The Limits to Growth and the Limits to the Takings Clause
By Douglas T. Kendall
INTRODUCTION
Editor's Note: During final edits to this Note, the Supreme Court handed down its decision in Lucas v. South Carolina Coastal Council on June 29, 1992. Reversing the South Carolina court, the six-member majority stated that virtually any regulation would effect a taking if it deprived an owner of all economic uses of his property. By exploring the growing conflict of takings jurisprudence with legislative efforts to protect the environment, this Note underscores certain issues resolved by Lucas and brings to the fore those yet unresolved, importantly the questions of how broadly the Court will allow state courts to expand traditional nuisance doctrine and how narrowly the Court will permit owners to define a property interest taken by regulation.
The United States is struggling to accommodate the desire for an ever-improving standard of living with the need for ecological limits. Legislators, judges and citizens face a fundamental tension between continued development and preserving the environment. The United States has risen to a position of world economic and political dominance by encouraging development and industrial growth. Further development is perhaps the only way that we can continue to improve our standard of living. Yet scientists warn that our planet cannot sustain the continued development of our land, air and water resources at the current rate, and that further economic development will actually hasten the decline of our standard of living.
The tension between continued growth and the ecological limits to that growth has moved into the mainstream of American politics. Scientific reports on the frightening prospects of ozone depletion, global climate change and unchecked population growth have forced environmental concerns into the collective conscience of Americans. Everyday encounters with overflowing landfills, smog-choked cities and polluted lakes reinforce the message that something is seriously wrong with the way we are using our planet.
Yet environmental regulation has been increasingly criticized for slowing economic growth and hampering America's ability to compete internationally. An unfortunate consequence of these regulations is that they do often hinder growth.
Groups seeking unfettered growth and those who seek to limit development have found a battleground in the realm of property rights.8 Landowners seeking to develop their land have become increasingly frustrated with environmental regulations that prohibit or delay development. These property owners have mobilized as a potent political force that is winning support for the claim that the government must compensate owners when government actions severely diminish private property values. Property owners are also looking to the new majority on the Supreme Court to step in on their side. These property owners argue that the “Takings Clause” of the Fifth Amendment to the U.S. Constitution requires the government to compensate landowners when they are prohibited from using property as they choose. Environmentalists, on the other hand, realize that a compensation requirement would essentially gut their efforts to protect endangered species and sensitive ecosystems, because the funds necessary to compensate these landowners simply do not and will not ever exist.12 The fact that the Supreme Court recently agreed to review three takings cases has fueled speculation that the Court may be contemplating a doctrinal shift in this area.
One case in particular, Lucas v. South Carolina Coastal Council, has attracted attention as a possible vehicle for the Court to alter its takings jurisprudence. Lucas involves a challenge to a state environmental regulation enacted to preserve the South Carolina beach and dune ecosystem.
This Note discusses the role the Court should play in the resolution of the conflict between property owners and advocates of environmental protection. Under current takings law, regulatory agencies should be concerned about their obligation to compensate a landowner for the amount of commercial value “taken” by a permit denial. However, this Note argues that the Takings Clause does not compel the Court to force governments to pay compensation in such cases. Because the Court's takings jurisprudence will play so important a role in resolving the conflict between development and ecological limits, the Court should not read such a requirement into the clause.
The Note proceeds in four parts. Part I explores the argument—part scientific and part economic—that there are ecological limits to economic growth. This section begins with the observation that society has an ill-kept reliance on economic growth. The section proceeds with a review of the famous and apocalyptic predictions of The Limits to Growth and then briefly examines the criticism of this work. The Note then turns to more recent arguments, exemplified by the work of Herman Daly and John Cobb in For the Common Good. These arguments reach the same conclusion: When all the costs of economic growth are accounted for, further growth will no longer lead to increased welfare, but will impose large costs upon future generations. This section does not attempt to prove that these scientists and economists are correct in their conclusions. That, only the future will prove. Rather, the section seeks to show a rational basis for legislatures to pass and the courts to enforce environmental laws.
