Brief Fact Summary. The Petitioner, Lucas (Petitioner), purchased residential lots on the coast of South Carolina in 1986. In 1988, the enactment of the Beachfront Management Act (the Act) barred the Petitioner from building any permanent habitable structures on the land.
Synopsis of Rule of Law. Regulation that destroys all economically viable use will be considered a taking unless rooted in background principles of common law nuisance and state property law.
Issue. Whether the restriction barring Lucas from building permanent, habitable structures destroyed all economically viable use of the property such that a taking had occurred which required just compensation.
Held. Total deprivation of beneficial use is the equivalent of a physical appropriation. The state must compensate unless it can identify background common law nuisance and property rules that would prohibit the intended construction, only on such a showing would the act not be a taking. The Court did not decide there was an actual taking and remanded for consideration of South Carolina’s background principles of nuisance and property law.
Dissent. Justice Harry Blackmun (J. Blackmun) did not find that the regulation prohibited all economic use of the real estate. Petitioner could still enjoy other attributes of ownership, including the right to exclude others. The determination of threatened harm to property and life was made by the legislature and should have been sufficient to prohibit the use without a taking.
Justice John Paul Stevens (J. Stevens) felt the per se rule for declaring a taking when a property is rendered valueless was arbitrary. If property is defined broadly, it will rarely be a total taking and there are some cases where if a smaller estate is owned it will easily be rendered valueless. J. Stevens would not freeze the state’s common law and would continue traditional power of the state to revise rights and uses of property.
Concurrence. Justice Anthony Kennedy (J. Kennedy) felt the common law of nuisance was too narrow a confine for the exercise of regulatory power in a complex and interdependent society. He thought the analysis should focus more on the investment backed expectations to determine whether the property truly had no value.
Discussion. A state needs to justify a particular prohibition a with common law nuisance principle, not a present finding that the use is now inconsistent with the public interest. A state must have historically been able to prevent such a use as a nuisance in order to regulate away all economic value without compensation.