Court Opinion

ID: 9592852
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:17:34.583698+00
Date Added: 2024-06-11T12:15:34.384916
License: Public Domain

Harwell, Justice, dissenting:
I respectfully dissent. For the reasons discussed below, I would affirm the circuit court order which determines that application of the Beachfront Management Act under these facts does constitute a taking, and hold that the Coastal Council must either compensate Lucas in the amount set forth in the order of the circuit court or issue a permit for the construction of habitable structures on his property pursuant to the 1990 amendments to the Beachfront Management Act.1
DISCUSSION
The Fifth Amendment of the United States Constitution provides that “private property [shall not] be taken for public use without just compensation.” U.S. Const, amend. V. The South Carolina Constitution provides that “private property shall not be taken for private use without the consent of the owner, nor for public use without just compensation being first made therefor.” S.C. Const. Art. I, § 13. Takings cases are generally recognized as falling into one of two categories: those pursuant to an exercise of eminent domain and those pursuant to an exercise of the police power. Eminent domain *390involves the taking of property for public use for which compensation is required to be made; police power involves regulation of private property to prevent its use in a manner detrimental to the public interest and will not necessarily result in a taking in the constitutional sense. Carter v. South Carolina Coastal Council, 281 S.C. 201, 204, 314 S.E. (2d) 327, 329 (1984). A governmental taking of property may, however, be accomplished without the formal apparatus of eminent domain; a taking may result from a government regulation in a particular area. First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 316, 107 S. Ct. 2378, 2386, 96 L. Ed. (2d) 250, 265 (1987).
The question of when regulation pursuant to a police power becomes a taking is not easily answered. Despite the wealth of authority on the subject of regulatory takings, this is an area of considerable confusion. Indeed, as Justice Stevens recognized in his dissent in First English Evangelical, the regulatory takings decisions of the United States Supreme Court have been “open-ended and standardless.” 482 U.S. at 340, 107 S. Ct. at 2378, 96 L. Ed. (2d) at 280 (footnote 17). As one commentator noted, the “[r]egulatory taking doctrine is the most perplexing area of American land use law.”2 This case necessitates explication of the pertinent decisions in this area and reflects my interpretation of regulatory takings law.
The starting point for this discussion with the 1887 case of Mugler v. Kansas, 123 U.S. 623, 8 S. Ct. 273, 31 L. Ed. 205 (1887) in which the Supreme Court recognized that “government can prevent a property owner from using his property to injure others without having to compensate the owner for the value of the forbidden use.” Penn Central Transportation Company v. New York, 438 U.S. 104, 144, 98 S. Ct. 2646, 2669, 57 L. Ed. (2d) 631,661 (1978). At issue in Mugler was a statute prohibiting use of a distillery for the manufacture of intoxicat*391ing liquors. The Supreme Court upheld the statute and reasoned that the power of the State to prohibit uses of property “prejudicial to the health, the morals, or the safety of the public, is not... burdened with the condition that the State must compensate such individual owners for pecuniary losses they may sustain.” Mugler v. Kansas, 123 U.S. at 669, 8 S. Ct. at 301, 31 L. Ed. at 213.
Mugler stands for the proposition that where the legislature has deemed an act to be necessary for the public's health, safety, and welfare, the judiciary need not scrutinize the acts of the legislature regardless of the extent of loss suffered by the property owner. A prohibition on the use of property, enacted in the interest of the community as a whole, the Mugler court held, cannot be deemed a taking or appropriation.
For the same reasons as those articulated in Mugler, the Supreme Court has held other state action not to constitute a compensable taking when necessary to prevent property owners from using such property in a manner which I perceive to be best described as nuisance oriented. See, e.g. Hadacheek v. Sebastian, 239 U.S. 394, 36 S. Ct. 143, 60 L. Ed. 348 (1915) (statute disallowing operation of a brickyard in a residential area; Reinman v. City of Little Rock, 237 U.S. 171, 35 S. Ct. 511, 59 L. Ed. 900 (1915) (law disallowing operation of livery stable in downtown area); Miller v. Schoene, 276 U.S. 272, 48 S. Ct. 246, 72 L. Ed. 568 (1928) (statute ordering destruction of red cedar trees because they produced cedar rust fatal to apple trees, an important state crop).
