Amicus Curiae Brief — Lucas v. South Carolina Coastal Council

Inthe Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-453

DAVID H. LUCAS,

Petitioner,

V.

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

ON WRIT OF CERTIORARI TO THE

SOUTH CAROLINA SUPREME COURT

BRIEF FOR

UNITED STATES SENATOR STEVE SYMMS,

UNITED STATES SENATOR LARRY E. CRAIG,

UNITED STATES SENATOR DON NICKLES, AND

UNITED STATES SENATOR CONRAD BURNS

AS AMICUS CURIAE SUPPORTING PETITIONER

PETER 8. DICKSON

Counsel of Record

SAM KALEN

HOWARD E. SHAPIRO

D. ERIC HULTMAN

RICHARD A. AGNEW

Van Ness, Feldman & Curtis

A Professtonal Corporation

1050 Thomas Jefferson St., NW

Seventh Floor

Washington, D.C

PO2) 298-1800

POOOT

January 2, 1992

TABLE OF CONTENTS

re Or ITI senpeccitscniscorseesciresninvensosssennesssnenisnsnenees 1

INTEREST OF AMICUS CURIAE ....................scssscccssssssccccesseees 2

TIE, ninsscinccsncininigcéosnenctiisestanenioadionsivens 2

ITE savisiisscetibnianedsecobiebiniitiiciiciensinhiaiepintibienrennctanbanesnninentisntnnsanien 2

I. Just Compensation Must Be Paid When A Regulation

Denies An Owner All Economically Viable Use Of The

NET icuinindartncoadidadadmbicnlabeinatnsediaupetisiinincinidgdiienetnedeiemies 2

A. As Found by the Court Below, the Beachfront

Management Act Destroyed All Economically Viable

ical calasnciensieeeenns 3

B. The Just Compensation Clause was Intended to

Secure a Fundamental Right. ............................eeeeeeee 4

C. There is No Historical Basis For an Exception to the

Just Compensation Clause. .................ssssssccccccssesesseees 5

1. Incidental Pecuniary Losses Did Not Constitute

@ “TISTEVEREGI GF PYGROTEY. 2000.0. 00sccccccsccssssesevossesens 8

2. Decisions Upholding the Exercise of the Police

Power did not Sanction Uncompensated

IN cs ahi alnaiiaiidadiabnanmiadiabioadebisisinhintinvssanneinaes 11

3. The Court in Mugler v. Kansas Did Not Create

any Exception to the Just Compensation

iach lind alicaeaiaslliadsdiniamnainlinainanesnie 14

D. A Regulation That Destroys Vested Property Rights

Requires Payment of Just Compensation. ................. 17

Il. This Court Has Not Created Any Exception To The Just

Compensation Requirement For Regulations That

SEIU FATs COUNT WORD oc ccccsccocccsnccccniccecsocsscccoscesensss 19

IIIT sicarticncdnaccicctinishisalidbocnlbcinsisddditslancsnaddalintineniiniunnnahinnentoensiie 26

CASES

TABLE OF AUTHORITIES

Barron v. The Mayor & City Council of Baltimore,

SB UD. (7 Fat.) DGB (BIB nese crsciscnsecsecninccntsemmmcnaiaae 5

Bartemeyer v. Iowa, 85 U.S.

(SB We.) ECG occcissnsinscsecssicnninsenivatanininammanen passim

Bedford v. United States, 192 U.S. 217 (1904) ........ccccccccceeeeeee i)

Boom Co. v. Patterson, 98 U.S. 403 (1879) oo... ccccccccecceeeeeeeeeees 7

Boston Beer Co. v. Massachusetts,

OF URE, Fp CIID osssiccnsennvininvnssmenasesedeie 13, 15

Boyd v. Alabama, 94 U.S. 645 (1877) ........cccccccccccccececeeeeeeeeens 12

Brimmer v. Rebman, 138 U.S. 78 (1891) .....0.....cccccccccceceeeeeees 16

California Reduction Co. v. Sanitary Reduction

Werten, BED UE. SOB CIID asencccccsssinssvisessscnsenedensasundaneann 14

Charles River Bridge Co. v. Warren River Bridge Co.,

SS UB. (RE Fab.) GD CRG) nnccescinncesicecesieviosennsasigaiiaumamasaae 6

Chicago B. & Q. R. Co. v. City of Chicago,

te | EN NENT 8,17

Chicago B. & Q. R. Co. v. Illinois,

BOD UF. GE CIID nnscccsccsvcnnsscsncscessinistieecidisusaninaminaian 9

City of Boston v. Lecraw, 58 U.S.

(37 Dire.) GB CRITI ocaccesssscsisscssatesieiemmtinniiicaainame weaaa )

City of Chicago v. Taylor, 125 U.S. 161 (1888) ..........00...cc000 9

Clark v. Nash, 198 U.S. 361 (1905) .............ccccccccsecsssssseeeeseeees 7

Cole v. City of La Grange, 113 U.S. 1 (1885) .........cccccccceeeeeeee 7

Connolly v. Pension Benefit Guaranty Corp.,

BTS US. BET (BB DD occccncnscnsscisinicsnencagetianainiatieaiaa ee 19

Crowley v. Christensen, 137 U.S. 86 (1890) ..........00ccccccceceeeeee 13

Davidson v. City of New Orleans, 96 U.S. 97 (1878) .............. 18

Eldridge v. Trezevant, 160 U.S. 452 (1896) .0........00000...ce cece 10

Fallbrook Irrigation District v. Bradley,

OE Bl ft | man ee visichomagielibiall 7,8

First English Evangelical Lutheran Church

v. County of Los Angeles, 482 U.S. 304 (1987) ............00000000 24

Fischer v. St. Louis, 194 U.S. 361 (1904) oo... 00ccc ccc cccecccc cece 14

Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810) .........00.00ccccceeee 6

Foster v. Kansas, 112 U.S. 205 (1884) ..............cccceeeceeeeeeeeeeees 15

Gardner v. Michigan, 199 U.S. 325 (1905) ........0cccccccccceeeeeeeee 14

i

a <

Gardner v. Village of Newburg,

ns <cccscuncccesesececeees 5

Gibson v. United States, 166 U.S. 269 (1897) ...........00000000000.. 10

Goldblatt v. Hempstead, 369 U.S. 590 (1962) ..............00.... 3, 22

Goszler v. Corp. of Georgetown,

Se I OE © IED... .cccnccccccnccccnccsccosccccessscescesees 9

Hadacheck v. Sebastian, 239 U.S. 394 (1915) .............. 3, 20, 21

Head v. Amoskeag Mfg. Co., 113 U.S. 9 (1885) ........000000000ccceee 7

Hennington v. Georgia, 163 U.S. 299 (1896) ............00000000000 16

Henry v. Dubuque, 10 lowa 540 (1860) ...............ccccccceccceeeeeeeee 5

Hodel v. Irving, 480 U.S. 704 (1987) .0..........ccccccccccccceeeceeeeeeee 19

Hudson County Water Co. v. McCarter,

i _ cccenccencccceccccccee 18

Jackman v. Rosenbaum Co., 260 U.S. 22 (1922) ........000000000.. 18

Keystone Bituminous Coal Ass’n v. DeBenedictis,

a. caseencessccnees passim

Kohl v. United States, 91 U.S. 367 (1876) .0.........cccccccccceeeeeeees 7

L’Hote v. New Orleans, 177 U.S. 587 (1900) ...000..00.. ccc ceec cease g

Lawton v. Steele, 152 U.S. 133 (1894) ............c cc ccccccccceceeeeeeeee 20

Leisy v. Harden, 135 U.S. 100 (1890) .0.......0.. cc cccccccceeceeeeeeeees 15

License Cases, 46 U.S. (5 How.) 504 (1847) .000..00..000ccccccc cece. 15

Lucas v. South Carolina Coastal! Council,

EE 3

Mahon v. Pennsylvania Coal Co.,

a... sesasccscsescecccceccceee 17

Manigault v. Springs, 199 U.S. 473 (1905) .........000.000000.... 9,11

Marchant v. Pennsylvania Railway Co.,

EE SD fe)

