Court Opinion

ID: 8991671
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:19:40.929354+00
Date Added: 2024-06-11T17:10:57.096091
License: Public Domain

K.K. HALL, Circuit Judge,
dissenting:
Let me say, first, that I thoroughly agree with the purposes of the Beachfront Management Act, and second, that my agreement or disagreement with and the wisdom or folly of the Act ought not bear upon whether just compensation should be paid for its effectuation. The Just Compensation Clause is not a miniature variant of substantive due process, ready to slap the government with monetary liability where we believe a regulation is foolish yet not so utterly silly that we should strike it down in its entirety. I hope and expect that the legislative and executive branches will be wise, and that the “public use” for which they take, damage, destroy or diminish private property will be admirable. Nonetheless, the Just Compensation Clause does not apply only to poor governmental choices.
I.
Before going on to our disagreements, I concur in the majority's judgment that the substantive due process claim of the Espo-sito plaintiffs was properly rejected by the *172district court. I cannot find fault in either the legislative end or means.
II.
It is all too easy in a takings case to become enmeshed in the various tests, factors, and doctrines the Supreme Court has applied through the years. Penn Central Transportation Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) (three-factor test); Agins v. Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980) (two-part test); Hodel v. Indiana, 452 U.S. 314, 101 S.Ct. 2376, 69 L.Ed.2d 40 (1981) (second Agins test only — “no economically viable use”); Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982) (per se rule for “permanent physical occupations”). The Court itself has admitted that its inquiry is essentially ad hoc. Penn Central, 438 U.S. at 124, 98 S.Ct. at 2659. The Court’s “tests” are not rigid, unforgiving yardsticks to be slavishly applied notwithstanding a draconian result. On the contrary, the tests are guidelines for resolving the question at the bottom of every case: whether the claimant has been “forc[ed] ... alone to bear [a] public burden[] which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554 (1960).1 Who should pay for South Carolina’s sudden change in land-use policy? I believe that fairness and justice require the expense to be borne by the public.
We are confronted with the claims of particular persons resulting from the Act’s devastating effect on the value of particular property. The plaintiffs do not attack the facial validity of the Act; they challenge it as applied to them. Hence, they need not make the strict showing required by the “no economically viable use” test. Keystone Bituminous Coal Ass’n v. De-Benedictis, 480 U.S. 470, 495, 107 S.Ct. 1232, 1247, 94 L.Ed.2d 472 (1987). The Keystone claimants failed to show how the challenged act affected any particular property; the Esposito defendants have done so. This case is not a facial challenge, and the “no economically viable use” test should not apply to it. I disagree, therefore, with footnote 5 of the majority opinion.
The factors the Supreme Court most often uses in “as applied” takings cases were identified in Penn Central, 438 U.S. at 124, 98 S.Ct. at 2659. They are (i) the character of the governmental action, (ii) the extent of interference with reasonable investment-backed expectations, and (iii) the economic impact on the claimant. Application of these factors illustrates that “fairness and justice” require compensation in these cases.
The first prong of the Penn Central test — character of the governmental action — alludes to two potentially dispositive situations. If the government has committed or authorized a permanent physical invasion of private property, compensation is always required. Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982). If the government acts to prohibit a “noxious use” of property, compensation is almost never required. Mugler v. Kansas, 123 U.S. 623, 8 S.Ct. 273, 31 L.Ed. 205 (1887). South Carolina is not occupying the claimants’ lots, and I reject the notion that a beachfront bungalow is a “noxious use” of property. See infra note 2. The character of the governmental action does not, therefore, resolve this case.
The second and third of the Penn Central factors weigh heavily in the landowners’ favor. Before the 1988 amendments to the Act, the Esposito claimants’ lots and homes ranged in value from $205,-000 to $450,000. The lame duck nature of *173their use of the property has caused a substantial diminution in value — 35% in the opinion of the Beaufort County assessor. Most of the affected properties are mortgaged. Landowners who had equity that could serve as collateral for other loans have seen their nest egg disappear. Several lending institutions entirely refused to accept the doomed properties as security, notwithstanding that they still have some value. Prospective buyers have been equally hesitant. No affected properties have been sold since the Act amendments, though several have been on the market.
The “investment-backed expectations” of these landowners have been bludgeoned. Were these expectations “reasonable?” Lending institutions thought so. The county thought so, and assessed property taxes accordingly. The state allowed 49% of its coastline to become developed without interfering. Indeed, the state’s coffers benefitted from the tax and tourism revenue generated by development of its beaches. I believe that a person could have purchased one of the affected properties with the reasonable expectation that his investment would not be affected by a drastic change in long-term land use policies.
Even under the majority’s harsh application of the “no economically viable use” test, the Act would have clearly effected a compensable taking of the Chavous landowners’ lots. The majority is able to avoid the issue2 by a combination of two fortuities — subsequent amendments to the Act and the district court’s unappealed holding that the Eleventh Amendment bars an award of just compensation against a state in a federal court.3 I agree with the majority that a remand is necessary. However, I would not create a sweeping rule that a state whose statute has been enjoined may moot the injunction by tinkering with the statute. The recent amendments to the Act may or may not rectify its previous constitutional defects. At oral argument, the landowners made it clear that they still challenge the constitutionality of the Act, even as amended; there is plainly still a case or controversy, and I would not force the landowners to file a new suit. I would remand to permit the Coastal Council to move to dissolve the injunction.
III.
Legislatures and administrators undoubtedly often face the choice between purchas*174ing a property right or regulating it away. In these days of deficits, it must be tempting to choose the costless regulatory route. Perhaps the Framers would have ensured more efficient government by permitting thievery of private property for public uses. However, they sacrificed the expedience of this approach in favor of a system that requires a proposed public use be one for which the public is willing to foot the bill. As Justice Holmes put it,
a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the damage.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922).
South Carolina now admits that its longstanding land use policies were ill-advised. Good government occasionally requires such admissions; history is a lesson, not a straightjacket. However, a governmental error is a collective error, and the burden of rectifying it should be borne by all, not just by those who unfortunately, but reasonably, relied on it.
Except as stated elsewhere in this opinion, I respectfully dissent.

