The end of environmental law? Libertarian property, natural law, and the just compensation clause in the Federal Circuit.

"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."

Justice Holmes, in Pennsylvania Coal Co. v. Mahon(1)

"The more often the government must pay for exercising control over private property, the less control there will be. That is the reality.... Ownership of property carries responsibilities to the community as a whole as well as privileges."

Chief Judge Nies, dissenting in

Florida Rock Industries v. United States(2)

I. INTRODUCTION

We clearly are experiencing a judicial property rights revolution. In the past seven years, the Supreme Court has legitimized the concept of regulatory takings as a judicial check on land use and environmental regulation. The dimensions of this revolution remain unclear because the Rehnquist Court's pronouncements have not uniformly favored property owners. The Court has interpreted the Constitution's Just Compensation Clause(3) to require payment of compensation to landowners where regulations 1) abolished the right to bequeath property,(4) 2) required the dedication of public easements as a development condition,(5) and 3) eliminated all economic value by restricting development rights.(6) But it has rejected compensation claims where regulations 1) restricted mining to protect against subsidence,(7) 2) imposed a rent control ordinance allowing tenant hardships to factor into allowable rent increases,(8) and 3) imposed both rent controls and termination restrictions on landlords.(9)

Some will see the Court's most recent pronouncement, in Dolan v. City of Tigard,(10) as an expansion of the Rehnquist Court's willingness to authorize the federal judiciary to serve as a "weapon of reaction" to ecological land regulation.(11) Although Dolan will increase the burden on government regulations to justify mitigation requirements as conditions for development approvals, the case does little to change the outlines of the Court's emerging just compensation law for regulatory takings. This is because Dolan, like most recent cases in which the Court has ordered payment of just compensation, is best understood as a physical occupation case.(12) Dolan will require regulators to increase the quality and quantity of 1;heir administrative records, which probably will produce an increased number of permit denials and certainly will increase developers, costs even when their projects are approved. These results are hardly the stuff of a property rights revolution.

Considerably more revolutionary than Dolan are two 1994 decisions of the Federal Circuit, Florida Rock Industries v. United States,(13) and Loveladies Harbor, Inc. v. United States.(14) In Florida Rock, the court, in an opinion written by Judge Jay Plager, announced for the first time that a government wetlands regulation could violate the Just Compensation Clause if it worked a "partial taking" of property.(15) In Loveladies Harbor, also authored by Judge Plager, the court affirmed a trial court ruling that the relevant parcel of property for takings analysis was, at least under the facts of the case, only the wetlands burdened by the regulation, not the entire original tract owned and subsequently developed and sold by the landowner.(16)

These two Federal Circuit decisions have ominous implications for federal wetlands regulation, indeed all federal environmental regulation, because they mean that virtually any federal restriction on development could work a partial taking, irrespective of how much profit a land development produced. The cases indicate that the Federal Circuit is prepared to impose much more exacting scrutiny on federal regulations than the Supreme Court has been willing to impose on state and local regulations. This is an anomalous result because federal regulations are much less likely than state and local regulations to suffer from the regulatory deficiencies which the Just Compensation Clause remedies.(17) Further, the two Federal Circuit results are inconsistent with the Supreme Court's recent just compensation clause decisions, which have emphasized physical occupations of property or their functional equivalent.(18)

This Article explores the two Federal Circuit rulings in the context of recent Supreme Court precedent. Section II briefly reviews the most prominent Supreme Court precedent at the time of the Federal Circuit decisions, Lucas v. South Carolina Coastal Council.(19) Sections III and IV analyze Florida Rock and Loveladies Harbor, respectively, showing how large an extension of the Lucas rationale these cases represent. Section V suggests that the Federal Circuit's reasoning is inconsistent with the Supreme Court's recent emphasis on physical occupations, most recently confirmed in the Dolan case.(20) Section VI concludes by claiming that underpinning the Federal Circuit decisions is a radically libertarian view of property which countenances an unprecedented vision of judicial activism in reviewing land use and environmental regulations restricting development. The result is the creation of a kind of natural law of property development which has no basis in the text of the Constitution, the intent of the Framers, or the history of Anglo-American property law.

II. THE LUCAS LEGACY

The Lucas decision generated a mountain of commentary,(21) which I will not retrace here. What is important for this analysis is simply what the Court did and did not hold. Lucas reversed a South Carolina Supreme Court decision that ruled there was no constitutional taking of private property when a state statute, enacted two years after a landowner paid nearly one million dollars for two beachfront lots zoned for residential use, barred construction of any permanent habitable structures on the lots.(22) The state court ruled there was no taking, regardless of the effect on property value, because the statute's objective of preventing public harm as a result of beach erosion fell within the longstanding nuisance defense to takings claims.(23) The Supreme Court reversed, in an opinion by Justice Scalia, holding that judicial deference to the legislature's declared nuisance-prevention purpose was unwarranted because it could effectively eviscerate all regulatory takings claims.(24)

Having eliminated the nuisance defense to takings claims, Justice Scalia then somewhat unsuccessfully attempted to establish a new categorical rule requiring compensation for regulations that deny "all economically beneficial or productive use of land."(25) This new rule would join the Court's existing categorical takings rule concerning permanent physical occupations, which are compensable without regard to case-specific inquiry under the Court's balancing test.(26) Scalia's effort was somewhat unsuccessful because the new rule was subject to a significant caveat: no compensation is owed for a deprivation of all economic value if the regulation restricts a restricted use that was "not part of [the] title to begin with," such as when a regulation duplicates a result that could have been achieved under common law property and nuisance principles.(27) This caveat makes the constitutionality of regulation turn on a myriad of common law nuisance factors, such as the degree of harm likely to result from a landowner's proposed activity and the suitability of the use to the location,(28) thereby resurrecting case-specific factors that the categorical rule attempts to obviate. Despite the apparent indeterminacy of the new rule-the dissent in Lucas recognized that common law nuisance principles have been called an "impenetrable jungle"(29)--once a landowner proves a regulation deprives him of all economic use of his land, Lucas shifts the burden of proof concerning the constitutionality of a confiscatory regulation to the government, which must then show that such a restriction "inheres in the title" as a consequence of background principles of nuisance or property law.(30)

Three aspects of the Lucas rule need emphasis for purposes of this inquiry. First, the Court emphasized that its ruling was limited to "relatively rare situations," that is, "the extraordinary circumstance when no productive or economically beneficial use of land is permitted."(31) In other words, the Lucas categorical rule applies only where regulations produce total economic wipeouts: in the opinion's words, "total taking[s]."(32) Justice Scalia made clear that the Lucas rule did not apply to a ninety-five percent wipeout, although he indicated that such a loss might require compensation under the Court's traditional formula of balancing the nature of the government action, its economic impact, and its effect on investment-backed expectations.(33)

Second, the reason the Court confined the Lucas rule to total economic wipeouts was because it fashioned the rule on an analogy between total economic wipeouts and permanent physical occupations: "total deprivation of beneficial use is, from the landowner's point of view, the equivalent of a physical appropriation."(34) In both situations, the Court opined, the "asserted `public interests'" behind new regulations are irrelevant; what matters is preexisting restrictions upon property title.(35) Total economic wipeouts are like permanent physical occupations because resembling a condemnation, they effectively eliminate the range of use-options available to landowners.(36)

The third point to emphasize about Lucas is that the background principles which can legitimize a complete regulatory wipeout without compensation are principles of state and federal common law.(37) For this reason the Court did not declare an unconstitutional taking in Lucas, but instead remanded the issue to the state courts.(38) Justice Scalia did say that permissible regulatory restrictions could be implicit, such as denying a landfill permit in order to promote flood control, or requiring decommissioning of a nuclear power plant on an earthquake fault; no compensation would be warranted in these situations even where no economically viable use remained.(39) This emphasis on common law to determine the scope of federal constitutional protection has received its share of criticism,(40) but courts applying the Lucas reasoning would seem to be bound to determine compensation requirements only after a searching look at state or federal property and nuisance law.(41)

Although Lucas was widely assailed as inconsistent with Framer intent and judicial precedent,(42) the decision was, at bottom, an extremely limited one. The Court held only that regulations effecting total takings require compensation unless they restrain nuisance-like behavior, in which case a total economic wipeout is noncompensable. The most prominent academic proponent of a vigorous judicial application of the Just Compensation Clause, Richard Epstein, regretted Lucas's limited reach. Epstein depicted the decision as "anticlimactic" and "a case of disappointned expectations."(43) The Federal Circuit did not share this vision. Instead, it saw in Lucas the seeds of constitutional revolution.

III. FLORIDA ROCK AND THE "PARTIAL TAKINGS" DOCTRINE

The first of the Federal Circuit's revolutionary just compensation clause cases was Florida Rock Industries, Inc. v. United States.(44) Florida Rock is a fourteen-year-old case whose proceedings, as one commentator noted, are rivaled only by those in Charles Dickens's Bleak House.(45)

In 1980, the Corps of Engineers denied Florida Rock a Clean Water Act section 404 permit to mine limestone in a ninety-eight acre tract of wetlands west of suburban Miami. Five years later in 1985, Judge Kozinski, of what was then the U.S. Claims Court, awarded over one million dollars in compensation, plus interest and attorney fees to Florida Rock.(46) The Federal Circuit then vacated that decision in 1986 because the trial court erred by excluding evidence introduced by the federal government indicating that the property retained substantial speculative value even after the permit was denied.(47) In 1990, Judge Loren Smith of the Claims Court subsequently reinstated the judgment with compound interest.(48) The government once again appealed, contesting the trial court's conclusion that it owed constitutional compensation as well as the award of compound interest.