Miller v. Schoene, 276 U.S. 272 (1928) ................cccccce. 3, 20, 21

Minnesota v. Barber, 136 U.S. 313 (1890) .0....00...0...0cc cece. 16

Missouri Pacific Railway Co. v. Nebraska,

Neen cc ssscsccccnrescesssenscccsecs 11

Mt. Holyoke Company v. Lyman,

ID oon. cncvasccccccssccccccccccsccccscenecccees 7

Mugler v. Kansas, 123 U.S. 623 (1887) ..............0..0.0..... passim

Munan v. Illinois, 94 U.S. 113 (1877) ...................ccccccceeeees 11,15

Murdock v. City of Memphis, 87 U.S.

sss senenaseancscsecccccece 10

nD

New York & N. E. R. Co. v. Bristol,

gt REE nN nO 1 et 14

New York R. C. Co. v. White, 243 U.S. 188 (1917) ................. 12

Noble v. Union River Logging R. Co.,

kN ERO eee ne one ee vaihalaaidaaes 8

Nollan v. California Coastal Comm'n,

aah eel ancidinintuioninbinieneonnenta 24, 25

Northern Transportation Co. of Ohio v. City of Chicago,

a I sia cscs island alsin nmmpnetmnbesicntnoneationduieiails 10

Northwestern Fertilizing Co. v. Hyde Park,

er a I isola ice ciceecatansascocapiaciiiiatiinadidcasiladanis 13

Otis Co. v. Ludlow Manufacturing Co.,

I a ao aeseenmnsanneninl 7

Patterson v. Kentucky, 97 U.S. 501 (1879) ..............ccccceeeeceeees 14

Penn Central Transportation Co. v. New York City,

ee iia cond isadcncasunnadantatainninnaneieionsl 19, 25

Pennsylvania Coal Co. v. Mahon,

ia claceissunacanenoneniahees passim

Pierce Oil Corp. v. City of Hope,

I sc salindlaiaidlienglabeieiieiiinl 14

Plymouth Coal Co. v. Pennsylvania,

I hs iaicliabeoniiimiempeidiian 18

Portsmouth Harbor Land & Hotel Co. v.

United States, 260 U.S. 367 (1922) ..................:cccceeceeeeeeeeeees 18

Pumpelly v. Green Bay Co., 80 U.S.

fo EE SE Oh ao Nn EER 10, 16

Reinman v. Little Rock, 237 U.S. 171 (1915) ...........cceeee. 14

Respublica v. Sparhawk, 1 U.S. (1 Dall.) 357 (1788) ............... 6

Rideout v. Knox, 19 N.E. 390 (Mass. 1889) ..................00000005. 18

Scranton v. Wheeler, 179 U.S. 141 (1900) ....00..0. cece i)

Sinneckson v. Johnson, 17 N.J.L. 129 (1839) 2.00.0... cccceecceeeees 5

Slaughter-House Cases, 83 U.S. (16 Wall.) 36 (1873) . 11, 13, 14

Smith v. The Corp. of Washington,

Se Se I Se ictrriicessscecnscinintadanenamnsnocinnismlaniieil )

Stone v. Mississippi, 101 U.S. 814 (1880) .......................ceeee. 12

Trustees of Dartmouth College v. Woodward,

ae en cin hs dc gie dissecbetindeiSedasadinoniiotainminsioniial 6

United States v. Jones,

Be A I GID cccsnicascscsccsscsessene ssiesaciaiens dpeebadameaidiaasiainadiatatd 8

iV

VanHorne’s Lessee v. Dorrance,

2 US. (2 Dall.) 310 (1795)... OL FM AIRE rs OE 4

West River Bridge Co. v. Dix,

a ee I iia, sss tsccdtcdansecadseieciibboesassionaiees 6

Yates v. Milwaukee, 77 U.S.

I a 10

CONSTITUTION and STATUTES

2 See ee eR Oe eee passim

fe 8 ERS SISEDS Rear ee ee eae AIEe me RID. passim

Sas ea, ae PU INU ss cnscsssissiiccccinicnscssdiisdsicdiedsimnmunentindenonanaiaa 3

MISCELLANEOUS

Books

A. Bickel, B. Schmidt, Jr., ZX History

of the Supreme Court of the United States:

The Judiciary and Responsible Government

ee UII rics sisictniscecsanectatalddiachaatinhanneiiasledatieocpustusiiionaioanssii 18

W. Blackstone Comm. on the Laws of England ...................... 4

T. Cooley, A Treatise on the

Constitutional Limitations (1868) .......0..........ccccccceececeeeeeees 12

E. Fruend, Police Power, Public Policy

and Constitutional Rights (1904) ..............0ccccccccceccccceeceeeees 17

M. Horwitz, The Transformation

of American Law 1780-1860 (1977) ..........cccccccccccccccseeeeeceeeeeee 5

H. Hovenkamp, Enterprise and American Law

EP AEE RA nesta ET OO Dees 8

J.W. Hurst, Law and the Conditions

of Freedom in the Nineteenth Century

eae os dpuidinietieliicleaasanmaniel 6

S. Kutler, Privilege and Creative Destruction:

The Charles River Bridge Case (1971) ..........0c0cccccccccceeceeeeeeeee 6

J. Locke, Two Treatises of Gov't

(Peter Laslett ed. student ed. 1988) .0................ccccceecceeeeeeeeeee 4

The Federalist No. 10 (Madison) ........................ccccccceecceseeceeeee 4

C.P. Magrath, Yazoo, Law and Politics

in the New Republic: The Case of :

a _ cuesucioubibsuenednbasesieeon 6

J. Nedelsky, Private Property and

the Limits of American Constitutionalism

I a scnniasineeienecennenniaei 4,5

A. Paul, Conservative Crisis and

the Rule of Law: Attitudes of the

Bench and Bar, 1887-1895 (1976) ...................00cccccc0ees 8,9, 11

W. Swindler, Court and Constitution

in the 20th Century: The Old Legality

i scsnsacnenittenannniiie 8

C. Warren, Ii The Supreme Court

in United States History (Rev. ed. 1947) ...............0.0000000000e 12

Articles

Alexander, Time and Property in

the American Republican Legal Culture,

SS Oi I I aca ciccenccnssnsacseniencoesecoossrussenosens 4

Bruchey, The Impact of Concern

for the Security of Property Rights on the

Legal System of the Early American Republic,

I a cssstiommansncnemeononncetecee 4

_ Fisher, Ideology, Religion, and the

Constitutional Protection of Private Property:

1760-1860, 39 Emory L. J. 65 (1990) ................ccccccecccceeceeeees 4

Grant, The “Higher Law” Background of

the Law of Eminent Domain,

I Ps PIN SUIT cctctintcodiesnensnrndsvensersurcensorcoeccsssceseusouee 4,5

Scheiber, Jnstrumentalism and Property

Rights: A Reconsideration of American

“Styles of Judicial Reasoning” in the

19th Century, 1975 Wisc. L. Rev. 1 ................ccccccccceeeeeeseeeeeees 5

Scheiber, Property Law, Expropriation, and

Resource Allocation by Government,

1789-1910, reprinted in L. Friedman & H. Schieber,

American Law and the Constitutional

nos eaciostieioualideiintinniauns 5

vi

Scheiber, The Road to Munn: Eminent Domain

and the Concept of Public Purpose in

the State Courts, reprinted in Perspectives

in American History 329 (1971) .0.............cccccccececececeeeeeeeeees 11

Stoebuck, A General Theory of Eminent

Domain, 47 Wash. L. Rev. 553 (1972) 2.0.0.0... cccccccceceeeeeeeeees 5

Treanor, The Origins and Original Significance

of the Just Compensation Clause of the Fifth

Amendment, 94 Yale L. J. 694 (1985) ..........ccc cc cccccceeeeeceeeeeeees 5

vil

In the Supreme Court of the United States

October Term, 1991

No. 91-453

DAVID H. LUCAS,

Petitioner,

v.