The viability of the Mugler analysis was first questioned in Pennsylvania Coal v. Mahon, 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922). Instead of following the Mugler approach of deferring to the judgment of the legislature with respect to the regulation at issue in Pennsylvania Coal, the Supreme Court instead evaluated the subject regulation and determined that the public interest it protected was not sufficient to warrant an exercise of police power. Justice Holmes, writing for the majority, noted that “[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 change.” Pennsylvania Coal v. Mahon, 260 U.S. at 416, 43 S. Ct. at 160, 67 L. Ed. at 326. Rather, the general rule as enunciated in Pennsylvania Coal is that “[w]hile *392property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.” 260 U.S. at 415, 43 S. Ct. at 160, 67 L. Ed. at 326.
The test which emerged from Pennsylvania Coal is that a reviewing court should first determine whether a regulation sufficiently implicates the public interest such that a state can enact it as a legitimate police power measure; and second, determine the extent of diminution in value suffered by the property owner. If the regulation goes too far, it is a taking for which an owner must be compensated. The test has recently been more succinctly stated to be that land use regulation can effect a taking if it “does not substantially advance legitimate state interests,... or denies an owner economically viable use of his land.” Agins v. Tiburon, 447 U.S. 255, 260, 100 S. Ct. 2138, 2141, 65 L. Ed. (2d) 106, 112 (1980).
After Pennsylvania Coal, the Mugler rule was no longer viewed as dispositive. In fact, the Mugler approach was essentially the same as that of the minority opinion in the Pennsylvania Coal case: that as long as a regulation serves an appropriate means to public end, restriction upon use does not constitute a taking merely because it deprives the owner of the property’s only profitable use. Pennsylvania Coal v. Mahon, 260 U.S. at 417, 43 S. Ct. at 160, 67 L. Ed. at 326. (Brandéis, J. dissenting). Therefore, after Pennsylvania Coal, the Mugler case was thought by many to have fallen by the wayside. This perception was dispelled however, five years later with the Supreme Court’s decision in Miller v. Schoene, supra. In Miller, the Supreme Court, applying Mugler, upheld a statute which required the owners of red cedar trees to destroy the trees because they produced cedar rust, a disease fatal to the state’s apple crop. Thus, after Miller, some confusion existed as to whether to apply the Mugler rule or that of Pennsylvania Coal. In two subsequent cases, Goldblatt v. Hempstead, 369 U.S. 590, 82 S. Ct. 987, 8 L. Ed. (2d) 130 (1962) and Penn Central Transportation Company v. New York City, 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. (2d) 631 (1978), the Supreme Court applied, respectively, the Mugler rule and the Pennsylvania Coal test.
In Goldblatt v. Hempstead, supra, the Supreme Court upheld, pursuant to a Mugler nuisance analysis, a statute forbidding excavation of sand below the water line. The Goldblatt *393Court nonetheless recognized that certain regulation may be “so onerous as to constitute a taking which constitutionally requires compensation.” 369 U.S. at 594, 82 S. Ct. at 990, 8 L. Ed. (2d) at 133.
In Penn Central Transportation Company v. New York City, supra, the Supreme Court upheld a landmark preservation law which prohibited Penn Central Railroad from erecting an office tower on top of the Grand Central Railroad Terminal. In Penn Central the Court candidly admitted that it had previously been unable to develop any “set formula” for determining when “justice and fairness” require the government to compensate landowners. 438 U.S. at 124, 98 S. Ct. at 2659, 57 L. Ed. (2d) at 648. In upholding the preservation law, the Court applied the Pennsylvania Coal test and determined that because the regulation served a strong public interest, did not completely destroy the economic value of the property, and did not substantially interfere with reasonable investment backed expectations it did not constitute a taking. The test first enunciated in Pennsylvania Coal, therefore continued in Penn Central to be that regulation can effect a taking if it “does not substantially advance legitimate state interests ... or denies an owner economically viable use of its land.” Because the preservation law advanced a legitimate state interest and the owner retained economically viable use of the terminal, a taking was determined not to have occurred.
