Amicus Curiae Brief — Lucas v. South Carolina Coastal Council

Supreme Court, U.S

FilED

No. 91-453 JAN 2 1992

SSE cuit |

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

DAVID H. LUCAS,

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

Supreme Court Of South Carolina

BRIEF OF AMICUS CURIAE

NATIONAL ASSOCIATION OF REALTORS"

IN SUPPORT OF PETITIONER

RALPH W. HOLMEN

Counsel of Record

430 North Michigan Avenue

Chicago, Illinois 60611

(312) 329-8375

Counsel for Amicus Curiae

NATIONAL ASSOCIATION

OF REALTORS®

Midwest Law Printing Co., Chicago 60611, (312) 321-0220

i

TABLE OF CONTENTS

PAGE

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

I. The Fifth Amendment Unequivocally

Requires Just Compensation To Be

SEE dabieddnednessekesabsckacsesacs 4

Il. The Decision Below Improperly En- ~

larges the Scope of This Court’s Prior

Application of the “Nuisance Excep-

A. This Court’s Use of the Nuisance

sc s6U0Aehténeoncecene 5

B. Use of the Nuisance Exception by

Pe SE SY pacnusccasenes

~]

Ill. Heightened Scrutiny of Regulatory Tak-

ings is Necessary When All Uses of

Property Are Eliminated ........... 9

A. Why Close Scrutiny is Required .. 9

B. Elements of the Close Scrutiny

DT sndduckusestudesateeens 11

86 ent as e6rereddcngeeccescesecs 13

ii

TABLE OF AUTHORITIES

Cases PAGE

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

Armstrong v. United States, 364 U.S. 40 (1960) .. 9

First English Evangelical Lutheran Church v. Los

Angeles, 482 U.S. 304 (1987) .............. 5, 6,9

Goldblatt v. Hempstead, 369 U.S. 590 (1962) ... 5

Hadacheck v. Sebastian, 239 U.S. 394 (1915) .... 5

Jacobs v. United States, 290 U.S. 13 (1933) .... 5

Keystone Bituminous Coal Association v. DeBene-

dictis, 480 U.S. 470 (1987) .......... 5, 6, 7, 11, 12

Miller v. Schoene, 276 U.S. 272 (1928) ........ 5

Mugler v. Kansas, 123 U.S. 623 (1887) ........ 5, 6

Nollan v. California Coastal Commission, 483

US. GBS (R607) ....cccccccscnnuuneeee 10

Penn Central Transportation Co. v. New York, 438

US. 106 (ROT) ....cccccccsccakunnnneee 5

Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922) . . 4

No. 91-453

IN THE

Supreme Court of the United States

OcTOBER TERM, 1991

DAVID H. LUCAS, ae

Petitioner,

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

On Writ Of Certiorari To The

Supreme Court Of South Carolina

BRIEF OF AMICUS CURIAE

NATIONAL ASSOCIATION OF REALTORS’

IN SUPPORT OF PETITIONER*

INTEREST OF AMICUS

The NATIONAL ASSOCIATION OF REALTORS®

(hereinafter ‘““NAR”’) is a not-for-profit professional associa-

tion comprised of approximately 750,000 persons engaged

in all phases of the real estate business.

* All parties of record in this case have consented pursuant to

Supreme Court Rule 36.1 to the filing of this amicus curiae brief

in support of Petitioner. These consents are filed herewith.

Ss

NAR was created in 1908 to promote and encourage the

highest and best use of land, to protect and promote pri-

vate ownership of real property and to advance profes-

sional competence in the rendition of real estate services.

NAR includes among its members real estate brokers,

managers, appraisers, counselors, and a variety of other

participants in the residential, commercial, industrial, farm

and investment real estate markets. Through its many

programs and the programs of its affiliated Institutes,

Societies and Councils, NAR has been involved in mat-

ters of concern to property owners for over three quarters

of this century. Of the issues which have concerned NAR,

few, if any, have been more fundamental or of greater

importance than the preservation of private property rights

as established by the United States Constitution. This

commitment to private property rights is the cornerstone

of NAR, for without such rights there would be no owner-

ship, development, transfer, or enjoyment of real estate.