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

ON WRIT OF CERTIORARI TO THE

SOUTH CAROLINA SUPREME COURT

BRIEF FOR

UNITED STATES SENATOR STEVE SYMMS,

UNITED STATES SENATOR LARRY E. CRAIG,

UNITED STATES SENATOR DON NICKLES, AND

UNITED STATES SENATOR CONRAD BURNS

AS AMICUS CURIAE SUPPORTING PETITIONER

QUESTION PRESENTED

Does a land-use regulation, pursuant to a State’s police power,

require compensation under the Constitution’s Fifth Amendment if

it totally eliminates the value of private property?

2

INTEREST OF AMICUS CURIAE

Amici are sitting United States Senators, duly elected and sworn

to represent the citizens and interests of their respective States. As

members of the legislative branch of the Federal government, amici

are acutely interested in matters affecting the Constitutional right

to just compensation when private property is taken for a public use.

SUMMARY OF ARGUMENT

The South Carolina Supreme Court held that Petitioner Lucas is

not entitled to just compensation under the United States Constitu-

tion even though the South Carolina Beachfront Management Act,

as applied, demed Mr. Lucas of all economically viable use of his

property. The state supreme court concluded that just compensa-

tion was not required on the sole basis that the statute had a valid

public purpose.

The court’s decision denies Lucas his fundamental right to just

compensation. This Court has consistently maintained that private

property cannot be taken for a public use, except upon payment of

just compensation. The Court’s decisions since the adoption of the

Constitution confirm that, while States may appropriately regulate

and prohibit certain conduct and use of property, just compensation

is required when private property is appropriated for a public use.

By effectively creating an exception that would allow the taking of

private property without compensation simply because the State

acts pursuant to a valid public purpose, the lower court ignored this

Court’s decisions requiring that a “takings” analysis consider the

impact on private property. The appropriate test for a regulatory

taking includes not only the element of the public purpose but also

the element of the impact on affected property.

ARGUMENT

I. Just Compensation Must Be Paid When A Regulation

Denies An Owner All Economically Viable Use Of The

Property.

3

A. As Found by the Court Below, the Beachfront Manage-

ment Act Destroyed All Economically Viable Use of the

Property.

The South Carolina Supreme Court held that petitioner Lucas

was not entitled to just compensation even though South Carolina’s

Beachfront Management Act of 1988,! as applied, denied petitioner

all economically viable use of his property.2_ The Court of Common

Pleas found that the setback lines drawn by respondent South Caro-

lina Coastal Council (“Council”) rendered Lucas’ two lots, which were

otherwise suitable for single-family residential development, value-

less and, therefore, awarded compensation. The Council appealed

to the state supreme court, which stated that the issue was “wheth-

er governmental regulation of the use of property, in order to pre-

vent serious public harm, amounts to a ‘regulatory taking’ of proper-

ty for which compensation must be paid.” Lucas v. South Carolina

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

The South Carolina Supreme Court held that there was no regu-

latory taking, even though it left undisturbed the trial court’s find-

ing that the property no longer had economic value. It effectively

held that a taking does not occur when a valid regulation serves to

prevent serious public harm, relying upon this Court’s decision in

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987),

as well as Mugler v. Kansas, 123 U.S. 623 (1887); Hadacheck v. Se-

bastian, 239 U.S. 394 (1915); Miller v. Schoene, 276 U.S. 272 (1928):

and Goldblatt v. Hempstead, 369 U.S. 590 (1962). Since, in this case

Lucas did not challenge the validity of the Act, the court concluded

that compensation is not constitutionally required.

This holding is inconsistent with the constitutional guarantee in

the Fifth Amendment, which is applicable to the States through the

Fourteenth Amendment, that private property shall not be taken

except for a public use and upon payment of just compensation.

S.C. Code Ann. § 48-39-10 et seq.

‘Amicus curiae do not address the effect of the 1990 amendment to the Beach-

front Management Act.

4

B. The Just Compensation Clause was Intended to Secure

a Fundamental Right.

The protection from an uncompensated taking of private property

is a fundamental right guaranteed by our Constitution. During the

framing of the Constitution, the people were deemed to have an

inalienable right to property--that is, a natural right to acquire, dis-

pose of and use property.’ John Locke had explained that the pri-

mary function of government is to preserve that inalienable right to

property. Writing roughly seventy-five years after Locke, Sir

William Blackstone similarly commented that the preservation of

vested property rights is the chief end of government; and, when a

property right is taken for the public good, it must be accompanied

by the payment of compensation.5

A student of this period has observed that “[t|he great focus of the

Framers was the security of basic rights, property in particular. . . .”6

Indeed, in Federalist No. 10, James Madison wrote that the protec-

tion of “the diversity in the faculties of men, from which the rights of

property originate,...is the first object of government.”’ To secure

‘In VanHorne’s Lessee v. Dorrance, 2 U.S.(2 Dall.) 304, 31011795), Justice Patter-

son observed that “it is evident: that the right of acquiring and possessing proper-

ty and having it protected, is one of the natural inherent and unalienable rights

of man.” See generally Federalist No. 10 (Madison); Grant, The “Higher Law”

Background of the Law of Eminent Domain, 1931 Wisc. L. Rev. 67. See also

Alexander, Time and Property in the American Republican Legal Culture, 66

N.Y.U. L. Rev. 273 (1991); Bruchey, The Impact of Concern for the Security of

Property Rights on the Legal System of the Early American Republic, 1980 Wisc.

L. Rev. 1135; Fisher, Ideology, Religion, and the Constitutional Protection of

Private Property: 1760-1860, 39 Emory L. J. 65 (1990).

‘J. Locke, Two Treatises of Gov't 323 (Peter Laslett ed. student ed. 1988).

12 W. Blackstone, Comm. on the Laws of England 4. When exercising its emi-

nent domain power, Parliament indulgently acts and must provide “a full indem-

nification and equivalent for the injury thereby sustained.” 1 W. Blackstone,

Comm. on the Laws of England 135.

‘J. Nedelsky, Private Property and the Limits of American Constitutionalism 92

(1990). Madison believed that “[t|he mghts of property were based on natural

rights.” Id. at 35.

"The Federalist Papers No. 10, at 78 (Madison) (Clinten Rossiter ed., 1961).

5 :

this protection, Madison introduced the clause in the Fifth Amend-

ment: “nor shall private property be taken for public use, without

just compensation.”* Not surprisingly, therefore, during the nation’s

formative years the requirement of just compensation was often

justified on the basis of fundamental or natural law.9

C. There is No Historical Basis For an Exception to the

Just Compensation Clause.

Protecting property rights against uncompensated appropriations

has remained a dominant theme throughout the development of our

constitutional jurisprudence. A prominent legal historian notes that

the period from 1789-1910 marks a “broad tendency to stress the

stability of property rights in the American Legal Order.”!° Despite

Chief Justice Marshall’s opinion in Barron v. The Mayor & City

Council of Baltimore, 32 U.S. (7 Pet.) 243 (1833), holding that the

Fifth Amendment to the United States Constitution did not apply to

the States, the Court’s decisions prior to the adoption of the

‘Nedelsky, supra, at 29; Treanor, The Origins and Original Significance of the

Just Compensation Clause of the Fifth Amendment, 94 Yale L. J. 694 (1985).

%E. g., Henry v. Dubuque, 10 lowa 540 (1860); Sinneckson v. Johnson, 17 N.J.L.

129 (1839); Gardner v. Village of Newburg, 2 Johns. Ch. 162 (N.Y. 1816). See

generally M. Horwitz, The Transformation of American Law 1780-1860 (1977);

Grant, supra; Scheiber, Instrumentalism and Property Rights: A Reconsideration

of American “Styles of Judicial Reasoning” in the 19th Century, 1975 Wisc. L. Rev.

1; Stoebuck, A General Theory of Eminent Domain, 47 Wash. L. Rev. 553 (1972).

WScheiber, Property Law, Expropriation, and Resource Allocation by Govern-

ment, 1789-1910, reprinted in L. Friedman & H. Scheiber, American Law and the

Constitutional Order 132 (1978).

6

Fourteenth Amendment nevertheless repeatedly confirmed that

private property could not be taken without just compensation. !!

In its first opinion on the eminent domain power,!2 the Court held

that a State could exercise this power against a corporate franchise.

