The federalist dimension of regulatory takings jurisprudence.

Author:Sterk, Stewart E.

CONTENTS INTRODUCTION I. PENNSYLVANIA COAL AND ITS LEGACY A. Pennsylvania Coal as a Limit on Regulatory Takings B. Pennsylvania Coal as a Protection Against Legislative Change C. Pennsylvania Coal and the Increased Importance of State Law D. Regulatory Takings, State Law, and Takings Scholarship II. TAKINGS IN A FEDERAL SYSTEM: STATE LAW AND THE SUPREME COURT OF THE UNITED STATES A. State Law and the Supreme Court in the Enforcement of Federal Constitutional Rights B. State Law and Takings Adjudication C. Guidance, Uniformity, and the Limited Value of Supreme Court Review in Takings Litigation 1. Complexity 2. Guidance 3. Uniformity III. DOCTRINAL IMPLICATIONS A. Ripeness and the Role of Inferior Federal Courts B. Categorical Rules 1. Availability of Money Damages for Takings 2. Exactions and the Rough-Proportionality Requirement 3. Denial of All Beneficial Use 4. Permanent Physical Occupations 5. Impact of Land Transfer on Right To Raise Takings Claims C. Balancing 1. State and Local Enactments 2. Federal Enactments IV. THE STATES AS GUARDIANS OF PROPERTY RIGHTS A. Legislation 1. Property Rights Legislation 2. Statutory Limits on Moratoria 3. Other Legislation B. State Courts 1. Developing State Law Doctrines To Control Local Regulatory Abuse 2. State Takings Litigation a. California b. New York c. Other States CONCLUSION INTRODUCTION

Conventional wisdom teaches that the Supreme Court's takings doctrine is a muddle. (1) And the Supreme Court's opinions have given conventional wisdom considerable ammunition. A landowner is entitled to full compensation whenever she can prove that a regulation has deprived her parcel of one hundred percent of its value; (2) if she can only prove a loss of ninety-five percent, she is apparently relegated to a balancing test that is unlikely to generate any redress at all. (3) The government must compensate the landowner when it requires her to permit installation of a tiny cable box on her roof, (4) but not when it denies her the right to build a multimillion-dollar office building. (5) These conclusions do not appear to fit neatly into a coherent analytical framework.

Appearances, however, are deceiving. The "property" protected by the Takings Clause is defined not by a single sovereign, but by the legislative enactments and judicial pronouncements of fifty separate states. As a result, federalism concerns--underappreciated in the takings literature--do and should play an important role in shaping the Court's takings doctrine. In particular, these concerns make it inappropriate for the Court to use the Takings Clause as a vehicle for articulating a comprehensive theory of the limits on government power to regulate land.

The Supreme Court cannot and does not provide the primary protection against overly burdensome land use regulations. Whenever the Supreme Court provides a federal constitutional standard against which state acts must be measured, it must inevitably leave application of that standard to other decisionmakers. The sheer volume of enactments prevents the Court from taking the leading role in enforcing constitutional standards. As a result, state courts, lower federal courts, legislatures, and administrative agencies must play a role in fleshing out the Court's pronouncements.

Takings cases, however, provide a challenge different in kind from those raised by other constitutional provisions. For example, the First Amendment and the Equal Protection Clause provide federal constitutional standards against which state and local enactments are to be measured. Consider Locke v. Davey, (6) in which the Supreme Court rejected free exercise and equal protection challenges to a Washington statute that excluded students pursuing devotional theology degrees from a merit scholarship program. (7) The Court examined the text, history, and operation of the statute (and the state constitutional provision on which it was based) against the Free Exercise Clause's constitutional baseline--the state may not display animus toward religion (8)--and against the Equal Protection Clause's constitutional baseline--the state must have a rational basis to support discrimination. (9)

By contrast, the Takings Clause furnishes no comparable constitutional baseline. The Takings Clause protects primarily against change in background state law. As a result, the constitutional protection available to a landowner depends heavily on background principles of state law in effect before the challenged regulation was enacted. A regulation that constitutes an unconstitutional taking in Houston could pass constitutional muster if enacted in New York. Because the constitutional standard against which any regulation is measured must itself incorporate background state law, the Supreme Court cannot develop a comprehensive national takings standard.

