Amicus Curiae Brief — Lucas v. South Carolina Coastal Council

(29 | (998

- No. 91-453 |

pie EK |

In The

Supreme Court of the United States

October Term, 1991

+

DAVID H. LUCAS,

Petitioner,

SOUTH CAROLINA COASTAL COUNCIL,

Respondent.

+

On Writ Of Certiorari To The

Supreme Court Of The State Of South Carolina

¢

BRIEF FOR AMERICAN PLANNING ASSOCIATION

AND TAHOE REGIONAL PLANNING AGENCY

AS AMICI CURIAE

IN SUPPORT OF RESPONDENT

*

Gary A. Owen H. Bissett Carey, III*

CROWELL, SusICH, OWEN Rosinson & COLE

& Tackes, Lrp. One Commercial Plaza

510 W. Fourth Street Hartford, Connecticut 06103

Post Office Box 1000 (203) 275-8200

mg Rae - evada 89702 Counsel for Amici Curiae

American Planning Association

Of Counsel for Amicus Curiae and Tahoe Regional

Tahoe Regional Planning Agency Planning Agency

*Counsel of Record

eee LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

Sy,

TABLE OF CONTENTS

INTERESTS OF THE AMERICAN PLANING ASSO-

CIATION AND TAHOE REGIONAL PLANNING

AGENCY

I. THE SOUTH CAROLINA SUPREME COURT'S

RELIANCE ON THE RULE FIRST SET FORTH

IN MUGLER V. KANSAS, 123 U.S. 623 (1887) TO

PRECLUDE PETITIONER’S FIFTH AMEND-

MENT TAKING CLAIM WAS APPROPRIATE

UNDER THE CIRCUMSTANCES OF THE CASE

PRESENTED

IF THE COURT CONCLUDES THAT THE

MUGLER DOCTRINE SHOULD NOT HAVE

BEEN APPLIED TO PRECLUDE PETITIONER'S

CLAIM, THIS COURT SHOULD FAVORABLY

CONSIDER A REMAND FOR FURTHER PRO-

CEEDINGS TO PERMIT THE SOUTH CARO-

LINA COURTS TO DETERMINE, UTILIZING

OTHERWISE APPLICABLE PRECEDENT,

WHETHER A REGULATORY TAKING HAS

OCCURRED, PARTICULARLY IN LIGHT OF

THE 1990 AMENDMENTS TO THE 1988

BEACHFRONT MANAGEMENT ACT

A REGULATION WHICH ELIMINATES THE

VALUE OF UNDEVELOPED LAND AT A GIVEN

POINT IN TIME DOES NOT ESTABLISH A

FIFTH AMENDMENT “TAKING” OF THAT

PROPERTY

TABLE OF CONTENTS -— Continued

Page

A. Petitioner never possessed a constitutionally

recognized “property right” in any given use of

land prohibited by the Act................. 25

B. Petitioner had no constitutionally protected

“economic interest” in any uses prohibited by

i. SPPreeerrrercr rir ry Pr 27

CONOLAFSSE gnc cccccvcccccuccocsucensceaseswenean 29

TABLE OF AUTHORITIES

Page

Cases:

Agins v. Tiburon, 447 U.S. 255 (1980) ......... 18, 19, 22

American Federation of Labor v. American Sash &

EE” 15

‘American Indians Residing on Maricopa-Ak Chin

Reservation v. United States, 667 F.2d 980

(U.S.C.C. 1981), cert. denied, 456 U.S. 989 (1982) ..... 3

Andrus v. Allard, 444 U.S. 51 (1979) ............. 23, 34

Armstrong v. United States, 364 U.S. 40 (1960)........ 26

Board of Regents v. Roth, 408 U.S. 564 (1972) .... 26, 27

Bowen v. Gilliard, 483 U.S. 587 (1987) ............... 26

Sa me, ae am. Spe (996$)............... 15

Candlestick Properties, Inc. v. San Francisco Bay

Conservation & Development Comm'n, 89

cee cece rece scece 12

Carter v. South Carolina Coastal Council, 314 S.E.2d

Ne csc eee csececccncce 12

DeStefano v. City of Charleston, 403 S.E.2d 648 (S.C.

EE 27

Elwood yv. City of New York, 450 F. Supp. 846

(D.C.N.Y. 1978), rev'd on other grounds, 606 F.2d

358, cert. denied, 447 U.S. 906 (1980)............... 3

Esposito v. South Carolina Coastal Council, 939 F.2d

165 (4th Cir. 1991), petition for cert. filed, 60

U.S.L.W. 3505 (U.S. Dec. 5, 1991) (No. 91-941)... .. 15

Euclid v. Ambler Realty Co., 272 US. 365 (1926)... 10, 14

iv

TABLE OF AUTHORITIES — Continued

Page

Fair Ocean Co., Ltd. v. Cargo of Permina Samudra

X11, 423 F. Supp. 1037 (D.C. Guam 1976)............ 3

First English Evangelical Lutheran Church v. County

of Los Angeles, 482 U.S. 304 (1987)......... 20, 21, 24

Friarsgate, Inc. v. Town of Irmo, 290 S.C. 266, 349

DE. Gre GOK Ge, C.F hb ed ecccedeceveness 27

Goldblatt v. Hempstead, 369 U.S. 590 (1962)...11, 14, 23

Hadacheck v. Sebastian, 239 U.S. 394 (1915)....9, 10, 11, 14

Hodel v. Irving, 481 U.S. 704 (1987). .............555. 26

Hodel v. Virginia Surface Mining & Reclamation

har a; Cat. Te Dax Be MRE on 60 chawdccesseesx 21

Just v. Marinetta County, 201 N.W.2d 761 (Wis.

NS 84-6464 5 60 SoC RRRER ENS KaaT eRe eee ebeeee 12

Kaiser Aetna v. United States, 444 U.S. 264 (1981) 21, 28

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480

8 ee RP ery reer Cerro ry eer passim

Lucas v. South Carolina Coastal Council, __ S.C.

___, 404 S.E.2d 895 (1991), cert. granted, _ US.

gy Oe ee ee I 6.8.06 b2d00auee a: i te tae OO

MacDonald, Sommer and Frates v. County of Yolo,

477 U.S. 340, reh’g denied, 478 U.S. 1035 (1986)... . 20

Maple Leaf Investors, Inc. v. State Dep't of Ecology,

ee 8B OR Pe errr rrerr re 12

Mays-Ott Co., Inc. v. Town of Nags Head, 751 F.

, Te Gs CAs co es wesnsacdsntbbaenees 27

Sai C2 Oe

TABLE OF AUTHORITIES — Continued

Page

McCarthy v. City of Manhattan Beach, 264 P.2d 932

(Cal. 1953), cert. denied, 348 U.S. 817 (1954)....... 12

McNulty v. Town of Indialantic, 727 F. Supp. 604

Se Se Sos vcnck des tsusakkbeiaae usu enewes 12

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

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

Nectow v. Cambridge, 277 U.S. 183 (1928)............ 1]

Nollan v. California Coastal Comm'n, 483 U.S. 825

SS diane os eeeran See eno cen nea 15, 19, 23

Orion Corp. v. State of Washington, 747 P.2d 1062

(Wash. 1987), cert. denied, 486 U.S. 1022 (1988).... 12

Penn Central Transportation Co. v. New York City,

438 U.S. 104, reh’g denied, 439 U.S. 883 (1978) passim

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

SENG Gaba canine AG S506 64 cee cas ce eee ee con 5, 7, 8

Potomac Sand & Gravel Co. v. Governor of Mary-

land, 293 A.2d 241 (Md. 1972), cert. denied, 409

a SR So i'n ca do's cs eae cae ss ckbaden 12

Reinman vy. Little Rock, 237 U.S. 171 (1915).....9, 10, 14

Ruckleshaus v. Monsanto Co., 467 U.S. 986 (1983)..... 25, 26

Scott v. Greenville County, 716 F.2d 1409 (4th Cir.

SP YE AR itn gh Moe Seu wrens eS RA

te

~J

vi

TABLE OF AUTHORITIES — Continued

Page

Spiegle v. Borough of Beach Haven, 218 A.2d 129

(N.J.), cert. denied, 385 U.S. 831 (1966)........ 10, 12

Sproles v. Binford, 286 U.S. 374 (1932)..............4. 15

Town of Indialantic v. McNulty, 400 So.2d 1227 (Fla.

cf TY TTT Cli T eT TET eee 12

Turner v. County of Del Norte, 101 Cal.Rptr. 93 (Cal.

