Another High Court Compromise PROPERTY RIGHTS

THE BALTIMORE SUN

Francis "Nick" Codd was overjoyed last week when he heard that the Supreme Court ruled that property owners may be entitled to compensation if government regulations deprive them all use of their land.

The Arnold optician has been trying in vain for two years to get the permits he needs to build a house on the Severn River. His family has owned a quarter-acre waterfront lot in Severna Park for three decades, long before passage of the state and federal laws designed to protect wetlands and the Chesapeake Bay that have denied him his dream home.

Now, armed with the high court's decision in David H. Lucas vs. South Carolina Coastal Council, Mr. Codd says, "I'm hoping to break the logjam with regulations so we can get our building permit."

But Mr. Codd shouldn't hold his breath. For while the Supreme Court's Lucas ruling may ultimately help his case, the court did not deliver the sweeping victory that property rights advocates had hoped for -- or that environmentalists had feared -- when the justices agreed last year to hear it and two other cases claiming that government regulations amounted to an unconstitutional "taking" of their land.

Like an approaching storm, the property rights movement has been gradually building nationwide since the mid-1980s, fueled by landowners' resentment of tightening government restrictions on destroying wetlands and building along shorelines. Encouraged by powerful farming, oil and real estate interests, it has mounted a growing political and legal challenge to the environmental movement and to regulations aimed at preventing pollution or destruction of rare plants and animals.

In last week's closely watched case, the court decided that David Lucas, who owns two waterfront lots on the Isle of Palms near Charleston, may deserve to be compensated because of a 1988 South Carolina beach protection law that barred him from building on them.

Mr. Lucas had paid nearly $1 million for the lots in 1986, with the idea of erecting houses alongside other beachfront homes already there. But two years later, that state's legislators enacted a law aimed at halting waterfront development considered harmful to the ecologically fragile beach and dunes. The state also claimed that homes built too far seaward threatened the life and property of other homeowners if the area was hit by more storms such as Hurricane Hugo, whose winds and waves ripped buildings apart and flung them into each other.

Historically, the courts have held that government may restrict or even ban activities deemed harmful to the community. Last week, however, the Supreme Court majority, in an opinion by Justice Antonin Scalia, declared that prevention of "nuisances" or "noxious uses" was an insufficient reason to deny someone all use of their land without paying them for it.

But while the Supreme Court's 6-3 decision rejected the state's legal justification for denying Mr. Lucas building permits, it did not flatly rule that South Carolina had effectively "taken" his land without compensation, in violation of the Fifth Amendment protection against government seizures of private property.

Instead, the case was sent back to South Carolina's supreme court for reconsideration of that question. The Supreme Court said the state may still be able to avoid paying Mr. Lucas or granting him a building permit if it can find some justification in other statutes or in that state's traditional common law for preventing possibly harmful beachfront construction.

Perhaps the most telling sign of just how murky was the court's ruling is that both sides in the growing legal and political dispute over property rights found something in it to cheer them.

Environmentalists contended it would apply to only a few "extreme" cases where government regulations have rendered land essentially worthless by forbidding any use of it.

"It's pretty rare for a court to find all 'economically viable' use is gone," said Ann Powers, vice president and general counsel for the Chesapeake Bay Foundation. That was the finding of the South Carolina trial court on which the Supreme Court relied.

In Maryland, Attorney General J. Joseph Curran Jr. hastened to declare that the Lucas ruling was no threat to the state's 1984 "critical area" law, which sharply restricts development within 1,000 feet of the Chesapeake Bay and its tidal tributaries.

The reason for that reassurance was that the critical area law "grandfathered" or exempted lots that were eligible for building permits before the law took effect, explained Robert Percival, a University of Maryland law professor.

Property rights advocates acknowledge they failed to get the Supreme Court to declare that government must pay when regulations reduce the value of a piece of land, even though it may not be rendered totally "valueless." Such "partial takings" might occur when wetland laws restrict how much of a parcel can be developed, they said.

"It certainly has not been as good a year for property rights as we would have hoped," said Paul Kamenar, executive legal director of the Washington Legal Foundation, a conservative public-interest law firm. "It was somewhat lackluster."

The court essentially ducked the issue in the other two property rights cases it initially agreed to hear this session. In one, involving a resort planned in a Puerto Rican environmental preserve, the court changed its mind and decided not to rule. In the other, the court upheld rent controls on mobile homes, but on different and limited grounds.

And the court has left so much unsettled that Robert Meltz, an attorney with the Congressional Research Service who follows property-rights cases, said it was a virtual draw. While it may encourage other aggrieved landowners to file suit, the court's ruling requiring historical legal research will only add to the already steep costs of pursuing such litigation, he said.

Still, property-rights advocates took heart from a footnote in Justice Scalia's opinion in the Lucas case, which seemed to invite future cases claiming compensation for government regulations that restrict development. Mr. Kamenar said the decision contains "nuggets" like that which could advance the cause, but which are "going to need some polishing in the lower courts."

An increasingly conservative U.S. Court of Claims, which reviews demands for compensation from the federal government, may be the mother lode for such cases. The number of suits accusing the government of "taking" property has gradually grown over the past decade; 52 were filed last year.

In one case already, the claims court awarded an eye-popping $150 million to Whitney Benefits Inc., which was barred from exploiting some land by the federal surface mining law. The Supreme Court refused to review that case, but it remains unresolved because of a continuing dispute over how much the land was worth.

In two other cases, the claims court has ordered the government to pay for protecting wetlands.

If the Supreme Court takes one of those cases and broadens its definition of takings to include partial losses of value, then last week's ruling may lead to significantly weakening land-use laws, environmentalists say.

But their biggest fear is that legislators and regulators will be spooked by the Lucas ruling or by a new flurry of lawsuits and back away from trying to protect wetlands or limit suburban sprawl development, which is one of the chief sources of runoff and air pollution degrading the Chesapeake Bay.

"The real danger is if this is misinterpreted as changing all the rules of the game, which it really doesn't at this point," said Mr. Percival, the Maryland law professor.

Environmentalists also counter that the courts need to balance "takings" with what they call "givings," mainly that government also gives land much of its value by building roads or utilities or by providing flood insurance to storm-prone beachfront property.

Meanwhile, the court's fuzzy Lucas ruling seems destined to keep the lawyers busy for years to come.

"Many landowners across the country were counting on this and assuming their land that was being held hostage would immediately be relieved," said Margaret Ann Reigle, head of the Fairness to Land Owners Committee, a group formed in Cambridge three years ago to fight wetlands restrictions on the Eastern Shore. The court's ruling was "evolutionary rather than revolutionary," she said, but by itself "it doesn't free up anybody's land."

Timothy Wheeler covers environment for The Baltimore Sun.

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