Lucas v. South Carolina Coastal Council

Although the South Carolina Supreme Court decided that state regulations "were designed to prevent serious public harm," the U.S. Supreme Court held that when a property owner suffered a "taking," there were no exceptions from common rule (the Takings Clause and the Just Compensation Clause). Furthermore, when the state of South Carolina amended their original statute by including provisions that might permit limited construction, the U.S. Supreme Court held that a property owner must still be compensated. Even when legislation later renders the initial act less restrictive, property owners still suffer from the original effects of a taking, thus, just compensation must be rendered.

In 1972, Congress passed the Coastal Zone Management Act in order to protect the state's shoreline from coastal erosion. After five years, South Carolina issued its own Coastal Zone Management Act in order to protect the shoreline from erosion, preserve the beach/dune system and prevent further coastal damage. The act stipulated that before construction could take place in any designated, environmentally-sensitive "critical area," an owner had to obtain permission from the South Carolina Coastal Council. In 1977, the "critical area" was not large and construction was prohibited only along a narrow zone of the coast. David H. Lucas (the petitioner) bought two residential lots on the South Carolina coast in 1986 (Isle of Palms, Charleston County) for about $900,000. He planned to build single-family homes similar to those on nearby parcels. However, the next year, after a survey gave evidence that beaches of South Carolina were "critically eroding," South Carolina issued the Beachfront Management Act (BMA). The statute placed broad restraints on use along the South Carolina shoreline. Because the "critical area" was extended (on which there was a building ban), Lucas's recently purchased plots were affected. No exceptions were provided. (At the time Lucas bought his parcels, that particular zone was not subject to any construction ban, therefore he was not required to have a permit to build a residential development.

Lucas submitted his suit to the South Carolina Court of Common Pleas. He believed that his property was rendered worthless, hence he required "just compensation" (a constitutionally guaranteed practice that requires proper compensation for property the government obtains in a "taking.") As petitioner, he asserted that the South Carolina Coastal Council action infringed on his constitutional rights according to the Fifth Amendment (the Takings Clause) because no restrictions against building were effective at the time when he purchased his lots. He did not dispute the legitimacy of Coastal Council's efforts to preserve the shoreline from further destruction, but he felt entitled to compensation because his property was rendered "valueless" by what constituted, in effect, a government regulatory "taking."

The attorney for the respondent argued that the South Carolina coast was an extremely precious public resource; therefore, there existed a justifiable public interest in prohibiting further construction along natural resources like beach/dune shoreline areas. Because public interest outweighed personal claims to property, the South Carolina Coastal Council opposed the Lucas's claim. Furthermore, previous cases suggested that reimbursement was not necessary when noxious and destructive uses of property were recognized and prohibited by the government. Finally, counsel for the respondent argued that Lucas's claim was not "ripe." Lucas had not petitioned the Coastal Council for permission to use his land and therefore had not exhausted all legal avenues.

The (lower) trial court thought that because "prohibition deprived Lucas of any reasonable economic use of the lots and rendered them valueless," the respondent was obliged to pay more than one million dollars "just compensation." The Supreme Court of South Carolina rescinded that judgment, reasoning that the Beachfront Management Act was intended to preserve South Carolina beaches and that additional construction would imperil the eroding coastal environment. Believing the taking was designed "to prevent serious public harm," the Court cited a U.S. Supreme Court ruling, Mugler v. Kansas (1887), stipulating that when government applied its power to preclude "noxious use of property" no owing under the Taking Clause existed.

When the case finally came before the U.S. Supreme Court, the majority opinion rejected the judgment of the Supreme Court of South Carolina. The existence of "constitutional limits" barred deprivation of real estate by irregular "takings." Moreover, the Fifth Amendment established clear procedure outlining circumstances when compensation must be extended. Particularly, compensation was required when a physical confiscation of property occurred and "where regulation denies all economically beneficial or productive use of property."

Finding South Carolina inappropriately took private property without compensation, the Court was particularly disturbed by the inference that a public interest or "common good" rationalized lack of compensation. All appropriations that diminished viable use of belongings constituted a taking. Moreover, the Court found the respondent's reliance on cases where compensation was avoided by practicing a reasonable "state's police power" failed to evidence an "objective conception of noxiousness" in order to exercise an exception from just compensation. The majority justices also emphasized that a thin line separated "harm-preventing" and "benefit-conferring" in order to justify departure from the Fifth and Fourteenth Amendment regulations regarding takings and just compensation. But the "noxious-use logic" was not designed as a way for government to avoid compensation.

Further, the majority stressed "noxious-use justification cannot be the basis for departing from our categorical rule that total regulatory takings must be compensated." Consequently, if "noxious-use logic" was considered a reference point, constitutional constraints under the Fifth and Fourteenth Amendments (that "taking" must be compensated) would be violated. Thus, the justices reasoned that precluding "permanent physical occupation" of property through "confiscatory regulations" (regulations that made all beneficial use of property impossible) as claimed by the petitioner constituted a taking.

The heart of the U.S. Supreme Court's decision held that traditional understandings about private property and its economical, beneficial use should be respected. The state could have an interest, in certain circumstances, to take property or to prescribe regulations that could devalue property or use of belongings; however, American history (dating back to property rights objections voiced in the Declaration of Independence) required just compensation. Ultimately such "common law principles" could not justify infringing on the petitioner's rights--the Court found it inconceivable that the respondent could merely suggest the petitioner's rights were incompatible with public interest and thereby avoid compensation as ordained by the Constitution.

In writing the opinion for dissenting justices, Justice Blackmun pointed out that the state had the authority to uphold South Carolina General Assembly legislation addressing evident coastal ruination and attempts to protect it. The Beachfront Management Act (BMA) clearly underscored the importance of the beach/dune system in "protecting life and property by serving as a storm barrier which dissipates wave energy and contributes to shoreline stability in an economical and effective manner." Thus, the minority reasoned it appropriate to recognize that the continued developments in places adjacent to the seashore "jeopardize the stability of the beach/dune system, accelerated erosion, and endanger adjacent property." Accordingly, the noncompensated taking of Lucas's land was reasonable. Justice Blackmun emphasized that, inherently, an owner's use of property had to be unhazardous to the community; therefore regulations which the government used to safeguard the "common welfare" did not require compensation. The state's intent was only to "minimize damage to coastal areas" and to "prevent serious injury to the community"; thus, he concluded that the South Carolina Supreme Court was correct in finding that no taking had occurred. Furthermore, Justice Blackmun pointed out that the council never made a determination as to whether Lucas's lots were in a "critical area" and inappropriate for construction; Lucas had never applied for a "special permit" nor for additional consideration about natural conditions on his parcels that might permit erecting habitation without damaging the environment. (In fact, Lucas had stated that his company produced a study showing the land was "perfectly safe to build on.") The minority opinion, therefore, disagreed that Lucas suffered "total" damage due to restrictions on the use of his property. Moreover, Justice Blackmun reasoned that the state had "full power to prohibit an owner's use of property if it is harmful to the public." Thus, economic loss to an owner could not prevail over the interest of government to restrict harmful use of real estate.

Justice Stevens wrote a separate opinion supporting the dissenting opinion. He ultimately concluded that the BMA had no other intention than to protect the beach/dune system. Further, since the substantial purpose of South Carolina's Legislature was within the limits of restricting land use for general public safety, the BMA did not amount to a property taking and compensation was not appropriate.