Introduction and decision.

I. Introduction

The taking issue has displayed wilderness characteristics of the dark wood in which Dante became entangled during his legendary descent into the Inferno.(1) The path has been obscured; the compass has been obliterated; and the map is out of date.(2) Once the U.S. Supreme Court finally had the opportunity to define the scope of a regulatory taking in Lucas v. South Carolina Coastal Council,(3) the decision was the subject of much anticipation. It is apparent that the Lucas case is important for the practice of land use, natural resources, and environmental law. But as one scholar observed, the decision is enigmatic.(4) What does the opinion mean and does it offer any guidance through the dark wood of taking? These are the questions this Colloquium explored.

II. Elements of the Case

A. Lucas' Property and the Beachfront Management Act

In 1986, David Lucas purchased two lots in the Wild Dunes development on the Isle of Palms in South Carolina.(5) The Isle of Palms is a barrier island east of the city of Charleston.(6) Lucas, who has lived in the vicinity since 1978, is a contractor, manager and part owner of the development.(7) He purchased the property to construct houses there.(8) Neighbors had built on both sides of his lots.(9)

In about half of the preceding forty years, all or part of Lucas' property was beach or flooded twice daily by the ebb and flow of the tide.(10) From 1957 to 1963, the property was under water.(11) Between 1963 and 1973, the shoreline was 100 to 150 feet onto the property.(12) Between 1981 and 1983, the Isle of Palms issued twelve emergency orders to safeguard the property in the development.(13) The Coastal Council had issued permits for two rock revetments to protect condominiums near Lucas' property. One of those revetments extended more than halfway onto one of Lucas' lots.(14)

Under the Coastal Zone Management Act of 1972 (CZMA), Congress authorized the states to enact comprehensive programs for the conservation and use of coastal resources.(15) In response, South Carolina adopted a coastal zone management act in 1977.(16) The statute authorized the designation of "critical areas" within which changes in land use required a permit from the South Carolina Coastal Council.(17) The statute defined a critical area to include beaches and sand dunes in the shoreline area.(18) The lots purchased by Lucas in 1986 were not in a critical area so the statute did not require him to obtain a permit from the Coastal Council to develop the property.(19)

In 1987, a committee appointed by the Coastal Council found that the state's beaches were "critically eroding" and recommended new land use restrictions.(20) The legislature responded to the proposals of the committee by adopting the Beachfront Management Act in 1988.(21) The Act did not change the uses permitted within a critical area.(22) Instead, it enlarged those areas, requiring the Coastal Council to establish a "baseline" connecting the landward-most "points of erosion ... during the past forty years" using "the best scientific and historical data" available.(23) The agency fixed the baseline where the shoreline had been in 1963. (Figure 1.). This line was landward of the Lucas property,(24) and brought Lucas into the enlarged critical area which the Act regulated. This action prohibited Lucas from constructing permanent structures on his lots.(25) The Act provided no exceptions.(26)

The 1988 Act authorized both administrative and judicial challenges to the baseline and the newly enlarged critical area.(27) Lucas did not utilize these remedies.(28) Thus, the Coastal Council never finally determined whether the property of Lucas was "correctly categorized as a critical area in which building would not be permitted."(29)

B. Decision of the Trial Court

Lucas brought suit against the Coastal Council in state court. He contended the restriction on the use of his property was a taking without just compensation in violation of the Fifth Amendment to the U.S. Constitution.(30) At trial, Lucas presented testimony from an appraiser that the "highest and best use of these lots ... [is] luxury single family detached dwellings."(31) The Act, the appraiser contended, caused "the value of the lots to plummet to zero."(32) They lacked "fair market value and there [remained] no economically viable use."(33) The appraiser stated that each lot was previously worth $650,000, but that the action of the Coastal Council caused them to retain "no value."(34)

