Amicus Curiae Brief — Lucas v. South Carolina Coastal Council

| Supreme Cout, SS |

2 FILED

No. 91-453 DEC 31 3991

IN THE GRICE OF IME CLene

Supreme Court of the Gnited States

OCTOBER TERM, 1991 ”

DAVID H. LUCAS,

Petitioner,

vs.

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

ON WRIT OF CERTIORARI TO THE

SUPREME COURT OF SOUTH CAROLINA

BRIEF OF THE NATIONAL

ASSOCIATION OF HOME BUILDERS

AND THE INTERNATIONAL COUNCIL OF

SHOPPING CENTERS AS AMICI CURIAE

IN SUPPORT OF PETITIONER

WILLIAM H. ETHIER MICHAEL M. BERGER

National Housing Center Counsel of Record

National Association of of BERGER & NORTON

Home Builders A Law Corporation

15th & M Streets, N.W. 1620 26th Street

Washington, D.C. 20005 Suite 200 South

(202) 822-0359 Santa Monica, CA 90404

(310) 449-1000

Attorneys for Amici Curiae

Lawyers Brief Service * Appellate Brief Printers * (213) 383-4457 * (714) 720-1510

No. 91-453

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1991

DAVID H. LUCAS,

Petitioner,

vs.

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

ON WRIT OF CERTIORARI TO THE

SUPREME COURT OF SOUTH CAROLINA

BRIEF OF THE NATIONAL

ASSOCIATION OF HOME BUILDERS

AND THE INTERNATIONAL COUNCIL OF

SHOPPING CENTERS AS AMICI CURIAE

IN SUPPORT OF PETITIONER

WILLIAM H. ETHIER MICHAEL M. BERGER

National Housing Center Counsel of Record

National Association of of BERGER & NORTON

Home Builders A Law Corporation

15th & M Streets, N.W. 1620 26th Street

Washington, D.C. 20005 Suite 200 South

(202) 822-0359 Santa Monica, CA 90404

(310) 449-1000

Attorneys for Amici Curiae

atks

TABLE OF CONTENTS

TABLE OF AUTHORITIES

INTERESTS OF AMICI CURIAE

SUMMARY OF ARGUMENT

ARGUMENT

I. BACKGROUND: THE NEED FOR

FAIRNESS IN LAND USE REGULA-

TION

Il. GOOD INTENTIONS ARE NO DE-

FENSE TO A FIFTH AMENDMENT

VIOLATION

III. DEFINITIONAL /PSE DIXIT CANNOT

CONTROL CONSTUTIONAL ADJU-

DICATION

A. The General Rule Requires Compen-

sation; Any Exception Must

Truly Narrow ~

B. The Regulator Cannot be Permitted

to Immunize Itself by Defining its

Target as a Nuisance

CONCLUSION

Page

il

13

14

16

19

YS

TABLE OF AUTHORITIES

Page

Cases

Agins v. City of Tiburon

447 U.S. 255 (1980) 2, 8, 17

Andrus v. Allard

444 U.S. 51 (1979) 7

Berman v. Parker

348 U.S. 26 (1954) 12

Boston Chamber of Commerce v. Boston

217 U.S. 189 (1910) 13

Collis v. City of Bloomington

246 N.W.2d 19 (Minn. 1976) 6

Connolly v. Pension Benefit Guaranty Corp.

475 U.S. 211 (1986) 7

Curtin v. Benson

222 U.S. 78 (1911) 15

Dames & Moore v. Regan

453 U.S. 654 (1981) 11

Delaware, L. & W.R. Co. v. Morristown

276 U.S. 192 (1928) 10

First English Evangelical Lutheran Church

v. County of Los Angeles

482 U.S. 304 (1987) 1,6, 9, 15, 18-20

Florida Rock Indus., Inc. v. U.S.

791 F.2d 893 (Fed. Cir. 1986) 12, 17

- iii -

Page

Florida Rock Indus., Inc. v. U .S.

21 Cl. Ct. 161 (Cl. Ct. 1990) 17

Hawaii Housing Authority v. Midkiff

467 U.S. 229 (1984) 12

Hodel v. Irving

481 U.S. 704 (1987) 8,9

Hodel v. Virginia Surface Min. & Recl. Assn.

452 U.S. 264 (1981) 7

J.E.D. Associates, Inc. v. Town of Atkinson

432 A.2d 12 (N.H. 1981) 7

Kaiser Aetna v. United States

444 U.S. 164 (1979) 3,7, 10, 13

Keystone Bituminous Coal Assn. v.

DeBenedictis, 480 U.S. 470 (1987) 8, 14

Kirby Forest Indus., Inc. v. United States

467 U.S. 1 (1984) 7

Knight v. City of Billings

642 P.2d 141 (Mont. 1982) 12

Loretto v. Teleprompter Manhattan CATV Corp.

458 U.S. 419 (1982) 3,7,9

Loveladies Harbor, Inc. v. U.S.

15 Cl. Ct. 381 (Cl. Ct. 1988) 17

MacDonald, Sommer & Frates v. County of Yolo

477 U.S. 340 (1986) 1,7

o iy «

Page

Mattoon v. City of Norman

617 P.2d 1347 (Okla. 1980) 12

McDougal v. County of Imperial

942 F.2d 668 (9th Cir. 1991) 18

McNabb v. U.S.

318 U.S. 332 (1943) 3

Mugler v. Kansas

123 U.S. 623 (1887) 14-16

Nollan v. California Coastal Commn.

