Lucas v. South Carolina Coastal Council

[Justice Scalia delivered the opinion of the Court, joined by Rehnquist, C.J., and White, O’Connor and Thomas, JJ. Kennedy, J., filed an opinion concurring in the judgment. Blackmun, J., and Stevens, J., each filed dissenting opinions. Souter, J., filed a separate statement, which is omitted. The 1992 Reporter’s syllabus prints no numeric tally; the line-up above is taken from the opinions themselves. In 1986 David H. Lucas paid $975,000 for two residential lots on the Isle of Palms, a barrier island east of Charleston, intending to build single-family homes like those on the adjacent parcels; neither lot was then a “critical area” requiring a permit under the State’s 1977 coastal legislation. The 1988 Beachfront Management Act barred occupable construction seaward of a line twenty feet landward of a “baseline” connecting the landward-most points of erosion over the preceding forty years; that baseline fell landward of both lots. The trial court found the lots “valueless” and awarded $1,232,387.50; the Supreme Court of South Carolina reversed, holding itself bound by the legislature’s uncontested findings and applying the Mugler v. Kansas line of harmful-or-noxious-use cases. Editorial omissions are marked. Acquisition gaps — reporter pages that did not come back from the source — are marked separately and by page number wherever they fall inside material used here. Footnotes are omitted except those labeled. Bracketed italics are editorial; everything else is verbatim.]

JUSTICE SCALIA delivered the opinion of the Court.

In 1986, petitioner David H. Lucas paid $975,000 for two residential lots on the Isle of Palms in Charleston County, South Carolina, on which he intended to build single-family homes. In 1988, however, the South Carolina Legislature enacted the Beachfront Management Act, which had the direct effect of barring petitioner from erecting any permanent habitable structures on his two parcels. A state trial court found that this prohibition rendered Lucas’s parcels “valueless.” This case requires us to decide whether the Act’s dramatic effect on the economic value of Lucas’s lots accomplished a taking of private property under the Fifth and Fourteenth Amendments requiring the payment of “just compensation.”

[Part I-A recounts South Carolina’s 1977 Coastal Zone Management Act, which required owners of coastal land qualifying as a “critical area” to obtain a permit from the newly created Coastal Council before committing the land to a new use. The text resumes at p. 1008.]

In the late 1970’s, Lucas and others began extensive residential development of the Isle of Palms, a barrier island situated eastward of the city of Charleston. Toward the close of the development cycle for one residential subdivision known as “Beachwood East,” Lucas in 1986 purchased the two lots at issue for his own account. No portion of the lots, which were located approximately 300 feet from the beach, qualified as a “critical area” under the 1977 Act; accordingly, he was not legally obliged to obtain a permit from the Council in advance of any development activity. His intention was to do what the owners of the immediately adjacent parcels had already done: erect single-family residences.

The Beachfront Management Act brought Lucas’s plans to an abrupt end. Under that 1988 legislation, the Council was directed to establish a “baseline” connecting the landward-most “point[s] of erosion … during the past forty years” in the region of the Isle of Palms that includes Lucas’s lots. In action not challenged here, the Council fixed this baseline landward of Lucas’s parcels. That was significant, for under the Act construction of occupable improvements was flatly prohibited seaward of a line drawn 20 feet landward of, and parallel to, the baseline. The Act provided no exceptions.

[Lucas sued, not contesting the Act’s validity as an exercise of the police power but contending that its complete extinguishment of his property’s value entitled him to compensation regardless. The trial court agreed, finding the prohibition “render[ed] them valueless.” The Supreme Court of South Carolina reversed; the Court’s own restatement of that court’s reasoning, at p. 1022, is given here.]

Petitioner “concede[d] that the beach/dune area of South Carolina’s shores is an extremely valuable public resource; that the erection of new construction … contributes to the erosion and destruction of this public resource; and that discouraging new construction in close proximity to the beach/dune area is necessary to prevent a great public harm.” In the court’s view, these concessions brought petitioner’s challenge within a long line of this Court’s cases sustaining the State’s use of its “police powers” to enjoin a property owner from activities akin to public nuisances. See Mugler v. Kansas, 123 U. S. 623 (1887); Hadacheck v. Sebastian, 239 U. S. 394 (1915); Miller v. Schoene, 276 U. S. 272 (1928); Goldblatt v. Hempstead, 369 U. S. 590 (1962).

[Part II holds the claim ripe notwithstanding a post-argument amendment creating a special-permit procedure. Reporter pages 1010–1013 did not return in acquisition. Reporter page 1014, the opening of Part III-A on Pennsylvania Coal Co. v. Mahon, likewise did not return; only its run-on into p. 1015 came back.]

