Lucas v. South Carolina Coastal Council

Brief Fact Summary. Lucas (Petitioner) bought two residential lots on the Isle of Palms in Charleston County, South Carolina, upon which he intended to build single-family homes. In 1988, the South Carolina Legislature enacted the Beachfront Management Act (Act), barred Petitioner from erecting any permanent structures on the two lots.

Synopsis of Rule of Law. When the state seeks to sustain regulation that deprives a landowner 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.

Facts. Petitioner bought two residential lots for $975,000.00 on the Isle of Palms in Charleston County, South Carolina in 1986, upon which he intended to build single-family homes. Petitioner filed suit against the South Carolina Coastal Council, which had deemed 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 power 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 Act decreed a permanent ban of 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 could be owed. The Supreme Court of the United States reviewed the case.

Issue. Has Petitioner’s property been “taken” in a way that requires “just compensation”?

Held. Yes. Judgment reversed.
There are two categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint: (1) when the property owner has suffered a physical invasion of his property; and (2) when the 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 Supreme Court of South Carolina based its opinion on the fact that there was a 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 constitute taking if it “substantially advances legitimate state interests.”
However, when the state seeks to sustain regulation that deprives a landowner 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 South Carolina 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. There are two dissents:
The first dissent does not like the threshold question of “has the property lost all its economic value,” and states that the trial court’s finding of total economic loss was erroneous.
The second dissent does not like the new test either, because the whole takings jurisprudence has been based on an ad hoc factual inquiry.
Concurrence. The concurrence felt that the Supreme Court of South Carolina erred by simply reciting the intent of the legislature in adopting the Act, and that the court should have gone further in describing the need for the regulation.

Discussion. This case describes the two categories of regulatory taking: (1) when the property owner has suffered a physical invasion of his property; and (2) when the regulation denies all economically beneficial or productive use of land.