The Coastal Council presented the testimony of an engineer who qualified as an expert in coastal development.(35) The engineer described the extensive erosion in the area due to storms and to siting of new developments.(36) He identified the setback line established by the agency for the Lucas property based on the most landward point of erosion over the past forty years coupled with a twenty-foot "no construction line."(37) He testified that "fifty percent of the time the beach has occupied part or all of the Lucas property over the last forty years."(38)

The Coastal Council also offered testimony of an appraiser who stated each lot was worth about ten percent of what it was prior to the application of the Act or about fifty-six thousand dollars per lot.(39) This testimony was stricken by the court as "pure speculation."(40)

The court ruled in favor of Lucas.(41) The court found that at the time Lucas purchased the lots, they were zoned for single family residential construction.(42) The court also found that the restriction on the property rendered it valueless.(43) The court awarded $1.2 million dollars as "just compensation for the |regulatory' taking" caused by the Act.(44)

C. Decision of the South Carolina Supreme Court 

The Coastal Council appealed and the South Carolina Supreme Court reversed.(45) The court determined that the case raised a "relatively straightforward issue" while noting the taking question is complex and "regulations affecting coastal property are especially problematic."(46)

The issue is whether governmental regulation of the use of property,

in order to prevent serious public harm, amounts to a "regulatory

taking" of property for which compensation must be paid. Lucas'

position ... is that if he is deprived of "all economically

viable use" of his property, he must be compensated for it even if

the regulation depriving him of such is a use-restriction regulation

enacted to prevent serious public harm. Coastal Council's view, obviously,

is that no compensation is due a landowner whose private

use threatens public harm.(47)

The court emphasized that Lucas had conceded the Act was properly designed to preserve the valuable beaches of the state. He had also acknowledged that preservation of public resources from harm is a "laudable goal."(48) In addition, the court stressed the findings and policy adopted by the legislature in the Act which Lucas did not challenge.(49) The court found itself bound by these legislative findings and rejected Luca's primary contention that "if a regulation operates to deprive a landowner of all |economically viable use' of his property, it has worked a |taking' for which compensation is due, regardless of any other consideration."(50) the court concluded a taking did not occur with respect to the Lucas property because the purpose of the regulation was to prevent serious public harm.(51) The court relied on a long line of cases, beginning with Mugler v. Kansas, holding that regulation of a use or activity, even complete termination, may constitute a proper exercise of the police power which does not require compensation.(52)

The regulation of nuisance-like activity under the Mugler rule is, according to the South Carolina Supreme Court, an exception to the just compensation requirement of the Fifth Amendment. The court also relied on Keystone Bituminous Coal Ass'n. v. DeBenedictis(53) in support of the proposition that, in some cases, no compensation is due, regardless of the value of the property after regulation.(54)

The court reversed the judgment below and emphasized again the fact that Lucas did not challenge the Act as necessary to prevent serious injury to the public or that the setback requirement was unreasonable or disproportionate to the goal of preventing harm.(55) Two justices dissented from the decision based on an analysis that the nuisance-like harm in Mugler was not present.(56)

D. Beachfront Management Act Amendments

Prior to the decision of the South Carolina Supreme Court, but after briefing and argument, the South Carolina legislature amended the Beachfront Management Act. The amendments authorized the Coastal Council to issue a "special permit" to build a structure seaward of the baseline if: (1) the structure was not on an "active beach" or primary oceanfront dune, (2) the landowner agreed to remove the structure should erosion cause it to rest on an active beach and, (3) the use would not be detrimental to public health, safety and welfare.(57)

The South Carolina Supreme Court majority opinion did not address the issue of whether the new amendments to the Act would allow Lucas to build a residence on his property.(58) The dissent determined a taking had occurred but urged remand of the case to the Coastal Council for consideration of permits under the new provisions.(59) The court passed up the opportunity to return the case to the trial court on the basis that it was not ripe.(60) The Coastal Council had argued that Lucas "has not yet obtained a final decision regarding how [he] will be allowed to develop [his] property"(61) and is not entitled to a definitive adjudication of his taking claim.(62)

