Amicus Curiae Brief — Lucas v. South Carolina Coastal Council

No. 91-453

In The

Supreme Court of the United States

October Term, 1991

e

DAVID H. LUCAS,

Petitioner,

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

S

Petition for Writ of Certiorari

to the Supreme Court

of the State of South Carolina

©

BRIEF AMICUS CURIAE OF

PACIFIC LEGAL FOUNDATION IN SUPPORT OF

THE PETITIONER, DAVID H. LUCAS

¢

Ronatp A. ZUMBRUN

*Epwarp J. CoNNok, Jr.

*Counsel of Record

Timotity V. Kassount

Pacific Legal Foundation

2700 Gateway Oaks Drive,

Suite 200

Sacramento, California 95833

Telephone: (916) 641-8888

Attorneys for Amicus Curiae,

Pacific Legal Foundation

CCR KLE LAW BRIFF PRINTING, CO. (0) 225-4004

OR CALL COLLECT 02) 42.2831

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES CITED.................. ii

INTEREST OF AMICUS CURIAE .................. l

STATEMENT OF THE CASE............c.cceecnees 2

REASONS FOR GRANTING THE WRIT .......... 4

I. THIS COURT HAS NEVER REQUIRED PROP-

ERTY OWNERS TO INVALIDATE LAND USE

REGULATIONS AS A PRECONDITION TO

Ee GE UUEIES oo cds secesscccescccess 4

Il. MUGLER DOES NOT STAND FOR THE PROP-

OSITION THAT THERE IS A “PUBLIC HARM”

OR “NUISANCE” EXCEPTION TO THE JUST

COMPENSATION CLAUSE WHEN A REGULA-

TION RESULTS IN THE DEPRIVATION OF ALL

ECONOMICALLY VIABLE USE............... 6

A. Mugler Was Decided Before Regulatory

Takings Were Recognized................. 7

B. This Court Has Never Insulated Govern-

mental Entities from the Just Compensation

Mandate when Property Owners Suffer a

Complete Deprivation of Economically Via-

MNS SEawERSER Gr sasechdctecrececvencess 9

Il. THE OPINION BELOW DIRECTLY CONFLICTS

WITH A RECENT NINTH CIRCUIT OPINION

WHEREIN THE COURT REFUSED TO INSU-

LATE THE GOVERNMENT FROM A JUST

COMPENSATION CLAIM, EVEN THOUGH

THE PROPERTY OWNER WAS PURPORTEDLY

ENGAGING IN A PUBLIC NUISANCE ....... 13

IV. EVEN IF THERE IS A NUISANCE EXCEPTION

TO THE JUST COMPENSATION CLAUSE, THE

CONSTRUCTION OF A HOUSE IS NOT A

NOXIOUS USE OF PROPERTY................ 14

ide re etiehdetcdeaecencesescnceesees 15

TABLE OF AUTHORITIES CITED

Page

Cases

Agins v. City of Tiburon, 447 U.S. 255 (1980)....... 5,9

Esposito v. South Carolina Coastal Council,

939 F.2d 165 (4th Cir. 1991).............. peceee 14, 15

First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles, 482 U.S. 304

(Per rrrr TT OO —— 5, 6

Goldbiatt v. Hempstead, 369 U.S. 590 (1962)....... 7, 11

Hadacheck v. Sebastian, 239 U.S. 394 (1915) ...6, 7, 10, 14

Hodel v. Virginia Surface Mining and Reclamation

Association, Inc., 452 U.S. 264 (1981)............... 5

Keystone Bituminous Coal Association v.