Nevertheless, our decision in Mahon offered little insight into when, and under what circumstances, a given regulation would be seen as going “too far” for purposes of the Fifth Amendment. In 70-odd years of succeeding “regulatory takings” jurisprudence, we have generally eschewed any “‘set formula’” for determining how far is too far, preferring to “engag[e] in … essentially ad hoc, factual inquiries.” Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978). We have, however, described at least two discrete categories of regulatory action as compensable without case-specific inquiry into the public interest advanced in support of the restraint. The first encompasses regulations that compel the property owner to suffer a physical “invasion” of his property. In general (at least with regard to permanent invasions), no matter how minute the intrusion, and no matter how weighty the public purpose behind it, we have required compensation. For example, in Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 (1982), we determined that New York’s law requiring landlords to allow television cable companies to emplace cable facilities in their apartment buildings constituted a taking, even though the facilities occupied at most only 1½ cubic feet of the landlords’ property.

The second situation in which we have found categorical treatment appropriate is where regulation denies all economically beneficial or productive use of land. See Agins, 447 U. S., at 260; Nollan v. California Coastal Comm’n, 483 U. S. 825, 834 (1987); Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 495 (1987). As we have said on numerous occasions, the Fifth Amendment is violated when land-use regulation “does not substantially advance legitimate state interests or denies an owner economically viable use of his land.” Agins, supra, at 260 (emphasis added).

[Footnote 7 — the denominator footnote, beginning at the foot of p. 1016 and running onto p. 1017. It is n. 7, not n. 8: n. 6 is the Court’s reply to Justice Blackmun, and n. 8, below, is the reply to Justice Stevens on the 95%/100% point. Justice Blackmun cites it as “ante, at 1017, n. 7.”]

Regrettably, the rhetorical force of our “deprivation of all economically feasible use” rule is greater than its precision, since the rule does not make clear the “property interest” against which the loss of value is to be measured. When, for example, a regulation requires a developer to leave 90% of a rural tract in its natural state, it is unclear whether we would analyze the situation as one in which the owner has been deprived of all economically beneficial use of the burdened portion of the tract, or as one in which the owner has suffered a mere diminution in value of the tract as a whole. (For an extreme—and, we think, unsupportable—view of the relevant calculus, see Penn Central Transportation Co. v. New York City, 42 N. Y. 2d 324, 333–334, 366 N. E. 2d 1271, 1276–1277 (1977), aff’d, 438 U. S. 104 (1978), where the state court examined the diminution in a particular parcel’s value produced by a municipal ordinance in light of total value of the takings claimant’s other holdings in the vicinity.) Unsurprisingly, this uncertainty regarding the composition of the denominator in our “deprivation” fraction has produced inconsistent pronouncements by the Court. Compare Pennsylvania Coal Co. v. Mahon, 260 U. S. 393, 414 (1922) (law restricting subsurface extraction of coal held to effect a taking), with Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 497–502 (1987) (nearly identical law held not to effect a taking); see also id., at 515–520 (REHNQUIST, C. J., dissenting); Rose, Mahon Reconstructed: Why the Takings Issue is Still a Muddle, 57 S. Cal. L. Rev. 561, 566–569 (1984). The answer to this difficult question may lie in how the owner’s reasonable expectations have been shaped by the State’s law of property—i. e., whether and to what degree the State’s law has accorded legal recognition and protection to the particular interest in land with respect to which the takings claimant alleges a diminution in (or elimination of) value. In any event, we avoid this difficulty in the present case, since the “interest in land” that Lucas has pleaded (a fee simple interest) is an estate with a rich tradition of protection at common law, and since the South Carolina Court of Common Pleas found that the Beachfront Management Act left each of Lucas’s beachfront lots without economic value.

We have never set forth the justification for this rule. Perhaps it is simply, as Justice Brennan suggested, that total deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation. “[F]or what is the land but the profits thereof[?]” 1 E. Coke, Institutes, ch. 1, § 1 (1st Am. ed. 1812). Surely, at least, in the extraordinary circumstance when no productive or economically beneficial use of land is permitted, it is less realistic to indulge our usual assumption that the legislature is simply “adjusting the benefits and burdens of economic life,” Penn Central Transportation Co., 438 U. S., at 124, in a manner that secures an “average reciprocity of advantage” to everyone concerned, Pennsylvania Coal Co. v. Mahon, 260 U. S., at 415. And the functional basis for permitting the government to affect property values without compensation—that “Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law,” id., at 413—does not apply to the relatively rare situations where the government has deprived a landowner of all economically beneficial uses.

On the other side of the balance, affirmatively supporting a compensation requirement, is the fact that regulations that leave the owner of land without economically beneficial or productive options for its use—typically, as here, by requiring land to be left substantially in its natural state—carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm. As Justice Brennan explained: “From the government’s point of view, the benefits flowing to the public from preservation of open space through regulation may be equally great as from creating a wildlife refuge through formal condemnation.” The many statutes on the books that provide for the use of eminent domain to impose servitudes on private scenic lands, or to acquire such lands altogether, suggest the practical equivalence in this setting of negative regulation and appropriation.