483 U.S. 825 (1987) 1, 2, 6, 8, 18, 19

Olmstead vy. U.S.

277 U.S. 438 (1928) 2

Penn Central Transp. Co. v. City of New York

438 U.S. 104 (1978) 7, 8, 12

Pennsylvania Coal Co. v. Mahon

260 U.S. 393 (1922) 3

Preseauli v. ICC

494 U.S. 1 (1990) 11, 20

Prune Yard Shopping Center v. Robins

447 U.S. 74 (1980) 7

Pumpelly v. Green Bay Co.

13 Wall. 166 (1872) 16

Regional Rail Reorganization Act Cases

419 U.S. 102 (1974) 11

Page

Richmond Elks Hall Assn. v. Richmond

Redevelopment Agency

561 F.2d 1327 (9th Cir. 1977) 12

Ruckelshaus v. Monsanto Co.

467 U.S. 986 (1984) Se Ota BF

San Antonio River Auth. v. Garrett Bros.

528 S.W.2d 266 (Tex. Civ. App. 1975) 12

San Diego Gas & Elec. Co. v. City of San Diego

450 U.S. 621 (1981) 2

Shelton v. Tucker

364 U.S. 479 (1960) 3

Skaw v. U.S.

740 F.2d 932 (Fed. Cir. 1984) 12

Stanley v. Illinois

405 U.S. 645 (1972) 3

U.S. v. Security Industrial Bank

459 U.S. 70 (1982) 10

United States Trust Co. v. New Jersey

431 U.S. 1 (1977) 11

United States v. Locke

471 U.S. 84 (1985) 7

United States v. Riverside Bayview Homes, Inc.

474 U.S. 121 (1985) 7

Webb’s Fabulous Pharmacies, Inc. v. Beckwith

449 U.S. 155 (1980) 17

sth.

West Park Ave., Inc. v. Township of Ocean

224 A.2d 1 (N.J. 1966)

Whitney Benefits, Inc. v. U.S.

926 F.2d 1169 (Fed. Cir. 1991)

Williamson County Reg. Plan. Commn.

v. Hamilton Bank, 473 U.S. 172 (1985)

United States Constitution

Fifth Amendment

Publications

Advisory Commn. on Regulatory Barriers

to Affordable Housing, “Not In My Back

Yard”: Removing Barriers to Affordable

Housing (1991)

Babcock, Foreword to Exactions: A Contro-

versial New Source For Municipal Funds,

50 Law & Contemp. Probs. 1 (1987)

Babcock, The Zoning Game 141 (1966)

Branch, The Sins of City Planners,

42 Pub. Ad. Rev. 1 (1982)

Delogu, Local Land Use Controls: An

Idea Whose Time Has Passed,

36 Me. L. Rev. 261 (1984)

Delogu, The Misuse of Land Use Control

Powers Must End: Suggestions for

Legislative and Judicial Responses,

32 Me. L. Rev. 29 (1980)

Page

5 i

4, 7-11, 13, 15-17, 19, 20

5, 6, 13

- Vii -

Frieden, The Environmental Protection

Hustle 8 (1979)

Hagman & Misczynski, The Quiet Federal-

ization of Land Use Controls: Disquietude

in the Land Markets, 40 The Real Estate

Appraiser 5 (1974)

Krasnowiecki, Abolish Zoning,

31 Syracuse L. Rev. 719 (1980)

Lawrence, Regulatory Takings: Beyond

the Balancing Test (1988)

20 The Urban Lawyer 389

Lefcoe, California’s Land Planning

Requirements: The Case for Deregulation,

54 S. Cal. L. Rev. 447 (1981)

Mandelker & Blaesser, Applying the

Ripeness Doctrine in Federal Land

Use Litigation, 11 Zoning & Planning

Law Report 49 (July-Aug. 1988)

Mandelker, Managing Our Urban

Environment 19 (1966)

Pulliam, Brandeis Brief for Decontrol of

Land Use: A Plea for Constitutional Reform,

13 Sw. U.L. Rev. 435 (1983)

Report of the President’s Commission

on Housing 177-183 (J. Foote ed. 1982)

Tucker, Progress and Privilege: America

in the Age of Environmentalism (1982)

Page

The National Association of Home Builders (NAHB) and

the International Council of Shopping Centers, Inc. (ICSC)

have received the written consent of the parties to file this

brief as Amici Curiae in support of the Petitioner and have

filed the letters of consent with the Clerk of this Court.

INTERESTS OF AMICI CURIAE

The NAHB represents 153,000 builder and associate

members organized into approximately 850 affiliated state

and local associations in all 50 states, the District of Colum-

bia, and Puerto Rico. Its members include not only people

and firms that construct and supply single-family homes, but

also apartment, condominium, commercial, and industrial

builders, as well as land developers and remodelers. It is the

voice of the American shelter industry.

The Just Compensation Clause and its implementation as

a shield against oppressive governmental land use regulation

is of paramount importance to the NAHB. The actual avail-

ability of compensation for the occasional statute or ordi-

nance that results in a taking is critical to the livelihood of

private landowners who either 1) have lost all reasonable

economic use of their property solely in order to serve the

broader public (i.e., governmental) interests, or 2) are other-

wise faced with governmental requirements that fail to sub-

stantially advance legitimate governmental interests. The

former type of governmental action is before the Court in

this case.

The NAHB has been before this Court as an amicus curiae

or as Of counsel on behalf of the property owner in prior

takings cases involving land use regulations. (Nollan v.