West River Bridge Co. v. Dix, 47 U.S. (6 How.) 507 (1848). In 1795,

Vermont had granted the West River Bridge Company the exclusive

right to build and operate a toll bridge along the West River. Forty-

four years later, the State passed an internal improvement act sanc-

tioning further development along the river, conditioned upon the

payment of compensation for the taking of any property (including

franchises). The West River Bridge Company challenged the new

statute, claiming that the State could not, under the pretext of the

eminent domain power, abrogate its contractual obligation with the

company by taking its franchise right, even though it afforded com-

pensation. 47 U.S. at 531. The Court upheld the exercise of the

power as a necessary incident to sovereignty. In a separate concur-

rence, Justice Woodbury demonstrated that the weight of authority

sanctioned the use of the eminent domain power, but only upon pay-

ment of compensation. 47 U.S. at 539-49.

Freedom from uncompensated takings of private property became

the subject of extensive litigation during the period of economic

\\Early decisions concerning the protection of private property focused on the

constitutional prohibition against impairing contracts. It is now well accepted

that decisions during the Marshall Court protected vested property rights from

encroachment. See Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.)

518 (1819); Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810). See generally C.P.

Magrath, Yazoo, Law and Politics in the New Republic: The Case of Fletcher v.

Peck 102 (1966) (“The Court's decision [in Fletcher v. Peck| elevated vested prop-

erty to a position of primacy in the hierarchy of American constitutional values.” ).

Under Chief Justice Taney, the Court continued to protect property interests, but

its decisions reflected an expanding concept of property that incorporated eco-

nomic change. See Charles River Bridge Co. v. Warren River Bridge Co., 36 U.S.

(11 Pet.) 420 (1837). See generally J.W. Hurst, Law and the Conditions of Free-

dom in the Nineteenth Century United States (1956); S. Kutler, Privilege and

Creative Destruction: The Charles River Bridge Case (1971).

'2But cf. Respublica v. Sparhawk, 1 U.S. (1 Dall.) 357 (1788) (whether compen-

sation required for seizure of flour unreturned during the war).

7

expansion and increased regulatory activity following the Civil

War.!3 State and local exercise of the expanding police power invari-

abiy affected private conduct and use of private property. As Justice

Holmes would later observe, “[g|overnment hardly could go on if to

some extent values incident to property could not be diminished

without paying for every such change in the general law.” Pennsyl-

vania Coal Co. v. Mahon, 260 U.S. 393, 413 (1922).

The degree to which government could affect particular conduct

and use of property became a principal focus of challenges to the

exercise of the police power. Such challenges were based primarily

on the newly adopted “due process” clause of the Fourteenth Amend-

ment, which provided that “nor shall any State deprive any person

of life, liberty, or property, without due process of law.” U.S. Const.

amend. XIV, § 1. The Court noted that until the Fourteenth Amend-

ment “[i|t has never been seriously contended that such laws raised

any question growing out of the Constitution of the United States.”

Bartemeyer v. Iowa, 85 U.S. (18 Wall.) 129, 132 (1874). The Four-

teenth Amendment, however, provided an opportunity for parties to

press for further limitations on State action. In particular, the clause

became viewed as a potential vehicle for curbing regulation of busi-

ness activity, under the premise that the protection against depriva-

tion of liberty and property without due process included the right to

''The focus quite often was on whether the eminent domain power could be

delegated, or whether the power was being used for a private use, or the appropri-

ate mechanism for determining compensation. See, e.g., Otis Co. v. Ludlow Man-

ufacturing Co., 201 U.S. 140 (1906) (upheld mill-dam statute, where compensa-

tion provided); Clark v. Nash, 198 U.S. 361 (1905) (whether valid condemnation

for a public use); Fallbrook Irrigation District v. Bradley, 164 U.S. 112 (1896)

(upheld delegation of eminent domain power to irrigation district); Head v.

Amoskeag Mfg. Co., 113 U.S. 9(1885) (upheld mill-dam statute ); Cole v. City of La

Grange, 113 U.S. 1 (1885) (statute authorizing compensable taking of private

property held not for a public use); Boom Co. v. Patterson, 98 U.S. 403, 406 (1879)

(reconfirming inherent right of sovereign to exercise eminent domain power); Mt.

Holyoke Company v. Lyman, 82 U.S. (15 Wall.) 500 (1873) (upheld claim of inter-

ference with fishery interest by construction of mill dam); Kohl v. United States,

91 U.S. 367 (1876) (upheld the Federal government’s exercise of eminent domain

power).

8

continue to engage in any activity lawful when first undertaken. !4

The post-Civil War “due process” challenges were not based di-

rectly upon the Just Compensation Clause. Not until the late 1890s

did the Court hold that the requirement of “due process of law” in-

corporated the concept of “just compensation.”'5 Chicago B. & Q. R.

Co. v. City of Chicago, 166 U.S. 226 (1897); see also Fallbrook Irriga-

tion District v. Bradley, 164 U.S. 112, 158, 161 (1896) (suggesting

that “due process” includes considering whether property taken for

a public use). Nevertheless, when resolving due process challenges

prior to the incorporation of the Fifth Amendment, the Court often

decided whether there was a “deprivation” of any protected “prop-

erty” interest. As we next show, the Court’s decisions defined two

general categories of instances where no deprivation of property

occurred. First, the Court ruled that damages resulting from regu-

lation, without more, did not constitute a “deprivation” within the

meaning of the Fourteenth Amendment. When governmental ac-

tion neither regulated nor restricted the use of property, no depriva-

tion occurred if the value of property was only indirectly and inci-

dentally affected. Second, the Court ruled that property owners did

not have any vested property interest in any particular continued

use of property or in any particular conduct that interfered with the

enjoyment of property by others.

1. Incidental Pecuniary Losses Did Not Constitute a

“Deprivation” of Property.

The Court distinguished between the lawful exercise of the police

power causing “incidental” or “consequential” damage and a

“taking.” Reviewing various earlier cases, the Court noted that they

“recognizled| . . . the distinction between an incidental injury to

\4See generally H. Hovenkamp, Enterprise and American Law 1836-1937 (1991);

A. Paul, Conservative Crisis and the Rule of Law: Attitudes of the Bench and Bar,

1887-1895 (1976); W. Swindler, Court and Constitution in the 20th Century: The

Old Legality 1889-1932 (1969).

iSThe requirement for just compensation was a limitation upon the use of the

eminent domain power. United States v. Jones, 109 U.S. 513, 518 (1883). Cf

Noble v. Union River Logging R. Co., 147 U.S. 165 (1893) (revocation of vested

right-of-way without compensation held void).

9

rights of private property resulting from the exercise of governmen-

tal powers, !awfully and reasonably exerted for the public good, and

the taking, within the meaning of the Constitution, of private prop-

erty for public use.” Chicago B. & Q. R. Co. v. Illinois, 200 U.S. 561,

583 (1906).

The Court held that governmental activity neither directly bur-

dening private property nor regulating its use did not “take” any

“property” interest. Landowners, for instance, could not claim any

vested right in the continued maintenance of the status quo of sur-

rounding land--i.e., a status quo that, if changed, would diminish a

particular landowner’s property value. In an opinion written by

Justice Brewer, an ardent defender of property rights,'6 the Court

noted that the exercise of the police power was not rendered invalid

simply because it worked pecuniary injury when the governmental

action was unrelated to the use of private property. L’Hote v. New

Orleans, 177 U.S. 587, 596-99 (1900) (upholding authorization of

what otherwise might have been deemed a nuisance at common

law). Thus, landowners whose property fronted streets, for exam-

ple, failed to persuade the Court to hold unconstitutional changes in

street grading. Cf. Marchant v. Pennsylvania Railway Co., 153 U.S.

380 (1894); City of Chicago v. Taylor, 125 U.S. 161 (1888).!7

Another common example of incidental damage occurred when

governmentally authorized construction along navigable waterways

incidentally affected riparian and other landowners. The Court held

that the due process clause generally did not bar such an exercise of

the police power. See Manigault v. Springs, 199 U.S. 473 (1905);

Bedford v. United States, 192 U.S. 217 (1904); Scranton v. Wheeler,

6A. Paul, supro. at 70.