DeBenedictis, 480 U.S. 470 (1987) ........... 7, 11, 12

McDougal v. County of Imperial, __ F.2d __,

1991 WL 156897 (9th Cir. 1991)................ 13, 14

Miller v. Schoene, 276 U.S. 272 (1928)......... 7, 10, 11

Mugler v. State of Kansas, 123 U.S. 623 (1887) .. passim

Nollan v. California Coastal Commission,

463 US. G25 CIOGDD .... cccccccaecsunee 5, 15

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393

CRGRAD .. ccccccccceccesceuennl 8, 9, 10, 11, 15

Preseault v. Interstate Commerce Commission,

aus. _.. 166 L. BA Be 8 Gio eeee eee 5

STATUTES

S.C. Code Ann. § 48-39-10, et seq. (Law Co-op

| rrr 3

TABLE OF AUTHORITIES CITED - Continued

Supreme Court Rule 37

Rule 10.1(b)

Rule 10.1(c)

Page

No. 91-453

¢

In The

Supreme Court of the United States

October Term, 1991

r

DAVID H. LUCAS,

Petitioner,

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

¢

Petition for Writ of Certiorari

to the Supreme Court

of the State of South Carolina

®

BRIEF AMICUS CURIAE OF

PACIFIC LEGAL FOUNDATION IN SUPPORT OF

THE PETITIONER, DAVID H. LUCAS

oOo

INTEREST OF AMICUS CURIAE

Pursuant to Supreme Court Rule 37, Pacific Legal

Foundation (PLF) respectfully submits this brief amicus

curiae in support of petitioner, David H. Lucas. Written

consent to the filing of this brief has been granted by

counsel for all parties. Copies have been lodged with the

clerk of the Court.

PLF is a nonprofit, tax-exempt corporation organized

under the laws of the State of California for the purpose

of engaging in litigation in matters affecting the public

interest. Policy is set by a Board of Trustees composed of

concerned citizens, the majority of whom are attorneys.

PLF’s Board evaluates the merits of any contemplated

legal action and authorizes such legal action only when

the Foundation’s position has broad support within the

general community. PLF’s Board has authorized the filing

of an amicus curiae brief in this matter.

The opinion below holds that a valid exercise of the

police power will insulate the government from a taking

claim, even though the regulation deprives landowners of

all economically viable use of property. Amicus submits

that this holding conflicts with prior precedents of this

Court, and of a United States Court of Appeals, wherein a

taking has been found whenever a regulation fails to

substantially advance legitimate governmental interests

or deprives landowners of economically viable use of

property. By failing to acknowledge this either/or takings

test, the South Carolina Supreme Court has decided a

federal question in a way that conflicts with applicable

decisions of this Court and of a United States Court of

Appeals.

STATEMENT OF THE CASE

The facts of the case are simple. Petitioner is the

owner of two undeveloped oceanfront lots in Charleston

County, South Carolina, which he purchased in 1986 for

$975,000. On July 1, 1988, the South Carolina General

Assembly adopted the Beachfront Management Act

(Act),! which regulated development along the South

Carolina coastline by imposing statutorily mandated set-

back lines. The Beachfront Management Act is adminis-

tered by respondent, South Carolina Coastal Council.

A setback line precluded petitioner from building

residences or making any other reasonable economic use

of his property. Petitioner instituted an action in the

South Carolina Court of Common Pleas, asserting that the

restriction on the use of his two lots amounted to a taking

of his private property for a public use without just

compensation. The court agreed and awarded petitioner

just compensation for a regulatory taking. In reaching

this conclusion, the court made the following finding of

fact:

“I find that the imposition of building restric-

tions on Lots 22 and 24 imposed by the South

Carolina Coastal Council deprives [petitioner]

of any reasonable economic use of the lots, has

eliminated the unrestricted right of use, and

renders them valueless.” Order of the Court of

Common Pleas at 5.

The South Carolina Supreme Court reversed the

judgment of the Court of Common Pleas, though it in no

way questioned the factual finding that the Beachfront

Management Act effectively deprived petitioner of all

economically viable use of property. The reversal was

grounded instead on the court’s belief that a valid exer-

cise of the police power precludes a taking. Petitioner’s

argument that deprivation of economically viable use, in

' $.C. Code Ann. § 48-39-10, et seq. (Law Co-op 1990).

and of itself, will work a taking, was dismissed as an

“erroneous statement of existing law.” Lucas v. South Car-

olina Coastal Council, 404 S.E.2d 895, 898 (1991).

