Takings Law, Lucas, and the Growth Management Act

JurisdictionWashington,United States,Federal
CitationVol. 16 No. 03
Publication year1993

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 16, No. 3SPRING 1993

Takings Law, Lucas, and the Growth Management Act

John M. Groen(fn*)

Richard M. Stephens(fn**)

I. Introduction

In 1990, Washington embarked on a major revision to the state laws governing land use planning. Driven by the need to update Washington planning policies in order to meet the challenge of rapid growth in the Puget Sound area, the Washington State Legislature adopted the Growth Management Act of 1990 with further amendments in 1991 and 1992 (GMA).(fn1) The central features of the GMA require cities and counties to adopt new comprehensive plans and development regulations,(fn2) establish urban growth boundaries,(fn3) increase protection of lands designated as critical areas,(fn4) and prohibit development unless transportation systems satisfy certain service standards.(fn5)

A primary concern is whether the GMA can achieve its growth management objectives without violating the Fifth Amendment to the United States Constitution, which states as follows: "Nor shall private property be taken for public use, without just compensation."(fn6) The principle is now well established that land use regulations may cause a "taking" even though legal title remains with the private owner. Under the "regulatory takings" doctrine, a land use restriction may have such a drastic effect on the owner's interests that the property is considered taken for public use.(fn7) The constitutionally required remedy is payment of just compensation.(fn8)

Evaluating liability under the regulatory takings doctrine has long been difficult. The general rule was set in 1922 in Pennsylvania Coal Co. v. Mahon,(fn9) where Justice Holmes explained that "while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking."(fn10) But over fifty years later, in Penn Central Transportation Co. v. New York,(fn11) the Supreme Court admitted that clear standards for determining just what is "too far" were still lacking.(fn12) In addition, the takings issue has been confounded by doctrinal inconsistencies between the regulatory takings principle of Pennsylvania Coal and the conflicting view represented by the 1887 case of Mugler v. Kansas.(fn13) In sharp contrast with Pennsylvania Coal, Mugler held that a valid police power regulation could not result in a taking.(fn14) Although Pennsylvania Coal was often viewed as rendering Mugler obsolete, the Supreme Court nevertheless has, on occasion, continued to cite Mugler without addressing its conflict with Pennsylvania Coal.(fn15) Not surprisingly, this unresolved tension has been a source of much confusion and misinterpretation.(fn16)

The Pennsylvania Coal/Mugler dichotomy reached its peak with the Supreme Court's 1987 decision in Keystone Bituminous Coal Assoc, v. DeBenedictus.(fn17) Although Keystone was a Pennsylvania Coal "too far" type of regulatory taking case, the Court quoted Mugler at length(fn18) and stated that the early Mugler era cases were not subsequently overruled by Pennsylvania Coal.(fn19) As a result, one court concluded that Pennsylvania Coal had been reduced as "a precedent pretty much limited to its own peculiar facts."(fn20) However, three months later, the Supreme Court in First English Evangelical Lutheran Church of Glendale v. Los Angeles(fn21) strongly reaffirmed the regulatory takings principle and stated that Pennsylvania Coal was "established doctrine."(fn22)

Faced with such conflicting signals from the nation's highest court, it is understandable that the Washington State Supreme Court has struggled recently in attempting to reconcile the Supreme Court cases into a coherent set of rules. Especially illustrative is Orion Corp. v. State,(fn23) which discusses the divergent lines of authority represented by Pennsylvania Coal and Mugler.(fn24) In Orion, and later in Presbytery of Seattle v. King County,(fn25) the Washington court attempted to reconcile this conflict.(fn26) The court retained the basic regulatory takings doctrine, but narrowed its application using a "threshold inquiry" designed to screen out most regulatory taking claims.(fn27) Specifically, the court focused on the public purpose for a regulation and insulated the government from takings liability where the challenged regulation protected public safety, health, the environment, or the fiscal integrity of the area and did not otherwise destroy fundamental attributes of ownership.(fn28)