On March 10, 1994, in an opinion written by Judge Plager, the Federal Circuit vacated the trial court's judgment for a second time, concluding that the trial court again erred in excluding evidence that indicated that the property retained substantial value after permit denial.(49) The appeals court noted that an offer to purchase the property for $4,000 an acre (more than twice the $1,900 an acre Florida Rock originally paid), a property tax assessment of $2,600 an acre, and average retail sales in the vicinity of the property of $6,100 an acre all indicated that the property retained substantial economic value.(50) The court specifically rejected the trial court's conclusion that the relevant market from which fair market value must be derived is limited to knowledgeable buyers who are accurately informed of legal restrictions: "The market from which a fair market value may be ascertained need not contain only legally trained (or advised) persons who fully investigate current land use regulations; ignorance of the law is every buyer's right."(51) As a result, the court remanded the case to the Court of Federal Claims with instructions to reconsider the property's current fair market value, which could include speculative value.(52)

Had the Federal Circuit simply stopped there, the case would hardly qualify as revolutionary. However, the court went on to opine that if the property's fair market value after permit denial was, say, $4,000 an acre (or roughly 40% of value with a fill permit), instead of the $500 an acre (roughly 5% of value with a permit) found by the trial court, that conclusion would not be determinative of whether the government owed compensation because, in the court's words:

The question remains, does a partial deprivation resulting from a regulatory

imposition, that is, a situation in which a regulation deprives the owner of a

substantial part but not essentially all of the economic use or value of the property,

constitute a partial taking, and is it compensable as such?(53)

Although this issue was never briefed and argued on appeal or in the proceedings below, Judge Plager, citing two law review articles, felt compelled to resolve it because it was "much debated" in the post-Lucas literature.(54) Lucas, of course, failed to address the issue of "partial takings" since the Supreme Court majority (however unrealistically) assumed a total deprivation of value.(55) This silence in Lucas compelled Professor Epstein, in one of the articles cited by the Federal Circuit, to chastise Justice Scalia for not using Lucas as a vehicle to expand the new categorical takings rule to include partial takings.(56) In Florida Rock, Judge Plager, over a spirited dissent by Chief Judge Nies,(57) adopted Professor Epstein's brainchild, the "partial takings" doctrine.

The methodology Judge Plager employed to embrace the "partial takings" doctrine was straightforward but problematic. Like Justice Scalia in Lucas, he relied on an analogy to physical occupations. According to the court, since a government occupation of five acres of a 100-acre tract for a public park would clearly require compensation, the court questioned why a wetland regulation diminishing value a similar amount should be treated differently:

Logically, the amount of just compensation should be proportional to the value

of the interest taken as compared to the total value of the property, up to and

including total deprivation, whether the taking is by physical occupation for

the public to use as a park, or by regulatory imposition to preserve the property

as a wetland so that it may be used by the public for ground water

recharge and other ecological purposes.(58) This logic led Judge Plager to conclude that "[t]he fact that the source of any particular taking is a regulation rather than a physical entry should make no difference."(59) The apparent assumption is that diminished value due to regulatory restriction is to be measured against a completely non-regulatory world. Professor Epstein could have penned these thoughts.(60)

Judge Plager recognized that the doctrine of "partial takings" faced a large conceptual problem. The Supreme Court only recently reaffirmed its longstanding rule which holds that a regulation which produces diminution in value does not effect a taking of property requiring just compensation.(61) Acknowledging that the difference between a compensable "partial regulatory taking" and a noncompensable "diminution in value" would be a "difficult line" to draw, the court asserted that "[w]hat is necessary is a classic exercise of judicial balancing of competing values."(62) Exercising "necessary" judicial activism, Judge Plager concluded that the quintessence of diminution in value is a regulation which results in a "reciprocity of advantage" to the landowner, which he defined as producing "direct compensating benefits" to the landowner, or allowing "alternative permitted activities" which are "economically realistic in light of the setting and circumstances."(63) What facts might produce a "reciprocity of advantage" to a landowner we are not told: the Federal Circuit remanded the case to the Court of Federal Claims, where the fertile mind of Judge Smith will be the first to examine these concepts in a factual context. Nevertheless, it is clear that Florida Rock is a considerable extension of Lucas, extending the categorical rule for constitutional compensation from complete economic wipeouts to "partial takings," which are to be distinguished from noncompensable mere "diminutions in value." Not only did Florida Rock appear dramatically to expand the number of regulations which will require constitutional compensation, it did so with no reference at all to state or federal property law.

Judge Neis's dissent accused the majority of overreaching: she felt that the entire discussion of "partial takings" was unnecessary dicta.(64) She also condemned the majority for relying on the views of Supreme Court dissents(65) and for mischaracterizing those opinions as support for the wholly novel theory of partial takings.(66) Judge Nies argued that Judge Plager's fundamental error was failure to distinguish a noncompensable loss of economic value from a compensable transfer of a property right. She claimed that "`[v]alue' is not a property right under Florida law or any state law that I can uncover"(67) and decried the majority both for its failure to ground its vision of property rights on state law and for its failure to follow the Supreme Court's repeated holdings rejecting the idea that loss of economic value by itself is compensable.(68) Judge Nies concluded by challenging the trial court's conclusion that the value of the wetlands prior to the permit denial was $10,500 an acre because that figure failed to take into account preexisting wetland regulations which already had diminished the property's value prior to the permit denial.(69)

Florida Rock is an extremely destabilizing decision, exposing all wetlands regulation, indeed all environmental and land use regulation, to compensation claims. As Judge Nies noted,(70) increased compensation requirements will produce less regulation, which in turn will produce more environmental injuries. Perhaps such a result would be tolerable if the partial takings doctrine had grounding in the text of the Constitution, in original intent, or in precedent. However, the partial takings doctrine has no such support, and, moreover, is flatly inconsistent with a number of Supreme Court rulings, as Judge Nies demonstrated.(71) Its pedigree seems to be Professor Epstein's book and a subsequent law review article criticizing the Lucas case and arguing that "conceptual coherence" demanded that total and partial takings be treated similarly.(72) Thus, the Federal Circuit adopted a doctrine apparently on the basis of a law professor's theory, effectively revising Holmes's famous dictum into: the life of the law is (now) logic, not experience.(73)

But there are serious problems with the logic as well. First, both Judge Plager and Professor Epstein claim that the partial takings doctrine is necessary to compensate a landowner who suffers a ninety percent reduction in value.(74) They assume that because, as Justice Scalia ruefully noted in Lucas, takings law "is full of these `all-or-nothing' situations,"(75) the burdened landowner will receive nothing. That assumption simply is erroneous: Scalia expressly pointed out that landowners might not be able to claim the benefit of the Lucas categorical rule for total loss of economic value, but they could recover under the Court's balancing test articulated in the Penn Central case.(76) Not long ago, the Federal Circuit in fact ordered compensation on the basis of balancing.(77)

Second, Judge Plager acknowledged that the partial takings doctrine will require some difficult judicial line drawing to distinguish compensable "partial takings" from noncompensable mere "diminutions in value."(78) He concluded, following Professor Epstein,(79) that the line should be drawn where a regulation ceases to produce a "reciprocity of advantage," or "direct compensating benefits" to the burdened landowner.(80) Apparently, this reciprocity is to be ascertained by conducting a trial each and every time a landowner suffers a reduction in economic value due to a regulation. Professor Epstein urged that reciprocity must be "established by the evidence, rather than presumed by the law."(81) A clearer call for judicial second guessing of legislation could hardly be imagined. The result would seem to be good news for the litigation bar, but it is not clear that the product would produce better lawmaking. The last judicial foray into close substantive review of economic legislation is hardly an endorsement of judicial competency.(82)

Third, by holding that any regulation producing a diminution in property value without an accompanying reciprocity of advantage violates the Just Compensation Clause, the partial takings doctrine seems to assume that property value is fixed by a pre-regulatory, pre-government market. This may well describe a libertarian, natural law view of property--where property and the individual exist in a kind of state of nature--but this view is fundamentally inconsistent with both recent Supreme Court rulings and vintage Anglo-American philosophy, which acknowledge that property rights are social constructs, creatures of the state.(83) As Jeremy Bentham wrote, "Property and law are born together, and die together. Before laws were made there was no property; take away laws, and property ceases."(84)

Finally, the partial takings doctrine founders philosophically because it runs against the dominant theory of property rights: utilitarianism. Property rules seek to foster social wealth, civic virtue, or individual privacy, or some combination thereof.(85) Any call for a radical restructuring of property rights, especially one to be effectuated by the federal judiciary without regard to state or federal law, should be premised on a careful explanation of how and why both individuals and the society would be better off after the restructuring. Judge Plager in the Florida Rock decision makes no attempt to supply such an explanation. Perhaps he simply assumed everyone had read Professor Epstein's book.(86)

IV. Loveladies Harbor and the Segmentation Doctrine

Three months after it decided Florida Rock, the Federal Circuit handed down its long-awaited decision in Loveladies Harbor, Inc. v. United States.(87) Loveladies Harbor involves an even longer running and more convoluted saga than Florida Rock. Loveladies purchased a 250-acre tract on Long Beach Island, New Jersey, adjacent to Barnegat Bay, in 1958. Prior to 1972, when Congress enacted the modem version of the Clean Water Act, Loveladies developed and sold about eighty percent of the tract, leaving the company with some fifty-seven acres, about fifty of which were wetlands.88 Loveladies subsequently sought state and federal permits to fill the wetlands acres from both the state and federal governments. The state denied permission in 1977; Loveladies challenged the denial in state court, inducing a 1981 settlement allowing development of 12.5 acres (one acre of previously filled uplands and 11.5 acres of wetlands) for thirty-five single family homes and imposing a conservation easement over the remaining 38.5 acres.(89)

Loveladies then sought a federal Clean Water Act permit to fill the 11.5 acres of wetlands from the U.S. Army Corps of Engineers. However, when the Corps circulated a public notice of the proposed fill to the state, as required under its permit regulations,(90) the state acknowledged issuing the permit as part of the settlement but denied that the fill was consistent with state requirements; instead, the state recommended that the Corps deny the permit because the wetland development was "anachronistic," a "throwback to 1950s-1960s style of shore development."(91) The Corps denied the permit in 1982.