E. Petition for Certiorari to the U.S. Supreme Court

Instead of seeking a permit under the 1990 amendments, Lucas sought review of the South Carolina decision by filing a petition for certiorari with the U.S. Supreme Court. The Coastal Council urged the Court to deny the petition, contending that the case was not ripe because tucas had not sought a permit under the new amendments. The Court granted the petition.(63)

The federal government, among others, filed an amicus curiae brief. The interest of the United States, according to the Justice Department, was two-fold. First, the Secretary of Commerce had approved the Beachfront Management Act as consistent with the federal Coastal Zone Management Act (CZMA).(64) The government advised the Court that the CZMA

establishes a national policy of protecting the resources of the Nation's

coastal zone and encouraging States to adopt coastal management 

programs that, inter alia, seek to minimize the loss of life

and property caused by improper development in flood-prone,

storm surge, and erosion-prone areas and destruction of natural

protective features such as beaches and dunes.(65)

Second, the Justice Department explained the purpose of the National Flood Insurance Act which provides coverage in communities that adopt flood-plain and land use measures consistent with federal standards for reduction of future losses.(66)

On the merits of the case, the federal government argued there was no present basis for finding a permanent taking since Lucas could apply for a special permit under the 1990 amendments to the Act. With respect to a possible temporary taking, the United States urged the Court to vacate the judgment and remand for the state trial court to consider. The Justice Department supported a Mugler analysis of the problem but concluded the South Carolina Supreme Court did not adequately consider whether the restrictions placed on the property actually met that standard.(67)

F. Decision of the U.S. Supreme Court

The U.S. Supreme Court handed down its decision on June 29, 1992. In an opinion by Justice Scalia, joined in by four others (C.J. Rehnquist, J. White, J. O'Connor and J. Thomas), the Court reversed the judgment of the South Carolina Supreme Court and remanded the case for further proceedings.(68) The Court held the case ripe for decision.(69) The 1990 amendments to the Act did not preclude Lucas from applying for a permit for future construction but his claim for past deprivation or a temporary taking remained because the South Carolina Supreme Court had disposed of the case on the merits.(70)

The Court determined Lucas properly alleged injury-in-fact necessary for standing under Article III of the Constitution.(71) The Court held that a legislature cannot create a new prohibition against all economically beneficial use of previously acquired land. Instead, such a prohibition "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."(72)

The Court determined that "[w]here 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."(73) The Court laid out a "total taking" inquiry based in part on nuisance law. This requires an analysis of the degree of harm to public lands and resources or adjacent property posed by the activity, the social value of the activity and its suitability to the area, and the ease with which the landowner and the government can avoid the harm.(74) In order to avoid a taking, South Carolina must rely on common law principles of nuisance and property law to prohibit the use proposed by Lucas.(75)

Justice Kennedy filed a concurring opinion but determined the law of nuisance is too narrow to confine the state's exercise of regulatory authority and is not the sole basis for restrictions on fragile coastal property.(76)

Justice Blackmun and Justice Stevens each wrote dissenting opinions concluding that the case was not ripe for decision, that Lucas had failed to use administrative remedies and that the presumption of the constitutionality of the legislation placed the burden of proof on the landowner, not the government.(77) They rejected the majority's reliance on common law and nuisance to establish a categorical rule for the determination of a taking.(78)

Justice Souter filed a separate statement which emphasized that the Court should not have granted certiorari or reached the merits of the case.(79) He found the trial court's conclusion that the state legislature had deprived Lucas of all economic value in his property to be so questionable that it precluded the Court from addressing the concept of a total taking in the case.(80)

III. Where Did the Court Leave Taking Law?

The Supreme Court did not decide that a permanent taking had occurred. Rather, the Court remanded the case to the state court to determine whether there had been a temporary taking. In a complex decision, each justice who did not join the majority wrote his own opinion. All observers agree that the case is important, but the question remains: Does Lucas give us any guidance through the dark wood of taking law?(81) The panelists provide their opening statements in Section II. In Section III, the panelists discuss their differences of opinion regarding what Lucas means to taking law.