We think, in short, that there are good reasons for our frequently expressed belief that when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.

[Footnote 8 — the Court’s reply to Justice Stevens, beginning at p. 1019 and running over to p. 1020. Its second paragraph, on noneconomic interests in land, is omitted.]

JUSTICE STEVENS criticizes the “deprivation of all economically beneficial use” rule as “wholly arbitrary,” in that “[the] landowner whose property is diminished in value 95% recovers nothing,” while the landowner who suffers a complete elimination of value “recovers the land’s full value.” Post, at 1064. This analysis errs in its assumption that the landowner whose deprivation is one step short of complete is not entitled to compensation. Such an owner might not be able to claim the benefit of our categorical formulation, but “[t]he economic impact of the regulation on the claimant and … the extent to which the regulation has interfered with distinct investment-backed expectations” are keenly relevant to takings analysis generally. It is true that in at least some cases the landowner with 95% loss will get nothing, while the landowner with total loss will recover in full. But that occasional result is no more strange than the gross disparity between the landowner whose premises are taken for a highway and the landowner whose property is reduced to 5% of its former value by the highway.

B

[At p. 1020 the Court restates the posture: the valueless finding entitled Lucas to compensation on his theory, and he thought it unnecessary to contest the Act’s purposes or means; the state court thought otherwise, treating the Act as an exercise of the police power to mitigate harm.]

It is correct that many of our prior opinions have suggested that “harmful or noxious uses” of property may be proscribed by government regulation without the requirement of compensation. We think the South Carolina Supreme Court was too quick to conclude that that principle decides the present case. The “harmful or noxious uses” principle was the Court’s early attempt to describe in theoretical terms why government [Reporter pages 1021, 1023 and 1025 did not return in acquisition; they carry the interior of the Court’s review of Mugler, Hadacheck, Miller and Goldblatt. The discussion resumes at p. 1024.]

The transition from our early focus on control of “noxious” uses to our contemporary understanding of the broad realm within which government may regulate without compensation was an easy one, since the distinction between “harm-preventing” and “benefit-conferring” regulation is often in the eye of the beholder. One could say that imposing a servitude on Lucas’s land is necessary in order to prevent his use of it from “harming” South Carolina’s ecological resources; or, instead, in order to achieve the “benefits” of an ecological preserve.

[Footnote 12 makes the point concretely: several of the legislature’s own findings, to which the state court deferred in characterizing the Act as harm-preventing, are phrased in benefit-conferring language — enhancing “South Carolina’s annual tourism industry revenue,” for instance. The footnote runs onto p. 1025, which did not return in acquisition. The opinion resumes at p. 1026.]

When it is understood that “prevention of harmful use” was merely our early formulation of the police power justification necessary to sustain any regulatory diminution in value; and that the distinction between regulation that “prevents harmful use” and that which “confers benefits” is difficult, if not impossible, to discern on an objective, value-free basis; it becomes self-evident that noxious-use logic cannot serve as a touchstone to distinguish regulatory “takings”—which require compensation—from regulatory deprivations that do not. A fortiori the legislature’s recitation of a noxious-use justification cannot be the basis for departing from our categorical rule that total regulatory takings must be compensated. If it were, departure would virtually always be allowed.

III

Where the State seeks to sustain regulation that deprives land of all economically beneficial use, we think it may resist compensation only if the logically antecedent inquiry into the nature of the owner’s estate shows that the proscribed use interests were not part of his title to begin with. This accords with our “takings” jurisprudence, which has traditionally been guided by the understandings of our citizens regarding the content of, and the State’s power over, the “bundle of rights” that they acquire when they obtain title to property. It seems to us that the property owner necessarily expects the uses of his property to be restricted, from time to time, by measures newly enacted by the State in legitimate exercise of its police powers. And in the case of personal property he ought to be aware of the possibility that new regulation might even render his property economically worthless. In the case of land, however, we think the notion pressed by the Council that title is somehow held subject to the “implied limitation” that the State may subsequently eliminate all economically valuable use is inconsistent with the historical compact recorded in the Takings Clause that has become part of our constitutional culture.

Where “permanent physical occupation” of land is concerned, we have refused to allow the government to decree it anew (without compensation), no matter how weighty the asserted “public interests” involved—though we assuredly would permit the government to assert a permanent easement that was a pre-existing limitation upon the landowner’s title. We believe similar treatment must be accorded confiscatory regulations, i. e., regulations that prohibit all economically beneficial use of land: Any limitation so severe cannot be newly legislated or decreed (without compensation), but must inhere in the title itself, in the restrictions that background principles of the State’s law of property and nuisance already place upon land ownership. A law or decree with such an effect must do no more than duplicate the result that could have been achieved in the courts—by adjacent landowners under the State’s law of private nuisance, or by the State under its complementary power to abate nuisances that affect the public generally, or otherwise.

