Lucas v. South Carolina Coastal Council

404 S.E.2d 895, 404 S.E.2d 89, 304 S.C. 376, 21 Envtl. L. Rep. (Envtl. Law Inst.) 20837, 1991 S.C. LEXIS 48

• Court: Supreme Court of South Carolina
• Decided: February 11, 1991
• Docket: 23342
• Status: Published

Opinions

Toal, Justice:

This appeal concerns whether the enforcement and application of the 1988 Beachfront Management Act to the plaintiff-respondent’s property is a taking of such property without just compensation.

FACTS

David H. Lucas, the respondent, owns two vacant oceanfront lots in the Beachwood East Subdivision of the Wild Dunes development on the Isle of Palms in Charleston County, South Carolina. The Beachfront Management Act, S.C. Code Ann. § 48-39-10 et seq. (1989 Cum. Supp.) (hereinafter referred to as “Act”) limits construction within the beach/dune system in a critical area, as defined by the Act. As applied to the two Lucas lots, the Act prohibits, through statutorily mandated setback lines, the construction of any permanent structure (including a dwelling), save a small deck or walkway.

Lucas instituted an action in the Court of Common Pleas, asserting that the restrictions on the use of his lots worked a taking of his property without just compensation. The lower court agreed and awarded Lucas $1,232,387.50 as just compensation for the “regulatory” taking. The South Carolina Coastal Council, the administrator of the Beachfront Management Act, now appeals. We reverse.

LAW/ANALYSIS

Although the regulatory takings question is a complex one, and although regulations affecting coastal property are especially problematic,¹ this appeal presents, in the end, what in our view is a relatively straightforward issue. The issue is whether governmental regulation of the use of property, in order to prevent serious public harm, amounts to a “regulatory taking” of property for which compensation must be paid. Lucas’ position, which is dealt with more extensively below, is that if he is deprived of “all economically viable use” of his property, he must be compensated for it even if the regulation depriving him of such is a use-restriction regulation enacted to prevent serious public harm. Coastal Council’s view, obviously, is that no compensation is due a landowner whose private use threatens serious public harm. We choose to characterize this issue as “straightforward” because, in the final analysis, Lucas’ position and the position of our dissenting brothers, is the position of the dissent in Keystone Bituminous Coal Ass’n. v. DeBenedictis, 480 U.S. 470, 107 S. Ct. 1232, 94 L. Ed. (2d) 472 (1987), while the Coastal Council’s view is represented by the Keystone majority, and by our decision in Carter v. South Carolina Coastal Council, 281 S.C. 201, 314 S.E. (2d) 327 (1984). We choose not to overrule Carter, and we choose to follow the majority view rather than the dissent in Keystone.

Lucas concedes that the Beachfront Management Act is properly and validly designed to preserve the extremely valuable resource which is South Carolina’s beaches. He concedes that the preservation of this existing public resource from harm is a “laudable goal.” See Respondent’s Brief, at p. 4. He admittedly fails to attack the validity of the Act, and therefore concedes the validity of the legislative declaration of its “findings” and “policy” embodied in Sections 1 and 2 of 1988 Act No. 634.² This Court is therefore in no position to question the legislative scheme or purpose. Section 1 of the Act reads:

SECTION 1. The General Assembly finds that:

(1) The beach/dune system along the coast of South Carolina is extremely important to the people of this State and serves the following functions:

(a) protects life and property by serving as a storm barrier which dissipates wave energy and contributes to shoreline stability in an economical and effective manner;

(b) provides the basis for a tourism industry that generates approximately two-thirds of South Carolina’s annual tourism industry revenue which constitutes a significant portion of the state’s economy. The tourists who come to the South Carolina coast to enjoy the ocean and dry sand beach contribute significantly to state and local tax revenues;

(c) provides habitat for numerous species of plants and animals, several of which are threatened or endangered. Waters adjacent to the beach/dune system also provide habitat for many other marine species;

(d) provides a natural health environment for the citizens of South Carolina to spend leisure time which serves their physical and mental well-being.

(2) Beach/dune system vegetation is unique and extremely important to the vitality and preservation of the system.

(3) Many miles of South Carolina’s beaches have been identified as critically eroding.

(4) Chapter 39, Title 48, Code of Laws of South Carolina, 1976, Coastal Tidelands and Wetlands, does not provide adequate jurisdiction to the South Carolina Coastal Council to enable it to effectively protect the integrity of the beach/dune system. Consequently, without adequate controls, development has been unwisely sited too close to the system. This type of development has jeopardized the stability of the beach/dune system, accelerated erosion, and endangered adjacent property. It is in both the public and private interests to protect the system from this unwise development.