California Coastal Commn., 483 U.S. 825 [1987]; Firs:

English Evangelical Lutheran Church v. County of Los

Angeles, 482 U.S. 304 [1987]; MacDonald, Sommer & Frates

v. County of Yolo, 477 U.S. 340 [1986]; Williamson County

~ o

Reg. Plan. Commn. v. Hamilton Bank, 473 U.S. 172 [1985];

San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S.

621 [1981]; Agins v. City of Tiburon, 447 U.S. 255 [1980})

Indeed, the NAHB’s brief was cited approvingly in this

Court’s-Vollan opinion, 483 U.S. at 840.

The ICSC is a not-for-profit corporation that has ap-

proximately 24,000 members worldwide and approximately

22,000 in the United States. ICSC is the trade association for

the shopping center industry. Its members, including devel-

opers, owners, retailers, lenders and all others having a

professional interest in the shopping center industry, are

engaged in the day-to-day activities of designing, planning,

constructing, managing, financing, developing, leasing and

owning shopping centers and their retail stores. It represents

almost all of the 37,000 shopping centers in this country and

is the only U.S. trade association specific to shopping

centers.

ICSC’s members have a clear interest in the disposition of

the present case because the holding of the Supreme Court of

South Carolina, if affirmed by this Court, would substantially

impair the value of many members’ property by eliminating

reasonable expectations of development rights.

These amici’s joint interest lies in seeing that the law in

this field remains consistent, fair, and cognizant of the need

to protect the rights of the individual when confronted with

well-meaning government officials whose actions to achieve

a public good may impinge on Constitutional guarantees. As

Justice Brandeis insightfully admonished:

“Experience should teach us to be most on our

guard to protect liberty when government’s pur-

poses are beneficent.... The greatest dangers to

liberty lurk in insidious encroachment by men of

zeal, well-meaning but without understanding.”

(Olmstead v. U.S., 277 U.S. 438, 479 [1928] [Bran-

deis, J., dissenting})

e

SUMMARY OF ARGUMENT

Ends and means. As is so often the case in constitutional

litigation, that is what this case is about.

The South Carolina Coastal Council and the South

Carolina Supreme Court focus on the ends sought to be

achieved by prohibiting home construction near the coast.

They argue as though recognition of that “good” is the end of

the inquiry.

However, this Court’s consistent jurisprudence makes

clear that recognition of a proper governmenta! goal is only

the beginning of the inquiry; it is not the end. (E.g., Kaiser

Aetna v. U.S., 444 U.S. 164, 174 [1979]; Loretto v. Tele-

prompter Manhattan CATV Corp., 485 U.S. 419, 425

[1982].) For, if the governmental action is not in pursuit of a

legitimate goal, then the action would be ultra vires and

invalid without more. Once a valid goal is recognized, the

means chosen to obtain that goal must be subjected to con-

stitutional scrutiny to determine whether the rights of those

injured in the process have been adequately protected:

“(T]he Constitution recognizes higher values than

speed and efficiency. Indeed, one might fairly say

of the Bill of Rights in general, and of the Due

Process Clause in particular, that they were de-

signed to protect the fragile values of a vulnerable

citizenry from the overbearing concern for effi-

ciency and efficacy that may characterize praise-

worthy government officials no less, and perhaps

more than mediocre ones.” (Stanley v. Illinois, 405

U.S. 645, 656 [1972]; footnote omitted.)!

1 See also Shelton v. Tucker, 364 U.S. 479, 488 (1960); McNabb v. U-S.,

318 U.S. 332, 347 (1943); Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,

416 (1922).

is

South Carolina has cast its net too broadly. In its overrid-

ing concern to find a solution to a perceived problem, South

Carolina forgot the rights of those whose property was to be

sacrified for the perceived greater good. The Fifth Amend-

ment’s Just Compensation Clause was designed to afford

protection in cases of such governmental oversight.

ARGUMENT

I. BACKGROUND: THE NEED FOR FAIRNESS

IN LAND USE REGULATION

As the unified voice of the home building industry in

America, the NAHB cannot let pass the central idea in the

legislation before this Court, i.e., that there is something so

nefarious about the building of a home that home construc-

tion can be condemned as a nuisance. At bottom, all that

Mr. Lucas wanted to do was to build two homes on land

which was of a type which had historically been so used. In

an economic era when people find themselves compelled to

seek large packing crates for shelter, there seems something

oddly surreal in condemning the construction of homes as a

nuisance which is so heinous that it can be prevented without

any thought of compensating the landowner.

Home building is not evil. There are ways to build homes

to ensure that they do not create problems for their neigh-

bors. South Carolina, however, chose not to avail itself of

the benefits of modern technology. Instead of a scalpel, it

reached for an axe. It perceived a problem on its coast and

sought to solve that problem by the simple expedient of

precluding the construction of any homes.

That simplistic solution finds numerous counterparts in

current land use regulations. Indeed, the problem — and its

chief consequence, a rising lack of affordable housing — has

become pervasive enough to result in yet another federal

«fs

government study, in the form of a report to President Bush

and Housing Secretary Kemp. (Advisory Commn. on

Regulatory Barriers to Affordable Housing, “Not In My Back

Yard”: Removing Barriers to Affordable Housing (1991)

(hereafter cited as NIMBY Report])* Thus, before proceed-

ing further, it seems appropriate to describe the regulatory

climate in which it is possible for such draconian legislation

to be enacted.

