Lingle v. Chevron U.S.A. Inc.

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Lingle v. Chevron U.S.A. Inc.
Seal of the United States Supreme Court.svg
Argued February 22, 2005
Decided May 23, 2005
Full case nameLinda Lingle, Governor of Hawaii, et al. v. Chevron U.S.A. Inc.
Docket no. 04-163
Citations544 U.S. 528 ( more )
125 S. Ct. 2074; 161 L. Ed. 2d 876; 2005 U.S. LEXIS 4342
Case history
PriorJudgment for plaintiffs, 57 F. Supp. 2d 1003 (D. Haw. 1998). Judgment vacated and remanded, 224 F.3d 1030 (9th Cir. 2000). Judgment for plaintiffs, 198 F. Supp. 2d 1182 (D. Haw. 2002). Judgment affirmed, 363 F.3d 846 (9th Cir. 2004).
ProceduralWrit of Certiorari to the United States Court of Appeals for the Ninth Circuit
SubsequentCase remanded to district court for further proceedings, 415 F.3d 1027 (9th Cir. 2005).
Holding
Contrary to the holding of Agins v. City of Tiburon, [1] the test of whether a governmental regulation substantially advances a legitimate state interest is irrelevant to determining whether the regulation effects an uncompensated taking of private property in violation of the Fifth Amendment.
Court membership
Chief Justice
William Rehnquist
Associate Justices
John P. Stevens  · Sandra Day O'Connor
Antonin Scalia  · Anthony Kennedy
David Souter  · Clarence Thomas
Ruth Bader Ginsburg  · Stephen Breyer
Case opinions
MajorityO'Connor, joined by unanimous
ConcurrenceKennedy
Laws applied
U.S. Const. amend. V
This case overturned a previous ruling or rulings
Agins v. City of Tiburon (1980)

Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005), [2] was a landmark case in United States regulatory takings law whereby the Court expressly overruled precedent created in Agins v. City of Tiburon . [1] Agins held that a government regulation of private property effects a taking if such regulation does not substantially advance legitimate state interests. Writing for the Court, Justice O’Connor found the test untenable for a number of reasons, but declined to grant Chevron relief because Chevron’s motion before the court (for grant of summary judgment) was limited to a discussion of the “substantially advances” theory which had just been struck down. The Court remanded to the Ninth Circuit for a determination of whether the statute exacted a taking according to the formula of Penn Central . [3]

Contents

Facts

Because of the distance from the continental United States and the logistical difficulties presented by the numerous islands that make up the state of Hawaii, only two oil refineries and six wholesale distributors were doing business in Hawaii, thus creating an oligopoly of gas providers. Chevron, USA was the largest refiner and marketer of gasoline in Hawaii controlling 60% of the market for gasoline produced or refined in-state and 30% of the wholesale market on Oahu, Hawaii’s most populous island. [4]

Half of all of retail service stations in Hawaii are leased from oil companies by independent lessee-dealers, some are owned by the oil companies, and some are owned by dealers who are not affiliated with any specific refinery. Chevron sells most of its products through the independent-lessee program, whereby Chevron charges the lessee a monthly rent (a percentage of the margin on sales) and requires the lessee to enter into an outputs contract, whereby the Chevron supplies the lessee with all gasoline products.

In 1997, in response to concerns about the effects of concentration of retail service stations and the market implications, the Hawaii Legislature enacted Act 257, restricting, among other things, the amount of rent that an oil company can charge their dealer-lessee to 15% of the dealer’s gross profits from sales, plus an additional 15% of gross sales of other products.

Chevron sued the State in the United States District Court of the District of Hawaii, claimed that the statute’s rent cap effected a taking of Chevron’s property in violation of the 5th and 14th Amendments.

Decision

The Fifth Amendment provides that “private property shall not be taken for public use, without just compensation.” It is made applicable to the states through the 14th Amendment. With regard to takings claims asserted as a result of government regulation (regulatory takings), the general rule is that “if a regulation goes too far it will be recognized as a taking.” [5] As is generally the case, the Court has been searching for exactly when a regulation goes “too far.” The Court has recognized two categories of regulatory takings that are considered per se takings: where the regulation amounts to a permanent physical invasion of private property, and second, where the regulation deprives a property owner of all economically beneficial uses of their property. [6]

When a regulation falls short of an entire deprivation of economic use or a permanent physical invasion, the Court has struggled to provide meaningful standards for determining when a regulation has effected a taking. In Agins v. City of Tiburon (1980), the Court declared that government regulation of private property effects a taking if it does not substantially advance legitimate state interests. [1] In the majority opinion in Lingle, Justice O’Connor determined that the Agins test is no longer appropriate for determining whether a taking has occurred (it’s seen more as a due process inquiry than a takings inquiry). In its place, an aggrieved party must assert either a physical taking, a Lucas-type “total deprivation” regulation, [6] a Penn Central -style taking, [3] or a land-use exaction that acts as a taking. [7]

In a concurring opinion, Justice Kennedy wrote separately to emphasize that the Court's decision did not foreclose Chevron's chances of prevailing on a due process claim. Justice Kennedy indicated that, on his view, a regulation of private property could perhaps be so arbitrary or irrational that it violated Constitutional guarantees of due process. This short concurrence seemed to indicate some openness on Justice Kennedy's part to substantive due process claims in the takings context.