Rae ere mp eye ee ee eee ee 12

Turnpike Realty Co. v. Town of Dedham, 284 N.E.2d

891 (Mass. 1972), cert. denied, 409 U.S. 1108

eh ie Dg aie nae RAG ata ace ew AD 12

United States v. Chandler-Dunbar Water Power Co.,

ee es Se NG 56 bb N Ke eONe he ewes dew eetnds 26

United States v. General Motors Corp., 323 U.S. 373

Ns Bui haut w ee bias Rele O0)646K00 6046S SRE EEA 25

United States v. Willow River Power Co., 324 U.S.

EO Tre Tee ree Pee ee Sree 27, 28

Usdin v. Dep't of Envir. Protection, 414 A.2d 280

(N.J. 1980), aff'd, 430 A.2d 949 (1981)............. 12

Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449

a ccc hie ue edlekdd ans eeueiee 6x 25, 26

Whitfield v. Seabrook, 259 S.C. 66, 190 S.E.2d 743

a bucke cENd RAR sa Ons oe ke eECk + 4ube ws is + Ke 27

Williamson County Regional Planning Comm'n vy.

Hamilton Bank, 473 U.S. 172 (1985)...........0..... 20

vii

TABLE OF AUTHORITIES ~— Continued

Page

CONSTITUTION

ES Ts os dss ck ee a bee ckeeknares ka passim

U.S. Supreme Court Rutes

a kre ae Re ae kt et ee 15

ea ha oe hal Na ee hee oes 2

FEDERAL STATUTES

Flood Disaster Protection Act of 1973, P.L. 93-234,

ht Eire ee ee ee 16

Tahoe Regional Planning Compact, Pub. L. 91-148,

83 Stat. 360 (1969), amended Pub. L. 96-551, 94

ee hace ennwuecesvees |

Se re ee ted ad ie ad 15

Cope or FeperRat REGULATIONS

de webincawewenen 16

FEDERAL RULES or EviIDENCE

a a 3

State STATUTES

South Carolina Beachfront Management Act, 1988 Act.

No. 634, S.C. Code Ann. § 48-39-250 et seg........ .2, 13

South Carolina Beachfront Management Act Amend-

ments, 1990 Act. No. 607, S. 3, S.C. Code Ann.

SD Se Sere COUN BL 5c ccc cece eccncsesvcces 2

Viil

TABLE OF AUTHORITIES — Continued

Page

OrnerR MATERIALS

BCD Council of Governments, The /sle of Palms,

Hurricane Hugo: One Year Later ...............0005: 4

Center for Urban and Regional Studies, University of

North Carolina, Evaluation of the National Coastal

Zone Management Program, (1991) .............045.5. 16

Federal Emergency Management Agency, /nteragency

Hazard Mitigation Team Report: Hurricane Hugo

(Report No. 843-DR-SE, October (1989)............. 17

Hildreth, Coastal Natural Hazards Management, 59

i rr rr a os Cl oe wane eeeewe ses 16

Maloney and O'Donnell, Drawing the Line at the

Oceanfront, 30 Fla. L. Rev. 393 (1978) ............. 16

National Research Council, Managing Coastal Ero-

Nee ee ae Aae ae es 6 17

Owens, Coastal Management in North Carolina;

Building a Regional Consensus, 51 J. Am. Plan.

I uly ne bs 16

Rohan, Zoning and Land Use Controls, § 18.04{3)[ii]

SE ecdae Te weed id cus doe Oak ae wes 40 se bene Ok 84-666 10

Shows, Florida’s Coastal Setback Line ~— An Effort to

Regulate Oceanfront Development, 4 Coastal Z.

a a ore ch 605 660 COREE A BS O Ok eee 9 16

Robert R. Simpson & Herbert Riehl, The Hurricane

ee ee eee eee 3

Williams, Jr., Norman, American Land Planning Law:

Land Use and the Police Power (1974-75) .......... 10

INTERESTS OF THE

AMERICAN PLANNING ASSOCIATION AND

TAHOE REGIONAL PLANNING AGENCY

The American Planning Association (“APA”) is a non-profit

association of 27,000 members, all of whom are employed in the

field of land use planning or are otherwise vitally concemed with

the discipline.

Virtually all members of APA are engaged in land use plan-

ning either on behalf of governmental bodies exercising regulatory

authority over the use of real property or for the benefit of holders

of land subject to land use regulation. Consequently, APA does not

represent the interests of those who seek to increase the constitu-

tionally permissible scope of government regulation or promote the

interests, constitutional or otherwise of individual landowners. APA

and its members are fundamentally and vitally interested in the

promotion of the rational, predictable, effective, and beneficial use

of real property consistent with the needs of individuals having

recognized interests in property and the public at large. APA

members are the professionals who engage in the planning to

accomplish that fundamental goal.

The Tahoe Regional Planning Agency (““TRPA”’) is an entity

created by an interstate compact between the States of California

and Nevada, approved by Congress. Tanoe Regional Planning

Compact, Pub. L. 91-148, 83 Stat. 360 (1969), amended Pub. L.

96-551, 94 Stat. 3233 (1980). Its jurisdiction encompasses the Lake

Tahoe Basin, an approximately 325 square-mile environmentally

fragile air and water basin whose focal point is Lake Tahoe. TRPA

is charged by the Compact with adopting and implementing a

regional plan of resource conservation to stem the rather rapid

deterioration of Lake Tahoe and its environs. The agency has

adopted a plan implementing regulations, including the regulation

of development near and around Lake Tahoe.

Land use planning alone, however, does not translate to

rational, predictable, effective, and beneficial land use without

enforceable regulations to implement the plans made to accomplish

those purposes. Effective implementation of sound land use plan-

ning is threatened by Petitioner’s suggestion that this Court adopt a

2

rule which, in essence, makes the “market value” of property the

determinant factor in considering whether the application of an

admittedly valid’ land use regulation results in a “taking”

under the Fifth Amendment. It is this suggestion, and its

impact on land use planning, which causes APA and TRPA to

file this brief as amici curiae.

APA and TRPA submit this brief as amici curiae pursuant

to Supreme Court Rule 37.2

STATEMENT OF THE CASE

Respondent’s Brief offers a concise, complete factual

Statement of the underlying dispute and procedural history

leading to the grant of certiorari by this Court on November

18, 1991. Certain facts either of record or subject to judicial!

notice of this Court require emphasis for purposes of the

arguments made herein.

First, South Carolina’s 1988 Beachfront Management

Act, 1988 Act No. 634, codified at §.C. Code Ann.

§ 48-39-250 et seq., (the “Act’), the legislation giving rise to

Petitioner’s claim, was amended effective on June 25, 1990,3

to provide a means by which a landowner, prevented by

operation of the Act from constructing any structure on its

property, may obtain a permit to do so. 1990 Act No. 607, s. 3

' The parties hereto have so stipulated. Lucas v. South Carolina

Coastal Council, ___ S.C. ___, 404 S.E.2d 895 (1991), Citing Respon-

dent’s Brief to the South Carolina Supreme Court, p. 4.

* Written consent for the filing of this brief has been granted by

counsel for all parties. Letters of consent have been filed with the Clerk

of this Court.

* The bill which eventually became known as 1990 Act No. 607

was first introduced in the South Carolina legislature on February 16,

1989, less than a year after the 1988 Beachfront Management Act became

effective. It was immediately referred to committee, and reported out

favorably on April 25, 1989, but languished until a joint conference report

of both houses adopted the measure on June 19, 1990. The 1990

amendment took effect upon signature of the governor on June 25, 1990.

3

codified at S.C. Code Ann. § 48-39-290(D) (1990 Supp.) (the

“1990 amendments”). The record does not reveal whether

Petitioner has submitted an application for a building permit

under the Act as amended.*

Second, Petitioner purchased his two lots in 1986. Peti-

tioner never obtained any permit to construct any structure on

either of his lots. Transcript of Record from South Carolina

Supreme Court (“Transcript”), pp. 39-40.