(5) The use of armoring in the form of hard erosion control devices such as seawalls, bulkheads, and rip-rap to protect erosion-threatened structures adjacent to the beach has not proven effective. These armoring devices have given a false sense of security to beach front property owners. In reality, these hard structures, in many instances, have increased the vulnerability of beach front property to damage from wind and waves while contributing to the deterioration and loss of the dry sand beach which is so important to the tourism industry.

(6) Erosion is a natural process which becomes a significant problem for many only when structures are erected in close proximity to the beach/dune system. It is in both the public and private interests to afford the beach/dune system space to accrete and erode in its natural cycle. This space can be provided only by discouraging new construction in close proximity to the beach/dune system and encouraging those who have erected structures too close to the system to retreat from it.

(7) Inlet and harbor management practices, including the construction of jetties which have not been designed to accommodate the long shore transport of sand, can deprive downdrift beach/dune systems of their natural sand supply. Dredging practices which include disposal of beach quality sand at sea also can deprive the beach/dune system of much-needed sand.

(8) It is in the state’s best interest to protect and to promote increased public access to South Carolina’s beaches for out-of-state tourists and South Carolina residents alike.

(9) Present funding for the protection, management, and enhancement of the beach/dune system is inadequate.

(10) There is no coordinated state policy for post-storm emergency management of the beach/dune system.

(11) A long-range comprehensive beach management plan is needed for the entire coast of South Carolina to protect and effectively manage the beach/dune system, thus preventing unwise development and minimizing man’s adverse impact on the system.

(Emphasis added).

Section 2 of the Act reads:

SECTION 2. In recognition of its stewardship responsibilities, the policy of South Carolina is to:

(1) protect, preserve, restore, and enhance the beach/dune system, the highest and best uses of which are declared to provide:

(a) a barrier and buffer from high tides, storm surge, hurricanes, and normal erosion;

(b) a public area which serves as a major source of state and local revenue;

(c) habitat for indigenous flora and fauna;

(d) a place which harbors natural beauty;

(2) create a comprehensive, long-range beach management plan and require local comprehensive beach management plans for the protection, preservation, restoration, and enhancement of the beach/dune system. These plans must promote wise use of the state’s beach front to include a gradual retreat from the system over a forty-year period;

(3) severely restrict the use of hard erosion control devices to armor the beach/dune system and to encourage the replacement of hard erosion control devices with soft technologies as approved by the Coastal Council which will provide for the protection of the shoreline without long-term adverse effects;

(4) encourage the use of erosion-inhibiting techniques which do not adversely impact the long-term well-being of the beach/dune system;

(5) promote carefully planned nourishment as a means of beach preservation and restoration where economically feasible;

(6) preserve existing public access and promote the enhancement of public access to assure full enjoyment of the beach by all our citizens including the handicapped;

(7) involve local governments in long-range comprehensive planning and management of the beach/dune system in which they have a vested interest;

(8) establish procedures and guidelines for the emergency management of the beach/dune system following a significant storm event.

By failing to contest these legislative findings, Lucas concedes that the beach/dune area of South Carolina’s shores is an extremely valuable public resource; that the erection of new construction, inter alia, contributes to the erosion and destruction of this public resource; and that discouraging new construction in close proximity to the beach/dune area is necessary to prevent a great public harm. This Court is likewise bound by these uncontested legislative findings. In lieu of any attack whatsoever on the statutory scheme, Lucas rests on a solitary argument, viz., that he is still, despite these concessions, entitled to compensation from the State. He contends that a single legal test exists which, if failed, conclusively establishes that a “regulatory taking” has occurred. Lucas maintains that if a regulation operates to deprive a landowner of “all economically viable use” of his property, it has worked a “taking” for which compensation is due, regardless of any other consideration. This is simply an erroneous statement of existing law.

At the outset, we recently noted that “[t]he United States Supreme Court has never articulated a ‘set formula’ to determine where regulation ends and taking begins.” Moore v. Sumter County Council, 300 S.C. 270, 387 S.E. (2d) 455, 457 n. 2 (1990). As a result, “takings” cases have been decided by the Supreme Court on a case-by-case basis, with the Court considering a variety of factors depending upon the circumstances before them. Among the factors considered are: (1) the economic impact of the regulation; (2) the regulation’s interference with investment backed expectations; (3) the character of the government action (whether there is a physical invasion); and (4) the nature of the State’s interest in the regulation. See Keystone, supra, 107 S. Ct. at 1244, 1247.