On this analysis, the owner of a lakebed would not be entitled to compensation when he is denied a permit to engage in a landfilling operation that would flood others’ land; nor the corporate owner of a nuclear generating plant directed to remove all improvements upon discovery that the plant sits astride an earthquake fault. Such regulatory action may well eliminate the land’s only economically productive use, but it does not proscribe a productive use that was previously permissible under relevant property and nuisance principles. When, however, a regulation that declares “off-limits” all economically productive or beneficial uses of land goes beyond what the relevant background principles would dictate, compensation must be paid to sustain it.

The “total taking” inquiry we require today will ordinarily entail (as the application of state nuisance law ordinarily entails) analysis of, among other things, the degree of harm posed by the claimant’s proposed activities, their social value and suitability to the locality, and the relative ease with which the alleged harm can be avoided. See, e. g., Restatement (Second) of Torts §§ 826–831.

It seems unlikely that common-law principles would have prevented the erection of any habitable or productive improvements on petitioner’s land. The question, however, is one of state law to be dealt with on remand. We emphasize that to win its case South Carolina must do more than proffer the legislature’s declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common-law maxim such as sic utere tuo ut alienum non laedas. Instead, as it would be required to do if it sought to restrain Lucas in a common-law action for public nuisance, South Carolina must identify background principles of nuisance and property law that prohibit the uses he now intends in the circumstances in which the property is presently found.

[Footnote 18, at p. 1032, answering Justice Blackmun’s charge that background nuisance principles are as manipulable as the harm/benefit dichotomy: “We stress that an affirmative decree eliminating all economically beneficial uses may be defended only if an objectively reasonable application of relevant precedents would exclude those beneficial uses in the circumstances in which the land is presently found.”]

The judgment is reversed, and the case is remanded for proceedings not inconsistent with this opinion.

So ordered.

---

[Justice Kennedy, concurring in the judgment. He did not join the opinion of the Court. Nearly entire.]

JUSTICE KENNEDY, concurring in the judgment.

The case comes to the Court in an unusual posture, as all my colleagues observe. After the suit was initiated but before it reached us, South Carolina amended its Act to authorize special permits at variance with its general limitations. As I read the Court’s opinion, it does not decide the permanent taking claim, but neither does it foreclose the state court from considering it.

The potential for future relief does not control our disposition, because whatever may occur in the future cannot undo [Reporter page 1033 did not return in acquisition; it carries Justice Kennedy’s temporary-taking discussion. The text resumes mid-sentence at the top of p. 1034.]

… ket value or resale potential. This is a curious finding, and I share the reservations of some of my colleagues about a finding that a beachfront lot loses all value because of a development restriction. While the state court on remand need not consider the case subject to this constraint, we must accept the finding as entered below, and it follows that petitioner is entitled to invoke the line of cases discussing regulations that deprive real property of all economic value.

The finding of no value must be considered under the Takings Clause by reference to the owner’s reasonable, investment-backed expectations. Kaiser Aetna v. United States, 444 U. S. 164, 175 (1979); Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978). The Takings Clause, while conferring substantial protection on property owners, does not eliminate the police power of the State to enact limitations on the use of their property. The rights conferred by the Takings Clause and the police power of the State may coexist without conflict. Property is bought and sold, investments are made, subject to the State’s power to regulate. Where a taking is alleged from regulations which deprive the property of all value, the test must be whether the deprivation is contrary to reasonable, investment-backed expectations.

There is an inherent tendency towards circularity in this synthesis, of course; for if the owner’s reasonable expectations are shaped by what courts allow as a proper exercise of governmental authority, property tends to become what courts say it is. Some circularity must be tolerated. The definition, moreover, is not circular in its entirety: the expectations protected by the Constitution are based on objective rules and customs that can be understood as reasonable by all parties involved.

In my view, reasonable expectations must be understood in light of the whole of our legal tradition. The common law of nuisance is too narrow a confine for the exercise of regulatory power in a complex and interdependent society. The State should not be prevented from enacting new regulatory initiatives in response to changing conditions, and courts must consider all reasonable expectations whatever their source. The Takings Clause does not require a static body of state property law; it protects private expectations to ensure private investment. I agree with the Court that nuisance prevention accords with the most common expectations of property owners who face regulation, but I do not believe this can be the sole source of state authority to impose severe restrictions. Coastal property may present such unique concerns for a fragile land system that the State can go further in regulating its development and use than the common law of nuisance might otherwise permit.

The Supreme Court of South Carolina erred, in my view, by reciting the general purposes for which the state regulations were enacted without a determination that they were in accord with the owner’s reasonable expectations. The promotion of tourism, for instance, ought not to suffice to deprive specific property of all value without a corresponding duty to compensate. Here, the State did not act until after the property had been zoned for individual lot development and most other parcels had been improved, throwing the whole burden of the regulation on the remaining lots. This too must be measured in the balance.