Last, many of “public harms” identified by the South

Carolina legislature, the same harms so readily belittled as

either insignificantS or secondary® to the purposes of the Act,

became menacingly real with the onslaught of Hurricane

Hugo in 1989. The impact of that storm, typical of hurricanes

which affect the South Carolina seacoast regularly,’ is one

of public record, judicial notice of which is appropriate.*

4 Respondent has, however, indicated to Counsel of Record that

Petitioner has, in fact, failed to apply for any such permit.

5 Petitioner opines that “[i}t is readily apparent that the underlying

purpose” of the Act was to promote tourism and the public use of South

Carolina’s beaches. Petitioner's Brief on the Merits, p. 39.

6 The dissent to the decision below would have found, as a matter of

law, that the “primary” purpose of the Act was not the prevention of a

“nuisance.” Lucas v. South Carolina Coastal Council, ___ §.C. ___, 404

S.E. 2d 895, 905 (1991).

7 See, e.g., Simpson, Robert R. and Herbert Riehl, The Hurricane

and Its Impact, (1981).

8 Fed. Rules of Evid. 201(b), 28 U.S.C. See also Elwood v. City of

New York, 450 F. Supp. 846 (D.C.N.Y. 1978), rev'd on other grounds, 606

F.2d 358, cert. denied, 447 U.S. 906 (1980) (acknowledges the power of

the Court to take judicial notice of scientifically verifiable facts); Amert-

can Indians Residing on Maricopa-Ak Chin Reservation v. United States,

667 F.2d 980 (U.S.C.C. 1981), cert. denied, 456 U.S. 9089 (1982) (allows

judicial notice of information in public records); Fair Ocean Co., Lid. v.

Cargo or Permina Samudra XII, 423 F. Supp. 1037 (D.C. Guam 1976)

(permits »1cial notice of wopical storm conditions.).

4

Estimated to have generated a storm surge of between 10 to

13 feet above normal,? Hurricane Hugo swept ashore during

the Fall of 1989 inundating virtually all of the Isle of Palms.

Despite the revetment running southerly from seaward of lot

23 (constructed to provide protection from the sea, and pre-

sumably providing the same for lots to the south of lot 23)

and a nourishment project on the beach, (Joint Appendix, pp.

2-3), the residences on either side of Petitioner’s lots, as well

as structures immediately in back of these lots, were substan-

tially damaged. During the first years after Hurricane Hugo,

building permits were issued in the Isle of Palms for two-

thirds of the buildings that existed before the store. One out

of twenty were completely destroyed.!°

SUMMARY OF ARGUMENT

It is not hyperbole to suggest that Petitioner invites the

Court to render a decision in this matter which would, in the

final analysis, cause a significant and essentially detrimental

upheaval in the law of “regulating takings,”!! one that would

impede the government's ability to rationally plan and

% BCD Council of Governments, The Isle of Palms. Hurricane

Hlugo: One Year Later, p. ii.

10 Id., pp. 10-11.

'! Of substanual concern is the fact that this challenge is made in

the context of a regulation which has as one of its many purposes the

preservation of environmentally sensitive land in a condition which will

permit it to perform its naturally protective role. It is unchallenged that

the legislation would have promoted that worthy purpose. As pointed out

infra, a vast panoply of state and federal jurisprudence has insulated

regulation seeking to protect environmentally sensitive areas from devel-

opment against “taking” claims, even where the impact on the “market

value” of the property subject of the regulation has been significant.

5

regulate the use of property.'? Petitioner urges the abandon-

ment of the multi-faceted, ad hoc and admittedly difficult

factual inquiry traditionally involved in Fifth Amendment

“taking” jurisprudence in favor of a single, economically

predicated, litmus test used to determine real estate entrepre-

neurial failure: no present “market value.”!?

As demonstrated below, the Court should reject Peti-

tioner’s impassioned plea to have this Court construe the Fifth

Amendment to require constitutional preservation of the value

of his assets by adopting a single, simplistic litmus test as to

when the application of a land use regulation “goes too far.”'4

12 Even Justice Holmes, whose opinion is so frequently relied upon

to support the economic use test for takings jurisprudence, forewarned

that, “Government could hardly go on if to some extent values incident to

property could not be diminished without paying for every such change in

the general law. . . . some values are enjoyed under an implied limitauion

and must yield to the police power. Pennsylvania Ccal v. Mahon, 260

U.S. 393, 413 (1922).

'3 Petitioner states his position as follows:

... the enforcement of land-use regulations which have

the effect of eliminating the value of private property should

be per se subject to the just compensation requirement of the

Fifth Amendment.

Petitioner’s Brief on the Merits, p. 19 (emphasis provided).

It is clear from the trial record that Petitioner is referring to the

“market value” of his property at the time the Act was first applied to his

property, i.e. when the “baseline” and “setback” lines were established

along the shoreline where his property is located. (Transcript, pp. 31-5,

48-9).

14 Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922). It is not

surprising, in light of the competing constitutional and public policy

concerns involved in the issue, that a “litmus test” to determine if a

“taking” has occurred has managed to clude the United States Supreme

Court. E.g., Penn Central Transportation Co. v. New York, 438 U.S. 104,

123-4 (1977). It is surprising, however, that Peuuoner views that the same

constitutional and public policy tensions are now in some way resolved to

permit the adoption of the singularly simple solution he suggests.

6

That is not to say that Petitioner's property rights do not or

should not enjoy constitutional protection or that those same

rights do not or should not enjoy that protection through

judicial intervention. It is to say that one’s property is not

“taken” under the Fifth Amendment if the record reveals that

there has been nothing more than a temporal impact on its

value allegedly caused by application of a state regulation

which is, by stipulation of the parties and according to that

state’s highest court, designed to prevent a recognized and

serious public harm. This is particularly true, we urge, if the

property owner has not availed himself of the opportunity to

seek to regain all or most of the value allegedly lost, if the

uses prohibited by the allegedly offending legislation, relied

upon as the foundation of the property's “market value,” do

not enjoy constitutional protection, and if the property owner

retains most if not all of the traditionally recognized “bundle

of rights” in the property.

ARGUMENT

I. THE SOUTH CAROLINA SUPREME COURT’S

RELIANCE ON THE RULE FIRST SET FORTH IN

MUGLER V. KANSAS, 123 U.S. 623 (1887) TO PRE-

CLUDE PETITIONER’S FIFTH AMENDMENT TAK-

ING CLAIM WAS APPROPRIATE UNDER THE

CIRCUMSTANCES OF THE CASE PRESENTED.

After what the Transcript reveals to have been a brief

trial, the Court of common Pleas, Charleston County, South

Carolina found that “[t)he effect of the setback line imposed

by the beachfront Management Act on Lucas’s two lots is to

render property which was otherwise perfectly suitable for

single-family residential development valueless.”!

'S The trial court also found that “enforcement of the Beachfront

Management Act has deprived Lucas of all of the essential elements of

ownership.” Pet. App., p. 39. This finding was made, presumably, on the

strength of the conclusion that “essential elements of ownership” are

defined as those having monetary or market value. It is respectfully

suggested that the trial court’s conclusion on this score is incorrect, at

least as it applies to the Fifth Amendment. See Section III, infra.

7

Petitioner's Appendix to Petition for Certiorari (“Pet. App.”’).

The trial court then concluded that the application of the Act

to Petitioner’s vacant lots resulted in a “taking” of that prop-

erty under the Fifth Amendment of the United States Consti-

tution. '©

On appeal, the South Carolina Supreme Court held that

the purposes of the Act were to prevent a recognized public

harm, and because neither the validity of the Act nor the

findings of the South Carolina legislature with respect to its

purposes went unchallenged in the trial court, the rule set

forth in Mugler v. Kansas, 123 U.S. 623 (1887) and its

progeny should apply. It therefore reversed the decision of the

lower court. Lucas v. South Carolina Coastal Council, —__

S.C. __, 404 §.E.2d 895 (S.C. 1991), cert. granted, _— US.

___, 112 S.Ct. 436 (1991). Petitioner sought, and was granted,

a writ of certiorari. This appeal, therefore, contests the val-

idity of the South Carolina Supreme Court’s application of

what it dubbed as the “Mugler rule” to Petitioner's claim.