One or more but fewer than all of these factors may be critical and determinative in a given case. A clear example of this is the fact that the United States Supreme Court has almost invariably found a taking when the government regulation is characterized as a permanent physical occupation. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435-438, 102 S. Ct. 3164, 3175-3177, 73 L. Ed. (2d) 868 (1982).

A second clear example is in the fact that a taking has not been found when the regulation exists to prevent serious public harm. See, e.g., Mugler v. Kansas, 123 U.S. 623, 8 S. Ct. 273, 31 L. Ed. 205 (1887) (prohibition on the manufacture and sale of intoxicating liquors); Hadacheck v. Sebastian, 239 U.S. 394, 36 S. Ct. 143, 60 L. Ed. 348 (1915) (ordinance prohibiting the manufacture of bricks near residents in Los Angeles); Miller v. Schoene, 276 U.S. 272, 48 S. Ct. 246, 72 L. Ed. 568 (1928) (state action destroying diseased cedar trees of certain property owners to prevent the infection of apple orchards); and Goldblatt v. Hempstead, 369 U.S. 590, 82 S. Ct. 987, 8 L. Ed. (2d) 130 (1962) (prohibition against excavating below the water table in order to extract gravel).

The Supreme Court has noted that the “special status” of this kind of regulation can be understood by way of “the simple theory that since no individual has a right to use his property so as to create a nuisance or otherwise harm others, the State has not ‘taken’ anything when it asserts its power to enjoin the nuisance-like activity.” Keystone, supra, 107 S. Ct. at 1245 n. 20. In conjunction with this analysis, the Supreme Court has stated it “is hard to imagine a different rule that would be consistent with the maxim ‘Sic utere tuo ut alienum non laedas’ [use your own property in such manner as not to injure that of another].” (Brackets in the original). Id., 107 S. Ct. at 1246 n. 22.

This Court has repeatedly used this same analysis in determining regulatory takings questions. Finding that the regulation under attack prevented a use seriously harming the public, we have concluded that no regulatory taking has occurred. See, e.g., Carter v. South Carolina Coastal Council, 281 S.C. 201, 314 S.E. (2d) 327 (1984) (regulating the use and alteration of wetlands); Arnold v. City of Spartanburg, 201 S.C. 523, 23 S.E. (2d) 735 (1943) (regulating the sale of intoxicating liquors); and Richards v. City of Columbia, 227 S.C. 538, 88 S.E. (2d) 683 (1955) (mandating the repair, alteration, or closing of dwellings unfit for habitation in order to protect public health and welfare).

In some of our opinions, we have indicated that no compensation is ever due a landowner when the State acts pursuant to its police power. See, e.g., Brabham v. City of Sumter, 275 S.C. 597, 274 S.E. (2d) 297 (1981) and Edens v. City of Columbia, 228 S.C. 563, 91 S.E. (2d) 280 (1956). This is perhaps too mechanical. In at least one case, the United States Supreme Court found a regulatory taking despite the fact that the State was acting pursuant to its police powers. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. (2d) 868 (1982). In Loretto, a New York law required landlords to permit cable television companies to install cable facilities on their rental property. The law was validly within the New York police powers as authorizing “rapid development of and maximum penetration by a means of communication which has important educational and community aspects.” Id. 102 S. Ct. at 3170. Despite this regulation for the public good, the Supreme Court found a taking since there was a physical occupation of the landowner’s property.

Hence, merely because the State acts within its police powers does not end the inquiry. Nevertheless, the fact remains that the Supreme Court has time and again held that when a State merely regulates use, and acts to prevent a serious public harm, there is no “taking” for which compensation is due. See Mugler, Hadacheck, Miller, and Goldblatt, supra. It is therefore the way the police power is exercised that is of critical import. Were we to adopt Lucas’ argument, whether the State acts pursuant to its police power would be wholly irrelevant.

As mentioned earlier, Lucas fails to attack in any way the legislature’s “findings” that new construction would cause serious public harm. This amounts to a concession that the Mugler “nuisance-like exception” applies. This Court is in no position to, sua sponte, take issue with these legislative findings. Instead, we are constrained to base our ruling only upon Lucas’ contention that a taking of property occurs when he is deprived, by operation of the regulation, of “all economically viable use” of his property. Lucas advances this proposition because of the United States Supreme Court’s use of the “all economically viable use” test in certain regulatory taking cases. See Keystone, 107 S. Ct. at 1247 (citing Agins v. Tiburon, 447 U.S. 255, 100 S. Ct. 2138, 65 L. Ed. (2d) 106 (1980)).³ It is clear, however, that such is not the dispositive test in all cases. Lucas’ position is clearly erroneous in light of the fact that the Keystone majority squarely rejected the identical contention in 1987.