Part II turns to the role of the Supreme Court in environmental protection and examines this role from a new perspective. Section A of Part II states a theoretical case for courts to protect the interests of future generations, a classic example of a group without access to the political process, where legislatures have acted to protect the environment that these generations will inherit. This section concludes that although there are practical limits to the role that the Court can play in accounting for future generations, the Court nevertheless should keep “our Posterity” in mind and refrain from intervening by reading an obstacle to environmental protection into our more than two hundred-year-old Constitution.
Section B of Part II examines the Supreme Court's traditional approach to regulatory takings claims. Section C of Part II then discusses the impact of recent cases on the traditional approach. This section argues that these holdings have wrought significant changes on the Court's takings jurisprudence, yet leave some fundamental questions unanswered. This section concludes that these changes and the remaining uncertainty in Supreme Court doctrine severely constrain legislators and administrators in enacting and enforcing environmental legislation. Section D of Part II examines two U.S. Claims Court decisions which held that by denying development permits under the Clean Water Act, the Army Corps of Engineers effected compensable takings. These cases indicate that the threat of judicial interference with environmental legislation is real rather than simply theoretical.
Part III outlines an approach the Supreme Court could take to add teeth to its takings inquiry without gutting legislation that respects ecological limits. This section focuses on the nuisance exception to the just compensation requirement. Although Supreme Court decisions recognize a category of cases where compensation is not required even if a regulation has a severe impact on a property owner, the Court has never articulated the boundaries of this category. Part III concludes by critiquing the most common approach to drawing these boundaries, the harm/benefit distinction.
Part IV proposes an alternative approach to the harm/benefit distinction that focuses on the process by which the challenged legislation was passed and enforced and, in particular, on the winners and losers of a challenged legislative action. By asking both whether the beneficiaries of legislation are an identifiable interest group who could be compelled to pay for the restriction and whether those burdened by the restriction are singled out for harsh treatment, the Court could identify and prohibit the evils with which Takings Clause review is primarily concerned: arbitrary legislative action and the imposition of majority will on individuals not protected by the political process. This section concludes that concerns of political capture and majoritarianism are not particularly valid in the case of environmental legislation, which imposes costs on a large number of landowners to ensure diffuse benefits for society, endangered species and future generations.
Editor's Note: During final edits to this Note, the Supreme Court handed down its decision in Lucas v. South Carolina Coastal Council on June 29, 1992. Reversing the South Carolina court, the six-member majority stated that virtually any regulation would effect a taking if it deprived an owner of all economic uses of his property. By exploring the growing conflict of takings jurisprudence with legislative efforts to protect the environment, this Note underscores certain issues resolved by Lucas and brings to the fore those yet unresolved, importantly the questions of how broadly the Court will allow state courts to expand traditional nuisance doctrine and how narrowly the Court will permit owners to define a property interest taken by regulation.
The United States is struggling to accommodate the desire for an ever-improving standard of living with the need for ecological limits. Legislators, judges and citizens face a fundamental tension between continued development and preserving the environment. The United States has risen to a position of world economic and political dominance by encouraging development and industrial growth. Further development is perhaps the only way that we can continue to improve our standard of living. Yet scientists warn that our planet cannot sustain the continued development of our land, air and water resources at the current rate, and that further economic development will actually hasten the decline of our standard of living.
The tension between continued growth and the ecological limits to that growth has moved into the mainstream of American politics. Scientific reports on the frightening prospects of ozone depletion, global climate change and unchecked population growth have forced environmental concerns into the collective conscience of Americans. Everyday encounters with overflowing landfills, smog-choked cities and polluted lakes reinforce the message that something is seriously wrong with the way we are using our planet.
Yet environmental regulation has been increasingly criticized for slowing economic growth and hampering America's ability to compete internationally. An unfortunate consequence of these regulations is that they do often hinder growth.
