A Troubling New Ruling on Property Rights Why Should Taxpayers Pay Compensation Because Public Programs Affect Land Values Taxpayers Helped to Create in the First Place?

Article excerpt

IN the final flurry of decisions from the United States Supreme Court, relatively little public attention seemed to focus on the court's decision on property rights - issued on the last day of the court's term.

But in Lucas v. South Carolina Coastal Council, the Supreme Court quietly planted the seed of a potential revolution - one that could drastically impair the ability of Americans to protect their communities, and could exacerbate the serious economic divisions in our country.

The Fifth Amendment to the US Constitution states in part: "Nor shall private property be taken for public use, without just compensation." The Fifth Amendment was originally understood to prohibit uncompensated government seizure of private land for a public road, a military base, or some other public facility. Early in this century, however, the US Supreme Court ruled that when regulation goes "too far," it too may constitute an unconstitutional "taking."

David Lucas purchased two oceanfront lots on the South Carolina shore for approximately $1 million. Two years later, South Carolina adopted its Beachfront Management Act to prevent hazardous development along the face of the ocean beach exposed to erosion and flooding. This new law, the trial court found, made Mr. Lucas's land "valueless."

The Supreme Court reversed the decision of the South Carolina Supreme Court upholding the constitutionality of the coastal law. But the court did not rule a "taking" had occurred. Instead, it sent the case back to the South Carolina courts for more development of the facts.

The precedent set in Lucas will have little or no direct effect on the ability of local, state, or federal government to carry out ordinary land use and environmental regulations. The court addressed only the very rare case when regulation makes land "valueless." Few environmental or land use measures have such drastic economic impact. Conservationists can rightfully claim partial victory in that the court refrained from issuing a more sweeping ruling.

However, in this narrow context, the court, borrowing from the writings of conservative legal scholar Richard Epstein, developed a new and quite radical approach in interpreting the Fifth Amendment. Justice Antonin Scalia, writing for a bare majority of the court, stated that, in general, the justification for any regulation making property valueless must be rooted in "background principles of the State's law of property and nuisance." While the scope of these "principles" is uncertain, it is clear they will be defined largely if not exclusively by judges rather than elected officials. Also, the burden apparently now rests on the state to demonstrate that these principles apply, rather than on the landowner filing suit to demonstrate that government has acted unreasonably.

The significance of this doctrinal shift can hardly be overstated. Since the 1930s, it has been an accepted tenet of constitutional law that judges, especially federal judges appointed to lifetime jobs, should defer to the judgment of elected representatives in matters relating to economic regulation. Judges, it is said, should not substitute their own economic policy preferences for those of the legislature. Without so much as a wave to history, Justice Scalia tossed this tenet in the direction of, if not into, the dustbin of history.

Does the Lucas decision only represent extreme doctrine for the extreme case? Or will Scalia and other conservative members of the court seek to apply the new doctrine more broadly to regulations that impinge on property values but still allow the owner to use the land productively? A move in the latter direction would destroy a sense of balance in this field of the law.

So-called property rights advocates tend to view regulation solely as a curtailment on their rights. …