In the Keystone case, the United States Supreme Court dealt with a takings challenge by coal companies to the Pennsylvania Subsidence Act, which required that fifty percent of the coal beneath certain structures be kept in place to provide surface support. In relating the history of the present takings analysis, the Court first cited Mugler v. Kansas, 123 U.S. 623, 668, 8 S. Ct. 273, 300, 31 L. Ed. 205 (1887) and its progeny for the proposition that, “prohibition simply upon the use of property for purposes that are declared, by valid legislation, to be injurious to the health, morals, or safety of the community, cannot, in any just sense, be deemed a taking . . .” Keystone, supra, 107 S. Ct. at 1244.

Twenty-five years after Mugler, the Supreme Court decided the case of Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922). There, Justice Holmes wrote,

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. As long recognized, some values are enjoyed under an implied limitation and must yield to the police power. But obviously the implied limitation must have its limits, or the contract and due process clauses are gone. One fact for consideration in determining such limits is the extent of the diminution. When it reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to sustain the act. So the question depends upon the particular facts.

Id. at 413, 43 S. Ct. at 159. Pennsylvania Coal is relied upon by Lucas for his asserted proposition that in all cases, when all economically viable use is extinguished by regulation, compensation is due. This exact contention was presented to the Keystone Court, which rejected such a rule.

The Keystone Court explained:

We reject petitioner’s implicit assertion that Pennsylvania Coal overruled [Mugler and its progeny] which focused so heavily on the nature of the state’s interest in the regulation. Just five years after the Pennsylvania Coal decision, Justice Holmes joined the Court’s unanimous decision in Miller v. Schoene, 276 U.S. 272, 48 S. Ct. 246, 72 L. Ed. 568 (1928), holding that the takings clause did not require the State of Virginia to compensate the owner of cedar trees for the value of the trees that the State had ordered destroyed. The trees needed to be destroyed to prevent a disease from spreading to nearby apple orchards, which represented a far more valuable resource. . . . [I]t was clear that the State’s exercise of its police power to prevent the impending danger was justified, and did notrequire compensation.

(Emphasis added) 480 U.S. at 490, 491, 107 S. Ct. at 1244, 1245. In Keystone, the Supreme Court again approved the Mugler rule that, in some cases, no compensation is due regardless of the remaining worth of the property after regulation. Specifically, the Keystone Court noted that “[l]ong ago it was recognized that ‘all property in this country is held under the implied obligation that the owner’s use of it shall not be injurious to the community.’ ” 480 U.S. at 491-92, 107 S. Ct. at 1245 (quoting Mugler v. Kansas, 123 U.S. at 665, 8 S. Ct. at 299).⁴

Once again, we note that Lucas does not challenge the fact that the legislation here is necessary to prevent serious injury to the community, nor does he contend that the setback requirements affecting him are unreasonable or disproportionate to the goal of preventing the specified harms. In fact, . Lucas does not even seek an injunction to prevent enforcement of the Act. Instead, Lucas merely prays for damages and asserts that he is entitled to such, regardless of how the proposed use of his property harms the public, because all economically viable use of his land has been extinguished. Lucas’ argument tracks the position of Justice Rehnquist’s dissent in Keystone.⁵ We follow the Keystone majority and also reject this contention.

Our decision in Carter v. South Carolina Coastal Council, 281 S.C. 201, 314 S.E. (2d) 327 (1984) is perhaps the best South Carolina representative of the Keystone majority analysis in action. In Carter we held that “the state may properly regulate the use of property where uncontrolled use would be harmful to the public interest; and this regulation, even though it prohibits a beneficial use, will not necessarily be deemed a taking in the constitutional sense.” Id., 281 S.C. at 204, 314 S.E. (2d) at 329. There, we upheld the validity of the 1977 Coastal Zone Management Act, which prevented the uncontrolled use of coastal wetlands, since such use had a detrimental effect upon “the public welfare.” Id. Our analysis in Carter did not contain a discussion of whether any “economically viable use” remained in the property of the landowners after regulation. It is clear, however, that the plaintiffs in Carter were as much deprived of all economically viable use of their lands as Lucas is. To adopt Lucas’ argument would therefore be to overrule Carter. We choose not to do so.