At stake in this case is the vitality of the protection

afforded property owners by the Fifth and Fourteenth

Amendments of the United States Constitution against

the uncompensated “taking” of property and the corre-

sponding rights and benefits of property ownership. The

decision below, unless remedied by this Court, will sub-

stantially if not entirely undermine the viability of the

protection provided by those Constitutional provisions and

this Court’s precedents interpreting them.

NAR is well-positioned to recognize the gravity of this

threat. NAR’s members, who are involved in upwards of

80% of real property resale transactions, span the nation.

Particularly interested in this case are those members of

NAR in coastal areas, who are seriously concerned about

the debilitating effect of the decision below on property

rights and values in their areas, and on the right of their

ain

clients and customers owning or purchasing coastal prop-

erties to enjoy the fruits of their investments. The com-

prehensive involvement of NAR and its members in land

development, investment and sale provides NAR with a

clear understanding of the impact regulatory actions such

as the one at issue here have on the enjoyment and ex-

ercise of constitutionally protected property rights.

NAR does not propose to duplicate the legal arguments

presented in the Petitioner’s brief, but rather endorses

and urges to this Court the Statement of the Case and

legal arguments set forth in therein. The purpose of NAR

in submitting this brief amicus curiae is to add the voices

of the hundreds of thousands of NAR members and the

millions of American property owners they serve to the

chorus of others concerned with the dangerously limiting

construction of the Fifth Amendment’s guarantee of pri-

vate property rights articulated by the court below.

SUMMARY OF ARGUMENT

The Fifth Amendment’s guarantee that private property

shall not be taken without payment of just compensation

is unqualified and absolute. This Court has occasionally

condoned regulation which prohibited particular uses of

property found detrimental to the public health, safety

or welfare. Such regulation has been tolerated, despite the

Fifth Amendment’s guarantee, on the premise that it is

necessary to prevent a public injury which the property

owner is without an inherent right to cause. In the case

of challenges to regulation which wholly eliminates all use

of property in the name of preventing such nuisance-like

activities, however, this Court should require a high level

of scrutiny to be exercised. This more demanding analysis

~~

is necessary to confirm objectively that the nuisance pur-

portedly caused by use of the property is genuine, sub-

stantial and legitimate, not simply an economic concern,

and that other useful or economically beneficial uses are

not also proscribed.

ARGUMENT

I. The Fifth Amendment Unequivocally Requires Just

Compensation To Be Paid

This case raises the question of the scope of protection

afforded property owners by the Just Compensation Clause

of the Fifth Amendment, which provides that “. . . (P)ri-

vate property shall not be taken for public use, without

just compensation.”’ U.S. Const., Amendment V. NAR

urges this Court to prevent emasculation of that protec-

tion by condemning judicial deference to the claim that

a severe restriction on land use is necessary to serve the

public interest or prevent a public injury.

The Just Compensation Clause has obvious application

to the sovereign’s exercise of the power of eminent do-

main. Beginning with this Court’s seminal decision in

Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922), how-

ever, it has been understood that land use regulation that

“goes too far’’ may also result in a compensable taking.

260 U.S. at 415. A substantial body of jurisprudence of

both this Court and lower Federal and state courts have

wrestled with the implications of this pronouncement.

Much of this litigation has focused on the question of how

much a land use regulation must diminish an owner’s

property interests and rights to constitute a ‘“‘taking’”’ re-

quiring compensation. Although various tests have been

ailici

formulated for making that determination, see Agins v.

Tiburon, 447 U.S. 255 (1980) and Penn Central Transpor-

tation Co. v. New York, 438 U.S. 104 (1978), this Court

has been “unable to develop any ‘set formula’ for deter-

mining when ‘justice and fairness’ require that economic

injuries caused by public action be compensated by the

government.” Penn Central, at 124. Nevertheless, the dic-

tate of the Fifth Amendment is clear, and absolute: When

a taking (however defined and determined) occurs, the

Constitution guarantees the owner the right to receive

compensation. First English Evangelical Lutheran Church

v. Los Angeles, 482 U.S. 304, 315 (1987), citing Jacobs v.

United States, 290 U.S. 13, 16 (1933). First English even

made it clear that this requirement extends so far as to

include property taken for only a temporary period. In

such circumstances, this Court has declared that com-

pensation is due for the period during which the owner’s

property rights were denied. No qualification or condition

applies to government’s obligation to pay compensation

for the regulatory taking of property.

