court's takings analysis would "likely change upon the retirement of Justice White at the end of the 1992-1993 term. Justice White was the fifth vote for Justice Scalia's bare majority opinion in Lucas."(28) I described how "Justice Kennedy, who may now hold the decisive vote on regulatory takings issues, expressed very different views in his Lucas concurrence than did Justice Scalia."(29) For example, in language particularly applicable to the protection of tidal wetlands, Justice Kennedy stated:

    The State should not be prevented from enacting new regulatory initiatives in response to changing conditions.... The Takings Clause does not require a static body of state property law .... property may present such unique concerns for a fragile land system that the State can go further in regulating its development and use than the common law of nuisance might otherwise permit.(80) Professor Lazarus has expanded and elaborated on the importance of changes in the membership of the Supreme Court since Lucas, explaining that with Justice White's departure, "the slim Lucas majority vanished almost upon its arrival. There are no longer five Justices on the Court who clearly support Justice Scalia's rationale.... In the Supreme Court, one should expect Lucas to receive a very narrow reading."(31)

    The Court's 1998 decision in Eastern Enterprises v. Apfel(32) both illustrated the critical role of Justice Kennedy in the Court's takings jurisprudence and strongly suggested further limits on potential Lucas takings.(33) There was no majority opinion, with four dissenting Justices rejecting both takings and due process claims,(34) and four who would have found a taking, but who expressly declined to decide the due process claim.(35) Justice Kennedy's concurring opinion, which alone found a due process violation, agreed with the four dissenters in rejecting the takings claim because imposition of liability alone did not "operate upon or alter an identified property interest" and thus could not be a taking of property under the Fifth Amendment.(36)

    For practical purposes, the entire Lucas "rule" of liability is an exception to the general rule that the vast majority of land regulations (and regulations of real, personal, or intangible property) do not, even arguably, give rise to a takings claim. Nonetheless, the "exceptions" to takings liability that were set forth in Lucas are important. For example, background principles are an absolute defense to any takings claim because they define title to property, whether examined under a Lucas categorical analysis or any other basis.

    Many courts have applied Lucas to deny compensation for anything less than a total (or virtually total) elimination of value and use.(37) This approach is consistent with the Lucas Court's recognition that "early constitutional theorists did not believe the Takings Clause embraced regulations at all"(38) and "[p]rior to Justice Holmes's exposition in Pennsylvania Coal Co. v. Mahon,... it was generally thought that the Takings Clause reached only a `direct appropriation' of property . . . or the functional equivalent of a `practical ouster of [the owner's] possession."(39) Deferring to this original understanding, the Court traditionally confined land use takings claims to "extreme circumstances" when regulations imposed severe economic burdens analogous to direct physical appropriations.(40)

    As discussed herein, both Lucas affirmative categories--compelled, permanent physical invasions of land and land use statutes or regulations that deny all economically beneficial or productive use of an entire parcel of land--do not result in takings if they mirror restrictions that are inherent in the title to

    the property.(41) For defendants, background principles can also be an attractive way to defeat takings claims that could be resisted on other grounds. For example, because background principles are absolute bars to takings claims, they are threshold issues that can be decided at early stages of cases, such as on motions to dismiss or on targeted motions for summary judgment.


    It is important to recognize the rarity of the cases to which Lucas liability potentially applies.

    1. The Government Action Requirement

      The fact that the Fifth Amendment applies to government actions is fatal to some attempted takings claims. For example, the Federal Circuit has held that "ultra vires conduct cannot give rise to a Fifth Amendment taking."(42) Where federally protected animals destroy property, most courts have found no governmental action.(43)

    2. Lucas "Total Takings" Are Limited to Losses of AU Value and Use


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