Legal Document

544 U.S. 528 LINGLE, GOVERNOR OF HAWAII, ET AL.v.CHEVRON U.S.A. INC. No. 04-163. Supreme Court of United States. Argued February 22, 2005. Decided May 23, Concerned about the effects market concentration on retail gasoline prices, Hawaii Legislature passed Act 257, which limits rent oil companies may charge dealers leasing company-owned service stations. Respondent Chevron U. S. A. Inc., then one largest in Hawaii, brought this suit seeking a declaration that cap effected an unconstitutional taking its property and injunction against application to Applying Agins v. City Tiburon, 447 255, 260 — where declared government regulation private "effects if [it] does not substantially advance legitimate state interests" District held uncompensated violation Fifth Fourteenth Amendments because it Hawaii's asserted interest controlling gas prices. The Ninth Circuit affirmed. Held: Agins' "substantially advance[s]" formula is appropriate test for determining whether Amendment taking. Pp. 536-548. (a) paradigmatic requiring just compensation direct appropriation or physical invasion property. See, e. g., States Pewee Coal Co., 341 114. Beginning with Pennsylvania Co. Mahon, 393, however, recognized be so onerous effect tantamount ouster. Regulatory actions generally will deemed per se takings purposes (1) requires owner suffer permanent her property, see Loretto Teleprompter Manhattan CATV Corp., 458 419, (2) regulations completely deprive "all economically beneficial us[e]" Lucas South Carolina Coastal Council, 505 1003, 1019. Outside these two categories (and special context land-use exactions discussed below), regulatory challenges are governed by Penn Central Transp. New York City, 438 104, 124. identified several factors including regulation's economic impact claimant, extent interferes distinct investment-backed expectations, character action particularly significant Because three inquiries reflected Loretto, Lucas, all aim identify functionally equivalent ouster from each them focuses upon severity burden imposes rights. 536-540. (b) advances" valid method identifying compensable takings. It prescribes inquiry nature due process test, has no proper place Court's jurisprudence. unquestionably was derived precedents, since supported citations Nectow Cambridge, 277 183, 185, Village Euclid Ambler Realty 272 365, 395. Although reliance those precedents understandable when viewed historical context, language selected imprecise. suggests means-ends asking, essence, effective achieving some public purpose. Such discerning been "taken" purposes. In stark contrast tests above, reveals nothing magnitude particular rights how any distributed among owners. Thus, help whose comparable property; tethered neither text Takings Clause nor basic justification allowing challenged under Clause. Moreover, formula's as would present serious practical difficulties. Reading demand heightened review virtually require courts scrutinize efficacy vast array federal task they well suited. also empower might often substitute their predictive judgments elected legislatures expert agencies. 540-545. (c) holding here disturb prior holdings. applied itself, S., at 261-262, arguably Keystone Bituminous Assn. DeBenedictis, 480 470, 485-492, never found based such inquiry. most cases reciting formula, merely assumed validity referring dicta. Tahoe-Sierra Preservation Inc. Tahoe Regional Planning Agency, 535 302, 334. Nollan California Comm'n, 483 825, 834, Dolan Tigard, 512 374, 385, drew language, rule established entirely test: They involved "doctrine conditions," provides person give up constitutional right receive taken use exchange discretionary benefit little relationship 385. 545-548. (d) A plaintiff challenge proceed alleging "physical" taking, Lucas-type total exaction violating standards. argued only theory, entitled summary judgment claim. P. 548. 363 F. 3d 846, reversed remanded. O'CONNOR, J., delivered opinion unanimous Court. KENNEDY, filed concurring opinion, post, p. 1 CERTIORARI TO THE UNITED STATES COURT APPEALS FOR NINTH CIRCUIT. 2 Mark J. Bennett, Attorney General cause petitioners. With him briefs were Michael L. Meaney, Deputy General, Seth Waxman, Paul R. Q. Wolfson, Robert G. Dreher, John D. Echeverria. 