Moreover, a comprehensive national takings standard is unnecessary. State law and state courts provide the primary protection against overly burdensome land use regulations. Most (although not all) land use regulation is conducted at the local level. State legislatures and state courts are insulated from many of the pressures that face local regulators and are consequently in a position to police abusive practices. The Supreme Court's Penn Central balancing test, (10) which, as a matter of practice, results in deference to the state courts, recognizes the institutional advantages state courts enjoy in constraining regulatory abuse. To be sure, state courts have had a somewhat checkered record in applying the Takings Clause, but that does not distinguish them from the Supreme Court itself. And a number of state courts have demonstrated the capacity to protect landowners against overzealous regulation.

The primary role state law must play in policing takings does not, however, make the Supreme Court irrelevant. First, the Supreme Court might articulate categorical rules that address difficulties cutting across state law. The Court has in fact taken that approach: Two examples are the Lucas rule requiring compensation for regulations that deprive a landowner of one hundred percent of land value (11) and the Nollan-Dolan rule requiring a causal nexus between a development's impact and an exaction required by the municipality as a condition of development. (12) Second, to recognize the primacy of state law issues in takings cases, the Court could develop a set of jurisdictional rules limiting access to the Supreme Court and, for that matter, the federal courts generally. The Court has taken that approach as well. (13) Finally, the Supreme Court could remain active in cases involving federal takings, where state legislatures and courts are ill equipped to police federal regulators. Here, too, the Court's actions reflect its institutional role. (14)

This Article, then, focuses on the ways in which federalism concerns (together with related institutional concerns) shape takings jurisprudence. Part I demonstrates that Justice Holmes's opinion in Pennsylvania Coal Co. v. Mahon (15)--often recognized as the first to establish that regulation could effect an unconstitutional "taking"--is equally important for establishing that state law serves as the foundation for evaluating takings claims. Part II explains that the primacy of state law in evaluating takings claims limits the Supreme Court's capacity to develop a comprehensive takings jurisprudence and suggests a greater role for the states in monitoring local regulation. Part III serves as a descriptive counterpart to the normative discussion in Part II, arguing that existing doctrine reflects the Court's limited capacity and effectively delegates to the states the primary responsibility for policing regulation of property rights. Part IV explores the ways in which the states have acted--both legislatively and judicially--to implement the core mission of the Takings Clause: protection of property rights against unforeseeable regulatory change.


    Pennsylvania Coal Co. v. Mahon (16) presented the Supreme Court with a simple set of facts. In 1878, Pennsylvania Coal executed a deed conveying rights in the surface of a parcel of land. (17) In express terms, the deed reserved to Pennsylvania Coal the right to remove coal under the surface. By the terms of the deed, the grantee assumed the risk of subsurface coal mining and waived all claims for damages that might arise from such mining. (18)

    In 1921, the Pennsylvania legislature enacted the Kohler Act, which prohibited mining of anthracite coal in a way that would cause the subsidence of a structure used for human habitation. Successors in interest to the 1878 grantee, relying on the new statute, filed a bill in equity to enjoin the coal company from mining coal in a way that would cause subsidence of their house and the surface of their land. In effect, the homeowners sued to enforce the very rights their predecessors had waived by the terms of the 1878 deed. The Pennsylvania Court of Common Pleas denied injunctive relief, holding that the Kohler Act, if applied to the case, would be unconstitutional. The Pennsylvania Supreme Court reversed, holding that the statute was a legitimate exercise of the police power. The United States Supreme Court reversed and held the Act unconstitutional. (19)

    1. Pennsylvania Coal as a Limit on Regulatory Takings

      Pennsylvania Coal has become a staple in law school casebooks as the first "regulatory takings" case. (20) That is, before Pennsylvania Coal, the Court had invoked constitutional provisions protecting property rights only when government action physically interfered with a landowner's use of the land. (21) Early cases focused on whether the landowner had been practically ousted from the land, (22) but the Court later came to award compensation for government actions that would have been tortious if committed by a private citizen. (23) In these cases, the government was treated as if it had...

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