|
New insight provided by Gideon Kanner
Given the devastation in Galveston Texas caused by hurricane Ike, will Lucas v. South Carolina Coastal Council play a role? According to news stories, at least one entire street of homes was completely wiped out, totally leveled and apparently the ocean surge has taken much of the beachfront away leaving a new coast line. According to reports debate over coastal development is firing up to say the least. How much of the debate will be influenced by Lucas?
-
This is a paraphrase from: Not with a Bang, but a Giggle: The Settlement of the Lucas Case in David L. Callies, Ed., Takings 308-11 (1996) Chapter 15, written by Gideon Kanner with permission to “update” our information about the Lucas case. Gideon’s writings are italicized.
Kanner writes, [In the Lucas case], the U.S. Supreme Court upheld the idea that forbidding all reasonable use of private land amounts to a taking. As we know the case was remanded for a hearing to allow the regulators to prove that any use of the land by Lucas would constitute a common law nuisance. Cotton Harness, general counsel for the Coastal Council, was quoted as saying he was confident that “we can go to court and demonstrate that there is a threat to the environment.” The South Carolina Supreme Court found that the proposed construction did not constitute a nuisance and sent it back to the trial court to reassess damages. Originally the trial court awarded Lucas around $1 million, based on the idea it was a full taking. During the time the Lucas case was waiting for appeal the regulations were amended to allow landowners subject them to apply for “special permits” for construction . . . The state supreme court thought this option reopened the question of the extent of the taking; Lucas would now be able to apply for a special permit, so the taking would be a temporary one. The opinion tacitly assumes that once confronted with Lucas’s application, the Coastal Council would issue the permit . . . Thus, a remand was necessary to reassess damages for the period between the enactment of the Coastal Act (1988) and the date of the opinion (1992). This trial didn’t happen as the case was settled. The settlement was $1.5 million of which each lot was valued at $425,000. Keep in mind that Lucas paid around $500 for each. According to Kanner, After payment of his mortgage and costs, David Lucas cleared less than $100,000.The State of South Carolina thus became the owner of Lucas’s lots. . . . South Carolina promptly executed a neck-snapping, intellectual about-face. The lots, which were only a year earlier were depicted as a “threat to life and property’ if built upon, underwent a sudden metamorphosis. In July 1993, Bachman C. Smith, III, another lawyer for the Coastal Council, was quoted as saying that-- given the built-up character of the area surrounding Lucas’s lots—“it is reasonable and prudent to allow house to be built.” So much for the “threat to life and property.The Coastal Council decided to sell the lots and market them and save the broker’s commission. They offered the lots at $450,000 each. Interestingly, the comparable sales indicated a value of $425,000. Kanner writes, The only timely bid the state received on its first effort to sell was from Andy Guagenti, one of Lucas’s neighbors, who offered $315,000 for one of the lots to keep it vacant and protect his view. The Commission apparently rejected the offer and after extending time and soliciting additional bids, the state accepted $392,500 per lot from a buyer planning on building houses.
Kanner writes, given the tone of the reporting of the Lucas case while it was pending before the U.S. Supreme Court, another villain emerges: the press . . . no major newspapers or magazines—certainly none of those that had carried on hysterically in 1992 about how a Supreme Court decision in favor of David Lucas might doom property regulation root and branch—reported South Carolina’s ignominious intellectual and moral retreat.
Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)[1], was a case in which the Supreme Court of the United States established the "total takings" test for evaluating whether a particular regulatory action constitutes a regulatory taking that requires compensation.
Plaintiff/Petitioner
David H. Lucas, owner of two beachfront properties in South Carolina.
Defendant/Respondent
South Carolina Coastal Council, a body that grants permits for the use of beachfront land.
State of law
South Carolina's Coastal Zone Management Act (1977) required owners of coast land in "critical areas" near beaches to obtain permits from Respondent South Carolina Coastal Council before committing the land to new uses. The state's Beachfront Management Act (1988), S.C. Code Ann. § 48-39-10 et seq. (1989 Cum. Supp.), increased the regulations on the use of coastal land.
Facts of case
Petitioner Lucas purchased beachfront properties in 1986 for $975,000. David H. Lucas owned two vacant oceanfront lots in the Beachwood East Subdivision of the Wild Dunes development on the Isle of Palms in Charleston County, South Carolina. The Beachfront Management Act effectively deprived Petitioner Lucas of his ability to erect homes on his properties.
Prior history
Lucas filed suit asserting that the restrictions on the use of his lots was a taking of his property without just compensation. The lower court agreed and awarded Lucas $ 1,232,387.50 as just compensation for the regulatory taking. The government of South Carolina appealed, and was reversed by the Supreme Court of South Carolina, Lucas v. South Carolina Coastal Council, 304 S.C. 376 (S.C. 1991).
Procedural posture
Petitioner Lucas seeks reversal of the South Carolina Supreme Court judgment, reinstatement of the trial court judgment, and declaration that the Beachfront Management Act constituted a taking.
Legal analysis
Issue
Whether the South Carolina Supreme Court erred in holding that the Beachfront Management Act was a valid exercise of the police power and did not constitute a taking.
Arguments/theories
Petitioner
Not stated, presumed reflected in holding and reasoning.
Respondent
(1) The Beachfront Management Act is a valid exercise of the police power, as the beach/dune area of the shores is a valuable public resource, and the erection of structures on that land contributes to erosion and destruction of that resource. (2) All property is held subject to the limitation that the state may regulate the property in such a way as to remove all value.
Rule of law
A regulation that deprives an owner of all economically beneficial uses of land constitutes a taking unless the proscribed use interests were not part of the title to begin with. In other words, a law or decree with the effect of depriving all economically beneficial use must do no more than duplicate the result that could have been achieved in the courts under the law of nuisance. As a result, "total takings" analysis requires a consideration of (1) the degree of harm to public lands or adjacent property posed by the regulated activities, (2) the social value of such activities, and (3) the relative ease with which the alleged harms can be avoided through measures taken by either the claimant or the government.
Holding
The South Carolina Supreme Court erred in holding that the Beachfront Management Act was a valid exercise of the police power and did not constitute a taking.
Reasoning
The majority argued as follows: (1) Deprivation of all economically beneficial use is, from the perspective of a property owner, deprivation of the property itself. (2) When all economically beneficial use is restricted, it is difficult to assume that the legislature is simply "adjusting" economical benefits and burdens. (3) Regulations that restrict all economically beneficial use may often be a guise of pressing that land into public service. (4) Lucas's lands have been deprived of all economically beneficial use. (5) There is no way to distinguish regulation that "prevents a harmful use" and confers benefits on nearby property. (6) Contrary to Respondent South Carolina's assertion, title is not held subject to the limitation that the state may regulate away all the property's economically beneficial use.
Notable concurring and dissenting opinions
Kennedy, J., concurring.
The determination of no value must be considered with reference to the owner's reasonable, investment-backed expectations.
Souter, J.
The case should have been dismissed as improperly granted, as the decision of the trial court that a total taking had occurred is highly questionable based on the facts presented.
Blackmun, J., dissenting.
Stevens, J., dissenting.
Result
Judgment/disposition
Judgment reversed and cause remanded for determination of whether regulation could be enacted under state nuisance law.
Subsequent history
On remand at the South Carolina Supreme Court: Lucas v. S.C. Coastal Council, 309 S.C. 424 (S.C. 1992), the court granted the parties leave to amend their pleadings to determine what the actual damages were.
Legacy and other notes
At its ruling, Lucas established the modern "total takings" test.
|