3 Solicitor Kneedler amicus curiae support brief Acting Clement, Assistant Keisler, Malcolm Stewart, B. Stern, Sharon Swingle. 4 Craig E. Stewart respondent. Donald Ayer, Fried, Louis K. Fisher.* 5 JUSTICE O'CONNOR 6 On occasion, would-be doctrinal finds way into our case law through simple repetition phrase however fortuitously coined. quarter century ago, 255 (1980), [such regulation] interests. . ." Id., 260. Through reiteration half dozen decisions Agins, ensconced See Monterey Del Monte Dunes Monterey, Ltd., 526 687, 704 (1999) (citing cases). 7 before us, lower strike down statute who lease stations owned companies. This us decide announced We conclude not. 8 * State territory comprises archipelago 132 islands clustered midst Pacific Ocean, located over 1,600 miles mainland ranks least populous 50 small size geographic isolation, wholesale products highly concentrated. When lawsuit began 1997, refineries six wholesalers doing business State. As time, respondent refiner marketer Hawaii: controlled 60 percent produced refined in-state 30 State's island, Oahu. 9 Gasoline sold 300 different About leased independent lessee-dealers, another 75 operated "open" dealers, remainder sells product 64 lessee-dealer typical arrangement, buys leases land third party, builds station, station dealer turnkey basis. charges monthly rent, defined percentage dealer's margin sales other goods. addition, enter supply contract, agrees purchase whatever necessary satisfy Chevron's product. unilaterally sets price 10 enacted 257 June apparently response concerns 1997 Haw. Sess. Laws no. § 1. seeks protect imposing certain restrictions ownership prohibits converting existing company-operated locating new close proximity dealer-operated Rev. Stat. §§ 486H-10.4(a), (1998 Cum. Supp.). More importantly purposes, amount company 15 gross profits plus than gasoline. 486H-10.4(c). 11 Thirty days after 257's enactment, sued Governor official capacities (collectively Hawaii) raising statute. pertinent here, claimed statute's provision, face, Amendments. sought swiftly moved claim, arguing interest. cross-motion claims. 12 To facilitate resolution motions, parties jointly stipulated relevant facts. agreed reduces $207,000 year aggregate otherwise hand, allows collect more remaining 53 stations, could increase overall rental income nearly $1.1 million year. further that, past 20 years, fully recovered costs maintaining alone. Rather, recoups expenses combination sales. Finally, joint stipulation states earned past, anticipates continue earn return investment satisfies standard. 13 granted Chevron, "Act fails interest, such, Amendments." Cayetano, 57 Supp. 2d 1014 (1998). accepted argument intended prevent and, importantly, resultant high prices consumers viability lessee-dealers. 1009-1010. court concluded actually reduce lessee-dealers' allow incumbent transferring occupancy lessee, incoming lessee premium reflecting value reduction. Accordingly, reasoned, lessee's same absence cap, there savings pass along consumers. 1010-1012. Nor lessees found, lessors raise fuel order offset reduction income. 1012-1014. 14 appeal, divided panel Appeals had correct legal standard 224 1030, 1033-1037 (2000). vacated grant judgment, ground genuine issue material fact remained 1037-1042. Judge William Fletcher concurred "reasonableness" applicable "ordinary control laws" should instead govern 1048. remand, entered 1-day bench trial called competing witnesses (both economists) testify. 198 1182 (2002). Finding witness "more persuasive" expert, once again required result 1187-1189. Even did costs, 1189. went reiterate determination enable lessee-dealers sell leaseholds premium, obtain benefits cap. 1189-1190. And while acknowledged preclude constructively evicting excessive rents, evidence attempt rents 1191. decrease number discourage building 1191-1192. Based findings, effect[ed] given failure interest." 1193. 16 affirmed, decision appeal barred challenging claim deferential review. 849-855 (2004). majority reject facts case. 855-858. dissented, renewing his contention reviewed 859-861. certiorari, 543 924 (2004), now reverse. II 17 Amendment, made Fourteenth, Chicago, & 166 226 (1897), shall "be use, without compensation." makes plain, "does prohibit but places condition exercise power." First English Evangelical Lutheran Church Glendale County Los Angeles, 482 304, 314 (1987). words, "is designed limit governmental interference se, rather secure event amounting taking." 