The question presented to this Court is whether the

Fifth Amendment to the United States Constitution

requires the payment of just compensation when an

alleged health and safety regulation denies a property

owner all economically viable use. Amicus respectfully

submits that the opinion of the South Carolina Supreme

Court, which answered this question in the negative, is

utterly irreconcilable with this Court’s prior decisions

and a recent decision of the Ninth Circuit.

e

REASONS FOR GRANTING THE WRIT

Supreme Court Rule 10.1(b) and (c) lists among the

considerations governing review on certiorari the circum-

stance when a state court of last resort has decided a

federal question in a way that conflicts with the applica-

ble decisions of the United States Supreme Court or of a

United States Court of Appeals. Both grounds for review

are present in this case.

THIS COURT HAS NEVER REQUIRED

PROPERTY OWNERS TO INVALIDATE

LAND USE REGULATIONS AS A

PRECONDITION TO JUST COMPENSATION

In concluding that no taking occurred, the court

below emphasized at length the fact that petitioner did

not challenge the validity of the Beachfront Management

Act. This was construed as a “concession” that the Act

was designed to abate the noxious use of property. Lucas,

404 S.E.2d at 900.

This Court has repeatedly held, however, that the

Just Compensation Clause was designed “ ‘not to limit

the governmental interference with property rights per

se, but rather to secure compensation in the event of other-

wise proper interference amounting to a taking.’ ” Pre-

seault v. Interstate Commerce Commission, 494 US. __,

108 L. Ed. 2d 1, 13 (1990) (quoting First English Evangelical

Lutheran Church of Glendale v. County of Los Angeles,

482 U.S. 304, 313 (1987) (emphasis in original)).

That property owners are not in every circumstance

required to challenge the validity of the governmental

regulation is evidenced by this Court’s unambiguous tak-

ings test: a taking occurs “if the ordinance does not

substantially advance legitimate state interests . . . or

denies an owner economically viable use of his land.”

Agins v. City of Tiburon, 447 U.S. 255, 260 (1980) (citation

omitted; emphasis added). See also Hodel v. Virginia Sur-

face Mining and Reclamation Association, Inc., 452 U.S. 264,

295-96 (1981): “A statute regulating the uses that can be

made of property effects a taking if it ‘denies an owner

economically viable use of land ....‘” Nollan v. Califor-

nia Coastal Commission, 483 U.S. 825, 834 (1987): “We have

long recognized that land-use regulation does not effect a

taking if it ‘substantially advancejs] legitimate state inter-

ests’ and does not ‘den[y}] an owner economically viable

use of his land.’” (Quoting Agins, 447 U.S. at 260

(emphasis added; brackets in original).)

This two-prong test, like the Just Compensation

Clause itself, does not refer to a “balancing” of public and

private interests. Indeed, just compensation is mandated

when governmental regulations are enacted for the bene-

fit of the public. As the Fifth Amendment provides, “nor

shall private property be taken for public use without just

compensation.” (Emphasis added.) To require property

owners in every instance to challenge the validity of the

governmental regulation would twist the Constitution

into the following: “nor shall private property be taken

without just compensation, unless for a public use.”

This Court’s decision in First English, and its unam-

biguous either/or takings test, demonstrates the fallacy

of the argument that governmental entities are insulated

from tife just compensation mandate simply because their

land use regulations are valid exercises of the police

power.

MUGLER DOES NOT STAND FOR

THE PROPOSITION THAT THERE IS

A “PUBLIC HARM” OR “NUISANCE”

EXCEPTION TO THE JUST COMPENSATION

CLAUSE WHEN A REGULATION

RESULTS IN THE DEPRIVATION

OF ALL ECONOMICALLY VIABLE USE

The court below cites five United States Supreme

Court cases in support of the proposition that there is a

“nuisance” exception to the Just Compensation Clause

which applies even when there is a complete depri®ation

of economically viable use: Mugler v. State of Kansas,

123 U.S. 623 (1887), Hadacheck v. Sebastian, 239 U.S. 394 (1915),

Miller v. Schoene, 276 U.S. 272 (1928), Goldblatt v. Hemp-

stead, 369 U.S. 590 (1962), and Keystone Bituminous Coal

Association v. DeBenedictis, 480 U.S. 470 (1987).

There are several reasons, however, why the lower

court’s reliance on these five cases is misplaced. First,

Mugler couid not have created an exception to the Just

Compensation Clause because the United States Supreme

Court had not yet recognized the possibility of a regula-

tory taking. Second, none of these cases involved the

complete deprivation of economically viable use.