(1.) Dante noted, Midway along the journey of our life I awoke to find myself in a dark wood, For I had wandered off from the straight path. Dante Alighieri, The Inferno 3 (Penguin Books 1971) (1472). (2.) One author noted, The taking issue is one of the motifs of environmental law and arises in every conceivable context where opportunities to maximize the economic value of land are constrained by society's desire to further resource preservation and other quality of life goals .... Despite a formidable accumulation of scholarship, and thousands of judicial opinions, the line between a noncompensable regulation and compensable taking remains uncertain. William Rodgers, Environmental Law 203-04 (1977) (footnote omitted). See, e.g., Penn Central Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978) ("[T]his Court, quite simply, has 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."). (3.) 112 S. Ct. 2886 (1992). (4.) Joseph Sax, Lucas and the Takings Saga in the U.S. Supreme Court, Presentation at the University of California at Los Angeles School of Public Policy and School of Law (Dec. 3, 1992). (5.) Lucas, 112 S. Ct. at 2889. (6.) Id. (7.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2905 (1992) (Blackmun, J., dissenting). (8.) Id. at 2889. (9.) Id. (10.) Id. at 2905 (Blackmun, J., dissenting). (11.) Id. (12.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992). (13.) Id. (14.) Id. (15.) 16 U.S.C. $Z 1451-1464 (1988). (16.) South Carolina Coastal Zone Management Act of 1977, S.C. Code Ann. $Z 48-39-10 to 48-39-220 (Law. Co-op. 1976 & Supp. 1992); Lucas, 112 S. Ct. at 2889, 2905 (Blackmun, J., dissenting at 2905). (17.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2889, 2905 (1992). (18.) Id. at 2889. (19.) Id. (20.) Id. at 2905 (Blackmun, J., dissenting) (citing South Carolina Blue Ribbon Committee, Report on Beachfront Management (1987)). (21.) S.C. Code Ann. $Z 48-39-10, -130, -250 to 360 (Law. Co-op Supp. 1992); Lucas, 112 S. Ct. at 2905. See Natasha Zalkin, Shifting Sands and Shifting Doctrines: The Supreme Court's Taking Doctrine and South Carolina's Coastal Zone Statute, 79 Cal. L. Rev. 207, 220 (1991). (22.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2905 (1992) (Blackmun, J., dissenting). (23.) S.C. Code Ann. $S 48-39-280 (Law Co-op. Supp. 1992); Lucas. 112 S. Ct. at 2905 (Blackmun, J., dissenting). (24.) Lucas, 112 S. Ct. at 2889. (25.) Id. at 2889 n.2. (26.) Id. at 2890. (27.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2907 (1992) (Blackmun J. dissenting); S.C. Code Ann. $S 48-39-280 (E) (Law. Co-op. Supp. 1992). The Act allowed any landowner to petition the Coastal Council to move the baseline seaward. (28.) Lucas, 112 S. Ct. at 2907 (Blackmun, J., dissenting). (29.) Id. (30.) Lucas v. South Carolina Coastal Council, 404 S.E.2d 895, 896 (S.C. 1991). (31.) Transcript of Record at 67, Lucas, 404 S.E. 2d (No. 89 CP 10 0066). (32.) Id. (33.) Lucas, 404 S.E.2d at 907. (34.) Transcript of Record at 67, Lucas, 404 S.E.2d (No. 89 CP 10 0066). (35.) Id. at 85-86. (36.) Id. at 89-99. (37.) Id. at 100. (38.) Transcript of Record at 113, Lucas, 404 S.E.2d (No. 89 CP 10 0066). (39.) Id. at 139, 148. (40.) Id. at 150. (41.) Lucas v. South Carolina Coastal Council, 404 S.E.2d 895, 896 (S.C. 1991). (42.