315 (emphasis original). While scholars have offered various justifications regime, we emphasized role "bar[ring] Government forcing people alone bear burdens which, fairness justice, borne whole." Armstrong States, 364 40, 49 (1960); Monongahela Nav. 148 312, 325 (1893). 18 e.g., 114 (1951) (Government's seizure operation coal mine national miners taking); Motors 323 373 (1945) occupation warehouse taking). Indeed, until watershed 393 (1922), "it thought reached `direct appropriation' functional `practical [the owner's] possession.'" (1992) (citations omitted emphasis added; brackets original); id., 1028, n. ("[E]arly theorists believe embraced all"). 19 may, instances, "regulatory takings" Amendment. Justice Holmes' storied cryptic formulation, "while regulated extent, goes too far 415. rub, course, remains discern "too far." answering question, must remain cognizant "government definition involves adjustment good," Andrus Allard, 444 51, 65 (1979), "Government hardly go values incident diminished paying every change general law," supra, 413. Our stake out First, minor provide compensation. 419 (1982) (state landlords permit cable install facilities apartment buildings second categorical applies 1019 pay "total takings," except "background principles nuisance law" independently restrict owner's 1026-1032. 21 relatively narrow below, infra, 546-548), standards set forth 104 (1978). hitherto "unable develop `set formula'" evaluating claims, "several significance." Primary "[t]he claimant particularly, interfered expectations." Ibid. "character action" instance amounts affects interests "some program adjusting life promote common good" occurred. though rise vexing subsidiary questions served principal guidelines resolving claims do fall within rules. Palazzolo Rhode Island, 533 606, 617-618 (2001); 632-634 (O'CONNOR, concurring). 22 jurisprudence cannot characterized unified, (reflected Central) share touchstone. Each aims classic directly appropriates ousts domain. unique impose: invasion, minimal cost entails, eviscerates exclude others entering using perhaps fundamental 384 (1994); 831-832 (1987); 433; Kaiser Aetna 164, 176 (1979). complete elimination property's determinative factor. 1017 (positing deprivation is, landowner's point view, appropriation"). turns large part, albeit exclusively, degree B 23 involving facial municipal zoning ordinances, ordinance interests, 188 (1928), denies viable land, 138, 36 (1978)." statement phrased disjunctive, read announce stand-alone wholly test. struck solely findings 534, 536. recited minted first opportunity consider freestanding process, takings, 24 There question precedents. cited 1928 city "deprived contravention Amendment," 185. discuss 365 (1926), historic survive substantive long "clearly arbitrary unreasonable, having substantial relation health, safety, morals, welfare." 395 added); Nectow, 187-188 (quoting "substantial relation" Euclid). 25 understandable. many decades, natural turn seminal guidance. Brief Amicus Curiae O. T. 1979, 79-602, pp. 12-13 (arguing "set attacked Amendment"). apparent commingling precedent then-recent Central. 127 (stating dicta "[i]t implicit Goldblatt [v. Hempstead, 369 590 (1962),] restriction real constitute `taking' reasonably effectuation purpose, supra"). But 590, 594-595 (1962) "`reasonably necessary'" Lawton Steele, 152 133, 137 (1894), case, applying "`reasonableness'" determine "valid police power" Due Process Clause). decided, history deprivations "takings," see, Rowan Post Office Dept., 397 728, 740 (1970), yet clarify properly cognizable Clause, Williamson Comm'n Hamilton Bank Johnson 473 172, 197-199 (1985). 26 understandable, regrettably asks, An logic challenge, serve objective irrational runs afoul Sacramento Lewis, 523 833, 846 (1998) intended, individual "the power reasonable objective"). 27 information consequence, 28 appeals principle meant "`to bar whole.'" 17-21 Armstrong, 49). clearly misplaced, reasons indicated. tells actual imposed rights, allocated, tell justice spread taxpayers payment subject effectively serves singled burdened ineffective regulation. make sense say suffered Likewise, significantly all, distribute broadly evenly notion nevertheless "takes" virtue ineffectiveness foolishness untenable. 