A. Mugler Was Decided Before Regulatory

Takings Were Recognized

Mugler involved a challenge to a Kansas statute

which prohibited the manufacture and sale of intoxicat-

ing liquors. The property owners contended that their

respective breweries would, in light of the statute, be of

little or no value if not employed in the manufacture of

beer. In concluding that the state’s restriction on the

permissible uses of the plaintiffs’ breweries did not con-

stitute a taking, the Mugler Court pointed out that the

liquor prohibition was a legitimate police power objec-

tive:

“{Ijt is difficult to perceive any ground for the

judiciary to declare that the prohibition by Kan-

sas of the manufacture or sale, within her limits,

of intoxicating liquors for general use there as a

beverage, is not fairly adapted to the end of

protecting the community against the evils

which confessedly result from the excessive use

of ardent spirits. . . . [Wje cannot shut out of

view the fact, within the knowledge of all, that

the public health, the public morals, and the

public safety, may be endangered by the general

use of intoxicating drinks.” 123 U.S. at 661-62.

It is important to point out, however, that Mugler was

decided more than 30 years before this Court recognized

that a regulatory taking could occur when it decided the

seminal case of Pennsylvania Coal Co. v. Mahon, 260 U.S.

393 (1922).2 Because Mugler was issued before regulatory

takings were even recognized, the Court was concerned

only with the question of whether the regulation was a

legitimate exercise of the state’s police powers and not

whether the property owner was deprived of economi-

cally viable use. That was the t «ginning, and the end, of

the inquiry.

This point is illustrated by the Mugler Court's recog-

nition that it was concerned, not with the Kansas regula-

tion’s economic impact on the property, but rather, with

whether the regulation could survive substantive due pro-

cess review:

“These [eminent domain] principles have no

application to the case under consideration. The

question in Pumpelly v. Green Bay Co. arose

under the State’s power of eminent domain;

while the question now before us arises under

what are, strictly, the police powers of the State,

exerted for the protection of the health, morals,

and safety of the people.” Id. at 668 (emphasis

added).

2 As Justice Holmes emphasized in Pennsylvania Coal, “while

property may be regulated to # certain extent, if regulation

goes too far it will be recognized as a taking.” 260 U.S. at 415.

Even if a state’s regulation did not advance a legitimate

police power, the Mugler Court pointed out that the Four-

teenth Amendment's Due Process Clause, as opposed to the

Fifth Amendment's Takings Clause, would be implicated:

“(Police power legislation cannot] come within

the Fourteenth Amendment, in any case, unless

it is apparent that its real object is not to protect

the community, or to promote the general well

being, but, under the guise of police regulation,

to deprive the owner of his liberty and property,

without due process of law.” Id. at 669.°

This illustrates the inapplicability of Mugler to the

facts of the present case, and to post-Pennsylvania Coal

takings principles. It is, in a nutshell, impossible for

Mugler to have created an exception to the requirement of

just compensation for regulatory takings, because this

Court had not yet recognized the rule that regulatory

takings could occur, an issue which Mugler did not

address.

B. This Court Has Never Insulated

Governmental Entities from the Just

Compensation Mandate when Property

Owners Suffer a Complete Deprivation

of Economically Viable Use

As noted above, the court below in no way ques-

tioned the factual finding that petitioner suffered a

3 Today, of course, a regulatory taking under the Fifth Amend-

ment may occur if the regulation does not substantially

advance legitimate state objectives or results in the denial of all

economically viable use. See, e.g., Agins v. City of Tiburon,

447 US. at 260. °

10

complete deprivation of economically viable use as a

result of the Beachfront Management Act. The court nev-

ertheless insulated the South Carolina Coastal Council

from the Fifth Amendment's just compensation require-

ment. A close analysis of the quintet of cases cited by the

lower court reveals a complete dearth of precedent to

support the proposition that the government may extin-

guish all economically viable use without the constitu-

tional obligation to pay just compensation. The reason for

this is quite simple: none of these cases involved the

complete diminution of all economically viable use.