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2889 (1992). (43.) Id. at 2896. (44.) Lucas, 404 S.E.2d at 896. (45.) Id. (46.) Id. The court's footnote alludes to the historic rules governing shoreline use and curiously leaves their applicability for another day: For example, theories such as dedication, prescription, custom, purpresture, and the public trust doctrine can be resorted to by the public in an attempt to regulate private property immediately adjacent to the public property which sits below the mean high water mark. See generally Finnell, Public Access to Coastal Public Property: Judicial Theories and the Taking Issue, 67 N.C.L. Rev. 627 (1989). We express no opinion on the force and validity of those theories in particular circumstances. Id. (47.) Lucas v. South Carolina Coastal Council, 404 S.E.2d 895, 896 (S.C. 1991). (48.) Id. (49.) Id. at 896-98. For example, the Act provides: The General Assembly finds that: (1) The beach/dune system along the coast of South Carolina is extremely important to the people of this State and serves the following functions: (a) protects life and property by serving as a storm barrier which dissipates wave energy and contributes to shoreline stability in an economical and effective manner; (b) provides the basis for a tourism industry that generates approximately two-thirds of South Carolina's tourism industry revenue...; (c) provides habitat for numerous species of plants and animals, several of which are threatened or endangered...; (d) provides a natural health environment for the citizens of South Carolina.... (2) Beach/dune system vegetation is unique and extremely important to the vitality and preservation of the system. (3) Many miles of South Carolina's beaches have been identified as critically eroding. (4) ... development has been unwisely sited too close to the system. This type of development has jeopardized the stability of the beach/dune system, accelerated erosion, and endangered adjacent property. It is in both the public and private interests to protect the system from this unwise development. (5) The use of ... hard erosion devices ... has not been effective. (6) ... It is in both the public and private interests to afford the beach/dune system space to accrete and erode in its natural cycle. S.C. Code Ann. $S 48-39-250 (Law. Co-op. Supp. 1992). In light of these specific findings, the legislature established its policy to: (1) protect, preserve, restore, and enhance the beach/dune system, the highest and best uses of which are declared to provide: (a) a barrier and buffer (b) a public area (c) habitat for indigenous flora and fauna (d) a place which harbors natural beauty (2) create a comprehensive, long-range beach management plan ... (3) severely restrict the use of hard erosion control devices ... (4) encourage the use of erosion-inhibiting techniques which do not adversely impact the long-term well-being of the beach/dune system ... (5) promote carefully planned nourishment as a means of beach preservation or restoration (6) preserve ... and promote ... public access. Id. $S 48-39-260. (50.) Lucas, 404 S.E.2d at 898. (51.) Id. at 899. (52.) Mugler v. Kansas, 123 U.S. 623 (1887) (prohibition on manufacture and sale of intoxicating liquors). See also, e.g., Hadacheck v. Sebastian, 239 U.S. 394 (1915) (ordinance prohibiting manufacture of bricks in city); Miller v. Schoene, 276 U.S. 272 (1928) (destruction of trees to prevent infection); Goldblatt v. Hempstead, 369 U.S. 590 (1962) (prohibition of excavation of gravel below water table). (53.) 480 U.S. 470 (1987). (54.) Lucas v. South Carolina Coastal Council, 404 S.E.2d 895, 902 (1991). The court cited two cases for the proposition that two other states had interpreted Keystone in the same way: McNulty v. Town of Indialantic, 727 F. Supp. 604 (M.D. Fla. 1989) (setback requirement for ocean property) and Presbytery v. King County, 787 P.2d 907 (Wash.), cert. denied, 498 U.S. 911 (1990) (wetlands ordinance). Lucas 404 S.E.2d at 902 n.7. In Presbytery however, although the regulation in question prevented the church from building on the wetlands portion of its property, the church still retained the opportunity to place residences on the remainder of the parcel. Presbytery, 287 P.2d 907. (55.) Lucas, 