Carter is an example of an appropriate application of the Mugler rule regarding regulation designed to prevent a serious public harm.⁶ The application of the Mugler rule to appropriate regulatory takings questions has been validated in the recent Keystone decision.⁷ The Mugler rule may therefore be applied again under the appropriate set of facts. Lucas’ de facto concession of the validity of the legislative scheme and of its purposes makes the instant set of facts appropriate for the application of the Mugler rule. We need not address the remaining issues in this case, and we express no opinion regarding them.⁸ Accordingly, we reverse the decision of the lower court.

Gregory, C.J., and Finney, J., concur. Harwell and Chandler, JJ., dissent in separate opinion.

1 For example, theories such as dedication, prescription, custom, purpresture, and the public trust doctrine can be resorted to by the public in an attempt to regulate private property immediately adjacent to the public property which sits below the mean highwater mark. See generally Finnell, Public Access to Coastal Public Property: Judicial Theories and the Taking Issue, 67 N.C.L. Rev. 627 (1989). We express no opinion concerning the force and validity of those theories in particular circumstances. We also express no opinion on the validity of portions of the Act to certain lands in light of our rule that, when a landowner causes his land to accrete through artificial means, he does not become the owner under the doctrine of title by accretion. See Epps v. Freeman, 261 S.C. 375, 200 S.E. (2d) 235 (1973).

2 It appears that Sections 1 and 2 of the 1988 Act were intended to be labeled as amendments to S.C. Code Ann. §§ 48-39-20 (1987) (entitled “Legislative declaration of findings”) and 48-39-30 (1987) (entitled “Legislative declaration of state policy”), although they are not designated as such in the actual codification. See Editor’s Note to § 48-39-270. The sections have, during the pendency of this case, been incorporated into the codification as Sections 48-39-250 and 48-39-260. Concomitantly, sections 1 and 2 of the 1988 Act have, as such, been repealed. See Act 607,1990 S.C. Acts 2581.

3 If Lucas can demonstrate a deprival of all economically viable use of his land, there is no need to weigh factors such as the economic impact of the regulation and/or the regulation’s interference with investment backed expectations. Such a showing by Lucas would by necessity weigh these factors in his favor.

4 We note only to prevent possible confusion that the Keystone majority proceeded, after reaffirming the Mugler rule, to analyze the taking issue before them by looking at whether the Pennsylvania Subsidence Act deprived the owner of all economically viable use of their lands. However, it is clear that the Court did not engage in this latter analysis for reasons of necessity, but instead did so because the plaintiff also failed to show adequate deprival of viable economic use. The Court stated, after declaring the validity of the Mugler rule, “Nonetheless, we need not rest our decision on this factor alone (meaning the Mugler rule), because petitioners have also failed to make a showing of [sufficient] diminution of value....” Id., 480 U.S. at 492-93, 107 S. Ct. at 1246.

5 The Keystone dissent labels the Mugler line of cases the “nuisance exception,” but then states that in no case has the Court “accepted the proposition that the State may completely extinguish a property interest or prohibit all use without providing compensation.” 480 U.S. at 513, 107 S. Ct. at 1257 (Rehnquist J. dissenting). Lucas’ argument is clearly simply a rephrasing of this same position.

6 The Carter decision relies in part on Goldblatt v. Hempstead, 369 U.S. 590, 82 S. Ct. 987, 8 L. Ed. (2d) 130 (1962), which is one of Mugler’s progeny.

7 During the pendency of this case, two other courts have interpreted Keystone in exactly the way we have. In McNulty v. Town of Indialantic, 727 F. Supp. 604 (M.D. Fla. 1989), a Florida District Court rejected a landowner’s contention that a town ordinance imposing setback requirements on oceanfront property worked a “taking.” The McNulty Court held, in pertinent part, “the government can destroy [by regulation] all economic use if necessary to avoid a public nuisance or nuisance like use.” 727 F. Supp. at 609. In Presbytery v. King County, 114 Wash. (2d) 320, 787 P. (2d) 907 (1990) cert, denied — U.S. —, 111 S. Ct. 284, 112 L. Ed. (2d) 238 (1990) a county ordinance prohibited all construction on several wetlands lots of the plaintiff-landowner. The Presbytery Court observed that if a regulation protects the public from harm, and does not infringe upon the right of the landowner to possess, exclude others, and dispose of the property, no “taking” has occurred.

8 We also do not address the issue, not raised in this case, of whether Lucas may build a habitable structure or other structures under the provisions and procedures of the 1990 amendments to the Beachfront Management Act. See Act 607, 1990 S. C. Acts 2581.