'7Earlier decisions rejected landowners’ attempts to effectively impose a nega-

tive servitude upon surrounding land, by arguing for compensation as a result of

incidental activity unrelated to the use of the landowners’ property. The Court

held that “one cannot build his house on the top of a hill in the midst of a city, and

require the grade of the street to conform to his convenience, at the expense of the

public.” Smith v. The Corp. of Washington, 61 U.S. (20 How.) 135, 148 (1858). See

Goszler v. Corp. of Georgetown, 19 U.S. (6 Wheat.) 593 (1821); City of Boston v.

Lecraw, 58 U.S. (17 How.) 426 (1855).

10

179 U.S. 141 (1900); Eldridge v. Trezevant, 160 U.S. 452 (1896).'*

The Court reasoned that such damages resulted from the “inciden-

tal consequence” of improvements on navigable highways, with the

government exercising a dominant and pre-existing servitude, and

did not constiiute a taking of property. Gibson v. United States, 166

U.S. 269, 274-76 (1897) (congressionally authorized construction of

dike in the Ohio river).

A good illustration is Northern Transportation Co. of Ohio v. City

of Chicago, 99 U.S. 635 (1879). There, state-approved construction

by the City of Chicago caused the interruption of a company’s access

to the Chicago river, where it maintained its dock and warehouse.

The company brought a nuisance action against the city, claiming

that it was entitled to compensation for consequential damages. 99

U.S. at 641. The Court rejected this argument, holding that “acts

done in the proper exercise of governmental powers, and not directly

encroaching upon private property, though their consequences may

impair its use, are universally held not to be a taking within the

meaning of the constitutional provision.” Jd. at 642.

Conversely, in Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166

(1872), the Court held that a taking occurred when there was a direct

and substantial injury to property. There, the operation of a govern-

mentally approved dam flooded certain private property, completely

destroying its value. After rejecting statutory defenses and noting

that the takings clause of the Fifth Amendment did not apply to the

States, the Court examined the Wisconsin Constitution, which con-

tained a just compensation provision similar to the Fifth Amend-

ment; the Court noted that “this limitation on the exercise of the

right of eminent domain is so essentially a part of American consti-

tutional law that it is believed that no state is now without it. .. .” 80

U.S. at 177.'9 The Court then rejected the argument that the injury

8C'f, Yates v. Milwaukee, 77 U.S. (10 Wall.) 497 (1871) (compensation required

upon removal of wharf, where no showing by city that wharf a nuisance or ob-

struction to navigation).

'SNot until Murdock v. The City of Memphis, 87 U.S. (20 Wall.) 590 (1875), did

the Court consider its jurisdiction over state law issues.

11

was consequential, and held that a taking could occur when there is

a “serious interruption to the common and necessary use of prop-

erty....” 80 U.S. at 179. See also Manigault v. Springs, 199 U.S.

473, 484-85 (1905) (“where there is a practical destruction or

material impairment of the value of plaintiff's lands, there is a

taking which demands compensation”).

2. Decisions Upholding the Exercise of the Police

Power did not Sanction Uncompensated

Takings.

The decisions upholding police power measures directly affecting

private conduct and use of private property cannot be read as per-

mitting the uncompensated taking of private property. In these cas-

es, litigants frequently sought to establish a vested or property right

in the status quo, often arguing that they were being deprived of a

liberty or property interest when the exercise of the police power

restrained their cpportunity to engage in a particular conduct or

previously allowed use of property.2°? Such arguments prompted the

Court to focus on the scope of the police power as well as the nature

and use of property, when considering a possible due process viola-

tion.2! No “taking” of “private property” occurred when the exercise

of the police power affected a change in the status quo--even though

“See generally A. Paul, supra. Although the majority in the Slaughter-House

Cases, 83 U.S. (16 Wall.) 36 (1873), rejected the argument that a restraint on the

exercise of a trade constituted a deprivation of property, Justice Bradley believed

otherwise. Id. at 127.

!The focus on the “use” of property supported the Court's conclusion in Munn v.

Illinois, 94 U.S. 113 (1877), that businesses affected with the public interest could

be regulated, and that such regulation did not deprive a company of property

without due process of law. See generally Scheiber, The Road to Munn: Eminent

Domain and the Concept of Public Purpose in the State Courts, reprinted in Per-

spectives in American History 329 (1971). However, such businesses could not be

required to transfer their property to private individuals. Missouri Pacific Rail-

way Co. v. Nebraska, 164 U.S. 403 (1896).

12

particular economic interests may have relied on that status quo.22

It became axiomatic both that the legislature could not contract

away the police power, Boyd v. Alabama, 94 U.S. 645 (1877) (lot-

tery); Stone v. Mississippi, 101 U.S. 814(1880)(same), and that “[nJo

person has a vested interest in any rule of law, entitling him to insist

that it shall remain unchanged for his benefit.” New York R. C. Co.

v. White, 243 U.S. 188, 198 (1917). It was in this context that a

commentator could confidently assert that “an act which came with-

in the scope of tne State police power could not be termed a depriva-

tion of property.”23

The Court held that States could constitutionally exercise their

police power to regulate or prohibit an activity or use of property

that interfered with any other persons’ equal enjoyment in the use

of their property. Such police power measures did not deprive an

owner of any vested property interest without due process, because

it had become well established that no person has the right to con-

tinue using property in such a way as to harm others. In Bartemeyer

v. Iowa, 85 U.S. (18 Wall.) 129 (1874), for example, the defendant

challenged his conviction for selling liquor, arguing that the prohibi-

tion on the sale of liquor violated the Fourteenth Amendment. The

22In his treatise on constitutional limitations, Thomas Cooley observed that no

vested rights exist in the status quo:

In organized society every man holds all he possesses, and looks forward

to all he hopes for, through the aid and under the protection of the laws;

but as changes of circumstances and of public opinion, as well as other

reasons affecting the public policy, are all the while calling for changes in

the laws, and as these changes must influence more or less the value and

stability of private possessions, and strengthen or destroy well-founded

hopes, and as the power to make very many of them could not be disput-

ed without denying the right of the political community to prosper and

advance, it is obvious that many nights, privileges, and exemptions which

usually pertain to ownership under a particular state of the law, and

many reasonable expectations, cannot be regarded as vested rights in

any legal sense. (Footnotes omitted).

T. Cooley, A Treatise on the Constitutional Limitations 437 (1868).

23C. Warren, II The Supreme Court in United States History 572 (Rev. ed. 1947).

13

Court rejected the argument, but in so doing noted that, if the prohi-

bition applied to liquor manufactured prior to the prohibition, then

a serious issue would arise as to whether it deprives an owner of

property without due process of law. 85 U.S. at 133. Concurring,

Justice Bradley emphasized that compensation is required when

vested rights are taken away for the public good, but that no such

property interest existed in Bartemeyer.*4

Similarly, in Boston Beer Co. v. Massachusetts, 97 U.S. 25 (1878),

a company authorized to manufacture malt liquor argued that it

had acquired such a vested right through its State incorporation,

and therefore was free from the exercise of the State’s police power.

The Court held that liquor prohibition was an appropriate exercise

of the police power, which the State cannot divest. 97 U.S. at 33. “If

the public safety or the public morals require the discontinuance of

any manufacture or traffic, the hand of the Legislature cannot be

stayed from providing for its discontinuance, by any incidental in-

convenience which iiidividuals or corporations may suffer.” Jd. at

32. The Court added, however, that “[wJe do not mean to say that

property actually in existence, and in which the right of the owner

has become vested, may be taken for the public good without due

compensation.” /d.

