Lingle v. Chevron U.S.A. Inc

Lingle v. Chevron U.S.A. Inc. 544 U.S. 528 (2005), arose from a Hawaii statute limiting the rent oil companies could charge dealers leasing company-owned service stations. (Lingle, supra, 544 U.S. at p. 532.) Chevron claimed the statute's rent cap on its face effected a Fifth Amendment taking of Chevron's property, and sought summary judgment in the district court on the basis that the rent cap did not "substantially advance any legitimate government interest," a stand-alone takings test that had been applied to analyze governmental land use regulations under the takings clause in earlier Supreme Court precedents, including Nollan and Dolan. (Lingle, at pp. 533-534, 540, 546-547.) The Hawaii District Court and Ninth Circuit Court of Appeals accepted the "substantially advance" test as controlling, and on that basis upheld summary judgment in Chevron's favor. (Id. at pp. 535-536.) The Supreme Court reversed, holding the stand-alone "substantially advance" formula was no longer "doctrinallytenable" for purposes of evaluating regulatory takings claims arising under the Fifth Amendment. (Lingle, at p. 544.) The Lingle court first reviewed the history of its takings jurisprudence. The court explained the takings clause is " 'designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.' " (Lingle, supra, 544 U.S. at p. 537, quoting First Lutheran Church v. Los Angeles County (1987) 482 U.S. 304, 315 96 L. Ed. 2d 250, 107 S. Ct. 2378.) Early case law required a direct government appropriation or physical invasion of private property before requiring compensation. (Lingle, at p. 537.) Later cases recognized that "government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct appropriation or ouster--and that such 'regulatory takings' may be compensable under the Fifth Amendment." (Ibid.) The Lingle court explained that regulatory takings law recognized two relatively narrow categories of regulatory action that are deemed to be per se takings under the Fifth Amendment: "First, where government requires an owner to suffer a permanent physical invasion of her property--however minor--it must provide just compensation. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 73 L.Ed.2d 868, 102 S.Ct. 3164 (1982) (state law requiring landlords to permit cable companies to install cable facilities in apartment buildings effected a taking). A second categorical rule applies to regulations that completely deprive an owner of 'all economically beneficial use' of her property. Lucas v. South Carolina Coastal Council (1992) 505 U.S. 1003, 1014 120 L. Ed. 2d 798, 112 S. Ct. 2886 (holding the government must pay just compensation for such 'total regulatory takings,' except to the extent that preexisting nuisance and property law independently restricted the owner's intended use of the property)." (Lingle, supra, 544 U.S. at p. 538.) But barring either a permanent physical invasion under Loretto or compete deprivation of use under Lucas--and outside the "special context" of land use exactions as provided in Nollan and Dolan, discussed below--regulatory takings claims are evaluated under a multifactor test outlined in Penn Central Transp. Co. v. New York City 438 U.S. 104 (1978), which focuses on whether the regulation interferes with investment-backed expectations for the property. (Lingle, at pp. 538-539.) The Lingle court noted that each of the three inquiries--physical invasion, complete deprivation of beneficial use, or the Penn Central multifactor test--shared a common focus on identifying regulatory actions that are "functionally equivalent" in whole or in part to a direct appropriation of the property or ouster of the owner. (Lingle, at p. 539.) With this background, the Lingle court considered the "substantially advances" formulation for regulatory takings first set forth in Agins v. Tiburon (1980) 447 U.S. 255 65 L. Ed. 2d 106, 100 S. Ct. 2138 (Agins), and later applied in Nollan and Dolan. (Lingle, supra, 544 U.S. at pp. 540-545.) The court found this test unquestionably derived from due process precedents, not from pre-Agins Fifth Amendment cases. (Lingle, at p. 540.) The court observed that a test limited to whether a regulation substantially advances a legitimate governmental interest--in contrast to the regulatory takings jurisprudence reflected in Loretto, Lucas, and Penn Central--"reveals nothing about the magnitude or character of the burden a particular regulation imposes on private property rights." (Lingle, at p. 542.) Further, it "does not help to identify those regulations whose effects are functionally comparable to government appropriation or invasion of private property." (Ibid.) The court ridiculed Chevron's suggestion that a regulation could be a taking of private property "merely by virtue of its ineffectiveness or foolishness." (Id. at p. 543.) Finally, the court emphasized that the Fifth Amendment should not be construed in a manner that would enmesh the courts in "heightened means-ends reviews of virtually any regulation of private property," a pursuit for which it deemed them ill suited. (Lingle, at p. 544.)