Il. ‘The Decision Below Improperly Enlarges the Scope

of This Court’s Prior Application of the ‘‘Nuisance

Exception”’

A. This Court’s Use of the Nuisance Exception

Despite the unconditional language of the Just Com-

pensation Clause, this Court has held that in some cir-

cumstances particular uses of property may be prohibited

without invoking the government’s obligation to pay com-

pensation. In cases such as Mugler v. 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 most recently, Keystone

Bituminous Coal Association v. DeBenedictis, 480 U.S.

ailtin

470 (1987), this Court declined to find a compensabie tak-

ing of property rights even though specific uses of prop-

erty were forbidden. This Court reached that result by

holding that the particular uses were offensive, injurious

or noxious to the public health, safety or well-being, and

that “all property in this country is held under the im-

plied obligation that the owner’s use of it shall not be

injurious to the community.”’ Mugler, 123 U.S. at 665. In

Keystone, this Court went on to explain that “since no

individual has a right to use his property so as to create

a nuisance or otherwise harm others, the State has not

‘taken’ anything when it asserts its power to enjoin nui-

sance-like activity.”’ 480 U.S. at 491, n.20. In First En-

glish, this Court also suggested that the conclusion that

a compensable taking had occurred might be avoided by

“establishing that the denial of all use was insulated as a

part of the State’s authority to enact safety regulations.”

482 U.S. at 313. Put in terms of the familiar “bundle of

rights” analogy of property ownership, this logic infers

that the use of property in a particularly injurious man-

ner is not a strand which is within the bundle at all, so

no right is taken when one is denied the opportunity to

use the property in that fashion.

As Chief Justice Rehnquist pointed out in his dissent

in Keystone, however, this Court’s application of the “nui-

sance exception” to the Constitutional guarantee of com-

pensation for the taking of property has heretofore been

confined to cases where the prohibited uses were discrete

and narrow, and other non-noxious uses presumably re-

mained available to the property owner.’ Accordingly, the

' Keystone, 480 U.S. 470, 513 (Rehnquist, J., dissenting). The one

possibie exception to this is the Keystone case itself, where the

aa (Footnote continued on following page)

= =

results in these cases probably could be justified on the

alternative basis that the property rights of the owners

were not sufficiently diminished to constitute a taking of

the property. Since only specific uses of their properties

had been forbidden, the owners did not and probably

could not have shown that they had been wholly denied

“economically viable use of (the) land,’ Agins, 447 U.S.

at 260, so that it could be said that no taking occurred

for that reason as well. In Keystone this Court did, in

fact, expressly articulate that alternative basis for its con-

clusion that no taking occurred. 480 U.S. 470, 493.

B. Use of the Nuisance Exception by the Court Below

In the present case, Petitioner is precluded from using

his property in a manner which is neither narrow nor dis-

crete, but which is sweeping and broad. Petitioner’s com-

plaint alleged that the building prohibition of the Beach-

front Management Act denies him all economically viable

and beneficial use of his property and renders it valueless.

The trial court, in a finding undisturbed by the South

Carolina Supreme Court, agreed. Thus, the South Carolina

Supreme Court’s application of the “nuisance exception”

principle in this case is, contrary to the court’s claim,

much more than a “straightforward”’ application of the

doctrine heretofore employed by this Court. The result

reached below is an inappropriate and Constitutionally

unacceptable extension of this Court’s decisions employ-

! continued

majority held the nuisance principle applicable but also held that

a taking had not occurred because not all use of the property at

issue had been taken. The dissent took the position that all inter-

est in and use of particular coal deposits had, in fact, been elimi-

nated, so that “all use” of the property, so defined, had been

eliminated.

olin

ing the “‘nuisa..ce’’ analysis to a circumstance where reg-

ulation eradicates all rights of use of a property.

This Court should condemn such an expansive interpre-

tation of the nuisance rule. Where regulation produces

complete extinction of an owner’s right to use and enjoy

his property in any useful fashion, the Fifth Amendment

unequivocally requires compensation to be paid. If the

government advances the justification that the prohibition

is necessary to prevent property use which will cause a

serious injury to the public weal, that explanation should

be subjected to vigorous and comprehensive scrutiny to

verify its legitimacy. The payment of just compensation

required by the Fifth Amendment may be denied if, but

only if, the regulation survives such analysis. The court

should objectively confirm that the uses prohibited by the

regulation are, in fact, truly noxious and therefore not

strands within the owner’s “bundle of rights.”