. Armstrongs admonition lacks the intellectually calming appearance of predictability of a two- or three-factor "test." A legal standard no better defined than "fairness" leaves any judge ill at ease. Nonetheless, one recent commentator, after an exhaustive inventory and analysis of the Supreme Court’s takings cases, concluded that the “moral justification” for placing a public burden on a single individual is the real issue on which any given case turns. Peterson, The Takings Clause: In Search of Underlying Principles, 77 Calif.L.Rev. 1299 (1989) (Part I) and 78 Calif.L.Rev. 53 (1990) (Part II).

. The South Carolina Supreme Court addressed a Chavous-style case in Lucas v. South Carolina Coastal Council, 404 S.E.2d 895 (S.C.1991). The state court, by a 3-2 margin, upheld the Act under the narrow "noxious use” exception to compensability. I agree entirely with the dissenters in Lucas. A noxious use is one that is "tantamount to a public nuisance.” Keystone, 480 U.S. at 491, 107 S.Ct. at 1245. Living in a beach bungalow bears little resemblance to the noxious uses of property the Supreme Court has identified. Mugler v. Kansas, 123 U.S. 623, 8 S.Ct. 273, 31 L.Ed. 205 (1887) (distillery); Reinman v. Little Rock, 237 U.S. 171, 35 S.Ct. 511, 59 L.Ed. 900 (1915) (downtown livery stable); Hadacheck v. Sebastian, 239 U.S. 394, 36 S.Ct. 143, 60 L.Ed. 348 (1915) (urban brickyard); Miller v. Schoene, 276 U.S. 272, 48 S.Ct. 246, 72 L.Ed. 568 (1928) (red cedar trees infected with apple rust disease near commercial orchards); and Goldblatt v. Hempstead, 369 U.S. 590, 82 S.Ct. 987, 8 L.Ed.2d 130 (1962) (quarrying below water table near town that depended on groundwater supply). The rapidity with which rental beach houses are gobbled up by the public causes me to doubt that they are, at least yet, generally regarded as "tantamount to a public nuisance.” Finally, the Act’s gradual forty-year retreat scheme, rather than immediate destruction of all offending structures, is clear proof that the Esposito claimants’ residences are not dire threats to public safety and welfare. A "public nuisance” ought to be abated, not phased out through a half-lifetime of attrition.

. I agree that this latter holding is not before the court, but I have strong doubts that it was correct. As the majority notes, the Fifth Amendment’s Just Compensation Clause was one of the earliest guarantees of the Bill of Rights to be enforced against the states through the Fourteenth Amendment. Chicago Burlington & Quincy R. R. Co. v. Chicago, 166 U.S. 226, 17 S.Ct. 581, 41 L.Ed. 979 (1897). Inasmuch as the Supreme Court has now held that the Just Compensation Clause always requires compensation for any taking, notwithstanding subsequent repeal or invalidation of the offending regulation, First English Evangelical Lutheran Church v. Los Angeles County, 482 U.S. 304, 317, 107 S.Ct. 2378, 2387, 96 L.Ed.2d 250 (1987), the Eleventh Amendment’s general bar of damages against states must yield. Otherwise, a recalcitrant state could nullify the Just Compensation Clause by simply refusing to furnish a procedure to assess and award compensation. The Clause could be converted from a fundamental constitutional right into an empty admonition.