As noted by the South Carolina Supreme Court, this

Court’s decision in Keystone Bituminous Coal Ass'n v.

DeBenedictis, 480 U.S. 470 (1987) put to rest any remaining

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

(1922) had, in essence, eviscerated the essential holding of

Mugler v. Kansas, 123 U.S. 623 (1887). Lucas v. South Caro-

lina Coastal Council, __ S.C. __, 404 §S.E.2d 895 (S.C.

1991), cert. granted, __ U.S. __, 112 S.Ct. 436 (1991).

Keystone not only affirmed the viability of Mugler and its

progeny but also by virtue of its reliance on the application of

the rule set forth in those cases sought to explain and define

the rule itself. Keystone Bituminous Coal Ass'n v.

DeBenedictis, supra, 480 U.S. at 488-492.

'6 The Circuit Court ordered the payment of compensation for the

lots as a result of its finding and, upon payment, the transfer of utle to the

State of South Carolina. No alternative remedy was ordered. Pet. App.,

pp. 40-41. See Section Ill, infra, pp. 21-29.

8

Ironically, this Court began its analysis with the teach-

ings of the same decision which purportedly cast doubt on the

viability of Mugler and other similar cases:

In Pennsylvania Coal the Court recognized that

the nature of the State’s interest in the regulation is

a critical factor in determining whether a taking has

occurred, and thus whether compensation is

required... .

* . 7

Many cases before and since Pennsylvania

Coal have recognized that the nature of the State's

action is critical in takings analysis.

Id., 480 U.S. at 488 (emphasis supplied).'? The Keystone

dissent agreed, emphasizing that the “nature” of the regula-

tion “may be relevant, for we have recognized that a taking

does not occur where the government exercises its unques-

tioned authority to prevent a property owner from using his

property to injure others without having to compensate the

value of the forbidden use.” Id., 480 U.S. at 511 (emphasis

supplied, citations omitted). After quoting at length from

Justice Harlan’s opinion in Mugler v. Kansas and referring

with favor to other precedent supporting the conclusion that

the nature of the State’s action is a predominant factor in the

required “ . . . weighing of private and public interests”, /d.,

480 U.S. at 492, the Court held:

The Court's hesitance to find a taking when the

State merely restrains uses of property that are

tantamount to public nuisances is consistent with

the notion of “reciprocity of advantage” that Justice

Holmes referred to in Pennsylvania Coal . . . While

'? The Court also pointed out that

. the type of taking alleged is also an often critical

factor. . . .While the Court has almost invariably found that

the permanent physical occupation of property constitutes a

taking, (citation omitted) the Court has repeatedly upheld

regulations that destroy or adversely affect real property

interests (Citations omitted).

Id., 480 U.S. at 488-9, n. 18.

9

each of us is burdened somewhat by [land use

regulations], we, in turn, benefit greatly from the

restrictions that are placed on others (citation omit-

ted). Long ago it was recognized that “all property

in this county is held under the implied obligation

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

the community,” (citations omitted) and the Takings

Clause did not transform that principle to one that

requires compensation whenever the state asserts its

power to enforce it.

Id., 480 U.S. at 491-2 (emphasis supplied). As a result, the

Court explained, “the public interest in preventing activities

similar to public nuisances is a substantial one, which in

many instances has not required compensation... ” and then

held that the regulation at issue in Keystone “ .. . plainly

seeks to further such an interest.” /d., 480 U.S. at 492.

Petitioner argues that the “Mugler rule” should be nar-

rowly construed and, if so construed, that the Act at issue

here would not fall within the so-called “nuisance excep-

tion.” '*® It is therefore appropriate, and possibly determina-

tive, to examine certain aspects of the rule which are pertinent

to the inquiry presently before the Court.

Clearly, the rule has been applied to uphold the regula-

tion of uses other than those which are found to be “nuisances

per se.” Comparing the facts in Reinman v. Little Rock, 237

U.S. 171 (1915), to the case before it, the Court in Hadacheck

v. Sebastian, 239 U.S. 394 (1915) stated that

.. . [t}here was a prohibition of a business, lawful

in itself, there as here. It was a livery stable there; a

brick yard here. They differ in particulars, but they

are alike in that which cause and justify prohibition

in defined localities — that is, the effect upon the

health and comfort of the community. . . . This

court said of [the ordinance at issue in Reinman|}:

“granting that the business was not a nuisance per

se, it was clearly within the police power of the

State to regulate it,” and to that end to declare that

'8 This phrase was apparently coined by the dissent in Penn Central

Transportation Co. v. New York City, 438 U.S. at 145.

10

in particular circumstances and in particular

localities a livery stable shall be deemed a nuisance

in fact and in law.”

Hadacheck v. Sebastian, 239 U.S. at 410-411, quoting Rein-

man v. Little Rock, 237 U.S. at 171. This same principle has

been more graphically expressed as follows:

Thus the question whether the power exists to for-

bid the erection of a building of a particular kind or

for a particular use, like the question of whether a

particular thing is a nuisance, is to be determined,

not by the abstract consideration of the building or

of the thing considered apart, but by considering it

in connection with the circumstances and the

locality. (Citation omitted). A nuisance may be

merely a right thing in the wrong place,-like a pig

in the parlor instead of the barnyard.

Euclid v. Ambler Realty Co., 272 U.S. 365, 388 (1926)

(emphasis provided).'?

The Court need not engage in consideration of whether

the use prohibited by a challenged regulation “ .. . con-

stitute(s) a nuisance according to common law; or whether

they may be so declared by state.” Keystone Bituminous Coal

Ass'n v. DeBenedictis, supra, 480 U.S. at 490. Rather, if it is

“clear that the exercise of [the] police power to prevent [an]

impending danger is justified,” then the prohibition of that

use does “not require compensation.” /d.

This is hardly a novel concept in the jurisprudence of this

Court; it enjoys the support and endorsement of the great

'? Numerous state decisions follow the original Mugler rationale

that some potenually harmful activities are simply unreasonable uses of

land and to deny them does not deny the reasonable use of land — it

merely requires the landowner to act reasonably. See, e.g., Spiegle v.

Borough of Beach Haven, 46 NJ. Super. 479, 491-92, 218 A.2d 129, 137

(1966), cert. denied, 385 U.S. 831 (1966). See also Norman Williams, Jr.,

American Land Planning Law: Land Use and the Police Power (1974-75)

and Rohan, Zoning and Land Use Controls § 18.04{3)[(11| (1991). For the

Court now to alter this century-long precedent in the state cases would

wreak havoc in the 50 states that have relied on it in creating and

administering their land use systems.

i}

weight of this century’s Supreme Court precedent. As held in

Penn Central Transportation Co. v. New York City, 438 U.S.

104 (1977):

{[Mjore importantly for the present case, in

instances in which a state tribunal reasonably con-

cluded that “the health, safety, morals, or gencral

welfare” would be promoted by prohibiting particu-

lar contemplated uses of land, this Court has upheld

land-use regulations that destroyed or adverscly

affected recognized real property interests. See

Nectow v. Cambridge, 277 U.S. 183, 188 (1928)

Zoning laws are, of course, the classic example

(citations omitted) which have been viewed as per-

missible governmental action even when prohibit-

ing the most beneficial use of the property (citations

omitted).

Id., 438 U.S. at 125.

Lastly, the use prohibited need not be “noxious.” As

explained by this Court in Penn Central:

We observe that the uses in issue in Hadacheck,

Miller |v. Schoene, 276 U.S. 272 (1928)]|, and Gold-

blatt |v. Hempstead, 369 U.S. 590 (1962)| were

perfectly lawful in themselves. They involved no

“blameworthiness, . . . moral wrongdoing or con-

scious act of dangerous risk taking which induce{d

society] to shift the cost to a palrtjicular individ-

ual.” (Citation omitted). These cases are better

understood as resting not on any supposed “nox-

ious” quality of the prohibited uses but rather on the

ground that the restrictions were reasonably related

to the implementation of a policy - not unlike

historic preservation — expected to produce a wide-

spread public benefit and applicable to all similarly

Situated property.

Id. 438 U.S. at 133-4, n. 30.