With these observations, I concur in the judgment of the Court.

---

[Justice Blackmun, dissenting. He wrote for himself alone. Substantially edited; several reporter pages of this opinion did not return in acquisition and are marked by page number where they fall.]

JUSTICE BLACKMUN, dissenting.

Today the Court launches a missile to kill a mouse.

The State of South Carolina prohibited petitioner Lucas from building a permanent structure on his property from 1988 to 1990. Relying on an unreviewed (and implausible) state trial court finding that this restriction left Lucas’ property valueless, this Court granted review to determine whether compensation must be paid in cases where the State prohibits all economic use of real estate. According to the Court, such an occasion never has arisen in any of our prior cases. Almost certainly it did not happen in this case.

Nonetheless, the Court presses on to decide the issue, and as it does, it ignores its jurisdictional limits, remakes its traditional rules of review, and creates simultaneously a new categorical rule and an exception (neither of which is rooted in our prior case law, common law, or common sense). I protest not only the Court’s decision, but each step taken to reach it.

[Reporter page 1037, the opening of Justice Blackmun’s Part I and his jurisdictional objection, did not return in acquisition. The text resumes at p. 1038.]

Petitioner Lucas is a contractor, manager, and part owner of the Wild Dune development on the Isle of Palms. In December 1986, he purchased two of the last four pieces of vacant property in the development. The area is notoriously unstable. In roughly half of the last 40 years, all or part of petitioner’s property was part of the beach or flooded twice daily by the ebb and flow of the tide; between 1957 and 1963 it was under water.

Petitioner never challenged the legislature’s findings that a building ban was necessary to protect property and life, or contended that the legislature was motivated by anything other than a desire to minimize damage to coastal areas. The court below considered itself “bound by these uncontested legislative findings.” Nothing in the record undermines the General Assembly’s assessment that prohibitions on building in front of the setback line are necessary to protect people and property from storms, high tides, and beach erosion.

[Reporter pages 1041–1043 did not return in acquisition; they carry Justice Blackmun on the Court’s rules of review and the opening of his attack on the record. The text resumes mid-sentence at the top of p. 1044. Pages 1045–1046 also did not return; his charge that the majority foists on the State “the burden of showing [its] regulation is not a taking” survives here only as quoted in the Court’s footnote 6.]

… had lost all economic value. This finding is almost certainly erroneous. Petitioner still can enjoy other attributes of ownership, such as the right to exclude others, “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” Petitioner can picnic, swim, camp in a tent, or live on the property in a movable trailer. State courts frequently have recognized that land has economic value where the only residual economic uses are recreation or camping. Petitioner also retains the right to alienate the land, which would have value for neighbors and for those prepared to enjoy proximity to the ocean without a house.

Yet the trial court, apparently believing that “less value” and “valueless” could be used interchangeably, found the property “valueless.” It accepted no evidence from the State on the property’s value without a home, and petitioner’s appraiser testified that he never had considered what the value would be absent a residence. The court appeared to believe that the property could be considered “valueless” if it was not available for its most profitable use. Absent that erroneous assumption, I find no evidence in the record supporting its conclusion that the damage to the lots by virtue of the restrictions [— the sentence breaks off at the foot of p. 1044 and completes on p. 1045, which did not return in acquisition.]

[The text resumes at p. 1047, where Justice Blackmun turns to the categorical rule itself.]

A

I first question the Court’s rationale in creating a category that obviates a “case-specific inquiry into the public interest advanced,” ante, at 1015, if all economic value has been lost. If one fact about the Court’s takings jurisprudence can be stated without contradiction, it is that “the particular circumstances of each case” determine whether a specific restriction will be rendered invalid by the government’s failure to pay compensation. When the government prevents the owner from any economically valuable use of his property the private interest is unquestionably substantial, but we have never before held that no public interest can outweigh it. The Court’s prior decisions “uniformly reject the proposition that diminution in property value, standing alone, can establish a ‘taking.’”

[Reporter pages 1049 and 1051 did not return in acquisition. At p. 1050 Justice Blackmun argues that the Court’s attempt to reconcile the noxious-use cases with its categorical rule distorts those cases. The text resumes at p. 1052.]

B

Ultimately even the Court cannot embrace the full implications of its per se rule: It agrees that there cannot be a categorical rule that wholly disregards the public need asserted, and will permit a State to regulate all economic value only if the State prohibits uses that would not be permitted under “background principles of nuisance and property law.” Ante, at 1031. Until today, the Court explicitly had rejected the contention that the government’s power to act without paying compensation turns on whether the prohibited activity is a common-law nuisance. The brewery closed in Mugler itself was not a common-law nuisance, and the Court specifically stated that it was the role of the legislature to determine [— the sentence breaks off at the foot of p. 1052; reporter page 1053 did not return in acquisition. The text resumes at p. 1054.]