See also

Related Research Articles

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Stephen Fain Williams is a Senior United States Circuit Judge of the United States Court of Appeals for the District of Columbia Circuit.

Inverse condemnation is a term used in the law to describe a situation in which the government takes private property but fails to pay the compensation required by the 5th Amendment of the Constitution, so the property's owner has to sue to obtain the required just compensation. In some states the term also includes damaging of property as well as its taking. In inverse condemnation cases the owner is the plaintiff and that is why the action is called inverse – the order of parties is reversed, as compared to the usual procedure in direct condemnation where the government is the plaintiff who sues a defendant-owner to take his or her property.

Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), was a case in which the United States Supreme Court held that a state could use eminent domain to take land that was overwhelmingly concentrated in the hands of private landowners and redistribute it to the wider population of private residents.

Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002), is one of the United States Supreme Court's more recent interpretations of the Takings Clause of the Fifth and Fourteenth Amendments. The case dealt with the question of whether a moratorium on construction of individual homes imposed by the Tahoe Regional Planning Agency fell under the Takings Clause of the United States Constitution and whether the landowners therefore should receive just compensation as required by that clause. The Tahoe Regional Planning Agency was represented by future Chief Justice John Roberts. Justice John Paul Stevens wrote the opinion of the Court, finding that the moratorium did not constitute a taking. It reasoned that there was an inherent difference between the acquisition of property for public use and the regulation of property from private use. The majority concluded that the moratorium at issue in this case should be classified as a regulation of property from private use and therefore no compensation was required.

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), was a case in which the Supreme Court of the United States held that whether a regulatory act constitutes a taking requiring compensation depends on the extent of diminution in the value of the property.

Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), was a case in which the Supreme Court of the United States established the "total takings" test for evaluating whether a particular regulatory action constitutes a regulatory taking that requires compensation.

Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987), is an important United States Supreme Court case interpreting the Fifth Amendment's Takings Clause. In this case, the court upheld a Pennsylvania statute which limited coal mining causing damage to buildings, dwellings, and cemeteries through subsidence.

Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), was a U.S. Supreme Court case that limited access to federal court for plaintiffs alleging uncompensated takings of private property under the Fifth Amendment. In June, 2019, the holding of this case was overruled by the Court's decision in Knick v. Township of Scott, Pennsylvania.

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Agins v. City of Tiburon, 447 U.S. 255 (1980), was a United States Supreme Court case in which the Court held that the test for determining whether a zoning ordinance or governmental regulation will be considered a taking is whether such action “substantially advances” a legitimate state interest.

Public use is a legal requirement under the Takings Clause of the Fifth Amendment of the U.S. Constitution, that owners of property seized by eminent domain for "public use" be paid "just compensation."

Stop the Beach Renourishment v. Florida Department of Environmental Protection, 560 U.S. 702 (2010), was a United States Supreme Court case in which the Court held that the Florida Supreme Court did not effect an unconstitutional taking of littoral property owners' rights to future accretions and to contact the water by upholding Florida's beach renourishment program.

Chicago, Burlington & Quincy Railroad Co. v. City of Chicago, 166 U.S. 226 (1897), incorporated the Takings Clause of the Fifth Amendment into the Due Process Clause of the Fourteenth Amendment by requiring states to provide just compensation for seizing private property. It was the first Supreme Court case that incorporated part of the United States Bill of Rights and applied it to a state or local government. Until then, the entire Bill of Rights was considered by the Supreme Court to apply only to the federal government, not state governments.

United States v. Riverside Bayview, 474 U.S. 121 (1985), was a United States Supreme Court case challenging the scope of federal regulatory powers over waterways as pertaining to the definition of "waters of the United States" as written in the Clean Water Act of 1972. The Court ruled unanimously that the government does have the power to control intrastate wetlands as waters of the United States. This ruling was effectively revised in Rapanos v. United States (2006), in which the Court adopted a very narrow interpretation of "navigable waters."

Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), is a United States Supreme Court case in which the Court held that land-use agencies imposing conditions on the issuance of development permits must comply with the "nexus" and "rough proportionality" standards of Nollan v. California Coastal Commission and Dolan v. City of Tigard, even if the condition consists of a requirement to pay money, and even if the permit is denied for failure to agree to the condition. It was the first case in which monetary exactions were found to be unconstitutional conditions.

Horne v. Department of Agriculture, 569 U.S. 513 (2013); 576 U.S. ___, 135 S. Ct. 2419 (2015), were a pair of United States Supreme Court cases in which the Court established that the takings clause of the Fifth Amendment to the United States Constitution applies to personal property. The cases arose out of a dispute involving the National Raisin Reserve, when a farmer challenged a rule that required farmers to keep a portion of their crops off the market. In Horne I the Court held that the plaintiff had standing to sue for violation of the United States Constitution’s takings clause. In Horne II the Court held that the National Raisin Reserve was an unconstitutional violation of the takings clause.

References