Not surprisingly, and of particular significance to this

appeal, land use regulations regarding shoreline construction,

on the strength of the public purposes of cither the preserva-

tion of the environment or the prevention of harm from

12

environmental forces, have been upheld against taking chal-

lenges, even when the effect of the regulation is the destruc-

tion of property interests or value in the property impacted.

E.g., McCarthy v. City of Manhattan Beach, 264 P.2d 932

(Cal. 1953), cert. denied, 348 U.S. 817 (1954) (a regulation

preventing construction of a structure on a California beach

upheld); Town of Indialantic v. McNulty, 400 So.2d 1227 (Fla.

App. Dist. 5 1981), and McNulty v. Town of Indialantic, 727

F. Supp. 604 (M.D. Fla. 1989) (an oceanfront setback very

similar to the regulation involved in the case at bar upheld).

See also Spiegle v. Borough of Beach Haven, 218 A.2d 129

(N.J.), cert. denied, 385 U.S. 831 (1966).

The same principles have been applied in the consider-

ation of the regulation to flood hazard areas. Turner v. County

of Del Norte, 101 Cal.Rptr. 93 (Cal. 1972); Turnpike Realty

Co. v. Town of Dedham, 284 N.E.2d 891 (Mass. 1972); cert.

denied, 409 U.S. 1108 (1973); Usdin v. Dep’t of Envir. Protec-

tion, 414 A.2d 280 (N.J. 1980), aff'd, 430 A.2d 949 (1981);

Maple Leaf Investors, Inc. v. State Dep’t of Ecology, 565 P.2d

1162 (Wash. 1977) (en banc).

Similarly, the right of an owner to build in sensitive

wetlands and coastal marshes in ways that harm public inter-

ests has been prohibited in numerous states, yet these regula-

tions have been held not to constitute a taking even where the

regulatory prohibition results in no structural development of

the environmentally sensitive land being feasible. E.g., Can-

dlestick Properties, Inc. v. San Francisco Bay Conservation &

Dev. Comm'n, 89 Cal.Rptr. 897 (Cal. 1973); Potomac Sand &

Gravel Co. v. Governor of Maryland, 293 A.2d 241 (Md.

1972), cert. denied, 409 U.S. 1040 (1972); Carter v. South

Carolina Coastal Council, 314 S.E. 2d 327 (S.C. 1984);

Orion Corp. v. State of Washington, 747 P.2d 1062 (Wash.

1987), cert. denied, 486 U.S. 1022 (1988); Just v. Marinette

County, 201 N.W.2d 761 (Wis. 1972).

13

Petitioner advances the view, in a mild variation from

that advocated by the dissent below, that the “underlying

purpose” of the legislation is more concerned with “promot-

ing a public good” than the prevention of public harm.° First,

the unambiguous language of the legislative findings regard-

ing the necessity of the beach/dune system clearly refute any

contention that the Act did not have as at least one of its

primary purposes the prevention of a public harm. See S.C.

Code Ann. § 48-39-250(1)(a), (c); § 48-39-250(2)-(4), (6);

§ 48-39-260(1)(a), (d).

Petitioner and others?! advance the argument that “resi-

dential construction” can hardly be regarded as a “nuisance”

or a “noxious use” of property. Petitioner’s Brief on the

Merits, pp. 41-45. The argument begs the question. The fact

that a traditionally accepted use of property is prohibited does

not obviate the application of the Mugler rule to insulate the

prohibition from a taking claim.?? It may be true that

20 Curiously, but not surprisingly in light of the legislative findings

of the Act itself, the dissent below implicitly recognized (by stating that

the Act does not have as its “primary purpose the prevention of a

nuisance.”) that at least one purpose of the Act was the prevention of a

public harm. Lucas v. South Carolina Coastal Council, 404 S.E.2d at 905

(Dissent of Harwell, A.J.).

21 See the dissenting opinion below, Lucas v. South Carolina

Coastal Council, 404 §.E.2d at 902 and Amicus Curiae brief of the

United States, p. __.

22 Petitioner objects to what it regards as the unjustified conclusion

of the South Carolina Supreme Court that he conceded that the use he

intended for his two lots was a “nuisance.” Petitioner’s Brief on the

Merits, p. 10. As demonstrated, supra, the label one puts on a “use” is not

pivotal. What is pivotal is the fact that the “use” is forbidden as a result

of the valid exercise of the police power to mitigate or avoid a public

harm.

residential building on the shoreline is traditionally regarded

as an acceptable use of shoreline property. Of course, all of

the uses prohibited by the challenged regulations in Mugler,

Hadacheck, Reinman, Goldblatt, and Keystone, not to men-

tion the panoply of uses involved in the profusion of federal

and state decisions upholding zoning regulations prohibiting

those uses, were legally acceptable uses of real property prior

to the legislative determination that they should be prohibited.

Any given use “in particular circumstances and in particular

localities” may be declared a nuisance in fact and in law.

Hadacheck v. Sebastian, 239 U.S. at 411. The South Carolina

legislature has found, and Petitioner has not contested, that

construction on his lots is, under the particular circumstances

— i.e., the uncontested need to preserve the beach/dune system

to provide, among other things, protection to people and

property — and in the particular locality — i.e., within the area

designated as within that system — a use which is harmful to

the public. Hence, even if the construction of a residence is

regarded in the abstract as an entirely appropriate and innoc-

uous use, that same use in the circumstances and in the

location identified by the South Carolina legislature may

properly be regarded as a “nuisance.” Here, construction in

the shoreline area comprising Petitioner’s lots is “ . . . merely

the right thing in the wrong place, — like a pig in a parlor

instead of a barnyard.” Euclid v. Ambler Realty Co., 272 U.S.

at 388.

If legislation declaring a particular use the legal equiva-

lent of a nuisance withstands judicial scrutiny, the public

interest is deemed sufficient to uphold the regulation against a

taking claim. Keystone Bituminous Coal Ass'n v.

DeBenedictis, supra, 480 U.S. at 490. The determinative

question, then, is whether the Act can withstand “judicial

scrutiny.”

The Act has already been at least reviewed by the South

Carolina Supreme Court, and has passed muster. Moreover, it

is respectfully suggested that there is no cause for the applica-

tion of this Court’s “scrutiny” where the constitutional val-

idity of the Act was not an issue raised below. A police power

regulation enjoys a strong presumption of validity. F.z.,

15

American Federation of Labor v. American Sash & Door Co.,

335 U.S. 538 (1949). In the case of Sproles v. Binford, 286

U.S. 374 (1932), this Court held that, “(w)hen the subject lies

within the police power of the State, debatable questions as to

reasonableness are not for the courts but for the legisiature,

which is entitled to form its own judgment, and its action

within its range of discretion cannot be set aside because

compliance is burdensome.” /d., 286 U.S. at 388-9. Applying

this principle, the Fourth Circuit Court of Appeals, while

reviewing precisely the same legislation involved here, held

that it would be inappropriate to “second guess” the deter-

mination of the South Carolina Assembly that the Act sub-

stantially advanced an important state interest. Esposito v.

South Carolina Coastal Council, 939 F.2d 165 (4th Cir.

1991), petition for cert. filed, 60 U.S.L.W. 3505 (U.S. Dec. 5,

1991) (No. 91-941). Further, the decision of the South Caro-

lina Supreme Court and the Petitioner’s identification of the

Question Presented to this Court make it clear that Petitioner

has never raised the validity of the statute, per se, for review.

See Rules of the Supreme Court, 24.1(a). The jurisdictional

Statute, 28 U.S.C. § 1257, indisputably gives this Court the

power to review the constitutionality of a state statute, but the

rules suggest that it would do so only if the question is raised

by the Petitioner or there is plain error in the statute. It stands

as a matter of general principle that the Court will not review

a question of statutory validity that has not been properly

presented. C./.0. v. McAdory, 325 U.S. 472 (1945).

