Lucas v. South Carolina Coastal Council

Brief Fact Summary. Petitioner purchased two residential lots in South Carolina with the intention of building single family homes on them. Two years later, the South Carolina legislature enacted a law barring Petitioner from building on the land. Petitioner sued.

Synopsis of Rule of Law. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking requiring just compensation under the Fifth Amendment to the United States Constitution.

Facts. In 1986, Petitioner, David Lucas bought two residential lots on the Isle of Palms, Charleston County, South Carolina. He intended to build single-family homes on the lots. At the time Petitioner purchased the lots they were zoned for single-family residential construction and with no restrictions imposed upon this use. In 1988, the South Carolina legislature enacted the Beachfront Management Act (the “Act”), which barred Lucas from erecting any permanent habitable structures on his two parcels of land. Petitioner filed suit against the South Carolina Coastal Council who had deemed, with legislative authority, Petitioner’s land as protected under the Act, claiming that his land had been taken without just compensation, but Petitioner did not challenge the facial validity of the Act. Petitioner claimed that the Act’s complete extinguishment of his property’s value entitled him to compensation regardless of whether the legislature had acted in furtherance of legitimate police pow
er objectives. The trial court found for Petitioner, and determined that, at the time of Petitioner’s purchase of the land, the lots were both zoned for single-family residential construction and there were no use restrictions placed on the property by the State of South Carolina, the County of Charleston, or the Town of Isle of Palms. The trial court also found that the Beachfront Management Act decreed a permanent ban on construction on Petitioner’s lots and that the prohibition deprived Petitioner of any reasonable economic use of the lots, eliminated the unrestricted right of use, and rendered them valueless. The trial court found that the property had been “taken” by operation of the Act and that Respondent was ordered to pay “just compensation” in the amount of $1,232,387.50. The Supreme Court of South Carolina reversed the trial court and found that, because Petitioner did not challenge the facial validity of the Act as a reasonable use of the police power, no compensation coul
d be owed. Petitioner Lucas petitioned the United States Supreme Court for review.

Issue. Did the construction ban depriving Petitioner of all economically viable use of his property amount to a “taking” requiring “just compensation” under the Fifth and Fourteenth Amendments?

Held. Yes. Judgment reversed and remanded.
There are two categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint: (1) Where the property owner has suffered a physical invasion of his property, and (2) Where regulation denies all economically beneficial or productive use of land.
The Court finds that there are good reasons for the belief that when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.
The South Carolina Supreme Court based its opinion denying that there was a taking on the line of cases which state that the government can proscribe “harmful or noxious uses” without paying compensation. The Court here states that the more contemporary standard is that land use regulation does not affect a taking if it “substantially advances legitimate state interests.”
However, where the state seeks to sustain regulation that deprives a land owner from all economic 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.
Thus, the burden is on the State of South Carolina on remand to identify background principles of nuisance and property law that prohibit the uses intended by Petitioner in the circumstances the property is now found.

Dissent.
Justice Blackmun: The Supreme Court of the United States has created a rationale for disregarding a component of basic Fifth Amendment Takings Clause jurisprudence: that a case specific inquiry be launched into the public interest advanced by the State to justify its regulation. At issue here was a nuisance. The State has not ‘taken’ anything when it asserts its power to enjoin a nuisance.
Justice Stevens: The Supreme Court’s new rule is wholly arbitrary: A landowner whose property is diminished by 95% would recover nothing, but one whose property is diminished 100% recovers everything. Moreover, the Supreme Court is denying the State legislatures much of their traditional powers to revise the law governing the rights and uses of property.
Concurrence. Justice Kennedy: The Takings Clause protects private expectations to ensure private investment. The means as well as the ends of regulation must jibe with a landowner’s reasonable expectations.

Discussion.
This case provides an example of a government “taking” resulting from a regulation of property. As such, this case is distinguishable from Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) in which the Supreme Court of the United States found that the regulation of certain property did not amount to a taking.
The Supreme Court also considered it significant that the property was not being regulated when the property owner bought it. Therefore, the property owner could not be said to have expected the loss from regulation before he bought the prope