Loveladies unsuccessfully challenged the permit denial in federal district court,(92) and then filed a just compensation claim in what is now the Court of Federal Claims. In 1988, Judge Loren Smith interpreted the Supreme Court's decision in Keystone to limit the size of the property relevant for Just Compensation Clause purposes to that owned at the time of the permit denial.(93) Judge Smith also disregarded the developed 6.4 acres still owned by Loveladies at the time of permit denial because this area was no longer contiguous to the parcel for which the permit was sought.(94) In 1990, the court found that the permit denial diminished the economic value of the property by more than ninety-nine percent without "countervailing substantial legitimate state interest" and awarded Loveladies compensation of more than $2.6 million.(95) The Federal Circuit first had to resolve a jurisdiction question, ruling that Loveladies could properly file an action seeking compensation in the Court of Federal Claims at the same time it was challenging the validity of permit denial in federal district court.(96) The Federal Circuit then turned to the merits of the long-running dispute in its June 15, 1994 opinion, authored by Judge Plager.(97)

The key issue in the case concerned the size of the property affected by the permit denial, the so-called "denominator issue."(98) If the appropriate unit was the original 250-acre tract, then a permit denial for 12.5 acres would likely not amount to a significant diminution in value to constitute a taking under Supreme Court precedent, since the restriction would burden only five percent of the parcel. Even if the appropriate unit was the 57.4 acres still owned by Loveladies at the time of permit application, less than twenty-five percent of the parcel was restricted. This diminution in value presented an unlikely case for compensation under Supreme Court precedent, although it might amount to a partial taking under Florida Rock.(99) on the other hand, if 12.5 acres was the appropriate unit, a taking would be much more likely because the regulatory restriction would extend to the entire parcel.(100) In footnote seven in Lucas, Justice Scalia rather curiously raised the denomination issue without deciding it, since the size of Lucas's property was not at issue.(101)

Scalia's raising of the issue was curious not only because it was extraneous to the case, but also because recent Supreme Court cases seem to have resolved the issue. In Penn Central Transportation Co. v. New York City, the Court rejected the landowners, attempt to depict the property at issue as just the air rights over Grand Central Terminal, stating that attempted "segmentation" of property in this manner was improper:

"Taking, jurisprudence does not divide a single parcel into discrete segments

and attempt to determine whether rights in a particular segment have been

entirely abrogated. In deciding whether a particular government action has effected

a taking, the Court focuses rather both on the character of the action

and on the nature of the interference with rights in the parcel as a whole.(102)

Nine years after Penn Central, the Court reaffirmed the "no segmentation" principle in Keystone Bituminous Coal v. DeBenedectis, quoting the passage above in ruling that the landowner could not confine the property at issue to just the coal burdened by a subsidence regulation, but also had to include all the company's coal that remained available for mining.(103) Although Justice Scalia's footnote seven seemed to call into question the "no segmentation" rule, Lucas made no attempt to overrule either Keystone, Penn Central, or any other of the Court's long-standing precedents counseling that the relevant parcel for compensation clause analysis is the property as a whole.(104) And in a post-Lucas case, Concrete Pipe and Products v. Construction Laborers Pension Trust, the Court reaffirmed the "no segmentation" rule, noting that:

[W]e rejected [a landowner's attempt to segment its property] years ago in

Penn Central Transportation Co. v. New York City where we held that a claimant's

parcel of property could not first be divided into what was taken and

what was left for the purpose of demonstrating the taking of the former to be

complete and hence compensable.(105)

Although all of these Supreme Court cases were quoted with approval by the Federal Circuit only six months prior to its opinion in Loveladies Harbor,(106) the Loveladies panel ignored these "no segmentation" precedents and proceeded to consider the relevant parcel as if it were an undecided issue. In fact, the predecessor Of the Federal Circuit decided two cases involving compensation claims arising from wetlands regulation that also embraced the "no segmentation" rule. In Deltona Corp. v. United States(107) and Jentgen v. United States,(108) the old Court of Claims (whose decisions are binding on the Federal Circuit) rejected Compensation claims because in each case the landowner retained developable uplands and, in Deltona, had received a fill permit for a portion of the property. In these cases the court clearly refused to limit its focus only to the property burdened by regulatory restrictions. Yet in Loveladies Harbor, the Federal Circuit claimed that "[o]ur precedent displays a flexible approach, designed to account for factual nuances."(109) The court cited both Deltona and Whitney Benefits, Inc. v. United states,(110) a 1991 case in which the court determined that compensation was due to a coal field owner where a substantial portion of the coal was under alluvial valley floors, the mining of which the Surface Mining Control and Reclamation Acts banned.(111) But Judge Plager made no attempt to explain what "factual nuances" in Whitney Benefits produced a finding of no economically viable use, other than to suggest that the trial court's determination was not "clearly erroneous."(112)

The same standard of review led the Federal Circuit to affirm Judge Smith's conclusion that the relevant property In Loveladies Harbor should not include "land developed or sold before the regulatory environment existed."(113) This reference presumably is to the federal permit requirements of the Clean Water Act and served to exclude the 199 acres that Loveladies had developed and partially sold.(114) It is not clear, however, why the onset of the regulatory environment should not have been 1899, since the government alleged, and Loveladies appeared to concede, that the development required a section 10 permit under the Rivers and Harbors Act of 1899.(115) Moreover, the court's use of the disjunctive--property "developed or sold" before the onset of the regulatory environment--apparently allowed Loveladies to exclude from consideration wetlands developed prior to 1972 which it had not sold (including 6.4 acres it still owned at the time of the permit denial in 1982, but which were no longer contiguous to the parcel for which it sought a permit).(116) The logic of allowing the exclusion of developed but retained acres is hard to fathom, especially in light of Federal Circuit precedent requiring consideration of both wetlands and uplands as part of the "parcel as a whole" for Just Compensation Clause purposes.(117)

The Federal Circuit also upheld the trial court's exclusion of the 38.5 acres on which the state received a conservation easement in exchange for the state fill permit because "whatever substantial value that land had now belongs to the state . . . [and] [i]t would seem ungrateful in the extreme to require Loveladies to convey to the public the rights in the 38.5 acres in exchange for the right to develop 12.5 acres, and then to include the value of the grant as a charge against the givers."(118) The exclusions of the 199 "pre-regulatory environment" acres and the 38.5 "conservation easement" acres left only the 12.5 acres that the trial court found were deprived of all economic value. Thus, the Federal Circuit found this to be a case of a Lucas-like "total takings," not a Florida Rock-like "partial takings."(119)

The court then considered whether prevention of a common law nuisance, the defense that Lucas recognized to a "total takings," was available to the government. Judge Plager refused to consider Loveladies, proposed wetland fill to be tantamount to a nuisance for two reasons. First, by issuing a permit for the fill, the state "publicly-acknowledged" that the fill was not a nuisance under state law.(120) Second, the fill did not fall within the Supreme Court's Mugler exception for noxious uses (which the Federal Circuit stated was "a somewhat different question" than the exception for state common law nuisances) because the government had failed to show that the fill was an "extraordinary case . . . so offensive to the public sensibility as to warrant no Constitutional protection."(121) The court emphasized the fact that the state failed to include fill restrictions in its "original conditions" authorizing development of the property in order to give "Loveladies . . . [the] opportunity to decide, at the beginning, whether its investment backed expectations could be realized under the regulatory environment."(122) The court therefore affirmed the trial judge's compensation award of $2.6 million plus interest.(123)

Loveladies Harbor is a troublesome decision, not only because it ignores both Supreme Court and Federal Circuit precedent,(124) but also because, like Florida Rock,l25 it fails to scrutinize state nuisance law in determining whether the exception authorized by the Lucas Court applied. Moreover, the court's discussion of nuisance law is quite confused. Judge Plager claimed that Lucas "dramatically change[d]" Just Compensation Clause law from requiring "ad hoc balancing decisions, balancing private property rights against state regulatory policy, to one in which state property law, incorporating common law nuisance doctrine, controls."(126) The court thought this reform would add a measure of predictability for all involved:

This sea change removed from regulatory takings the vagaries of the balancing

process, so dependent on judicial perceptions with little effective guidance in

law. It substituted instead a referent familiar to property lawyers everywhere,

and one which will have substantial (though varying from state to state) likelihood

of predictability for both property owners and regulators.(127)

No property lawyer familiar with the "impenetrable jungle" of nuisance law(128) would suggest that reliance on nuisance law would increase predictability. Nuisance law varies not only from jurisdiction to jurisdiction, but it also changes over time (as information changes).(129) Moreover, as the court itself acknowledged in its opinion, nuisance doctrine has its roots in equitable principles;(130) the essence of equity is doing justice, not increasing certainty.(131) Judge Plager claimed that the fill in Loveladies Harbor could not be a nuisance because it had received state authorization. Yet most property lawyers will recognize that regulatory approval does not necessarily absolve their clients of nuisance liability.(132) The court could have avoided this confusion had it looked more carefully into state nuisance law, as the Supreme Court in Lucas instructed.(133)

Loveladies Harbor also overstated the Lucas holding. Justice Scalia was careful to limit Lucas's new categorical rule to regulations of non-nuisance-like activities effecting "total taking[s]."(134) However, Judge Plager interpreted Lucas to "dramatically change" the judicial inquiry in all compensation cases, from balancing competing public and private claims to "simply one of basic property rights."(135) Apart from the fact that property rules are a reflection of the public versus private balancing that the Federal Circuit interpreted Lucas to obviate,(136) there is simply nothing in Lucas that calls for elimination of balancing outside of the narrow categorical rule it created.(137)

Loveladies Harbor's ratification of property owners, ability to segment their property into small parcels will increase the general applicability of the Lucas "total takings" rule.(138) In short, landowners will act strategically to create segments capable of taking advantage of Lucas, categorical rule.(139) For example, developers can use the Loveladies Harbor rule to develop and sell uplands and then file compensation claims for remaining wetlands if they are denied development permits. Under Florida Rock, developers could file "partial takings" claims even without segmenting, but a "total takings" will increase compensation awards and avoid uncertainties about the boundary between "partial takings" and noncompensable "mere diminutions in value."(140)

It is possible, however, that Loveladies Harbor may not sanction freewheeling segmentation. First, the Federal Circuit allowed segmentation of the 199 developed acres because they were filled prior to the onset of the regulatory environment, the date of which was arguable under the Loveladies factual situation,(141) but was clearly earlier than the date of the permit denial that the Court of Federal Claims assumed was the appropriate date.(142) Segmentation after the establishment of a regulatory regime would seem to be ineligible for compensation, on the theory that the developer's expectations were reasonably settled with the advent of the regulatory regime. Second, the court allowed segmentation of the 38.5 acres subject to the state conservation easement.(143) Segmentation of this parcel may be justified because under the easement, the landowner lost all economically viable use of those acres. Thus, Loveladies Harbor may be properly limited to its facts, allowing segmentation only of parcels developed prior to the establishment of regulatory controls and parcels subject to restrictions that leave the owner with no economically viable use of those parcels. Such an interpretation of Loveladies Harbor would forbid a landowner from receiving constitutional compensation due to restrictions forbidding the development of property after the onset of a regulatory regime.