29 Instead addressing probes underlying validity. logically presupposes acted pursuit expressly takes "for use." interfering "in Church, added). Conversely, impermissible meet "public use" requirement violate end No can authorize action. illustrates flaws theory. begin with, unclear below year, expects 534. recoup reductions 535. short, let severe burden. gravamen simply protecting Whatever merits sound plainly seek enforcement alleges fundamentally irrational. 31 doctrinally untenable If interpreted, 32 instant tip proverbial iceberg, foreshadows hazards placing role. resolve choose between views opposing economists supracompetitive market. other, Legislature's chosen strategy achieve objectives. 2d, 1187-1193. determined charged, charge, rents. enjoined provision Chevron. find proceedings remarkable, least, eschewed scrutiny Exxon Corp. Maryland, 437 117, 124-125 (1978); Ferguson Skrupa, 372 726, 730-732 (1963). deference legislative need for, likely effectiveness of, established, think less here. 33 For foregoing reasons, Since theory III 34 emphasize today sure, 261-262 (finding ordinances advance[d] goals"), 485-492 (1987) "`substantially advance[s]'" finding interest). 334 (2002); Dunes, 704; 1016; Yee Escondido, 503 519, 534 (1992); Riverside Bayview Homes, 474 121, 126 35 played 825 (1987), 374 (1994). 21-23. cases, apply today's decision. Both adjudicative specifically, demands landowner dedicate easement access obtaining development permit. Dolan, 379-380 (permit expand store parking lot conditioned dedication portion "greenway," bike/pedestrian path); Nollan, 828 build larger residence beachfront traverse strip seawall mean high-tide line). premise appropriated 384; 831-832. could, effecting granting deny. answered affirmative, provided furnish denial 834-837. "`rough[ly] proportiona[l]' both proposed development." 391; 702 (emphasizing extended "beyond [such] exactions"). 37 quoted 385; address today. Whereas unconcerned type dedications outside 387-388; 841. advanced authorities deny altogether. explained involve `unconstitutional conditions,'" conferred property." That worlds apart says affecting constitutes face today, 38 39 Twenty-five years posited [a] interes[t]." took logical conclusion, doing, revealed imprecision. Today course. hold indeed reaffirm theories above taking," Dolan. reverse remand consistent opinion. 40 ordered. Notes: Briefs ofamici urging reversal et al. Eliot Spitzer, York, Caitlin Halligan, Daniel Smirlock, Sipos, Bill Lockyer, California, Manuel Medeiros, Thomas Greene, Chief Matthew Rodriquez, Senior Siegel, Supervising Vázquez Irizarry, Secretary Puerto Rico, Attorneys respective jurisdictions follows: Gregg Renkes Alaska, Fiti Sunia American Samoa, Terry Goddard Arizona, Ken Salazar Colorado, Richard Blumenthal Connecticut, M. Jane Brady Delaware, Douglas Moylan Guam, Lawrence Wasden Idaho, Lisa Madigan Illinois, Miller Iowa, Gregory Stumbo Kentucky, Steven Rowe Maine, Joseph Curran, Jr., Reilly Massachusetts, Mike Hatch Minnesota, Jim Hood Mississippi, McGrath Montana, Peter C. Harvey Jersey, Pamela Brown Northern Mariana Islands, W. Drew Edmondson Oklahoma, Hardy Myers Oregon, Gerald Pappert Pennsylvania, Patrick Lynch Summers Tennessee, Shurtleff Utah, H. Sorrell Vermont, Iver Stridiron Virgin Christine Gregoire Washington, Darrell V. McGraw, West Virginia; Association Edward Sullivan; League Cities Andrew Schwartz; National Conference Legislatures Ruda, Timothy Dowling, Jason Rylander; Service Station Dealers America Gunst. amici affirmance Action Apartment Association, Rosario Perry; Cato Institute Epstein; Equity Lifestyle Properties, David Bradford, DeBruin, Terri Mascherin; Manufactured Housing Communities Parham; Home Builders Berger Duane Desiderio; Legal Foundation Radford Nancie Marzulla; Small Property Owners San Francisco Utrecht; Charles Coupe Kenneth Kupchak Thomas. 41 concurring. 42 separate writing note foreclose possibility process. Eastern Enterprises Apfel, 524 498, 539 (KENNEDY, dissenting part). accomplish stated obvious voluntarily dismissed prejudice, occasion Session "represents rare instances even permissive violated." 550. observations, I join

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