Even if the Act were to be examined anew by this Court

to determine whether it “substantially advances legitimate

State interests,” e.g., Nollan v. California Coastal Commis-

sion, 483 U.S. 825, 834 and n. 3 (1987), ii is clear that, given

the record in this case, the allegedly offending regulation

would pass the test. The findings of the South Carolina

legislature are clear, concise, and uncontradicted by the Peti-

tioner. The record is void of any evidence which would in any

way contest the legislative findings regarding the public inter-

ests served by the Act, its purposes, and the legitimacy of the

means chosen to accomplish those purposes. The South Caro-

lina legislature has found that construction or reconstruction

16

of other than certain specifically authorized things within a

specified distance from the shoreline will interfere with the

continued viability of the South Carolina beach/dune system,

which in turn the legislature found to be an important natural

resource serving, among other natural and essential purposes,

to prevent and/or mitigate the undeniable harm occasioned by

storms and the sea. In order to prevent the public harm

occasioned by the continued destruction of the beach/dune

system, the legislature chose to utilize the obvious and most

direct means: to eventually eliminate what it found to be the

cause of the harm by prohibiting new construction or recon-

struction which would threaten the continued viability of the

valuable resource.

The national trend since the mid-1970’s has been to

secure a better understanding of the dynamics of barrier

islands, storms and erosion and to apply reasonable setback

regulations for those highly hazardous areas. The Flood

Disaster Protection Act of 1973 (P.L. 93-234, Section 107)

was adopted to include erosion hazards within the risks to be

addressed by the federal flood insurance program. The regula-

tions adopted to implement this program have, since 1976,

provided that where erosion prone areas are identified, local

regulations should “require setbacks for all new development

from the ocean to create a safety buffer. The buffer may be

used for suitable open space purposes and for other activities

using temporary and portable structures only.” 44 C.F.R. Part

60.S. Some thirteen coastal states have adopted minimum

setbacks for development in high hazard areas along the

oceans and Great Lakes.?3 The National Research Council has

23 Center for Urban and Regional Studies, University of North

Carolina, Evaluation of the National Coastal Zone Management Program

at 69 (1991). For discussion of the state minimum oceanfront setback

requirements of other states, see, e.g., Hildreth, Coastal Natural Hazards

Management, 59 Oreg. L. Rev. 201 (1980); Maloney and O'Donnell,

Drawing the Line at the Oceanfront, 30 Fla. L. Rev. 393 (1978); Owens,

Coastal Management in North Carolina; Building a Regional Consensus,

51 J. Am. Plan. Assoc. 322, 325-27 (1985); Shows, Florida's Coastal

Setback Line — An Effort to Regulate Oceanfront Development, 4 Coastal

Z. Mngt. J. 151 (1978).

17

recommended that all coastal states adopt minimum ocean-

froni setbacks even more substantial than the one involved in

this case, and that such be a mandated part of the federal

flood insurance program.?* The team of experts who reviewed

this area of South Carolina after Hurricane Hugo concluded

that “[i]t is crucial that the concept of a gradual, strategic

retreat from the ocean remain a part of coastal management at

the state level and that the local communities participate in

the process by adopting the Local Comprehensive Shorefront

Management Plans. These plans are to include the develop-

ment and adoption of local ordinances to protect sand dunes

and provide for setback requirements.”25 In short, South Car-

olina is not alone in recognizing the need for Shoreline

Management regulations which prohibit the construction of,

among other things, private residences within the beach/dune

system.

Given the true nature and clear applicability of the

Mugler rule revealed by more than a century of Supreme

Court precedent, and given the undeniable weight to be

accorded the Act because of the legitimate interest of the

State of South Carolina to provide for the continued viability

of an important and protective natural resource, it is respect-

fully submitted that the decision of the South Carolina

Supreme Court should be affirmed.

24 National Research Council, Managing Coastal Erosion (1990).

25 Federal Emergency Management Agency, /nieragency Hazard

Mitigation Team Repori: Hurricane Hugo at 18-19 (Report No. 843-DR-

SE, October 1989).

18

Il. IF THE COURT CONCLUDES THAT THE MUGLER

DOCTRINE SHOULD NOT HAVE BEEN APPLIED

TO PRECLUDE PETITIONER’S CLAIM, THIS

COURT SHOULD FAVORABLY CONSIDER A

REMAND FOR FURTHER PROCEEDINGS TO

PERMIT THE SOUTH CAROLINA COURTS TO

DETERMINE, UTILIZING OTHERWISE APPLICA-

BLE PRECEDENT, WHETHER A REGULATORY

TAKING HAS OCCURRED, PARTICULARLY IN

LIGHT OF THE 1990 AMENDMENTS TO THE 1988

BEACHFRONT MANAGEMENT ACT.

If this Court is inclined to hold that the South Carolina

Supreme Court was in error in its application of Mugler and

its progeny to deny Petitioner's regulatory taking claim, it is

respectfully suggested that this Court favorably consider

remanding the matter with instructions in order to permit the

South Carolina courts to determine whether, under relevant

and time-honored considerations long endorsed by this Court,

a regulatory taking did in fact occur.

The decision of the South Carolina Supreme Court is

premised on the application of but one legal principle, the

“Mugler rule.” Because it held that principle to be conclusive,

the state court did not consider any other factors which have

traditionally been deemed of utmost importance in the deter-

mination of whether the application of a land use regulation

results in a taking requiring compensation under the Takings

Clause of the Fifth Amendment.2© See Lucas v. South Caro-

lina Coastal Council, 404 S.E.2d at 896.

For example, the court did not address whether the regu-

lation, in fact, denied Petitioner “all economically viable

26 Even though Petitioner concedes that the appropriate tests to be

applied to his claim are those enumerated in Penn Central Transportation

Co. v. New York, 438 U.S. at 124, the tests pronounced in Agins v.

Tiburon, 447 U.S. 255 (1980) are also referred to herein. The fact remains

that regardless of which of the tests are deemed applicable to the claim

under consideration, the South Carolina courts did not fully address the

questions posed by either in reaching their decisions.

19

use,”2? the nature and extent of Petitioner's “investment

backed expectations” in the property in question?® and the

reasonableness thereof in light of the regulated nature of the

shoreline land question,?? whether Petitioner had, as a matter

of state law, a recognized and protected “property interest” in

the construction of any structure permitted by applicable land

use regulations prior to the enactment of the Act,° and

whether, given the 1990 amendments to the Act, there was a

“taking” at all, particularly in light of this Court’s admonition

that “[mJere fluctuations in value during the process of gov-

ernmental decision making, absent extraordinary delay, are

‘incidents of ownership.’ ” Agins v. Tiburon, 447 U.S. 255,

263, n.8 (1980).

It is clear that should the South Carolina Supreme

Court’s decision be reversed, the decision of the trial court

cannot stand as presently stated. The trial court awarded

Petitioner compensation for a “permanent” taking. A finding

of a “permanent” taking and an award of compensation,

27 E.g., Nollan v. California Coastal Commission, 483 U.S. at 834.

This question is particularly perplexing and fact oriented where, as here,

the use of the property pursued by Petitioner was to hold it as raw land,

and hence it was a use which would have produced generated income

only if there was an increase in “market value.”

28 E.g., Penn Central Transportation Co. v. New York, 438 U.S. at

124.

29 Where, as is arguable here, the claimant had adequate real or

constructive notice of the possibility of value depressing regulations, a

fact question arises as to whether and to what extent his investment was

reasonable, as opposed to speculative.

30 See Section IV, infra. The attorney for Respondent reserved the

argument that no taking has occurred as a result of his failure to apply for

a permit. Jt. App., pp. 3-4, para. 16.

20

therefore, without offering the government the option of pro-

viding alternative relief is directly contrary to recognized

law: “[o]nce a court determines that a taking has occurred, the

government retains the whole range of options already avail-

able — amendment of the regulation, withdrawal of the invali-

dated regulation, or exercise of eminent domain.” First

English Evangelical Lutheran Church v. County of Los

Angeles, 482 U.S. at 321. Therefore, the matter requires

further proceedings of any event.

Further, with the enactment of the 1990 amendments to

the Act, particularly provisions providing a means by which a

permit may be issued to enable the construction of the resi-

dences Petitioner originally intended, it is clearly inappropri-

ate to conclude that there has been a permanent taking of

Petitioner’s property. It is undisputed that Petitioner has not

availed himself of the opportunity to determine whether the

South Carolina Coastal Commission would grant him a permit

to “use” his property in the manner he claims to have origi-

nally intended. Until he does so, it is necessarily impossible

to determine whether the “ . administrative agency has

arrived at a final, definitive position regarding how it will

apply the regulations at issue to the particular land in ques-

tion.” Williamson County Regional Planning Comm'n v. Ham-

ilton Bank, 473 U.S. at 172, 190-1 (1985). At this stage in

these proceedings, considering the mandates of Williamson

County Regional Planning Comm'n v. Hamilton Bank, 473

U.S. 172, 190-1 (1985) and MacDonald, Sommer and Frates

v. County of Yolo, 477 U.S. 340, 348, reh’g denied, 478 U.S.

