Lucas
bought some beachfront property on an island for $975k in order to build a
pair of houses.
Two
years later, the South Carolina legislature passed the Beachfront
Management Act that made it illegal
for Lucas to develop the land.Lucas sued.
Lucas
argued that the law constituted a taking of his property without just compensation, hence a violation of
the 5th Amendment.
Under
the 5th Amendment, the
government has a right to take land, but it must be for the public good
and there must be compensation.
South
Carolina argued that this was a legitimate use of police power because
Lucas' construction would cause beach erosion and the destruction of a
valuable public resource.
The
Trial Court found for Lucas, and order South Carolina to pay $1.2M in
compensation.South Carolina
appealed.
The
Trial Court felt that the new law deprived Lucas of 100% of the economic
value of the land, and therefore constituted a taking.
Even
if Lucas didn't lose 100% of the value, clearly he lost the "primary
investment backed expectation" value that was mentioned in Penn
Central Transportation Company v. City of New York.
The
South Carolina Supreme Court reversed.Lucas appealed.
The
South Carolina Supreme Court found that the Statute served a valuable
public purpose and therefore no compensation was required by the 5th
Amendment.
The
US Supreme Court reversed the South Carolina Supreme Court and remanded
for trial.
The
US Supreme Court felt that there are two clear-cut cases of regulatory
takings:
Physical
occupation of private property
Denial
of all economically productive use of private property.
The
US Supreme Court found that when the State deprives a property owner of
100% of the economic value of their land for some public purpose, it is a
compensabletaking unless the use that is being taken away was
never part of the title to the land in the first place.
For
example, it's not a taking to
deprive the owner of the right to create a nuisance on their land, because that wasn't part of
their property rights anyway.
The
US Supreme Court remanded for trial since South Carolina could possibly
show that if Lucas' intended use of the land constituted a nuisance, the
law would stand and Lucas would not get compensation.
South
Carolina had a reasonable argument that causing the erosion of a public
beach was a nuisance.
This
case established the total takings test for evaluating whether a particular regulatory action constitutes
a regulatory taking that
requires compensation.
Basically,
the Court held that land use regulations that prohibit all economic uses
of a property are takings, unless
the prohibited uses are common law nuisances.
Total
takings analysis requires a
consideration of:
The
degree of harm to public lands or adjacent property posed by the
regulated activities.
The
social value of such activities.
The
relative ease with which the alleged harms can be avoided through
measures taken by either the claimant or the government.
Did
Lucas' land really lose "all economic value" as the majority
suggested?In a dissent,
Justice Blackmun points out that the land is still quite valuable for
camping and such.If the land
still has some economic value, it isn't covered by the total takings
doctrine that the Court developed for this case.
Justice
Blackmun goes on to say that the test shouldn't be whether the
prohibition results in the availability of some residual value or not,
but whether the government interest was sufficient to prohibit the
activity given the significant private cost.
In
another dissent, Justice Stevens points out that the new rule is rather
arbitrary.If someone loses
100% of the value of their land, they are entitled 100% compensation, but
if they only lose 95% of the value, they are entitled to nothing.Doesn't seem fair.
Some
States agree, and have enacted Statutes that provide for some
compensation when a regulation partially reduces the value of a property.
