Property
Class Notes
Nollan v. California Coastal Commission
What
happened in this case? Notice that the
law is changing! The Scalia camp is in the
ascendant! It’s a flip! What had been the
majority becomes the minority and vice versa.
A
lot of how you evaluate eminent domain cases, and particularly regulatory
takings, depends on how you feel about government and whether government can be
trusted to protect the institution of private property. Do we have to worry about the government
going too far?
Nollan
owned some beachfront property. There
was a little bungalow on the land, and the Nollans wanted to tear it down and
build a single-family residence. They
were going to make a much bigger structure.
The government was concerned about a “wall” of residential properties
creating a barrier to the view of the ocean.
So, as a condition to get their permit, the government required them to
provide an easement.
Where
was the easement? You’ve got the
ocean. The state owns the beach up to the
“mean high tide” line. Then there’s the
area between that line and the Nollans’ wall.
Then there’s the house, and then there’s a public highway.
The
state wanted to condition the permit on granting an easement between the mean
high tide line and the wall. It would be
a different case if the state
required an easement from the public highway to the beach. (That’s what I thought this was!!!)
That’s
the fact pattern. But what’s the public
purpose here? You want people to be able
to see the beach from the highway and know that it’s public. That’s a sufficient public purpose to justify
regulation and taking by eminent domain.
But the big question is: is this a compensable taking or just a
regulation that adjusts the benefits and burdens of economic life in our
society and doesn’t require compensation?
The
Court starts with the proposition that if the California Coastal Commission had
wanted to, they could have denied a building permit altogether. If they had done that, then there would have
been no taking. If the state can do
that, why can’t the state just put a condition on the building that says “If
you want to build on this property, you must grant an easement that runs
between the wall and the mean high tide line”?
There
are three main “sticks” in the bundle of property rights: the right to exclude,
the right to use and enjoy, and the right to alienate. Which of these rights would be most affected
by the actions of the California Coastal Commission? Arguably, it’s the right to exclude. You now have the public “intruding” on the landowners’
property and being authorized to do so by the government. So this is a physical invasion, but is it
permanent? You might argue that people
won’t use the easement 24 hours a day, year-round. However, the Court is willing to assume,
without discussion, that the invasion is permanent. They find it doesn’t have to be continuous to be permanent.
So
the landowners lose primarily their
right to exclude, but secondarily the right to use and enjoy and a little bit
of the right to alienate.
There
seems to be a problem here. The majority
admits that they could ban the construction altogether, which is more severe
than what the state actually did. The
state said: “You can build, and we’ll give you permission, but in return, you
must allow the public to cross your land.”
Why can’t they do that? Why can’t
they condition their approval on this requirement?
Why
are they talking about “‘fire’ in a crowded theater”? Why does Scalia go off on this tangent? Why would it be unlawful to let people pay
$100 to yell “fire” in a crowded theater when the state could just ban it
altogether?
The
justification for prohibiting people from yelling “fire” is public safety, and
that allows you to prohibit it altogether.
The justification for allowing the permitting process would be to raise
money. There is an important public
purpose that would allow you to prohibit the speech, but the permitting process
doesn’t serve that same purpose.
Therefore, it would be unconstitutional.
How
does that apply to this case? Just
because they can ban something doesn’t mean they can impose a condition that
forces people to give up a constitutional right.
The
government is restricted: if you have a constitutional right, like free speech,
the government can’t impose conditions
on the exercise of that right. Here, you
have the constitutional right not to have
your property taken except to a public purpose with just compensation. What the government is doing is imposing a condition on that right: the Nollans
must give up their constitutional right in order to get a building permit. Scalia says that this condition is unconstitutional. Just because the government has the right to
do something more severe doesn’t mean the government has the right to do
something less severe, that is, putting a condition on the exercise of a constitutional
right.
Land
use regulation is not a taking if it advances a substantial state interest and
does not deny the owner economically viable use of the land.
The nexus requirement
The
condition must be closely tailored to the public purpose
that justifies the restriction.
What
if the easement ran between the highway and the beach? Could they have done that? Scalia suggests they could have because this
condition (highway-to-beach easement) actually furthers the Commission’s public purpose (or goal) as stated.
One
way of understanding this case is that the California Coastal Commission
screwed up in stating the wrong purpose.
This
goes on all the time in real estate development. If you want to build a residential
development, for example, a community may force you to give them land for a
school or fire station in return for being allowed to develop. But on the other hand, if I’m a farmer and
the state says they’re going to take 20 acres of land to build a school, that
must be compensated in order to be constitutional.
The
rule of the case is that if the relationship between the condition and public
purpose exists, then the condition is constitutional. But if the relationship doesn’t exist then
the regulation can’t be imposed.
Dolan v. City
of
In
this case, the city imposed a condition and it was clear that the expansion of
the plaintiff’s hardware store, which resulted in increased traffic, was
causing some harm. It was clear that
what the state was doing satisfied the Nollan nexus requirement. The Supreme Court looked at this and said it
was fine.
But
what was wrong in Dolan was that
there was no reasonable relationship between how much land Dolan was being
required to give up and how much harm she was causing.
Therefore,
there are two requirements:
1. There must be a nexus
between the condition and the public purpose.
2. The burden on the landowner
must be proportional to the amount of harm the landowner is causing by their
current use of the land.
Lucas v. South Carolina Coastal Council
Lucas
is a real estate developer on the barrier islands off the coast of
After
acquiring the new lots, a new statute comes into effect that establishes the “no-build”
line. It turns out his lots are on the
seaward side of that line and he loses his chance to develop the land
altogether.
The
trial court decides, and no one disputes, that the land has lost its value
altogether. (Braunstein thinks this
probably isn’t strictly true: the land has some
value, it’s just that it’s minimal versus what you would get if you could
develop it.)
This
will develop the third of the per se rules: when government regulation denies
an owner all economically viable use of
his land.