1035 (1986), the ultimate impact of the Act on the “property

rights” of Petitioner cannot be determined until such time as

an administrative decision concerning the uses to be permit-

ted is made.

Because this Court does not have the benefit of many of

the factual and legal determinations regarded as necessary in

considering regulatory taking claims, including whether any

“taking” found is “temporary” or “permanent,” a remand for

consideration of the facts and circumstances pertinent to those

factors would be a substantial aid in what this Court has

consistently referred to as the “ .. . essentially ad hoc, factual

21

inquiries .. . ” necessary to the determination of a regulatory

taking claim. E.g., Keystone Bituminous Coal Ass'n v.

DeBenedictis, 480 U.S. at 495. See First English Evangelical

Lutheran Church v. County of Los Angeles, 482 U.S. at 321-2

(case remanded to determine whether there had in fact been a

taking based on a denial of “all use of . . . property for a

considerable period of years”).

Ill. A REGULATION WHICH ELIMINATES THE

VALUE OF UNDEVELOPED LAND AT A GIVEN

POINT IN TIME DOES NOT ESTABLISH A FIFTH

AMENDMENT “TAKING” OF THAT PROPERTY.

This Court has long recognized that it

... has generally “been unable to develop any

‘set formula’ for determining when ‘justice and

fairness’ require that economic injuries caused by

public action be compensated by the government,

rather than remain disproportionally concentrated

on a few persons. Rather, it has examined the “tak-

ing” question by engaging in essentially ad hoc,

factual inquiries that have identified several factors

— such as the economic impact of the regulation, its

interference with reasonable investment backed

expectations, and the character of the government

action — that have particular significance.

Kaiser Aetna v. United States, 444 U.S. 164, 175 (1981);

Hodel v. Virginia Surface Mining & Reclamation Ass'n, Inc.,

452 U.S. 264, 294-296 (1981). Petitioner concedes, as he

must, that these considerations are applicable to his taking

Claim.*! Petitioner nonetheless advances the contention that

3! Petitioner’s Brief on the Merits, pp. 15-16. Petitioner, neverthe-

less, implies that the test of “economically viable use” is pertinent here.

Even if that test is applied the derivation of the term demonstrates that it

should have limited applicability to the broad spectrum of factual circum-

stances found in “regulatory takings” cases. Making its debut as a

(Conunued on following page)

22

where a land use regulation “eliminat[es] the value of private

property [it] should be per se subject to the just compensation

requirement of the Fifth Amendment.” Pet. Brief on the

Merits, p. 19. He, in essence, urges the adoption of the

proposition that where the economic interest of the landowner

is eliminated, no other considerations this Court has tradi-

tionally deemed relevant to a taking inquiry would or could

apply to prevent the finding of the constitutional taking. In

other words, Petitioner urges that considerations which this

Court has long deemed to be relevant to the taking inquiry be

deemed irrelevant if one of them, “the economic impact of the

regulation,” reveals that the regulation has caused the loss of

all “market value” of the property involved.

(Continued from previous page)

material consideration in Fifth Amendment regulatory “taking” cases in

Agins v. Tiburon, 447 U.S. 255, 260 (1980), it is derived from an

admission made during oral argument in Penn Central Transportation Co.

v. New York City, supra. As recited in the Penn Central decision, that

admission was:

The city conceded at oral argument that if appellants can

demonstrate at some pomt in the future that circumstances

have so changed that the Terminal ceases to be “economically

viable,” appellants may obtain relief. See Tr. of Oral Arg.

42-43.

Id., 438 U.S. at 138, p. 36. Placed in context, the term clearly applied to

property which was being commercially utilized in a manner permitted

under state law and utilized in a manner which was “economically viable”

at the ume of the imposition of the allegedly offending regulation. In

other words, counsel for the City of New York admitted that if, in the

future, its restricuons on the expansion of the already exisung commercial

use of the property caused it to “cease” being “economically viable,” then

Penn Central would be entitled to “relief.”

It is respectfully submitted that application of that test to raw,

undeveloped land - i.e. land which has not established any form of

“economic viability” in any literal sense of that term — does nothing more

than seek to maintain the land’s “market value”, an interest in property

which in and of itself is not recognized as a constitutionally recognized

property right. See Section III, infra

23

Yet this Court has made it clear that, just as a legitimate

exercise of the police power may result in a Fifth Amendment

taking, see, e.g., Nollan v. California Coastal Commission,

supra, “a comparison of values before and after a regulatory

action is relevant,” but such a comparison is “ ... by no

means conclusive.” Keystone Bituminuous Coal Ass'n v.

DeBenedictis, 480 U.S. at 490 quoting from Goldblatt v.

Hemstead, 369 U.S. at 594 (emphasis provided). The wisdom

of that holding continues, particularly where, as here, the

property alleged to have been taken has never been put to a

use other than that ordinarily put to vacant land, even when

other, more intense uses could have been pursued. Moreover,

in making some form of “market value” test conclusive in the

determination of a Fifth Amendment taking claim involving

the type of land (or property interest) involved in the case

now before it, this Court would permit the vicissitudes of the

real estate market, undeniably fickle and entrepreneurial, to

dictate with exactitude not only the compensation to be paid,

but also the decision as to whether a “taking” occurred. That

result,*2 we suggest, is inconsistent with established prece-

dent, as previously cited, and is not mandated by the Fifth

Amendment.

Further, this Court has also held that a taking does not

necessarily occur where regulation impacts on some but not

all of the “bundle of rights” which comprise the property in

question. See, e.g., Andrus v. Allard, 444 U.S. 51, 66 (1979)

(the deprivation of but one “strand,” the right to convey, of a

full “bundle of property rights” does not result in a taking);

Penn Central Transportation Co., supra (deprivation of air

32 That this is particularly unfortunate is demonstrated by this case.

With the 1990 amendments, Petitioner has the ability to obtain a permit to

use the property in a manner otherwise prohibited by the Act. As a result,

it is not a stretch of the imagination or common sense to conclude that

Petitioner's lots, purportedly valucless at the time of tal, gained value

(as yet unquantified, a fact which should be ascertained, see Section II,

supra) as soon as the 1990 amendments became effective. This would be

clearly the case if permits to construct have been issued to other affected

landowners in similar circumstances.

24

rights over property not a taking where remaining rights

maintained). Here, the Act prohibits construction (with cer-

tain exceptions) on Petitioner's lots. Even if the Court

assumes that Petitioner’s expectation of being able to con-

struct residences on the property is a recognized property

right subject to Fifth Amendment protection, this is but one

“strand” in his “bundle of property rights”. See Andrus v.

Allard, 444 U.S. at 66. He has always retained the full

panoply of recognized rights considered to be a part of fee

simple ownership of raw land: the right to use, to exclude

others, to dispose, to pass it on to his heirs, etc.**

Lastly, it is noteworthy that the “litmus test” that Peti-

tioner suggests has, after all, been perfectly apparent for more

than a century. It is conspicuous only by its absence in

“taking” jurisprudence; it has never been adopted as the

bright line beyond which a regulation may not tred without

actuating the “Takings Clause” of the Fifth Amendment. It is

respectfully suggested that there has been no material change

in pertinent facts or law, including those applicable to prop-

erty rights and interests, which might lead to the conclusion

that the test Petitioner suggests would be more constitu-

tionally palatable, indeed mandated, now than it might have

been in the past.

For these reasons alone, it is respectfully suggested that

this Court categorically reject such an unsupported, simplistic

and over reaching application of the Taking Clause.

33 It is important to note that this is not a situation where loss of “all

use” of land has been cither assumed or proven. This Court in Furst

English Evangelical Lutheran Church of Glendale v. County of Los

Angeles, assuming by virtue of the pleadings below that “all use” of the

property had been extinguished by the regulation in question, concluded

that there would be a taking. Here, it is uncontradicted that Peutioner has

retained uses, as well as the full panoply of property rights normally

recogmzed as held by the owner of property.

