Lucas v. South Carolina Coastal Council

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), 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.
Background.
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 prevented Petitioner Lucas from erecting homes on properties due to the effects it will have on the public beach.
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 the Supreme Court of South Carolina reversed.
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.
Supreme Court Review.
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.
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.
Opinion of the Court.
In a majority opinion by Justice Antonin Scalia, the Court found that 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.
Souter's statement.
In an unusual filing, Justice Souter, a former state supreme court justice (in New Hampshire), wrote a statement in which he neither joined the majority or dissented and said the case should be dismissed on procedural grounds. He wrote, "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 on the basis of the facts presented" because "The petition for review was granted on the assumption that the state [of South Carolina], by regulation, had deprived the owner of his entire economic interest in the subject property. Such was the state trial court's conclusion, which the state supreme court did not review."
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, the court granted the parties leave to amend their pleadings to determine what the actual damages were.
Legacy and other notes.
Established the modern "total takings" test.
After paying Lucas $850,000 in compensation for the two lots, South Carolina proceeded to sell the lots to private parties for development. A 5,000-square-foot private home now sits on one lot, while the other remains undeveloped.