In Mugler, the plaintiffs did not contend, nor did this

Court conclude, that no structures at all could be built or

that there was in any way a complete deprivation of all

economically viable use of land.

In Hadacheck, a city ordinance made it unlawful for

any person to operate an establishment or factory for the

manufacture or burning of brick within described geo-

graphical limits. The Hadacheck Court was thus not pre-

sented with a regulation of all economically viable use of

property, because the plaintiff was free to construct resi-

dences or other types of manufacturing enterprises on the

property. Moreover, Hadacheck, like Mugler, was decided

prior to this Court’s determination that regulatory tak-

ings were possible in the Pennsylvania Coai case.

In Miller, the State of Virginia ordered plaintiffs to

cut down a large number of ornamental red cedar trees

growing on their property as a means of preventing the

communication of a rust or plant disease, with which

they were infected, to the apple orchards in the vicinity.

Plaintiffs were, however, entitled to use the felled trees

11

and to make any other economically viable use of prop-

erty with the sole exception being the continued growth

of red cedar trees.

It should also be noted that the plaintiffs did not

even allege a Fifth Amendment taking in Miller, only a

due process challenge. Miller cannot, therefore, be cited

as a Fifth Amendment Takings Clause precedent.

In Goldblatt, the Town of Hempstead enacted an ordi-

nance regulating dredging and pit excavating on prop-

erty within its limits. Plaintiffs failed, however, to

provide evidence “which even remotely suggests that

prohibition of further mining will reduce the value of the

lot in question.” 369 U.S. at 594. The Goldblatt Court was

thus not faced with the question whether the dredging

regulation could have been insulated from the Fifth

Amendment's just compensation mandate, even if the

regulation had deprived the property owner of all eco-

nomically viable use.

Finally, in Keystone, the State of Pennsylvania had

enacted a Subsidence Act which was designed to prohibit

mining that causes subsidence damage to certain catego-

ries of structures. In concluding that the Subsidence Act

did not result in the taking of plaintiffs’ property, the

Court pointed out that the plaintiffs had “failed to make a

showing of diminution of value sufficient to satisfy the

test set forth in Pennsylvania Coal and our other regula-

tory takings cases.” 480 U.S. at 492-93.

This Court has simply never held that a police power

regulation which precludes all economically viable use

may in certain circumstances be insulated from the Fifth

12

Amendment's just compensation mandate. As noted by

Chief Justice Rehnquist in his Keystone dissent:

“[O]ur cases have never applied the nuisance

exception to allow complete extinction of the value of

a parcel of property. Though nuisance regulations

have been sustained despite a substantial reduc-

tion in value, we have not accepted the proposition

that the State may completely extinguish a property

interest or prohibit all use without providing com-

pensation.” 480 U.S. at 513 (Rehnquist, C.J., dis-

senting) (emphasis added).

Under Chief Justice Rehnquist's analysis of the facts

in Keystone, the Subsidence Act did “completely destroy”

the plaintiff's coal deposits. As such, the Chief Justice

found a taking requiring just compensatian because

“{a]pplication of the nuisance exception in these circum-

stances would allow the State not merely to forbid one

‘particular use’ of property with many uses [as in Mugler

and its progeny] but to extinguish all beneficial use of

petitioner’s property.” 480 U.S. at 514 (Rehnquist, C.J.,

dissenting) (emphasis in original).

Because the Court of Common Pleas in the present

action made a specific factual determination that the set-

back lines deprived respondent Lucas of “any reasonable

economic use of the lots,” and rendered the lots “value-

less,” the five United States Supreme Court cases cited by

the Coastal Council, which al! involve only partial dimi-

nution in value, are irrelevant.

13

Ill

THE OPINION BELOW DIRECTLY

CONFLICTS WITH A RECENT NINTH

CIRCUIT OPINION WHEREIN THE COURT

REFUSED TO INSULATE THE GOVERNMENT

FROM A JUST COMPENSATION CLAIM, EVEN

THOUGH THE PROPERTY OWNER WAS

PURPORTEDLY ENGAGING IN A PUBLIC NUISANCE

The Ninth Circuit has recently issued an opinion

which directly conflicts with the opinion of the court

below. In McDougal v. County of Imperial, __ F.2d __,

1991 WL 156897 (9th Cir. 1991), the Court of Appeals

refused to insulate the government from a just compensa-

tion claim, even though the property owner’s water busi-

ness was purportedly contributing to a public nuisance.