I leave for others in this colloquium the chore of analyzing Dolan in detail.(144) I do want to emphasize briefly, however, that there is nothing in Dolan that supports the Federal Circuit's "partial takings" rule in Florida Rock or its "segmentation" rule in Loveladies Harbor. Justice Rehnquist's opinion makes it fairly clear that Dolan--like Loretto,(145) Kaiser Aetna,(146) and Nollan(147)--is best understood as a physical occupation case. Since Florida Rock and Loveladies Harbor both amount to extensions of the Lucas categorical rule for regulatory deprivations of all economic value,(148) and since there was no question that the offensive permit condition in Dolan did not deprive the landowner of all economic value, Dolan is conceptually distinct from Lucas and its progeny. Indeed, as a physical occupation case, Dolan represents an entirely separate category of Just Compensation Clause doctrine.

The key fact in Dolan was that the city required the landowner, as a condition of the permit to expand, to "dedicate to the city . . . all portions of the site that fall within the existing 100-year floodplain [of Fanno Creek] . . . and all property 15 feet above [the floodplain] boundary."(149) The Court emphasized the city's requirement that the landowner "deed portions of the property to the city," which would deprive her of the "right to exclude others, `one of the most essential sticks in the bundle of rights that are commonly characterized as property.'"(150) The public access condition was central to the Dolan result, just as it was in Loretto,(151) Kaiser Aetna,(152) and Nollan.(153) Justice Rehnquist drew a sharp distinction between a nondevelopment condition preserving the floodplain as open space and dedicating the floodplain to the public:

But the city demanded more [than mere nondevelopment]--it not only wanted

petitioner not to build in the floodplain, but it also wanted petitioner's property

along Fanno Creek for its Greenway system. The city has never said why a

public greenway, as opposed to a private one, was required in the interest of

flood control.

The difference to petitioner, of course, is the loss of her ability to exclude

others.... It is difficult to see why recreational visitors trampling along petitioner's

floodplain easement are sufficiently related to the city's legitimate interest

in reducing flooding problems along Fanno Creek . . . .(154)

The public ownership aspect of the greenway condition failed to satisfy the "rough proportionality" standard the Court required of the city's permit conditions. The Court even suggested that the public ownership requirement was considerably more offensive than a public easement over property to which the landowner retained title.(155) Chief Justice Rehnquist distinguished Dolan from PruneYard Shopping Center v. Robins,(156) a case where the Court ruled that a landowner's right to exclude did not extend to state-protected rights of free expression and petition:

In PruneYard, we held that a major private shopping center that attracted

more than 25,000 daily patrons had to provide access to persons exercising

their state constitutional rights to distribute pamphlets and ask passersby to

sign their petitions. We based our decision, in part, on the fact that the shopping

center "may restrict expressive activity by adopting time, place, and manner

regulations that will minimize any interference with its commercial

functions." By contrast, the city wants to impose a permanent recreational

easement upon petitioner's property that borders Fanno Creek. Petitioner

would lose all rights to regulate the time in which the public entered onto the

Greenway, regardless of any interference it might pose with her retail store.

Her right to exclude would not be regulated, it would be eviscerated.(157)

This "permanent recreational easement," which "eviscerated" the right to exclude, made the floodplain condition objectionable and also makes Dolan best understood as a physical occupation case.(158) Even the state's conservation easement in Loveladies cannot be seen to have eviscerated the landowner's right to exclude, and the other restrictions regulate uses but do not promise public access.

Neither Florida Rock nor Loveladies Harbor are permanent physical occupation cases. The Court has been quite careful to separate regulatory restrictions from physical occupations for Just Compensation Clause purposes. For example, two years ago, in Yee v. City of Escondido,(159) the Court refused to consider the combination of a local rent control ordinance and a state law limiting a landlord's ability to evict mobile home tenants to be a physical occupation of property because they did not "authorize an unwanted physical occupation" but merely "regulat[ed] petitioners use of their property."(160) Similarly, last term the Court again rejected an attempt to extend the permanent physical occupation rule to an alleged retroactive application of the pension withdrawal liability provisions of Multiemployer Pension Plan Amendments Act.(161)

With this perspective, then, Dolan is a fairly predictable result, conceptually distinct from Lucas. Florida Rock and Loveladies Harbor, on the other hand, present radical extensions of Lucas, the former extending the Lucas categorical rule to the hazily defined area of "partial takings," the latter countenancing some (it is not clear how much) landowner segmentation to make "total takings" much more likely. Neither result can find precedential value in the Dolan reasoning.

VI. LIBERTARIAN PROPERTY AND NATURAL LAW

Florida Rock and Loveladies Harbor move far beyond the familiar confines of Dolan's compensation for physical occupations. Of the two decisions, Florida Rock is the more encompassing, extending the Lucas categorical rule for "total takings" to "partial takings." This "partial takings" doctrine could authorize payment of just compensation for nearly every regulation that diminishes property value, regardless of the public purpose that the regulation serves, the economic value that the landowner retains, or the existence of investment-backed expectations, and apparently without reference to state property law.(162) The effect is to transform the Just Compensation Clause into a kind of constitutional tort. The only exception is where a regulation produces a "mere diminution in value," but the Federal Circuit has defined this exception narrowly to embrace only situations where a regulation produces "direct compensating benefits" to the landowner or allows realistic, alternative activities.(163) Apparently, in order to decide whether the requisite reciprocity exists, every environmental and land use regulation will be put on trial any time a landowner suffers an alleged economic loss.(164) One can hardly imagine a larger invitation for courts to second-guess legislative decisions, unconstrained even by state definitions of property. In Florida Rock, Judge Plager called this judicial activism "a classic exercise of judicial balancing of competing values."(165)

What is even more remarkable about Florida Rock is that its "partial takings" doctrine seems to have come directly from Professor Epstein's book.(166) The compensability of "partial takings" is a central notion of Epstein's project to disable all government attempts to redistribute wealth.(167) Adopting a kind of latter day scientific jurisprudence(168) (thought by most to be interred by the legal realists a half century ago(169)), Epstein's conception of property is one of fixed, unchanging, Lockean natural rights which the government did not create but is bound to protect, largely through its courts.(170) Thus, Epstein's Just Compensation Clause enshrines these natural rights against any and all government redistribution. According to Epstein, the Constitution proscribes the destruction of any stick in the common law bundle of property rights, subject only to a narrow exception, where public goods increase overall wealth by a pro rata share.(171) Epstein's vision of judiciaL decision making is an idealized exercise of logic, the purpose of which is to confine legislative rent-seeking.(172) Adoption of this vision of Lockean natural rights, he contends, will serve utilitarian ends by discouraging legislatures from engaging in wealth-destructive redistributions.(173)

The "partial takings" doctrine is a central feature of Epstein's project because it transforms the inquiry in compensation cases from that property which is left unrestricted after regulation to that which is "taken" by regulation. This focus on particular sticks in the property bundle of rights makes every regulation restricting possession, use, or disposition appear to require compensation. This "conceptual severance," as Professor Radin has called it,(174) unbundles the abstract property fragments familiar to modern property lawyers.(175) Property today is not understood to be a simple relationship between an individual and a thing, but instead a complex arrangement of rights and duties among many with respect to things.(176)

Professor Epstein has argued for the constitutionalization of this fragmentation of property through his construction of the Just Compensation Clause. But his is an uneasy argument. "Conceptual severance" is a product of the evolving, ever-changing character of modern property rules.(177) Epstein, however, denies th-at property rights have changed since Blackstone: he contends that "Blackstone's account of property explains what the term means" for Just Compensation Clause purposes.(178) Yet Blackstone was a proponent of "property as a whole," not of "conceptual severance"; he referred to property as "that sole and despotic dominion which one man claims and exercises over external things of the world, in total exclusion of the right of any other individual in the universe."(179) Combining Blackstone's eighteenth century definition with the modern notion of "conceptual severance" in a libertarian theory of constitutional property is troublesome.(180) Thus, the "partial takings" doctrine of Florida Rock, which threatens to undermine all environmental and land use regulation, rests on a blend of two fundamentally inconsistent ingredients.(181)

The Loveladies Harbor "segmentation" rule, although less sweeping than the "partial takings" doctrine, is also premised on the notion of "conceptual severance," albeit of a geographic, rather than an abstract nature. Justice Scalia's footnote seven in Lucas indicated that he considered the segmentation issue unresolved,(182) despite recent precedent to the and so Loveladies Harbor has a firmer legal footing than Florida Rock. Footnote seven's suggestion makes the doctrine no more satisfactory, however, for it enables savvy landowners to segment their property into small parcels so as to create regulatory "total takings," regardless of how they treated their property before severance, how much profit they exacted, or how much notice of the restriction they had. There is no clear baseline from which to judge the appropriate size of the property, but in his footnote seven, Justice Scalia suggested that the answer

[m]ay 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.(184)

This may mean that owners may segment their property for Just Compensation Clause purposes into mining rights, water rights, and solar rights, if the state recognizes such discrete property interests. This result, also a kind of "conceptual severance," would allow some landowners to take advantage of the Lucas "total takings" rule even without parcelling off their property, as Loveladies did. The latter result would at least have some grounding in state law, which the Supreme Court repeatedly has stated is the origin of property rights.(185)

The combined effect of Florida Rock and Loveladies Harbor is to countenance stricter judicial review of federal regulations than the Supreme Court has sanctioned for state and local regulations. This is an anomalous result because state and local regulations are much more likely than federal regulations to suffer from the very deficiencies which the Just Compensation Clause was designed to remedy.(186) First, the kind of factional control conducive to rent-seeking legislation is much more likely at the state and local level. Second, singling out certain landowners for disparate treatment is more probable at the state and local level. Third, with greater access to scientific and economic expertise, federal legislation is less likely to produce arbitrary results than state and local legislation. For all of these reasons, if a distinction is to be drawn between state and local legislation and federal legislation, the former warrants stricter judicial review than the latter, but the Federal Circuit cases produce precisely the opposite result.