The threshold inquiry for imposition of the Court’s new rule, “deprivation of all economically valuable use,” itself cannot be determined objectively. Whether the owner has been deprived of all economic value of his property will depend on how “property” is defined. The “composition of the denominator in our ‘deprivation’ fraction,” ante, at 1017, n. 7, is the dispositive inquiry. Yet there is no “objective” way to define what that denominator should be. “We have long understood that any land-use regulation can be characterized as the ‘total’ deprivation of an aptly defined entitlement… . Alternatively, the same regulation can always be characterized as a mere ‘partial’ withdrawal from full, unencumbered ownership … .” Michelman, Takings, 1987, 88 Colum. L. Rev. 1600, 1614 (1988).

In Keystone Bituminous Coal the Court treated the “support estate” as “merely a part of the entire bundle of rights possessed by the owner,” while the dissent characterized it as a distinct property interest that was wholly destroyed; the Court could agree on no “value-free basis” to resolve the dispute. Even more perplexing is the Court’s reliance on common-law principles of nuisance in its quest for a value-free takings jurisprudence. In determining what is a nuisance at common law, state courts make exactly the decision that the Court finds so troubling when made by the South Carolina General Assembly today: They determine whether the use is harmful.

C

Finally, the Court justifies its new rule because such action is not part of the “‘long recognized’” “understandings of our citizens.” Ante, at 1027. It is not clear where our “historical compact” or “citizens’ understanding” comes from, but it does not appear to be history. The principle that the State should compensate individuals for property taken for public use was not widely established in America at the time of the Revolution.

“The colonists … inherited … a concept of property which permitted extensive regulation of the use of that property for the public benefit—regulation that could even go so far as to deny all productive use of the property to the owner.” F. Bosselman, D. Callies, & J. Banta, The Taking Issue 80–81 (1973).

[Justice Blackmun canvasses the early sources at pp. 1056–1059: state governments long took property for public projects without paying compensation; the Takings Clause “originally did not extend to regulations of property, whatever the effect”; and state courts continued to uphold bans on particular uses notwithstanding the economic impact.]

Nor does history indicate any common-law limit on the State’s power to regulate harmful uses even to the point of destroying all economic value. Common-law courts themselves rejected such an understanding. As Chief Justice Shaw explained in upholding a regulation prohibiting construction of wharves, the existence of a taking did not depend on “whether a certain erection in tide water is a nuisance at common law or not.” Alger, 7 Cush., at 104.

In short, I find no clear and accepted “historical compact” or “understanding of our citizens” justifying the Court’s new takings doctrine. Instead, the Court seems to treat history as a grab bag of principles, to be adopted where they support the Court’s theory, and ignored where they do not. What makes the analysis unworkable is its attempt to package the law of two incompatible eras and peddle it as historical fact.

V

The Court makes sweeping and, in my view, misguided and unsupported changes in our takings doctrine. While it limits them to the most narrow subset of government regulation—those that eliminate all economic value from land—they go far beyond what is necessary to secure petitioner Lucas’ private benefit. One hopes they do not go beyond the narrow confines the Court assigns them to today.

I dissent.

---

[Justice Stevens, dissenting. He wrote for himself alone. Substantially edited; several reporter pages of this opinion did not return in acquisition and are marked by page number where they fall.]

JUSTICE STEVENS, dissenting.

Today the Court restricts one judge-made rule and expands another. In my opinion it errs on both counts. Proper application of the doctrine of judicial restraint would avoid the premature adjudication of an important constitutional question. Proper respect for our precedents would avoid an illogical expansion of the concept of “regulatory takings.”

I

South Carolina’s Beachfront Management Act has been amended to permit some construction seaward of the line that frustrated petitioner’s proposed use of his property. Until he exhausts his right to apply for a special permit under that amendment, petitioner is not entitled to an adjudication by this Court of the merits of his permanent takings claim.

[Reporter pages 1062–1063, carrying the remainder of Justice Stevens’s ripeness discussion and his treatment of Mahon, did not return in acquisition. The text resumes mid-sentence at the top of p. 1064.]

… tion [of value.] So the question depends upon the particular facts.” Id., at 413.

Nor does the Court’s new categorical rule find support in decisions following Mahon. Although in dicta we have sometimes recited that a law “effects a taking if [it] … denies an owner economically viable use of his land,” our rulings have rejected such an absolute position. We have frequently—and recently—held that, in some circumstances, a law that renders property valueless may nonetheless not constitute a taking. As we stated in Keystone Bituminous Coal Assn. v. DeBenedictis, “‘Although a comparison of values before and after’ a regulatory action ‘is relevant, … it is by no means conclusive.’”