Developing land these days is not for the faint of heart.

Nor is it any place for those short of stamina or economic

staying power. The multi-tiered regulatory system facing

property owners can be as daunting as it is bewildering, with

[sometimes well-intentioned] regulatory bodies and their dis-

crete regulations proliferating.” From every governmental

office, bureau, department, board or commission, bureaucrats

2 A report of the situation a decade ago, which had reached the same

conclusions about the adverse effect of land use regulations on the

affordability of housing, can be found in Report of the President's

Commission on Housing 177-183 (J. Foote ed. 1982). The human cost of

excessive regulation, in the sense of driving people out of the housing

market, is hardly a secret aside from the governmental commissions. For a

sampling of similar conclusions from varying sources, see, e.g., Delogu,

The Misuse of Land Use Control Powers Must End: Suggestions for

Legislative and Judicial Responses, 32 Me. L. Rev. 29, 61 (1980); Lefcoe,

California's Land Planning Requirements: The Case for Deregulation, 54

S. Cal. L. Rev. 447, 462 (1981); Pulliam, Brandeis Brief for Decontrol of

Land Use: A Plea for Constitutional Reform, 13 Sw. U.L. Rev. 435 (1983).

3 See, e.g., Nimby Report 8:

“Numerous Federal, State, and local regulations that are intended to

achieve specific, admirable goals turn out to have negative conse-

quences for affordable housing. The impact on housing costs may not

have been considered when the regulations were promulgated.”

Although noted here in a 1991 report, this regulatory Balkanization has

long roots. See Delogu, Local Land Use Controls: An Idea Whose Time

Has Passed, 36 Me. L. Rev. 261 (1984); Krasnowiecki, Abolish Zoning, 31

Syracuse L. Rev. 719 (1980); Hagman & Misczynski, The Quiet Federal-

ization of Land Use Controls: Disquietude in the Land Markets, 40 The

Real Estate Appraiser 5, 7 (1974); Mandelker, Managing Our Urban

Environment 19 (1966).

~ =

(often responding to no more than selfish demands of estab-

lished neighborhood groups or single issue environmentalist

constituencies)* issue a series of decrees that can, and often

do, transform a desirable and well thought out plan of land

development into an economically infeasible fiasco. On rare

occasion, a court will come to the property owner’s aid on

particularly outrageous facts, but not with such reliability as

to diminish the size of the risk of such enterprises. As the

most recent study concluded:

“Millions of Americans are being priced out of

buying or renting the kind of housing they other-

wise could afford were it not for a web of govern-

mental regulations. For them, America — the land

of opportunity — has become the land of a frustrat-

ing and often unrewarded search for an affordable

home.””>

Much of the unconcerned attitude on the part of the

regulators was spawned during the 1980s, before this Court

decided First English, and resolved the question (or so one

would have thought) of the constitutional consequences of

over-regulation.° Slowing the momentum and changing the

Nimby Report 8; Babcock, The Zoning Game 141 (1966); Frieden, The

Environmental Protection Hustle 8 (1979); Tucker, Progress and Privilege:

America in the Age of Environmentalism (1982); Branch, The Sins of City

Planners, 42 Pub. Ad. Rev. 1, 3 (1982).

5 NIMBY Report 3. Quantifying that generality, the report concludes that

excessive regulation can add $15,000 to $30,000, or 25-30% to the cost of

modest housing. (N/MBY Report S$)

© Professor Richard Babcock, the dean of the American land use bar, has

called overreaching governmental regulation (in which the regulators

demand that which they know they are legally precluded from demanding

but which they know their targets cannot afford the time or expense to

challenge) “municipal leverage.” (Babcock, Foreword to Exactions: A

Controversial New Source For Municipal Funds, 50 Law & Contemp.

Probs. 1, 2 [1987]) Aside from this Court's celebrated response in Nollan

v. California Coastal Comma., 483 U.S. 825, 837 (1987), in which this

Court described such tactics as “extortion,” some condemnatory judicial

reactions can be found in Collis v. City of Bloomington, 246 N.W.2d 19, 26

(continued)

eae

approach of those regulators has not been easy. The steady

stream of petitions presented to this Court attests to that.

Coupled with the apparent judicial indecision over

remedies has been the agony of determining whether a land

use dispute is “ripe” enough to obtain the attention of the

courts. While a complete discussion is plainly beyond the

scope of this brief, suffice it to note that almost all regula-

tory taking complaints are met with a governmental defense

that the case is not yet ripe, and a staggering number of those

cases are resolved in the government's favor. (Mandelker &

Blaesser, Applying the Ripeness Doctrine in Federal Land

Use Litigation, 11 Zoning & Planning Law Report [July-Aug.

1988] 49, 53; emphasis added.) As one government lawyer

expressed it, “[l]ike the vagueness of the three-factor analy-

sis [for determining what is a taking], this [ripeness] require-

ment has historically worked to the advantage of government

regulators.” (Lawrence, Regulatory Takings: Beyond the

Balancing Test [1988] 20 The Urban Lawyer 389, 400 fn. 71)

In apparent recognition of the difficulties facing property

owners, this Court has repeatedly held that a _ property

owner's reasonable, or distinct, investment-backed expecta-

tions merit Fifth Amendment protection against harsh

regulatory interference.’ In three of those decisions which

in. continued

(Minn. 1976) {* grand theft"]; West Park Ave., Inc. v. Township of Ocean,

224 A.2d 1, 4-5 (N.J. 1966) [“municipal lawlessness”]; J.E.D. Associates,

Inc. v. Town of Atkinson, 432 A.2d 12, 14 (N.H. 1981) [“extortion”].

