To overcome the hurdles to a competitive gas market due to Hawaii’s geographic isolation, the state legislature enacted a rent control statute for gas stations. An oil company, Chevron, challenged the statute as ineffective and therefore a regulatory taking.
CRC's brief explained why it is best to have accountable legislatures, not unaccountable judges, decide on the wisdom and efficacy of laws, and noted that the text of the Takings Clause provides no justification for a judicial means-end scrutiny of land use regulation. The Court decided 9-0 to abandon the atextual, ahistorical means-ends test in takings claims, and it made its clearest statement to date about evaluating takings claims based on the original understanding of the Takings Clause, which dealt exclusively with expropriations of property. Here are the Court’s words:
This [means-ends]test does not help to identify those regulations whose effects are functionally comparable to government appropriation or invasion of private property; it is tethered neither to the text of the Takings Clause nor to the basic justification for allowing regulatory actions to be challenged under the Clause. 544 U.S. at 542.
Lingle represents a dramatic return by the Supreme Court to Takings Clause first principles. In a clear departure from the direction the Court was heading in cases like Nollan, Lucas and Dolan, the Court eliminated an entire test for takings liability in Lingle and declared that from then on, the touchstone for takings liability would be “functional equivalence” to an actual appropriation. This is a fair test that is consistent with the text and history of the Takings Clause.
Read an op-ed from the Los Angeles Daily Journal by CRC's Timothy Dowling here.
Read CRC's new release in response to the ruling here.
CRC's Merits Amicus Brief (PDF)
Petition Filed: July 30, 2004
Cert. Granted: October 12, 2004
Brief Filed: December 3, 2004
Opinion Issued May 23, 2005
Lower Court Opinion: The Ninth Circuit's opinion is reported at 363 F.3d 846. The District Court's opinion is reported at 198 F.Supp.2d 1182.
1. Whether the Just Compensation Clause authorizes a court to invalidate state economic legislation on its face and enjoin enforcement of the law on the basis that the legislation does not substantially advance a legitimate state interest, without regard to whether the challenged law diminishes the economic value or usefulness of any property.
2. Whether a court, in determining under the Just Compensation Clause whether state economic legislation substantially advances a legitimate state interest, should apply a deferential standard of review equivalent to that traditionally applied to economic legislation under the Due Process and Equal Protection Clauses, or may instead substitute its judgment for that of the legislature by determining de novo, by a preponderance of the evidence at trial, whether the legislation will be effective in achieving its goals.