There may be few ordinances which so comprehensively

deny property use as to merit such extraordinary scrutiny,

although the present case certainly appears to present a

strong candidate for such analysis. Of those, there may

be even fewer which need be that broadly restrictive in

order to remedy effectively a legitimate social evil. In

those rare instances, denial of compensation may be war-

ranted. The covenant of the Just Compensation Clause,

however, demands zealous efforts by courts to safeguard

property owners from unwarranted and uncompensated

regulatory appropriation of their property rights.

~9—

Ill. Heightened Scrutiny of Regulatory Takings is Nec-

essary When All Uses of Property Are Eliminated

A. Why Close Scrutiny is Required

In addressing the question of when, if ever, and under

what circumstances land use regulation may eradicate all

beneficiai uses of property without invoking the govern-

ment’s obligation to pay compensation, two considerations

discussed above provide the appropriate foundation for

analysis. First, because governmental action which consti-

tutes a taking of property rights necessarily implicates

the “‘constitutional obligation to pay just compensation,”

First English, 482 U.S. 304, 315, citing Armstrong v.

United States, 364 U.S. 40, 49 (1960), courts must be keen-

ly sensitive to the draconian nature of regulation resulting

in uncompensated elimination of all right to use and en-

joy a particular property. Such radical action is wholly

abhorrent to the Fifth Amendment’s otherwise inviolate

guarantee. In order to fulfill the Fifth Amendment’s prom-

ise of the right to enjoy property rights free of excessive

governmental restriction, courts should be meticulously

hostile, rather than deferential and accommodating, to reg-

ulations which effect broad restraints on property rights.

Thus, a court’s review of comprehensively restrective land

use regulations should be based on a predisposition against

the validity of such ordinances and towards protection of

the owner’s rights as secured by the Fifth Amendment.

Second, as explained above, the rationale for the con-

clusion that the nuisance exception applies in certain cases

is that the regulation does not take an inalienable right

of the property owner because the proposed use is so nox-

ious that it is not one to which the owner is entitled. In

addition, in many and perhaps even most nuisance cases,

only a few discrete uses are proscribed, so that the regula-

tion may elude characterization as a taking because not

wife

all use of the property is prevented. Other non-noxious

and economically viable uses remain available to the prop-

erty owner.

As a result, it may be sufficient to examine narrow and

specific land use restrictions with the measure of exacti-

tude prescribed in Nollan v. California Coastal Commis-

sion, 483 U.S. 825 (1987), that is, to determine whether

the regulation ‘“‘substantially advances” a legitimate state

interest. The familiar “rational relationship” test of due

process analysis may also be adequate. In either case, a

less demanding inquiry may be warranted because there

exists the alternative basis for the conclusion that no tak-

ing has occurred, since not all uses (and thus presumably

not all “economically viable’’ uses’ -re prohibited.

But, where, as in the present case, the regulation is so

encompassing as to forbid all reasonably available and

viable uses of the property, the rights guaranteed by the

Fifth Amendment are grievously imperiled. The owner is

deprived of the opportunity to use, enjoy and benefit from

his property in any manner whatsoever. The threat of

such wholesale destruction of property rights requires that

extraordinary care be exercised to insure that the Con-

stitutional guarantees retain vitality and meaning. The

government should thus be obliged to carry a weighty

burden to clearly and unequivocally substantiate the denial

of compensation by establishing beyond doubt that the

regulation is necessary to, and does in fact, eliminate on/y

those uses of the property so inimical to the public well-

being that they cannot be said to be “rights” of the

owner. Correspondingly, courts reviewing such regulations

must exercise a substantially elevated level of scrutiny

to validate the applicability of the nuisance exception and

its underlying rationale.

alten

B. Elements of the Close Scrutiny Analysis

The enhanced level of inquiry of regulation producing

a total deprivation of property use should incorporate

several concerns. First, as in the case of regulations with

a less pervasive impact on the owner’s opportunity to use

his property, the court should confirm that the objective

and effect of the regulation is not simply to confer on the

public a desirable benefit at the expense of the owner’s

opportunity to enjoy his property rights, but to avoid a

genuine threat of injury to public health, safety or welfare.