The next significant decision of the Supreme Court to address the test to be applied in regulatory takings cases is Keystone Bituminous Coal Association v. Debenedictis, 480 U.S. 470, 107 S. Ct. 1232, 94 L. Ed. (2d) 472 (1987). In Keystone, the plaintiffs challenged the constitutionality of a Pennsylvania statute known as the Bituminous Mine Subsidence and Land Conservation Act. The Subsidence Act required coal companies to keep in the ground at least 50% of the coal beneath defined structures to protect these structures from subsidence damage. Although the Supreme Court held that a taking had not occurred, the method by which it arrived at this holding has been the subject of considerable debate. Part of the reason for this debate is the persistent confusion over when Mugler is applicable. Although it continues to recognize the vitality of the Mugler line of cases, the Keystone Court nonetheless continues to retain the two prong test first recognized in *394Pennsylvania Coal. The Keystone Court unequivocally recognizes that it retains this as the test by stating:
“The two factors that the Court considered relevant [in Pennsylvania Coal], have become integral parts of our takings analysis. We have held that land use regulation can effect a taking if it ‘does not substantially advance legitimate state interests,... or denies an owner economically viable use of his land.’ Agins v. Tiburon, 447 U.S. 255, 260, 100 S. Ct. 2138, 2141, 65 L. Ed. (2d) 106, 112 (1980) (citations omitted); see also Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124, 98 S. Ct. 2646, 2659, 57 L. Ed. (2d) 631, 648 (1978).”
and continues by holding that: “[application of these tests to petitioners’ challenge demonstrates that they have not satisfied their burden of showing that the [Act] constitutes a taking.” 480 U.S. at 485, 107 S. Ct. at 1242, 94 L. Ed. (2d) at 488. Clearly, then, despite the myriad of considerations which go into an analysis of the factors included in the above mentioned test, it still emerges as the test after Keystone.
The first prong of this traditional test is discussed under the heading of “The Public Purpose.” Keystone Bituminous Coal Association v. Debenedictis, 480 U.S. at 485, 107 S. Ct. at 1242, 94 L. Ed. (2d) at 488. It is at this point that the Court explicitly holds that its Mugler line of cases were not overruled by Pennsylvania Coal. 480 U.S. at 490, 107 S. Ct. at 1244, 94 L. Ed. (2d) at 491. The Court then goes on to affirm that a state’s interest in “preventing activities similar to public nuisances is a substantial one, which in many instances has not required compensation.” 480 U.S. at 492, 107 S. Ct. at 1246, 94 L. Ed. (2d) at 493. The Court further holds that the act at issue in Keystone “plainly seeks to further such an interest.” Id. In so holding the Keystone Court equates subsidence mining to the nuisances sought to be abated in the Mugler line of cases. Accordingly, the Keystone opinion reaffirms the teaching of Mugler that certain uses are so noxious that an owner is not entitled to compensation, and that “the nature of the state action plays [an important role] in our takings analysis.” 480 U.S. at 490, 107 S. Ct. at 1245, 94 L. Ed. (2d) at 491. Although the Keystone opinion marks a continued recognition of the Mugler rule, it does not abolish the Pennsylvania Coal fac*395tors. Further, the Keystone Court does not hold that every exercise of police power can escape the Constitution by calling that which it seeks to prevent a nuisance. Such an interpretation would totally eviscerate the takings clause. Indeed, if we were to accept an interpretation of Keystone, based on Mugler, that any exercise of police power could not effect a taking, we would have to say that there would never be any need to reach the second part of the test: diminution in value. No matter how valueless a person’s property, if the taking was pursuant to a valid exercise of the police power it could never be compensated. As feared by the dissenters in Keystone, this could become an exception which would swallow the rule. Keystone, 480 U.S. at 512, 107 S. Ct. at 1256, 94 L. Ed. (2d) at 505 (Rehnquist, J., dissenting).