Bartemeyer and Boston Beer both confirmed the principle that the

police power could be constitutionally exercised to abate conduct

and use of property that is noxious and harmful. The Court applied

this same principle in Northwestern Fertilizing Co. v. Hyde Park, 97

U.S. 659 (1878), where the police power was exercised to abate a

Justice Bradley explained that the law “was not in this case an invasion of

property existing at the date of its passage, and the question of depriving a person

of property without due process of law does not arise.” 85 U.S. at 136. Justice

Field also concurred, distinguishing Bartemever from the Slaughter-House Cases,

where the Court upheld a State grant of a partial monopoly to one company in the

slaughtering business, thus excluding others from engaging in the business. /d.

at 137-38. Justice Field later wrote that the nght to acquire, dispose of and use

property is an inalienable right, but limited to the extent that such use “will not

impair the equal enjoyment by others of their property.” Crowley v. Christensen,

137 U.S. 86, 90 (1890) (upholding prohibition on the right to sell liquor).

14

nuisance that had been previously permitted. The State incorporat-

ed a fertilizing company to transport, manufacture and convert dead

animals and animal matter into fertilizer. Subsequently, the com-

pany was given two years to stop transporting matter through Hyde

Park. In an action brought against the corporation for refusing to

stop its business, the company argued that its charter created a

contract (or property) right that could not be impaired unless

through condemnation. The Court rejected the company’s argu-

ment, holding that the activity clearly involved a nuisance and that

the police power “rests upon the fundamental principle that every-

one shall so use his own as not to wrong and injure another. To

regulate and abate nuisances is one of its ordinary functions.” 97

U.S. at 667. And, since the government cannot contractually guar-

antee freedom from the exercise of the police power, the exercise in

this instance was valid.25

None of these cases, however, held that the value of existing prop-

erty could be totally destroyed without the payment of just compen-

sation, nor did the “nuisance” cases relied on by the court below.

3. The Court in Mugler v. Kansas Did Not Create

any Exception to the Just Compensation

Requirement.

The court below emphasized Mugler v. Kansas, 123 U.S. 623

(1887). But that case was simply another example of the Court’s

evolving response to the parade of “due process” chailenges to the

exercise of the States’ police power. Sellers and manufacturers of

“Subsequent cases upheld the power to prohibit or regulate one’s ability to

engage in activity or conduct deemed injurious to the health and safety of others.

See Pierce Oil Corp. v. City of Hope, 248 U.S. 498 (1919) (storage of gasoline);

Reinman v. Little Rock, 237 U.S. 171(1915) (livery stables); Gardner v. Michigan,

199 U.S. 325 (1905) (garbage collection and disposal); California Reduction Co. v.

Sanitary Reduction Works, 199 U.S. 306 (1905) (same); Fischer v. St. Louis, 194

U.S. 361 (1904) (upheld prohibition on dairy or cow stables to be built or main-

tained in city without permission); New York & N. E.R. Co. v. Bristol, 151 U.S.

556 (1894) (railroad crossing); Patterson v. Kentucky, 97 U.S. 501 (1879) (illumi-

nating fluids).

15

alcoholic beverages challenged Kansas’ law prohibiting the manu-

facture and sale of liquor.26 The Court had to decide whether the

State’s police power could be constitutionally exercised in this fash-

ion. Prior decisions had already established that the police power

encompassed such regulation.2’ Yet, counsel for the liquor sellers

argued, inter alia, that the prohibition was an unconstitutional at-

tempt to deprive parties of their right to engage in the continued

operation of the brewery. The State replied, inter alia, that parties

acquire no vested right to engage in a particular business “detri-

mental to the public hea'th or public morals, because of the absence

of any legislation on the subject.” Mugler, 31 L. Ed. at 207.

The Court held that the Fourteenth Amendment did not restrict

the exercise of the State’s police power to prohibit the manufacture

and sale of liquor. The Court first reviewed prior decisions uphold-

ing the State’s power to regulate the manufacture and local sale of

liquor. It then rejected the argument that the police power could not

regulate the right to manufacture liquor for one’s own use, conclud-

ing that, as in the case of Munn v. Illinois, the power to regulate

emanates from the power to protect society from the injurious conse-

quences to others from the activity. The Court then explained that

State legislatures have the power to determine what activity causes

injurious consequences justifying the exercise of the police power,

subject to the courts’ constitutional responsibility to determine

“Kansas charged Mugler with manufacturing and selling liquor without a

license in violation of the law, and Mugler challenged his conviction by claiming

that he “was denied rights, privileges and immunities guaranteed by the consti-

tution...” 123 U.S. at 653. In a separate action, Kansas sought to close down

Ziebold & Hagelin’s brewery. Id. at 654

27Foster v. Kansas, 112 U.S. 205 (1884); Boston Beer Co. v. Massachusetts, 97

U.S. 25 (1878); Bartemeyer v. lowa, 85 U.S. (18 Wall.) 129 (1874); License Cases,

46 U.S. (5 How.) 504 (1847), overruled by Leisy v. Harden, 135 U.S. 100 (1890).

16

whether it is a legitimate exercise of that power.2* 123 U.S. at 660-62.

The Mugler Court, therefore, rejected the parties’ specific argu-

ment that the prohibition must fail because they had a vested right

to continue to engage in the manufacture and sale of liquor.2° The

Court held that the State had not, and could not contract away its

police power, nor had it “give[n] any assurance, or come under an

obligation, that its legislation upon that subject would remain un-

changed.” 123 U.S. at 669. In accordance with prior decisions, the

Court reaffirmed that “all property in this country is held under the

implied obligation that the owner’s use of it shall not be injurious to

the community.” Jd. at 665.

The Court also refuted defendants’ reliance on Pumpelly v. Green

Bay Co. (discussed supra), emphasizing that Mugler did not involve

the State’s power of eminent domain; instead, “the question now

before us arises under what are, strictly, the police powers of the

State. . . [and] the present case must be governed by principles that

do not involve the power of eminent domain.” 123 U.S. 668. It ruled

that a prohibition on use cannot be deemed a deprivation of property

simply because it causes pecuniary loss “by reason of their not being

28“If, therefore, a statute purporting to have been enacted to protect the public

health, the public morals, or the public safety, has no real or substantial relation

to those objects, or is a palpable invasion of rights secured by the fundamental

law, it is the duty of the courts to so adjudge. .. .” 123 U.S. at 661. Justice Harlan’s

majority opinion in Mugler echoed other opinions by Justice Harlan, in which the

Court held that the exercise of the police power had to be reasonably related to a

legitimate State objective. See Hennington v. Georgia, 163 U.S. 299 (1896);

Brimmer v. Rebman, 138 U.S. 78(1891); Minnesota v. Barber, 136 U.S. 313 (1890).

“~The Court summarized the parties’ argument as follows:

it is contended that, as the primary and principal use of beer is as a bever-

age; as their respective breweries were erected when it was lawful to

engage in the manufacture of beer for every purpose; as such establish-

ments wil] become of no value as property, or, at least, will be materially

diminished in value, if not employed in the manufacture of beer for every

purpose,- the prohibition upon their being so employed is, in effect, a

taking of property for public use without compensation, and depriving the

citizen of his property without due process of law.

123 U.S. at 664.

17

permitted, by a noxious use of their property, to inflict injury upon

the community.” /d. at 669.8° Lastly, the Court declined to construe

the statute as necessarily authorizing the forfeiture of property law-

fully in existence prior to the prohibition. Jd. at 671-72. Thus,

Mugler does not justify a public interest or nuisance exception per-

mitting an uncompensated regulatory taking of existing property.

D. A Regulation That Destroys Vested Property me

Requires Payment of Just Compensation.

In his oft-repeated observation that “while property may be regu-

lated to a certain extent, if regulation goes too far it will be recog-

nized as a taking,” Justice Holmes brought “due process” and

“takings” analysis together. Pennsylvania Coal Co. v Mahon, 260

U.S. 393, 415 (1922). From that seminal decision evolved the con-

temporary concept of a regulatory taking. In Pennsylvania Coal,

plaintiffs sought an injunction against the mining of coal underlying

their property.3! They alleged that the removal of coal would cause

the subsidence of their house, contrary to the State law known as

the Kohler Act. The trial court refused to issue an injunction, hold-

ing instead that the company had the right to remove the coal and

that plaintiffs only sought to prevent a private injury. On appeal,

the state supreme court held that the Kohler Act was a police

measure which did not “contemplate the taking of private property

for public use,” and it upheld the Act. Mahon v. Pennsylvania Coal

Co., 118 A.2d 491 (1922).