7 Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (1978);

Andrus v. Allard, 444 U.S. 51 (1979); Kaiser Aetna v. United States, 444

U.S. 164 (1979); PruneYard Shopping Center v. Robins, 447 U.S. 74

(1980); Hodel v. Virginia Surface Min. & Recl. Assn., 452 U.S. 264 (1981);

Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982);

Kirby Forest Indus., Inc. v. United States, 467 U.S. 1 (1984); Ruckelshaus

v. Monsanto Co., 467 U.S. 986 (1984); United States v. Locke, 471 U.S. 84

(1985); Williamson County Reg. Plan. Comma. v. Hamilton Bank, 473 U.S.

172 (1985); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121

(1985); Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211 (1986);

MacDonald, Sommer & Frates v. County of Yolo, 477 U.S. 340 (1986);

(continued)

wis

involved land use regulations, this Court measured the regu-

lations against the property owner’s ability to earn a profit or

make a reasonable return on investment.

That protection of reasonable expectations against undue

regulatory interdiction supplies fairness to the process and

provides incentives to property owners to become involved

in the development process. Actions like South Carolina’s,

by contrast, which purport to extinguish reasonable expecta-

tions without compensation, are as counterproductive in the

housing market as they are unconstitutional.

This Court was right to recognize the expectations interest

as one which merits constitutional protection. By actually

providing protection in the case at bench, this Court can

demonstrate its adherance to the concept and let lower-courts

and regulatory entities know the seriousness of the protection

to be accorded.

Ii. GOOD INTENTIONS ARE NO DEFENSE TO A

FIFTH AMENDMENT VIOLATION

The explicit premise of the South Carolina legislation is

that, if the end sought to be achieved by government regula-

tion can be said to be virtuous, then there cannot be a Fifth

Amendment violation.

That concept is foreign to this Court’s jurisprudence. At

its most basic, this Court has held that a taking occurs if a

land use regulation either fails to substantially advance a

legitimate state interest or denies the property owner eco-

nomically viable use of his land. (E.g., Agins v. City of

fn. continued)

eystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470 (1987);

Hodel v. Irving, 481 U.S. 704 (1987); Nollan v. California Coastal

Comman., 483 U.S. 825 (1987).

8 Penn Central, 438 U.S. at 136; Williamson County, 473 U.S. at 200:

Keystone, 480 U.S. at 496, 501.

-9-

Tiburon, 447 U.S. 255 [1980]) Perforce, that means that a

regulation effects a taking even if done for a legitimate

purpose if its effect is to deny economically viable use to the

owner.

When there is a taking, there must be compensation. A

taking for public use without compensation violates the Fifth

Amendment:

“|. government action that works a taking of

property rights necessarily implicates the ‘consti-

tutional obligation to pay just compensation.’

[Citation.]” (First English Evangelical Lutheran

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

315 [1987]; emphasis added.)

If government enacts legislation which takes property and

intends to provide no compensation, the legislation is in-

valid. (Hodel v. Irving, 481 U.S. 704 [1987])

Governmental power is not permitted to run roughshod

over the constitutionally protected rights of individuals.

That is what this Court was talking about when it concluded

in First English that “... many of the provisions of the

Constitution are designed to limit the flexibility and freedom

of governmental authorities and the Just Compensation

Clause of the Fifth Amendment is one of them.” (482 U:S. at

321)

In so holding, First English continued a long line of this

Court’s decisions that the Fifth Amendment places a stern

restriction on the exercise of all governmental power.

For example, in Loretto v. Teleprompter Manhattan CATV

Corp., 485 U.S. 419 (1982), the Court was faced with a

statute designed to facilitate communication via cable televi-

sion. The State of New York required landlords to permit the

installation of cables on their property. The City of New

York urged, and the state courts agreed, that the objective

was a legitimate police power activity in the nature of regula-

tion, and thus beyond constitutional challenge. This Court

~ S

reversed, concluding that recognition of a valid police power

objective was only half the case. The other half of the case

dealt with the means chosen to attain it:

“The Court of Appeals determined that §828 serves

the legitimate public purpose of ‘rapid develop-

ment of and maximum penetration by a means of

communication which has important educational

and community aspects,’ and thus is within the

State's police power. We have no reason to ques-

tion that determination. /t is a separate question,

however, whether an otherwise valid regulation so

frustrates property rights that compensation must

be paid.” (458 U.S. at 425; emphasis added.)

The same conclusion appears in Kaiser Aetna v. U.S., 444

US 164 (1979). There, the Army Corps of Engineers decreed

that a private marina must be open to the public. The reason

for this Court’s disagreement is telling:

“In light of its expansive authority under the

Commerce Clause, there is no question but that

congress could assure the public a free right of

access to the Hawaii Kai Marina if it so chose.

Whether a statute or regulation that went so far

amounted to a ‘taking,’ however, is an entirely

separate question.” (444 U.S. at 174; emphasis

added.)

See also U.S. v. Security Industrial Bank, 459 U.S. 70

(1982) [retroactive application of bankruptcy legislation is

subject to the Fifth Amendment].”

9 Among the early antecedents of this rule is Delaware, L. & W.R. Co. v.

Morristown, 276 U.S. 192, 193 (1928):

“But, assuming that under the circumstances the creation of the

public hack stand would be a proper exertion of the police

power, it does not follow that the due process clause of the

14th Amendment would not safeguard to the owner just

compensation for the use of its property.” (Emphasis added.)

a.

