The Regulatory Takings Battleground: Environmental Regulation of Land Versus Private-Property Rights

AuthorCharles M. Haar/Michael Allan Wolf
Page 329
Chapter Five
The Regulatory Takings Battleground:
Environmental Regulation of Land Versus
Private-Property Rights
I. A New Activism? Judicial Reactions to Regulatory Overreaching (and a
Suggested Response)
For more than eight decades, zoning and land use planning have been located squarely within the
“comfort zone” of local government.1 Indeed, as noted in Chapter ree, it has been an unshaken
principle of American constitutional jurisprudence since the Supreme Court handed down its deci-
sion in Euclid in 1926 that local governments are entitled to generous deference when exercising
their traditional police powers, including zoning and planning.
As the nation entered the second half of the 20th century, its local governments began to
experiment with the incorporation of environmental policies and practices into their zoning and
planning schemes, a practice that by century’s end brought local ocials into direct conict with
the ideology shared by many Justices on the Rehnquist Court. Beginning in the late 1960s and
early 1970s, environmental issues began to capture the attention of elected ocials (driven by
constituent concerns and demands) on the federal level. By the time Ronald Reagan took oce
in 1981 with his “government is the problem2 philosophy, the U.S. Code and the Code of Federal
Regulations contained reams of pages devoted to regulation of air pollution3; water pollution4;
waste treatment, transport, and disposal5; toxic chemicals6; pesticides and other poisons7; ocean
dumping8; safe drinking water9; protection of endangered and threatened species10; management
of the coastal zone11; federal public land management12; and releases of hazardous substances.13 All
of this statutory and regulatory activity was not conned to the federal level, however, as activists
1. Much of the discussion in this introduction derives from Michael Allan Wolf, Earning Deference: Reections on the
Merger of Environmental and Land Use Law, in N G: T A  L E L 347
(John R. Nolon ed. 2003).
2. President Ronald Reagan, Inaugural Address (Jan. 20, 1981), 1981 P. P 1 (Jan. 20, 1981).
3. See Clean Air Act, 42 U.S.C. §§7401-7671q.
4. See Federal Water Pollution Control Act, 33 U.S.C. §§1251-1387.
5. See Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§6901-6992k.
6. See Toxic Substances Control Act, 15 U.S.C. §§2601-2692.
7. See Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §§136-136y.
8. See Marine Protection, Research, and Sanctuaries Act of 1972, 33 U.S.C. §§1401-1445.
9. See Safe Drinking Water Act, 42 U.S.C. §§300f to 300j-26.
10. See Endangered Species Act, 16 U.S.C. §§1531-1544.
11. See Coastal Zone Management Act, 16 U.S.C. §§1451-1465.
12. See Federal Land Policy and Management Act, 43 U.S.C. §§1701-1785.
13. See Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§9601-9675.
Page 330 Land Use Planning and the Environment: A Casebook
in states and localities successfully urged lawmakers to implement legal controls over activities that
endangered our fragile ecological balance.
By the close of the 20th century, this nonfederal experimentation was in serious jeopardy. is
is because one legacy of the Reagan years proved to be a signicant barrier to the growth and even
continued vitality of state and local environmental activity: President Reagan and his successor,
President George H.W. Bush, remade the federal judiciary, particularly the Court. One key and
controversial contribution to American jurisprudence made by the new conservative majority on
the Court was the reinvigoration of the Takings Clause, a move that has posed serious problems
for a wide range of environmental regulations promulgated and enforced by local and state o-
cials.14 State and local oodplain controls, wetlands restrictions, coal mining regulations, beach
access easements, bicycle paths, coastal development bans, endangered species protections, and
open-space ordinances have all been subjected to regulatory takings analysis, and some of these
regulations have fallen as a result of increased and heightened judicial scrutiny.
A study of the leading regulatory takings cases included in this chapter reveals the Court’s
tension between nonfederal environmental regulation and private-property rights protection. For
several years following the Court’s invocation of Justice Holmes’ opinion in Pennsylvania Coal, dis-
cussed at the end of Chapter ree, the Court avoided deciding the substantive question of whether,
in fact, a regulation that went “too far” eected a taking that required compensation from the
government.15 In 1987, the new Chief Justice, William H. Rehnquist, writing for the Court in First
English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 321
(1987), answered that question armatively, assuming for the purpose of the appeal that the chal-
lenged restriction (local oodplain controls) deprived the landowner “of all use of [his] property.
A few weeks later, in Nollan v. California Coastal Comm’n, 483 U.S. 825, 834 (1987), a ve-
member majority expanded the reach of the regulatory takings doctrine beyond deprivation of
value to allow for the invalidation of regulations that do not “substantially” (as opposed to “ratio-
nally” or “reasonably”) advance a “legitimate state interest.” A state coastal commission’s exaction
of a beach access easement use in exchange for permitting beachfront construction was thereby
voided because of lack of a substantial connection between ends and means.
e regulatory takings steamroller picked up momentum ve years later when, in Lucas v.