This Court reversed. It held that, as applied to Pennsylvania Coal

Company's property, the statute destroyed the company’s existing

contract and property rights. 260 U.S. at 413. The Court then

balanced the extent of the taking, which it viewed as “great,” against

“See generally E. Fruend, Police Fens or, Public Policy and Constitutional Rights

568-69 (1904) (explaining Mugler and the distinction between indirect pecuniary

loss and taking, noting that State cannot compensate for pecuniary losses incurred

as result of prehibiting a specific noxious use of property). Justice Harlan, writing

the majority opinion in Mugler, later wrote in Chicago B. & Q. R. Co. v. City of

Chicago, 166 US. at 235-6, that the “|dJue protection of the rights of property has

been regarded as a vital principle of republican institutions.”

Plaintiffs had previously conveyed the subsurface estate to the company.

18

the public interest, which it viewed as minimal and not involving a

common nuisance. /d. at 413-14.52 Thus, the Court concluded that

“lilf we were called upon to deal with the plaintiffs’ position alone we

should think it clear that the statute does not disclose a public

interest sufficient to warrant so extensive a destruction of the defen-

dant’s constitutionally protected rights.” Jd. at 414.53 In the

remainder of the opinion, the Court held that, because the Act went

too far and apparently did not secure any “average reciprocity of

advantage” (/d. at 415),34 it was an unconstitutional exercise of the

police power. However, the Court indicated that the State’s exercise

of the police power, in these circumstances, would be constitutional

if accompanied by just compensation.*5

The principle of Pennysluania Coal v. Mahon should have been

applied by the South Carolina Supreme Court.

Justice Holmes had earlier indicated that the line between an acceptable po-

lice power measure and a taking was a matter of degree. Hudson County Water

Co. v. McCarter, 209 U.S. 349, 355 (1908); Rideout v. Knox, 19 N.E. 390, 392

(Mass. 1889). See also Portsmouth Harbor Land & Hotel Co. v. United States, 260

U.S. 367 (1922) (constant firing of ammunition over property may effect taking of

easement).

“The Court distinguished Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531

(1914), where the Court had upheld a statute requiring the maintenance of pillars

while mining to protect the safety of miners. The coal company had argued that

the method for determining the appropriate width of the pillar violated due pro-

cess. Jd. at 540. Anoted scholar has questioned whether this case even presented

any serious issue warranting the Court's attention. A. Bickel, B. Schmidt, Jr., 1X

History of the Supreme Court of the United States: The Judiciary and Responsible

Government: 1910-1921 306-07 (1984).

4A concept similar to “average reciprocity of advantage” had been used in ear-

lier due process cases to justify the imposition of assessments on landowners for

such public activities as draining swamps and building roads. See, e.g., Davidson

v. City of New Orleans, 96 U.S. 97 (1878). Justice Holmes also used the phrase in

Jackman v. Rosenbaum Co., 260 U.S. 22, 30 (1922).

The opinion concludes with the caveat that “we assume that an exigency exists

that would warrant the exercise of eminent domain.” 260 U.S. at 416.

19

II. This Court Has Not Created Any Exception To The Just

Compensation Requirement For Regulations That

Destroy All Economic Value.

The South Carolina Supreme Court apparently assumed that

Mugler and Mahon represented two distinct approaches to deciding

whether there has been a taking of private property for which just

compensation is due. The court premised its holding that Lucas was

not entitled to compensation on its view that several of this Court’s

cases, beginning with Mugler, create a so-called “nuisance-like”

exception to the right to just compensation for regulations that “go

too far” under Mahon.

As shown above, however, the lower court’s assumption misap-

prehends both Mugler and Mahon, as well as subsequent cases ap-

plying them. This Court’s evolving response to challenges to the

exercise of the State’s police power demonstrates that Mugler does

not support any modern day exception to the just compensation

requirement. Mugler reflects the Court’s recognition that States

can regulate, and even prohibit, activity deemed injurious to the

public health and safety. Such State action does not deny due pro-

cess of law simply because it prevents persons from engaging in a

particular activity deemed harmful to others. Mahon, on the other

hand, establishes that a regulation that restricts the use of property

to the extent of destroying its economic value is a taking.

Although this Court in Keystone Bituminous Coal Ass'n v.

DeBenedictis, 480 U.S. 470 (1987), acknowledged certain “nuisance”

cas2s, it has never recognized a “nuisance” or “nuisance-like” excep-

tion which would mechanically justify a refusal to pay just compen-

sation for the destruction of all economically viable uses of a prop-

erty caused by an otherwise valid regulation. Instead, this Court’s

decisions have from the beginning been essentially “ad hoc” factually

oriented inquiries. Hodel v. Irving, 480 U.S. 704, 714 (1987) (quot-

ing Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979)); see also

Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224

(1986); Penn Central Transportation Co. v. New York City, 438 U.S.

104 (1978). Although these decisions are not necessarily reducible

20

to easy formulas, one statement about them can be made with

confidence.

In every case, the Court has weighed not just the governmental or

public interest in the regulation, but also the impact of the regula-

tion on the property owner’s interests. Nor should this be surpris-

ing, since the owner of private property is the intended beneficiary

of the Just Compensation Clause. In no case has the Court rested on

its analysis of the governmental action and declined to examine, as

the court below did here, the property owner’s rights.*6

Indeed, the South Carolina Supreme Court’s decision can be fairly

read to create a per se rule never before applied in “takings” cases: if

there is a valid public purpose to the regulatory measure, and if the

legislature has taken the trouble to label the object of its regulation

a “nuisance,” then no compensation is payable even when the prop-

erty owner’s investment-backed expectations are totally frustrated

by the loss of all economically viable uses of the property.

This novel interpretation “goes too far.” It would change the Just

Compensation Clause to read “nor shall private property be taken

except for public use,” thus eliminating any requirement for com-

pensation. This Court’s decisions have emphasized time and again

that the question of whether a regulation effects a taking requires a

factual inquiry into both the public justification and the impact on

private property, one which “necessarily requires a weighing of pri-

vate and public interests.” See, e.g., Keystone, 480 U.S. at 492 (quot-

ing Agins v. Tiburon, 447 U.S. 255, 260-61 (1980)). In none of the

cases since Mahon has this Court held otherwise. Indeed, in two of

the cases relied on by the lower court, there was no “just compensa-

tion” issue even presented or discussed.*’ Nor in the other cases did

——— ~ eS

%*Even before the incorporation of the just compensation requirement into the

due process clause and before Mahon, the Court in Lawton v. Steele, 152 U.S. 133

(1894) indicated that forefiture of articles declared to be illegal and a nuisance,

such as illegal fishing nets or diseased cattle, might rise to the level of a due

process violation if the property being taken was of great value.

Miller v. Schoene, 276 U.S. 272 (1928); Hadacheck v. Sebastian, 239 U.S. 394

(1915).

21

the Court’s analysis end with the justification for the regulation; it

never held that the regulation justified the uncompensated extin-

guishment of all economic value.

Hadacheck v. Sebastian, 239 U.S. 394 (1915), like Mugler before

it, predates the Court’s first acknowledgement in Pennsylvania Coal

Company v. Mahon of the “regulatory takings” doctrine. Hadacheck,

like Mugler, was merely a due process examination of the validity of

the challenged regulation, and no more. Hadacheck involved a facial

challenge to the regulation and there were no findings of fact on the

extent to which the property owner’s rights or “investment-backed

expectations” were extinguished.

In Hadacheck, the owner had for many years conducted a perfectly

legal brickyard business on a plot which overlay the clay deposits

used in manufacturing the bricks. As the city of Los Angeles grew, it

annexed the area in which the brickyard was located, which became

primarily residential in character. The city then passed an ordi-

nance prohibiting only the operation of the brickyard. The ordinance

did not, for example, prohibit the extraction of the clay to be trans-

ported elsewhere, or any other business which might be conducted

on the site.

The owner was convicted of the misdemeanor of continuing to

operate the brickyard, and brought a habeas corpus petition alleg-

ing that the statute violated the Due Process Clause. No issue of

whether just compensation should be paid was presented to or

decided by the Court. Rather, the Court focused on the effect the

ordinance had in depriving the owner of its ability to continue con-

ducting the business of the brickyard -- just one of the many bundles

of rights in the property. The lower court had stated that the regu-

lation was not precluded by the fact that “the value of the invest-

ments made in the business ... will be greatly diminished.” 239 U.S.

at 408. This says nothing, nor would the record or posture of the

case support anything further *o be said, about the other uses to

which the property could be put, or about whether and to what extent

“just compensation” was owed to the owner.

