Summary and Analysis of Lingle — No Sign of Lochner Revividus
on May 23, 2005 at 12:08 pm
Justice O’Connor’s wonderful opening line in her opinion for a unanimous Court today in No. 04-163, Lingle v. Chevron U.S.A. Inc., speaks volumes: “On occasion, a would-be doctrinal rule or test finds its way into our case law through simple repetition of a phrase—however fortuitously coined.” This is a case in which a declared “doctrinal rule,” not-so-“fortuitously” coined (for another unanimous Court) by Justice Powell in 1980 in Agins v. City of Tiburon, resulted in a quarter-century of confusion and mischief, countless law-review articles, and a powerful arrow in the quiver of property-rights proponents.
The Court finally cleared the deck this morning, acknowledging that its dictum in Agins was unfortunate and should play no role under the Just Compensation Clause of the Fifth Amendment.
As I noted back in December, Lingle was a very important case for the following reasons: In recent decades, the Court has adopted the multifactor Penn Central balancing test for determining when a regulation of private property is tantamount to a “taking” of property for which the state owes compensation. In a dictum in its 1980 Agins case, however, the Court suggested a different test—namely, that “[t]he application of a general zoning law to particular property effects a taking if the ordinance does not substantially advance legitimate state interests.” Some defenders of strong property rights have read this sentence to indicate that a government must provide compensation for a regulation of property unless it is able to prove that the regulation will substantially advance legitimate government interests—without regard to the other factors that a court ordinarily would weigh under the Penn Central test, such as the burden on the particular property owner and “reasonable expectations.” And recently, the U.S. Court of Appeals for the Ninth Circuit has gone even further, in three cases dealing with rent-control ordinances: Richardson v. City of County of Honolulu, 124 F.3d 1150 (9th Cir. 1997); Chevron USA, Inc. v. Bronster, 363 F.3d 846 (9th Cir. 2004); and Cashman v. City of Cotati, 374 F.3d 887 (9th Cir. 2004). In each of those cases, the court of appeals held that the governments in question had failed to demonstrate that the laws “substantially advance” the purported government objectives—and furthermore, instead of merely requiring payment of compensation (as even the strongest reading of the Agins dictum would suggest), the court of appeals went so far as to “facially” invalidate the rent-control ordinances themselves. [As the topside briefs in Lingle explained,] the Ninth Circuit’s use of the “substantially advances” test as a grounds of invalidating rent-control ordinances threatens a de facto revival of the Lochner regime, in which the plaintiff property owners complaining of property regulations would be able to avoid the post-Lochner judicial deference that would apply under the Due Process and Equal Protection Clauses by simply reframing their complaints as claims under the Just Compensation Clause.
The Court today confirmed that it is the multi-factored Penn Central test, rather than a “substantially advances” means/ends test, that generally governs the question whether a regulation of property requires just compensation. The Agins “formula,” Justice O’Connor explained, was “regretably imprecise”; it “prescribes an inquiry in the nature of a due process, not a takings, test, and . . . it has no proper place in our takings jurisprudence.” “Instead of addressing a challenged regulation’s effect on private property,” said the Court, “the ‘substantially advances’ inquiry probes the regulation’s underlying validity. But such an inquiry is logically prior to and distinct from the questionw hether a regulation effects a taking, for the Takings Clause presupposes that the government has acted in pursuit of a valid public purpose.”
And, the Court explained, once the test of a regulation’s efficacy in advancing the government’s objectives is properly located in the due process framework, it is plain that it must be an exceedingly deferential test, because otherwise the entire edifice of the Court’s post-Lochner jurisprudence would be implicated: “The Agins formula can be read to demand heightened means-ends review of virtually any regulation of private property. If so interpreted, it would require courts to scrutinize the efficacy of a vast array of state and federal regulations—a task for which courts are not well suited. Moreover, it would empower—and might often require—courts to substitute their predictive judgments for those of elected legislatures and expert agencies. Although the instant case is only the tip of the proverbial iceberg, it foreshadows the hazards of placing courts in this role. . . . We find the proceedings below remarkable, to say the least, given that we have long eschewed such heightened scrutiny when addressing substantive due process challenges to government regulation. The reasons for deference to legislative judgments about the need for, and likely effectiveness of, regulatory actions are by now well established, and we think they are no less applicable here.”
One other important development of note that could affect another significant question that has divided the lower courts: In her discussion of the Nollan/Dolan “exactions” doctrine (involving cases in which a state has required the creation of an easement as a condition of a development license), Justice O’Connor explained that the Court applied a heightened “means/ends” proportionality review in those cases because the exaction in question (an easement) would have been a “per se physical taking” if imposed directly. This indicates (properly, in my humble opinion), that the Nollan and Dolan tests should not apply when the condition imposed is the mere assessment of a monetary fee, or tax, as a condition of development — because taxes and fees, standing alone, are not “per se” takings at all, let alone “per se physical takings.”