The Constitution of the United States and of South Carolina provided a just compensation clause for the protection of citizens; surely the framers of these constitutions never intended for this protection to be distinguished away in order to allow States to avoid compensating an individual required to bear a burden which in fairness should be borne by all. Therefore, I simply refuse to accept that the Mugler line of cases “grant carte blanche to government agencies to regulate private property into oblivion.” Berger, The Year of the Taking Issue, 1 B.Y.U.J. Pub. L. 261, 279 (1987). Rather I would hold that some factual situations may lend themselves to the harsh rule in Mugler, whereas others must be recognized as situations in which one individual should not be called upon to bear a burden which in fairness should be borne by all. My interpretation of Keystone is that a court must first review the public purpose of a regulation. Some regulations will be held unconstitutional because the public purpose for which they are enacted is not deemed to be legitimate or sufficient. Other regulations may provide for the prevention of a nuisance and as such will not require compensation to an affected landowner. Other regulations not designed to prevent a nuisance may nonetheless legitimately advance state interests and yet require compensation upon a showing of a loss of economically viable use of land.
In my opinion the Beachfront Management Act does not have as its primary purpose the prevention of a nuisance and is therefore not subject to the Mugler analysis. The activities *396and effects the Act seeks to prohibit do not rise to such a level as to be fairly considered “noxious.” The primary purpose of the Beachfront Management System is to protect and foster the regeneration of the beach/dune system, the benefits of which enure to the State of South Carolina by among other things, promoting tourism, creating a habitat for indigenous flora and fauna, creating a place which harbors natural beauty, and providing a barrier and buffer from high tides, storm surge, hurricanes and normal erosion. The Act also lists other similar findings and policies of the Act. Upon my review of the Act, I conclude that none of these intended purposes can fairly be said to resemble a nuisance. The goals which the Act seeks to accomplish do not appear in any way similar to protecting an important state resource from an infectious disease (Miller v. Schoene), prohibiting excavations below the water table for safety purposes (Goldblatt), prohibiting an illegal use of a distillery (Mugler), preserving the residential integrity of an area by prohibiting a brickyard (Hadacheck) or protecting patrons of a downtown area from the unpleasantness associated with a livery stable (Reinman). Accordingly, I do not find as did the Keystone Court, that the Act at issue here plainly seeks to further “public interest in preventing activities similar to public nuisances” such that it is entitled to the protection afforded by Mugler.
This is not to say that the Act itself is invalid. Even though an act is not of the Mugler variety, it can remain valid if it nonetheless advances a legitimate state interest. However, if it is not a Mugler type act, despite the fact that it advances a legitimate state interest, compensation will be necessary where the act deprives an owner of economically viable use of his land. Lucas has conceded the “laudable” goals of the Act and does not challenge the legitimacy of its public purpose. Thus, the remaining question is whether his property retains economically viable use.
Although, the Keystone Court indicated that it could end its analysis with its determination that the Subsidence Act sought to “prevent activities similar to public nuisances,” it held that it “need not rest [its] decision on this factor alone, because petitioners have also failed to make a showing of diminution of value sufficient to satisfy the test set forth in *397Pennsylvania Coal3 and our other regulatory takings cases.” Keystone Bituminous Coal v. Debenedictis, 480 U.S. at 493, 107 S. Ct. at 1246, 94 L. Ed. (2d) at 493. The Court did not have to reach the diminution in value question because the only issue left to it by the federal district court was whether the “mere enactment of the statutes and regulations constitutes a taking.” Id. The next phase of the case would have concerned evidence about the actual effects the Subsidence Act had on the owners’ property.
In assessing the question of whether Lucas retains any economically viable use of his land, we are nonetheless guided by the Keystone decision. The Keystone Court held that the critical distinction in this regard involves a comparison of the value that has been taken from the property with the value that remains in the property. 480 U.S. at 497, 107 S. Ct. at 1248, 94 L. Ed. (2d) at 496. “[W]here an owner possesses a full bundle of property rights, the destruction of one ‘strand’ of the bundle is not a taking because the aggregate must be viewed in its entirety.” Id. [citation omitted]. Applying these factors, the Keystone Court determined that
When the coal that must remain beneath the ground is viewed in the context of any reasonable unit of petitioners’ coal mining operations and financial-backed expectations, it is plain that petitioners have not come close to satisfying their burden of proving that they have been denied the economically viable use of that property.
480 U.S. at 499, 107 S. Ct. at 1249, 94 L. Ed. (2d) at 497. The Court further determined that there was no showing that “petitioners’ reasonable investment backed expectations” were materially affected. Id.