Miller v. Schoene, 276 U.S. 272 (1928), decided after Pennsylvania

22

Coal Company v. Mahon, also presented only the question of

whether the exercise of the police power was valid. That case simi-

larly says nothing about whether just compensation was owed. In

an effort to preserve the commercially valuable apple crop, the Vir-

ginia State Entomologist had directed that cedar trees near apple

orchards be destroyed to eliminate the disease the cedar trees were

suspected of transmitting. Certain cedar tree owners challenged

the validity of the law.

It is noteworthy that the statute provided for payment to the

owners for the costs of removal of the trees and also reserved to

them ownership of the felled trees. Had a just compensation issue

been presented by the case, the only property interest arguably

taken would have been the interest present in the trees while they _

were standing. But that is beside the point; there was no question

presented on whether the cedar tree ordinance went “too far” in any

sense that would require the payment of just compensation. All that

the Court was called upon to decide, and all that it did decide, was

whether the statute was a valid exercise of the State’s police power.

The facts of Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962),

are somewhat similar to Hadacheck. The town of Hempstead had

grown such that residential development and schools surrounded an

extensive sand and gravel pit where prior excavations had created a

twenty acre lake. What had once been a perfectly legal and unobjec-

tionable activity now had become incompatible with its surroundings.

The town enacted a regulatory ordinance which concededly rendered

unprofitable the excavation activity, which was concededly the most,

but far from the only profitable use of the property.

Here, the Court did consider the question of whether the regula-

tion required the payment of just compensation, but little analysis

was in fact required on the posture of the case. After noting that

“(t|here is no set formula to determine where regulation ends and

taking begins|,|. . .” Goldblatt, 369 U.S. at 594, the Court went on to

say that “[|hjow far regulation may go before it becomes a taking we

need not now decide, for there is no evidence in the present record

which even remotely suggests that prohibition of further mining

23

will reduce the value of the lot in question.” Jd. In other words, the

Court properly ruled that the issue of whether a compensable taking

had occurred could not be decided without evidence and consider-

ation of the private property owner’s interest.

The final case relied upon by the lower court is the most recent,

Keystone Bituminous Coal Association v. DeBenedictis, supra. This

case is commonly misinterpreted as giving new life to the possibility

of a “nuisance exception.” Keystone does not, however, sanction the

per se rule effectively adopted by the South Carolina Supreme Court

in this case. The opinion of the Court in Keystone is in fact a classic

“weighing of the public and private interests” so characteristic of

this Court’s takings jurisprudence.

In Keystone, Pennsylvania coal operators brought a facial chal-

lenge to the validity of a statute which required that certain coal

deposits be left in place to prevent subsidence, or settling, of the

surface due to mining. The Court’s opinion sets out the task before

the Court: “(t]he two factors that the Court considered relevant [in

Mahon| have become integral parts of our takings analysis. We have

held that land use regulation can effect a taking if it ‘does not sub-

stantially advance legitimate state interests. ...or denies an owner

economically viable use of his land.’” 480 U.S. at 485 (emphasis

added). The opinion then states the essence of its holding: the appli-

cation of both tests, not just one, demonstrates that the facial chal-

lenge must fail.

First, unlike the Kohler Act, the character of the govern-

mental action involved here leans heavily against finding a

taking; the Commonwealth of Pennsylvania has acted to

arrest what it perceives to be a significant threat to the com-

mon welfare. Second, there is no record in this case to sup-

port a finding similar to the one the Court made in Pennsyl-

vania Coal, that the Subsidence Act makes it impossible for

petitioners to profitably engage in their business, or that

there has been undue interference with their investment-

backed expectations.

Keystone, 480 U.S. at 485.

24

The Court first determined whether the statute served a legiti-

mate public purpose. It described prior cases as expressing “[t|he

Court’s hesitance to find a taking when the State merely restrains

uses of property that are tantamount to public nuisances. .. .” 480

U.S. at 491 (emphasis added). The Court said that its past “hesi-

tance” to find a compensable taking when a State merely prohibits a

nuisance was consistent with the notion of “average reciprocity of

advantage” noted in Pennsylvania Coal v. Mahon. But this did not

end the analysis. In a footnote to this discussion, the Court referenc-

es the other rationale for the “hesitance,” namely, the “simple theory”

that since no individual has a right to use his property so as to create

a nuisance or otherwise harm others, nothing is “taken” when the

nuisance is enjoined. /d. at 491 n.20. The Court further indicates in

this footnote that any “nuisance exception” to the takings guarantee

is “not coterminous with the police power itself.” Jd. (quoting Penn

Central, 438 U.S. at 145 (Rehnquist, J., dissenting)).3* Moreover,

during the same term, the Court decided two other cases clearly

implying that both the element of the public purpose as well as the

element of the impact on private property are, as stated in Keystone,

supra, “integral parts of our takings analysis.” Nollan v. California

Coastal Comm’n, 483 U.S. 825 (1987); First English Evangelical

Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987). The

Court’s “hesitance” discussion, therefore, does not, as believed by

the court below, dispense with any need to weigh the economic

impact of the regulation on private property.

*In his dissenting opinion in Keystone, the Chief Justice elaborated on this

language, stating among other things that the exception to the takings guarantee

is in fact one based not on nuisance, but one premised on allowing the government

to prevent a “‘misuse or illegal use. . ..” and is a “narrow” one. Keystone, 480 U.S.

at 512 (quoting Penn Central (Rehnquist, J., dissenting)). In effect, if there is an

exception, it is certainly wrong to label it a “nuisance” exception, and it would

appear to require considerably more illegality or harm than Luca proposed con-

struction of two houses. The dissent further states that “we have not accepted the

proposition that the State may completely extinguish a property interest or

prohibit all use without providing compensation|,}. . .” a fair description of the

effect of the Beachfront Management Act on Lucas’ property here. /d. at 513

25

The court below brushed aside this Court’s ensuing consideration

of the impact on the value of private property in Keystone, possibly

because the Court concluded its public justification discussion by

noting that it “need not rest. . . [its] decision on this factor [the public

justification] alone. .. .” Keystone, 480 U.S. at 492. The South Caro-

lina Supreme Court apparently read this phrase as a ruling that

public justification can alone serve as the sole basis for denying just

compensation. Two reasons, however, belie any such reading. First,

the quoted language is prefaced by an express acknowledgement

that any takings analysis “necessarily requires a weighing of private

and public interests.” Jd. Second, it introduces an extensive discus-

sion of how relatively little adverse impact the statute would in fact

have on the coal operators’ property rights. Jd. at 493-99. That

discussion concludes with an unqualified holding that “it is plain

that the petitioners have not come close to satisfying their burden of

proving that they have been denied the economically viable use of

that property.” Jd. at 499.

Of course, if the Court had intended its Keystone opinion to signal

that it would now recognize a rule not requiring compensation when

the government legitimately acts to prevent a harmful use of prop-

erty, no analysis of the impact on the property owner’s rights would

have been necessary. The Court’s discussion of that impact was not,

however, as the court below effectively held, mere dictum. The test

for a regulatory taking includes the element of the impact on affected

property as well as the public purpose. That is the consistent hold-

ing of this Court, Nollan, supra; Agins, supra; Penn Central, supra;

and nothing in Keystone can be read as overriding this settled line of

precedent.

26

CONCLUSION

The decision of the South Carolina Supreme Court should be re-

versed, and the case remanded for a consideration of Lucas’ claim

for just compensation.

Respectfully submitted,

Peter 0. Dickson

Counsel of Record

Sam Kalen

Howard E. Shapiro

D. Eric Hultman

Richard A. Agnew

Van Ness, Feldman & Curtis

A Professional Corporation

1050 Thomas Jefferson St., N.W.

Seventh Floor

Washington, D.C. 20007

(202) 298-1800

January 2, 1992