Ultimately, property rights are about maximizing social welfare, as even Richard Epstein acknowledges.(187) Thus, property ought to be defined in ways that will produce the kind of society we want. The libertalian view of property animating Florida Rock and Loveladies Harbor will thrust judges into the role of close supervision of legislative choices, a role libertarians view as necessary due to the jaundiced view they hold for the legislative process.(188) However, a skeptic might fairly doubt that the courts can produce greater social welfare under the Just Compensation Clause than the more representative branches of government. History indicates that exacting judicial review of economic and social legislation produced unsatisfactory results.(189) A natural law of property rights risks erection of an "imperial judiciary."(190)

The libertarian urge to "conceptually sever" property rights into discrete segments reflects an individualistic, atomistic view of the world that is out of step with life in the last decade of the twentieth century. In an increasingly crowded world this reactionary impulse to return to a simpler time is understandable, but it is inadequate for an era in which ecological interdependencies become more apparent with each passing day. Consider the sustainability of the following account of the libertarian approach to the environment:

Libertarians regard resource exploitation as a desirable consequence of individual

initiative and creativity because the pursuit of personal preferences creates

social wealth. They agree with John Locke that if God gave the earth to

mankind, he gave it for "the use of the industrious." Nature provides a bounty 

for human prosperity, limited only by our imaginations. If "environmentalism"

is taken to mean an obligation to consider what is good for nature separate

from our own preferences, then it is not a part of the libertarian culture.(191)

Libertarians claim the free market will produce environmental protection but, as I have explained elsewhere, markets fail to efficiently allocate environmental resources because of chronic problems involving information costs, externalities, public goods, and strategic behavior.(192) Indeed, widespread market failure was the cause of modern environmental regulation.(193) Libertarian property advocates have yet to show how social welfare will be enhanced by judges allocating environmental resources largely on common law nuisance principles. Nuisance law showed itself to be a spectacular failure in the pre-regulatory era.(194)

Finally, the kind of libertarian property that underlies Florida Rock and Loveladies Harbor is inconsistent with the Supreme Court's view of property. As discussed above, the Court has limited its per se Just Compensation Clause rulings to physical occupations or their functional equivalent.(195) In other words, while the Federal Circuit has opened up compensation claims to a variety of regulatory negative servitudes, the Supreme Court has restricted its categorical compensation rules to regulatory affirmative easements and their equivalent. There is some justification for the Supreme Court's distinction. First, it parallels the common law's distinction between trespass and nuisance, which has been justified on economic grounds because trespass involves fewer parties and lower transaction costs.(196) The fewer parties, the more potential for singling out individuals to pay costs which, "in all fairness and justice," the society should pay.(197) Thus, a per se rule of compensation for trespasslike occupations is appropriate, while the multi-party nuisance-type compensation case is more aptly decided on balancing grounds.

Second, limiting per se rules to what amounts to affirmative easements not only upholds the Court's concern for preserving the right to exclude,(198) it also vindicates landowners, liberty interest in not having to suffer without compensation the "forced sharing of space" and, along with it, the "forced sharing of decision-making power."(199) Physical occupations threaten "state instrumentalization" by conscripting private property to state-dedicated uses.(200) This conscription offends the political liberty that the Just Compensation Clause was designed to preserve.(201)

The Federal Circuit's decisions in Florida Rock and Loveladies Harbor are out of step with Supreme Court precedent, the history and purpose of the Just Compensation Clause, and are extremely destabilizing to all land use and environmental regulation.(202) They reflect a radical libertarian concept of property, grounded in natural law principles and judicial oversight of legislative decision making that will not maximize social welfare as we approach the twenty-first century.

It is far from clear that the Supreme Court will ratify the "partial takings" doctrine. After all, Chief Justice Rehnquist's opinion for the slender five-person majority in Dolan drew a sharp distinction between physical occupations and regulatory restrictions. Moreover, Judge Plager's call for active judicial review to distinguish "mere diminutions of value" from "partial takings" equips courts to second guess legislative and regulatory judgments on a scale that has not been attempted since the substantive due process era early in this century. It does not seem likely that a majority of a Supreme Court, thought to be conservative, would want to reverse large-scale social and economic decisions of more representative branches of government with no basis in precedent or in the history of the Fifth Amendment. Yet unless the Supreme Court reverses Florida Rock, all federal environmental regulations are in jeopardy, and environmental law, as we have come to know it over the last quarter century, is over. (1) 260 U.S. 393, 413 (1922). (2) 18 F.3d 1560, 1575, 1580 (Fed. Cir. 1994). (3) U.S. Const. amend. V ("nor shall private property be taken for public use, without just compensation"). (4) Hodel v. Irving, 481 U.S. 704, 717 (1987). (5) Nollan v. California Coastal Comm'n, 483 U.S. 825, 841 (1987) (finding that the commission's access requirement did not further a "legitimate state interest"); Dolan v. City of Tigard, 114 S. Ct. 2309, 2322 (1994). (6) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2900 (1992). (7) Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 501-02 (1987). (8) Pennell v. City of San Jose, 485 U.S. 1, 9-11 (1985). (9) Yee v. City of Escondido, 112 S. Ct. 1522, 1528 (1992). (10) 114 S. Ct. 2309 (1994). (11) See J. Peter Byrne, Green Property, 7 Const. Comment. 239, 245 (1990). (12) See infra part IV. (13) 18 F.3d 1560 (Fed. Cir. 1994). (14) 28 F.3d 1171 (Fed. Cir. 1994) [hereinafter Loveladies V]. (15) Florida Rock, 18 F.3d at 1570. (16) Loveladies V, 28 F.3d at 1181. (17) See infra text accompanying and following note 186. (18) See infra notes 34-36 and accompanying text. (19) 112 S. Ct. 2886 (1992). (20) Dolan v. City of Tigard, 114 S. Ct. 2309, 2321 (1994). (21) In addition to the recent Colloquium on Lucas, 23 Envtl. L. 869 (1993) (contributions by Michael C. Blumm, William Funk, James L. Huffman, Donald Large, Edward Sullivan, and Lawrence Watters), see Richard C. Ausness, Wild Dunes and Serbonian Bogs: The Impact of the Lucas Decision on Shoreline Protection Programs, 70 Denv. U. L. Rev. 437 (1993); United States Court of Federal Claims Symposium, 42 Cath. U. L. Rev. 717 (1993) (contributions by James E. Brookshire, Dennis J. Coyle, John A. Humbach, Glynn S. Lunney, Jr., George W. Miller & Jonathan L. Abram, and Loren A. Smith); Daniel R. Mandelker, Of Mice and Missiles: A True Account of Lucas v. South Carolina Coastal Council, 8 J. Land Use & Envtl. L. 285 (1993); Jed Rubenfeld, Usings, 102 Yale L.J. 1077 (1993); Symposium, Lucas v. South Carolina Coastal Council, 45 Stan. L. Rev. 1369 (contributions by Richard A. Epstein, William W. Fisher III, Richard J. Lazarus, and Joseph L. Sax) (1993); Symposium, Windfalls and Wipeouts: Environmental Regulation, Property, and the `Takings' Clause after Lucas v. South Carolina Coastal Council, 17 Vt. L. Rev. 645 (1993) (contributions by Daniel W. Bromley, Fred R. Disheroon, John Echeverria & Sharon Dennis, and C. Ford Runge); Glenn P. Sugameli, Takings Issues in Light of Lucas v. South Carolina Coastal Council: A Decision Full of Sound and Fury Signifying Nothing, 12 Va. Envtl. L.J. 439 (1993); Hon. John M. Walker Jr., Common Law Rules and Land Use Regulations: Lucas and Future Takings Jurisprudence, 3 Seton Hall Const. L.J. 3 (1993). (22) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886 (1992), rev'g 404 S.E.2d 895 (S.C. 1991). (23) Lucas, 404 S.E.2d at 899 (citing Mugler v. Kansas, 123 U.S. 623 (1887) (prohibition on manufacture and sale of intoxicating liquors); Hadacheck v. Sebastian, 239 U.S. 394 (1915) (ordinance prohibiting manufacture of bricks near city residents); Miller v. Schoene, 276 U.S 272 (1928) (state action destroying diseased cedar trees of certain property owners to prevent the communication of disease); Goldblatt v. Hempstead, 369 U.S. 590 (1962) (prohibition against excavating below the water table in order to extract gravel)). (24) Lucas, 112 S. Ct. at 2899 (judicial deference to legislatively declared nuisances "would essentially nullify Mahon's affirmation of limits to the noncompensable exercise of the police power"). (25) Id. at 2893. (25) The foundation of the Court's permanent physical occupation rule is Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166, 177-78 (1871) (reservoir that permanently flooded landowner's property requires compensation); the modern lodestar is Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 432, 441 (1982) (legislation requiring landlords to permit cable television companies to install equipment in rental buildings is permanent physical occupation, requiring constitutional compensation per se). See also United States v. Causby, 328 U.S. 256, 266-67 (1946) (frequent low overflights that interfere directly and immediately with use and enjoyment of land requires compensation); Kaiser Aetna v. United States, 444 U.S. 164, 180 (1979) (permit condition for a marina requiring public access requires compensation).