In a similar vein, of course, are cases such as Preseault v.

ICC, 494 U.S. 1 (1990), Ruckelshaus v. Monsanto Co., 467

U.S. 986 (1984), Dames & Moore v. Regan, 453 U.S. 654

(1981), and the Regional Rail Reorganization Act Cases, 419

U.S. 102 (1974). In each of them, this Court was faced with

the claim that Congress, in pursuit of legitimate goals,!° had

taken private property in violation of the Fifth Amendment.

In each, this Court directed the property owners to the U.S.

Claims Court to determine whether these legitimate exercises

of legislative power required compensation. Noble regu-

latory goals cannot override constitutional guarantees:

‘Mass transportation, energy conservation, and

environmental protection are goals that are impor-

tant and of legitimate public concern. Appellees

contend that these goals are so important that any

harm to bondholders from repeal of the 1962

covenant is greatly outweighed by the public

benefit. We do not accept this invitation to engage

in a utilitarian comparison of public benefit and

private loss.... Thus, a State cannot refuse to

meet its legitimate financial obligations simply

because it would prefer to spend the money to

promote the public good rather than the private

welfare of its creditors.” (United States Trust Co.

v. New Jersey, 431 U.S. 1, 29-30 [1977])

This consistent teaching probably explains why the Court

of Appeals for the Federal Circuit, a body which hears all

appeals from the Claims Court (the court which adjudicates

more takings cases than any other because it is virtually the

exclusive forum for takings cases against the United States),

has had no trouble recognizing that the Just Compensation

Clause operates against proper governmental action:

10 Respectively, the preservation of rail transportation corridors, the

registration of pesticides, the aftermath of the Iranian hostage crisis, and

the provision of rail service to the Northeast United States.

» 2

“In such cases the characteristic feature is the

defendant’s use of rightful ... regulatory rights to

control and prevent exercise of [private] ownership

rights the defendant is unwilling to purchase and

pay for.”!!

In Berman v. Parker, 348 U.S. 26 (1954) the govem-

ment’s right to condemn land for an urban renewal project

was challenged. This Court had no question that the program

was a rational governmental project and within the power of

the legislative branch to decide to accomplish. Nonetheless,

the transfer of property interests could not be done without

just compensation. Likewise, Hawaii Housing Authority v.

Midkiff, 467 U.S. 229 (1984) involved Hawaii’s right to use

the eminent domain power to break up an oligopolistic form

of land ownership by taking property from large landowners

and transferring fee title to individuals. This Court did not

question that the land redistribution was a rational govern-

mental project. Nonetheless, the transfer of property inter-

ests could not be accomplished without just compensation.

The upshot of the governmental position at bench would

be the elimination of the Just Compensation Clause. In its

repeated analysis of the issue, this Court has consistently

defined a regulatory taking in terms of three factors —

diminution of the property’s economic value, interference

with distinct investment-backed expectations, and the charac-

ter of the government's action (the latter primarily concerned

with whether there has been a physical invasion of property

rights). (E.g., Penn Central Transp. Co. v. City of New York,

'l Florida Rock Indus., Inc. v. U.S., 791 F.2d 893, 899 (Fed. Cir. 1986).

(Quoting with approval; emphasis, the Court's.) See also Whitney Benefits,

Inc. v. U.S., 926 F.2d 1169, 1177 (Fed. Cir. 1991); Skaw v. U.S., 740 F.2d

932, 939 (Fed. Cir. 1984). For a sampling of other courts reaching the

same conclusion, see Richmond Elks Hall Assn. v. Richmond Redevelop-

ment Agency, 561 F.2d 1327, 1332 (9th Cir..1977); Mattoon v. City of

Norman, 617 P.2d 1347, 1349 (Okla. 1980); Knight v. City of Billings, 642

P.2d 141, 145-46 (Mont. 1982); Sam Antonio River Auth. v. Garrett Bros.,

528 S.W.2d 266, 273 (Tex. Civ. App. 1975).

~

438 U.S. 104, 124 [1978].) All three of these factors relate

only to the impact of the government’s regulation on the

individual's property interest. They have nothing to do with

the legitimacy of the governmental goal. When inquiring

whether a governmental regulation violates the Just Compen-

sation Clause of the Fifth Amendment, the question is not the

subject matter of the governmental regulation, but the impact

on the private property owner. (E.g., Kaiser Aetna, 444 U.S.

at 174.) Indeed, as this Court said long ago in Boston Cham-

ber of Commerce v. Boston, 2:7 U.S. 189, 195 (1910), “...

the question is, What has the owner lost?, not What has the

taker gained?”!?

Thus, regardless of South Carolina’s good intentions in

enacting this scheme, the Fifth Amendment prohibits the

State from achieving its goals by the uncompensated seizure

of private property development rights.

iI. DEFINITIONAL IPSE DIXIT CANNOT CON-

TROL CONSTUTIONAL ADJUDICATION

The South Carolina Supreme Court relied on the idea that

there is a “nuisance exception” to the constitutional com-

mand for compensation. No doubt the governmental briefs in

this Court will do so as well.