However, subsequent to the Washington decisions, the legal landscape in United States Supreme Court takings precedent has been changed dramatically by the landmark decision in Lucas v. South Carolina Coastal Council.(fn29) Of particular significance is the Lucas Court's discussion of Mugler and the ultimate rejection of that case as a limitation on the regulatory takings doctrine. Additionally, Lucas rejects a public purpose/ harm prevention rationale as a basis for avoiding takings. And finally, an obvious result of Lucas is that the Washington "threshold inquiry" set forth in Orion and Presbytery of Seattle is now inconsistent with federal precedent.(fn30)

In light of Lucas and the recent constitutionally questionable Washington decisions, government entities charged with implementing the GMA may have a more difficult time avoiding takings liability than previously thought. Accordingly, this Article first seeks to clarify the modern takings analysis as refined by Lucas. Second, Washington takings precedent is contrasted with the federal approach and several key changes are suggested to make state law consistent with controlling federal precedent. Third, key aspects of the GMA are identified that can be expected to raise takings implications. By identifying potential trouble spots in the GMA now, hopefully some takings will be avoided without resort to litigation in the future.

II. Analysis of Regulatory Takings Law

A. Historical Background

1. The Early Cases

Early in this country's history, the law became settled that ownership of private property is not absolute. Rather, ownership is qualified by an "implied limitation" whereby the owner's use may not be injurious to the use of lands owned by others.(fn31) Relying on this limitation, early state court decisions reasoned that a state may adopt land use restrictions that regulate or prohibit injurious and noxious uses of private property.(fn32) The Supreme Court eventually recognized that this implied limitation "lies at the foundation of the police power."(fn33)

The Takings Clause was not immediately applied to land use regulations adopted under the police power. Rather, takings principles evolved from the simple, physical concept of "direct appropriation" and progressed gradually toward the more abstract regulatory taking concept.(fn34) Accordingly, the early takings cases were state court decisions that typically required an actual physical appropriation from the owner. Even when government actions resulted in significant damage to private property, the state court decisions often denied compensation because, in the literal sense, there had been no "taking" (i.e., an appropriation of property by the government).(fn35) The corollary to the direct appropriation rule was that a police power restriction on the mere use of land was not a taking.(fn36)

This limited view was strongly criticized by early commentators. In 1857, Theodore Sedgwick observed that the state cases that denied compensation in the absence of an actual appropriation resulted in less constitutional protection than was afforded by the English government.(fn37) From Sedgwick's perspective, justice should have required a broader construction of the Takings Clause from the very beginning.(fn38)

Similarly, Justice Smith of the New Hampshire Supreme Court stated that a misconception of the term "property" was why a number of early state cases had not applied the takings provision to police power restrictions of use.(fn39) Justice Smith explained that the term property referred not only to land, but also to the rights of the owner in relation to the land, including the right of use.(fn40)The purpose of this constitutional prohibition cannot be ignored in its interpretation. The framers of the constitution intended to protect rights which are worth protecting; not mere empty titles, or barren insignia of ownership, which are of no substantial value. The constitutional prohibition must have been intended to protect all the essential elements of ownership which make "property" valuable. Among these elements is, fundamentally, the right of use, including, of course, the corresponding right of excluding others from the use. . . . "To deprive one of the use of his land is depriving him of his land;" for, as Lord Coke said,- "What is the land but the profits thereof?" The private injury is thereby as completely effected as if the land itself were physically taken away.(fn41)

These criticisms of the state cases were soon vindicated by the United States Supreme Court. In its first significant ruling interpreting the term "taking," the Supreme Court in Pumpelly v. Green Bay and Mississippi Canal Co.(fn42) rejected the argument that in order to effect a taking property must be actually appropriated from the owner.(fn43)

In Pumpelly, a government authorized dam resulted in the flooding of private land and...

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