The facts of Keystone contrast sharply with those present in this case. The testimony in this case was that Lucas purchased two lots for development. Lucas planned to erect single family dwellings on the lots and'intended to put one home on the market for sale and retain one for his family. At the *398time Lucas invested in these lots, his reasonable expectations were that he would proceed with these plans. However, according, to the testimony of Lucas’ appraiser, the Act’s prohibition against the erection of any habitable structure caused the value of the lots to plummet to zero. The lots now lack fair market value and there is no economically viable use. Although the Coastal Council introduced testimony that the lots would have some value, its expert was completely unable to explain the method relied upon to arrive at this conclusion. The trial judge chose the conclusion of Lucas’ expert over that of the Coastal Council’s expert. This Court generally defers to the discretion of the trial judge on these matters because he is in a better position to observe the demeanor of the witnesses and pass on their credibility. Further, from my own review of the record, I find the valuation of Coastal Council’s expert to have been totally speculative. Accordingly, since Lucas’ land has no fair market value, I would hold that the second part of the test, deprival of economically viable use, has been met and a taking has been established.
Having determined that application of the Act constitutes a taking under the Constitution of the United States, it is not necessary to examine whether it constitutes a taking under the South. Carolina Constitution.4 The remaining question is the appropriate remedy to be afforded the property owner now that a taking has been determined. The most recent amendments to the Act, specifically, S.C. Code Ann. §§ 48-39-290(A)(6) and 48-39-290(D)(l) (Supp. 1990), provide that an applicant may request a special permit to build a structure other than an erosion control structure or device seaward of *399the baseline that is not otherwise allowed pursuant to Sections 48-39-250 through 48-39-360. If Lucas’ application is denied, in the alternative, I would hold that Lucas be compensated for the loss of use of the land pursuant to the circuit court order.
Although I affirm the decision of the circuit court that a taking occurred, I would remand the matter to the Coastal Council for its decision as to whether to issue permits in view of the recent 1990 amendments to the Beachfront Management Act for construction of a habitable structure on the lots. If the Council should decline to issue such special permit, I would require that Lucas be compensated pursuant to the circuit court order.
Chandler, J., concurs.

 Although certain amendments to the Beachfront Management Act had not been enacted at the time this case was abjudicated, I note that neither the majority opinion nor the dissent prohibit Lucas from pursuing a course of action under the 1990 amendments which would enable him to construct a new habitable structure within the guidelines set forth in the amendments. See, S.C. Code Ann. §§ 48-39-290(A)(6) and 48-39-290(D)(l) (Supp. 1990).

 Settle, Regulatory Taking Doctrine in Washington, Now You See It, Now You Don’t, 12 U. Puget Sound L. Rev. 339 (1989). The lack of uniformity in this area has been noted by other commentators. See, e.g. G. Harr, Land Use Planning (3d ed. 1977); Berger, A Policy Analysis of the Taking Problem, 49 N.Y.U.L. Rev. 165 (1974); Michelman, Property, Utility, and Fairness: Comments on the Ethical Foundations of “Just Compensation” Law, 80 Harv. L. Rev. 1165 (1967); Rose, Mahon Reconstructed: Why the Takings Clause is Still a Muddle, 57 S. Cal. L. Rev. 56 (1984).

 We note that this is another reference by the Keystone Court to the continued vitality of the Pennsylvania Coal test.

 There are several South Carolina decisions involving takings under the compensation clause. One of the most recent cases is Carter v. South Carolina Coastal Council, 281 S.C. 201, 314 S.E. (2d) 327 (1984) in which we held that restrictions which disallowed a landowner from filling in wetlands did not constitute a taking. In Carter, this Court did not specify whether its analysis of the takings issue was pursuant to federal or state law. Regardless, I do not see Carter as controlling under the facts of this case particularly since we must look to federal decisions for the proper interpretations of the United States Constitution. In Carter, we held that every regulation “will not necessarily be a (taking) in the constitutional sense.” Implicit in this is a recognition that there nonetheless will be situations where regulation will be a taking. As indicated by the analysis in this opinion, I would hold that this is one of those situations.