Mr. Lucas’ brief on the merits discusses the validity of the

“nuisance exception” at length, and that argument will not be

rehearsed here. However, in light of the clear authorities

discussed above which preclude the defense of “good inten-

tions,” two things must be said about that “exception.” First,

12 With due respect to good intentions, a substantial factor in the lack of

affordable housing today has been “environmental” regulations:

“Exerting considerable influence on both urban and suburban

landscapes, otherwise valuable environmenal protection regulations

seriously restrict the amount of buildable land that is available for

development. This effect raises the cost of what land remains open for

homebuilding.” (NJMBY Report 6)

-14-

to the extent it has validity at all, it is a narrow exception to

the general responsibility to compensate for property taken.

Second, the agency drafting the regulatory restriction cannot

be permitted to define its liability out of existence by the

simple expedient of declaring something to be a nuisance.

A. The General Rule Requires Compensation;

Any Exception Must be Truly Narrow

The “nuisance exception” is said to stem from this Court's

decision in Mugler v. Kansas, 123 U.S. 623 (1887). Thus,

the place to begin any inquiry into the meaning of that "ex-

ception” is in Mugler. There, this Court explained the lim-

ited nature of its holding:

“The power which the States have of prohibiting

such use by individuals of their property as will be

prejudicial to the health, the morals, or the safety

of the public, is not — and, consistent with the

existence and safety of organized society, cannot

be — burdened with the condition that the State

must compensate such individual owners for

pecuniary losses they may sustain, by reason of

their not being permitted by a noxious use of their

property, to inflict injury upon the community.”

(123 U.S. at 669; emphasis added.)

Thus, what this Court permitted in Mugler was the uncom-

pensated prohibition of a specific use of property which

caused injury to others. As the Court noted, “[s]uch legisla-

tion does not disturb the owner in the control or use of its

property for lawful purposes ....” (123 U.S. at 669) That

conclusion was reinforced in this Court's more recent discus-

sion in Keystone Bituminous Coal Assn. v. DeBenedictis, 480

U.S. 470, 488 (1987) which described Mugler and _ its

progeny as applying to “... activities akin to a public

nuisance.” (Emphasis added.)

~. ee

Neither in Mugler, nor any of its progeny, was there a

toiui prohibition of use. A specific use was involved in each

case. Although the regulations may have precluded the

property owner’s preferred use (even the property’s most

valuable use), it did not preclude all economically viable use.

Curtin v. Benson, 222 U.S. 78 (1911), another case de-

cided in that same era, makes it clear that Mugler was not

intended to grant carte blanche to government agencies to

regulate private property into oblivion. As this Court put it

in Curtin:

“On the merits of the case we may concede,

arguendo, as contended by the [governmental]

appellees and disputed by appellant [property

owner], that the United States may exercise over

the park not only rights of a proprietor, but the

~ powers of a sovereign. There are limitations,

however, upon both. Neither can be exercised to

destroy essential uses of private property. The

right of appellant to pasture his cattle upon his

land, and the right of access to it, are of the very

essence of his proprietorship. May conditions be

put upon their exercise such as appellees put upon

them? ... [The government’s] order is not ..a

regulation of the use of the land, as an order to

fence the lands might be, but is an absolute prohibi-

tion of use. It is not a prevention of a misuse or

illegal use, but the prevention of a legal and essen-

tial use, — an attribute of its ownership, — one

which goes to make up its essence and value. To

take it away is practically to take his property

away, and to do that is beyond the power even of

sovereignty, except by proper proceedings to that

end.” (222 U.S. at 86; emphasis added.)

This recognition that total use preclusion without compen-

sation is forbidden by the Fifth Amendment was recently

confirmed in First English, 482 U.S. at 316-317, with this

sits

Court taking as its text the following comment from another

Mugler contemporary, Pumpelly v. Green Bay Co., 13 Wall.

166, 177-178 (1872):

“It would be a very curious and unsatisfactory

result, if ... it shall be he'd that if the government

refrains from the absolute conversion of real prop-

erty to the uses of the public it can destroy its

value entirely, can inflict irreparable and perma-

nent injury to any extent, can, in effect, subject it

to total destruction without making any compensa-

tion, because, in the narrowest sense of that word,

it is not taken for the public use.” (Emphasis, the

Court's.)

Thus, to the extent it makes any sense to recognize an

“exception” from the Constitutional command of compensa-

tion, this Court’s cases have treated the “exception” as a

narrow one. The holding sought by South Carolina would

have the “exception” swallow — in fact, displace — the

rule.

B. The Regulator Cannot be Permitted to

Immunize Itself by Defining its Target as a

Nuisance

An insidious aspect of the “nuisance exception” idea is

that the governmental proponents of it generally arrogate to

themselves the power to decide whether something is a

nuisance. Here, for example, the South Carolina legislature

purported to make “findings” that home construction is a

nuisance and therefore could be prevented by fiat.

The potential for result-driven “findings” and subjective

(even if unconscious) value judgements is unmeasurable. In

a constitutional system, such as ours, the legislative branch

cannot be given (or abdicated) the power to determine its

own Fifth Amendment liability by the simple expedient of

defining the target of its actions as a nuisance. Judicial

-%.

interposition, to determine the actuality of the “nuisance,” is

essential for the proper functioning of the Fifth Amend-

ment’s scheme. As the Claims Court has recently remarked,

to accept the assertion that a particular activity is a nuisance

merely because Congress chose to prohibit it is “circular

reasoning” (Florida Rock Indus., Inc. v. U.S., 21 Cl. Ct. 161,

168 [Ci. Ct. 1990]) which has “no benchmark of objectivity”

(Loveladies Harbor, Inc. v. U.S., 15 Cl. Ct. 381, 389-90 [Cl.