On the Court's balancing test, see Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224-25 (1986) (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124 (1978) (eschewing the development of any set formula for identifying unconstitutional taking, but instead relying on circumstances of the case, including 1) a regulation's economic impact on claimant; 2) the extent to which it interferes with investment-backed expectations; and 3) the character of the government's action)). (27) Lucas, 112 S. Ct. at 2899. (28) Id. at 2901 (citing Restatement (Second) of Torts [subsections] 826-28 (1977)). (29) Id. at 2914 n.19 (Blackmun, J., dissenting) (citing W. Page Keeton et al., Prosser and Keeton on the Law of Torts [sections] 86, at 616 (5th ed. 1984)). (30) Id. at 2893 n.6, 2900. (31) Id. at 2894. (32) Id. at 2901. (33) Id. at 2895 n.8 (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124 (1978)); see also Connolly v Pension Benefit Guaranty Corp., 475 U.S. at 224-25 (discussed supra note 26). (34) Id. at 2894 (citing San Diego Gas & Electric Co. v. San Diego, 450 U.S. 621, 652 (1981) (Brennan J., dissenting)). (35) Id. at 2900. (36) See Rubenfeld, supra note 21, at 1157-63. (37) Lucas, 112 S. Ct. at 2900-01. "Background principles" of federal law creating a preexisting limitation on title include the federal navigation servitude. Id. at 2900 (citing Scranton v. Wheeler, 179 U.S. 141, 163 (1900)); Kaiser Aetna v. United States, 444 U.S. 164, 178-80 (1979)). These "background principles" may insulate all wetlands regulation from just compensation claims if courts scrutinize English common law wetland cases, as Fred Bosselman has suggested. Fred P. Bosselman, Remarks at the Conference on Regulatory Takings and Resources: What Are the Constitutional Limits? at the Natural Resources Law Center and the Byron R. White Center for American Constitutional Study, University of Colorado School of Law (June 13, 1994) (arguing that English common law rules bear a remarkable similarity to federal wetlands regulation under [sections] 404 of the Clean Water Act); see also Bosselman, Background Principles of Wetlands Law: The Early History, in Conference on Regulatory Takings and Resources: What Are the Constitutional Limits? (June 13-15, 1994) (on file with University of Colorado School of Law). (38) Lucas, 112 S. Ct. at 2902. On remand, the South Carolina Supreme Court, without the benefit of a full briefing, held that there had been a taking because "[the state] has not persuaded us that any common law basis exists by which it could restrain Lucas's desired use of his land; nor has our research uncovered any such common law principle." Lucas v. South Carolina Coastal Council, 424 S.E.2d 484, 486 (S.C. 1992). (39) Lucas, 112 S. Ct. at 2900-01. (40) See Michael C. Blumm, Property Myths, Judicial Activism, and the Lucas Case, 23 Envtl. L. 907, 914-15 (1993); William Funk, Revolution or Restatement? Awaiting Answers to Lucas, Unanswered Questions, 23 Envtl. L. 891, 895, 897-99 (1993); Jeffrey T. Palzer, Note, "Taking" Aim at Land Use Regulations: Lucas v. South Carolina Coastal Council, 26 Creighton L. Rev. 525, 547-50 (1993). (41) See Lucas, 112 S. Ct. at 2902 n.18, where Justice Scalia cautioned that the compensation clause demanded an "objectively reasonable application of relevant precedents" of state property and nuisance principles; see also Stevens v. City of Cannon Beach, 114 S. Ct. 1332 (1994) (Scalia, J., dissenting from denial of certiorari) (detailed examination of Oregon case law regarding public access rights on the Pacific beachfront). (42) Richard A. Epstein, Lucas v. South Carolina Coastal Council: A Tangled Web of Expectations, 45 Stan. L. Rev. 1369, 1377 (1993) (Lucas inconsistent with originalism); William W. Fisher III, The Trouble With Lucas, 45 Stan. L. Rev. 1393, 1394-95 (1993) (same); Blumm, supra note 40, at 911-12 (same); Sugameli, supra note 21, at 456-57 (Lucas inconsistent with Yee v. City of Escondido, 112 S. Ct. 1522 (1992)); Kenneth Berlin, Just Compensation Doctrine and the Workings of Government: The Threat from the Supreme Court and Possible Responses, 17 Harv. Envtl. L. Rev. 97, 100-01 (1993) (Lucas ignores much existing precedent); Palzer, supra note 40, at 550 (same). (43) Epstein, supra note 42, at 1369, 1392. (Epstein co-authored an amicus brief for the Institute of Justice in the Lucas case which is reprinted in 25 Loy. L.A. L. Rev. 1233 (1992)). (44) 18 F.3d 1560 (Fed. Cir. 1994). (45) Susan K. Hori, Wetlands, 3 Land Use & Envt. Forum 212, 213 (1994) (referring to Charles Dickens, Bleak House (Penguin 1971)). (46) Florida Rock Indus., Inc. v. United States, 8 Cl. Ct. 160, 179 (1985) (concluding that limestone mining was the land's only viable economic use and would not cause groundwater pollution, and that permit denial reduced property value 95%) aff'd in part and vacated in part, 791 F.2d 893 (Fed. Cir. 1986), cert. denied, 479 U.S. 1053 (1987), remanded, 21 Cl. Ct. 161 (1990), judgment entered by 23 Cl. Ct. 653 (1991), vacated, 18 F.3d 1560 (Fed. Cir. 1994), petition for cert. filed, 63 U.S.L.W. 3268 (U.S. Sept. 19, 1994) (No. 94-511). Congress renamed the Claims Court as the Court of Federal Claims effective October 29, 1992. Pub. L. No. 102-572, [sections] 902, 106 Stat. 4506, 4516 (1992). (47) Florida Rock, 791 F.2d 893, 902-03 (Fed. Cir. 1986). (48) Florida Rock, 21 Cl. Ct. 161, 176 (1990) (permit denial deprived landowner of all economically viable use), judgment entered, 23 Cl. Ct. 653 (1991), vacated, 18 F.3d 1560 (Fed. Cir. 1994), petition for cert. filed, 63 U.S.L.W. 3268 (U.S. Sept. 19, 1994) (No. 94-511); see also Florida Rock, 18 F.3d at 1562 (discussing the trial court's awarding of compound interest). (49) Florida Rock, 18 F.3d 1560, 1565-68 (Fed. Cir. 1994), vacating 21 Cl. Ct. 161 (1991). (50) Id. at 1563-66 (51) Id. at 1566 n.12. (52) Id. at 1567-68. (53) Id. at 1568. (54) Id. (citing Epstein, supra note 42, at 1375, 1387-92, and Rubenfeld, supra note 21, at 1158-62 (recommending against adoption of a "partial takings" doctrine because of "staggering costs")). (55) Lucas, 112 s. ct. at 2896. All of the other opinions in the case questioned the assumption of a total deprivation of economic value. Blumm, supra note 40, at 911 (citing Lucas, 112 s. ct. at 2902-03 (Kennedy, J., concurring); id. at 2908 (Blackmun, J., dissenting); id. at 2919 (Stevens, J., dissenting); id. at 2925-26 (Souter, J., separate statement)). (56) Epstein, supra note 42, at 1370, 1376-77, 1392. (57) Florida Rock, 18 F.3d at (58) Id. at 1569. (59) Id. at 1572. (60) See Epstein, supra note 42, at 1374-77. (61) Concrete Pipe and Products, Inc. v. Construction Laborers Pension Trust for Southern California, 113 S. Ct. 2264, 2291 (1993). (62) Florida Rock, 18 F.3d at 156-70. (63) Id. at 1570-71. (64) See id. at 1574 (Nies, C.J., dissenting). (65) Id. at 1573 (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 138-53 (1978) (Rehnquist, J., dissenting); Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 506-21 (1987) (Rehnquist, C.J., dissenting)). (66) Id. ("[T]he majority espouses compensation for a partial taking of the fee, which is not the same as the total taking of a severable interest. No support for the partial taking theory can be found even in dissents."). (67) Id. at 1575. (68) Id at 1575-76 (citing Penn Central, 438 U.S. at 131; Welch v. Swasey, 214 U.S. 91 (1909); Village of Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365 (1926) (75% diminution in value not compensable); Hadacheck v. Sebastian, 239 U.S. 394 (1915) (87% diminution in value not compensable)). (69) Id. at 1580. (70) See supra note 64 and accompanying text. (71) See supra note 68 and accompanying text. (72) See Richard A. Epstein, Takings: Private Property and the Power of Eminent Domain 57-92 (1985); Epstein, supra note 42, at 1392. (73) Cf. Oliver Wendell Holmes, The Common Law 1 (Boston, Little, Brown and Co. 1881) ("The life of the law has not been logic: it has been experience."). (74) See Florida Rock, 18 F.3d at 1567; Epstein, supra note 42, at 1377. (75) Lucas v. South Carolina Coastal Council, 112 S. Ct. 2886, 2895 n.8 (1992). (76) Id. (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124 (1978)). (77) See, e.g., Yancey v. United States, 915 F.2d 1534, 153912 (Fed. Cir. 1990) (holding that compensation is due for a government quarantine which required the sale for slaughter of healthy turkey breeder stock at a 77% reduction in value). (78) Florida Rock, 18 F.3d at 1569-70. (79) See Epstein, supra note 42, at 1374. (80) See supra note 63 and accompanying text. (81) Epstein, supra note 42, at 1374. (82) See Edward Sullivan, Substantive Due Process Resurrected Through the Takings Clause: Nollan, Dolan, and Ehrlich, 25 Envtl. L. 155 (1995). See generally Lochner v. New York, 198 U.S. 45 (1905) (relying on substantive due process to invalidate legislation); Adkins v. Children's Hospital, 261 U.S. 525 (1923) (same); Weaver v. Palmer Bros., 270 U.S. 402 (1926) (same); Adams v. Tanner, 244 U.S. 590 (1917) (same). (83) See, e.g., Pruneyard Shopping Center v. Robins, 447 U.S. 74, 84 (1980) (States possess "residual authority . . . to define `property' in the first instance."); Lucas v. South Carolina Coastal Council, 112 S. Ct. 2286, 2900-02 (1992) (constitutionally protected property is a function of state "background" principles of nuisance and property law). (84) Jeremy Bentham, The Theory of Legislation 113 (C.K. Ogden ed. & Richard Hildreth trans., 1931). Bentham also wrote: The idea of property consists in an established expectation; in the persuasion of being able to draw such