Groups seeking unfettered growth and those who seek to limit development have found a battleground in the realm of property rights.8 Landowners seeking to develop their land have become increasingly frustrated with environmental regulations that prohibit or delay development. These property owners have mobilized as a potent political force that is winning support for the claim that the government must compensate owners when government actions severely diminish private property values. Property owners are also looking to the new majority on the Supreme Court to step in on their side. These property owners argue that the “Takings Clause” of the Fifth Amendment to the U.S. Constitution requires the government to compensate landowners when they are prohibited from using property as they choose. Environmentalists, on the other hand, realize that a compensation requirement would essentially gut their efforts to protect endangered species and sensitive ecosystems, because the funds necessary to compensate these landowners simply do not and will not ever exist.12 The fact that the Supreme Court recently agreed to review three takings cases has fueled speculation that the Court may be contemplating a doctrinal shift in this area.
One case in particular, Lucas v. South Carolina Coastal Council, has attracted attention as a possible vehicle for the Court to alter its takings jurisprudence. Lucas involves a challenge to a state environmental regulation enacted to preserve the South Carolina beach and dune ecosystem.
This Note discusses the role the Court should play in the resolution of the conflict between property owners and advocates of environmental protection. Under current takings law, regulatory agencies should be concerned about their obligation to compensate a landowner for the amount of commercial value “taken” by a permit denial. However, this Note argues that the Takings Clause does not compel the Court to force governments to pay compensation in such cases. Because the Court's takings jurisprudence will play so important a role in resolving the conflict between development and ecological limits, the Court should not read such a requirement into the clause.
The Note proceeds in four parts. Part I explores the argument—part scientific and part economic—that there are ecological limits to economic growth. This section begins with the observation that society has an ill-kept reliance on economic growth. The section proceeds with a review of the famous and apocalyptic predictions of The Limits to Growth and then briefly examines the criticism of this work. The Note then turns to more recent arguments, exemplified by the work of Herman Daly and John Cobb in For the Common Good. These arguments reach the same conclusion: When all the costs of economic growth are accounted for, further growth will no longer lead to increased welfare, but will impose large costs upon future generations. This section does not attempt to prove that these scientists and economists are correct in their conclusions. That, only the future will prove. Rather, the section seeks to show a rational basis for legislatures to pass and the courts to enforce environmental laws.
Part II turns to the role of the Supreme Court in environmental protection and examines this role from a new perspective. Section A of Part II states a theoretical case for courts to protect the interests of future generations, a classic example of a group without access to the political process, where legislatures have acted to protect the environment that these generations will inherit. This section concludes that although there are practical limits to the role that the Court can play in accounting for future generations, the Court nevertheless should keep “our Posterity” in mind and refrain from intervening by reading an obstacle to environmental protection into our more than two hundred-year-old Constitution.
Section B of Part II examines the Supreme Court's traditional approach to regulatory takings claims. Section C of Part II then discusses the impact of recent cases on the traditional approach. This section argues that these holdings have wrought significant changes on the Court's takings jurisprudence, yet leave some fundamental questions unanswered. This section concludes that these changes and the remaining uncertainty in Supreme Court doctrine severely constrain legislators and administrators in enacting and enforcing environmental legislation. Section D of Part II examines two U.S. Claims Court decisions which held that by denying development permits under the Clean Water Act, the Army Corps of Engineers effected compensable takings. These cases indicate that the threat of judicial interference with environmental legislation is real rather than simply theoretical.
Part III outlines an approach the Supreme Court could take to add teeth to its takings inquiry without gutting legislation that respects ecological limits. This section focuses on the nuisance exception to the just compensation requirement. Although Supreme Court decisions recognize a category of cases where compensation is not required even if a regulation has a severe impact on a property owner, the Court has never articulated the boundaries of this category. Part III concludes by critiquing the most common approach to drawing these boundaries, the harm/benefit distinction.
Part IV proposes an alternative approach to the harm/benefit distinction that focuses on the process by which the challenged legislation was passed and enforced and, in particular, on the winners and losers of a challenged legislative action. By asking both whether the beneficiaries of legislation are an identifiable interest group who could be compelled to pay for the restriction and whether those burdened by the restriction are singled out for harsh treatment, the Court could identify and prohibit the evils with which Takings Clause review is primarily concerned: arbitrary legislative action and the imposition of majority will on individuals not protected by the political process. This section concludes that concerns of political capture and majoritarianism are not particularly valid in the case of environmental legislation, which imposes costs on a large number of landowners to ensure diffuse benefits for society, endangered species and future generations.