Ct. 1988]) and which “would yield the destruction of the

fifth amendment.” (Florida Rock, 21 Cl. Ct. at 168)

In other contexts, this Court has refused to permit

wordplay as a substitute for compliance with the Just Com-

pensation Clause:

“This Court has stated that a sovereign ‘by ipse

dixit, may not transform private property into

public property without compensation .... This is

the very kind of thing that the Taking Clause of the

Fifth Amendment was meant to prevent.’ (Ruckel-

shaus v. Monsanto Co., 467 U.S. 986, 1012 [1984];

quoting Webb’s Fabulous Pharmacies, Inc vy.

Beckwith, 449 U.S. 155, 161 [1980].)

Moreover, such deferential abdication to the legislative

branch is contrary to this Court’s general approach to takings

cases. In Agins v. City of Tiburon, 447 U.S. 255, 260-261

(1980), for example, the Court explained that the “deter-

mination that governmental action constitutes a taking, is, in

essence, a determination that the public at large, rather than a

single owner, must bear the burden of an exercise of state

power in the public interest,” and recognized that this ques-

tion “necessarily requires a weighing of private and public

interests.” That essential “weighing” process in the Con-

stitutional matrix cannot be accomplished by conclusively

granting the governmental side the power to dictate the

ground rules by defining targets of regulation as nuisances.

s PF

Examining this Court’s precedents, the 9th Circuit Court

of Appeals recently concluded that the balancing test re-

quired to determine whether there has been a taking man-

dates careful factual examination. That analysis seems

equally apt in the context of permitting one litigant to define

the terms of the dispute in such a way that its conduct is

immunized, as several of the illustrative cases are “nuisance”

taking cases. As the 9th Circuit explained:

“To hold that a legitimate public interest alone

precludes a taking without regard to the degree of

private deprivation turns the Court’s balancing of

interests into a bright-line test for which there is no

precedent. The Court’s own disclaimers make this

clear. See, e.g., United States v. Riverside Bayview

Homes, 474 U.S. 121, 126 (1985) (‘We have never

precisely defined those circumstances’ when

governmental land-use regulations amount to a

taking); Penn Central Transp. Co., 438 U.S. at 124

(takings analysis involves ‘essentially ad hoc,

factual inquiries’); Goldblatt v. Town of Hemp-

stead, 369 U.S. 590, 594 (1962) (‘no set formula to

determine where regulation ends and _ taking

begins’); Pennsylvania Coal Co. v. Mahon, 260

U.S. 393, 416 (1922) (takings determination is ‘a

question of degree — and therefore cannot be

disposed of by general propositions’).” (McDougal

v. County of Imperial, 942 F.2d 668, 677 (9th Cir.

1991); parallel citations omitted.)

That excessive deference is not due the government's

definitional efforts is borne out by First English and Nollan,

in which this Court declared that the rights of property own-

ers are to be protected by the judiciary against the

“cleverness and imagination” of governmental word games

(Nollan 483 U.S. at 841), even if that “lessen[s] to some

extent the freedom and flexibility of land use planners and

governing bodies of municipal corporations ....” (First

- 19 -

English, 482 U.S. at 321) The thought was further empha-

sized in Nollan when this Court concluded that the standard

which the government must meet to successfully defend its

actions is a stricter one than the “rational basis’ test histori-

cally applied in due process cases. (483 U.S. at 834, fn 3)

Allowing government to define the terms in such a way

that there is only one possible outcome to litigation does not

comport with this Court’s takings jurisprudence. It’s not

good sense either. It would provide government with a

license to confiscate by definitional ipse dixit. What govem-

mental entity could resist such a tempting way to balance its

budget? A self-declared and self-fulfilling power to define

constitutional liability and immunity is foreign to the Fifth

Amendment. To adopt South Carolina’s position would truly

eliminate the Fifth Amendment's protection of property

owners.

CONCLUSION

Good intentions are not enough. Neither is significant

public benefit. In fact, the presence of both good intentions

and substantial public benefit merely leads to the conclusion

that the government is acting in an area appropriate for

governmental conduct. Neither addresses the compensation

question.

In First English, this Court may have believed that it had

answered the question. There, with simple elegance, this

Court held that the Fifth Amendment's Just Compensation

Clause means precisely what it says: when there is a taking

—— regardless of the instrumemality of the taking — the

Constitution demands compensation. Period.

South Carolina, like many of those who can be expected

to appear as its amici, has not learned that lesson. It believes

that it can, with constitutional impunity, enact stultifying

regulations which have popularity with significant blocs of

the voting public and harm only the interests of a

- *.

disorganized few. It cannot. The purpose of the Fifth

Amendment was to stand as a shield against governmental

overreaching even against unpopular targets.

One cannot improve on the straightforwardness of First

English:

“|. government action that works a taking of

property rights necessarily implicates the constitu-

tional obligation to pay just compensation.” (482

U.S. at 315; internal quotation marks and citation

omitted.)

At bottom, that is all this case is about. As this Court

reaffirmed that simple rule in Preseault v. ICC, 494 U.S. 1

(1990), so the facts at bench call for the same application.

These amici pray that the decision of the South Carolina

Supreme Court be reversed.

DATED: December 31, 1991.

Respectfully submitted,

MICHAEL M. BERGER

Counsel of Record

of BERGER & NORTON

A Law Corporation

WILLIAM H. ETHIER

National Housing Center

National Association of

Home Builders

Attorneys for Amici Curiae