or such an advantage from the thing possessed, according to the nature of the case. Now this expectation, this persuasion, can only be the work of law. I cannot count upon the enjoyment of that which I regard as mine, except through the promise of the law which guarantees it to me. It is law alone which permits me to forget my natural weakness. It is only through the protection of law that I am able to inclose a field, and to give myself up to its cultivation with the sure though distant hope of harvest. Id. at 112. (85) See, e.g., Carol M. Rose, Mahon Reconstructed: Why the Takings Issue Is Still A Muddle, 57 S. Cal. L. Rev. 561, 587-97 (1984). (86) Epstein, supra note 72; see infra notes 166-81 and accompanying text. (87) 28 F.3d 1171 (Fed. Cir. 1994). (88) Id. at 1174. (89) Id. The conservation easement forbade the filling of wetlands and other waterbodies for non-water dependent uses. Id. at 1174 n.6. (90) 33 C.F.R. 325.3(d) (1994). (91) Loveladies Harbor, 28 F.3d at 1174. (92) Loveladies Harbor, Inc. v. Baldwin (Loveladies I), No. 82-1948, 20 Env't Rep. Cas. (BNA) 1897 (D.N.J. Mar. 14 1984), aff'd without opinion, 751 F.2d 376 (3d Cir. 1984). (93) Loveladies Harbor, Inc. v. United States (Loveladies II), 15 Cl. Ct. 381, 392 (1988) (interpreting Keystone Bituminous Coal Ass'n v. DeBenedictus, 480 U.S. 470, 497-99 (1987)). This interpretation was directly contrary to the Deltona case, where the old Court of Claims, the predecessor to the Federal Circuit, compared the diminution in value due to a wetland regulation to the value of total acreage of the landowner's original tract. See Deltona Corp. v. United States, 657 F.2d 1184, 1188-89, 1192-93 (Ct. Cl. 1981), cert. denied, 455 U.S. 1017 (1982). (94) Loveladies II, 15 Cl. Ct. at 393. (95) Loveladies Harbor, Inc. v. United States (Loveladies III), 21 Cl. Ct. 153, 160 (1990), aff'd, 28 F.3d 1171 (Fed. Cir. 1994). (96) Loveladies Harbor, Inc. v. United States (Loveladies IV), 27 F.3d 1545 (Fed. Cir. 1994). The jurisdictional issue arose because the Federal Circuit ruled that 28 U.S.C. [sections] 1500, which prohibits simultaneous dual litigation against the United States in the Court of Federal Claims and another court, barred the filing of an action in the Court of Federal Claims if the same claim is pending in another court at the time of filing. UNR Industries v. United States, 962 F.2d 1013, 1021-24 (Fed. Cir.), aff'd suo nom., Keene Corp. v. United States, 113 S. Ct. 2035 (1992). However, in Loveladies IV, the court denied the federal government's motion to dismiss, based on UNR Industries v. United States, determining that Loveladies was properly seeking two distinct types of relief in two separate courts. Loveladies IV, 27 F.3d at 1654. (97) Loveladies Harbor, Inc. v. United States (Loveladies V), 28 F.3d 1171 (Fed. Cir. 1994). (98) Id.; see also Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470, 497 (1987) (quoting Frank I. Michelman, Property, Utiliy, and Fairness: Comments on the Ethical Foundations of Just Compensation Law, 80 Harv. L. Rev. 1165, 1192 (1967)): Because our test for regulatory taking requires us to compare the value that has been taken from the property with the value that remains in the property, one of the critical questions is determining how to define the unit of property "whose value is to furnish the denominator of the fraction." (99) See supra notes 53-63 and accompanying text. (100) See Loveladies V, 28 F.3d at 1179-82. Even though one acre of the 12.5 acres was previously filled and would not require a Corps permit, the Court of Federal Claims assumed that acre was undevelopable in the absence of a permit, and the Federal Circuit apparently accepted this assumption. Id. (101) Lucas, 112 S. Ct. at 2894 n.7: When . . . a regulation requires a developer to leave 9096 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 the value of the tract as a whole. (102) 438 U.S. 104, 130-31 (1978). See also Andrus v. Allard, 444 U.S. 51, 65-66 (1979) ("[W]here an owner possesses a full `bundle' of property rights, the destruction of one `strand' of the bundle is not a taking, because the aggregate must be viewed in its entirety."). (103) 480 U.S. 470, 497-99 (1987). The Court reached this conclusion despite the fact that the State of Pennsylvania recognized a distinct support estate. Id at 501. (104) See John A. Humbach, "Taking" the Imperial Judiciary Seriously: Segmenting Property Interests and Judicial Revision of Legislative Judgments, 42 Cath. U. L. Rev. 771, 796 n.144, 799 (1993) (discussing Welch v. Swasey, 214 U.S. 91 (1909) (upholding height limitations on buildings); Gorieb v. Fox, 274 U.S. 603 (1927) (upholding setback requirements); Miller v. Schoene, 276 U.S. 272 (1928) (upholding destruction of cedar trees to prevent spread of disease to apple trees)). Justice Scalia's footnote seven did, however, declare "extreme" and "unsupportable" a state court opinion in Penrl. Central which employed as the relevant parcel for compensation analysis the total value of the landowners, other properties in the vicinity. Lucas, 112 S. Ct. at 2894 n.7 (citing Penn Central Transp. Co. v. New York City, 42 N.E.2d 1271, 1276-77 (1977), affd, 438 U.S. 104 (1978)). (105) 113 S. Ct. 2264, 2290 (1993). (106) Tabb Lakes, Ltd. v. United States, 10 F.3d 796, 802 (Fed. Cir. 1993) (rejecting a temporary taking claim by a landowner due to a Corps of Engineers cease and desist order). (107) 657 F.2d 1184, 1192-93 (Ct. Cl. 1981), cert. denied, 455 U.S. 1017 (1982). (108) 657 F.2d 1210, 1214 (Ct. Cl. 1981), cert. denied, 455 U.S. 1017 (1982). (109) Loveladies V, 28 F.3d at 1181. (110) Whitney Benefits, Inc. v. United States, 926 F.2d 1169 (Fed. Cir.), cert. denied, 112 S. Ct 406 (1991). (111) Loveladies V, 28 F.3d at 1181. (112) Id. at 1181-82. (113) Id. at 1181. (114) Id. at 1180. (115) 33 U.S.C. 407. See Combined Petition for Rehearing and Suggestion for Rehearing In Bank by Appellant, United States, at 4 n.1, 5, 7-9 (July 20, 1994). (116) See supra text accompanying note 94. (117) See Deltona Corp. v. United States, 657 F.2d 1184, 1192 (Ct. Cl. 1981) (citing Penn Central Transp. Co. v. New York City, 438 U.S. 104, 131 (1978)); Jentgen v. United States, 657 F.2d 1210, 1213 (Ct. Cl. 1981). The lesson of these cases and Loveladies V seems to be that uplands which do not require filling must be considered as part of the developer's parcel but that filled wetlands do not. This clearly encourages developers to fill wetlands, inconsistent with the policy of the Clean Water Act. See generally Michael C. Zaleha, Federal Wetlands Protection Under the Clean Water Act Regulatory Ambivalence, Intergovernmental Tension, And A Call for Reform, 60 U. Colo. L. Rev. 695 (1989). (118) Loveladies V, 28 F.3d at 1181. (119) Id. at 1181-82. The court affirmed the trial court's rejection of a tax assessment of some $377,000 as indicative of the fact that the property retained remunerative value. Id. at 1182 n.16 (no "clear error"). (120) Id. at 1182. (121) Id. at 1182-83. If this was a response to the Lucas Court's dictum that "total takings" were the product of "extraordinary circumstance[s]," see supra text accompanying note 31, the Federal Circuit turned that rationale on its head by concluding that the exception to the "total takings" rules was the "extraordinary case." (122) Id. at 1183. (123) Id. at 1173, 1183. (124) See supra notes 102-08, 112 and accompanying text. (125) See supra notes 66-67 and accompanying text. (126) Loveladies V, 28 F.3d at 1179. (127) Id. (128) See supra note 29 and accompanying text. (129) See Joel C. Dobris, Boomer Twenty Years Later: An Introduction, with Some Footnotes About "Theory," 54 Alb. L. Rev. 171, 177-78 (1990); see generally Robert Abrams & Val Washington, The Misunderstood Law of Public Nuisance: A Comparison with Private Nuisance Twenty Years After Boomer, 54 Alb. L Rev. 359 (1990). (130) Loveladies V, 28 F.3d at 1182. (131) See, e.g., Gilles v. Dep't of Human Resources Dev., 521 P.2d 110, 116 (Cal. 1974) ("[Equity] anticipate[s] that the trier of fact, instead of attempting to channelize his decision within rigid and specific rules, will draw upon precepts of justice and morality as the basis for his ruling."). (132) See 4 Restatement (Second) of Torts [sections] 821B(2)(b) & cmt. e (1977) (statutory compliance is one factor in determining whether an activity constitutes a public nuisance but is not determinative); [sections] 827 cmt. h (zoning ordinances are conclusive as to the suitability of a particular use to the location in a private nuisance context but not as to other factors, such as the extent and character of the harm and the social value of the use). (133) See Lucas, 112 S. Ct. at 2901-02 (state property and nuisance principles may prohibit all beneficial uses without requiring constitutional compensation). (134) Id. (135) Loveladies V, 28 F.3d at 1179. (136) Id. (137) Lucas, 112 S. Ct. at 2894-95 n.8. (138) See Humbach, supra note 104, at 807 n.214 (discussing 1992 conference sponsored by the National Real Estate Development Center that promised to explain how to define a parcel of property to demonstrate a compensable taking and how to fractionalize current property holdings to discourage regulation). (139) Id. (140) See supra notes 61-62 and accompanying text. (141) See supra notes 114-15 and accompanying text. (142) See supra note 93 and accompanying text. (143) See supra note 118 and accompanying text. (144) See Edward Sullivan, Substantive Due Process Resurrected Through the Takings Clause: Nollan, Dolan, and Ehrlich, 25 Envtl. L. 155 (1995); William Funk, Reading Dolan v. City of Tigard, 