The governmental entity in McDougal designated the

plaintiffs’ property a “floodway,” which allegedly ren-

dered it valueless. In defending a Fifth Amendment just

compensation claim, the government argued that no tak-

ing occurred because the floodway designation was nec-

essary to abate a public nuisance. The Ninth Circuit

disagreed:

“We cannot agree that any legitimate purpose

automatically trumps the deprivation of all eco-

nomically viable use, such that whenever a reg-

ulation has a health or safety purpose, no

compensation is required even if the land owner

is thereby denied all use of his property.

... Instead, we believe that a court is required to

consider the nature as well as the legitimacy of

the state’s interest together with the nature and

extent of its impact on the owner’s use of his

land.” McDougal, 1991 WL 156897 at 27-28.

14

The court below, in refusing to consider the economic

impact of the Beachfront Management Act, has created a

precedent directly at odds with the Ninth Circuit’s opin-

ion in McDougal and, as explained above, the precedents

of this Court.

IV

EVEN IF THERE IS A NUISANCE

EXCEPTION TO THE JUST COMPENSATION

CLAUSE, THE CONSTRUCTION OF A

HOUSE IS NOT A NOXIOUS USE OF PROPERTY

Even if it is assumed that there is a “public harm” or

“nuisance” exception to the Fifth Amendment’s Just

Compensation Clause, the construction of a house is not

even remotely a noxious use of property. The Beachfront

Management Act, which is quoted extensively in the

opinion below, speaks primarily of the need to protect the

South Carolina coastline from erosion. It does not, and

could not, justify the outright prohibition of structures as

somehow constituting a “noxious” use of property on par

with the maintenance of a distillery in Mugler and an

urban brickyard in Hadacheck. As recently explained by

the dissent in Esposito v. South Carolina Coastal Council,

939 F.2d 165 (4th Cir. 1991):

“The rapidity with which rental beach houses

are gobbled up by the public causes me to doubt

that they are, at least yet, generally regarded as

_‘tantamount to a public nuisance.’ . . . [T]he

Act’s gradual forty-year retreat scheme, rather

than immediate destruction of all offending

structures, is clear proof that the Esposito claim-

ants’ residences are not dire threats to public

safety and welfare. A ‘public nuisance’ ought to

15

be abated, not phased out through a half-

lifetime of attrition.” Id. at 173 n.2.

The Beachfront Management Act’s conclusory refer-

ences to the protection of “life and liberty,” language

which can be made part and parcel of practically any

governmental enactment, cannot survive Fifth Amend-

ment scrutiny. As this Court pointed out in Nollan v.

California Coastal Commission, 483 U.S. 825, “[wle view the

Fifth Amendment's Property Clause to be more than a

pleading requirement, and compliance with it to be more

than an exercise in cleverness and imagination.” Id.

at 841.

CONCLUSION

The dissent in the opinion below rightly bemoaned

the fact that takings law “is an area of considerable

confusion.” Lucas, 404 S.E.2d at 903. In an era of increas-

ingly complex and pervasive environmental regulations,

many of which contain no provisions whatsoever for just

compensation, this Court should take steps to ensure the

preeminence of the United States Constitution. As laud-

able as environmental regulations may purport to be, it

must still be recognized that “a strong public desire to

improve the public condition is not enough to warrant

achieving the desire by a shorter cut than the constitu-

tional way of paying for the change.” Pennsylvania Coal

Company v. Mahon, 620 US. at 416.

16

For the reasons stated above, amicus respectfully

requests that this Court grant the petition for certiorari.

DATED: October, 1991.

Respectfully submitted,

RONALD A. ZUMBRUN

*Epwarp J. Connor, Jr.

*Counsel of Record

Timotuy V. Kassouni

Pacific Legal Foundation

2700 Gateway Oaks Drive,

Suite 200

Sacramento, California 95833

Telephone: (916) 641-8888

Attorneys for Amicus Curiae,

Pacific Legal Foundation