Daily Development for
Tuesday, February 9, 1999

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

TAKINGS; REGULATORY TAKINGS; WETLANDS: Where a landowner is denied a permit to build a bulkhead, and fill in behind that bulkhead, leaving the property without any economically beneficial use, there is a taking for which the landowner is entitled to damages.

McQueen v. South Carolina Coastal Council, 496 S.E.2d 643 (S.C.App. 1998).

The landowner purchased two lots more than thirty five years ago that were located on manmade, saltwater canals. The lots were created from fill. The landowner's lots were undeveloped, but were surrounded by other lots that had bulkheads. Houses had been constructed on most of the lots in the area. Due to the erosion on the landowner's lots, and the adverse effects of sedimentation on the adjoining canals, the landowner applied for permits to erect bulkheads and backfill behind the bulkheads.

Pursuant to the Coastal Zone Management Act, the Coastal Council denied the permit on the basis that the lots were wetlands and that bulkheading and backfilling would have an adverse environmental impact. The court agreed with that determination, but found that a taking had occurred and ordered that the landowner be compensated.

The court quoted extensively from the decision of the U.S. Supreme Court in Lucas v. South Carolina Coastal Council, 505 U.S.1003 (1992), and found that the present case bore a "remarkable similitude" to Lucas. In the court's view, the definitive issue is what rights the landowner possessed at the time that the lots were purchased. It found that the rights to add a bulkhead and backfill were among such rights. The court agreed with findings below that the denial of the permit left each of the lots without any economically beneficial use. The Coastal Council argued that the landowner could still make a "recreational, aesthetic use" of the lots, but its own witness conceded that such use was "indirect." The court found that such use did not truly benefit the landowner and that there had been a "textbook taking."

A dissenter argued that the case is distinguishable from Lucas because of the fact that the landowner here tolerated erosion and flooding to the extent that his lots became marshland because of his own neglect, and that the State has no obligation to salvage the property from such neglect by compensating for regulations properly protecting critical environmental concerns. Although the dissenter acknowledged that the building of the bulkhead probably was not a "common law nuisance," the dissenter emphasized that Judge Rehnquist stated that protected property interests deserve protection excedpt when government regulation "prohibits that which commonlaw nuisance principles *or other background principles* have always prohibited." The dissenting judge saw the landowner's neglect as justifying invocation of some other unspecified "background principle" to support uncompensated state regulation.

Comment 1: It's rare these days that we find a categorical finding of a regulatory taking. Most state court systems have established such a procedural maze for plaintiffs to follow that few plaintiffs can afford to pursue the case to the point of a positive result.

Comment 2: Isn't there nevertheless something in the dissent's view that property which has reverted to a preexisting unusable condition need not be granted protection from state regulation of the restoration process? Should we compensate the owner even when it was the owner's own neglect that created the conditions that rendered the property valueless?

Comment 3: At some future time it may be possible technologically to reclaim land, such land beneath oceans, lakes and swamps, that is now regarded as useless. If the state were to view such reworking of the land an environmental disaster, is it appropriate to view the owner as having a compensable right to develop it? Of course, in the present case, the land had already been reclaimed once, but the principle established by the court would appear to elevate the ability to reclaim any submerged property to a Constitutional property expectation. Is this a comfortable result?

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1 - 6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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