Regulatory takings: a historical overview and legal analysis for natural resource management.

Author:Stedfast, Susan M.

    The past ten years have witnessed an explosive increase in the intensity of public debate on how to best use our nation's natural resources.(1) On one side of the debate are the well-established national environmental groups that have supported increased regulation and engaged in litigation for the enforcement of existing regulations.(2) In these efforts, environmental groups have sought to secure the public interest through the conservation and preservation of natural resources.(3) Newer to the scene is the Wise Use Movement that seeks to represent the views of private landowners and businesspeople in the debate over natural resource policy.(4) In particular, the Wise Use Movement advocates decreased regulation and the protection of private landowners' rights. Like environmental groups, the Wise Use Movement focuses much of its energy on the legislative process in order to obtain policies, laws, and regulations consistent with its positions.(5)

    The environmental groups draw inspiration for their ongoing efforts from the large number of environmental statutes enacted in the 1970s, including the Coastal Zone Management Act,(6) the Endangered Species Act,(7) and the Clean Water Act.(8) These same statutes, however, have also functioned as a catalyst for the Wise Use Movement, as each additional grant of governmental regulatory authority increases the possibility of undue regulatory activity.(9)

    As the level of regulation aimed at protecting natural resources and the

    environment has increased, so has the number of private and public entities affected.(10) A recurring issue in this debate is the appropriate level of government regulation of natural resources.(11) Environmental groups, for example, have typically proposed maintaining or increasing current levels of regulation, while the Wise Use Movement favors decreasing current levels or eliminating regulation.(12) A variety of intermediate positions are espoused by others involved in the debate, including industry; regulatory agencies; federal, state, and local governments; and interested citizens who rely upon natural resources for income or recreational opportunities. The debate is intensified by the assertion that in many instances the level of regulation to which a landowner is subject is so high that an unconstitutional taking has occurred.(13)

    The debate over the appropriate level of regulation raises additional issues with long-term implications of its own. If the level of regulation is such that landowners often claim an unconstitutional taking, costly and time-consuming litigation will likely follow.(14) Similar litigation will ensue to the extent that landowners that disfavor environmental regulations contest the enforcement of such regulations.(15) To the extent that courts decide in favor of landowners challenging regulations, the effectiveness of regulation for management of natural resources is decreased. Conversely, to the extent that landowner claims are found invalid, it is the landowners' efforts and resources that will have been wasted.

    An examination of regulatory takings case law is needed to improve the discourse about the appropriate level of regulation and the parameters of unconstitutional regulatory takings. Recent court decisions on this issue further accentuate the need for a fresh look at regulatory takings case law. This Article examines such case law to promote informed dialogue among resource managers, policy makers, private landowners, activists, and interested citizens. Part II introduces the concept of a taking and its constitutional underpinnings. Part III summarizes and analyzes the earliest takings case law and emphasizes the concept of police powers and the establishment of the regulatory takings concept. Part IV details takings cases from 1962 to 1999, highlights guidelines utilized in takings cases, and examines trends in this area of the law. Part V offers hypothetical takings claims to elucidate the guidelines established by the case law. Part VI summarizes the guidelines and trends to be drawn from takings case law.


    1. What is a Taking?

      The Fifth Amendment to the United States Constitution provides, in part, "nor shall private property be taken for public use, without just compensation."(16) Each of the terms contained in the provision (property, taken, public use, and just compensation) is subject to interpretation and has been analyzed in court decisions.(17) Most takings cases focus on the question of whether a taking of property has actually occurred.(18) For purposes of the Fifth Amendment, property generally may be taken in the following two ways: 1) the government may intrude directly on private property and take possession of it,(19) or 2) the government may regulate the use of the property to the extent that the government has constructively possessed the property.(20) Takings accomplished by the second method are described as regulatory takings.(21)

      Not all takings are unconstitutional; it is the absence of just compensation that makes a taking unconstitutional.(22) Landowners can obtain compensation for a taking in one of two ways. First, if the property is taken by direct intrusion, the government should initiate a condemnation proceeding.(23) In the course of this proceeding, the court will determine the appropriate level of compensation and order the government to pay the landowner.(24) Second, if the government does not initiate a condemnation proceeding, or if the landowner believes that a taking has occurred because of unjust regulation, the landowner may initiate an inverse condemnation proceeding.(25) As in the condemnation proceeding, the court will assess the appropriate level of compensation in an inverse condemnation proceeding and order the government to pay the landowner.(26)

    2. Purpose and Effect of the Takings Clause

      In 1791 Congress proposed and the states ratified the addition of the Fifth Amendment to the Constitution, as well as nine other amendments.(27) These amendments, also known as the Bill of Rights, were adopted as limitations on the powers of the federal government? Having recently engaged in a revolution to overthrow British control of the colonies, Americans were wary of granting excessive power to the new federal government.(28) Through the Takings Clause, they rendered it impermissible for the federal government to take property without paying just compensation to the landowner. While the Takings Clause was initially adopted as a limitation on the powers of the federal government, the United States Supreme Court has since declared that the clause also applies to state governments through the Fourteenth Amendment.(30)

    3. Effect of the Due Process Clause

      In addition to containing the Takings Clause, the Fifth Amendment includes the Due Process Clause, which provides that "[n]o person shall ... be deprived of life, liberty, or property, without due process of law."(31) The Fourteenth Amendment, which applies to the states directly, contains an almost identical Due Process Clause.(32) In its early cases, the Supreme Court generally determined the constitutionality of regulations by applying the requirements of one of these Due Process Clauses.(33) It was not until the twentieth century that the Court increasingly assessed regulations with regard to the requirements of the Takings Clause.(34) Under Takings Clause analysis, if a regulation is unconstitutional, the government must pay compensation for takings resulting from the regulation.(35) By contrast, under due process analysis, if a regulation is unconstitutional, it is invalidated.(36) Despite this distinction, the Court has often recognized the precedential value of due process analysis in takings cases, blurring the line between the two types of analyses.(37) In addition, the earlier due process cases not only demonstrate the Court's initial attempts to deal with regulation, but also elucidate the Court's later regulatory takings decisions.(38) Accordingly, due process concerns, as they relate to regulatory takings, will be considered in this Article.(39)


    1. Regulations Upheld as an Exercise of Police Powers

      Challenges to government regulation were present even in the nineteenth century. In the most often cited cases from this period, however, the Supreme Court upheld regulations as valid exercises of police powers by state governments.(40) The source of state police powers comes in part from the desire of the nation's citizens for the government to secure the common good. The Tenth Amendment establishes the constitutional source of these powers, declaring that "[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."(41)

      1. Munn v. Illinois

        As early as 1876, we have an example of a private business owner bringing a claim of unconstitutional regulation to court and a discussion by the United States Supreme Court of the police powers and their source. In Munn v. Illinois, the state court had found that Munn had operated a public warehouse without a license in violation of an Illinois statute.(42) Following the state court's judgment, Munn claimed that the statute, which required licenses as part of a regulatory scheme to fix maximum prices for the storage of grain in warehouses, was unconstitutional.(43) The ensuing court case was ultimately

        appealed to the United States Supreme Court.

        Munn asserted that, among other provisions, the Illinois statute violated the Fourteenth Amendment's Due Process Clause.(44) The Court found that the General Assembly of Illinois had committed no violation of the U.S. Constitution by its enactment of the regulatory statute. The Court gave the following two bases for its decision: 1) the police powers, and 2) the public nature of Munn's business.(45)

        As to the police powers, the Court...

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