In addition to lacking support in past decisions, the Court’s new rule is wholly arbitrary. A landowner whose property is diminished in value 95% recovers nothing, while an owner whose property is diminished 100% recovers the land’s full value. The case at hand illustrates this arbitrariness well. The Beachfront Management Act not only prohibited the building of new dwellings in certain areas, it also prohibited the rebuilding of houses “destroyed beyond repair by natural causes or by fire.” Thus, if the homes adjacent to Lucas’ lot were destroyed by a hurricane one day after the Act took effect, the owners would not be able to rebuild, nor would they be assured recovery. Under the Court’s categorical approach, Lucas (who has lost the opportunity to build) recovers, while his neighbors (who have lost both the opportunity to build and their homes) do not. The arbitrariness of such a rule is palpable.

Moreover, because of the elastic nature of property rights, the Court’s new rule will also prove unsound in practice. Courts may define “property” broadly and only rarely find regulations to effect total takings; developers and investors, on the other hand, may market specialized estates to take advantage of the rule, since the smaller the estate, the more likely a regulatory change will effect a total taking. The rule will thus have one of two effects: Either courts will alter the definition of the “denominator” in the takings “fraction,” rendering it meaningless, or investors will manipulate the relevant property interests, giving it sweeping effect.

[At pp. 1064–1065 Justice Stevens takes up in turn the three justifications the Court offers for the rule — the equivalence of total deprivation to physical appropriation, the rarity of total takings, and the risk of property being “pressed into some form of public service” — and finds each either proves too much or too little.]

In short, the Court’s new rule is unsupported by prior decisions, arbitrary and unsound in practice, and theoretically unjustified. A categorical rule as important as the one established today should be supported by more history or more reason than has yet been provided.

The Nuisance Exception

Like many bright-line rules, the categorical rule established in this case is only “categorical” for a page or two in the U. S. Reports. No sooner does the Court state that “total regulatory takings must be compensated,” ante, at 1026, than it quickly establishes an exception to that rule.

[Reporter pages 1066–1067, continuing Justice Stevens’s critique of the nuisance exception, did not return in acquisition. The text resumes at p. 1068.]

The exception provides that a regulation that renders property valueless is not a taking if it prohibits uses of property that were not “previously permissible under relevant property and nuisance principles.” Ante, at 1029–1030. The Court thus rejects the basic holding in Mugler v. Kansas, where we held that a statute prohibiting the owner of a brewery from making alcoholic beverages did not effect a taking, even though the use had been perfectly lawful before the statute was enacted. Under the Court’s opinion today, however, if a State should decide to prohibit the manufacture of asbestos, cigarettes, or concealable firearms, it must be prepared to pay for the adverse economic consequences of its decision. One must wonder if government will be able to “go on” effectively if it must risk compensation “for every such change in the general law.” Mahon, 260 U. S., at 413. The Court’s holding today effectively freezes the State’s common law, denying the legislature much of its traditional [— the sentence breaks off at the foot of p. 1068.]

[Reporter pages 1069–1075 — the entire back half of Justice Stevens’s dissent, including his Part III on the generality of regulation — did not return in acquisition. Only the final three lines, at p. 1076, came back.]

… Carolina Legislature persuade me that the Act did not effect a taking of petitioner’s property.

Accordingly, I respectfully dissent.

Notes & Questions

1. Big picture — a categorical rule bought at the price of a question the Court refuses to answer. Penn Central gave the field a three-factor balancing test that decides nothing in advance, and the profession complained about it for fourteen years. Lucas is the answer to that complaint: a bright line. Deprive an owner of all economically beneficial use and you have taken his property, full stop, without any case-specific inquiry into public purpose or countervailing benefit. Scalia is candid that this is a rule about the extreme case, and candid that he is drawing it because the alternative is standardless. But watch what the rule costs, because the whole module turns on it. A categorical rule that triggers at total deprivation is only as determinate as the word “total,” and “total” is a fraction — value lost over value held. The Court declines to say what goes in the denominator, and files the problem in a footnote. So Lucas trades Penn Central’s open-ended balancing for a rule whose single operative term is undefined, and the indeterminacy does not disappear; it migrates. Ask yourself, as you read, whether that is a bad trade. There is a serious argument that it is not — that pushing the vagueness into one identifiable question is progress over spreading it across three factors — and you should be able to make it. Then notice the second escape hatch: even a total deprivation is not a taking if the restriction inheres in the title, as one of the “background principles of the State’s law of property and nuisance.” That exception has swallowed a great deal of the rule, and it is where every Lucas case since has actually been fought.