404 S.E.2d at 901. The South Carolina Supreme Court's decision in Lucas was similar to the earlier decision, Beard v. South Carolina Coastal Council, 403 S.E.2d 620 (S.C. 1991). In Beard, the court rejected a taking challenge brought against the Coastal Council for denial of a permit to build a bulkhead. The court held: The State has a legitimate interest in protecting the public from serious harm. In the Act, the legislature made specific findings regarding the coastal environment set forth policies concerning protection of the beaches. The Beards did not challenge the legislative findings and policies not did they challenge the lower courts conclusion that a |substantial and legitimate State interest' was involved. Id. at 622. The Fourth Circuit Court of Appeals had reached the same result a short time later in Esposito v. South Carolina Coastal Council, 939 F.2d 165 (4th Cir. 1991), cert. denied, 112 S. Ct. 3027 (1992). (56.) Lucas, 404 S.E.2d at 903-06 (Harwell, J., dissenting). (57.) S.C. Code Ann. $Z 48-39-270 (13); 48-39-290(D) (Law. Co-op. Supp. 1992). (58.) Lucas, 404 S.E.2d at 902 n.1 (Harwell, J., dissenting). (59.) Lucas v. South Carolina Coastal Council, 404 S.E.2d 895, 908 (1991) (Harwell, J., dissenting). (60.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2891 (1991). (61.) Id. at 2890 (citing Williamson County Regional Planning Comm'n of Johnson City v. Hamilton Bank, 473 U.S. 172, 190 (1985). (62.) Id. (63.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 436 (1991). (64.) 16 U.S.C. $Z 1451-1464; Brief for the United States as Amicus Curiae in Support of Reversal at 1, Lucas, 112 S. Ct. 2886 (1992) (No. 91-453). (65.) Brief for the United States, supra note 64, at 1-2. (summarizing 16 U.S.C. $Z 1452(2), 1456b(2) (1988)). (66.) 42 U.S.C. $Z 4001-4128 (1988); Brief for the United States, supra note 64, at 2. The brief also pointed out that federal agencies engage in the regulation of real property and have an obligation to ensure its programs are "implemented in a manner that respects basic constitutional protections." Id. at 2; Clean Water Act, 33 U.S.C. $S 1344 (1988) (discharge of fill material into navigable waters); Executive Order 12,630, 3 C.F.R. (555) (1989) (directing the Attorney General to help agencies avoid takings of private property). (67.) Brief for the United States, supra note 64, at 9, 11, 18-27. (68.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2887 (1992). (69.) Id. at 2891-92. (70.) Id. at 2891-92. "The South Carolina Supreme Court shrugged off the possibility of further administrative and trial proceedings, however, preferring to dispose of Lucas' takings claim on the merits." Id. at 2891. (71.) Id. at 2891. (72.) Id. at 2900. (73.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2899 (1992). (74.) Id. at 2901. (75.) Id. at 2901-02. (76.) Id. at 2903 (Kennedy, J. concurring). (77.) Id. at 2904 (Blackmun, J. dissent); Id. at 2917 (Stevens, J., dissenting). (78.) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2910 (1992) (Blackmun, J. dissent); Id. at 2919 (Stevens, J., dissenting). (79.) Id. at 2925 (statement of Souter, J.). (80.) Id. at 2925-26 (statement of Souter, J.). (81.) Professor Sax noted: All in all, Lucas is an enigmatic case. It is at once broad and narrow. It uses familiar standards, but in unfamiliar ways. It may presage some dramatic new turns in takings law, or it may be focused on a quite narrow category of cases. It may represent a firm new majority, or it may rest on a very fragile coalition of the smallest possible Court majority. Sax, supra note 4. Dante reserved a special place in the Inferno for lawyers, but in deference to the complexity of the Lucas decision, perhaps shifting sands is the best metaphor to replace the tangled wood he described.