South Carolina Coastal Council, 505 U.S. 1003, 1027 (1992), the Court held that “where the State
seeks to sustain regulation that deprives land of all economically benecial use, [the State] may
resist compensation only if the logically antecedent inquiry into the nature of the owner’s estate
shows that the proscribed use interests were not part of his title to begin with.” Two years after
Lucas, regulators received an even more signicant jolt from the Justices. e majority in Dolan v.
City of Tigard, 512 U.S. 374, 391 (1994), built on Nollan’s activist foundation and obligated a local
government to carry the signicant burden of demonstrating that the bicycle path and oodplain
easements it had exacted from a plumbing supply business were roughly proportional to the impact
of a planned expansion of its building. is was a far cry from Euclidean deference, occasioned
(and justied) most likely by the majority’s concern about the motives and abilities of local regula-
tors to craft and impose fair environmental protection measures.
Subsequent cases brought additional bad news to state and local environmental regulators and
their supporters. Five years after Dolan, in City of Monterey v. Del Monte Dunes at Monterey,
Ltd., 526 U.S. 687, 697-98 (1999), the Court considered a case involving a frustrated landown-
14. See Charles M. Haar & Michael Allan Wolf, Euclid Lives: e Survival of Progressive Jurisprudence, 115 H. L. R.
2158 (2002).
15. See, e.g., MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340, 348 (1986) (in which the Court could not
decide whether a regulatory taking had occurred because the local regulator had not yet made “a nal and authoritative
determination of the type and intensity of development legally permitted on the subject property”).
Chapter Five: The Regulatory Takings Battleground Page 331
er’s eorts to secure site plan approval for a beachfront residential development (county ocials
imposed open-space requirements and were concerned about the impact on the critical habitat of
an endangered buttery). is time, there was no need to expand the substantive reach of regu-
latory takings; instead, the Court permitted the extremely puzzling questions of “economically
viable use” and “substantially advancing a legitimate public purpose” to be submitted to a jury.
en, in Palazzolo v. Rhode Island, 533 U.S. 606, 616, 626-30 (2001), we learned that even land-
owners who maintained a “token interest” could claim a Lucas-type total deprivation. Morever,
we were told that, even if those landowners acquired their ownership interest in the property with
notice of existing restrictions, they were not necessarily foreclosed from bringing a regulatory tak-
ings lawsuit challenging those very regulations. At risk in Palazzolo were state controls over lling
coastal wetlands.
is litany of decisions demonstrates quite clearly the hazards of implementing and enforc-
ing state and local environmental controls aecting the use of land. Although not all nonfederal
regulation has been struck down in recent years,16 a majority of the Rehnquist Court viewed such
restrictions as the Achilles’ heel of property regulation generally, and the result was the dramatic
expansion of the judiciary’s power to strike down a wide and increasing array of regulatory work
product by elected and administrative ocials.
Given the eagerness with which some disgruntled landowners pursue regulatory takings chal-
lenges to environmentally avored land use restrictions, often with the assistance of public interest
lawyers from groups such as the Institute for Justice and the Pacic Legal Foundation,17 local gov-
ernments should be especially careful when creating and implementing new land use controls that
threaten to reduce the existing and potential value of real property. One strategy that local ocials
should consider pursuing, a strategy borrowed from a key federal environmental law statute, is to
“stop and think” before regulating.
A few decades ago, environmental law was revolutionized by a seemingly simple statute that
appeared to require very little of federal agencies—the National Environmental Policy Act (NEPA)
of 1969.18 In the hands of activist judges, led by the legendary J. Skelley Wright, NEPA quickly
shed its “paper tiger” image.19 By the mid-1970s, NEPA was widely understood to mandate federal
agencies to “stop and think” carefully and expansively about the implications of “major Federal
actions signicantly aecting the quality of the human environment,20 and, perhaps, to engage
in time- and resource-consuming studies of those wide-ranging implications. As a result, the envi-
ronmental impact statement process triggered by NEPA, and by state versions in several jurisdic-
tions, has become a focal point for active public participation and, at times, lawsuits orchestrated
by federal, state, and local nongovernmental organizations.
e process of making and enforcing local environmental law could benet from the adoption
of four NEPA elements. First, at the proposal stage for a new environmental regulation device or
program, local regulators could do an initial analysis concerning whether the implementation of
that device or program would “signicantly aect the market value of private property within the
16. See, e.g., Tahoe-Sierra Preservation Council v. Tahoe Reg’l Planning Agency, 535 U.S. 302 (2002) (holding that devel-
opment moratoria totaling 30 months did not eect a per se regulatory taking).
17. In fact, the Pacic Legal Foundation led amicus or party briefs in all of the major cases included in this chapter.
e Institute for Justice led amicus briefs, carrying Professor Richard Epstein’s name, in Tahoe-Sierra, Palazzolo, Del
Monte Dunes, Dolan, and Lucas.
18. NEPA §§2-209, 42 U.S.C. §§4321-4370d.
19. Calvert Clis’ Coordinating Comm. v. Atomic Energy Comm’n, 449 F.2d 1109, 1114 (D.C. Cir. 1971) (Judge J.
Skelly Wright, writing for the court, noted that “Congress did not intend the Act to be a paper tiger”).
20. NEPA §102(2)(C), 42 U.S.C. §4332(2)(C).

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