Second, the regulatory purpose and the public injury to

be thereby averted should be carefully and independently

assessed and verified by the court to be, as this Court

described the legislative purpose of the statute at issue

in Keystone, “genuine, substantial and legitimate. . .,” 480

U.S. at 486. Similarly, the court must conclude that the

injury is one which would inevitably result from the pro-

posed property use. The court should not deferentially ac-

cept the assertions of the legislative or regulatory body

adopting the regulation, but must require that the threat

of injury, and the prophylactic effect of the regulation’s

limitations on property use, be justified by facts, data and

reasoned and sound conclusions drawn therefrom. The

court should not hesitate to evaluate independently and

objectively such data to determine whether the use pre-

sents a legitimate threat of public harm. The court should

further establish that the threatened harm is a substan-

tial one, rather than a minor annoyance to the community.

Third, the public injury to be prevented by application

of the regulation at issue must not be one which is sim-

ply deleterious to the economic well-being of the public,

but rather one which presents a significant threat of phys-

ical harm to persons or private or public property. In

~12—

striking the appropriate balance between protection of

public interests and invasion of the ordinarily inviolate

right of property owners to be free from uncompensated

appropriation of their property, the property owner should

not be obligated to carry the economic welfare of the com-

munity on his back. See Keystone, 480 U.S. 470, 513

(Rehnquist, J. dissenting).

Finally, the court should carefully evaluate the scope

of the regulation to insure that it is no more encompass-

ing than absolutely necessary to circumvent the substan-

tial public injury which is threatened. Since the proscrip-

tions of certain uses of the property may be tolerated only

because such uses are harmful to the public well-being,

and are therefore not uses to which the owner can claim

a right, that justification does not apply to other non-

injurious uses also within the owner’s “bundle of rights.”’

Thus, other non-harmful uses should not and may not also

be prohibited. This consideration may also cause regu-

lators to exercise restraint in regulating or prohibiting

property uses which may threaten public harm if they

come to recognize that unduly broad restrictions are likely

to be stricken, or invoke the obligation to pay just com-

pensation, as intolerably invasive of the rights of proper-

ty owners.

This intensified inquiry into whether the nuisance prin-

ciple genuinely applies is necessary to prevent the nui-

sance principle from becoming the exception that engulfs

the rule. As this case itself makes clear, land use regu-

lators have begun to learn the lessons of Mugler and its

progeny, including Keystone: a simple declaration that reg-

ulation is necessary to prevent property use contrary to

the public well-being may avoid the requirement that com-

pensation be paid for depriving an owner of the use of

—13—

his property. There are, to be sure, legitimate and signifi-

cant public interests that merit protection. Property own-

ers have no inherent right to use their property in ways

which are likely to result in a variety of bona fide social

evils, such as pollution of public water supplies or the air

breathed by all, or subjecting citizens to the threat of ex-

posure to radioactive or other hazardous materials. But

where the property owner loses all value of or opportunity

to use his property in an economically viable fashion, the

Just Compensation Clause of the Fifth Amendment en-

titles the affected property owner to no less than’a court's

vigorous and painstaking efforts to verify that the regula-

tion is narrowly circumscribed to prohibit only uses to

which the owner has no inherent right or entitlement.

CONCLUSION

The decision of the South Carolina Supreme Court em-

ploys a formulation of the nuisance principle which will

permit land use regulators to expeditiously emasculate the

promise of the Fifth Amendment that property rights may

not be taken without compensation. Should this Court

decide to allow all beneficial use and enjoyment of prop-

erty to be denied in certain limited circumstances to pre-

vent a substantial and legitimate injury to the public, it

should also require lower Federal and state courts to

—14—

undertake a demanding analysis of that justification of the

usurpation of Constitutionally protected property rights.

Respectfully submitted,

RALPH W. HOLMEN

Counsel of Record

430 North Michigan Avenue

Chicago, Illinois 60611

(312) 329-8375

Counsel for Amicus Curiae

NATIONAL ASSOCIATION

OF REALTORS®

January 2, 1992