25

A. Petitioner never possessed a constitutionally rec-

ognized “property right” in any given use of land

prohibited by the Act.

Even if the Court is inclined to look favorably on Peti-

tioner’s contention, his claim suffers from a basic, and fatal,

flaw: Petitioner did not have a protected property interest to

construct any structure on his undeveloped land, and therefore

has no property interest in the value derived therefrom. As a

result, Petitioner has not suffered a compensable taking of

private property under the Fifth Amendment.

Petitioner's claim requires the examination of some basic

elements of taking law. The Fifth Amendment states, in perti-

nent part, that “private property [shall not] be taken for public

use without just compensation.” By virtue of the language

itself, it is axiomatic that “private property” is protected

against uncompensated taking for public use. Hence, in the

consideration of any Fifth Amendment taking claim, the ini-

tial determination must be whether what is claimed to have

been “taken” is to be deemed “private property” for which

compensation may be paid. E.g., Ruckelshaus v. Monsanto

Co., 467 U.S. 986, 1000-1 (1983); Webb’s Fabulous Phar-

macies, Inc. v. Beckwith, 449 U.S. 155, 160-1 (1980).

The scope of the term “private property” has been delin-

cated:

It is conceivable that (the term “property” in the

Taking Clause) was used in its vulgar and untechni-

cal sense of the physical thing with respect to which

the citizen exercises rights recognized by law. On

the other hand, it may have been employed in a

more accurate sense to denote the group of rights

inhering in the citizen's relation to the physical

thing, as the right to possess, use and dispose of it.

The construction given the phrase has been the

latter.

United States v. General Motors Corp., 323 U.S. 373,

377-378 (1945). Yet, while this Court has defined the scope of

the term, it is a “basic axiom that [p|roperty interests are not

created by the Constitution. Rather, they are created and their

dimensions are defined by existing rules and understandings

26

that stem from an independent source such as state law.”

Ruckelshaus v. Monsanto Co., 467 U.S. 1001, quoting Webb's

Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. at 161

(internal quotation omitted). See Board of Regents v. Roth,

408 U.S. 564, 577 (1972). However, “ .. . a mere unilateral

expectation or an abstract need is not a property interest

entitled to protection.” Webb’s Fabulous Pharmacies, Inc. v.

Beckwith, 449 U.S. at 161.

Applying these principles, this Court has concluded that a

variety of property interests fall within the broad definition of

“property” as used in the Taking Clause. E.g., Hodel v. Irving, 481

U.S. 704 (1987) (right to pass on property to heirs); Armstrong v.

United States, 364 U.S. 40 (1960) (materialmen liens). Conversely,

it has also concluded that certain interests are not “property” for

Fifth Amendment purposes. E.g., Bowen v. Gilliard, 483 U.S. 587

(1987) (continuation of support payments under AFDC); United

States v. Chandler-Dunbar Water Power Co., 229 U.S. 53 (1913)

(no protectable interest in navigable waters).

The question thus becomes whether Petitioner has a “property

interest” recognized by the Taking Clause in the uses prohibited by

the Act. Simply stated, the Act as applied prohibited any (with

some exceptions) “construction” on his lots. The question is there-

fore further refined to whether Petitioner possessed a “property

right” in the ability to construct anything on his lot.**

There is no vested interest in the mere anticipation of a

right to build. Where a permit to build is required, any

prospective right to the permit prior to its issuance “is not in

34 Petitioner's property prior to the enactment of the Act was subject

to zoning which permitted residential uses. (Transcript, p. 27). In order to

engage in that use, Petitioner was required to obtain permits from the

local government. (Transcript, pp. 39-40). Petitioner did not gain any

form of permit to construct anything on his lots. (Transcript, pp. 39-40).

With the application of the Act, Petitioner was prohibited from any

construction, with some exceptions. Hence, the appropriate question is

whether the application of the Act was a taking of any vested interest

Petitioner may have had in the ability to construct anything on his

property.

27

the nature of interests the deprivation of which is encom-

passed by the Fifth Amendment ‘takings’ doctrine.” Scott v.

Greenville County, 716 F.2d 1409, 1421 (4th Cir. 1983). See,

e.g., DeStefano vy. City of Charleston, 403 S.E.2d 648, 651

(S.C. 1991).

Whether a given plaintiff has a vested property right is a

matter to be determined by reference to state law. Mays-Ott

Co., Inc. v. Town of Nags Head, 751 F. Supp. 82, 84 (E.D.N.C.

1990), citing Bd. of Regents v. Roth, 408 U.S. 564, 578

(1972). It is evident in this context that the state of South

Carolina does not recognize the concept of a vested right in a

putative right to develop property absent the issuance of a

permit and substantial expenditures in reliance thereon. E.g.,

Friarsgate, Inc. v. Town of Irmo, 290 S.C. 266, 269, 349

S.E.2d 891, 893 (S.C. Ct. App. 1986) (a zoning change that

prevented development prior to substantial expenditures by

the developer did not infringe upon vested rights even though

the change came after issuance of the permit); Whitfield. v.

Seabrook, 259 S.C. 66, 190 S.E.2d 743 (1972) (issuance of a

permit to build without subsequent expenditures did not cre-

ate a vested right to be protected from subsequent zoning

changes).

In the case at bar, Petitioner never obtained a permit to

build. He actually never even sought one from the govern-

mental authority. (Transcript, pp. 39-40). Under South Caro-

lina law, therefore, he never acquired a right to construct on

his lots. Consequently, the Act did not prohibit a “property

right” held by Petitioner.

B. Petitioner had no constitutionally protected “eco-

nomic interest” in any uses prohibited by the Act.

While recognizing that “economic interests” may be

regarded as property subject to Fifth Amendment protection,

this Court has been clear in delineating the test to determine

whether an “economic interest” is to be so regarded. As held

in United States v. Willow River Power Co., 324 U.S. 499

(1945),

toe [NJjot all economic interests are “property

rights”; only those economic advantages are rights

28

which have the law back of them, and only when

they are so recognized may courts compel others to

forbear from interfering with them or to compensate

for their invasion.

Id., 324 U.S. at 502. In considering the landowner’s claim in

that case, the Court described the process by which it was to

determine whether an “economic interest” is to be considered

a “property right:”

We cannot start the process of decision by calling

such a claim as we have here a “property right”:

whether it is a property right is really a question to

be answered. Such economic uses are rights only

when they are legally protected interests.

Id., 324 U.S. at 502-3.

Willow River does not stand alone. In Kaiser Aetna vy.

United States, supra, this Court considered whether Kaiser

Aetna had an economic interest in a navigable pond which it

created on land which was regarded as private property under

state law. Quoting and applying the test enunciated in Willow

River, the Court found that because Kaiser had improved the

pond to its navigable state, and had done so on property

regarded as private property under Hawaii state law, the

economic interest in being able to charge for the use of the

pond was protected from the United States’ claim that the

pond was a “navigable waterway” not subject to private

control. /d., 444 U.S. at 178-9.

Applying these concepts to the case at hand, it is clear

that Petitioner has no protectable “economic interest” in the

uses prohibited by the Act. The record reveals that the value

ascribed to the property was tied inexorably to construction

on the lots.*> Yet, as demonstrated above, Petitioner has no

35 The testimony below was that the property was rendered value-

less by virtue of the application of the Act. (Transcript, pp. 40-59). The

Act prohibited any new construction on Petitioner's lots. A priori, if

Peuuoner’s evidence is to be believed, the lots only have value if

something (other than what the Act permitted) could be constructed on it.

29

constitutionally protected right in any given construction on

inese lots, and therefore has no right in the “value” resulting

therefrom.

CONCLUSION

For all of the reasons stated herein, the American Plan-

ning Association and Tahoe Regional Planning Agency, as

Amici Curiae, respectfully suggest that the decision of the

South Carolina Supreme Court be affirmed or, in the alterna-

tive, be vacated and remanded for the purposes suggested

herein.

Respectfully submitted,

H. Bissett Carey, Ill

Rosinson & Coe

One Commercial Plaza

Hartford, Connecticut 06103

(203) 275-8200

Counsel of Record for Amici Curiae

American Planning Association

and Tahoe Regional Planning Agency

February 3, 1992