25 Envtl. L. 127 (1995); James L. Huffman, Dolan v. City of Tigard: Another Step in the Right Direction, 25 Envtl. L. 143 (1995). (145) Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 421 (1982) (cable TV wire constitutes physical occupation which entitled owner to compensation). (146) Kaiser Aetna v. United States, 444 U.S. 164, 176 (1979) (permit condition requiring public access requires compensation for lost right to exclude). (147) Nollan v. California Coastal Comm'n, 483 U.S. 825, 834-37 (1987) (permit condition requiring dedication of public easement as condition for building permit requires compensation because of lack of "essential nexus" between the condition and the impact of the proposed development). (148) Dolan, 114 S. Ct. at 2316 n.6 ("There can be no argument that the permit conditions would deprive petitioner `economically beneficial us[e]' of her property as she currently operates a retail store on the lot. Petitioner assuredly is able to derive some economic use from her property."). (149) Id. at 2318 (quoting City of Tigard Planning Comm'n Final Order No. 91-09 PC, App. to Pet. for Cert. G37). (150) Id. at 2316 (quoting Kaiser Aetna, 444 U.S. at 176); id. at 2320. (151) Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982) ("[t]he power to exclude has traditionally been considered one of the most treasured strands in an owner's bundle of property rights"). (152) Kaiser Aetna v. United States, 444 U.S. 164, 179-80 ("In this case, we hold that the `right to exclude' so universally held to be a fundamental element of the property right, falls within this category of interests that the Government cannot take without compensation."). (153) Nollan v. California Coastal Comm'n, 483 U.S. 825, 831-32 (1987). (154) Dolan, 114 S. Ct. at 2320 (citations omitted). (155) Id. at 2321. (156) 447 U.S. 74 (1980). (157) Dolan, 114 S. Ct. at 2321 (citations omitted). (158) The Court could have analyzed the bikepath condition in the same manner as the floodplain condition, but it chose to emphasize the rather weak findings that the city made attempting to relate the increased congestion the development would generate with the bikepath's capability to offset that congestion. Id. at 2321-22 ("conclusory statement" that bikepath "could offset some of the traffic demand" not sufficient to meet "rough proportionality, test). (159) 112 S. Ct. 1522 (1992). (160) Id. at 1531 (1992) (161) Concrete Pipe and Products, Inc. v. Construction Laborers Pension Trust for Southern California, 113 S. Ct. 2264, 2290 (1993). (162) See supra notes 67-68 and accompanying text. (163) See supra note 63 and accompanying text. (164) See supra note 81 and accompanying text. (165) Florida Rock Industries v. United states, 18 F.3d 1560, 1570 (Fed. Cir. 1994). (166) Epstein, supra note 72. (167) Id. at 57-104 (all regulations on possession, use, and disposition of property are "partial takings"). Epstein's book stimulated an avalanche of commentary. See Symposium, Richard Epstein's Takings: Private Property and the Power of Eminent Domain, 41 U Miami L. Rev. 1-275 (1986); Joseph L Sax, Takings, 53 U. Chi. L. Rev. 279 (1986); James L. Huffman, A Coherent Takings Theory At Last: Comments on Richard Epstein's Takings: Private Property and the Power of Eminent Domain, 17 Envtl. L 153 (1986). (168) See Morton J. Horowitz The Transformation of American Law, 1780-1860, at 253-66 (1977); Perry Miller, The Life of the Mind in America: From the Revolution to the Civil War 97-265 (1965). (169) See Karl N. Llewellyn, Some Realism About Realism--Responding to Dean Pound, 44 Harv L. Rev. 1222 (1931); Felix S. Cohen, Transcendental Nonsense and the Functional Approach, 35 Colum. L. Rev. 809 (1935); Jerome Frank, Law and the Modern Mind (1936); Horowitz, supra note 168, at 193-94. (170) Epstein, supra note 72, at 10-18. (171) Id. at 19-31, 35-104; see also id. at 4-5 (explaining the exception). (172) Id. at 306-29. Rent-seeking behavior employs the political process to produce governmental intervention in the market to further individual or group interests. The rewards are "economic rents"--payments for use of an economic asset in excess of the market price. See Daniel A. Farber & Philip P. Frickey, In the Shadow of the Legislature: The Common Law in the Age of the New Public Law, 89 Mich. L. Rev. 875, 879-80 (1991); Jonathan R. Macey, Promoting Public-Regarding Legislation Through Statutory Interpretation: An Interest Group Model, 86 Colum. L. Rev. 223, 224 n.6 (1986); Richard A. Epstein, An Outline of Takings, 41 U Miami L. Rev. 3, 17-18 (1986). (173) Epstein, supra note 72, at 306-29. (174) Margaret J. Radin, The Liberal Conception of Property: Cross Currents in the Jurisprudence of Takings, 88 Colum. L. Rev. 1667, 1676 (1988). (175) See Thomas C. Grey, The Disintegration of Property, in 22 Nomos: Property 69 (J. Roland Pennock & John W. Chapman eds., 1980); James E. Krier, The (Unlikely) Death of Property, 13 Harv. J.L. & Pub. Pol'y 75 (1990). (176) See, e.g., Jesse E. Dukeminier & James Krier, Property 58 (3d ed. 1993), (quoting Felix S. Cohen, Dialogue on Private Property, 9 Rutgers L. Rev. 357, 373 (1954) ("[p]roperty is a relationship among human beings such that the so-called owner can exclude others from certain activities or permit others to engage in those activities and in either case secure the assistance of the law in carrying out his decision.")). (177) See, e.g., Carol M. Rose, Property Rights, Regulatory Regimes and the New Takings Jurisprudence--An Evolutionary Approach, 57 Tenn. L. Rev. 577 (1990) (arguing that property rights and property regulation have been evolving since Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926)); John A. Humbach, Evolving Thresholds of Nuisance and the Takings Clause, 18 Colum. J. Envtl. L. 1 (1993) (pointing to Lucas as a maJor evolutionary leap in land use law). (178) Epstein, supra note 72, at 23. (179) See Grey, supra note 175, at 73. (180) Also troublesome is Epstein's assumption about the clarity of the common law property baseline he advocates. See, e.g., Margaret J. Radin, The Consequences of Conceptualism, 41 U. Miami L. Rev. 239, 240-41 (1986) (noting that Epstein's emphasis on free-market alienability of property rights hardly characterized common law property rules). (181) See Thomas C. Grey, The Malthusian Constitution, 41 U. Miami L. Rev. 21, 30 (1986). (182) See supra (183) See supra notes 102-05 and accompanying text. (184) Lucas, 112 S. Ct. at 2894 n.7. (185) See, e.g., PruneYard Shopping Center v. Robins, 447 U.S. 74, 84 (1980) (States possess "residual authority . . . to define ,property, in the first instance."); see also Lucas, 112 S. Ct. 2886, 2900-02 (constitutionally protected property is a function of state "background" principles of nuisance and property law); cf. M & J Coal Co. v. United States, 30 Fed. Cl. 360, 36770 70 (1994) (using federal statutory law as supplement to state law for ascertaining constitutional property rights). (186) Carol M. Rose, The Law of Takings: An Introduction, Remarks at the Conference "Regulatory Takings and Resources: What Are the Constitutional Limits?," Natural Resources Law Center, University of Colorado School of Law (June 13, 1994). (187) See Epstein, supra note 42, at 1371. (188) See id. at 1388 ("massive abuse" in zoning), 1392 (arguing for an expanded interpretation of Just Compensation Clause that would give "close scrutiny and swift dispatch [to land use regulations] that most of them so richly deserve"). (189) See Sullivan, supra note 82. (190) See Humbach, supra note 104. (191) Dennis J. Coyle, Takings Jurisprudence and the Political Cultures of American Politics, 42 Cath. U. L. Rev. 817, 844 (1993) (citations omitted). (192) See Michael C. Blumm, The Fallacies of Free Market Environmentalism, 15 Harv. J.L. & Pub. Pol Y 371, 372 (1992). (193) See, e.g., Richard B. Stewart & James E. Krier, Environmental Law and Policy 10716 (2d ed. 1978). (194) See, e.g., Robert v. Percival et al., Environmental Regulation: Law, Science, and Policy 82-83 (1992) (surveying shortcomings of nuisance doctrine); Joel F. Brenner, Nuisanee Law and the Industrial Revolution, 3 J. Legal Stud. 403, 419 (1974) (concluding that nuisance law was ignored in nineteenth century England). (195) See supra notes 34-36 and accompanying text; see also supra part V. (196) See Thomas W. Merrill, Trespass, Nuisance, and the Costs of Determining Property Rights, 14 J. Legal Stud. 13, 45-48 (1985). (197) Armstrong v. United States, 364 U.S. 40, 49 (1960). (198) See supra notes 150-52 and accompanying text. (199) Radin, supra note 174, at 1679. (200) Rubenfeld, supra note 21, at 1143. (201) Id. at 114246, 1163. In an earlier article, I argued that the Just Compensation Clause was aimed primarily at preserving privacy rights. Blumm, supra note 40, at 916-17. Because the Court, in both Lucas and Dolan, continued to fail to separate privacy from commercial property, it now seems to me to be fruitless to carry this argument further. But see Radin, supra note 174, at 1687-96 (arguing that constitutional property rights should be based on the concept of "human flourishing--of personhood in the context of community"). (202) Loveladies Harbor may be limited to its peculiar facts, however. See supra notes 14143 and accompanying text.

Michael C. Blumm (*) Professor of Law, Northwestern School of Law of Lewis and Clark College; Director, Northwest Water Law and Policy Project. Prepared for delivery at the Law School's conference on Dolan, September 23, 1994. My thanks to Thea Schwartz, third-year student, Northwestern School of Law of Lewis and Clark