2. Raw specific knowledge — state the rule, both exits, and the footnote by its right number. Write out, with pin cites: (a) the two discrete categories requiring compensation without case-specific inquiry — permanent physical invasion, which is Loretto, and denial of all economically beneficial or productive use, which is this case; (b) the “economically idle” formulation and the two ideas the Court uses to justify treating it as special, average reciprocity of advantage and property “pressed into some form of public service”; (c) the background-principles exception and the “logically antecedent inquiry” framing, which tells you that the exception is not a defence the State pleads but a question about what the owner ever owned; and (d) the rejection of the harm-preventing / benefit-conferring distinction and what happens to the Mugler line as a result. Then the housekeeping that trips people up. The denominator footnote is n. 7, at 1016–1017. It is the one that opens on the rhetorical force of “deprive of all economically feasible use” depending on how the owner’s interest is defined, and it carries the illustration of the owner of a tract 90% of which is rendered unusable. It is not n. 8; n. 8 is the reply to Justice Stevens on the 95%/100% problem. Blackmun himself cites it as “ante, at 1017, n. 7.” Cite it correctly, and be able to say in one sentence why a footnote that raises the central difficulty and then declines to resolve it is placed in a footnote at all. Finally, note that this reading carries no vote line: the 1992 syllabus prints no numeric tally, so the head of the reading gives the line-up from the opinions and nothing more.

3. Practical application — draw the denominator three ways and watch the case change. Take a single owner with a hundred-acre coastal parcel. A new statute bars all construction on the seaward forty acres. (a) Compute the loss with the denominator set at the forty affected acres, at the hundred-acre parcel, and at the owner’s entire holdings in the State including two inland parcels. State the Lucas result under each. (b) Now do the same in time rather than space: a thirty-two-month building moratorium on land whose fee simple runs forever. That is Tahoe-Sierra, in this module, and the Court refuses to sever the interest temporally — explain why the refusal is a denominator holding even though the opinion does not use the word. (c) Now do it in sticks: the owner retains the right to camp, picnic and moor a boat but may not build. Is that “economically idle”? South Carolina argued Lucas’s lots were not. (d) Finally, the aftermath, which is the best practical lesson in the case. On remand the South Carolina Supreme Court found no background principle of state law that would have barred Lucas’s houses; the State paid him and then resold the lots, and a house was built on them. So the litigation established that the State had to buy what it wanted to prevent, and then it did not want it enough to keep it. What does that sequence tell you about what the compensation requirement actually does — and about Penn Central’s worry that the takings question and the police-power question cannot really be separated?

4. Attack the reasoning — the exception that ate the rule, and the two dissents. (a) Background principles. Scalia insists the exception is narrow: the State must identify a principle already inhering in the title, not a newly-legislated judgment about harm. But state nuisance law is judge-made and evolving, and the whole point of the harm-preventing/benefit-conferring critique is that “harm” is not a fact in the world. So what stops a state court from announcing, in the very case, that building on a fragile barrier island was always a nuisance under the State’s law? Palazzolo — also in this module — takes the related question of whether an owner who acquires after the regulation takes with notice, and answers no. Read the two together and state the doctrine that survives. (b) Blackmun. His attack is on the finding, not the rule: the trial court’s determination that the lots were rendered valueless was, he says, implausible on the record, and the Court has built a constitutional rule on a factual premise no one should accept. Note that this is the most dangerous kind of dissent, because if he is right the case is an advisory opinion. Note also that parts of his argument are missing from this reading — the reporter pages did not return in acquisition and the gaps are marked on the page rather than bridged. Where you see one, do not guess what filled it; if the argument matters to your answer, go to the reporter. (c) Stevens. The arbitrariness point is the cleanest sentence in the case: the owner who loses 95% of his value recovers nothing, and the owner who loses 100% recovers everything. Scalia’s reply is in n. 8, and it is essentially that all bright lines have this property. Is that an answer, or a description of the objection?

5. Creative thinking — design the rule you would rather have. Two exercises, and do them in this order. (a) Rescue the categorical rule. Draft a definition of the denominator — one sentence — that a trial court could apply without knowing which side it favours. Candidates: the parcel as described in the deed; the parcel as a reasonable investor would have assembled it; the interest the owner acquired at the time of acquisition; the largest unit over which the regulation’s burden is uniform. Test each against the hundred-acre hypothetical above and against Penn Central’s air rights, and see whether any of them can decide both cases the way the Court did. If none can, say what follows: either one of the two cases is wrong, or the denominator is not a question of law at all. (b) Or abandon it. Justice Kennedy, concurring in the judgment, would decide the case on reasonable investment-backed expectations rather than on a categorical rule, and would treat the nuisance limitation as too narrow a hook. That is, he would keep Penn Central and lean on its second factor. Write the majority opinion Kennedy would have written — two paragraphs — and then identify what it gives up. Specifically: an expectations test makes the constitutional question turn on what the owner reasonably expected, which is partly a function of what the law already was, which means the more regulation there is the less anyone can expect. Is that a vicious circle, a sensible acknowledgment that property is a creature of law, or both?